“Helping Manufacturers Succeed”

Lean Manufacturing Overview with Lego Simulation
Ted Theyerl NWMOC / CVTC Project Manager
V-Feb 2007

The National MEP System
United States Department of Commerce, National Institute of Standards and Technology, State of Wisconsin

Headquarters Location

Blue = NWMOC Region

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Economic Development
NWMOC Promote economic development in Northwest Wisconsin through retention and growth of the existing manufacturing base.

“To create and keep good jobs for our clients”

Last year NWMOC’s client companies reported over $93 million dollars in positive impacts to their organizations directly attributed to our work with them.
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Some NWMOC Services
• Strategic Focus
- Business planning - Performance measures - People, culture, leadership, work teams Both Manufacturing and Office - Value Stream improvements - Tactical tools such Lean; 5-S, Quick Change-over, Cellular, Pull/Kanban, - 21st Century Lean Marketing System - Selling to the Government

• Operations Improvements –

• Sales and Marketing Improvements • Training, Certifications, Resources

- Lean Certificate series; Public and in-house - Technical College System; Workplace training - standard, custom, on site - UW-Stout; Technical resources, faculty, class projects, internships 4

Introductions

• Name! • What you do? • Why did you come? • What do you expect to learn?

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Round 1 Instructions
“Traditional Manufacturing” 1.  2.  3.  4.  5.  Build airplanes with Legos 7 minute round Follow your instructions. Do your own job, don’t worry about others – don’t stop. Batches of 5 – make a batch, move a batch, make another batch and keep moving. 4.  Station #1 – keep process moving (expensive equipment) 5.  Quality problems – turn upside down, keep going. 6.  Let me know when first batch of 5 is complete. Questions?
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Round One: Debrief

•  Discuss results •  Discuss the process •  Relationship to real world

•  List problems that need to be solved on flip chart

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Traditional Manufacturing
“Push System” »  Large inventories »  Manufacture in Batches »  Shortages »  Delivery delays »  Overtime »  Excess equipment »  Process problems hidden »  Short on Space

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Why should a business consider a lean strategy?

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Mass Production

Material
Pre-fab Fabrication

Lay-up Shipping Warehouse

Receiving Warehouse Storage Repair Sawing Assemble

Ship ORDER Value-Added Time: Time in Plant: Minutes Weeks CASH 10

Rapid Changes in the World – Since About 2000

Shorter Lead Times

More Changeovers

Price set by the Customer

The Customer

More frequent schedule changes, expedites

Smaller batches

Increased competition
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So… We want to help our country??? Let’s Buy an “American Car” !
• Toyota - Is manufactured in the USA. - Has a higher percentage of US-made parts than any other car made in the USA, or anywhere. • Chevy Equinox - Made in Canada - With a motor made in China • Chevy Impala – you guessed it, Canada • Chrysler PT Cruiser - Mexico

Toyota is pushing the in-USA percentage higher. US auto companies are pushing their percentage lower.

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Lean is Market Driven Customer Demands:

Past

Present

Price Set By Manufacturer

Price Set By Market

Cost + Profit = Price

Price - Cost = Profit

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It’s All About Time

“The longer an article is in the process of manufacture, the greater is its ultimate cost.”
Henry Ford, 1926

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More about time…

“The average North American-produced vehicle crosses the border seven times. During the journey each vehicle faces a staggering 28,200 customs transactions. By comparison, cars imported from Europe or Asia involve a single customs transaction. If we delay cross-border shipments by just a day, the Americas lose their proximity advantage over Asia.”

Read into this: If we delay Manufacturing Thru-put Time……

Mike Eskew UPS Chairman and CEO July 23, 2007
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Defining Lean
Lean is:

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Definitions

• Value Added
Any activity that increases the market form or function of the product or service. i.e. Chip time, paint time, touch time. (These are things the customer is willing to pay for.)

• Business Value Added
Any activity that is necessary to run the business. Examples: Financial, legal, payroll services, maintenance.

• Non-Value Added
Any activity that does not add market form or function or is not necessary. (These activities should be eliminated, simplified, reduced, or integrated.)
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Lean = Eliminating Waste
Value-Added Non-Value-Added - “The 8 wastes”

1.  Overproduction 2.  Waiting 3.  Transportation 4.  Non-value-added processing 5.  Excess inventory 6.  Defects 7.  Excess motion 8.  Underutilized people

Typically 95% of all manufacturing lead time is nonvalue-added.
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Waste In A Value Stream
Value Stream: Every activity,from Beginning to End
Value Added Activities – Customer is willing to pay for Total Lead Time
PO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Invoice

Waste Eliminated from the System Non Value Added Activities – Customer is not willing to pay for

The downward pressure on price is because the customer does not want to pay for the “wastes” in the system.

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The Value Stream / Lead Time
Value Stream: Every activity,from Beginning to End

Lead Time Affect on Cash Flow
Investing $$ 12 Wks Lead Time Traditional Invoice

Lean 3 Wks Lead Time

9 Wks Invested $$ Now Available

Invoice

As Waste is Eliminated from the Value Stream, the Lead Time is Shortened, and Invested Dollars Lowered!

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How Do I…?

STOP / REDUCE THE WASTE

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Lean Tactical Building Blocks

Continuous Improvement
Pull / Kanban / Scheduling Quality at Source Standardized Work 5S / Visual Cellular/Flow Point of Use Storage Equipment Reliability Quick Changeover Teams / Culture
Value Stream Mapping

Batch Reduction Measures

Plant Layout

Foundations of Lean for Office and Manufacturing 22

How to Improve

Utilizing Lean Tools
1.  Create a work cell 2.  Balance the workload – establish takt time 3.  Implement a pull/kanban system 4. Batch size reduction 5. Simple, visual instructions 6. Point of use storage

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Impact Of Batch Size Reduction
• Batch & Queue Processing
Process Process Process

A
10 minutes

B

C
10 minutes

10 minutes

Lead Time: 30+ minutes for total order 21+ minutes for first piece

• Continuous Flow Processing
Process Process Process

A

B

C 12 min. for total order 3 min. for first part

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Pull System Flow Diagram
Information Flow

Raw Process A Supplier Matl

Process B

Process Fin. Customer Goods C

Part Flow

Kanban Locations
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Cellular Manufacturing
Linking of manual and machine operations into the most efficient combination to maximize value-added content while minimizing waste. Punch Cut to size De-burr

Package Sand

Form

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Takt Time
Helps us understand the flow patterns and demand rate of processes that are reasonably repetitive in nature.

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Balance the Process

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Round Two Preparation

What lean manufacturing techniques can we use to improve our Lego airplane production? How can we solve the problems?

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Typical Results

Lead Time Reduction Productivity Increase WIP Reduction Quality Improvement Space Utilization Quick Changeover

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Where do I Start ??
Value Stream Mapping is key. –  Current State Map: Create a clear picture of current material and information flow . –  Future State Map: Build a future vision of an improved process through effective use of lean and value stream mapping strategies. –  Action planning: Make it happen.

Or…….. Just do something ….. Anything.
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Sample Value Stream Maps

Current State

Future State

Thru put: 4 weeks to 3 days

Travel Distance: 4,337 feet to 340 feet 32

Continuous Improvement
Old Adage:

“If you always do what you always did, you’ll always get what you always got.”

Competitive Corollary:

“If the other guy gets BETTER, you’re gonna get LESS.”
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Conclusion - The Journey to Lean
Traditional Lean

•  •  •  •  •  •  •  • 

Complex Forecast driven Excessive inventory Speed up value-added work Batch production Long lead time Inspected-in Functional departments

•  •  •  •  •  •  •  • 

Simple and visual Demand driven Inventory as needed Reduce non-value- added Small lot size Minimal lead time Quality built Value stream managers
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“Helping Manufacturers Succeed”

Thank You.
If you can do this for Lego airplanes………... Think what you can accomplish on a process you understand and care about!

Contact Information NWMOC Central Office
• Phone Number: (715) 232-2397 • Fax Number: (715) 232-1105 • Web Site: http://nwmoc.uwstout.edu Ted Theyerl NWMOC/CVTC – Project Manager CVTC Gateway Campus 715-874-4658 theyerlt@uwstout.edu
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