Module 3

Module Objectives

By completing this module, you will be able to;
 Describe Lean concepts and it principles
 Describe the importance value-added in the business
processes for the customer and the business.
 Describe the step-by-step approach for prudent

The Road to Lean 1900: Craft Production 1908: Frederick Taylor – Scientific Management 1908: Model T – Mass Production 1940s': WW2 – Japan reconstruction – Deming 1950 – Eiji Toyoda visit Ford River Rouge 1960 – Toyota Production System 1990s – Womack .Lean .

• Frederic Winslow Taylor brought the • The quantity was very limited and it principles of Scientific Management that was symbol of rich and wealthy. expansive. • Millions of Model T came out of Ford plant and made it affordable reality. brought significant improvement to • Each car was unique and very industrial efficiency. . • Ford motor adapted the concept and mass produce Model T for the first time. The Birth of Mass Production 1900s 1908 • Car was made by Master craft-man.

. effort to find a solution for nearly • Toyota sales plummet and under pressured bankrupt Toyota Motor. of bankruptcy. conveyance production line and supermarket. Japan Reconstruction and Economic Struggle 1940s 1950s • After WWII. PDCA which gave birth to Kaizen • Combining the two concepts of philosophy and SGA movement in Japan. American supermarket. Japan went for major • Eiji Toyoda visited Ford River Rouge as an reconstruction. Taichi Ohno experimenting with unconventional production system that continuously eradicating waste (Muda). • Taichi Ohno visited Ford plant and • Deming introduced problem solving cycle.

• The initial comprehensive production system • “The Machine that Change the World” was was completed in the early 1970s. first published to share this findings to • In 1980s. The Rise of Lean 1960s 1990s • The development of infamous Toyota • 5 mil. study by MIT team. in Japan especially at Toyota. . • Kanban system was ended failure in 1961 • “LEAN” was coined to represent the good before it became successful in the 1967. cash surplus with overall growth equivalent • During that time.Toyota recorded $billion dollar of American automaker and the world beyond. GM. production system observed during the study. Toyota was half the size of to Japan GDP. Now Toyota has becoming the biggest automaker in the world. lead by Womack Production System was through trial and and Jones found good manufacturing practices error.

low yield and scrap significantly reduced thus lower cost of production and higher margin.  Survivability even during tough time.  Toyota has survived the worst especially after WWII. minimize the risk of overstocking.  Agility and flexibility of the production toward the unpredictable demand. Why word “Lean”?  Ability to do more with less and less resources.  Through relentless waste elimination lost due to rework. .  Production capability of producing various products in smaller lot size.  Healthy cash flow and margin for the business.  Keeping the inventory level to the lowest reduces holding cost thus healthier cash flow.

Lean on Cost Management As result. need to price remains increase. alternative. employees Cost increase due to Most company Cost reduce as result of and increase on material. . salary and other afterward. control. perish relentless effort to shareholders. eliminate waste which is resources which are within organization beyond control. to find an customers. price As result. and margin pressuring the increases. market until Satisfying all they manage stakeholders.

 Ask how your current products and processes disappoint your customer’s value expectation:  Price?  Quality?  Reliable delivery?  Rapid response to changing needs?  Fundamental definition of the product? . Value  Specify value from the standpoint of the end customer.

Over Produced Motion 7 Categories Transportation of Waste Inventory Waiting Correction Over Processed .

Create signal devices to prevent early processing. Create work place norms and standards for each process. To eliminate it: Establish work flow sequence to satisfy the downstream customer. The waste of over producing Over produced Produce too much of something or produce it before it is required. LSS-Lean Practitioner Training-TMO.MAHB-PS 11 .

machine or information. Cross-train employees to allow work flow to continue while someone is out. paper. The waste of waiting Waiting Idle time that cause the work flow to stop includes people.MAHB-PS 12 . LSS-Lean Practitioner Training-TMO. Make sure that equipment supplies are available. To eliminate it: Review and standardized required signatures to eliminate unnecessary ones. Balance the workload throughout the day so that all people are being used optimally.

The waste of over processing Over processed Processing things that the customer doesn’t want therefore doesn’t want to pay for. To eliminate it: Review the value-added steps in each process. and streamline or eliminate steps whenever possible. LSS-Lean Practitioner Training-TMO.MAHB-PS 13 . Review all signature requirements and eliminate signatures wherever possible.

Ensure that the work arrives at the downstream process when it is required and does not sit there. Standardize the work locations and the number of units per location. extra supplies. To eliminate it: Produce only enough to satisfy the work requirements of your downstream customer. unnecessary stock of finished goods. unneeded raw material. The waste of inventory Excessive inventory Excess stock of anything e.MAHB-PS 14 . LSS-Lean Practitioner Training-TMO.g.

MAHB-PS 15 . The waste of motion Excessive motion Any motion that is not necessary to the successful completion of an operation. To eliminate it: Systematic arrangement of processes based on logical sequence and keep it close. Arrange work areas of shared equipment in central locations. use color codes as much as possible. LSS-Lean Practitioner Training-TMO.

MAHB-PS 16 . The waste of correction / defects Correction Producing defectives work that needs to be redone or doing something over. Create and post job aids. LSS-Lean Practitioner Training-TMO. To eliminate it: Establish standardize work procedure and forms. Allow sufficient time to train workers to be competent before allowing them to work at the shop floor.

MAHB-PS 17 . LSS-Lean Practitioner Training-TMO. Eliminate any temporary storage locations or stocking locations. information or paper. or moving materials. or temporarily locating. filing. stacking. stocking. To eliminate it: Make the distance over which something is moved as short as possible. people. The waste of transport Excessive transportation Transporting something farther than necessary.

The Benefits of Waste Elimination Eliminate Non Value Added activities Suppliers Value Chain Consumers Reduce Lead Time ✓ Higher flexibility ✓Less stocks ✓service Better ✓ Reduced Complexity ✓ Less cost ✓ Improved Quality .

. 60% waste . Lean Cost Management Cost Cutting LEAN Cost Management 5% LEAN helps to increase Value-added the value-added… 35% Conventional cons Incidental waste cutting initiative focus (Unavoidable waste due existing system limitation) on the value-added.relentlessly eliminate waste. ..by simplifying the system. focus here . Smart work Initial Lean projects with significant return. hard work with insignificant return.

 Use commonsense to spot and eradicate waste continuously. ad-hoc  Waste exist in any processes. poor process design. and machine day by day… …after a while. Operator and machine …that OVERSTRAINED man work beyond natural capacity and capability. . the man unintentionally created WASTE to create better work environment. The Vicious Cycle of Waste Eg.  Waste not only burden the It all started with the people of the process but also UNEVENNESS in the the customer. poor production planning. Last minute order. meeting. business processes…  The key to Lean is total elimination of the 7 deadliest waste (Muda). Eg.

Focus on the 3 Ms  Battling muda does not Muda: accurately represent all that Lean is about. • Activity that consumes resources especially human effort but add  The true Lean works to no-value to the customer. . eliminate three types of interrelated waste: muda. Muri: mura and muri. • Pushing a machine. Mura: • Uneven workflow or workload that limits sufficient planning. process or person beyond natural limits.

Second Pillar Lean’s learning building block Best in quality-Lowest cost-Shortest lead time First Pillar Best in safety-High morale Just-In-Time People & Teamwork Jidoka • One-piece flow (Build in Quality) • Takt • Automatic stop • Continuous flow Kaizen • Andon • SMED • Poka yoke • Pull system • Built in Quality The foundation Waste elimination (Kanban) Heijunka (Stable process) Standardized work 5S work place management .

So the customer can pull. Identify the value stream for each product family. As you manage toward perfection. Make the product flow. 5. 5 Simple Principles toward Lean 1. 2. 4. . 3. Specify value from the standpoint of end customer.

The non-value activities are then remove or minimize via continuous improvement of Kaizen.  Lean specify value from ultimate customer standpoint and work all the way back through the processes separate value to non-value activities. . In Summary  Lean is about creating healthy business and sustainable culture that relentlessly eliminating the 7 waste.  It continuously managing 3 interrelated waste namely Mura. Muri and Muda.