"Make Green, Go Green, by

Going Lean”

How to Go Green?
How to Go Lean?


Doing nothing is not an option!
Governor Arnold Schwarzenegger signed into
law emission reduction targets for California:
• By 2010, reduce GHG emissions to 2000
• By 2020, reduce the GHG emissions to
1990 levels,
• By 2050, reduce GHG emissions to 80
percent below 1990 levels

Green and Lean

15-30% of a manufacturing company’s monthly energy
bill creates greenhouse gases.
The energy management within a facility - benchmark
Lean methodologies can be used to reduce waste in the
consumption of energy within a manufacturing facility.
The ultimate goal - eliminate equipment not needed in
the process.
If elimination is not possible, minimize the use
– plot energy consumption to predict maintenance schedules
and replacement cycles.


Analysis of Electric Industry CO2
• The electric industry cannot provide substantial
reductions in CO2 emissions in the near future to meet
• Limited potential to switch to “greener energy” near-term
• CO2 reduction must come from reducing demand
– supported by new energy efficient technologies
– conservation programs
• A market-based collaborative systematic approach to
demand reduction is a critical success factor (profit


6 . • DOE has established a minimum 10% energy reduction guideline as attainable through the application of proper maintenance and technology solutions.The Economic Case For Change • Asset performance management can reduce energy consumption by 6% to 11%.

A. Index = Availability * Performance * Quality * Energy Efficiency • Availability = All downtime / Scheduled time • Performance = Actual output for scheduled time / Design output for scheduled time • Quality = Total production minus defects or rework / Total production • Energy Efficiency = Design energy consumption/Actual energy consumption 7 .S.S. Index: Global Asset Sustainability Index G.G.A.

746 kWatts 15.000 Watts 100 HP 76.4%) 8 .000 Watts 1HP = .Example: Motor Efficiency 90.400 Watts (17.

828/.Motor Efficiency Savings • Energy Savings = 90kW x 8.607 per year. x $.000 hrs.94)) = 87.94 efficiency = $69.000 hrs. the estimated savings would be $9./year x (1-(.746 kW/HP x 8. • Motor operating cost: – (100 HP x . • At an average cost of 11 cents per kWh.336 kWh/yr. 9 .11/KWh ) / .838 per yr.

Repair v. Buy • Break even analyses must be based on the increased cost of purchasing a new. 10 . • The cost energy today ranges from 10-13 cents per kilowatt-hour. more energy efficient equipment versus the energy consumption reduction.

Lean Definition • “A philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities of the enterprise. 10th ed. 11 .APICS Dictionary.” .

Emphasis is given to lean structures and processes. flexibility of response and methods and techniques to continually seize new opportunities as they arise.Lean Enterprise • “An enterprise with a focus on waste elimination and the customer’s needs in all parts of its operations.” .APICS Lean SIG 12 . manufacturing and administration.

Early Lean Processes Mass Production • • • • • • Early 1900’s Ford Motor Company was a pioneer Assembly line production High volume production Limited number of products Significant cost reductions 13 .

S. companies have less than 250 employees • Global competition / low cost labor • Demands by customers: • • • • • Higher quality Innovation Mass customization Flexibility Lower Costs • Limited resources Source: U. 2004 14 . Bureau of Census.S.Today • More than 96% of all U.

What is Lean? • It is NOT: • Collection of techniques or a methodology • Reduced staffing or low inventories • It IS: • • • • A philosophy of manufacturing Totally different way of thinking A different value system Seeks to eliminate waste (non-value added activities to the customer) • Emphasis on flow manufacturing 15 .

What is Lean? Lean Production Total Quality Management (TQM) Six Sigma Cellular Manufacturing Business Process Improvement (BPI) Just in Time Theory of Constraints Zero Defects SPC TQC Kanban 16 .

etc. clean workplace ― Pull production being used ― JIT inventory control ― Factory layout in work cell arrangement by products ― Active error elimination ― Improved quality. 17 .Lean Characteristics • Focus is on the improvement of resource utilization: ― Equipment setup time reduced ― Scheduled machine maintenance ― Orderly.

often referred to as waste ― The driving force for waste elimination is improved value in the products and services customers buy 18 .The Importance of Waste Elimination • Lean deals with the elimination or reduction of many types of nonvalue-added activities.

Seven Popular Wastes • • • • Overproduction Waiting Excessive transportation Inappropriate processing (the hidden factory) • Unnecessary inventories • Unnecessary motion • Defects .Taiichi Ohno Toyota Production System 19 .

Overproduction – Target and achievement unclear – Processes not statistically capable 2. Waiting – Operators waiting – Operators slower than production line 3.The Nature of Wastes 1. Excessive Transportation – Widely spaced equipment waiting – Forklifts not available when needed 20 .

Inventory – Large safety stocks – Variable procurement lead times 21 . Inappropriate Processing – Variability in operator’s performance – Processes not statistically capable 5.The Nature of Wastes (continued) 4.

The Nature of Wastes (continued) 6. Motion – Double handling – Non-standard layouts – Equipment widely spaced from each other 7. Defects – Low material yields – Excessive process variability 22 .

– Synchronizing quantities and timing between processes. – Balancing uneven loads with flexible workers and equipment. Waiting – Eliminate through synchronizing work flow. 2. Overproduction – Eliminate by reducing setup times.Correcting Wastes 1. 23 . – Make only what is needed now.

4.Correcting Wastes (continued) 3. Inappropriate Processing – Why should this item be made? – Why is each process necessary? – Are any processes being performed that are not part of the work flow? 24 . if possible. Excessive Transportation – Establish layouts and locations to make transport and handling unnecessary.

– Economy improves productivity. Improving work skills. there is a danger of automating waste. and consistency improves quality. Motion – Study motion for economy and consistency.Correcting Wastes (continued) 5. 25 . Otherwise. – Improve the motions. Inventory – – – – Reduce by shortening setup times. then mechanize or automate. Smoothing fluctuations in demand for the product. 6. Reducing all the other wastes reduces the waste in stocks.

– Design processes to be failsafe (Poka yoke). Defects – Develop the production process to prevent defects. At each process.Correcting Wastes (continued) 7. produce no defects. – Quality processes yields quality products – automatically. – Eliminate the need for inspection. 26 .

Can you think of other actions to eliminate waste in your company? 27 .

Leadership Function • Initiate needed change by identifying a vision • Aligning employees to that vision • Motivating to achieve that vision 28 .

Leadership – Lean Change Infrastructure Champion CEO Plant Management/President Vice President Vision & Lean Strategy Value – No Waste – Flow – Pull – Standard Work – JIT – Project & Training Plans ____________________ ____________________ ____________________ ____________________ ____________________ ____________________ ____________________ ____________________ ___________ Sponsors: Manufacturing Engineering Quality Lean Office Facilitator Team Team Facilitator Team Team Facilitator Team Team 29 .

Transparent Workplace 30 .

Transparent Workplace • • • • • • • • Define Processes Value-Added Activities A Value-Added Step Value versus Non-Value-Added Value-Stream Mapping Typical Process Flow Analysis Visual Order – The Five S’s Visual Control 31 .

activities. or operations • Processes are found in manufacturing & service industries • Example: Manufacturing Office Grind Turn Mill Drill Type Contract Obtain Signature Type Envelope Mail 32 .Transparent Workplace – Processes Definition • A particular method of doing something which involves a number of steps.

Process Map 2 Total Time: 10 Days Value-Added Time: 6 minutes Production Control Weekly Orders Supplier Weekly Orders 1 Customer Weekly Schedule Daily Daily 4 Stamping 3 Weld I 1 Day 1 Day 50 sec 5 Assembly I 2 Days 40 sec Paint I 2 Days 90 sec Shipping I 3 Days 120 sec Staging 1 Day 60 sec Process Time Line 33 .

Transparent Workplace – Value-Stream Mapping Process • Map customer requirements (orders) • Map order information flows • Map physical product/material flows • Map plant/office information flows • Add a process time line • Summarize current state  Ask questions at each step to determine waste or non-value-added areas 34 .

Transparent Workplace – Summarize Current State The % of value-creating time • • The number of units of inventory required to support a production unit • Total travel distance versus valuecreating distance 35 .

What Are Value-Added Activities? Transparent Workplace – • Add value to products & services that customers are willing to pay for – Improvements that change a product’s or service’s form. fit or function • Other activities use resources but add no value • • • • Some non-value-added activities may be necessary Based on current knowledge or technology Long term goal .Eliminate Remaining non-value-added activities should be eliminated now! 36 .

Transparent Workplace – A Value-Added Step • A process that physically changes the work passing through it that makes it more valuable to the customer • A step requested by the customer .they are willing to pay for it 37 .

Charlene B. supplies Preparing drawings Assembling Shipping to customers Processing customer deposits Examining patients Filing insurance claims Dispensing event tickets Fueling airplane Waiting/sorting Moving Kitting/staging Counting Inspecting Checking Recording Obtaining approvals Testing Reviewing Copying Filing Revising/reworking Tracking work . Adair & Bruce A. Breakthrough Process Redesign 38 . Murray.Transparent Workplace – Value versus Non-Value-Added Value-Added Activities Non-Value-Added Activities • • • • • • • • • • • • • • • • • • • • • • • • Entering order Ordering materials.

Value Stream Costing 39 .

Traditional Accounting and Lean Controls System/Issue Traditional Accounting Lean Production Inventory Control • Work Order • Production tracking • Inventory Cycle Count • Kanban • Visual signals • Five S Procurement • Purchase order approval • Three way match in AP • Key Suppliers • Master POs • Supplier Certification Quality of Products • Detailed inspection • Rework or scrap • Standardized work • Single-piece flow Production Cost Control • Standard cost • Variance Reports • Analysis of Variance • Cell/VS CSFs and measures • Analysis of Root Cause 40 .

Costs Outside the Value Stream • Identify tasks not related to the Value Stream – Exp. accurate cost info about the Value Stream 41 .ISO 9000 • These costs are not allocated to the Value Stream • They are treated as sustaining costs of the business – Budgeted – Controlled • No need for full absorption costing • Value Stream costing proves relevant. .

• Transparent Workplace – Value-Stream Mapping (VSM) Observe & record the flows of orders. materials. goods and information for a product family – Product family: A group of product variants passing through similar processing steps that use common equipment • Mapping identifies waste situations for improvements 42 .

What are some value-added & non-value-added activities at your company? 43 .

Five S’s as the method for exposing waste & poor utilization of resources 44 . you must first find it • Visual order makes waste evident and is a good starting point for managing resources • Toyota Production .Transparent Workplace – Visual Order – The Five S’s • To eliminate waste.

Transparent Workplace – Visual Order – The Five S’s Sort Set in order Shine Standardize Sustain 45 .

Transparent Workplace – Lockheed & Boeing’s Six S’s SORT SUSTAIN 6S STRAIGHTEN SHINE SAFETY STANDARDIZE 46 .

easy to get & easy to return • Shine: Conduct cleanup to identify abnormalities • Standardize: Put a system in place to readily identify abnormal conditions • Safety: Identify & eliminate dangerous & hazardous conditions • Sustain: Make a habit of properly maintaining & following standard practices 47 . instructions into necessary & unnecessary • Set in Order: Make it visible & easy to use.Transparent Workplace – The Six S’s • Sort: Classify tools. parts. 3 Es = easy to see.

Transparent Workplace – Visual Control • Awareness of what’s happening – Manpower: Skill levels. shadow boards for location of tools – Methods: Standard Worksheets and Operating Procedures – Measurements: Performance trends • Display schedule • Quality targets • Reductions in setup & lead times 48 . performance. continuous training – Machines: Develop Maintenance schedules and use them – Materials: Demand Signals indicating shortages.

Pull versus Push Production Strategy Lean Principles Value Value Stream Flow Pull Perfection 49 .

Pull • No one upstream should produce any good or service until the customer downstream asks for it • Kanban Lean Principles Value Value Stream Flow Pull Perfection 50 .

Push • • • • • Build product to forecast Excess inventory Poor utilization & distribution of product Filled distribution channels 50% of all books manufactured are shredded Lean Principles Value Value Stream Flow Pull Perfection 51 .

Pull • • • • Design Schedule based on actual demand signals Produce exactly what the customer wants Flow takes place throughout the supply chain. not just inside your production facility Lean Principles Value Value Stream Flow Pull Perfection 52 .

Pull • Benefits • High throughput • Excellent protection against stock-outs • Higher flexibility • Less congestion • Shorter lead times • Higher customer service Lean Principles Value Value Stream Flow Pull Perfection 53 .

space and defects Lean Principles Value Value Stream Flow Pull Perfection 54 .Perfection • Begins with visualizing the “perfect” process • Continuous process to remove waste by eliminating effort. time.

A. The journey is never-ending and definitely not easy (especially at first) but the results are well worth the effort.Final Thoughts – Lean and Green • • • • There is a social responsibility component to saving energy and reducing the amount of CO2 emissions.S. Select an small area with high visibility and a manageable number of variables for the first G. 55 . Green as a marketing tool. Assessment and Lean project.