Chapter 2

The Lean Production System

•What is Kaizen?
•Kai - means "change" or "the action to correct".

•Zen - means "good".

•Kaizen = A change for the better

• Constant, positive changes
performed in small increments
• You don’t have to shake the
world
• The perfection of many small
processes that may seem barely
perceptible, but adds great value
to the end result
• Never being satisfied with where
you’re at
• No pointing fingers
• Stop looking for excuses for why
“it won’t work”
• Seek the wisdom of Ten rather
than one
• Don't worry about being perfect
• Don’t wait for the next great
idea to get going - go NOW!
• If something’s wrong Fix it -
NOW !
• Never stop doing KAIZEN
• Change people’s way of thinking
to Systems Thinking
• Where do we have systems
in everyday life?
• Examples of systems…
• The players don’t like the coach's
system.
• Under the new system, students will
have to pass an exam to graduate.
• She devised a new filing system.
• We need a better system for
handling customer service.
• People have systems for doing
everyday tasks
• What is a system?
• System Defined by Webster;
• The regular interacting of a
group of items to form a
unified whole
• System defined by the book;
• An integrated series of parts
with a clearly defined goal.
• To reduce wastes we much
understand and change the
way we think of our Systems
• Page 15
• What does is mean to
think in terms of the
System?
• The ability to think in terms
of the system door to door
• If your run process B, but
don’t care about A or Z
are you a systems thinker?
• Localized improvement
only helps locally
• System Thinking is the
hard part, everything else
can be taught
• Sometimes departmental supervisors or
managers are systems thinkers – “if they
can’t keep up that’s their problem”

• Have to change their mental model of self promoting

• Why is it hard to
change someone’s
thinking process?
• Everyone has their own
Mental Model
• Is a machine operator
going to have the same
mental model of
preventative
maintenance as a
maintenance mechanic?
• Our mental models are our
expectations about the
world, based on our own:
• Temperament
• Upbringing
• Experiences
• Can we change these things
about a person?
• How can we change the way
our people view our system?
• The first step in changing the
teams Mental Model is
involvement
• Are your employees a part of
a Vicious Cycle or a Virtuous
Cycle?
• How can you tell?
• The companies operating in
Virtuous Cycle have
involvement and allow their
team members to succeed
• Do continuous improvement
projects ever fail due to the
lack of involvement?
• The first step in buy-in or
changing the thinking is
inclusion of employees
• Do people feel more positive
about things being done to
them or with them?
• The people on the floor are our
front line defenders of Wastes
 Waste vs. Value
Customer Product/service
Orders provided

• Defects
• Overproduction
• Waiting
• Not utilizing peoples KSA’s
• Transportation
• Inventory
• Motion
• Excess Processing
• Lean is doing more
with less

1. Less Time
2. Less Space
3. Less Human Effort
4. Less Machinery
5. Less Materials
6. Less Money
 Goals of Lean Six Sigma
• Reduce Waste
• TPS
• 8 Wastes
• Drive Out Variation
• Motorola
• 3.4 Defects per
million opportunities
• 99.9% Defect Free
 Six Sigma = 99.9% success
Isn’t that good enough?
• 4,000+ families would leave
with the hospital with the
wrong baby each year.
• 75,000 patients would get
surgery performed on the
wrong part of their body in
2012.
• 126,000 manufactured cars
would be missing seat belt bolts
every year.
• There would be no plumbing in
your home for 1 month per
year.
 Another way to look at

6
If you putt at a level of:

2 - You will miss 6 putts per round

3 - You will miss 1 putt per round

4 - You will miss 1 putt every 9 rounds

5 - You will miss 1 putt every 2.3 years

6 - You will miss 1 putt every 163 years

Who Defines Value & Quality?
 Sell People the Good Stuff

 Along the way, Joe meets Kickin’ Wing, a Native

American owner of a fireworks stand that only sells
sparklers and snakes, because that is what he wants.
Kickin’ Wing’s stand suffers from poor sales.

Joe does his best to convince Kickin’ Wing that if he

sold some hoosker doos, hosker don’ts or whistlin’
kitty chasers, he might do more sales. That would
help him fund his dream of being a Veterinarian.
Later in the movie we learn that Kickin’ Wing has,
indeed, funded his dream, thanks to learning to sell
the good stuff.
 Sell People the Good Stuff
 Our life lesson from this is that when we are trying
to sell something, whether it be actual goods and
services, or merely our ideas, we must do so by
selling what the people want.
 We have to remember that to sell, there must be a
buyer, and that buyer cares not a lick what we
want, only what they want.
 If you want to be successful in life,
remember to sell the good stuff.
 Goal of Lean Six Sigma:
Maximize Value, Eliminate Wastes & Variation

What is Value?
• Any activity or activities that the
customer is willing to pay for.
• Activities that change the
products’ form, function or market
value.

What is Waste?
• Everything else.
• Wastes consume resources without
adding any value.
• Wastes cost money.
1. Move the part!! Make your numbers!!
2. Make as much as you can, go as fast as you can.
3. Make bigger batches, the machine is more efficient.
4. Do what I say, I am the boss.
5. We have some standards, they are in the system, not sure
if they are followed, but we have them.
6. Engineers and managers create standards, we just do
what we are told.
7. Don’t get caught holding the bag.
8. Only grunts go to the shop floor.
9. GO-GO-GO
1. Stop production, fix the root problem.
2. We make only what the customer ordered.
3. Make things one at a time (or in Kanbans) and move them
through the system quickly.
4. Instead of Thou Shalt, what do you think?
5. We have simple, visual standards for all important things.
6. The people closest to the work help to create the
standards with engineers and managers.
7. Make problems visible.
8. Go out and see for yourself.
9. Plan-Do-Check-Adjust
• Provide the highest
quality, at the lowest
cost, in the shortest
time by continually
eliminating wastes in:
• Productivity
• Delivery
• Quality
• Cost
• Safety
• Morale
1. Actual Work
• Motion that adds Value
2. Auxiliary Work
• Motion that supports Actual
Work
• Loading the Machine
• Getting a part out of a supplier
box
3. Muda
• Motion that creates no Value
• Quick Test
• If you stopped doing that,
would it adversely effect the
product??
3 Categories of Waste
 3 Categories of Waste
Mura
Unevenness &
fluctuation of work
Muri
Hard To’s
Muda
• Process wastes that the
customer is not willing to
pay for
 Mura
Translation: Unevenness

Inconsistency in physical matter

or human spiritual condition

Fluctuations in the work load

What are examples?

 Example:
Run the difficult parts or processes the
first part on the first shift
“We run the easy stuff during night shift
so we don’t have to get called in.”
Go home early today but have to work
overtime tomorrow.
 Muri
Translation: Overburden
Unreasonableness or
absurdity
Hard to’s…
Caused by variations in
production, poor job
design, ergonomics,
inadequate tools or jigs,
unclear specifications,
etc.
What are some hard
to’s?
MUDA - The 8
Deadly
Wastes
 Muda
In most operations
95% of our day to
day is Muda
Most of our overhead
costs are wastes
Taiichi Ohno – “True
cost is the size of a
plum seed”
There are 8 wastes
every business
experiences
 Defects
• Defects are
caused
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weak process
control, poor
quality,
inefficient
inspections,
product design
and not having
quality at the
source.
• Repairing or
remaking
defective
products
• Defects
compromise
time, material
and man time.
Overproduction
• Producing more product,
sooner and faster than the
customer requires.
• What causes
Overproduction?
• Just in case logics
• Island mentality
• Overproduction = Extra
• extra workers, extra machines, large
warehouses, extra electricity, extra
overhead, extra offices, etc.
• Overproduction leads to all
other wastes!!
 Waiting

• Wastes caused by
unbalanced
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workloads,
unplanned
maintenance, long
set up times,
upstream quality
problems, unleveled
scheduling.
• Occurs when the
customer has to
wait; for anything
• For materials to be
delivered
• Line stoppages
• Changeovers to be
complete
• Signatures
• Approvals
• Information
• The waste of not
utilizing people’s;
• Mental, Creative, &
Physical abilities
• What’s the cause?
• Old guard thinking
• Low or no investment in
training
• No employee involvement
 Not Utilizing People’s KSA’s

• Examples?
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 Transportation

• Waste
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caused by excess
3,400,000

movement of parts
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around the plant or

office, caused by poor
understanding of process
flow.
• What are the
causes?
• Poor or no
understanding of
process flow.
• Insufficient layout
• What are some
transportation
wastes examples?
 Inventory

• Inventory
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wastes are
3,400,000
caused by
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Request $ 2,500,000

complexity, buffers for

inefficiencies,
unbalanced workloads,
unreliable shipping by
suppliers and
miscommunication.
• Related to the keeping or
storage of raw materials,
parts, and WIP.
• Don’t hide in the WIP!!!
• What causes Inventory
wastes?
• Push Systems
• Buffers for inefficiencies
• Unbalanced workloads
• Unreliable shipping
• Is inventory an asset?
 Excess Motion

• Any excess of people,

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product or machines that

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does not add value to

the product, caused by
poor people
effectiveness,
unfavorable layout and
inconsistent work
methods.
• What causes Motion
wastes?
• Poor people effectiveness
• Lack of 5S
• Unfavorable layouts
• Inconsistent work methods
• Failed communications
• What some examples of
Motion wastes?
 Excess Process Wastes

• Effort that adds 3,400,000

Donation
no value
to Net
the Stateproduct
Land Request $ from
2,500,000 the

customers perspective,
caused by lack of
communication, over
processing and no
defined standards.
•What are
some
examples?
 Lean Accounting 101
 What are some easy ways
to cut cost?
 Lay off as many people as
possible.
 Drastically reduce
maintenance and its budget
 These items show an
immediate reduction to the
bottom line.
 What are some problems
with these decisions?
 They are not sustainable
 Lean Accounting 101
How do companies set their
prices?
The Conventional Cost
Model
Cost + Profit Margin = Price
What do we have to do in
order to increase our
profits? Problem???
Customers have more
choices
 Lean Accounting 101
Price – Cost = Profit

How do you increase

profits?
The only way to
increase Profit is to
decrease our costs.
 Lean Accounting 101
 The elimination of
wastes is best & most
sustainable way to
reduce costs
 When do we typically
begin to try to eliminate
wastes and cut costs?
 When times are bad
 “When times were good
we never really worried
about money or costs.”
 Problem: How to best move a 6000 lb. load with a
forklift that has a capacity of 2000 lbs.?

Muda: 6 trips @ 1000 lbs.

Mura: 2 trips @ 2000 lbs.
2 trips @ 1000 lbs.
Muri: 2 trips @ 3000 lbs.
Best: 3 trips @ 2000 lbs.
Summary

 There are wastes in every activity we do.

 Value are those activities the customer is willing
to pay for.
 Remove wastes the customer is not willing to pay
for that cost the company money.
 Go to your job and identify wastes.