Lean Manufacturing

Discussion

The principles of lean manufacturing offer a way of reducing energy and resource consumption and increasing worker productivity in manufacturing and other industries.

The idea is to reorganise the way materials and goods are processed, in the factory and beyond, to:

Readings

Lean Manufacturing - Definition

Lean Manufacturing - Building the lean machine. Todd Phillips. Advanced Manufacturing

What is lean manufacturing?

Lean production is aimed at the elimination of waste in every area of production including customer relations, product design, supplier networks and factory management. Its goal is to incorporate less human effort, less inventory, less time to develop products, and less space to become highly responsive to customer demand while producing top quality products in the most efficient and economical manner possible.

Seven Types of Waste

The Toyota Production System defines seven types of waste ("muda"):

1. End of Production Storage Due to Over-Production

[Unnecessary end-of-production storage, of goods or material between production and distribution, often results from over-production - producing more than demanded or before it is needed - due to producing to speculative demand.]

[Minimise end-of-production storage by producing to current demand rather than supposed future demand. Use Just-In-Time systems to match production to demand.]

2. Inventory

Inventory or Work In Process (WIP): is material between operations due to large lot production or processes with long cycle times.

[Minimise within-production storage (material stored between operations) by using smaller lots and shorter cycle times.]

3. Transport

Transport: does not add any value to the product. Instead of improving the transportation, it should be minimized or eliminated.

[Minimise movement of goods around the factory with cellular manufacturing where each location performs many processes on one type of product, rather than one process on many different products.]

4. Motion

Motion of the workers and machines (e.g. due to the inappropriate location of tools and parts) is waste. Instead of automating wasted motion, the operation itself should be improved;

[Minimise movement by workers and machines with better location of tools and parts. Eliminate unnecessary motion, don’t automate it.]

5. Processing

Processing should be minimized by asking why a specific processing step is needed and why a specific product is produced. All unnecessary processing steps should be eliminated.

6. Waiting

Waiting by workers for a machine to process should be eliminated. The principle is to maximize the utilization/efficiency of the worker instead of maximizing the utilization of the machines;

[Minimise waiting by workers for a machine to process, by making machines wait for workers, not workers for machines.]

7. Defects

Making defective products is pure waste. Prevent the occurrence of defects instead of finding and repairing defects.

[Minimise defects by preventing them instead of finding and repairing them.]

Lean Plant Layout

Build a Lean Plant Layout to Increase Your Efficiency. David Berger, Advanced Manufacturing

Philosophy

[“Value” is what the customer values.] Everything non-value added must be eliminated.

A typical facility layout and corresponding production flow are laden with opportunities that will eventually seem obvious.

" Value" must be translated into common objectives for all employees, and everyone must be given adequate training on how to exploit those opportunities.

Objectives and Measures

In general, the key objectives of a lean facilities layout and flow are to deliver a high-quality, low-cost product quickly, while maintaining a safe and pleasant working environment. The most significant layout and flow improvements are typically describes as follows:

Key Concepts

Traditional factories push batches of product from one machine or work centre to another, with usually a different routing for each product, and ending in finished goods storage. But you can greatly improve your operations by following these key concepts:

Just in Time (JIT)

Under JIT, product is "pulled" through the plant at a rate equal to the rate that sales are generated. A customer order creates demand for finished product, which in turn creates demand for final assembly, sub-assemblies, and so on up the supply chain to raw materials. This pull system significantly reduces the need for building inventory.

Cellular Manufacturing

In many cases, efficiencies can be gained by grouping machines into separate "cells", dedicated to manufacturing similar items or part families, that require a similar production process.

One-Piece Flow

Instead of the traditional batch movement of product between work centres, one-piece flow uses a lot size of one. This increases the speed and predictability of the production process, and dramatically reduces WIP accumulation if the process is properly balanced.

Key Principles

In light of the lean philosophy, objectives, and concepts described above, your facilities layout and flow can be thoroughly analyzed to identify productivity improvements.

The following key principles should be employed:

1. Minimize material handling

Preference should be given to low or no-cost solutions such as gravity-feed slides. Handle product once only.

2. Minimize distances

Avoid walking, carrying, etc. by creating cells, combining operations within a work centre, better planning, and so on.

3. Minimize strain

Work centres should be ergonomically designed to avoid back and other muscle strains.

4. Minimize clutter

Everything should have a home, from parts and tools at a workstation, to equipment and product within designated floor spaces.

5. Minimize storage

If you have the space, it will surely get filled. Thus, continuously minimize your storage space for raw material, WIP, finished goods and spare parts throughout the supply chain.

6. Maximize utilization

Make optimal use of people, space, and equipment to improve the return on investment.

7. Maximize flexibility

The key to lean is creating a layout that can adapt quickly to changes in product, equipment, personnel, or material.

8. Maximize smooth flow

Continuously determine and eliminate the bottlenecks, then re-balance the line.

9. Maximize visibility

To quickly spot problems, maintain a clear line of vision to anywhere, from anywhere.

10. Maximize communication

Lean requires constant training on tools available to meet goals and objectives, and feedback on how well things are going.

A Caution

Do not assume that lean concepts and principles can be applied equally to any area within your facility. Examples where caution is required include applying one-piece flow in environments where transfer time is greater than touch time, or using cells when products, work centres, and routing vary tremendously from one product to the next.

Cellular Manufacturing

Cellular Manufacturing - The Heart of Lean. Strategos

Cellular Manufacturing and workcells are at the heart of Lean Manufacturing.

[Whereas conventional manufacturing has a range of products passing through a series of locations each specialising in a function (eg auto insert, wave solder, function test, mechanical assembly, integrate and test, package, etc.), in cellular manufacturing, locations specialise in products, with a series of productions at the location. This minimises queuing and movement of goods, and facilitates communication between the different stages of the product manufacturing cycle.]

What Is A Workcell?

A workcell is a work unit larger than an individual machine or workstation but smaller than the usual department. Typically, it has 3-12 people and 5-15 workstations in a compact arrangement.

An ideal cell manufactures a narrow range of highly similar products. Such an ideal cell is self-contained with all necessary equipment and resources.

Cellular Layout versus Functional Layout

In the functional configuration, departmental organization is by function (or process). Since each [manufactured item] requires all (or most) processes, it travels to every department. In each department it sits in queue waiting for processing. Ten process steps require ten queues and ten waits. Travel distances are long, communications difficult and coordination is messy.

[With a cellular layout, in contrast, the item travels to one department, the workcell, where it undergoes all the processes, albeit in different parts of the cell.]

Cellular layouts organize departments around a product or a narrow range of similar products. Materials sit in an initial queue when they enter the department.

Once processing begins, they move directly from process to process (or sit in mini-queues). The result is very fast throughput.

Communication is easy since every operator is close to the others. This improves quality and coordination. Proximity and a common mission enhance teamwork.

Benefits of Cells

Cells increase productivity and quality.

Simplicity of material flow [leads to simplicity in] scheduling, supervision, management and even accounting systems.

Requirement - Good interactions within the cell

Cellular Manufacturing seems simple. But beneath this deceptive simplicity are sophisticated Socio-Technical Systems. Proper functioning depends on subtle interactions of people and equipment. Each element must fit with the others in a smoothly functioning, self-regulating and self-improving operation.

Lean Manufacturing - Benefits

Benefits From Lean and Cellular Manufacturing. Strategos

Lean manufacturing benefits include those from material handling. The illustrations of a functional and cellular layout vividly demonstrate many of these material handling benefits. Fewer moves, shorter travel distances, and simpler route structures add up to impressive savings. These characteristics also contribute to savings in inventory, coordination and quality.

The product-focused cellular layout has fewer interdepartmental moves compared to a functional equivalent. This reduces handling frequency and cost by as much as 90%. The cellular layout also reduces the queuing, delays, tracking effort, and confusion that accompany material movement.

Travel distances are shorter in the cellular layout. In addition to reducing the cost of long moves, this improves communication and often enables visual control systems.

Complex routings are characteristic of functional layouts. Many products and components visit multiple work centers in multiple sequences. This, in turn, necessitates complex process plans and extensive documentation. Cellular routings are simple.

Functional layouts have variable route structures since many products move in so many different directions. This necessitates costly handling devices such as fork trucks or Automated Guided Vehicles that can accommodate such variable route structures. The cellular layout, by contrast, has simpler and more stable route structures that may allow simple and cheap handling devices such as conveyors and chutes.

Lean Practices

A Look At Lean. Jill Jusko. Industry Week. 1999

Efforts to reduce inventory and eliminate waste propel good performances.

[Lean manufacturing practices] reduce inventory levels and remove waste from the production process. Lean-manufacturing techniques are an obvious component of many organizations' continuous-improvement programs. IW Census data shows manufacturers that have implemented such practices in their organizations are realizing improved performances relative to speed, productivity, and quality.

Lean Practices

Lean Production - Windshields

Natural Capitalism - Muda, Service, and Flow. Paul Hawken, Amory Lovins, L. Hunter Lovins, Rocky Mountains Institute

Windshield Muda - A Hypothetical Example

Consider the typical production of glass windshields for cars. Economies-of-scale thinking says that the giant float-glass furnace should be as large as possible: a theoretically ideal situation would be if all the flat glass in the world could be made in a single plant. Big, flat sheets of glass emerge from the furnace and are cut into pieces somewhat larger than a windshield. The glass is cooled, packed, crated, and shipped 500 miles to the fabricator. There, 47 days later, it's unpacked and cut to shape, losing 25 percent in the process. It is then reheated and drooped or pressed into the right curving shape. (Because each car model has different specifications, huge batches of windshields are shaped at once while a given set of dies is installed.) Then the glass is cooled, repackaged, and shipped 430 miles to the glass encapsulator. There, 41 days later, it's unpacked, fitted with the right edge seals and other refinements, repacked, and shipped another 560 miles to the car factory. There, 12 days later, it's unpacked and installed in the car. Over 100 days have elapsed and the glass has traveled nearly 1,500 miles, almost none of which contributes to customer value.

Each part of this sequence may look efficient to its proprietor, but in fact the cooling, reheating, unpacking, repacking, shipping, and associated breakage is all muda. An efficient system for manufacturing windshields would build a small plant at the same place as the car factory, and carry out all the steps in the production process in immediate succession under one roof, even though several machines and companies might be involved. The machinery would be sized to deliver windshields only as fast as the automotive assembly line "pulls" them in.

Lean Manufacturing - Pros and Cons

Pros & Cons of Lean Manufacturing. Edward J. Phillips. Society of Manufacturing Engineers. 2003.1

Lean manufacturing is not a bed of roses. Small- to medium size fab shops should look for the thorns before jumping in.

For most of us, cellular manufacturing is not new. This is particularly true for those of us who produce and assemble small- to medium-size electromechanical products on a repetitive basis. Cross training assemblers and cellular assembly of relatively small products has been employed for many years in traditional manufacturing plants.

What is relatively new is the coupling of this technique to lean manufacturing concepts, such as lead-time reduction and batch-size reduction, and fine tuning inventories, in a traditional, process/equipment centralized, fabrication environment.

Most newer cellular implementation efforts have focused principally on reducing inventories and customer order lead times.

[Many] plants have only partially converted to lean manufacturing via a cellular approach...have chosen only selected plant areas to implement cells [eg areas where cells were obvious and easy to implement]. [In these plants] many processes remain centralized with all the typical associated problems, such as high work-in-process inventories, bottlenecks, and long lead times through the shop.

The Negatives: Lessons Learned

I have visited more than a few plants where the transition to lean manufacturing and cross-trained cell teams has been curtailed or stopped altogether.

1. Need for support by shop-floor operators

Zero advancement can be made without the true support of the shop floor operators involved, [especially] those individuals directly tasked with producing the parts and products within a cell. Without mutual operator assistance and support of the workers involved, you will have a hopeless task in convincing people to change the way they are doing things.

In many older plants, people have been trained for years to run large batch sizes so as to amortize setup costs over the largest number of parts and products. It is extremely difficult to convince people of all the latent problems associated with running large batches. Some people may never be convinced. This is a major "culture" change problem that adversely affects many companies.

2. Inappropriate production systems

Some larger companies that are running repetitive production are literally "stuck with" the latest whiz-bang ERP, CRM, or other material-control/product-costing system that higher-ups have purchased for millions of dollars. Often these systems are purchased without even talking to shop floor people.

Most newer systems claim to support flow, cells, and/or lean operations but many, in fact, do not. Certainly few, if any, support a mixed traditional and cellular environment very well. I have seen several instances in repetitive production environments where a simple Kanban materials-control system would suffice, while reducing inventories and improving operations dramatically.

Shop-floor operations, in general, and cellular production, in particular, have to continually try to work around these newer material-control and product-costing systems. Many newer systems simply will not work on the shop floor as anticipated and will tend to force either a large-batch manufacturing approach, or an approach that forces the wrong subcontracting decisions to be made.

Implementing cells in these types of system-controlled environments can be an exercise in frustration and futility. Allocation of indirect overhead and factory burden in a plant with both traditional process-centralized activities, cells (where processes are mixed within the cell), and outsourced operations is a continuing problem.

Cost accounting systems in use today are a major negative or impediment when trying to determine the effect of outsourcing on product cost in a mixed traditional and cellular manufacturing environment.

3. Fear of underused equipment due to archaic business models

[Many, especially large, companies, who wanted the benefits of lean manufacturing,] shied away from the cellular approach, since some redundancy in equipment would be required.

One company had a long-standing policy that if a piece of equipment could not be utilized 36% of the time, the factory did not deserve to have it and the operation should be outsourced to others. This myopic return-on-investment (ROI) policy placed them at a severe strategic disadvantage to their competitors whose investments were more attuned to reducing lead times and inventories and gaining market share.

Many companies are still driven by archaic business models based purely on cost savings. These models will only allow equipment investments if an extremely high ROI is achieved. Ironically, if most of these companies added up all their theoretical ROI savings, based on capital appropriation requests submitted and approved over the last 10 or 20 years, they would conclude that production costs should now be zero!

In a competitive lean manufacturing world, companies need to focus more strategically on achieving growth and increases in profits rather than just pure cost savings. There is no way a company can grow on cost savings alone. I am not advocating that we totally ignore ROI, as that would be foolhardy in the long run. However, I am saying that we need to take into account other factors that may be just as important or even more important than achieving a high ROI based on cost savings alone.

That is a key benefit that smaller companies, with adequate financial resources, have over larger companies. Smaller companies can make quicker investment decisions and will invest in new equipment when they believe in their hearts they can capture more market share and increase profitability. Larger companies often take months or even more than a year to go through a capital appropriations process, with multiple potential stopping points along the way, before they can approve capital investments.

4. Loss of interest due to poor initial implementation

Many lean programs fail due to loss of interest by top management and, eventually, the workers themselves.

This typically occurs after the first one or two cell implementations, when management notices there were no beneficial improvements to the plant's bottom line performance. These failures can typically be traced to a poor selection of products or parts for cell implementation.

Usually, when analyzing these failures, one finds that value stream or network mapping was not performed, there was no analysis of the "real" factory constraints or bottlenecks affecting output, and no overall long-term plan developed for a coherent, phased implementation. In other words, the company jumped on the bandwagon of lean without first analyzing what the real problems and constraints were in the factory. Simply put, they selected the wrong products at the wrong time.

Summary

Cultural change, establishing an environment for true teamwork, the building (or rebuilding) of trust between employees and management, and ongoing training will be the key factors in lean manufacturing success.

Of all the issues involved, the people and cultural change issues are, and will continue to be, the major negatives involved with implementing a lean, cellular manufacturing approach. The older the company and the more senior the employees, the more difficult the challenge is. However, that does not mean we should not accept the challenge.

2007.7.16