Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Fundamentals of Lean
Professor Deborah Nightingale
September 9, 2002
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
2
Lean is a New Approach to Managing
Enterprises
null Origin and evolution of lean concepts
null Core lean principles & practices
null How lean differs from craft and mass
production models of industrial organization
null Lean implementation steps
null Value stream mapping
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Lean was Born out of Necessity: How to
Withstand the Mass Production Behemoths
null On August 15, 1945 -- end of war with Japan -- Toyota faced a
daunting challenge: How to succeed against Western mass
production auto giants poised to enter Japanese market?
null Kiichiro Toyoda to Taiichi Ohno (father of lean production): “Catch
up with America in three years.”
null Ohno’s challenge: How to design a production system exploiting
central weaknesses of mass production model
null Japan faced many dilemmas: small & fragmented market,
depleted workforce, scarce natural resources, little capital
null Lean evolved as a coherent response to this challenge over a
number of decades -- a dynamic process of learning and
adaptation later labeled as “lean production” by Western
observers
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Lean Response: Use Less of Everything, Offer
Greater Variety of Higher Quality & More Affordable
Products in Less Time
null Best Japanese auto companies developed a
fundamentally different way of making things
null These companies changed the dynamics of
international competition
null New goals in manufacturing systems --
combined benefits of craft and mass
production
null Improved quality
null High productivity
null Efficiency at low volumes
null Production flexibility
null Rapid, efficient development cycle
null Product mix diversity
null Lean production contrasts with traditional
mass production paradigm
null Systemic principles are transferable
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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What
The removal of muda!
Muda- Is a Japanese word for waste
Waste- any activity that absorbs resources & creates no
value!
Source: by Womack & Jones
is Lean Thinking?
LeanThinking
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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More Japanese Terms
null Kaikaku- radical improvement
null Kaizen- continuous incremental improvement
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Taiichi Ohno (1912-1990)
Toyota Executive
null Types of Muda:
null Mistakes which require recertification
null Production of items no one wants
null Processing steps which really aren’t needed
null Employee or goods movement/transport from one
place or another without any purpose
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Taiichi Ohno (1912-1990)
Toyota Executive
null Types of Muda:
null People in downstream activity waiting because
upstream activity has not delivered on time
null Goods and services that don’t meet the need of
customer
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Antidote to Muda: Lean Thinking
null Provides way to specify value
null Line up value creating actions in best sequence
null Conduct activities without interruption whenever
someone
null Perform them more and more effectively
null Provides a way to make work more satisfying
requests them
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Lean Thinking is the Dynamic Process of Eliminating
Waste with the Goal of Creating Value for all
Enterprise Stakeholders
null Customer-focused:
“pull” enterprise activities
null Knowledge-driven: Draws upon knowledge and
innovation from everyone -- workers, suppliers
null Eliminating waste: Stresses elimination, not just
reduction, of all types of waste
null Creating value: Puts premium on “growing the pie”, not
just reducing costs, to benefit all stakeholders
null Dynamic and continuous: Pursues on-going systemic
as well as incremental improvement -- both innovation
and continual improvement
Customer needs and expectations
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Lean Encompasses a Set of Mutually-Positively-
Reinforcing Concepts, Practices and Tools Creating
a Virtuous Cycle
null Synchronizing flow and pull: “Pull” based just-in-time production
enabled by kanban system
null Striving for perfect quality: Completely defect- free parts must flow
to each subsequent process; variability reduction; quality designed-
in, not based on inspection
null Flexibility and responsiveness: Small lot sizes and quick set-up
times; ability to respond to shifts in demand
null Trust-based relationships: Mutual commitments and obligations,
internally and externally with suppliers
null Continuous improvement (Kaizen): Continuous improvement
through work standardization, productive maintenance, error
proofing, root cause analysis, and worker training & empowerment
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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5 Steps to
Becoming
Lean
Northrop Grumman
ISS
*
4
3
2
1
5
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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1. Define Value
2. Identify the Value
Stream
3. Flow the Product
4. Pull
5. Strive for Perfection
Customer
Follow the Product
Eliminate Waste
Produce Just-in-Time
Continuously Improve
5 Steps to Becoming Lean
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Definition
Information/Material in a Form That the
Customer
Customer Is Willing to Pay for
Value is
Defined
Defined by the Customer
Value is
Created
Created by the Producer
1. Define Value
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Who’s the
customer?
C
user
C
shareholder
C
environmental
C
employee
Who’s the Customer?
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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The Value Stream Consists of
Tasks Required to Bring a Specific Product
Through Three Critical Processes:
Design -
Problem-solving From Concept Through Detailed Design
and Engineering to Production Launch
Order -
Information Management From Order-taking Through
Detailed Scheduling to Delivery
Make -
Physical Transformation from Raw Materials to Finished
Product In the Hands Of the Customer
C
U
S
T
O
M
E
R
2. Identify the Product’s Value Stream
the Actual
Product:
Component
Procurement
Supplier:
XXX
Product:
Vehicle
Customer:
U.S. Government
Value:
– Affordable
– High Quality
– High Performance
Product
– On Time Delivery
Perform Detail
Design
J. Wessels
4/27/2001
Rev. 4
- Specs
- Environmental
Criteria
- Standard Parts
- Standard Designs
- Design Handbook
- Geometric Design &
Tolerancing
- Mfg. Process
Capability
- Etc.
Des. Ref.
Library
Release
BTP
? Build to Package
? Buy to Package
? CDRLs
? Reports
Des.Proc.
Guidance
- Design for
Manufacturing
- Design for
Assembly
- Design to Cost
- Design for Key
Characteristics
- Design for
Supportability
- Design for 6 Sigma
- Design for ..........
Define Structural
Arrangement
? Finalize Conceptual Design
? Conduct Structural
Configuration/Cost/Mfg. Trades
? Perform Airframe Analysis
- Weights
- Finite Element Model
- Environmental Model
- Internal Loads
- Observability Model
? Develop Material Allowables
? Define Arrangement
- Production Breaks
? Develop ICDs
Prepare
Prelim.Design
? Develop Layouts
? Create Assemblies
? Create Sub-Assemblies
? Perform Structural Analysis
- Stress
- Environmental
- Weight
? Production Factory
Requirements Analysis
? Develop Adv. Mfg. Plan
Tooling & Mastering
Concepts
? Design Parts &
Details
? Perform Structural
Analysis
Pre-Contract
Req’m’nts &
Concept’l Des.
Component
Procurement Spec
To All Processes Shown
Manage Program
Systems Engineering
Manage Team
Apply Program Plans
Apply Technical Plans
Apply Processes & Tools
Apply Resources
Allocate Requirements to
Component
Allocate Requirements to
Structure
Prime System Spec
Prime
Contractor/
Team Process
System Req’m’ts
Review
Prelim. Design
Review
Critical Design
Review
@ 80% BTP
Release
zz
months
yy
months
0
months
Iterate
Test
System
? Development
? Verification
? Validation
Program
Req’m’nts
SEMP
Req’m’nts
Structure Specs
ICDs
System Design
Review
Produce
Product
? Fab Tooling
? Build & Inspect
? Deliver
Analyze Rework
Root Cause
Procure
Suppliers
? Build and
? Assemble
Change / Rework
Iterate
xx
months
Example: Structural Design Value Stream Map
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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2.
Piece
Where possible
3. Focus on the Product
and Its Needs Rather
Than the Organization
or the Equipment
1.
Activities That
Are Pure Waste
4. Focus on actual object and never let it out of sight
from beginning to completion
5. Ignore traditional boundaries of jobs, careers, functions,
and organizations to form a Lean enterprise removing
all impediments to the continuous flow of the product
6. Rethink specific work practices and tools to eliminate
backflows, scrap, and all stoppages
3.
Prefer One
Flow
Eliminate
Flow the Product
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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What Is a Value-Added Activity?
A value-added activity is any action that
transforms information/material into a
capability for our ultimate customer at
the right time and the right quality.
Definition
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Definition
Any Activity That Consumes
Resources Yet Adds No Value
Waste
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Batch Production Example
A C D
= Different
Processes
Processing Time = 1Min./ Unit
0 A C D
E
L
A
P
S
E
D
T
I
M
E
M
I
N
Processes - Oriented Layout
With Transfer Lot Size of Five
5
A C D
10
A C D
15
A C D
20
A BB D
Throughput Time (5 Units) =
5x1 + 5x1 + 5x1 + 5x1 =
20 Min.
Work in Process
5 + 5 + 5 + 5 =
20 Units
B
B
B
B
B
C
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Batch Production Example
A D
= Different
Processes
Processing Time = 1Min./ Unit
0 A C D
E
L
A
P
S
E
D
T
I
M
E
M
I
N
Processes - Oriented Layout
With Transfer Lot Size of Five
5
A C D
10
A C D
15
A C D
20
A BB D
Throughput Time (5 Units) =
5x1 + 5x1 + 5x1 + 5x1 =
20 Min.
Work in Process
5 + 5 + 5 + 5 =
20 Units
C B
B
B
B
B
C
A C 1
A C 2
A C 3
A C 4
A C 5
A C 0
Product-Oriented Layout
With Lot Size Of One
E
L
A
P
S
E
D
T
I
M
E
M
I
N
6 A C
7 A C
8 A C
One - Piece Flow Example
A C D
= Different
Processes
Processing Time = 1Min./ Unit
Throughput Time (5 Units) =
1x4 + 1x1 + 1x1 + 1x1 +
1x1 =
8 Min.
Work in Process
1 + 1 + 1 + 1 =
4 Units
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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B D
B D
B D
B D
B D
B D
B D
B D
B D
B
A C 1
A C 2
A C 3
A C 4
A C 5
A C 0
Product-Oriented Layout
With Lot Size Of One
E
L
A
P
S
E
D
T
I
M
E
M
I
N
6 A C
7 A C
8 A C
One - Piece Flow Example
A C D
= Different
Processes
Processing Time = 1Min./ Unit
Throughput Time (5 Units) =
1x4 + 1x1 + 1x1 + 1x1 +
1x1 =
8 Min.
Work in Process
1 + 1 + 1 + 1 =
4 Units
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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B D
B D
B D
B D
B D
B D
B D
B D
B D
B
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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4.
null Definition
null Letting the Customer Pull
Value from the Enterprise
null Don’t Make Anything Until It
Is Needed
null Then Make It As Quickly As
Possible
Pull
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Pull
null Concept of letting the customer pull product
from as needed instead of pushing it on them
null Reduces inventories and produces one time
cash windfall & return on investment
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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5.
null Definition
null Continuous Process
Improvement
null Pursue Perfection, Not
the Competition
null There Is No End to the
Process of Reducing
Efforts, Space, Costs
and Mistakes
Strive for Perfection
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Perfection
null Continuous radical and incremental improvement
null Continuous banishment of muda
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Seven Categories of Waste
null Over Production …………...… Making Ahead of Demand
null Waiting ………………………... Delay From Previous Processing Steps
null Transportation ……………….. Unnecessary Transport of Materials
null Over Processing …………….. Doing More Than Is Necessary
null Inventories ……………………. More WIP Than the Absolute Minimum
null Movement …………………….. Unnecessary Movement of People
During the Course of Their Work
null Making Defective Products … Products Do Not Meet Customer
Requirements
Some General Product Definition Wastes
? Task to Be
Accomplished
(New, In-work,
etc.)
? Undocumented
Information
? Prioritization
? Too Much
Information
? Inaccurate / Incomplete
Information
? Inadequate Analysis
? Requirements Creep
? Change / Multiple Tools
? Inadequate Testing
? Generating More Info
Than Required
? Excessive Iterations,
Don’t Stop at Good
Enough
? Fine Tuning Beyond
Required
? Over Designing
? Unnecessary Interim
Drawings for Build
? Over Analysis
? Excessive Test Points
? Duplicate Tasking
? Tasks Finished
Before Required,
e.g. Making
Drawings Before
They Are Needed
? Access to Data Storage
? People Are Not Co-located
? Walk to Tools (Printer, Copier,
CADAM, Etc.)
? Hand Carry Product for Signatures
? Travel to Meetings
? Transferring Data From One
Database to Another
? Physical Movement of Product
? Unnecessary Movement of Data
(Physical or Electron Flows)
? Required to Stop a
Given Task Due to
Unavailable,
Inaccurate, And/or
Late Information
? Jobs in Queue
Waiting for
Resources
? Setup Time
(Computer Logon,
Printers, Xerox, etc.)
Seven
Types of
Waste
Making Ahead of Demand
Delay From Previous
Processing Steps
Unnecessary Transport
of Materials
Doing More Than Is
Necessary
More WIP Than the
Absolute Minimum
Unnecessary
Movement of People
During the Course of
Their Work
Products Do Not
Meet Customer
Requirements
Making Defective Products
(Rework)
Inventories
Waiting
Movement
Transportation
Over Processing
Over Production
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Exercise – Specific Examples You Encounter
Seven
Types of
Waste
Making Ahead of Demand
Delay From Previous
Processing Steps
Unnecessary Transport
of Materials
Doing More Than Is
Necessary
More WIP Than the
Absolute Minimum
Unnecessary
Movement of People
During the Course of
Their Work
Products Do Not
Meet Customer
Requirements
Making Defective Products
(Rework)
Inventories
Waiting
Movement
Transportation
Over Processing
Over Production
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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Deborah Nightingale ? 2002 Massachusetts Institute of Technology
32
Apply Five Simple Principles:
null Specify value from the standpoint of end
customer
null Identify the value stream for each product
family
null Make the product flow
null So the customer can pull
null As you manage toward perfection
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
33
Lean Thinking Differs Sharply from Craft and
Mass Production in Important Ways
FOCUS CRAFT MASS
PRODUCTION
LEAN
THINKING
Focus Task Product Customer
Operations Single items Batch and queue Synchronized
flow and pull
Overall aim Mastery of
craft
Reduce cost and
increase
efficiency
Reduce waste
and add value
Quality Integration
(part of craft)
Inspection (a
second stage,
after production)
Prevention (built
in by design &
methods)
Business
strategy
Customization Economies of
scale and
automation
Flexibility and
adaptability
Improvement Master-driven
continuous
improvement
Expert-driven
periodic
improvement
Workforce-driven
continuous
improvement
Source: Lean Aerospace Initiative
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
34
Value Stream Mapping
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
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SUPPLIERS
The CUSTOMER’S
CUSTOMERS
CUSTOMER
VALUE
STREAM
FLOW
VALUE
PULL
PERFECTION
The EXTENDED ENTERPRISE
NORTHROP GRUMMAN
Lean/Value Stream Philosophy
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
36
What is a Value Stream Map?
null A Visual Representation of Every Process in
the a Product’s Path from Order to Delivery
null Includes:
null Information and Materiel Flow Integration
null Product Through-Put and Cycle Times
null Resources Utilized
null Value Added Times
null Location of Significant Waste
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
37
Why Value Stream Map?
null Systems Approach To:
null Visualize the Entire Product Flow
null Identifies the Sources of Waste
null Basis of an Lean Implementation Plan
null Determine Future Operating State
Deborah Nightingale ? 2002 Massachusetts Institute of Technology
38
Product
Current-State
Drawing
Future-State
Drawing
Work Plan
Business Case
Justification
Understanding how the product
currently flows
Designing a lean flow
How to get there
Using the Value Stream Mapping Tool