Lean Manufacturing - Toyota Production System

LEAN MANUFACTURING 2
Lean Manufacturing Principles and Techniques
Presented by:-
Eng. Mohammed Hamed Ahmed Soliman
Copyright 2014 © Mohammed Hamed Ahmed Soliman

Content:
1. Lean Manufacturing Principles
2. Productivity Measurement, Analysis and Improvement
3. Effect & Elimination of the Manufacturing 7-Wastes
4. Lean Improvement Techniques
5. Lean Management for Making Improvement & Gaining Sustainability

TOYOTA BUSINESS 5
Overview on the Toyota Performance & Business Success
Toyota’s annual profit at the end of its fisical year in March 2003 , was 8.13$ Billion-larger than
the combined earnings of Chrysler, GM, and Ford.
Toyota has a profit margin of 8.3 times higher than the industry average.
While the stock prices of the big three was falling in 2003, Toyota’s shares had increased 24%
over 2002. Toyota’s market capitalization was 105$ Billion as of 2003.
The return on asset is 8 times higher than the industry average.

TOYOTA BUSINESS 6
The company has made a profit every year over the last 25 years and has 20$-30$ billion in its
cash war chest on a consistent basis.
Toyota has for decades been the number one automaker in Japan and distance fourth behind
the big 3 automakers in North America. But in AUG 03, for the first time, Toyota sold in North
America more than one of the 3 big automakers (Chrysler).
In 2003, Toyota was on track to sell more vehicles in the US than either of the two brand
names that have led US sales for the past 100 years—Ford and Chevrolet. Camry was top-
selling US passenger car in 2003. Corolla was the top-selling small car in the world.
Toyota became the leader in producing luxury cars when they introduced the Lexus firstly in
1989.
Toyota invented the lean production, known inside Toyota as Toyota Production System TPS.

TOYOTA BUSINESS 7
Toyota has the fastest product development process in the world. New cars and trucks take 12
months or less to design, while companies require typically 2 or 3 years.
Toyota automobiles have been consistently been at the top of quality rankings by JD Powers
and Associates, Consumer Reports, and others for many years.
In the small cars category (Toyota Corolla, Ford Focus/Escort, Crysler Neo, GM Cavalier), Toyota
won each of the last three years for overall reliability, as well as the prior three years, and
predicted reliability for 2003 model year.
For family sedans, the Toyota Camry beat out the Ford Taurus, the GM Malibu, and Dodge
Intrepid, wining in the last three years, the three prior years, and predicited reliability for the
2003 model year.
More than half of all Toyota used cars are singled out as “recommendedfor purchase,”
compared with less than 10% of the fords, 5 percent of the GMs, and none of the Chryslers.

TOYOTA BUSINESS 8
Toyota Lexus has dominated the J.D Powers “initial quality” and long-term durability rankings
for years. Toyota Lexus was again the #1 most reliable car, according to the J.D. Powers 2003
quality survey, Followed by Prosche, BMW, and Honda.
Toyota’s Profit in 2014 Was Around 18-19$ Billion
Announced as per the Fisical Year March 2015, Bigger than
the Combined Profit of Volkswagen and General Motors
In 2015, Toyota keeps top global automaker crown, sells 10.15 million cars. Compared to
9.93m for Volkswagen and 9.8m for Chevrolet.

Lean Principles

The five principles of lean
Lean has some goals, intentionally looking from the perspective of the
customer. The five principles of lean are defined below:
1. Value: Specify what adds value to the customer and what doesn’t.
Customer needs a good quality, good prices and good delivery speed.
Quality should meet the customer expectation, no exception. Non
values added processes are those that customers are not willing to pay
for. They add cost to the product and delay the manufacturing process.
2. Value stream: This involves every step of the process starting from
the supplier and ending with the customer. Every step must bring the
product closer to the completion and add value to it.

3. Make the product flow: All obstacles that are constraining the flow of
the parts through the manufacturing processes must be removed. Lean
strive for one piece flow, which is about providing smooth flow for each
piece of product with no wastes in time, performance, and quality, in
order to deliver the product quickly to the customer.
4. Pull not push: Producing what the customer needs, and avoid over
productivity that creates the most of ever wastes in the production
processes.
5. Strive for perfection: There must be a vision for perfection.
Companies should strive to continuously improve the process rather
than being good at what they are doing.
The seven-wastes are those non-value added steps that obstacle the
flow of the stream, add cost to the product, reduce quality, and delay
the process.

Non-Value Added & Value-Added
Value is something that adds to the process or to the customer. Value
added is good, non-value added is bad. Value actually is what customer
want to pay for.
Value stream. This present every step from the start to the end of the
process. Every step of the process should bring the product closer to the
completion.
Add value
What adds value to the customer which customer is willing to pay for.
Non-add value essential
Activities that support the process. Will need to be minimized.
Ex. The maintenance, quality check points, changeovers..etc.
Unnecessary non-add value
Ex. The seven wastes. This need to be completely eliminated.

7 Wastes:
Commonly known in lean language as Muda “which is a Japanese term”.
It has been given a shortcut as “TIMWOOD”
T=Transportation, I=Inventory, M=Motion, W=Waiting, O=Over processing, O=Over
productivity, D=Defects.
LEAN MANUFACTURING
14

For example, if there is a manufacturing process consist of several processes such as cutting,
casting, assembly, handling, maintenance, inspection, and changeovers. The added value works
which involve making what the customer needs is just a few processes which are cutting, casting,
and assembly.
The others are those non-value added works that need to be removed or minimized. The seven
wastes define those non-value added in terms of transportation, inventory, motion, waiting, over
processing, over productivity, and defect. They have been given the abbreviation Timwood. The
8th waste is the underutilization of human capabilities or untapped human potential.

Cutting process
Lathe Process
Changeover Maintenance
Downtime
Machine Setting
Re Work Absent
Wait for
Tools
TransportationValue Added
Non-Value Added
Weld Drill
Flow Flow Flow
Main goal is to reduce the
Lead Time & increase productivity rate per hour
Assembly

Takt Time
One of the most important calculations in lean is the takt time, which is
the rate of customer demand for group or family of products produced
by one process.
Takt time is calculated by dividing the effective operating time of a
process (for example per shift or per day) by the quantity of items
customers require from a process in that time period.

࢚ࢇ࢑࢚ ࢚࢏࢓ࢋ =
࢟࢕࢛࢘ ࢋࢌࢌࢋࢉ࢚࢏࢜ࢋ ࢕࢖ࢋ࢘ࢇ࢚࢏࢔ࢍ ࢚࢏࢓ࢋ ࢖ࢋ࢘ ࢙ࢎ࢏ࢌ࢚
(quantity customer require per shift)

Example. Takt time calculations
The effective operating time for a process is 25,200 seconds per shift.
The effective operating time = operating time-allowances
Allowances such as planned downtime, lunches, breaks, team meeting, cleanup, and planned
maintenance.
The changeovers, unplanned downtimes are those variables that need to be improved to have
the best effective operating time.
Customer demand rate= 420 pieces in a shift
Takt time= 25200/ 420= 60 seconds
Based on the available time, on average the customer is currently buying one unit every 60
seconds.

The actual intended cycle time of an assembly process, called planned
cycle time, is usually less (faster) than the takt time. In less than one
hour, we expect this machine to produce 60 pieces of product. Any
interference would reduce the productivity rates of this machine, and
delay the product for the customer.
Seconds
10
20
30
40
60
50
Process Output Cycles
An unstable process

The OEE could present those interferences in terms of availability,
performance, and quality.
Many of us track pieces produced per hour or shift and therefore
unable to answer the question “at how many seconds per piece should
this process be cycling?”

OEE Overall Equipment Efficiency
Overall equipment efficiency (OEE) is a total productive maintenance
(TPM) module; machine capacity is a part of all three terms: availability,
performance, and quality. Each term present numerous improvement
opportunities.

How OEE is related to productivity and capacity?
OEE measures the ratio (%) of what product is actually made which is
defect less and sellable, to what could be made according to the design.
One hundred percent of OEE is the design or maximum capacity a
process or a machine is designed to make with zero defects.
The intention is to find why this process is not working as what have
been expected, and why the real output is low. Then, some actions
should be taken to maximize the current process capabilities, fix
problems, and improve productivity.
Why use OEE & what is the intention behind this?
ࡾࢋࢇ࢒ ࡰࢋࢌࢋࢉ࢚࢒ࢋ࢙࢙ ࡻ࢛࢚࢖࢛࢚ / Design Output

OEE Metrics
OEE involves three metrics, described as follow:
1. Availability
this is a time metric that is usually measures as a percentage of the
operating time. Machine availability is a measure of how much time this
machine was available to run product. A machine that is busy or can’t
make product is considered unavailable.
Improving the machine available time by reducing wastes and excess
motions from the process will improve:
Costs
Utilization of both operating time & resources
Time required to make a product
Overtimes

2. Performance:
This is one of the most debate issues. It takes into account the factors
that are affecting the speed of the machines. Most of companies take
the number of pieces produced and compare it to the design, count
quality and availability, then, assume the problem is a machine speed
that has been caused by in proper maintenance.
Actually, the performance can be affected by many other factors:
1. Untrained operators
2. Bad/insufficient operation instructions
3. No instructions

What is the effect of working at lower performance or speed?
Consume more resources
Waste money
Longer production lead time
More operators
Some companies plan their productivity according to the current
situation and the current process capability, making a few hours job
last the whole shift. With no trial to evaluate the process or see if it
can be improved, the process will never run efficient.

3. Quality
This is one of the greatest wastes in the process. Quality is so important
for customers, adding value to your customer is what keeps you in
business. If a process is producing a number of defected pieces, the
required working time to compensate those defects and re produce
sellable items will reduce the capacity of making a new product and will
consume more resources. Cost of producing a defected piece plus the
cost of re working it could be more than double the cost of making it
right at the first time. And if a defected product passed to the customer,
this can lead to complete business loss. It is more important to make
sellable parts rather than focus on just making high number of parts.
Reducing the defects ratio will improve the real output of the machine,
increase the capacity of making product, reduce the inspection effort,
reduce costs, and add value to your business.
Quality
Cost
Defect
Parts
Re Work
Parts

Find: What waste time? What slow the speed? What degrades the
quality?
Production availability & time analysis
As shown in fig.1, availability of the machine can be affected by any of
these factors. Each problem in fig1 presents a different type of
improvement. Availability often presents the waiting waste which is one
of the most common wastes in terms of muda (seven-wastes). It can be
seen in the most of process improvement events.
Unfortunately, many people use the availability as a measure of uptime
subtracting many other wastes, and present the formula by this way:
ࢀ࢕࢚ࢇ࢒ ࢝࢕࢘࢑࢏࢔ࢍ ࢚࢏࢓ࢋ (࢛࢖࢚࢏࢓ࢋ + ࢊ࢕࢝࢔࢚࢏࢓ࢋ) − ࢀ࢕࢚ࢇ࢒ ࢊ࢕࢝࢔࢚࢏࢓ࢋ
ࢀ࢕࢚ࢇ࢒ ࢝࢕࢘࢑࢏࢔ࢍ ࢚࢏࢓ࢋ

The above formula tends to focus on an individual process which is the
machine downtime, often caused by preventive maintenance, routines,
adjusting, calibration, overhaul and the other maintenance activities.
The maintenance folk’s main goal is the uptime-keep the equipment
working which does not means that this equipment is available to run
product. There are still many factors influence the availability of the
process or machine as presented in fig.1. But by considering only
downtime, this means reducing the PM time or the mean time to repair
(MTTR) and losing the opportunity to improve the overall process
effectiveness. The main goal of the OEE is to understand the obstacles
and wastes that are lowering the productivity rate. For this reason, the
availability should be presented by this formula:
ܶ‫݈ܽݐ݋‬ ‫݊݋݅ݐܿݑ݀݋ݎ݌‬ ‫݃݊݅݇ݎ݋ݓ‬ ‫݁݉݅ݐ‬ − ܶ‫݈ܽݐ݋‬ ‫݊݋݅ݐܿݑ݀݋ݎ݌‬ ݀‫݁݉݅ݐ݊ݓ݋‬
ܶ‫݈ܽݐ݋‬ ‫݊݋݅ݐܿݑ݀݋ݎ݌‬ ‫݃݊݅݇ݎ݋ݓ‬ ‫݁݉݅ݐ‬

Productivity time
Non-Value Add
Activities
Wait for loading
Machines setting
time for changeovers
No operators
Break-times
Operation
Losses Value-add
Figure 1. Most common availability and time lost issues during the
operating time
Maintenance downs
Wait to get tools
Wait for quality
inspection
Wait for CNC
program loading
Wait for instructions
Wait for materials
Wait for spare parts
Electric cut-off
Wait for the
manufacture
drawing LEAN MANUFACTURING 31

Performance Analysis
In many times, the primary cause of performance issues is hidden and
overlap with the availability metric.
Performance
Maintenance
issues
Data Management
programs like ERPs don’t
provide solution or root
cause of the problem.
The reason of low
machine output
regardless of the quality
issue and availability can
be the speed of the
machine
Operator Skills
Training Skills

It is hard to catch the performance reasons by a software. It will require
a deep observation at the gemba.

Quality Analysis
It is not difficult to know how many defects exist using a simple sheet to record the number of
the defected parts which can’t be sold. What is not easy to know is the cause of this defect
which requires an intensive effort to understand the source of variation that is causing the
quality problem. It will be necessary to perform an in deep process analysis in order to grasp
the real situation for elimination of the root causes.
Toyota way of analyzing & solving quality problems :
1. Genchi genbutsu (Observe the real situation at the gemba)
2. Mistake-proofing (Poka Yoka)
3. Simple tool like Pareto for data analysis
4. Ask 5 whys to find the root causes.
What Six Sigma and other complex analysis tools can do?

Code Equip description Downtime hrs
(average)
frequency Percentage
A1 Product Changeover 5 4 12.50%
A2 Maintenance downtimes 4 6 10.00%
A3 Bringing tools 4 2 10%
A4 Waiting for material 3 2 7.50%
A5 Quality check 2.5 1 6.25%
A6 Preventive maintenance 2.5 1 6%
A7 Wait for instructions 1 1 3%
A8 Electric current problems 0.5 1 1.25%
A9 Others 0.2 1 0.50%
A10 ---- ---- ----
Data Analysis & Priority Identification
Production downtime weekly report.
Total Operating time= 40 hours

Equipment
Code
Equip
description
Downtime hrs
(average)
frequency Percentage
K1920 Cutting 7 4 17.5%
K1921 Skimming 5 6 12.5%
K1922
Attachment 4
4
7.5%
K1923
Forming 3
3
10%
K1924
Assembly 3.7
2
9.25%
Production Downtime Analysis by Eq

Pareto Analysis A problem solving tool that breaks data down into
manageable groups and identifies the greatest opportunity for return on
investment. The analysis is based on the Pareto Principle, also known as
the 80:20 Rule. Simply stated, the principle says that 20% of a
population will cause 80% of the problems associated with the
population
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
0
1
2
3
4
5
6

How to set priorities for Improvement Start?
Which machine or line to begin with? A famous question that is being
discarded in every improvement debate is which process to start
analyzing first and calculate OEE for? Which production line? Or which
machine?
There is a recommendation to start analyzing the pacemaker process.
In the automotive industry, pacemaker is the assembly process; this
process is connected to various external customers and can affect the
customers directly.

Which problem to start with?
After reviewing the metrics details, the next question become which
problem to work on to understand it better with “go and see” approach
and improve it? Pareto analysis is a good answer. Process can be
analyzed and each factor influenced the efficiency of the process is
given a weight depending on its greatest effect in terms of money.
However, it is not always the best to start with the biggest problem that
poses the great cost.
Pareto may not work if the
situation at the process changed,
this will lead to something called
Pareto paralysis. This is something
that should be avoided, and people
can spend long time searching for
the right first step to take!

Actually, defining where to start may depend on the current culture
driven by the company. For example, if managers and directors are
resisting the improvement, then it is better to start with the one that
can be fixed quickly and easily to present the benefits from the process
improvement, and get the support as needed from the top management
for continuously improving the other processes.

Gemba or genchi genbutsu

Go and See to observe the real situation.
A place where the value creating works
happen.
A place where real problems solving should be
carried.
A place for developing leaders.
A place where the improvement is carried.
A place where hidden problems exist.
What is Gemba?

Grasp the real situation at the Gemba

Benchmarking is a tool
for quality analysis and
improvement

1st Transportation
Transportation is about material handling. It involves all material
movements from the supplier to the customer. What creates most of
wastes in the manufacturing process is the movement of the parts
through the production processes. It adds more cost on the product,
and could affect external customers directly, causing a delay in orders
delivery.

Factors affecting the transportation efficiency
The layout of the plant.
Distance between the different manufacturing process steps
Distance between machines inside each workstation
How close are the workstations and machines to the tools
How far are the inventory warehouses from the production facilities
How far are the other service departments such as the maintenance
workshops from the production lines.

Considerations to minimize transportation:
Mistakenly, many manufacturers tend to arrange machines by similarity
rather than by the sequence of the process steps. For example, if there
are two processes, cutting and skimming, and a process of heat
treatment that is required between both, then, the oven should be
placed between the cutting machine and the skimming machine. Long
distance between the process steps increases the time it takes to
produce one piece of product and more resources will be needed to
move one product from a process to another.

Machines arrangement should take into consideration the following
things:
Minimizing the work in process WIP inventory
Minimizing the time it takes to produce one piece of product
Be faster than the takt time which is the customer demand rate for a
product or group of products.
Consider all workstations, machines, and operation tools to be as
close as possible to avoid waiting for tools or parts issue and what is
called ergonomics in the workplace.

Cost effects of transportation:
Cost of the transportation equipment like forklifts.
Cost of operators driving forklifts
Safety risks due to using forklifts in the area
Labor wages,
Cost of resources
The risk of product deterioration during the handling process
The effect of delays on the customer.

Cost Benefit Analysis Involve in Decision Making
A common thinking that the transportation problems has no solution if the root
cause came up to a point where the company must re arrange machines and
processes to be closer. This action is considered very costly, so many companies
won’t even think about it. This is not exactly correct, as long as the main goal is to
have an efficient process with minimum wastes and shortest lead time for long-
term benefit. Such wastes could affect any organization financially on both long
and short terms. Also, this may affect the external customers too, and customers
satisfaction worth more than money. If a cost benefit analysis is carried to
determine whether to re arrange the process steps by sequence or keep them as
they are, the accumulative cost of keeping the current condition over weeks,
months, and years could be much higher than the cost of doing the job once and
forever. So, this is the key point. The cost of losses must be estimated over
months and years. Also, when the company decides to make the changeover, this
can be performed gradually.

Toyota way of thinking about cost-benefit analysis
They believe that management decisions should be based on long-term
improvement that matches the company’s vision and goals. And As long
as this improvement is in the company’s vision, cost benefit analysis is
only being carried to determine the best method to make the
improvement not to decide whether to make it or not.
Toyota principle: Base you management decisions
on long term financial improvement even at the
expense of the short-term benefit

2nd Inventory
This is one of the greatest wastes. Inventory issues are greatly affected
by the production system. But the improper sales forecasting, and the
bad procurement planning are also reasons for inventory problems.
Reducing the inventory storing value became the main goal of any
industrial company. The just in time JIT theory and approaches like
Kanban have been utilized to serve the manufacturers demands in
reducing the inventories, and keep some buffer for emergencies.

The high inventory turns became an indication of how this organization
is profitable. You want to spend money on materials and quickly get the
return by selling the finished goods. The total selling revenue recover
profits, and other costs such as indirect salaries, direct salaries, plant
expenses, manufacturing overheads, depreciation, taxes, and insurance.
ࡵ࢔࢜ࢋ࢔࢚࢕࢘࢟ ࢀ࢛࢘࢔࢙ ࡾࢇ࢚࢏࢕ =
ࢀ࢕࢚ࢇ࢒ ࡭࢔࢛ࢇ࢒ ࡼ࢘࢕ࢊ࢛ࢉ࢚ ࡿ࢕࢒ࢊ
࡭࢜ࢋ࢘ࢇࢍࢋ ࡵ࢔࢜ࢋ࢔࢚࢕࢘࢟ ࢏࢔ ࡿ࢚࢕ࢉ࢑(࢘ࢇ࢝ ࢓ࢇ࢚ࢋ࢘࢏ࢇ࢒ + ࢃࡵࡼ + ࡲ࢏࢔࢏࢙ࢎࢋࢊ ࡳ࢕࢕ࢊ࢙
Inventory types are the raw material inventory, the work in process
WIP inventory, and the finished product inventory.

E.g. if the cost of goods sold in the period was 1000 and the inventory
was 100, then the ITO was 1000/100 = 10 times. The ITO can as well be
expressed as throughput time (TPT). If the ITO is expressed as times a
year, then the TPT is calculated as 365/ITO days. In the example the TPT
would be 365/10 = 36.5 days. To measure the ITO for a single item, you
can simply calculate units sold/units in inventory.
Trim Master, Inc (seats supplier) for Toyota Motor Kentucky has a ITR of 135times per
month!

Cost effects of inventory: The direct cost of the inventory carrying can
be estimated through the following parameters:
1. Return on investment ROI:
Any investment should have a return. The quicker you get this return,
and the better it will be. If money has been spent to buy some materials
needed for the production process, a quick return is good; a delay in
selling the finished product to the customer is bad. The idea is that this
investment amount could have been spent on something else, or putted
in the bank. Delay in getting the return involves the interest losses
during this period, and what is called opportunity cost. This money
could have been invested in another
profitable opportunity or project rather than being wasted on some
sluggish materials.

2. Risk:
The risk of parts deterioration and damage varies. It depends on the
product type. If this product has an expiration date like food, or glue,
then it will be very risky to store them. Therefore, most of fast moving
consumer goods FMCG companies try to accelerate the inventory
movement and keep as minimum value as possible in their warehouses.
Furthermore, stocking too much inventories, put the business on risk if
there was a market change like change in the raw material prices or in
the currency value. There is also the risk of accidents such as fires.
At the same time, having no inventory, puts the business in another risk,
if the supplier has went down unexpectedly due to economic problem
or a nature disaster like the earth quakes in Japan, and tsunami.

Toyota are best and the leader of inventory management.
They stock parts from more than one supplier, indeed two
suppliers for each part type. When the tsunami and japan
quake occurred, some suppliers went down, but Toyota has
taken numerous actions to rectify the issues quickly.

3. Material handling:
This is the cost of transporting goods. Some accountants see stocking
the inventory one time per year is economically good from the cost of
transporting view, but actually this puts the whole business in risk and
affect the profitability of the company.
4. Space:
Inventory takes much space and requires additional space renting or
buying. The space is valuable whether this space is rented or owned by
the manufacturer. The company may found itself has to re buy more
spaces for more production lines to expand their business, while there is
a lot of inventory taking much space in the factory. It is better to
minimize the inventory rather than buying more spaces to store it.
Either, those additional spaces will need more resources such as a
ventilation system, manpower, equipment, energy, and data recording
system.

5. Insurance and taxes:
Spaces need insurance, as well as the insurance for all transportation
equipment and the manpower. Also taxes are applied in some areas on
the inventory.
It is clear that higher inventory turns is a good sight, low turns is an
indication of lazy system and unprofitable one.
An example of the inventory turns ratio at one of the Toyota suppliers.
In 1994, Toyota set up Trim Master, Inc TMI as a joint venture plant to
supply seats for the opening of its new plant in Georgetown, Kentucky.
The TMI had an inventory turns of 135 turns per month! This has been
reported by Jeff in his bestselling book Toyota Way. The author thought
that he has caught an error and the number of turns is per year, but it
was really per month!
Carrying cost in industrial companies is 25-55% from the total
inventory amount

WIP Inventory Hidden Costs:
Hides many issues behind it
Problems are not visible
Increase waiting between the process steps
Increase lead times
Root cause finding of quality problems is difficult
More wastes
Delay in customer delivery

Rocks signify quality, downtimes, and other production problems

Considerations to minimize inventory
Production style affect the inventory. Pull or Push?
Building too much work in process WIP inventory between the process
steps or using a production system based on large batches, will
constraint the parts flow through the manufacturing processes. A
process might have to wait for parts that need to be made until they are
all finished with the other process that supplies it.
The main lean goal is to make one piece flow through the production
processes, and minimize the work in process WIP inventories. Producing
small batches is also a good idea, and will help facilitate the
transportation without using heavy equipment like forklifts. Trolley and
other light equipment are preferable for both cost and safety issues.

The main lean goal is to make one piece flow through the production
processes, and minimize the work in process WIP inventories. Producing
small batches is also a good idea, and will help facilitate the
transportation without using heavy equipment like forklifts. Trolley and
other light equipment are preferable for both cost and safety issues.
Minimum Wastes
Maximum Delivery Speed
Minimum WIP Inventory
Shortest Lead Times

Should we have zero WIP inventory?
At the same time, having zero WIP inventory will put the process in risk of
stoppage if another process is supplying it with parts has been went down
unexpectedly. Using an inventory buffering system is a good idea to avoid
emergencies. Materials or parts can still be pulled to the production lines
but with a little bit of safety stock using a technique like Kanban to provide
the needed materials on time and with the right quantity.

3rd Motion
This is the ergonomics. The operator needs to have his tools and parts
handed to him in exactly the right orientation to eliminate wasted
walking and handling losses.
5S is a good technique to eliminate the operator searching for tools
issue. By ensuring there are enough tools available in place, and give
them a location so they are being returned after use. By arranging the
tools and putting them in a clear place, access to the tools became
much easier now. Shadow boards would be helpful to realize if a tool is
missed. Basically the tools are outlined and a missing tool show a
shadow when it is not there. The board should be followed up regularly
to ensure tools are returned after use.

Tools should be
returned after use
Someone should
follow up the board
regularly to ensure
tools are available, in
good condition, and
returned after use.
Each tool should be
outlined on the
board, if one is
missed, it will be
recognized.

4th Waiting
This is the time waste factor,
and it involves the following
activities:
• Waiting for materials.
• Waiting for spare parts.
• Waiting for the quality
inspection process.
• Waiting for services such as waiting for maintenance crafts
• Waiting for quality inspectors.
• Low machine performance/speed.

When calculating the takt time, and customer demand rate, those are
the variables than need to be eliminated to improve the effective
operating time.
• Waiting due to machine downtime, repairs, and preventive
maintenance.
• Waiting for operators to get tools or spare parts.
• Waiting for changeovers from one product to another.
• Waiting for CNC machine loading program.
• Waiting for instructions or design drawing.

Over productivity and inventory issues are related. Over productivity
creates most of production wastes. Making product more than what is
actually needed or over the capacity of the selling department is a
waste of money in enormous rates. The losses are the costs that have
been spent to make this product. Even if this product is going to be sold
later, there is still a problem with the return on investment for the raw
materials and the other resources that have been used to make this
product.
Pulling product to customer is one of the main lean goals. And if the
product is computer or a modern technology, so the company will be in
troubles. Technology changes fast, and cannot be stored for a period of
time.
5th Over productivity

In additional, for any goods that have an expiration limitation date,
producing with mass of quantities with no realization of where this
product is going to be sold, put them in danger of damage and
deterioration. The goal is to make only what is needed and when
needed. A method like Kanban can be used either with the finished
goods to produce according to the customer demand.
Basic Kanban or Pull System mechanism
Kanban (pull system)

1. The customer process (assembly process as shown in the fig)
receives some form of production instruction.
2. The material handler serving this assembly process regularly
goes to the up stream store and withdraw parts that the
assembly process needs in order to fulfill the production
instructions
3. The supplier process then produce to replenish what was
withdraw from the supplier store.
Kanban is an inventory buffer, and a production regulation tool.

The
same
machine
The
same
machine
What parts run on what machine?

PatternFlexible
• Can run any part on
any process
• Many variables
• Difficult to understand
causes of problems
• Strives to dedicated
part numbers to
processes
• Easier to understand
causes of problems

Cost effects of over productivity: Over productivity create the most of manufacturing wastes.
Mass productivity holds many downtime problems
Mass productivity holds many quality issues behind it.
Increase the non-value added
Longer lead time of making product
Delay in delivery to customer
Waste of money
Producing one piece or small batches will help pointing out the production obstacles quickly
and discover the root causes before problems are developed.

Traditional Mass Productivity Thinking VS Lean Thinking
One of the most debate issues is the use of mass production technique.
The approach involves making as many parts as possible using the
maximum available resources and all available machines. It doesn’t take
into consideration the customer demand rate or the sales forecasting.
Furthermore, if you are making 500 parts, and there were a problem
with the production process, a quality failure can occur with all of those
parts. Problems are hidden with the mass productivity approach; it will
be also so difficult to discover where the error is coming from. So the
root causes will remain hidden.

If a supplier process is producing with mass productivity and building
too much work in process WIP inventory, the downstream process will
find all what it needs even if the supplier process has been went down
suddenly. The downtime is hidden, and is not important; no one will
consider preventing it in the future unless it has an obvious affection on
the production process. Also if the operator at the supplier process is
spending time getting tools or parts, the downstream process is still
receiving the parts it needs to make.
Mass productivity creates the inventory problems, hides many wastes
behind it, and effect the delivery time to customers. If you are
assembling one piece of product in 3 minutes, waiting for 10 pieces to
be assembled will take 30 minutes. The cycle time of one piece became
30 minutes although the add value time is only 3 minutes.

Large batch processing

Continuous product flow

With pull concept, and producing only what is needed for each process
step and between the production lines, there will be a minimum work in
process WIP inventory. If a process is went down, the downstream
process won’t be able to receive parts, and the upstream process won’t
be able to produce and build WIP inventory. Problems are now surface
and clear. And everyone will strive to fix downtime and prevent the
recurrence of this downtime.

Advantages of pull system:
Problems are surfaced quickly
Produce according to the customer needs saving cost & resources
Reduce the WIP inventory
Shorter lead time
Increase value-added work
Better quality control

CT=104 min CT=76 min CT=104 min CT=40 min
CT=40 min
Assembly
SawLatheDrillWeld
0.75 days
WIP
0.25 days
WIP
1.7 days
WIP
0.13 days
WIP
Lead times=3.75 days
CT=Cycle Time
WIP=Work In-Process

CT=105 minCT=103 min
CT=108 min
Weld
0.13 days
WIP Inventory
Min= 0
Max= 1
Lead times=0.80 days
Saw, Lathe, Drill
Assembly
0.13 days
WIP Inventory
Min= 0
Max= 1

Before After
Production Lead Time 3.75 days 0.8 days
# of forklifts 11 1
Travel Distance per
product piece
1700 ft. 1000 ft.
Result of Lean
Transformation

6th Over processing
It means making more steps in the process than what are actually
needed or making steps that are not needed. By asking some questions
while mapping the process, we can allocate the over processing:
• Why do we do this step? Is this step needed?
• Why do we do it now?
• Why do we do it this way? Is there an easier way to do it?
• Do we need this step?
• Can we eliminate this step? Or reduce its time?
• Can we do two steps together at the same time? Can the step be
grouped with others and preassembled?
• Could two tasks be done at the same time?
• Would two peoples doing the job make it faster?

Many processes can be improved and reduced time through removal of
the unnecessary steps. The improvement is not only limited to the
manufacturing process itself, but also to the other processes such as
changeover, maintenance, and material movement.
The most common reason of why over processing is exist, is the work
standardization. No standardization creates many wastes.
Standardization is a good way to avoid over processing,
mistakes, defects, and other wastes.

TOYOTA BUSINESS 88
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Mapping as a lean tool for process improvement

What is Mapping? it is a range of techniques for analyzing the steps (or
stages) in process. Any process is suitable. As experience, the most
common maps are in processes-the way a product is manufactured.
Why Mapping?
Mapping is used most often to analyze a process to find ways to improve
how the task is carried out. If lean principles are applied, we can make
any process more efficient.
With a team skilled operators and engineers, we can identify any steps
where errors are introduced and where they effect the rest of the
process.

Is Lean a Positive or Just an Extra Work?
The company/Managers/Engineers need to decide carefully whether to
spend their cash on a promise of something better or a bit of equipment
that will do something better.
It is pretty much guaranteed that unless the improvements are
embedded in the daily life and the culture of organization, they will
evaporate away.
For prolong success, the improvement work never must be regarded as
extra work. It needs to be ongoing like the preventive maintenance
program or the scheduled program.

•Basic Process Mapping
•The Big Picture Map
•Capacity Maps
•Value Stream Mapping ”VSM”
•Value and Capacity Stream Map
•Swim Lanes Mapping.
•SIPOC Maps.
Commonly used for:
-As a tool for problems finding and process improvement.
-Pointing out inefficient process steps “non-value added”.
-Allocate wastes and remove them.
Mapping Tools:
Process mapping is a workflow diagram to bring forth a clearer understanding of a
process or series of parallel processes.

•Value Stream Maps.
The non value added and the value added are being separated in the map, time of each is
calculated and pointed out, so the time saving by eliminating the non-value is clear.
Value add
Non-value add
Value add Value add Value add
Non-value add Non-value add
•Process Maps.
Look for all details inside each dept, point out the wastes and improvement chances, , its the
most common map.
This is my preferred MAP, and will begin with it. Other maps can be discussed in the next
report.
Process MAP can zoom ++ for specific points and show up the wastes in wider scale.

Toyota Production Goals
Zero Defects
100 percent value added
One-Piece Flow, in sequence, on demand
Security for people

Phase#1 Preparation for the Kaizen Event
1. Clearly define the scope of work
2. Set the objectives: like improve quality, reduce costs, reduce lead
times…etc.
3. Create preliminary current state map
4. Collect all relevant documents and data
5. Post the preliminary current state map on the wall in a room

Define the Customer
Requirements
Current State Map
Future State Map
Implementation Plan
Do it
Evaluate
-Scope of Business
-What is the value add to
customer?
-Measurable objectives
-Process steps
-Process flow
-Point out non-value
added & value added
-Eliminate non-value added
-Kaizen work
-What? Who? When?
-Communication and
Training Plan
-Begin workshop
-Establish process metrics
-Visually track progress
-Continuous Improvement
Data
KaizenPhase
(Phase#2)
LEAN MANUFACTURING- 99

1.Analyze Current-State MAP
To complete this map you need the following:
• Team should physically walk through the process
• Obtain insight on how the process works
• Surface issues and solicit ideas for improvement
• Begin the analysis of the preliminary state map based on the data
collected through the work
This is the map that present the current situation, and all
symptoms/problems and wastes that need to be improved.

• Point out the value added, the pure non-value added, and the
required non-value added
• Calculated and summarize the metrics
Metric Measurement
Value added %
Non-value added %
Quality ratio %
Lead times hrs
Workers productivity %
WIP inventory Batch size/ no of pieces/ tons
Cost $

Process Actual/Current Best Possible
(Target)
Data Box (KPIs)
Each task/process is presented with the current measurement and
the target.

Parking lot
Process Actual/Current Best Possible
Those are the tasks that you decided to work on later.

Process Map Analysis “Red Post-its Analysis”.
Process /issue
description
Symptom/Problem Exists Total time

2.Develop a Future State Vision/Future State Map
This is the waste free map that has no waste in time or resources with
the optimum/efficient cycle time and the no of resources needed. It also
should present the right flow of the process steps.
Tips:
• Draw & write down all ideas of improvement from the team
• Allow people who manage the work day by day and have intensive
experience about the process to share their ideas
• Consider the workers who do the work every day to put, and share
their own ideas on how to improve these issues.

This map would include:
• The optimum lead time (cycle time) of each task in the process
• The optimized flow of the process
• The right no of resources
• Seven wastes free
• Use brainstorming for potential solutions
• Create a parking lot for things that have been surfaced so you will
work on later

3.Implementation & Visual Tracking System
The use of the visual tracking system on field during the kaizen work and
before drawing the future state map is a good idea to present the
following:
• Obstacles found in the project.
• The progress and the percentage of completion.
• The responsibility of each task.
• Postponed, in progress, and completed tasks.
• Documentation & procedures.
• Train people on the new process.

Metric Unit of
measure
Target Improvement Owner
Process Cycle time Days/hours
Non-value added %
Value added %
No of workers
Quality ratio %
WIP inventory No of
pieces/tons
Lead time between
processes
Hours/days
Delivery % on time
Productivity %
4. Evaluate measuring performance

Value Stream Mapping is a tool to ensure that process improvement
effort:
1. Fit together from a process to process so that a flowing value stream
is developed.
2. Match with the organization’s targets.
3. Serve the requirements of the external customers.
The tools you need onsite while observing the real situation:
• A stop watch
• A graph paper
• A pencil
• An eraser
• Calculator

Inappropriate actions commonly performed by lean leaders when using
the value stream mapping for removal of wastes on shop floors:
• Treats the VSM as a tool for process improvement rather than a
method to ensure that process level improvement efforts: 1. Fit
together from a process to process so that a flowing value stream is
developed 2. Match with the organization’s targets 3. Serve the
requirements of the external customers.
• Focus on maximizing the efficiency of an individual process on behalf
of others without understanding the real situation at the factory
floor. For example, maximizing the material flow through the
production processes using small batches will put more effort and
load on the transportation department and the crew will have to
make more batches.

• Jump to the do phase to implement the plan without spending
enough time gathering facts, colleting people’s ideas, training
peoples. Processes tend to slip back if people have not been trained
on the culture of continuous improvement. Also people who the
work day by day must be allow putting their own ideas to improve
their works and produce the future state map. They should believe
that this is something to facilitate their work and make it much easier
and safer.
• Metrics are used by the senior managers to evaluate the results and
control the employee performance at the factory floor without
understanding the obstacles that need to be removed to get stable
results. Managers should act as facilitators for the improvement
process. Also metrics should be used by the employee themselves to
measure their own progress and define the requirements of the next
step.

Productivity & capacity improvement through finding the bottleneck
Machine.1 Machine.2
Capacity=100 units per hour Capacity=70 units per hour
A product is passing through two machines, one is capable of 100peices/hrs, the
other is only capable of 70 pieces/hr.
Assume perfect quality and no time waste, so what is the OEE for each machine?

Sustain Standardize
Shine
Sort Set in Order

Any successful 5S process must achieve the following:
Eliminate the seven deadly wastes from the process
Reduce ergonomics in the workplace
Provide a secure and safe environment for the working labors
and staff
Increase workers morale and satisfaction
Improve the factory appearance to attract the customers
Increase the productivity of the workers

A place for everything, and everything in its place

7 to 8 out of each 10 lean projects fail as companies try to treat lean as
toolkit, copying and pasting the techniques without trying to adapt the
employee culture, manage the improvement process, and develop
peoples.
Some Management Habits. What do you think about the following
approaches?
Management by Objectives
Incentives and Rewarding System
Sink or Swim Mentality
Blame Culture
Lean Failure!

Toyota’s main pillars “4P”

Eng. MohammedEng. MohammedEng. MohammedEng. Mohammed Hamed AhmedHamed AhmedHamed AhmedHamed Ahmed SolimanSolimanSolimanSoliman
The American University in Cairo
Email: mohammed@personal-lean.org
m.h.ahmed@ess.aucegypt.edu
Tel: +201001309903
References:
Liker, J. K. (2003). Toyota way. New York: MacGraw-hill.
Liker, J. K., & Convis, G. L. (2012). Toyota way to lean leadership: Achieving and sustaining excellence through leadership
development. New York: MacGraw-hill.
Rother, M. (2009). Toyota Kata. New York: MacGraw-hill.
Ahmed, M.H. (2013). Lean Transformation Guidance: Why Organizations Fail to Achieve and Sustain Improvement with Lean
Methodology. International Journal of Lean Thinking, 4(1). http://thinkinglean.com/img/files/PAPER_4(2).pdf
www.personal-lean.org

Lean Manufacturing - Toyota Production System

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