08 - Chapter 5 _ Perfection.ppt

(1)

Engineering Management

MSE507

Lean Manufacturing

(2)

The Incremental Path

 Joe Day, the president of FNGP (Freudenberg-NOK General

Partnership) of Plymouth, Michigan began to introduce Lean Thinking in 1992.

 No matter how many times his employees improved a given

activity to make it leaner, they could always find more ways

to remove Muda by eliminating effort, time, space, and

errors.

 _{When FNGP reorganized its Ligonier, Indiana facility, an initial}

Kaizen event to achieved:

• 56% increase in labor productivity

• 13% reduction in factory space needed

 _{In revisiting this activity in five additional three-day kaizen}

events over the next three years, there were:

• 991% productivity boost

(3)

Repeat Kaizens – FNGP Ligonier,

Indiana Factory, 1992-1994

Feb 1992*

April 1992

May 1992

Nov 1992

Jan 1993

Jan 1994

Aug 1995

Number of

operators 21 18 15 12 6 3 3

Parts per operator 55 86 112 140 225 450 600

Space utilized

(4)

Kaizen vs. Kaikaku

_{Kaikaku can describe radical}

non-recurring improvements or changes

_{Sometimes called radical Kaizen} _{“Kaikaku Teams” often take}

control of operations in crisis situation

_{Repeated incremental}

improvement steps

_{“Point Kaizen”or event driven}

improvements

_{“Flow Kaizen” incorporates total}

operations in Lean Manufacturing (TPS)

(5)

(6)

(7)

The Incremental Path

 _{Improvements as seen in FNGP seem to defy all logic!}

 _{Kaizen activities are not free, and perfection- the complete}

elimination of muda – is surely impossible. So…

 Should managers manage the steady state, keeping the

“normal” performance?

 _{Two common opinions of senior managers from around the}

world:

 _{Steady state management – management of variances}

 Planning to do something, asking, “why did FNGP didn’t get the

job done the first time instead of wasting three years before getting it “right”?

 Both reactions show how traditional management fails to grasp the

concept of perfection through

(8)

The Radical Path

 _{The alternative to incremental changes via kaizen events is a}

radical change in the path to perfection – kaikaku

 _{A total value stream Kaikaku involves all the steps from start to}

finish.

(9)

Continuous Radical and Incremental

Improvement

 _{To pursue perfection, every organization needs to use both}

kaizen and kaikaku.

 _{Every step in the value stream can be improved in isolation to}

good effect.

If you are spending significant amounts of

capital to improve specific activities, you are

usually pursuing perfection the wrong way…

 _{To effectively pursue both incremental and radical}

improvement, two final lean techniques are needed to be used by value stream managers:

• Apply the four lean principles of: value specification, value identification, flow, and pull.

(10)

The Picture of Perfection

 Managers have to learn to see: • See the value stream

• See the flow of value

• See value being pulled by the customer

 _{The final form of seeing is to bring perfection into clear view so}

the objective of improvement is visible and real to the whole organization.

 _{The example of glassmaking demonstrates a radical rethink of}

the whole value stream so that value-creating steps are conducted immediately next to the customer exactly when needed.

 Toyota certainly had a picture of perfection derived from its

mastery of lean principles:

• Japanese service parts business in 1982

(11)

The Picture of Perfection

 _{No picture of perfection can be perfect…}

 _{As changes and improvements are being made to a value}

stream, the picture of perfection is changing…

However, the effort to envision the picture of

perfection provides inspiration and direction

essential to making progress along the path…

 _{One of the most important things to envision is the type of}

product designs and operating technologies needed to take the next steps along the path to excellence.

 _{The knowledge that products must be manufactured more}

(12)

Focusing Energy to Banish

Muda

 Organizations which never started down the path of continuous

improvement because of lack of vision obviously failed.

 _{Sadly, other firms set off full of vision, energy, and high hopes,}

but make very little progress due to lack of direction and resources along the path.

 What’s needed instead is to form a vision, select the two or

three most important steps to set you there, and defer to other steps until later.

 Policy deployment is the last lean technique needed to be done

by top management agreement on:

• Few simple goals for transitioning from mass to lean

• Few projects to achieve these goals

• Designate people and resources for getting the projects done

(13)

Focusing Energy to Banish

Muda

 _{If a firm adopt a goal of converting the entire organization to}

continuous flow with all internal order management by means of a pull system, the projects required to do this might include:

1. Reorganizing the product families such that product teams take many on many of the jobs of traditional functions

2. Creating a “lean function” to assemble the expertise to assist the product teams in the conversion

3. Commencing a systematic set of improvement activities to convert batches and rework into continuous flow.

 _{Numerical improvement goals and timeframes may be:} 1. Convert into production teams within 6 months

2. Conduct improvement activities on six major activities per month

3. Reduce on hand inventory by 25% in the first year

(14)

Vital Few Goals for 2004

Aerospace Operations Actuation Systems Division Los Angeles Department/Work Group Growth

 Capture New Aftermarket Business of $12.0M

 Establish a Repair/Overhaul Presence in Asia

 Win 7E7 Hydraulics System

 Grow our business 1.5x the Aerospace industry growth rate

 Be strategic in our pricing providing high value to our customers

Grow the business in targeted areas in support of the Aerospace overall goals.

 Capture new A/M business of $2.3m

 Win applicable portions of the 7E7

 Strategic pricing deployment – take government spares to 40% GM

 Achieve Sales plan of $192.9m

 Meet acquisition target

$10M in new business wins

Win applicable portions of the 7E7

Capture new A/M business of $1.5M

Achieve Sales plan of $99.9m

Achieve 40% Gross Margin on Government Spares

Business Excellence and Cost Reduction  Achieve 95% on-time delivery to customer

 Develop an integrated Aerospace Quality System focus and improve our DPPM by 10%

 Improve productivity & efficiency of our operations by 5%

 Achieve $30M of cost reductions through strategic sourcing, lean manufacturing and improved processes

Drive a culture of Continuous Improvement so that we deliver exceptional results for our customers and Eaton Aerospace

 Productivity improvement of 4%

 Improve Lean Enterprise to 3.0

 Improve quality performance 10%

 Strategic Sourcing of $800k

Achieve 95% On-Time-Delivery

Improve Productivity 5%

Achieve $3.5 million in Cost Out

Improve Average Repair and PRO TAT to 25 Days

Achieve DPPM of 3400

Lean Score 3.0

Achieve PROLaunch score 18

Cultural and Organizational Development  Build organizational capability by completing 100%

of our “personal development actions”

 Improve employee engagement by completing 100% of our action items from the Employee Satisfaction Survey

 Make safe work practices, processes and behaviors a focus for 2004 and reduce recordable accidents by 20%

Drive culture change for Actuation systems so that we re considered “best in class” within Eaton Aerospace and by our Customers

 Improve Organizational Capability through staffing and execution of OCA and APEX personal development activities

 Drop TCIR by 20% implementing EHS

 Improve Employee Engagement scores by 10% if below Eaton Top 25%

 Voice of Customer data improved by 50%

Achieve EHS Score of 3.0

Improve Employee Engagement Score 10%

Organization Capability Assessment Actions Complete

Implement APEX to Upgrade Goal Deployment

Develop customer focus metrics

Financial/Performance  Grow revenue from $740M to $777M

 Reduce Working Capital Usage - DOH from 107 to 93.9 - DSO from 50 to 47.8

Meet Profit plan for Actuation Systems, including improved profitability and working capital performance.

 CFROGC to 31% DOH 119.8

(15)

Smashing Inertia to Get Started

 We now reviewed the basic lean principles, the five powerful

ideas in the lean tool kit needed to convert firms and value

streams from areas full of MUDA to fast-flowing value, defined and then pulled by the customer.

 _{The techniques themselves and the philosophy are open for}

everyone to know.

 Transparency in everything is a key principle.

 Policy deployment operates as an open process to align people

and resources with improvement tasks.

 Massive and continuing amounts of problem solving are

conducted by teams of employees who historically have not even talked to each other, much less treated each other as equals.

 _{Yet the catalytic force moving firms from batch-and-queue into}

(16)

Homework Assignment

 _Questions:

1. Describe the five steps of Lean Thinking. How are they being deployed to achieve continuous improvement?

2. You are documenting a Current State Value Stream Map for a business for the first time

• Which types of waste are likely to be present?

• Which will be the top three types of waste that you are likely

to be first address? Explain your selection

(17)

Homework

 _{Describe the five steps of Lean Thinking. How are they being}

deployed to achieve continuous improvement?

 _{You are evaluating a Current State Value Stream Map that was}

done for the first time.

• Which types of waste are likely to be present?

(18)