Lean Production for the Small Company

288 Pages·2012·3.468 MB·English

by  Mike Elbert

Productivity Improvement / Cellular Manufacturing / Just-in-Time E Lean Production for
l
b
“Our Minnesota operation was the pilot plant and led our creative process improvements.
e
Mike was a leader at this site and had a huge impact on the required change management
r
activities and challenging the status quo. His out-of-the-box thinking and ability to apply his
t
knowledge to the operation were critical to our success. Mike has a deep understanding of the Small Company
material flow.”
—David Wambold, Vice President Lean Manufacturing, Beckman Coulter, Inc.
L
e
“You can read about value stream mapping, eliminating non-value-added work, or Lean
a
manufacturing most anywhere; however, these are always so oversimplified they make
n
Lean difficult to apply. Mike Elbert effectively teaches the Lean fundamentals at a level that
allows anyone to understand, take action, then follow through. He has implemented Lean at Mike Elbert
P
the front-line level. His methods will make a positive impact on your bottom line; but more
r
importantly, it will send a ripple of activity throughout your organization making a positive
o
impact on your culture.”
d
—Dennis Edwards, Operations Rapid Continuous Improvement Manager, Allsteel
u
A hands-on guide to adapting Lean principles and the Toyota Production System to high-
c
mix/low-volume environments, Lean Production for the Small Company uses charts,
t
pictures, and easy-to-understand language to describe the methods needed to improve i
o
processes and eliminate waste. It walks readers through the correct order of implementation
and describes problems and pitfalls along with time-tested solutions. n

f
Explaining how to incorporate existing systems into a Lean strategy, the book starts with the
o
fundamentals and builds on them to describe the full range of tools and processes needed to
r
implement Lean. It outlines how to design factories for Lean manufacturing and demonstrates

how to remove variations within business and manufacturing processes to achieve a smooth t
continuous flow of product that delivers your product on time to customers. h
e
The tools, methods, and ideals discussed are applicable in any industry and all parts of your
business—from manufacturing and sales to human resources. The text unveils new methods S
and tools that can help you reduce inventory, improve inventory turns, and facilitate raw m
material flow through the factory. It details how to use customer order demands to schedule
the production floor, rather than using estimated production schedules. It also considers the a
accounting process and explains how to improve your cash-to-cash cycle time. l
l

C
Drawing on the author’s decades of experience transforming high-mix plants to Lean, the text
covers the tools and processes that have made Toyota so successful. All the information in o
this book, when implemented, will result in a culture change that will transform your company m
into a learning organization that continuously eliminates waste and improves its processes.
p
a
n
K13607
y
ISBN: 978-1-4398-7779-1
90000
www.crcpress.com
9 781439 877791
www.productivitypress.com
K13607 mech-rev3.indd 1 6/21/12 11:30 AM
Lean Production for
the Small Company
Mike Elbert
CRC Press
Taylor & Francis Group
6000 Broken Sound Parkway NW, Suite 300
Boca Raton, FL 33487-2742
© 2013 by Taylor & Francis Group, LLC
CRC Press is an imprint of Taylor & Francis Group, an Informa business
No claim to original U.S. Government works
Version Date: 20120611
International Standard Book Number-13: 978-1-4398-7780-7 (eBook - PDF)
This book contains information obtained from authentic and highly regarded sources. Reasonable efforts have been
made to publish reliable data and information, but the author and publisher cannot assume responsibility for the valid-
ity of all materials or the consequences of their use. The authors and publishers have attempted to trace the copyright
holders of all material reproduced in this publication and apologize to copyright holders if permission to publish in this
form has not been obtained. If any copyright material has not been acknowledged please write and let us know so we may
rectify in any future reprint.
Except as permitted under U.S. Copyright Law, no part of this book may be reprinted, reproduced, transmitted, or uti-
lized in any form by any electronic, mechanical, or other means, now known or hereafter invented, including photocopy-
ing, microfilming, and recording, or in any information storage or retrieval system, without written permission from the
publishers.
For permission to photocopy or use material electronically from this work, please access www.copyright.com (http://
www.copyright.com/) or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923,
978-750-8400. CCC is a not-for-profit organization that provides licenses and registration for a variety of users. For
organizations that have been granted a photocopy license by the CCC, a separate system of payment has been arranged.
Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for
identification and explanation without intent to infringe.
Visit the Taylor & Francis Web site at
http://www.taylorandfrancis.com
and the CRC Press Web site at
http://www.crcpress.com
This book is dedicated to my wife Suretta and daughters Michelle
and Danielle, without whom this book would not have been possible.
I cannot express enough my love and gratitude for all their help
and understanding, and all their support throughout the years.

Contents
Preface............................................................................................... xi
About.The.Author..............................................................................xv
  1  Introduction..................................................................................1
Who Should Use This Book .......................................................................1
How to Use This Book ...............................................................................2
Brief History of Lean Manufacturing ..........................................................3
The Philosophy of Lean Manufacturing and Business Systems ................5
Why Do We Need Lean Manufacturing and Business Systems? ...............7
  2  Fundamentals.of.Lean.Production.and.Business.Systems............9
Nine Critical Wastes in Business ................................................................9
Concerning Elimination of Waste .............................................................11
Fundamentals of Lean Manufacturing ......................................................11
The Five Whys ..........................................................................................13
Critical Importance of Management Commitment ..................................14
Establish Your Lean Team and Lean Leader ............................................15
The Lean Coach ................................................................................16
Lean Coach and Consultants ............................................................18
Lean Team .........................................................................................18
Lean Production and Your Employees .............................................19
Some Will Leave Us (Making the Really Tough Decision, Removing
Human Roadblocks) ..................................................................................21
Lean Systems versus Six Sigma ................................................................22
  3  Tools.for.Continuous.Improvement............................................25
Step 1: Hands- On ......................................................................................25
Example: Order out of Chaos: ..........................................................25
Housekeeping: 5S ......................................................................................26
v
vi  ◾  Contents
  4  Beginning.Your.Journey.............................................................33
Waste Walk ................................................................................................33
Plant Manager: Waiting (Idle Time) ..................................................34
Materials Manager: Excess Inventory ................................................34
Finished Goods: Overproduction .....................................................34
Production Manager: Overproduction ..............................................36
Quality Manager: Defects ..................................................................36
Purchasing Manager: Environmental ................................................36
Planning Manager: Transportation ....................................................36
Manufacturing Engineering Manager: Excessive Motion .................36
Lean Leader: Overprocessing ............................................................37
Current Lean Status ...................................................................................37
  5  Value.Stream.Maps:.The.Amazing.Tool.
(Critical.to.Your.Success)............................................................39
What a Value Stream Map Is and Why You Need It ...............................39
Why a Value Stream Map Is Critical to Your Success ......................40
How to Create a Value Stream Map .........................................................41
Current State Map ..............................................................................41
Creating the Map ...............................................................................41
Gather Your Data ..............................................................................42
How to Read a Value Stream Map ...........................................................54
Future State Map ...............................................................................54
Creating the Future State Map ..................................................................61
Next, Compare the Current State Map to the Future State Map .............72
  6  Identify.Your.Projects.................................................................77
Continuous Improvement Projects ...........................................................77
Identifying Your Projects from Your Maps ...............................................78
Which Project to Do First? ........................................................................79
Machine Tools and Takt Time ..................................................................86
Smoothing the Flow of Production ..........................................................87
Balancing Product Mix in the Work Cell .................................................89
Implementation .........................................................................................90
Audits .........................................................................................................91
Who Should be Audited? ..........................................................................92
Stabilizing Your Processes ........................................................................94
  7  Your.First.Kaizen.Project.Team..................................................97
What Is a Kaizen Event (Continuous Improvement Event)? ....................97
Team Makeup ............................................................................................98
Contents  ◾  vii
Kaizen Event Process ................................................................................98
SMART Goals ..........................................................................................101
Plan–Do–Check–Act ...............................................................................107
Using Plan–Do–Check–Act and A3 ........................................................108
Kaizen Toolbox .......................................................................................112
  8  Continuous.Flow.......................................................................117
Introduction .............................................................................................117
Step 1: Determine Family Mix ................................................................117
Step 2: Build First Production Cell .........................................................118
Step 3: Create Goals and Results Chart ..................................................118
Stabilizing Your Process ..........................................................................120
Standing in the Circle .............................................................................121
Standardized Work ..................................................................................122
Using Standardized Work ................................................................123
Reducing Variability ................................................................................124
Leaders’ Standard Work versus Work Instructions ................................125
Team Leader’s Standard Work ........................................................126
Manager’s Standard Work ...............................................................127
Accountability ..........................................................................................129
Daily Production Meetings .....................................................................130
  9  Work.Cell.and.Factory.Layout...................................................133
Work Cell Layout .....................................................................................133
Ergonomic Design ...................................................................................134
Work Cell Material Handling Design......................................................135
10  Creating.Your.Lean.Road.Map.(Strategy.Deployment).............137
Introduction .............................................................................................137
Strategic Lean Manufacturing Plan .........................................................138
Visual Controls and Visual Management ...............................................143
Visual Management Displays and Controls ....................................143
Andon Display .................................................................................147
11  Production.Scheduling.............................................................151
Introduction .............................................................................................151
MRP and Lean Complement Each Other ...............................................152
What Finished Goods Inventory Should You Stock? .............................153
Types of Pull Systems .............................................................................156
Organizing and Controlling Finished Goods Warehouse .....................158
viii  ◾  Contents
12  How.to.Schedule.the.Production.Line.(Value.Stream)..............163
Introduction .............................................................................................163
Pacemaker Process ..................................................................................164
Efficiency versus Changeover .................................................................166
Supermarket (Warehouse) Location in the Factory ................................167
Signaling Material Withdrawal from the Market ....................................170
Batch Production Signal Kanban ............................................................172
Production Capacity versus Changeover Time ......................................173
Determining Production Lot Size ...........................................................174
Reorder Trigger Point ..............................................................................175
Working without Work Orders ...............................................................176
Labor and Material Accuracy ..................................................................176
Work- Order Back- Flushing .....................................................................177
Cycle Count Inventory ............................................................................177
13  Material.Management...............................................................179
Raw Material Inventory Management .....................................................179
Loading the PFEP ....................................................................................182
What Data to Input First .........................................................................185
Equations Used with the PFEP ...............................................................185
Planning Minimum Inventory Levels .....................................................186
Value of Frequent Deliveries ..................................................................186
Quantity of Containers Required............................................................187
Material Reorder Points ...........................................................................187
Updating and Editing the PFEP ..............................................................187
Creating the Raw Material Market ..........................................................189
Organizing the Warehouse .....................................................................190
Layout of the Supermarket ..............................................................191
Creating the Supermarket ...............................................................192
How Do I Expedite Parts? ......................................................................192
Timed Delivery Routes ...........................................................................193
Basic Material Handling Information .....................................................194
Creating Your Timed Delivery Routes ............................................195
Point- of- Use Rack Design ................................................................196
Pull Signal for Material ....................................................................198
Coupled versus Decoupled Routes: What Is the Difference? .........198
Determining the Number of Pull Signals .......................................199
Kanban- in- the- Loop ........................................................................200
Sustaining the Material Handling System ...............................................201
Contents  ◾  ix
Supplier Replenishment to Your Warehouse..........................................201
Getting Started .................................................................................202
Finished Goods Replacement .........................................................205
Tying Finished Goods Warehouse to the Production Floor ..........205
Packaging Schedule Board .....................................................................206
How to Use the Packaging Schedule Board ..................................206
Sequence of Operation ...................................................................207
14  Standardized.Problem-.Solving.Method....................................211
Problem Solving ......................................................................................211
Recognize You Have a Problem .....................................................212
Elevate to the Next Higher Level ....................................................212
Evaluate the Severity of the Problem .............................................212
Control the Expansion of the Problem ...........................................212
Containing the Problem ..................................................................213
Preventing a Recurrence .................................................................213
Inspect Every Job ............................................................................214
Mistake- Proofing .....................................................................................215
Where Do You Start Error- Proofing? ..............................................217
General Inspection ..................................................................218
100% Inspection ......................................................................219
Error- Proofing Devices ............................................................219
Immediate Feedback ...............................................................220
Statistical Process Control and Mistake- Proofing ...........................221
15  Working.with.Suppliers.and.Partners......................................223
Introduction .............................................................................................223
Looking for Suppliers ..............................................................................224
Seven Characteristics of Supplier–Customer Partnering ........................225
Outsourcing Products .............................................................................228
Group Suppliers by Capability ................................................................229
16  Lean.Accounting.......................................................................231
Show Me the Money ...............................................................................231
Performance Goals ..................................................................................232
Box Scores ...............................................................................................233
What You Get for Your Effort .................................................................236
Profit and Loss (Income) Statements ......................................................236
Cash- to- Cash Cycle .................................................................................241
Calculate Cash- to- Cash Cycle ..........................................................242