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Lecture 1: Introduction to Lean ProductionWhy should we plan? We should plan because we can influence Machine Idle time, product Waiting
time and machine Changeover time with the sequence of production.
Combine similar products (batching): less setups, more efficient, but: longer waiting time
for product
Earliest due date: no batching, less waiting time, but: more setups,
less efficient
Examples of changeover:
- Light after dark paint
- Thick after thin steel bending
- Regain concentration after a disturbance
The actual adding value to the customer is the processing time, in which you actually perform
activities on your raw material that is going to be delivered to the customer.
Traditional companies tend to maximize the use of machines, so they want to reduce the machine idle
time, because it costs a lot having the machine not running. If you maximize the time the machine is
running, you increase the batch size. Increasing the batch size means the product waiting time is
increasing as well. The larger the batch size, the lower the machine idle time, but at the expense of the
product waiting time. Companies choose to do this anyway because they want to optimize the time
and resources that they have.
Taiichi Ohno: Scheduling is WASTE: it does not add value. Can we not take away the need? Lean
philosophy started from Toyota. Taiichi Ohno implemented this system that is able to only focus on
the processing time trying to reduce or even avoid all the other time. If you want to do so then you
don’t need the planning of the production.
Lean = avoiding waste
You want to reduce every source of waste that does not add any value to the customer. If you do so,
you just focus on processing. You don’t want transport time, waiting time and changeover time, just
processing time. This is not completely possible, but you can always reduce those times by focussing
what is actually adding value to the customer.
A definition of lean: ‘Lean production is an integrated socio-technical system whose main objective is
to eliminate waste by concurrently reducing or minimizing supplier, customer and internal variability.’
Integrated socio-technical system: it is not only techniques, but also human resources. So there is an
interaction between people and technology in workplaces. The interaction of social and technical
factors create the conditions for successful (or unsuccessful) organizational performance.
Lean is not cutting costs, lean is not improving profitability. It is also, but not directly. The main aim
of lean is to reduce any source of variability.
If you think about lean, lean is a sort of philosophy following the circle. Lean
means being able to follow five different principles: (1) value (for the customer),
(2) value stream (how the value is flowing through the system), (3) creating flow
(you want a continuous flow of activities adding value to the customer), (4)
establishing pull (you want this flow to be pulled by the customer demand, instead
of pushed by a forecast) and finally you want your process to keep getting better,
and better and better: (5) seek perfection.
, 1) Identify (non) value: 7+1 wastes
> Defects: you want a system that has the highest quality
> Overproduction: not producing more than the actual demand, you also don’t want to
produce in advance because you don’t know what will happen in the future
> Waiting: waiting for resources, products and/or machines. The difficult part of lean is
being able to maximize the time the machine is used, but also to minimize the waiting
time of the product. How? By reducing variability
> Not using all available human potential: in lean you tend to try to continuously
improve the process, not top down but bottom up. You want your shopfloor
employees to understand what they are doing, what they are doing wrong and then
propose improvement. In order to do so you need to empower them.
> Transport: moving products from A to B to C until the final customer. Instead of
having A-B-C, you rather have A to C directly, because for each movement you need
to stock a product somewhere, which causes holding costs. You are postponing
delivery of the product and adding variability without any value for the customer.
> Inventory (the root of all evil)
> Motion: not transport, transport means transporting resources, while motion means
moving employees. Also in this case you want to minimize these movements.
> Extra processing: you want to do only the activities that are really seen by the
customer as adding value. Not adding features that customer do not even care about.
You want a product that has all the required features but not more than what the
customer wants.
Inventory is extra important. Inventory is not only a waste because you have stock that you are not
actually selling, but inventory or safety stock is actually hiding all the problems you have in the
shopfloor. If you have inventory, you don’t really see the problem. Reduce the level of inventory
(water) to reveal the operations’ problems. If you decrease the inventory levels, not only you have less
stock but also the problems are revealed. The problems are preventing the process from going
smoothly, this might cause the risk of having a stock out.
It is important to reduce inventory instead of using it as a buffer, is because as soon you realize you
have problems, you also start thinking about how to solve these problems. The way you were working
is not the optimal one.
Variability is the root of all evil
- Variability in processing times, quality, customer orders, production sequence, setup-times
- Inventory is just a symptom
- To handle variability, we need to buffer:
o Products (inventory)
o Capacity (overcapacity)
o Time (lead time)
- Buffers impede (belemmeren) our stable, predictable, efficient flow
- Variability might be a choice or prerequisite (voorwaarde)
o Offer different products
o Provide meaningful jobs
o Be agile (behendig)
If you want to decrease inventory, you need to reduce variability. As soon as you have a low
variability, you can easily increase inventory without any issues.
, 2) Map the value stream
Once you know what is value for the
customer and what is not, the second step is
value stream. You want to map the stream of
the value in your system. You do this by
value stream mapping. You start with the
activities, the main steps. Then you add the
flow of information (top row), you also track
time, you track how much inventory you
have in your system (bottom row). So
activity one is aking 0.5 units of time, the
availability is 100% and changeover time is
30 units of time. You repeat this for each step. You also understand how much inventory you have
between these steps: triangles in the figure. Then you try to understand how much time you are using
for adding value, 8 hours in this case, and how much time raw material is taking to reach the final
customer, 258 hours in this case. So only 8 hours of these 258 hours are adding value. If you have
something like that in your company, you actually see there is a lot of waste around.
3) Create flow
Create a stable, predictable, efficient flow
Stability and predictability are disrupted by
Job shops
High setup times
Machine disruptions
Defects in products/rework
Individual differences in processing times
Unreliable suppliers
Efficiency is disrupted by unnecessary activities
4) Pull
As soon as you are able to create a continous flow of activities that are actually adding value to the
customer, you can really create a pull system in which you produce only when there is demand of the
customer. With lean, you wait for actual demand to start the process.
Traditional approach: (1) focus on high capacity utilization (reducing idle time of machines), in
doing so they (2) push, they do more production at each stage, this causes (3) extra production going
into inventory because of continuing stoppages at stages. The effect of this is that (4) you have high
inventory, this means less chance of problems being exposed an solved. You don’t see the problems,
you don’t solve the problems. If you don’t solve the problems (5), things are getting worse and worse
and you get more stoppages because of problems, this leads to even higher inventories and these
strengthen each other. Then (6), since you have more stoppages, the traditional approach says I need to
increase the capacity.
Lean approach: (1) focus on producing only when needed, if you do so (2) this leads to lower
capacity utilziation, but no surplus production going into inventory. Therefore, (3) you can see when
something is wrong. Low inventory problems are exposed and solved. This leads to (4) fewer
, stoppages, and these again lead to even lower inventory. You have a more continous flow. Then you
can again focus on only producing when needed.
5) Seek perfection: Kaizen
Creating a perfect flow is impossible, but aiming for that is
possible. This means when you that when you start up in a
very bad situation, you want to have the perfection in the
very long term and you want to try to reach that perfection
step by step.
Continous small steps within a structure (e.g., reduction of
batch size through reduction of setup time)
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