Mark Janson Sotto

Learning Objectives• Value-Added•Non Value-Added•Waste• Identify the 7 Wastes

Elements of Work• Value-Added• 1. The customer is willing to pay

for it

• 2. The activity changes the product or service towards something that the customer wants

• 3. The thing must be done right the first time.

Elements of Work

• Non Value Added

- anything that the customer does not want and won’t pay for

Elements of Work

• Waste

• Muda – no value• - Anything other than the

exact amount of equipment, materials, parts, space, and workers' efforts that are absolutely essential to add value to a product.

The Toyota Production System• The Toyota Production System definition states that it is:“A philosophical approach to business that is based on satisfying the customer (internal or external) by producing quality products that arejust what they need, when they need them, in the quantity requiredusing a minimum of materials, equipment, space, labor and time (insummary: To eliminate wastes).”

Lean System Components

• PHILOSOPHY: To Eliminate Waste, Human Development, Teamwork, Quality, Continuous Improvement, Problem Solving, JIT, etc.

• TOOLS: Kanban, TPM, 5-S, Mistake proofing, Cellular Manufacturing, One Piece Flow, Quick Changeover, Standardization, Value Chain Mapping, etc.

• ACTION: Problem Solving, Brainstorming, Root Cause Analysis, Implementation, Process Improvement Teams, Training & Learning, etc.

Wastes and Non-Value Added Value Added

Value Added

Value Added

Total lead time through Value Stream

Traditional improvement focus (Make Value Added twice as fast)

Waste elimination focus

Transportation Waste• Any material movement that does not

directly support immediate production.• When product is transported to a place

other than the next process location or, the next process is not located adjacent to the current one.

Examples of Transportation waste

• Units are parked off the production floor to gather a “full lot” for a batch operation.

• Production Lots that are sent off to the other side of the plant for the next process step.

• This can occur, either between operations or within an operation where workstations are not properly laid off.

• Containers that are too big and difficult to open or close.• Excess of material handling equipment. Lift-trucks that travel empty.

Transportation waste causes

• Improper Facility Layout• Large buffers .• Large lot purchasing or

processing.• Poor production planning.• Poor scheduling.• Poor work place organization.

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Waiting

•Waiting occurs when a worker cannot proceed with the next task in a process.• There are workers waiting and doing

nothing (wasting their time or making others waste theirs) while others workload is excessive.

Waiting causes• Lack of an adequate maintenance.• Need of proper tools or materials.• Lengthy setup times.• Lack of cross training.• Lack of SOP or undocumented work methods.• Production bottle necks.• Irregular distribution of training.

Consequences of Waiting

• Personnel that cost doing nothing (adding no value).• Delays that lead to overtime to conclude what was

programmed.• Costs due to inefficient processes that exceed the

standard costs.• Loss of motivation; Low morale.

_ _ _ _ _ _

Motion waste

• Any movement of people which does not contribute to add value to the product or service.• Persons moving from one place to another create

a false impression of being working, while in reality, are doing nothing. They are costing while adding no value.

Consequences of Motion waste

• Employees move from one workstation to another, doing nothing.• They are unnecessary trips.• No value is added during this process.• Include time spent looking for parts, tools, fixtures, etc.• Include time spent going to/from a warehouse.

Motion waste Causes

• Ineffective Layouts (equipment, office and plant).• Lack of Visual controls.• Poor Process Documentation.• Poor work place organization.

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Inventory waste

• Any supply (Materials or Goods) in excess of what is required to deliver products in a Just-In-Time manner.• These parts will need to be processed, moved,

counted, stored, etc. Will add to costs and can not be shipped to our customers.

Inventory waste causes• Poor sales forecasting (Demand Forecasting).• Long lead times (set-up and cycle times).• Poor inventory planning.• Poor inventory tracking.• Unbalanced production processes.• Processes that can not produce the required quantity or quality of products in a

consistent manner.• Suppliers that can not supply the required quantity or quality of products in a

consistent manner.

Consequences of Inventory waste

• Large lot purchases of raw materials, only to be stored for weeks or months.

• Very large WIP’s inventories.• Low inventory turnover. Need of large working capital to

finance inventories.• Damaged Products.• Obsolete products.

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Over-Processing waste

• Any unnecessary step, either production or communication, that adds no value to a product or service.• Occurs when we execute an operations,

and the customer is not willing to pay for what is being done.

Processing waste causes

• Lack of a concurrent design.• Processes poorly documented (Lack of SOP’s).• Lack of customer input concerning requirements.• Poor configuration control.• Quality Standards not related to customer needs.• Redundant inspections and approvals.

Consequences of Processing waste

• Time spent building a feature that is irrelevant to the customer and that the customer will not pay for.• Additional costs for materials used in excess.• Lack of control because improper use of design

documents.• Products that either, exceed the requirements of the

customer or fail to comply with them.

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Defects waste

• Costs due to sorting, repairing and/or repairing products.• Include cost of materials scrapped due to

defects.• Also consist in the cost of goods returned by

customers, recall campaigns.• Recycling part of the products is also a waste.

Defects waste causes

• Too many product models.• High inventory levels.• Inadequate tools/equipment.• Poor employee training.• Poor layouts.• Unnecessary handling.

• Poor process documentation.• Processes that can not produce

the required quantity or quality of products in a consistent manner.• Suppliers that can not supply the

required quantity or quality of products in a consistent manner.

Consequences of Defects waste

• Excessive processing costs.• Many additional non-value-added processes

or operations.• Additional quality control inspections needed.• Damaged relations with customers.

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Overproduction

• Producing more products than is needed, faster than needed or before they are needed is a waste.• Adding extra units to the quantity needed

“just in case” or building to a pre-defined lot or batch size is also wasteful.

Consequences of Over-Production

• Loss of Production Control.• Fixing rejects becomes a low priority.• Increased Mix-ups, mistakes and confusion.• Valuable time and resources consumed

(wasted) building products that are not a priority.

Overproduction Causes• Poor Planning Process.• “Just-in-case” instead of “Just-in-time” production.• Poor communications between departments.• Low Capability Processes, that are unable of producing the quantity and/or

quality required in a consistent basis.• Prolonged setup and cycle times.• Sub-optimization caused by local optimization (Processes that benefits a single

department’s interests against the organization’s interests).• Low equipment reliability.

Talent / Skill

Wrap up

• Technical Tools- Identifying where waste is happening within the processes

and eliminate it.• Culture change- How do we work together as a team to make

improvements in the processes ?- Creating the culture of continuous improvement

Action Plan Competition using Lean Management