Lean Production for the Small Company
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1 A % 12 Lean Production for the Small Company Mike Elbert CRC Press Taylor & Francis Group Boca Raton London New York CRC Press is an imprint of the Taylor & Francis Group, an informa business A PRODUCTIVITY PRESS BOOK
2 Contents Preface About The Author xi i..xv 1 Introduction 1 Who Should Use This Book 1 How to Use This Book 2 Brief History of Lean Manufacturing 7. 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
3 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
4 Contents vii Kaizen Event Process 98 SMART Goals 101 Plan-Do-Check-Act 107 Using Plan-Do-Check-Act and A3 108 Kaizen Toolbox 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 Leaders' Standard Work versus Work Instructions 125 Team Leader's Standard Work 126 Manager's Standard Work 127 Accountability 129 Daily Production Meetings Work Cell and Factory Layout 133 Work Cell Layout 133 Ergonomic Design 134 Work Cell Material Handling Design 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 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
5 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 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 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
6 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 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 % Inspection 219 Error-Proofing Devices 219 Immediate Feedback 220 Statistical Process Control and Mistake-Proofing 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 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
7 x Contents 17 Achieving a Higher Level of Lean 245 Culture Change: Learning to Stop and Fix the Problem 245 Changing the Cultural Change 246 Key Ingredients in Cultural Change 247 Team Leader and Stopping the Production Line 250 Creating a Culture That Will Stop and Fix Problems (Get Out of Fire Fighting) 251 Using Metrics to Track Change 252 To Change a Culture, Change a Behavior Final Thoughts 255 What Have We Learned? 255 Sustaining Lean Conversion 256 The Human Factor 259 Goals and Measurements 259 Rewards Help? 259 Where Do You Find People with Lean Business Knowledge? 260 Conclusion 261 Glossary 263 References 269 Index 271
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