Kanban. Order to Produce. Today s Agenda

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1 Kanban Order to Produce RLM & Associates LLC RESOURCE PLANNING EXECUTION LAYOUT WORLD CLASS Quality-Cost-Time-Flexibility Propagate Best Practices STANDARDIZATION DTP SPC/Quality Tools Mistake Proofing TQM Supplier Certification Kanban Level Loading TPM Cross Training SMED Standard Work Micro Layout Visual Controls 5 S Value Stream Mapping Macro Layout EMPOWERMENT Today s Agenda Kanban Introduction Kanban video Benefits Push vs. Pull systems Kanban process Visual factory Tiny Tag factory activity 3

2 Kanban Introduction to Kanban Any signal to indicate when more parts are needed Card, empty bin, empty space, signal light 4 Kanban System A pull system that uses color-coded cards attached to parts or part containers to regulate the upstream production and delivery flow. Making a certain a mount of all the products, every day 5 Kanban Video 6

3 The Eight Deadly Wastes 1. Overproduction 2. Waiting 3. Transportation 4. Over Processing 5. Inventory 6. Motion 7. Wasting Talent 8. Making Defects 7 Takt Time Takt Time-customer demand rate. Takt time sets the pace of production to match the rate of customer demand. It is the drum or heartbeat of any lean system. The concept carries backward through a process stream. Every step is synchronized with the final output. Customer Retailer Manufacturer Suppliers 8 Takt Time Calculation Calculated by taking the work time available and dividing it by the number of units sold. Net Operating Time 480 min. Lunch/Breaks - 50 min. Maintenance/Cleanup - 30 min. Net time available 400 min. 400 min x 60 sec/min 1000 Units/Day Takt Time = 24 Sec./Unit 9

4 Pull versus Push Production Strategy 10 Push System Push System Products are provided to the consumer based on forecasts or schedules. Build product to forecast Create excess inventory Extra Inventory costs Extra floor space Expired product Damaged product 11 Large Lot Size Disadvantages of Large Lot Size Inventory waste large sums of money are tied up in stored products Quality loss Good product becomes defective as it sets in storage, from bumping, scraping, water damage Customer waiting Customers must wait until a long run is finished before getting their portion of the run 12

5 Push System 13 Push System 14 Pull System 15

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11 How many pull signals What obstacles should be considered in establishing maximum inventory levels? Long change over times Long lead times Machine downtime Schedule increases / decreases Large process or transfer or batch sizes Poor quality Long cycle times 31 How will the pull system change your job? More time for constructive activities that will make your job and working conditions better Only run the parts that are needed. Shut down time can be spent on: Preventive maintenance Quality improvements House keeping Team meetings 32 Implementation of a pull system is affected by many factors: The process itself Cost and availability of transportation Relationship and logistics with supplier Level scheduling Containerization Supplier and customer floor space 33

12 Pull System Conclusion Pull System is a flexible and simple method of controlling/balancing the flow of resources. Produce exactly what the customer wants Minimum inventory Small lots Simplifies production scheduling and MRP Management by sight/signals The Pull takes place throughout the supply chain, not just inside your production facility 34 Pull at your company Identify the opportunity for Kanbans In your department With your suppliers With your customers 35 Pull System Scheduling Courtesy of Ingersoll-Rand Co., Southern Pines, NC 36

13 Production Leveling - Heijunka Pull System Scheduling Workstation 38 Pull System Scheduling

14 Kanban cards 41 Kanban Cards Production Kanban describes how many of what item a particular operation needs to produce. Withdrawal Kanban is used to pull items from a preceding operation or a supermarket. 42

15 Supermarket System A stocking system in which materials are stored by the operation that produces them until they are retrieved by the operation that needs them. When the store is full, production stops 43 Kanban Supermarkets 44 Kanban Supermarkets Vendor maintained kanbans 45

16 Workstations Kanban Limits 46 FIFO 47 Visual Factory Definition: Visual Factory Management Innovative method of providing valuable information to everyone! Employee involvement and management support is CRUCIAL!!!! Be colorful with signs, displays and visuals 48

17 Visual Management 49 Visual Management Visual Management

18 Visual Management Visual Management 53 Visual Controls Benefits of Visual Controls 1. Cleaner and Safer Workplace 2. Decreased Inventories 3. Less Wasted Time 4. Improved Morale 5. Improved Product Quality 54

19 Kaizen Kai + zen (Change for the better) 6σ RLM & Associates LLC Kaizen Defined Continuous, incremental improvement of an activity to create more value with less waste. A process of continually making small incremental, ongoing changes. 56 Kaizen Benefits Small-scale improvements are easier and faster. The risks are lower because they generally have limited effect. The accumulated effect is often greater than a single large improvement 57

20 Kaizen and the Company Kaizen respects people all else are tools Kaizen focuses on humanizing the workplace and eliminating hard mental and physical work. The goal of Kaizen is to eliminate waste in the value stream. Kaizen involves everyone, at all levels! 58 Kaizen Involvement Continual, incremental change in all areas large and small, internal and external. Overarching strategy for business Toyota and Canon receive 100 suggestion per employee per year 59 Involvement cont. Senior Mgt responsible for defining the Kaizen organization, setting goals, and creating the culture in which Kaizen can thrive. Middle Mgt required to ensure that the employees have the skills, materials and tools. Supervisors make sure that Kaizen is occurring on both an individual and workgroup level. 60

21 Kaizen Teams 61 Change Management The Lean journey is paved by kaizen events Lean concepts are simple --sustaining is hard Lean is a business strategy and must be supported by top mgt. 62 Eliminating Waste Focus on eliminating waste in the value stream Transportation Waiting Overproduction Defects Inventory Movement Extra Processing Wasting Talent 63

22 Plan-Do-Check-Act Cycle Methodology for implementing Kaizen Plan Define the steps you need to make the change, and predict the results of the change. Do Carry out the plan in a trial or test environment, on a small scale, under controlled conditions. Check Examine the results of our trial. Act Implement the changes you ve verified on a broader scale. 64 Project Selection Analyze the VSM and select biggest contributing problem areas Don t try to fix the entire value stream in a few projects Projects can be selected at 3 levels 1. Individual Level 2. Management Level 3. Work Team Level Individual Projects Empowers every employee to improve their work area Very low investment projects Employees implement the ideas 66

23 2. Management Projects Conducted by task forces and cross-functional teams Reduce bureaucracy within the organization and its systems Ensure that the measurement and business systems support a Lean enterprise Ensure that requisite facility improvement are in place Work Team Projects Larger and more involved, but still follow the small, incremental, low-investment model that individual projects follow. Timed agenda Before and after pictures for improvement Meets in area near the work space Uses key data for improvement 68 Kaizen event or blitz (Creativity before capitol) A larger scale Kaizen project over an area Entire PDCA cycle completed in 5 days Normal production is halted for 3-5 days Cross-functional team consisting of member of senior management, the VS owner, area workers, and support functions. 69

24 Project Leader Lean Champion Team Members Pre-Event: People 70 Training Lean training 8 Wastes Project scope Overview with goals Team charter Review the current Value Stream Map Set up plant walk-through 71 Next Current State Analysis Brainstorm ideas for future state map Select methods for improvement Identify items or material you need Communicate with target area people Build team consensus and select actual tasks Organize tasks A Tasks - the team can do without permission B Tasks -requiring help from maint., IT, accounting 72 C Tasks - requiring management approval

25 Effort and Impact Matrix 73 Implementation Implement 5S Establish one-piece flow Implement process changes do the work Instruction of changes Identify additional improvements Pilot test changes in work area Plan for Day 4 74 Observe and Refine Validate improvements Verify full-rate production Refine improvements Establish work standards 75

26 Finally Sustain and Celebrate Establish visual controls Complete all changes to standards Develop a 30-day action item follow-up list Document improvements Calculate savings Celebrate! 76 Now What? List some of your opportunities for a Kaizen event. Tiny Tag Co. Activity 78

27 Manufacturing Costs Tiny Tags Company Push System Pull System Kaizen Count Total Count Total Count Unit Cost Cum. Cost Total Card $ 0.50 $ $ $ $ 0.50 Hole Punch $ 0.50 $ $ $ $ - Reinforce Hole $ 0.30 $ $ $ $ 1.30 Dot enhancement $ 0.20 $ $ $ $ - Install string $ 0.40 $ $ $ $ 1.90 Batch $ 0.20 $ $ $ $ 2.10 $ $ $ 5.80 Total Costs Finished Packets $ $ $ $ Total Revenue Profit $ (27.20) $ (1.90) $ 4.70 Cost includes raw material, labor, and overhead 79 Tiny Tag Co. results Push System Pull System Unit Cost Cum. Cost Count Total Count Total Card $ 4.00 $ $ $ Hole Punch $ 1.25 $ $ $ 1.25 Reinforce Hole $ 1.00 $ $ $ 1.00 Dot enhance $ 0.75 $ $ $ 0.75 Install string $ 0.50 $ $ $ 0.50 Batch $ 0.25 $ $ $ 0.25 Packet $ 0.25 $ $ $ 0.25 WIP Total $ $ Costs includes raw material, labor, and overhead 80