Lean Manufacturing Essential Principles

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1 Mini-Lessons from Juran Global The Source for Breakthrough Juran.com Series Lean Manufacturing Essential Principles

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3 Lean Manufacturing Essential Principles Lean manufacturing involves neverending efforts to eliminate or reduce muda in design, manufacturing, distribution, and customer service processes muda is the Japanese term for waste or any activity that consumes resources without adding value. Developed by the Toyota executive Taiichi Ohno ( ) during the post- Second World War reconstruction period in Japan, lean manufacturing is a framework that includes several universal principles. These lean manufacturing principles include the elimination of waste, continuous improvement, level production, and just-in-time manufacturing. Without firm management commitment to these fundamental concepts, the lean manufacturing process quickly breaks down. Elimination of Waste In lean organizations, waste is commonly referred to by the Japanese term of muda and is the core of lean manufacturing. While waste can take many forms, the most detrimental to an organization are known as The Seven Deadly Wastes. Overproduction: When more products are produced than what is required or products are made too early, the result is overproduction. In either case, the result is excess inventory, which adds unnecessary costs to the organization. Unnecessary Movement: One of the chief reasons for unnecessary movement is the layout of the physical plant, which is often inefficient. However, unnecessary 2 Lean Manufacturing Essential Principles movement also occurs because of product defects, reprocessing, overproduction, and excess inventory. Unnecessary movement results in lost time and reduced productivity, neither of which adds value to the product being produced. Inventory: Product that is not directly required to fulfill current customer orders which includes raw materials, work-in-process, and finished goods all add unnecessary costs to the organization in the form of additional handling and space. Defects: Products that fail to conform to specifications or customer expectations cause rework, customer dissatisfaction, product returns, and lost customers. Waiting: Also known as queuing, waiting refers to the periods of inactivity in a downstream process that occur because an upstream activity does not deliver on time. Idle downstream resources are then often used in activities that either don t add value or result in overproduction. Transportation: Of course, the production process requires some amount of transportation to occur, as the product must be transported to the customer or work in process must be transported from station to station. However, the amount of transportation should be minimized in terms of times and distance, because each time a product is moved, it stands the risk of being damaged, lost, or delayed. Over-processing: Rework, reprocessing, handling, and storage all result in overprocessing.

4 The Seven Deadly Wastes originated as a lean manufacturing principle, but they are now also applied to service organizations. What s more, many lean manufacturing organizations have added an eighth deadly waste, that being the under-utilization of the skills and talents of their employees. Whether seven or eight deadly wastes, the fundamental concept of waste elimination is to identify non-valueadded work and reduce it or eliminate it. Lean Manufacturing Continuous Improvement Commonly referred to by the Japanese word kaizen, continuous improvement is a staple of lean manufacturing. The idea behind continuous improvement is that all employees are trained and expected to identify opportunities to change and improve production processes in order to achieve operational excellence. While these changes can be big or small, they must enable ongoing improvement. Lean manufacturing organizations oftentimes discover it is easier to implement several small improvements rather than one big one to achieve a desired state. Lean Manufacturing Level Production When level production is achieved, the workload remains constant throughout the day, every day. Unfortunately, most manufacturing organizations pace production based on customer orders, which results in production peaks and valleys. That s not all. By timing production with orders, the company often faces increased delivery lead times, which may not satisfy customer requirements. Alternatively, many organizations base the production schedule on a production forecast, which presents its own problems. If the forecast is wrong, the company either is not able to meet customer demand or winds up with excess inventory one of the Seven Deadly Wastes. Level production minimizes production peaks and valleys, as it takes both forecast and history into consideration. Critical to achieving level production, however, is the implementation of a pull system. Lean Manufacturing Just-In-Time Production The idea behind just-in-time production is to produce only what is required, when it is required, and in the quantity required. Just-in-time manufacturing prevents lean manufacturing organizations from producing product that is not required, which, in turns, reduces inventory and eliminates overprocessing. However, for just-in-time production to work, the company must already have implemented a level production system. Juran Global Assessments Organization Health Check: With more than 1,000 assessments completed, we can jump start your journey to becoming a world-class organization. The Organization Health Check provides a quick qualitative review or fitness test against industry best practices. COPG Assessment: The cost of poor quality is the difference between the costs of a perfectly performing process and versus the actual costs. The Juran COPQ assessment results in the quantification of the potential dollars that are lost due to ineffective and inefficient processes. This includes understanding the customer needs through the design, development, production, transportation, installation, and servicing of those goods to meet customer needs. 3 Lean Manufacturing Essential Principles

5 Employee Engagement: We focus on the practices, shared mindset, and ethos of your organization to identify the willingness and ability of employees to contribute to the success of the company and the extent to which employees put discretionary effort into their work in the form of extra time, brainpower, and energy. Quality Management System (ISO): A quality management system allows you to maintain stable internal processes. It enables quick adaptation to new customer demands, all the while delivering superior products and services in an ever-changing market. To learn more about our assessments, or to take the Organization Health Check, please visit our website at or contact us at: Juran Global info@juran.com Copyright 2015 Juran Global. All rights reserved. 4 Lean Manufacturing Essential Principles

6 5 DMAIC: The Lean Six Sigma Steps

7 6 DMAIC: The Lean Six Sigma Steps