Lean & kaizen

KAIZEN
 WHAT IS KAIZEN?
CONTINUOUS INPROVEMENT
KAI : TO BREAK APART
ZEN : TO STUDY , TO IMPROVE

DIFFERENT TOPICS OF SYSTEM
IMPROVEMENTS.
 KAIZEN
 LEAN THINKING
 FLOW
 CONTINUOUS IMPROVEMENT
 JUST IN TIME
 THEORY OF CONSTRAINTS
 QUALITY CIRCLE
 SIX SIGMA
 TOTAL QUALITY MANAGEMENT
 QUICK REPLENISHMENT
 RE-ENGINEERING

WHAT IS KAIZEN EVENT ?
 AN INTENSIVE BURST OF PROCESS
IMPROVEMENT.

CONTINUOUS OR BURST ?
 In the Western world , The work Kaizen has
become short hand for “Kaizen Event”.
 So kaizen is not really a synonym for
continuous improvement after all.
 The biggest change of all ….

CHANGE OF ALL …..
# All system improvement teachings emphasize ways of thinking – not just
sets of practices.
# Every employee is hired to use their mind - not just their body.
# Ultimate objectives of all continuous improvement is Human
Development.
# The Real power is when every one is applying “lean thinking” to their work
every day.
# When everyone is giving birth to miraculous new ideas every day.
The biggest change of all … Employees empowerment,.

World Class Benchmarks
 Quality improvement – 50% per year. (helped by
new product introductions)
 Productivity improvement – 2% per month
 Over 10% of total process time is value-adding
activities – compared to 5% for most companies
 Continuous improvement culture
 Total employee involvement, with sharing of
authority, accountability, and reward

How do they do that?
 The biggest change of all – Employee
Empowerment
 The second biggest change of all –
Management Style

Formula for Change
 Change = V x D x A
 V = Vision
 D = Dissatisfaction
 A = Action (quick first steps)
 The degree of change is the result of
multiplying all factors.
 If any factor is zero, change won’t happen

Process Improvement Mandate
 Process Boundaries
 Why does this need to be improved?
 Improvement targets
 Empowerment Boundaries
 Participants
 Session dates, times, and places

Empowerment Boundaries
 Where do you think we might find a template
for our executives to use to define Kaizen
Team Empowerment Boundaries?
 Within our Portal!

KAIZEN
 Everything Takes time ,Costs money
 Costs of Inventory Cost to borrow money
 Insurance
 Space
 Loss due to damage and obsolescence
 Cost to count it
 (over and over)
 Cost to move it
 (over and over)

The accountants have it wrong
Inventory is not an asset
Inventory is a liability
Goal = minimize inventory

All work is either - Value Add
 Transforms material or information to meet
the true desires of an external customer
Non-Value Add
 Control
 Information
 Administration & OTHERS

Which of these activities add value?
 Looking for parts
 Building products
 Inspecting
 Testing
 Rework
 Delivering services
 Packaging
 Shipping
 Searching for info
 Filling out forms
 Entering data
 Answering customer questions
 Stocking shelves
 Training
 Selling

Low hanging fruit
 Where do you think you will find the “low
hanging fruit” when you begin your
improvement efforts?
 By reducing the 5% of value-add activities?
 By reducing the 95% of non-value-add
activities

The # 1 Fundamental Principle of Process
Improvement
 Anything that does not add value is waste,
and must be reduced or eliminated

Reduce
 “Necessary Non-Value Add” activities that
really are needed for control – until the
process can be further simplified

Eliminate
 “Unnecessary Non-Value Add” activities

The Seven Types of Muda
As defined by Taiicho Ohno (Toyota
executive, 1912-1990)
Defects
 Overproduction of goods not demanded by
actual customers
 Inventories awaiting further processing or
consumption
 ( See next page)

Contd…
 Unnecessary processing
 Unnecessary movement of employees
 Unnecessary transport of goods
 Waiting for an upstream process to deliver

few more types of waste
 Unsafe or un ergonomic work conditions
 Working to the wrong metrics
 Missing or misinformation
 Underutilized human potential - skills, talents,
and ideas

Goal = Get ever closer to zero
 Zero waste
 Zero defects
 Zero scrap
 Zero rework
 Zero receiving rejections
 Zero downtime
 Zero inventory
 Zero handling
 Zero paperwork
 Zero mistakes
 Zero absenteeism
 Did we mention…
Zero waste?

Goal = Get ever closer to zero process
times
 Setups
 Sales quotes
 Delivery date promising
 Sales order delivery
 Production process time
 Purchase order lead times
 Outsourcing

Contd…
 Engineering changes
 Time to market
 Returns
 Repairs
 Data collection
 Data analysis
 Period end close

Lego Game
 A game to “learn to see waste”
 Every Lean Consultant has a favorite Lego
game to help people “learn to see waste”.
 Newcomers to Lean teachings almost always
have several “aha” experiences before the
game is over.

Sort, Set, Sweep, Standardize, Sustain - 5
S
Steps to reduce or eliminate waste
 Organize the workplace (5S)
 Arrange everything to “flow”

2. Arrange for flow

What is “flow”?
 A process where a "target object" moves
quickly from value-adding activity to value-
adding activity without interruptions for any of
the 7 types of muda

A “target object” might be…
 A physical item moving through production or
distribution
 A design spec for developing a new product
 An approval process (for anything that needs
approval)
 Any other "target object" that you can conceive that
receives value by going through a process

Why flow?
Vastly improved process efficiency
 "Flow" processes routinely outperform "batch
& queue" processes by staggering margins,
with common numbers like: 20-40% increase
in productivity
 70-90% lead time improvement
 40-60% reduction in floor space
 50-90% reduction of WIP
 40-70% quality improvement

Why flow?
Improved employee morale
 In the classic research book Flow: The
Psychology of Optimal Experience,
Csikzentmihalyi studies thousands of self-
described "optimal experiences" at work and
play, and summarizes the characteristics of
an optimal work experience

What are your self-described “optimal
experiences”?

Flow – Optimal Experiences
 The worker sees and understands the whole
process and how the parts fit together
 The worker has high degree of control and
involvement
 The task requires full attention - it is neither boring
nor overwhelming
 There are few or no interruptions
 There is immediate feedback

The flow of flow
 In your own mind, compare the "flow of flow" to the
"flow of batch & queue"
 Is it any wonder that employees in a flow
environment report a much higher degree of job
satisfaction? In addition, flow usually also provides:
 Improved communication between direct work force
and management / staff
 Improved safety

Why flow?
Improved supplier relations
 Don't you wish that your customers would:
 Provide you with long-term visibility of their level-
loaded production schedule
 Commit to a long-term partnership with you
 Offer their Kaizen Team to teach your people how to
achieve the best-of-class results that they have
already field-tested and proven within their own
company

Why flow?
The number one reason…
 All of that is great, but what is the number
one reason for wanting to achieve flow? Flow
enables pull
 (remember this answer for later)

Why arrange everything around product
lines?
 To reduce many types of waste
 Uninterrupted work flow
 The better the flow – the lower the WIP (Work In
Process)
 The lower the WIP – the faster the throughput
 Fewer set-ups and change-overs
 Fewer mistakes
 Less rework and obsolescence
 Dedicated support people that know your
challenges, and are available when needed

Production Environments that embrace
flow
 Continuous Flow (non-discrete products)
 Repetitive (assembly lines)
 Lean (work cells)

Functional Department Layout
(Spaghetti Diagram)

Work Cell Layout
 Why are work cells the “holy grail”?
 Production lines still need to deal with sales
forecasting, batch sizes, and finished goods
inventories.
 The work cell can accommodate a batch size of
one. And it can be employed in work environments
that have traditionally been organized in batch &
queue departments - which have the most
opportunity for improvement.

What if our process
includes a “monument”?
 A “monument” is anything (but usually a large piece
of equipment) that is so huge or expensive that it
requires large batches, and/or must be shared by
the production processes for several product lines
 55 What if our process includes a “monument”?
 Ideal option is often to replace the monument with
equipment capable of producing in small lot sizes
 But the world isn’t always ideal, is it?

What if our process includes a
“monument”? (Decouple the process)
 Inventory is bad
 Inventory is terrible
 Inventory is a liability
 We want zero inventory
 Inventory is to be minimized
 Reduce inventory
 Inventory is bad, bad, bad…

What do you think is (by far) the
number one reason for lean initiative
failures?
Reducing inventory too much too
soon

Lower the water level slowly
Why?

 Batch & queue is more tolerant of quality
problems, machine breakdowns, and other
problems that stop production
 Click here for more quality effects of flow vs.
batch & queue
 It takes intensive problem elimination efforts
before a process is ready to withstand the harsh
penalties of and on line-stopping
 The "rocks beneath the water of inventory” should
be slowly and carefully revealed, so that each
new rock can be removed as it surfaces

What does jidoka mean?
 Everything stops whenever anything goes
wrong

What are andon lights?
 Lights that looks like a traffic light – located
on the shop floor. Anyone can turn on a light
at any time.
 Red light – stops production
 Yellow light – need inventory
 Blue light – have a question

Key enablers of flow
 Total Quality Maintenance
When there is any quality problem anywhere, the
whole process stops.
 Total Productive Maintenance
When any machine is down, the whole process
stops.
 Minimize “internal” setups
When a machine is down, the whole process stops.
 Reliable suppliers
When a delivery is late or rejected, the whole
process stops more key enablers of flow .

When does batch & queue make sense?
 Temporarily while your people are unable to
stop problems that stop flow
Permanently for…
 Prototypes
 Non-mission critical processes that simply
aren't worth the effort to convert to flow

Your competitors are going to buy you up and pay for
you by liquidating your own excess inventories if you
continue to use batch & queue for...
Production of product lines with any kind of volume
New product design cycles that allow your competitors
to consistently "beat you to market"
Sales order processing & fulfillment processes that are
inefficient enough to annoy and anger your customers

Standardize Work
 Standardize work

The USA Principle
Understand
Simplify

Standard Work
Definition
 Standardization of best work practices - as
the work is actually routinely done. (in real
life)
Purpose
 To make operations repeatable, ensuring
consistently high productivity, and reduced
variability

To get started with defining Standard
Work, start by…
 Review the Standard Operating Procedures,
routings, and other process documentation?
(wrong)
 Observe and document the way things are
actually being done

Components of Standard Work
 Work layout & sequence
 Standard WIP
 Takt time and cycle time

What’s the difference between?
 Process lead time
 Cycle time
 Takt time

Process Lead Time – time required to
complete the whole race
Examples: Time to produce an item,

Takt Time – planning drumbeat
 Process Lead Time and Cycle Time are
measures of the average time that it actually
takes to do something
 Takt time is used for planning
 Takt time can be thought of as “planned cycle
time” (planned average time between
completion

Takt Time Calculation
 What is the formula for calculating the
“drumbeat planning” Takt Time? (planned
average time between completion of two
discrete units of production)
 The available production time (per day)
divided by the rate of customer demand (per
day)

Takt Time
The “drum beat” pace of planned
production, set by:
 Forecast?
 Capacity?
 Efficiency targets?
 Utilization targets?
 Material availability?
 The rate of customer demand?

Takt Time – driven by the rate of customer
demand

 Maximize Throughput
Not Output
 Output
The dollar value of items produced
 Throughput
The dollar value of items produced that have
been sold

 Operational Takt Time
 Takt Time = Rate of Customer Demand
 Operational Takt Time = Takt Time adjusted for
Sales & Operations Planning
 E.g. Seasonality
 Planned downtime
 New product introduction ramp-up
 Etc.

Target Cycle Time
 When doing Staff Load Balancing for a process that
is divided between several staff positions, it is
common to need to add Wait time to the Standard
Work for some staff positions in order for each sub-
job to be synchronized to the same Target Cycle
Time.
 Target Cycle Time must be less than or equal to
(and is usually equal to) Operational Takt

 Takt Time, Operational Takt Time, and
Target Cycle Time
 In many environments, Takt Time,
Operational Takt Time, and Target Cycle
Time are all the same, and the single term
"Takt Time" can be used.
 In other environments, the differences can
become important.

Takt Time – planning drumbeat
We’re workin’ to da takt time…
to da takt time…
Workin’ to da takt time…
Uh huh…
We’re workin’ to da takt time…
to da takt time…
Workin’ to da takt time…
Oh yeah…

Balanced Scorecards
There should be clear relationships between
 Strategic Measures Scorecard
 Departmental Measures Scorecards
 Process Measures Scorecards

Information Feedback Time
Definition:
 The time it takes to receive feedback
regarding key measures of a process.
 Information Feedback Time is one of the
"process time prints" that is an important part
of any process improvement effort.

Process Measures Scorecards
 Should be posted where people can see
them while working on the process

Visual Systems
 Wherever possible – implement visual
systems that…
 Are easily found where needed
 Are easy to understand
 Are quick to understand
 Provide (only) the most meaningful feedback

Major Goal – Error Free Processing
 Use Cause & Effect Analysis to identify and
eliminate all root causes for errors
 Ask why? Why? Why? Why? Why?
 Poke Yoke = error proofing

What are some examples of poke yoke?
 Error Free Processing

Process Design Tools
 Value Stream Map
 Flow chart
 Functional Flow Chart
 Process Design Matrix
 Organization Chart
 Brainstorming/Affinity
 Root Cause Analysis
 Spaghetti Diagram
 Time Observation Worksheet
 Standard Work Instructions, Chart, & Analysis
 Staff and Machine Load Balancing

Process Design Objectives
 Lean Objectives and Ideals
 Ideals and objectives of lean process improvement
 Deliver exactly what is needed
 Defect-free
 Deliver exactly the quantity requested
 Produce in the smallest batch size possible - ideally a batch size of one
 Deliver on demand - exactly when requested
 Produce with the shortest practical cycle time and lead time
 Produce without waste
 Any of the Deadly Types of Waste
 Immediately respond to problems, changes, or challenges that arise
 Applying the Lean 4 Rules In Use
 Produce in ways that are safe
 For workers, customers, and the surrounding environment
 Treat human beings with respect and dignity
 Change Agent starts with job security, and works toward bottom-up lean culture

Job Design & Change Management Tools
 Jobs Design Spec
 Change Management Worksheet
 Force Field Map
 Organization Chart
 5S Schedule
 Standard Work Chart
 Standard Work Audit Checklist

Software Design Tools
 In the design process, three things can happen
 Don’t change
 Change process
 Change software
 Software Design Tools
 Customization Spec
 Upgrade Spec
 Integration Spec
 Data Conversion Spec
 Software Fit Analysis (New software purchase spec)

Process Documentation Tools
 Any design tools, plus…
 Standard Work Instructions
 Standard Operating Procedure
 Training video
 User-defined on-line help (within a software
application)

Training Program Development Tools
Any design or documentation tools,
plus…
 Training Program Development Spec
 Training Plan
 Training Evaluations s)
 Training slides & handouts
 (perhaps with Instructor Notes)
 Training database sample data
 Cross-Training Matrix

 Small batches
 Make small batches

Why are small batches better?
 Shorter lead times
 Less inventory – and obsolescence
 More flexibility – to meet demand variability
 Higher quality – with lower scrap & rework
 Less floor space – in production and storage
 Lower cost? (be sure to consider ALL factors)

What is needed for small batch sizes?
 Short setups

What are the two primary measures used
to reduce Lean batch sizes?
 Internal Setup Time
 Every Part Every Interval

What is “internal setup time”?
 The time from last good part to first good part
 Your mission is to minimize internal setup
time
 Common Goal = SMED (Single Minute
Exchange of Dies)

Every Part Every Interval
answers what questions?
 When can we get it?
 How small can our batch sizes be?
 If we got an order tomorrow for one of
everything we make – when could we deliver
the whole order?

Every Part Every Interval - Calculation
 Time Available for Changeovers = Working hours per month for
pacemaker operation minus calculated total cycle time for all
items going through pacemaker operation (e.g. 320 working hrs –
280 cycle hours = 40 hours)
 Number of Intervals Per Month = Time Available for
Changeovers divided by number of products or product families
times Changeover Time per changeover (e.g. 40 hours / 20
products x 1 hr per CO = 2)
 EPE Interval = Number of working days per month divided by the
Number of Intervals per Month (e.g. 20 working days / 2 Intervals
per Month = Every Part Every 10 days)

How to improve your EPE Interval?
 Increase working shifts
 Decrease batch sizes

 What do you think is next?
 (hint: what was the #1 reason for wanting
flow?)

Organize the workplace (5S)
Arrange everything to “flow”
Standardize work
Make small batches
Introduce pull systems (self-correcting

 Pull - make only what the customer orders
 "Pull" is the biggest pay-off for re-designing
your process to flow with small batch sizes.

Benefits of pull
 Little or no waste doing things that no one will ever
pay for
 Little or no finished goods inventory
 Little or no reliance on sales forecast
 Radically short lead times for radically customized
deliverables
 An arsenal of weapons to annihilate your
competitors: Lower costs, lower lead times, higher
quality...

Key Enablers of Pull
 Level Schedule
 Level Selling
 Locate near customers
 Supplier partnerships

Kanban
 In Japanese, kanban is the word for "card",
because a kanban is often a 3x5 card
attached to a parts container. When the
container is emptied, (because the parts have
been used to fulfill actual customer orders),
the container is delivered to the upstream
operation, and the kanban card provides the
information needed to fill the container.

Types of kanbans
A kanban can be any visual signal authorizing
upstream production or delivery
 Materials kanbans
authorize replenishment of materials
 Production kanbans
authorize upstream production
 Electronic kanbans
can be used to trigger replenishment by off-site
suppliers

 Introduce pull systems (self-correcting
control)
 (what do you think is next?)

Tiny batches
 Introduce pull systems (self-correcting
control)
 Make tiny batches (ideal lot size is 1)

What is needed for tiny batch sizes?
 Short setups Steps to reduce or eliminate waste
 Introduce pull systems (self-correcting control)
 (What do you think is next?)

Never stop continuous improvement
 Introduce pull systems (self-correcting control)
 Never stop continuous improvement

 And that concludes our presentation…
 What can you do to help?
 Where do you think we might find a
document explaining Kaizen Team Roles?

Prepare for Resistance
Resistance to change is natural
 Stability = security, control, status
 Provide assurance that jobs are not at risk
 Communicate openly and often
 Involve everyone that is affected
 Focus on positive payoffs of change
 “If someone doesn’t get upset, we’re not
really trying to change anything”

Ground Rules
 Where do you think we might find our
company’s Ground Rules for Working
Together?

Kaizen Principles
 Let the mandate guide you
 No rank among Team Members
 No excuses or blaming – focus on solutions
 Open your eyes, ears, and mind
 BBQ sacred cows
 Ask “Why?” until root cause is uncovered
 Creativity before capital
 Avoid analysis paralysis – try it & adjust

Lean & kaizen

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