Advanced Lean Module Advanced Lean LEAN Delivering value

Advanced Lean Module Advanced Lean LEAN: Delivering value to Customers with shortest turn around time Advanced Lean

• Lean Overview … Recap • Lean Methodology Ø Five Lean Principles • Lean Advanced Toolkit • Lean Deployment • Lean Resources Advanced Lean

Five Lean Principles Lean Enterprise Raw Materials Tier 2 Suppliers Tier 1 Suppliers General Electric LEAN OFFICE LEAN ENTERPRISE Lean Enterprise: Maximizing Value Wing to Wing Advanced Lean Customer

Five Lean Principles Lean Thinking The Fundamental Objective The Fundamental Insight Provide perfect value to the customer through a perfect value creation process with zero waste in: Ø Focus on each product and its value stream rather than organizations, assets, process technologies, and career paths Ø Design (concept to customer) Ø Build (order to delivery) Ø Ask which activities are waste and which truly create value Ø Service (order to cash) Ø Enhance value & eliminate waste Lean: Fundamentally Change how we do business Advanced Lean

Five Lean Principles Define value in from the customers perspective and express value in terms of a specific product 1 Specify Value 2 Map the Value Stream Map all of the steps…value added & non-value added…that bring a product of service to the customer 3 Establish Flow 5 Work to Perfection The continuous movement of products, services and information from end to end through the process The complete elimination of waste so all activities create value for the customer 4 Implement Pull Nothing is done by the upstream process until the downstream customer signals the need The Tools get you there…The Principles keep you there Advanced Lean

Five Lean Principles 1. Specify Value A capability provided to a customer at the right time at an appropriate price, as defined in each case by the customer. ü Specify value from the standpoint of the end customer ü Ask how your current products/services and processes disappoint your customer’s value expectation: Ø price? Waste: Ø Activities that add no value, add cost and time Ø Symptoms; need to find root causes and eliminate them Ø 7 types of waste Ø quality? Ø reliable delivery? Ø rapid response to changing needs? Ø fundamental definition of the product? • Incidental • Work • Pure Waste • Value Typical Operation: 1 -10% Activities are Value Adding Advanced Lean • Value

Five Lean Principles 2. Map the Value Stream “Whenever there is a product or service for a customer, there is a value stream. The challenge lies in seeing it. ” (Womack, Learning To See) Ø Identify all of the steps currently required to move products from order to delivery Ø Challenge every step: Why is this necessary? Would the customer think the product is worth less if this step could be left out? Ø Many steps are only necessary because of the way firms are organized and previous decisions about assets and technologies Value stream All activities, both value added and non-value added, required to bring a product (or provide a capability) from raw material (initialization) into the arm of the customer 3 Main Value Streams: 1. Raw material to customer 2. Concept to launch 3. Order to cash Mapping the VS – See the whole and improve the system Advanced Lean

Five Lean Principles 3. Establish Flow Line up all steps that truly create value in a rapid sequence ü Require that every step in the process be: ü Continuous movement of products, services and information through the various transactions from Ø Capable – right every time (6 Sigma) end to end in the process ü Flow appears impractical and illogical because we have been trained to think in terms of: Ø departments, silos Ø batches, queues Ø efficiencies and backlogs Ø Available – always able to run (TPM) Ø Adequate – with capacity to avoid bottlenecks and over capitalization (right-sized tools) Batch Processing – 1 minute per piece A B Continuous Flow – Make One Move One C Cycle Time= 30++ Min (weeks) Cycle Time= 12 Min Applying the right tools at the right stage Advanced Lean A B C

Five Lean Principles 4. Implement Pull Nothing is done downstream until required upstream ü A system of cascading production and delivery instructions in which nothing is done by the upstream supplier until the downstream customer signals the need ü Through lead time compression & correct value specification, let customers get exactly what’s wanted exactly when it’s wanted: Ø At the pull of the customer/next process Ø Using signals (kanbans) One more please! Okay supplier customer Pull: Customer Centric Advanced Lean

Five Lean Principles 5. Work to Perfection A continual cycle of process improvements ü There is always more waste ü People learn and exercise more creativity ü Involve employees in the process, training them as you proceed. ü Continuous improvement leads to innovation ü Use root cause analysis to solve problems promptly and permanently. Next Future State ü Make objectives visible Future State Current State Original State Continuous Improvement never stops Advanced Lean

Lean Advanced Toolkit Level 2 Level 1 Tool Sophistication Reduce Variability Control the Process Expose the Waste · 5 S · MUDA · Mistake proofing · Intro to Value Stream Mapping · Visual Management · Value Stream Mapping · Standardized Work · Intro to Continuous Flow · Intro to Pull Production Time / Cultural Maturity Applying the right tools at the right stage Advanced Lean

Lean Tools Description Reduce Variability Control the Process Ø Value Stream Mapping Ø Standardized Work Ø Introduction to Continuous flow Ø Introduction to Pull production <Action Work Out> Advanced Lean

Value Stream Mapping C PA N GE L VIS T IO N E A ENTERPRISE Advanced Lean N

Value Stream Overview View of the entire Supply Chain SUPPLIERS YOUR PLANT OR BUSINESS CUSTOMER TO END USER TOTAL VALUE STREAM See the Whole Process from Start to Finish – Wing to Wing Advanced Lean

Value Stream Overview • Value Stream Mapping (VSM) is a pencil and paper tool that helps us see and understand the flow of material and information as a product makes its way through the Value Stream • Follow the product or services path starting from the Customer and then move to the supplier and carefully draw a visual representation of every process • Ask a set of key questions and draw a “Future State” map of how value should flow • Help us see the sources of Waste and eliminate them Looking at the process from a customer value perspective Advanced Lean

Value Stream Mapping Why Value Stream Mapping is a good place to start your LEAN journey • it helps you visualize more than just the single process level, i. e. assembly, welding, etc. • it helps you see more than waste it helps you see the sources of waste in your value stream • it provides a common language for talking about manufacturing processes • it makes decisions about the flow apparent, so you can discuss them • it ties together lean concepts and techniques helps you avoid "cherry picking" • it forms the basis of an implementation plan • it shows the linkage between the information flow and the material flow Forms the Blueprint for a Lean Implementation Plan Advanced Lean

Value Stream Mapping VSM Steps Product Family Current State Drawing Future State Drawing 3 • Identify the Value Stream for every major product family/program. Concept to launch - Order to delivery • Map the current state - Identify all the actions that don’t create value. Challenge every step • Develop and map concepts for the future state as a management team • Develop actions and drive toward future state Implementation Plan After completion…. look for other opportunities to improve Advanced Lean

Value Stream Mapping Current Future Template ~ Create your own Value Stream Map Identify AWO opportunities from the Value Stream map Advanced Lean

Value Stream Deployment Roadmap 1. Set the strategy 2. Find a change agent (how about you? ) 3. Get the knowledge 4. Do an Action Work Out 5. Eliminate waste by executing the plan 6. Expand the scope to other areas Don’t Wait!! – “Opportunities multiply as they are seized” Advanced Lean

Trace Collection Process: VSM No Phones GECFA NL L Collections GE Money Mainframe (Vision Plus) EXTERNAL AGENCY EXITS L X Mainframe 0 -29 days past due accounts Workable/Non Workable 4 Hours + 4 Mins V+, CPAC, ICBS c IWP c 10+5+5 Mins DMS c App req 3 -9 DAYS c FCS c Sentricx 10 + 4 Mins c Hold 5 - 11 DAYS L = Locate NL = No Locate C = Call made Wait Time: up to 14 days X Advanced Lean = Routed Value Add: ~ 35 Min Reduce TAT from 3 -9 Days to Less than 4 days

Value Stream Map From GE Rail ~ AWO Before Lead Time: 76 Days 59 Total Steps After Process Flow Lead Time: 52. 35 Days 59 Total Steps Advanced Lean

Standardized Work C PA N GE L VIS T IO N E A ENTERPRISE Advanced Lean N

Standard Work Why have Standard Work? 1. Waste Elimination To make office process rules explicit Establish the explicit methods for manual tasks with respect to quality, quantity, cost and safety. prevent wastes 2. A tool for Improvement There can be no improvement in the absence of standards. Abnormal situation show that something is going on. expose wastes Advanced Lean

Standard Work The combination of people, information and material to carry out an operation in the most efficient way Normal vs. Abnormal When normal and abnormal work activities are undifferentiated, waste almost inevitably occurs. Standard Work provides an efficient framework in which to determine when an abnormality has occurred so that it can be addressed. Office Processes • • Often poorly defined Examples: • Standardize Input • Hand-off can create huge waiting time. Reduce time by standardization Flow effect • • Provide clarity about activities Reduce process variance Makes process reliable Exposes more waste Identify Problems Normal vs. Provides the Basis for Kaizen Advanced Lean Abnormal Why?

Standard Work The devil is in the details. If you do not specify the standard, you allow wastes to occur that could be eliminated. But more important, it hinders learning and improvement in the organization. Specify content, sequence, timing and outcome to prevent and to expose waste. However, keep in mind that the details have to improve the flow of value as drawn in a value stream map. A perfect example of Standard Work 1. 2. 3. 4. Each worker understands their task. All tools and equipment are at arms length Standard work has been practiced to perfection Continuous observation and analysis drives continuous improvement Types of Waste Eliminated • Searching • Finding • Selecting • Transporting • Waiting Advanced Lean

Levels of Standardization Two levels for standardization for every type of item A. Activity B. Connection between activities Connection Activity Advanced Lean Customer

Standard Activity Customer Standard Activity have to make the activity direct and unambiguous. On a detailed level tasks/decisions/etc… should be specified. When designing a Standard Activity keep in mind the follow elements: 1. TAKT time 2. Work sequence 3. Standard work in process Advanced Lean

Standard Work: Takt Time Element 1 Create Standard Work around Takt Time, keeping in mind the changes in Takt Time. TAKT Time = the frequency at which a product or service must be competed in order to meet customer needs Rate of Customer Demand = Rate of Producing/Servicing Available Time TAKT time formula: Office Processes • Required Output (Customer or Forecasted Demand) Time It’s 8: 30 am. How are we doing? Takt Time 60” 7 am A (60”) Advanced Lean Check any time if you’re on schedule: Daily 400 in-voices. It is 13: 30, are we on schedule? B (60”) C (60”) D (12”) Person Orders 8 am 9 am 10 am 11 am noon

Standard Work: Work Sequence Element 2 Standard Work • What has to be done? • In what sequence? • How much time can it take? Work Sequence The order in which an person performs a series of repetitive tasks. It should be differentiated from the processing sequence, which is the order in which the part is processed. Standard Work / Combination Sheet Standard Work Sheet Use this Template Physical or digital design Standard Work Sheet and Standard Work/Combination Sheet defines the Work Sequence Advanced Lean

Standard Work: Standard WIP Element 3 Set a Standard WIP in your Cell, if applicable to your office process. The minimum Work in Process (WIP) required to perform repetitive operations, and maintain a continuous flow. Controls the in-process inventory to ensure an even and controlled process flow. Standard WIP should be kept as low as possible. Advanced Lean