The Value of Lean Thinking Process Coaching Incorporated

The Value of Lean Thinking Process Coaching Incorporated Presented by: Brian D Krichbaum

What is Lean Thinking? A systematic approach to identifying and eliminating waste through continuous improvement by flowing the service or product at the pull of customers in pursuit of perfection. Process Coaching Incorporated 1

History of Lean Manufacturing 1798 Eli Whitney develops interchangeable parts 1908 through 1913 Henry Ford develops the moving assembly line. Process Coaching Incorporated 1920’s Sakichi Toyoda develops mistake proofing and 5 Whys August 4, 1937 First supermarket in the United States opened 1933 - Toyota Motor Company established 1950’s - Taiichi Ohno develops the Toyota Production System (TPS) June – August 1950 Deming introduces lean quality principles to Japanese engineers and managers 2

House of Lean Process Coaching Incorporated 3

Benefits of Lean Production § Reduction in overhead / operating costs § Productivity Increase (30% - 40%) § Throughput Time Decrease (70% +) § Increase Profit § Customer Lead Time Reductions (50% +) § Work in Process Inventory reductions (70%+) § On Time Delivery to customers (95% +) § Quality Performance Improvements Process Coaching Incorporated 4

The Eight Deadly Wastes § Overproduction § Excess Inventory § Waiting § Defects § Transportation (Moving) § Excess Motion § Non-Value Added § Underutilized Resources Processing Process Coaching Incorporated 5

Value Added Activity 95% Non. Value Added 5% Value Added What is value added activity? § Tasks that customers recognize as valuable § Tasks that are done right the first time § Tasks that transform the product or service Process Coaching Incorporated 6

Lean Manufacturing Principles 1 § Specify Value § Identify the Value Stream § Make value creating steps flow § Let the customer pull product § Strive towards Perfection 1 James Womack, Lean Thinking, (Simon & Schuster, 1996), p. 16 - 26 Process Coaching Incorporated 7

Lean Manufacturing Principles Specify Value § Correctly specifying value is critical in lean thinking § Providing the wrong good or service the correct way is still waste § Value must be defined in terms of specific products at specific prices at specific times § Only the ultimate customer can define value – but they often don’t know how to do it! Process Coaching Incorporated 8

Lean Manufacturing Principles Specify Value § Customers and producers must challenge old value definitions and work together to define what is needed – not just a better widget § Look at the “whole” product – not just the features, but how it is used – to determine it’s requirements § Define the Target Cost (the cost of producing the product waste free) Process Coaching Incorporated 9

Lean Manufacturing Principles Identify the Value Stream § When the steps for producing a product aren’t identified, they can’t be challenged § The purpose of value stream mapping is to identify waste § We map the current state and the future (lean) state § All value streams have internal (our plant) and external (our plant + suppliers + customers) components Process Coaching Incorporated 10