Operational Excellence
Operational Excellence
What is Lean?
Where did Lean come from?
Not a project
• Not a program
• Not just manufacturing
•
Henry Ford - 1913
General Motors – 1940s
Lean is a Business Strategy
Eliminates waste
Creates Flow – flow of VALUE
Connects value added steps to deliver
product or service to the customer Allowing us to GROW the Business
Operational Excellence
World War II – 1941-1945
Toyota in shambles
Demming visits Toyota
Toyota studies Ford, GM, Supermarkets
Operational Excellence
What is the definition of VALUE?
8 Basic Wastes
Those things for which a customer receives
benefit and is willing to pay for.
or
Anything a customer is willing to pay for!
1. Overproduction
2. Waiting
3. Inventory
4. Transportation
5. Motion
6. Processing
7. Defects
8. People Skills
Who defines Value?
The customer
What are some examples of value?
Operational Excellence
Operational Excellence
Types of Activities
Pencil Simulation – Batch Method
•
Need 5 volunteers
• 4 assemblers
• 1 Engineer to record findings
Incidental Work
40%
Pure Waste
50%
Value
10%
Operational Excellence
Operational Excellence
Value Stream Mapping (Current State)
Before we can do things differently,
we must be able to see things differently.
Production
Control
Forecast
Supplier
Weekly
Order
Forecast
Customer
Weekly
Order
Weekly
Schedule
Operational Excellence Definition
“Each employee sees the flow of Value,
and can fix that flow when
it breaks down.”
Raw
Materials
I
Finished
Goods
Unbox
I
Remove lid
10
Assemble
I
10
7 days
I
Box & Ship
10
A value stream is all activities, both value added and non value added,
Required to bring a product from raw material to the customer.
Operational Excellence
Operational Excellence
Value Stream Mapping (Future State)
Forecast
Need 7 volunteers
• 4 assemblers
• 1 Industrial Engineer to keep track of time
• 1 Material Engineer to keep track of inventory
• 1 Clerk to record findings
Production
Control
Forecast
Weekly
Order
Weekly
Schedule
Raw
Materials
Customer
Finished
Goods
Assembly Cell
I
2 days
C C
•
Daily
Weekly
Order
C C
Pencil Simulation – Single piece flow
Supplier
A value stream is all activities, both value added and non value added,
Required to bring a product from raw material to the customer.
Operational Excellence
Operational Excellence
Value Stream Mapping
Value Stream Mapping can be used:
• Enables everyone to see the waste simply and
easily.
• Provides a system-level view.
• Snapshot from the customer’s perspective.
• Identifies the current operating philosophy.
• Provides a roadmap for change that yields
bottom line results.
Shop floor
Office
Logistics
Supply Chain
Operational Excellence
Summary
1. Lean Enterprise is a Business Strategy that
• eliminates waste
• creates flow
• connects value added steps
2. The Customer is King and defines value
3. Must be able to see flow in order to fix it
when it breaks down
4. Value Stream Mapping is a tool used to see
the waste easily and simply