Lean Operations
 House Building Game
 The transition to Lean Ops
 The Paradigm of Lean Operations: The ideal
 Basic philosophy of Lean Ops
 Lean tools for synchronization & waste reduction
 Driving Continuous Improvement through Visibility
Lean Operations
Slide 1
© Van Mieghem
Paradigm of Lean Operations:
In Search for the Holy Grail

The ideal Process =
–
Synchronization of all flows
•
•
•
–

1x1
production on demand
defect free
At lowest possible cost
Waste = Gap between ideal and actual
 How do we sync at lowest cost?
> Synchronization or Lean Tools
 How do we set up a system to continually reduce waste ?
Lean Operations
Slide 2
© Van Mieghem
Improvement as a process
The
Ideal Operation
• perfectly synchronized with demand
• at lowest cost
D = deviation from ideal
= waste, variability, inflexibility
= opportunity for improvement
The
Actual Operation
Continuous
Improvement
Process
Increase visibility of D
• Andon pulls, workplace organization
• Exploratory stress
• Process measurement, visual
management
Reduce D
• Root cause analysis & problem solving
mindset
• Waste reduction (Lean tools)
• Variability reduction (Six Sigma, TQM)
Lean Operations
Slide 3
© Van Mieghem
The architect behind Lean Operations:
Toyota’s Taiichi Ohno and waste elimination

“Toyota Production System: Beyond Large-Scale
Production” by Taiichi Ohno

Lean operations has been defined as “a business system
for organizing and managing product development,
operations, suppliers, and customer relations that
requires less human effort, less space, less capital, and
less time to make products with fewer defects to precise
customer desires, compared with the previous system of
mass production.”
Lean Operations
Slide 4
© Van Mieghem
There are three elements of work
Waste
• Work or time that does
not add any value to a
product
• Waste is sometimes
called "muda", from
the Japanese for waste
Value
Added
Activity
Waste
Elements
of work
Incidental
Activity
Value Added Activity
• Work or time that directly increases the
value of the product in the eyes of the
customer (e.g. Assembly of parts)
• What the customer is paying for
Objective
The objective is to maximise
the proportion of value
added activity by eliminating
waste and incidental activity
Incidental Activity
• Work or time that does not directly add
customer value, but which is currently
necessary to maintain operations (e.g.
small movements to reach for material
for assembly)
Lean Operations
Slide 5
© Van Mieghem
THERE ARE 7 CLASSIC TYPES OF WASTE
“wormpit”
Over-production
Making parts on a piece rate basis to
fully load individual machines
Motion
Walking around the
factory looking for
something or fetching
equipment
Rework
Documenting the same
information in several places
for a new hospital patient
Waiting
Mortgage applications
piling in a desktop in tray
8
Inventory
Excess stock of drugs or
equipment in clinical areas
Lean Operations
Intellect
Failure to make full use of the
whole team’s experience and
knowledge
Transportation
Transferring finished goods
to off-site packing and then
freighting onto customers
Over-processing
Polishing a luxury walnut
dashboard to a mirror finish
on both sides
Slide 6
© Van Mieghem
Lean Tool #1: cut batch sizes
An illustrative example
 Consider the following 4-step process:
A
B
C
1 min/job
Resource 1
1 min/job
Resource 2
1 min/job
Resource 3
D
1 min/job
Resource 4
 What is:
– The bottleneck:
– The process capacity or maximal R:
– The theoretical flow time Tth
– The minimal amount of inventory needed to run at capacity:

Ith
– Call this scenario 1, the best. Let’s now consider what happens if we
have (transfer) batches
Lean Operations
Slide 7
© Van Mieghem
Lean Tool #1: cut batch size
ABCD example continued
Batch Shop (Batchsize = 4)
A
0
B
C
Flow Shop (Batchsize = 1)
D
A
0
1
1
1
3
3
2
1
4
3
2
1
5
4
3
2
4
3
T
5
1
6
2
7
3
8
4
9
5
1
0
6
2
1
7
3
2
8
4
3
9
5
1
4
0
6
2
5
1
7
3
6
2
8
4
Elapsed Time
Elapsed Time
D
2
4
7
8
Lean Operations
C
2
4
T
B
9
T=
I=
R=
T=
Slide 8
I=
R=
= scenario ?
© Van Mieghem
Synchronization requires smaller batch sizes or even 1x1

Changeover / setup / batch related costs must be reduced if batch size is
to be decreased
Lean Operations
Slide 9
© Van Mieghem
Lean Tool #2: process on demand = pull
Just-In-Time operations
JIT = have exactly what is needed, in the quantity it is needed, when it is
needed, where it is needed.
“hand-to-mouth” material flow
 needed by whom?

Lean Operations
Slide 10
© Van Mieghem
Lean Tool #2: Synchronization with demand:
customer demand pulls product
PUSH: Inputs availability triggers execution
Supplier
Process
inputs
Customer
outputs
PULL: Outputs need triggers execution
Supplier
Process
inputs
Lean Operations
Customer
outputs
Slide 11
© Van Mieghem
Lean Tool #2: how make pull system in house game?
Production
control
Lean Operations
Slide 12
Roof
cut
Base
cut
FA
Base
assembly
© Van Mieghem
Lean Tool #2: Pull Implementation:
Kanban Production Control Systems
Kanban
Job
Processing
center i
WIP
Processing
center i + 1
http://www.toyota.co.jp/en/vision/production_system/video.html
Lean Operations
Slide 13
© Van Mieghem
Lean Tool #3: Quality at the Source
Defects
Found at:
Impact to the
Company
Lean Operations
Own Station
Next Station
End of Line
Final
Inspection
End User’s
Hand
$
$
$
$
$
 Very
Minor
 Minor
Delay
 Rework
 Resched.
of work
 Significant
Rework
 Delay in
Delivery
 Additional
Inspection
 Warranty
costs
 Administra
tive costs
 Reputation
 Loss of
Market
Share
Slide 14
© Van Mieghem
Reducing Waste:
Quality at the Source

Fool-proof/Fail-safe design (Poka-Yoke)
 Inspection
– Self
– Automated (Jidoka)

Line-stopping empowerment (Andon)
Line-stopping empowerment
Poka Yoke and Jidoka
Trouble!
Approach for operators
• Preventative
• If trouble, STOP!
If defective don't pass
Lean•Operations
Approach for machines
• A mistake-proofing system prevents errors and defects
• Stop line when defects are detected or machine breaks
down
Slide 15
© Van Mieghem
Lean Tool #4: Flexible Resources & Standardized Work

Cross training of workforce allows resource pooling

Use of IT in services
Lean Operations
Slide 16
© Van Mieghem
WORKPLACE ORGANIZATION – 5S
5S is a structured approach to systematically clean and organize the workplace to support a
lean working environment
Maintenance of
improved condition
Waste identification and elimination
Sort
• Check what is
needed and get
rid of what is
not used
Set in
order
• Place each item
in its optimal
position in the
workplace and
employ visual
management
Shine
• Keep the area
and equipment
always clean. Set
a cleaning
program
Standardize
Sustain
• Improve and maint-ain • Employ systems
the first 3 "S" by
improving the environment:
– visual controls
– standard machine
improvements
– standard procedures
for all similar areas
to monitor 5S and
ensure that it is
constantly
maintained
Objectives
Organize the workplace with the aim to
• Identify and eliminate waste
• Maintain and continuously improve the workplace/equipment
• Improve morale and increase worker involvement
Lean Operations
Slide 17
© Van Mieghem
Lean Tool #5: Heijunka
Mixed Level/Balanced Production
Batch Production Schedule
Product
Mixed Production Schedule
(AAAABBBB..)
(ABAB...)
April 1.................15...........................30
April 1....................15.......................30
A
B
FGI
FGI
time
time
http://www.toyota.co.jp/en/vision/production_system/video.html
Lean Operations
Slide 18
© Van Mieghem
SILS: shipping in line sequence
Business Mall adjacent to Russelsheim’s LeanField
Lean Operations
Slide 19
© Van Mieghem
Lean Tool #6: From
Functional Layout
to
Product Cell organization
Department 1
Production
Control
Production
Control
Production
Control
Production
Control
Roof
Cut
Department 2
Roof
Cut
Roof
Cut
Roof
Cut
Department 2
Base
Cut
Base
Cut
Department 2
FA
Base
Assy
FA
Base
Assy
Production
Control
Base
Assy
Roof
Cut
FA
Lean Operations
Base
Assy
FA
Base
Cut
Department 2
FA
Cell 1
Base
Cut
Slide 20
Cell 2
Production
Control
Base
Cut
Roof
Cut
Base
Assy
FA
Cell 3
© Van Mieghem
Base
Cut
Base
Assy
Towards a system of continuous improvement:
Increase Problem Visibility– Lower water to expose rocks
Inventory
Missed Due Dates
Late
Deliveries
Too much paperwork
Engineering
Change Orders
Scrap &
Rework
Poor
Quality
Lean Operations
Too Much
Space
100% inspection
Slide 21
Long queues
Machine
Downtime
© Van Mieghem
Visibility: Time plays the role of Inventory in Lean
Service Operations
TIME
Lean Operations
Slide 22
© Van Mieghem
Towards a system of continuous improvement:
Kaizen Tools

Reduce variability
– Standard operating procedures

Increase visibility of waste and quality at source
– Line-stopping empowerment (Andon)
– Quality inspection: Self & Automated (Jidoka)
– Fool-proof/Fail-safe design (Poka-Yoke)

Targeted improvements: root cause analysis (6 Why’s)
– Active worker involvement
– Time for experimentation
– Supplier involvement

Exploratory stress
 Human infrastructure & process measurement and review (visual
management)
Lean Operations
Slide 23
© Van Mieghem
Learning Objectives
Lean Operations
 Paradigm of Lean Operations:
 Strive for the ideal by eliminating waste
 This is a total business management system
 Synchronization Tools
1. Reduced batch sizes
2. Pull production control systems (vs. push)—JIT & Kanban control
3. Quality at the source
4. Resource pooling
5. Level loading (Heijunka)
6. Layout: Cellular operations
 Set up a System for Continuous Improvement
1. Reduce variability (standard operating procedures)
2. Increase visibility (river analogy)
3. Improve human infrastructure
Lean Operations
Slide 24
© Van Mieghem
Lean Operations
Slide 25
© Van Mieghem

Sears (SHC) does actually have a whole social media team who handles their
Twitter and Facebook accounts. They are VERY pro-active on those
accounts. SHC contracts out to Viewpoints, which is the company I work for. We
run the MySears, MyKmart and Craftsman Community platforms for them, and
handle customer service in a pro-active way on those accounts
 Along with the senior customer service reps, and folks at corporate, MySears is very
fortunate to have a handful of associates or call center employees who pop on to
assist, as well. They are not paid, but are influencers who receive an "Advisor"
recognition badge for their help. We wish we had more folks like these, as their
contributions are most helpful.
 Here are a few threads that we would consider "wins" for SHC, as the site helped
solve an issue or complaint for a particular customer:
–
This member was all over the board complaining about the Sears "Lifetime Warranty" on Tools. He
ended up connecting with the VP of Tools through the site, something that would be impossible
without utilizing social media: http://www.mysears.com/Tools--7018/topics/WARRANTYISSUES/posts
– Someone who visited having issues with their
washer: http://www.mysears.com/Appliances/topics/Kenmore-3-1-CU-FT-IEC-High-EfficiencyFront-Load-Washer-model-42052/posts?page=1
– One of the above mentioned "Advisor" that help. This member who offered his suggestion is
actually a retired service techinician who hangs out a bunch on the
site: http://www.mysears.com/Dishwashers--3933/topics/Washer-model-number-66517033402/posts?page=1#post_199551
Lean Operations
Slide 26
© Van Mieghem