Effective 5S
5S or the 5 pillars of the visual workplace is a systematic process of workplace organization. When I ask manufacturing people about the 5S’s, most of them say they don’t think the 5S’s are relevant. “That’s just a system of keeping things organized and clean, right? Oh yeah, and they have this crazy idea that toolboxes are bad.” Or sometimes I hear: “Why make a big program out of cleaning up?” The 5S’s are not simply eliminating toolboxes and cleaning up. While the concepts are easy to understand, most companies have not implemented them. Implementation of the 5S’s has many benefits: higher quality, lower costs, reliable deliveries, and improved safety…to name a few. These benefits are clearly relevant to any manufacturer, and they are not had simply by eliminating toolboxes and cleaning up.
The intent of 5S is to have only what you need available in the workplace, a designated place for everything, a standard way of doing things, and the discipline to maintain it. Created in Japan, the 5S’s are: seiri, seiton , seiso, seiketsu, and shitsuke. Translated to English, we have:
Sort - remove all items from the workplace that are NOT needed for current production.
Set in Order - arranging needed items so that they are easy to find and put away. Items used often are placed closer to employee.
Shine - making sure everything is clean, functioning, and ready to go.
Standardize - the method you use to maintain the first 3S's.
Sustain - making a habit of properly maintaining correct procedures.
For the organization, this creates fewer defects, less waste, fewer delays, fewer injuries, and fewer breakdowns. These advantages translate to lower cost and higher quality.
For the operator, the 5S’s create a superior working environment. They give the operator an opportunity to provide creative input regarding how the workplace should be organized and laid out and how standard work should be done. Operators will be able to find things easily, every time. The workplace will be cleaner and safer. Jobs will be simpler and more satisfying with many obstacles and frustrations removed.
The first “S” (Sort) requires you to distinguish between what is needed and what is not needed. Then, it requires you to discard what is not needed. This is known as “Red-tagging.” A team goes through all items (tools, equipment, material, etc.) and asks the question: “Do I need this to do my job on a regular basis?” Items that are used very infrequently or not used should be red-tagged. After determining what is actually needed, update all documentation to reflect the needed parts.
The second “S” (Set in Order) requires you to organize things so that they are easy to use and label them so that anyone can find, use, and return them to the correct place easily. Visual controls should be used where practicable in this activity; a visual control is any communication device used in the work environment that tells you at a glance how work should be done. The requirements for setting in order include:
Equipment and tool organization - Simple, organized storage with visual confirmation (you know exactly where it goes and if it is missing/empty with just a glance).
Tools and equipment used most frequently are closest to employee.
Workstations have a place for each tool with no toolboxes or drawers that interfere with visibility and require unneeded motion to open and close.
Taping - tape floor to indicate areas of: operations, parts, walkways, discrepant material and hazards.
Work instructions - current and at workstation.
Signboard strategy:
o Indicate cell, product lines, and workstations.
o Indicate production goals and status
o Area information boards with key status indicators (inventory, training, calibration etc).
Ergonomics - Follow ergonomic guidelines in work / tool design
The third “S” (Shine) involves bringing the workspace back to proper order by the end of each day. It requires periodic (at least once daily) cleanup, responsible person(s) identified for cleanup, establishment of cleanup/restocking methods (tools, checklists etc), and periodic supervisor inspection.
The fourth “S” (Standardize) is the method by which you maintain the first three S’s. Organization, Orderliness, and Cleanliness are maintained and made habitual by instituting 3S Duties into regular work routines. The methods need to be standardized and required company-wide.
The fifth “S” (Sustain) allows the organization to sustain its 5S program. This requires an executive 5S champion to ensure that 5S becomes part of the culture, periodic walk-through inspections/audits with posted results, and 5S performance measurement of workgroups. Implementation of this final S is where most companies fall back into their old ways of doing things. Very often, 5S is thought of as an activity rather than an element of company culture; companies implement 5S for several months only to find themselves back to their previous state. To make 5S work, it is critical that performance be measured and that top management be committed.
About the Author
Darren Dolcemascolo is an internationally recognized lecturer, author, and consultant. As Sr. Partner and co-founder of EMS Consulting Group, he specializes in productivity and quality improvement through lean manufacturing. Mr. Dolcemascolo has written the book Improving the Extended Value Stream: Lean for the Entire Supply Chain, published by Productivity Press in 2006. He has also been published in several manufacturing publications and has spoken at such venues as the Lean Management Solutions Conference, Outsourcing World Summit, Biophex, APICS, and ASQ. He has a BS in Industrial Engineering from Columbia University and an MBA with Graduate Honors from San Diego State University.
7/04/2009
5S Implementation
5S Implementation
As many organizations attempt to become “World Class Manufacturing” operations, where to begin their lean journey is the first question facing management. The answer is simple - the 5S program. The 5s's are: sort, set in order, shine, standardize, and sustain. Depending on a company's situation, the 5S’s can be implemented in different ways. However, many companies have found success using the following 8 steps:
1. Organize the program committee.
2. Develop a plan for each S.
3. Publicly announce the start of the program.
4. Provide training and education to employees.
5. Select a day in which everybody cleans up his/her own working area.
6. Select a day in which everybody organizes his/her own working area.
7. Evaluate the results of 5S.
8. Perform Self-Examination and Take Corrective Actions.
5S, like all other quality and prevention initiatives, requires commitment from top management and participation by everyone in the organization. Requiring plans tailored to each facility, a 5S program cannot be implemented using a “one-size-fits-all" approach. 5S is best implemented very gradually over a period of time. Because implementing five S can be such an overwhelming task, some companies decide to institute it department-by-department.
The most common mistake companies make when implementing 5S is the failure to train adequately at the outset. Upper management and other members of the steering group must have a working knowledge of 5S. This starts with a thorough review of the 5S program, implementation methods, team concepts, and the role of management. Practical exercises, or a real world pilot project, should follow. Since most steering group members work in the office, they should also apply 5S to their own office or work area. This activity will not only provide a practical understanding of 5S and the kinds of issues that will need to be addressed throughout the implementation, but it also communicates the commitment of upper management to a company-wide 5S implementation. At this point, management should endorse the formal Five S plan and set dates for implementation.
The implementation team, typically consisting of supervisors and team leaders, is the next group to be trained. Requiring the same training as upper management plus training in team leadership, they should receive practical training through the implementation of pilot projects. A good approach is to carry out one pilot program under the leadership of the 5S advisor (a consultant or internal resource fully experienced in all aspects of 5S) and then to carry out a second one on their own. A program committee that includes the plant manager and some of the area workers should coordinate the preliminary work. Once the preliminary work is completed, plans describing implementation of the Five S campaign should be prepared and released. When the results are satisfactory, the program can then be launched company wide.
The goal and process of the first “S” is organization. The sort process distinguishes needed items from unneeded items and removes the latter. This process forces people to remove all items not currently needed for work, whether they are in the factory or in the office. It is initially the most difficult for people who are afraid to let go of parts, machines, and data "just in case" they may be needed in the future. However, "red-tagging" items allows workers to set aside and evaluate items and information in terms of their usefulness and frequency of use. The items and information are returned, stored elsewhere, sold, given away, or thrown away. Red tagging is best done in one target area at a time and within one or two days. When red tagging is completed, problems and annoyances in the workflow are reduced, communication between workers is improved, product quality is increased, and productivity is enhanced.
"Set in order" organizes a work area for the maximum possible efficiency. Organization and orderliness work best when they are implemented together. "Set in order" means arranging needed items so that they are easy to use and labeling them so that anyone can find them and put them away. The key word in this definition is "anyone." Labeling is mostly for other people who need what is in the area, when the area "owner" is away. The benefit is economy of time and motion. When orderliness is implemented, there is no wasted human energy or excess inventory.
"Shine" - as the word implies - means to thoroughly clean everything in the work area. Planning a cleanliness campaign is a five-step process including: cleanliness targets, assignments, methods, tools, and follow-up inspections. The goal is threefold: 1) to turn the workplace into a clean, bright place where people enjoy working, 2) to review the first two Ss, and 3) to find the source of dirt or litter and eliminate it. The definition of cleanliness is "keeping everything swept and clean." "Shine" should become so deeply ingrained as a daily work habit that tools are also kept in top condition and are ready for use at any time.
Once the first three "S’s" are in place, "standardize” details a plan to maintain the continual improvement activities. The plan should include the creation of procedures and simple daily checklists that are to be visibly posted in each work area; the checklist should serve as a visual to ensure that the daily 5S requirements are being met. Standardized cleanup integrates sort, set in order, and shine into a unified whole.
The last "S," sustain, requires discipline. Without discipline, it is impossible to maintain consistent standards of quality, safety, clean production, and process operation. The more closely workers are able to follow manufacturing standards, procedures, and rules, the less likelihood there is of errors, defects, waste, and accidents. However, trying to impose discipline in an authoritarian manner will not get far in most firms today. Rather, people should be motivated to want to follow the rules because the workplace rules are actually a set of shared values. Shared values are achieved by coaching and team participation, not by orders and penalties. Implementation of 5S provides coaching by getting the workers to do the simple things right. "Buying in" to these basic values is the essential starting point to developing a "World Class" organization. Empowering shop floor workers to take control of their daily activities and their work environment is the unifying principle of 5S. By taking an active role in designing and maintaining their workplace, workers take more pride in their work, leading to greater satisfaction and higher productivity.
Many believe that 5S is a must-have tool. For any of the tools in the toolkit for becoming lean -- quick changeover, total productive maintenance, mistake proofing, and so on -- 5S significantly helps in both the implementation and sustaining of improvements. The Gold Standard for 5S is that anyone should be able to find anything in their own workplace in less than 30 seconds, and anywhere else in the workplace in less than 5 minutes without talking to anyone, opening a book, or turning on a computer. 5S is the foundation for successful lean implementation. 5S is the tool to begin, support, and sustain the lean journey.
About the Author
David McBride is co-founder of EMS Consulting Group (http://www.emsstrategies.com), a Carlsbad, CA based engineering and management consulting firm. David has a BS in Mechanical Engineering from Ohio State University. He has a successful track record in the development and implementation of FMEA and Design for Manufacturability programs at several organizations and has greatly reduced Manufacturing costs through the utilization of Lean Manufacturing, Kaizen Events, and Manufacturing System Analysis. He has also been highly successful at developing and executing New Product Introduction processes, and Staffing and Capital Equipment Plans.
As many organizations attempt to become “World Class Manufacturing” operations, where to begin their lean journey is the first question facing management. The answer is simple - the 5S program. The 5s's are: sort, set in order, shine, standardize, and sustain. Depending on a company's situation, the 5S’s can be implemented in different ways. However, many companies have found success using the following 8 steps:
1. Organize the program committee.
2. Develop a plan for each S.
3. Publicly announce the start of the program.
4. Provide training and education to employees.
5. Select a day in which everybody cleans up his/her own working area.
6. Select a day in which everybody organizes his/her own working area.
7. Evaluate the results of 5S.
8. Perform Self-Examination and Take Corrective Actions.
5S, like all other quality and prevention initiatives, requires commitment from top management and participation by everyone in the organization. Requiring plans tailored to each facility, a 5S program cannot be implemented using a “one-size-fits-all" approach. 5S is best implemented very gradually over a period of time. Because implementing five S can be such an overwhelming task, some companies decide to institute it department-by-department.
The most common mistake companies make when implementing 5S is the failure to train adequately at the outset. Upper management and other members of the steering group must have a working knowledge of 5S. This starts with a thorough review of the 5S program, implementation methods, team concepts, and the role of management. Practical exercises, or a real world pilot project, should follow. Since most steering group members work in the office, they should also apply 5S to their own office or work area. This activity will not only provide a practical understanding of 5S and the kinds of issues that will need to be addressed throughout the implementation, but it also communicates the commitment of upper management to a company-wide 5S implementation. At this point, management should endorse the formal Five S plan and set dates for implementation.
The implementation team, typically consisting of supervisors and team leaders, is the next group to be trained. Requiring the same training as upper management plus training in team leadership, they should receive practical training through the implementation of pilot projects. A good approach is to carry out one pilot program under the leadership of the 5S advisor (a consultant or internal resource fully experienced in all aspects of 5S) and then to carry out a second one on their own. A program committee that includes the plant manager and some of the area workers should coordinate the preliminary work. Once the preliminary work is completed, plans describing implementation of the Five S campaign should be prepared and released. When the results are satisfactory, the program can then be launched company wide.
The goal and process of the first “S” is organization. The sort process distinguishes needed items from unneeded items and removes the latter. This process forces people to remove all items not currently needed for work, whether they are in the factory or in the office. It is initially the most difficult for people who are afraid to let go of parts, machines, and data "just in case" they may be needed in the future. However, "red-tagging" items allows workers to set aside and evaluate items and information in terms of their usefulness and frequency of use. The items and information are returned, stored elsewhere, sold, given away, or thrown away. Red tagging is best done in one target area at a time and within one or two days. When red tagging is completed, problems and annoyances in the workflow are reduced, communication between workers is improved, product quality is increased, and productivity is enhanced.
"Set in order" organizes a work area for the maximum possible efficiency. Organization and orderliness work best when they are implemented together. "Set in order" means arranging needed items so that they are easy to use and labeling them so that anyone can find them and put them away. The key word in this definition is "anyone." Labeling is mostly for other people who need what is in the area, when the area "owner" is away. The benefit is economy of time and motion. When orderliness is implemented, there is no wasted human energy or excess inventory.
"Shine" - as the word implies - means to thoroughly clean everything in the work area. Planning a cleanliness campaign is a five-step process including: cleanliness targets, assignments, methods, tools, and follow-up inspections. The goal is threefold: 1) to turn the workplace into a clean, bright place where people enjoy working, 2) to review the first two Ss, and 3) to find the source of dirt or litter and eliminate it. The definition of cleanliness is "keeping everything swept and clean." "Shine" should become so deeply ingrained as a daily work habit that tools are also kept in top condition and are ready for use at any time.
Once the first three "S’s" are in place, "standardize” details a plan to maintain the continual improvement activities. The plan should include the creation of procedures and simple daily checklists that are to be visibly posted in each work area; the checklist should serve as a visual to ensure that the daily 5S requirements are being met. Standardized cleanup integrates sort, set in order, and shine into a unified whole.
The last "S," sustain, requires discipline. Without discipline, it is impossible to maintain consistent standards of quality, safety, clean production, and process operation. The more closely workers are able to follow manufacturing standards, procedures, and rules, the less likelihood there is of errors, defects, waste, and accidents. However, trying to impose discipline in an authoritarian manner will not get far in most firms today. Rather, people should be motivated to want to follow the rules because the workplace rules are actually a set of shared values. Shared values are achieved by coaching and team participation, not by orders and penalties. Implementation of 5S provides coaching by getting the workers to do the simple things right. "Buying in" to these basic values is the essential starting point to developing a "World Class" organization. Empowering shop floor workers to take control of their daily activities and their work environment is the unifying principle of 5S. By taking an active role in designing and maintaining their workplace, workers take more pride in their work, leading to greater satisfaction and higher productivity.
Many believe that 5S is a must-have tool. For any of the tools in the toolkit for becoming lean -- quick changeover, total productive maintenance, mistake proofing, and so on -- 5S significantly helps in both the implementation and sustaining of improvements. The Gold Standard for 5S is that anyone should be able to find anything in their own workplace in less than 30 seconds, and anywhere else in the workplace in less than 5 minutes without talking to anyone, opening a book, or turning on a computer. 5S is the foundation for successful lean implementation. 5S is the tool to begin, support, and sustain the lean journey.
About the Author
David McBride is co-founder of EMS Consulting Group (http://www.emsstrategies.com), a Carlsbad, CA based engineering and management consulting firm. David has a BS in Mechanical Engineering from Ohio State University. He has a successful track record in the development and implementation of FMEA and Design for Manufacturability programs at several organizations and has greatly reduced Manufacturing costs through the utilization of Lean Manufacturing, Kaizen Events, and Manufacturing System Analysis. He has also been highly successful at developing and executing New Product Introduction processes, and Staffing and Capital Equipment Plans.
Sustaining 5S
Sustaining 5S
Many organizations make some early 5S improvements and then slide back into their old ways of doing things. Other organizations continue to maintain their 5S programs for many years. What separates a successful 5S program from one that is headed for failure? An unsuccessful implementation of 5S was never a complete 5S implementation. The fifth “S” stands for “sustain;” if implemented completely, a 5S program will have longevity. There are three keys to successfully sustaining 5S: commitment, top management support, and performance measurement.
Key #1: Commitment. The first key is to commit to all five S’s. While this may appear to be obvious, I once had a conversation with a well-meaning executive who told me: “We are just going to implement 3S for now. We aren’t ready for all five.” The fifth “S,” “Shitsuke” in Japanese, actually translates more closely to “commitment” than “sustain.” According to Tomo Sugiyama (author of The Improvement Book), “’shitsuke’ is a typical teaching and attitude towards any undertaking to inspire pride and adherence to the standards established.” If your entire organization is not committed to 5S, your organization’s 5S program will be short-lived.
Key #2: Top Management Support. The first and second keys go hand-in-hand. Commitment is not possible without top management’s visible support for the program. All employees must believe that the organization has committed to the program. One way that we encourage top management to get involved on a continuing basis is for them to conduct quarterly 5S visits in which executives inspect each work area to 5S conditions and offer advice and support to the employees. Another effective method for demonstrating top management support is for executives to mandate and participate in visible promotion of 5S. Some ways to promote 5S include:
1. Designated 5S days: Select a day per month or per quarter to emphasize 5S throughout the plant.
2. Slogans: Select a 5S related slogan, post it in public areas throughout the plant, pass out shirts made up with the slogan to successful 5S teams, etc.
3. Public Announcements: In monthly or quarterly announcements/all-employee meetings, take some time to emphasize the importance of 5S.
4. Seminars: Have employees participate in seminars throughout the year. Some of these should be 5S related.
Key #3: Performance Measurement and Reward System. The third key is to measure 5S performance in each work area and set up a reward system to reward teams that achieve 5S success. Organizations that have successful 5S programs measure their performance through weekly audits using checklists and score sheets. Results of the audits are posted in public areas. This creates an atmosphere of friendly competition and will help to instill pride in the teams you’ve set up. This measurement and competition should be combined with a reward system; most successful organizations offer monthly or quarterly rewards for their teams in various 5S categories. The rewards can range from movie tickets to cash bonuses.
These three keys are simple but powerful. Your organization must commit to all 5 of the 5 pillars. Top management must show visible support for the program. And your organization must set up a 5S performance measurement and reward system.
About the Author
Darren Dolcemascolo is an internationally recognized lecturer, author, and consultant. As Sr. Partner and co-founder of EMS Consulting Group, he specializes in productivity and quality improvement through lean manufacturing. Mr. Dolcemascolo has written the book Improving the Extended Value Stream: Lean for the Entire Supply Chain, published by Productivity Press in 2006. He has also been published in several manufacturing publications and has spoken at such venues as the Lean Management Solutions Conference, Outsourcing World Summit, Biophex, APICS, and ASQ. He has a BS in Industrial Engineering from Columbia University and an MBA with Graduate Honors from San Diego State University.
Many organizations make some early 5S improvements and then slide back into their old ways of doing things. Other organizations continue to maintain their 5S programs for many years. What separates a successful 5S program from one that is headed for failure? An unsuccessful implementation of 5S was never a complete 5S implementation. The fifth “S” stands for “sustain;” if implemented completely, a 5S program will have longevity. There are three keys to successfully sustaining 5S: commitment, top management support, and performance measurement.
Key #1: Commitment. The first key is to commit to all five S’s. While this may appear to be obvious, I once had a conversation with a well-meaning executive who told me: “We are just going to implement 3S for now. We aren’t ready for all five.” The fifth “S,” “Shitsuke” in Japanese, actually translates more closely to “commitment” than “sustain.” According to Tomo Sugiyama (author of The Improvement Book), “’shitsuke’ is a typical teaching and attitude towards any undertaking to inspire pride and adherence to the standards established.” If your entire organization is not committed to 5S, your organization’s 5S program will be short-lived.
Key #2: Top Management Support. The first and second keys go hand-in-hand. Commitment is not possible without top management’s visible support for the program. All employees must believe that the organization has committed to the program. One way that we encourage top management to get involved on a continuing basis is for them to conduct quarterly 5S visits in which executives inspect each work area to 5S conditions and offer advice and support to the employees. Another effective method for demonstrating top management support is for executives to mandate and participate in visible promotion of 5S. Some ways to promote 5S include:
1. Designated 5S days: Select a day per month or per quarter to emphasize 5S throughout the plant.
2. Slogans: Select a 5S related slogan, post it in public areas throughout the plant, pass out shirts made up with the slogan to successful 5S teams, etc.
3. Public Announcements: In monthly or quarterly announcements/all-employee meetings, take some time to emphasize the importance of 5S.
4. Seminars: Have employees participate in seminars throughout the year. Some of these should be 5S related.
Key #3: Performance Measurement and Reward System. The third key is to measure 5S performance in each work area and set up a reward system to reward teams that achieve 5S success. Organizations that have successful 5S programs measure their performance through weekly audits using checklists and score sheets. Results of the audits are posted in public areas. This creates an atmosphere of friendly competition and will help to instill pride in the teams you’ve set up. This measurement and competition should be combined with a reward system; most successful organizations offer monthly or quarterly rewards for their teams in various 5S categories. The rewards can range from movie tickets to cash bonuses.
These three keys are simple but powerful. Your organization must commit to all 5 of the 5 pillars. Top management must show visible support for the program. And your organization must set up a 5S performance measurement and reward system.
About the Author
Darren Dolcemascolo is an internationally recognized lecturer, author, and consultant. As Sr. Partner and co-founder of EMS Consulting Group, he specializes in productivity and quality improvement through lean manufacturing. Mr. Dolcemascolo has written the book Improving the Extended Value Stream: Lean for the Entire Supply Chain, published by Productivity Press in 2006. He has also been published in several manufacturing publications and has spoken at such venues as the Lean Management Solutions Conference, Outsourcing World Summit, Biophex, APICS, and ASQ. He has a BS in Industrial Engineering from Columbia University and an MBA with Graduate Honors from San Diego State University.
Standardized Work
Standardized Work
One element that seems to be missing from many so-called lean factories around the United States is standardized work. As we've mentioned in several other articles, most self-proclaimed "lean" factories have mastered the u-shaped cell in terms of layout. One important element is often missing: standardized work charts. Very often, when I ask about standardized work charts, most people either give me a very puzzled look or point me to a dust-covered binder full of work instructions. They often tell me that the operators know what to do; they've been doing it for a long time and they need no standardized work charts. However, when we look at the process in more depth, everyone in the cell has a Burger King approach to manufacturing- have it your own way. And that approach will fail. As important as highly detailed work instructions may be, standardized work charts are much more important. They allow anyone in the factory to understand what the standard work is and, more importantly, whether or not is being utilized. Standarized work is part of the foundation of the Toyota Production System; it is one of the key contributing elements to stability in a factory. If everything in a factory is not done consistently, basic stability will be unachievable. And, anyone who has studied lean can tell you that without basic stability, lean will fail 100% of the time.
Standardizing every operation is one of the most important tools of lean. While it is often not considered a tool in itself, having a standard work chart for every operation is absolutely critical to lean success. For example, in a manufacturing cell, each operator should have a standard work chart showing the operations he/she is to perform, the standard times for each operation, and a graphic representation.
The standard work chart should be on one page. Where should standard work charts be used to ensure that processes are being followed consistently? They should be used for:
Manufacturing Cells/All production operations
Material Delivery to Manufacturing Cells
Warehouse operations
Document Control Activities
Production Planning Activities
All other repeatable activities in a factory or office
Standardized work is critical to lean success. If you are implementing lean and haven't considered standardized work and standardized work charts, you are missing one very foundational aspect of the puzzle.
About the Author
Darren Dolcemascolo is an internationally recognized lecturer, author, and consultant. As Sr. Partner and co-founder of EMS Consulting Group, he specializes in productivity and quality improvement through lean manufacturing. Mr. Dolcemascolo has written the book Improving the Extended Value Stream: Lean for the Entire Supply Chain, published by Productivity Press in 2006. He has also been published in several manufacturing publications and has spoken at such venues as the Lean Management Solutions Conference, Outsourcing World Summit, Biophex, APICS, and ASQ. He has a BS in Industrial Engineering from Columbia University and an MBA with Graduate Honors from San Diego State University.
One element that seems to be missing from many so-called lean factories around the United States is standardized work. As we've mentioned in several other articles, most self-proclaimed "lean" factories have mastered the u-shaped cell in terms of layout. One important element is often missing: standardized work charts. Very often, when I ask about standardized work charts, most people either give me a very puzzled look or point me to a dust-covered binder full of work instructions. They often tell me that the operators know what to do; they've been doing it for a long time and they need no standardized work charts. However, when we look at the process in more depth, everyone in the cell has a Burger King approach to manufacturing- have it your own way. And that approach will fail. As important as highly detailed work instructions may be, standardized work charts are much more important. They allow anyone in the factory to understand what the standard work is and, more importantly, whether or not is being utilized. Standarized work is part of the foundation of the Toyota Production System; it is one of the key contributing elements to stability in a factory. If everything in a factory is not done consistently, basic stability will be unachievable. And, anyone who has studied lean can tell you that without basic stability, lean will fail 100% of the time.
Standardizing every operation is one of the most important tools of lean. While it is often not considered a tool in itself, having a standard work chart for every operation is absolutely critical to lean success. For example, in a manufacturing cell, each operator should have a standard work chart showing the operations he/she is to perform, the standard times for each operation, and a graphic representation.
The standard work chart should be on one page. Where should standard work charts be used to ensure that processes are being followed consistently? They should be used for:
Manufacturing Cells/All production operations
Material Delivery to Manufacturing Cells
Warehouse operations
Document Control Activities
Production Planning Activities
All other repeatable activities in a factory or office
Standardized work is critical to lean success. If you are implementing lean and haven't considered standardized work and standardized work charts, you are missing one very foundational aspect of the puzzle.
About the Author
Darren Dolcemascolo is an internationally recognized lecturer, author, and consultant. As Sr. Partner and co-founder of EMS Consulting Group, he specializes in productivity and quality improvement through lean manufacturing. Mr. Dolcemascolo has written the book Improving the Extended Value Stream: Lean for the Entire Supply Chain, published by Productivity Press in 2006. He has also been published in several manufacturing publications and has spoken at such venues as the Lean Management Solutions Conference, Outsourcing World Summit, Biophex, APICS, and ASQ. He has a BS in Industrial Engineering from Columbia University and an MBA with Graduate Honors from San Diego State University.
Supplier Relationships in a Lean Enterprise
Supplier Relationships in a Lean Enterprise
The traditional purchasing model has buyers and suppliers as adversaries or at least competitors. The supplier is trying to bid just low enough to get a contract while the buyer is looking for the lowest price. The buyer continually is applying pressure to the supplier, and the supplier has no way to meet their demands without sacrificing something. Ultimately, at least one of the organizations loses. However, the lean buyer-supplier model is one of cooperation. The buyer and supplier are partners. If the buyer succeeds, the supplier succeeds. What does such a relationship look like?
Entering an outsourcing relationship must create value for both the supplier and buyer. To accomplish this, it is important that the supplier be given the tools and incentives to succeed. First of all, “open book” or transparent costing must be in place. That is, the buyer should be able to know how much it costs the supplier to produce components. The buyer’s goal is no longer to maximize its own profits and minimize the profits of the supplier. Instead, both organizations must work toward increasing total value.
An outsourcing contract need not specify the pricing on each item that the supplier will provide; it should specify the method by which prices will be determined. The buyer and supplier need to gain agreement on pricing. Initial pricing can be based on supplier cost plus a reasonable % profit. Generally speaking, pricing on existing products should be expected to decrease. The buyer must challenge the supplier to decrease pricing through productivity improvements, and some form of gain-sharing should be specified.
The buyer must ensure that the supplier has the tools to accomplish such improvements. A lean organization must help its suppliers get lean by assisting them in activities such as:
Value stream mapping training and implementation.
5S training and implementation.
Kaizen Events focused on Cellular Manufacturing / One Piece Flow, TPM, Quick Changeover, and other basic lean tools.
Setting up kanban systems.
If an organization makes such investments in its suppliers, it will build an environment of trust and will create the necessary conditions for its suppliers to succeed. If an organization’s suppliers are successful, its supply chains will be successful: overall lead time, inventory, and costs will decrease.
About the Author
Darren Dolcemascolo is an internationally recognized lecturer, author, and consultant. As Sr. Partner and co-founder of EMS Consulting Group, he specializes in productivity and quality improvement through lean manufacturing. Mr. Dolcemascolo has written the book Improving the Extended Value Stream: Lean for the Entire Supply Chain, published by Productivity Press in 2006. He has also been published in several manufacturing publications and has spoken at such venues as the Lean Management Solutions Conference, Outsourcing World Summit, Biophex, APICS, and ASQ. He has a BS in Industrial Engineering from Columbia University and an MBA with Graduate Honors from San Diego State University.
The traditional purchasing model has buyers and suppliers as adversaries or at least competitors. The supplier is trying to bid just low enough to get a contract while the buyer is looking for the lowest price. The buyer continually is applying pressure to the supplier, and the supplier has no way to meet their demands without sacrificing something. Ultimately, at least one of the organizations loses. However, the lean buyer-supplier model is one of cooperation. The buyer and supplier are partners. If the buyer succeeds, the supplier succeeds. What does such a relationship look like?
Entering an outsourcing relationship must create value for both the supplier and buyer. To accomplish this, it is important that the supplier be given the tools and incentives to succeed. First of all, “open book” or transparent costing must be in place. That is, the buyer should be able to know how much it costs the supplier to produce components. The buyer’s goal is no longer to maximize its own profits and minimize the profits of the supplier. Instead, both organizations must work toward increasing total value.
An outsourcing contract need not specify the pricing on each item that the supplier will provide; it should specify the method by which prices will be determined. The buyer and supplier need to gain agreement on pricing. Initial pricing can be based on supplier cost plus a reasonable % profit. Generally speaking, pricing on existing products should be expected to decrease. The buyer must challenge the supplier to decrease pricing through productivity improvements, and some form of gain-sharing should be specified.
The buyer must ensure that the supplier has the tools to accomplish such improvements. A lean organization must help its suppliers get lean by assisting them in activities such as:
Value stream mapping training and implementation.
5S training and implementation.
Kaizen Events focused on Cellular Manufacturing / One Piece Flow, TPM, Quick Changeover, and other basic lean tools.
Setting up kanban systems.
If an organization makes such investments in its suppliers, it will build an environment of trust and will create the necessary conditions for its suppliers to succeed. If an organization’s suppliers are successful, its supply chains will be successful: overall lead time, inventory, and costs will decrease.
About the Author
Darren Dolcemascolo is an internationally recognized lecturer, author, and consultant. As Sr. Partner and co-founder of EMS Consulting Group, he specializes in productivity and quality improvement through lean manufacturing. Mr. Dolcemascolo has written the book Improving the Extended Value Stream: Lean for the Entire Supply Chain, published by Productivity Press in 2006. He has also been published in several manufacturing publications and has spoken at such venues as the Lean Management Solutions Conference, Outsourcing World Summit, Biophex, APICS, and ASQ. He has a BS in Industrial Engineering from Columbia University and an MBA with Graduate Honors from San Diego State University.
Outsourcing and the Extended Value Stream: Taking Lean Manufacturing to the Next Level
Outsourcing and the Extended Value Stream: Taking Lean Manufacturing to the Next Level
In a lean transformation, companies typically focus on their "door-to-door" value streams. That is, they analyze and improve the flow of value between (but not including) their suppliers and their customers. After this transformation has progressed considerably, organizations want to know how to take Lean Manufacturing to the next level. Analyzing the extended value stream and then developing and executing an effective outsourcing plan is the answer. This article focuses on the five basic steps to accomplish this:
1. Map your extended value stream(s).
Inherent in true lean thinking is the concept of a complete value stream that includes customers and suppliers. Using the same value stream mapping techniques that are used for mapping your door-to-door value stream, map the entire value stream for your product lines from the raw material level to your suppliers to your plant(s) to your customer(s).
2. Define your core competencies.
Using the insight gained through a view of the entire extended value stream, re-define which components, processes, and products your organization should be producing in house. Recognized as one of the world's leading authorities in outsourcing, Michael F. Corbett & Associates, Ltd. uses a simple test for identifying core competencies: "First, if starting your company today would you do this yourself? If the answer is yes, then the function's criticality is widely recognized. Second, would other companies hire you to do this for them? This gets at your firm's ability to perform the task in question. Third, will tomorrow's CEO come from this area? This question addresses the importance of the activity to the firm. Importantly, you must answer yes to all three questions before considering a business activity a core competency." (Outsourcing Helps Firms to Focus on Core Competencies, Michael F. Corbett and Associates, http://www.firmbuilder.com). While this step can be a difficult task, it is something that all World Class Organizations must do to stay competitive and maximize value.
3. Rate your key suppliers.
Use the Pareto principle to determine who your key suppliers are; typically, about 80% of your purchasing dollars will go to 20% of your suppliers. Define those characteristics that are most important to your organization, and rate your key suppliers according to those characteristics. They should include all of the basics of lean with particular emphasis on the most critical items for your business.
4. Develop a plan.
First, select the key suppliers with which you plan to continue doing business and plan to forge a long-term relationship. Next, decide which suppliers you can no longer afford to keep. These key decisions should be based on your current relationship and ranking of your suppliers. It should also be based on their willingness to embrace lean. Then, develop an outsourcing plan. Decide which suppliers will handle which business activities. List the voids you have and put together a plan to find new suppliers to fill the voids. Ideally, your goal should be to find suppliers that are already on a lean journey.
5. Act on your plan.
Develop agreements with key suppliers that you intend to keep. Many American companies continue to struggle with this issue. Typically, American companies still have an adversarial relationship with their suppliers, even though many of them will say that they have long-term supplier relationships. Competitive bidding is still going on even with long-time suppliers. Before helping or convincing your suppliers to go lean, you need to have already in place "open-book" relationships with those suppliers. This is because the major improvements you are going to help them make (and they are going to continue making as they progress on their lean journey) should be shared between your company and theirs. After these long term agreements are formed, begin helping your suppliers develop a lean manufacturing plan.
Demonstrate the successes your organization has had with lean and explain that their going lean will benefit them as well. Some of the benefits to your suppliers are:
• Cost savings are shared with your organization. (Instead of your dictating a drop in price while offering no way for them to achieve it, you are both working within a lean continuous improvement environment in which cost reductions are achievable.)
• The ability to easily win bid wars when they are quoting their other non-lean customers' jobs. Lean Thinking, by Womack and Jones, actually talks quite a bit about this with reference to the success experienced by Toyota's suppliers.
• Incentive and the ability to produce even more cost savings for themselves through lean.
Provide implementation assistance to those suppliers; help them map their door-to-door value streams to get started. Ultimately, these suppliers should become an important part of your organization. After they set up a lean manufacturing operation, key suppliers should be involved (or even take a primary role) in the development of your products and key components of your products. Since they will be manufacturing them (and you've assured them of this), they must meet your cost targets. To do this, they need to play a major role in the design.
Finally, act on a plan to find new suppliers and develop agreements with those suppliers. Again, in cases where these new suppliers are not lean, help them take their first steps.
At the completion of these 5 steps, your organization will have further distanced itself from your non-lean competitors. You will be more focused on your core activities, your suppliers will be more profitable and will be focused on what they do best, and you will have an improvement methodology in place that will continue to perfect your entire value stream.
About the Author
Darren Dolcemascolo is an internationally recognized lecturer, author, and consultant. As Sr. Partner and co-founder of EMS Consulting Group, he specializes in productivity and quality improvement through lean manufacturing. Mr. Dolcemascolo has written the book Improving the Extended Value Stream: Lean for the Entire Supply Chain, published by Productivity Press in 2006. He has also been published in several manufacturing publications and has spoken at such venues as the Lean Management Solutions Conference, Outsourcing World Summit, Biophex, APICS, and ASQ. He has a BS in Industrial Engineering from Columbia University and an MBA with Graduate Honors from San Diego State University.
In a lean transformation, companies typically focus on their "door-to-door" value streams. That is, they analyze and improve the flow of value between (but not including) their suppliers and their customers. After this transformation has progressed considerably, organizations want to know how to take Lean Manufacturing to the next level. Analyzing the extended value stream and then developing and executing an effective outsourcing plan is the answer. This article focuses on the five basic steps to accomplish this:
1. Map your extended value stream(s).
Inherent in true lean thinking is the concept of a complete value stream that includes customers and suppliers. Using the same value stream mapping techniques that are used for mapping your door-to-door value stream, map the entire value stream for your product lines from the raw material level to your suppliers to your plant(s) to your customer(s).
2. Define your core competencies.
Using the insight gained through a view of the entire extended value stream, re-define which components, processes, and products your organization should be producing in house. Recognized as one of the world's leading authorities in outsourcing, Michael F. Corbett & Associates, Ltd. uses a simple test for identifying core competencies: "First, if starting your company today would you do this yourself? If the answer is yes, then the function's criticality is widely recognized. Second, would other companies hire you to do this for them? This gets at your firm's ability to perform the task in question. Third, will tomorrow's CEO come from this area? This question addresses the importance of the activity to the firm. Importantly, you must answer yes to all three questions before considering a business activity a core competency." (Outsourcing Helps Firms to Focus on Core Competencies, Michael F. Corbett and Associates, http://www.firmbuilder.com). While this step can be a difficult task, it is something that all World Class Organizations must do to stay competitive and maximize value.
3. Rate your key suppliers.
Use the Pareto principle to determine who your key suppliers are; typically, about 80% of your purchasing dollars will go to 20% of your suppliers. Define those characteristics that are most important to your organization, and rate your key suppliers according to those characteristics. They should include all of the basics of lean with particular emphasis on the most critical items for your business.
4. Develop a plan.
First, select the key suppliers with which you plan to continue doing business and plan to forge a long-term relationship. Next, decide which suppliers you can no longer afford to keep. These key decisions should be based on your current relationship and ranking of your suppliers. It should also be based on their willingness to embrace lean. Then, develop an outsourcing plan. Decide which suppliers will handle which business activities. List the voids you have and put together a plan to find new suppliers to fill the voids. Ideally, your goal should be to find suppliers that are already on a lean journey.
5. Act on your plan.
Develop agreements with key suppliers that you intend to keep. Many American companies continue to struggle with this issue. Typically, American companies still have an adversarial relationship with their suppliers, even though many of them will say that they have long-term supplier relationships. Competitive bidding is still going on even with long-time suppliers. Before helping or convincing your suppliers to go lean, you need to have already in place "open-book" relationships with those suppliers. This is because the major improvements you are going to help them make (and they are going to continue making as they progress on their lean journey) should be shared between your company and theirs. After these long term agreements are formed, begin helping your suppliers develop a lean manufacturing plan.
Demonstrate the successes your organization has had with lean and explain that their going lean will benefit them as well. Some of the benefits to your suppliers are:
• Cost savings are shared with your organization. (Instead of your dictating a drop in price while offering no way for them to achieve it, you are both working within a lean continuous improvement environment in which cost reductions are achievable.)
• The ability to easily win bid wars when they are quoting their other non-lean customers' jobs. Lean Thinking, by Womack and Jones, actually talks quite a bit about this with reference to the success experienced by Toyota's suppliers.
• Incentive and the ability to produce even more cost savings for themselves through lean.
Provide implementation assistance to those suppliers; help them map their door-to-door value streams to get started. Ultimately, these suppliers should become an important part of your organization. After they set up a lean manufacturing operation, key suppliers should be involved (or even take a primary role) in the development of your products and key components of your products. Since they will be manufacturing them (and you've assured them of this), they must meet your cost targets. To do this, they need to play a major role in the design.
Finally, act on a plan to find new suppliers and develop agreements with those suppliers. Again, in cases where these new suppliers are not lean, help them take their first steps.
At the completion of these 5 steps, your organization will have further distanced itself from your non-lean competitors. You will be more focused on your core activities, your suppliers will be more profitable and will be focused on what they do best, and you will have an improvement methodology in place that will continue to perfect your entire value stream.
About the Author
Darren Dolcemascolo is an internationally recognized lecturer, author, and consultant. As Sr. Partner and co-founder of EMS Consulting Group, he specializes in productivity and quality improvement through lean manufacturing. Mr. Dolcemascolo has written the book Improving the Extended Value Stream: Lean for the Entire Supply Chain, published by Productivity Press in 2006. He has also been published in several manufacturing publications and has spoken at such venues as the Lean Management Solutions Conference, Outsourcing World Summit, Biophex, APICS, and ASQ. He has a BS in Industrial Engineering from Columbia University and an MBA with Graduate Honors from San Diego State University.
Key Metrics of the Extended Value Stream
Key Metrics of the Extended Value Stream
Many organizations have mapped their door-to-door or internal value streams. These show material and information flow for a given facility. Taking the door-to-door concept up one unit of analysis, the extended value stream stretches across several organizations and facilities from raw materials to the end user. A lean extended value stream has the following characteristics:
Everyone in the value stream knows the takt time and rate of customer demand.
There is little inventory in the system, and there is a standard amount of inventory in the system based on the variability and availability of processes.
Lead-time is minimized.
Transportation is minimized.
There are several key metrics that will set a baseline and assist in developing goals and an action plan to reach the goals. This article attempts to help the reader gain an overview of some of these key metrics:
Value-Creating Time: Within a value stream, the time the material/product is physically being changed in such a way that value is added to the product.
In-Plant Time: Within the extended value stream, the time the material/product is in the factories/plants (but not necessarily being physically worked on).
Transport Time: Within the extended value stream, the time the material/product is moving between facilities.
Total Time: The total lead-time from raw materials to the end user.
Total Time = In-Plant Time + Transport Time
Value % of Time: % of Total Time that is value-creating.
Value % of Time = Value-Creating Time/Total Time X 100%
Value % of Steps: % of total steps in a lean extended value stream that are value-creating.
Inventory Turnover: The ratio of annual sales to average inventory, which measures the speed, that inventory is produced and sold.
Inventory Turnover = Annual Sales / Average Inventory
Product Travel Distance: The total physical distance that product travels in a lean extended value stream (between facilities).
About the Author
Darren Dolcemascolo is an internationally recognized lecturer, author, and consultant. As Sr. Partner and co-founder of EMS Consulting Group, he specializes in productivity and quality improvement through lean manufacturing. Mr. Dolcemascolo has written the book Improving the Extended Value Stream: Lean for the Entire Supply Chain, published by Productivity Press in 2006. He has also been published in several manufacturing publications and has spoken at such venues as the Lean Management Solutions Conference, Outsourcing World Summit, Biophex, APICS, and ASQ. He has a BS in Industrial Engineering from Columbia University and an MBA with Graduate Honors from San Diego State University.
Many organizations have mapped their door-to-door or internal value streams. These show material and information flow for a given facility. Taking the door-to-door concept up one unit of analysis, the extended value stream stretches across several organizations and facilities from raw materials to the end user. A lean extended value stream has the following characteristics:
Everyone in the value stream knows the takt time and rate of customer demand.
There is little inventory in the system, and there is a standard amount of inventory in the system based on the variability and availability of processes.
Lead-time is minimized.
Transportation is minimized.
There are several key metrics that will set a baseline and assist in developing goals and an action plan to reach the goals. This article attempts to help the reader gain an overview of some of these key metrics:
Value-Creating Time: Within a value stream, the time the material/product is physically being changed in such a way that value is added to the product.
In-Plant Time: Within the extended value stream, the time the material/product is in the factories/plants (but not necessarily being physically worked on).
Transport Time: Within the extended value stream, the time the material/product is moving between facilities.
Total Time: The total lead-time from raw materials to the end user.
Total Time = In-Plant Time + Transport Time
Value % of Time: % of Total Time that is value-creating.
Value % of Time = Value-Creating Time/Total Time X 100%
Value % of Steps: % of total steps in a lean extended value stream that are value-creating.
Inventory Turnover: The ratio of annual sales to average inventory, which measures the speed, that inventory is produced and sold.
Inventory Turnover = Annual Sales / Average Inventory
Product Travel Distance: The total physical distance that product travels in a lean extended value stream (between facilities).
About the Author
Darren Dolcemascolo is an internationally recognized lecturer, author, and consultant. As Sr. Partner and co-founder of EMS Consulting Group, he specializes in productivity and quality improvement through lean manufacturing. Mr. Dolcemascolo has written the book Improving the Extended Value Stream: Lean for the Entire Supply Chain, published by Productivity Press in 2006. He has also been published in several manufacturing publications and has spoken at such venues as the Lean Management Solutions Conference, Outsourcing World Summit, Biophex, APICS, and ASQ. He has a BS in Industrial Engineering from Columbia University and an MBA with Graduate Honors from San Diego State University.
Seven Wastes of the Extended Value Stream
Seven Wastes of the Extended Value Stream
Most people who have had any exposure to lean thinking have heard of “The Seven Wastes.” Taiichi Ohno, the former Chief Engineer at Toyota that popularized the Toyota Production System, is responsible for identifying the seven wastes of manufacturing. As he observed activity on the shop floor, he identified the following wastes:
Overproduction
Transportation
Unnecessary Inventory
Inappropriate Processing
Waiting
Excess Motion
Defects
In 1996 James Womack identified an eighth waste, the waste of underutilized employees (with respect to their ideas/minds), in the book Lean Thinking.
The idea of the lean value stream is to continuously work to eliminate the sources of these wastes based on their relative contribution to key lean metrics. Many organizations have reached the point in their lean journey in which they are working to create a lean extended value stream. That is, they would like to work on the value stream that includes their suppliers and customers. This value stream stretches from raw materials to the end user. One key to successfully achieving a lean extended value stream is to understand the types of waste one might find in the extended value stream. This article attempts to help the reader understand the implications of the seven wastes for the extended value stream.
1. Overproduction – Overproduction simply means producing more than what is actually needed by an upstream process or customer. On the shop floor, this generally occurs because changeover times are high, equipment is unreliable, the process is unreliable (causes defects), and standard cost accounting metrics are used. In the extended value stream, overproduction certainly occurs for some of these same reasons. However, probably the biggest reason for overproduction is poor information flow (communication) between facilities. Improved information flow between facilities is one of the key characteristics of a lean extended value stream.
2. Transportation – Moving product does not create value; this is amplified when examining the extended value stream. Unnecessary transportation is generally caused by making supplier selection decisions based on single points in a value stream rather than seeking to optimize the entire value stream. Proper selection of supplier/facility location is critical to a lean value stream.
3. Unnecessary Inventory – For the extended value stream, unnecessary inventory is generally the result of poor information flow and batch processing. Suppliers often hold inventory to support a lean customer; this ultimately gets passed on to the customer in the form of higher pricing and/or poor quality. Sometimes, suppliers and their customers are holding redundant inventory. Extended value stream mapping will expose this waste.
4. Inappropriate Processing – In the door-to-door value stream, this usually refers to using larger scale equipment than necessary; it also refers to building in rework to a process. In the extended value stream, it can also refer to using the wrong suppliers and/or the wrong process. With regards to rework, many times organizations rework parts after they come in from a supplier simple because of poor communication between facilities.
5. Waiting – This waste refers to operators waiting for machines as well as product waiting (inventory). This waste is generally the same for the extended value stream as the door-to-door value stream.
6. Excess Motion- Generally, this waste applies to production personnel having to move out of their work area to locate tools, materials, etc. Like the waste of waiting, this is essentially the same for the extended value stream as the door-to-door value stream.
7. Defects- This waste refers to defective product and information (paperwork). Its unique application to the extended value stream is defective product moving between facilities. This results in additional waste in the form of excess inventory and rework.
8. Underutilization of Employees’ Minds/Ideas – This waste could be changed to “Underutilization of Suppliers’ and Customers’ Minds/Ideas.” Organizations rarely approach their customers and suppliers to leverage their know-how with respect to manufacturing processes, information processing, and product design. This is a very important waste of the extended value stream.
“The seven wastes” is a powerful tool for implementing lean manufacturing in a facility. When analyzing the extended value stream, one must consider the seven wastes with a slightly different paradigm.
About the Author
Darren Dolcemascolo is an internationally recognized lecturer, author, and consultant. As Sr. Partner and co-founder of EMS Consulting Group, he specializes in productivity and quality improvement through lean manufacturing. Mr. Dolcemascolo has written the book Improving the Extended Value Stream: Lean for the Entire Supply Chain, published by Productivity Press in 2006. He has also been published in several manufacturing publications and has spoken at such venues as the Lean Management Solutions Conference, Outsourcing World Summit, Biophex, APICS, and ASQ. He has a BS in Industrial Engineering from Columbia University and an MBA with Graduate Honors from San Diego State University.
Most people who have had any exposure to lean thinking have heard of “The Seven Wastes.” Taiichi Ohno, the former Chief Engineer at Toyota that popularized the Toyota Production System, is responsible for identifying the seven wastes of manufacturing. As he observed activity on the shop floor, he identified the following wastes:
Overproduction
Transportation
Unnecessary Inventory
Inappropriate Processing
Waiting
Excess Motion
Defects
In 1996 James Womack identified an eighth waste, the waste of underutilized employees (with respect to their ideas/minds), in the book Lean Thinking.
The idea of the lean value stream is to continuously work to eliminate the sources of these wastes based on their relative contribution to key lean metrics. Many organizations have reached the point in their lean journey in which they are working to create a lean extended value stream. That is, they would like to work on the value stream that includes their suppliers and customers. This value stream stretches from raw materials to the end user. One key to successfully achieving a lean extended value stream is to understand the types of waste one might find in the extended value stream. This article attempts to help the reader understand the implications of the seven wastes for the extended value stream.
1. Overproduction – Overproduction simply means producing more than what is actually needed by an upstream process or customer. On the shop floor, this generally occurs because changeover times are high, equipment is unreliable, the process is unreliable (causes defects), and standard cost accounting metrics are used. In the extended value stream, overproduction certainly occurs for some of these same reasons. However, probably the biggest reason for overproduction is poor information flow (communication) between facilities. Improved information flow between facilities is one of the key characteristics of a lean extended value stream.
2. Transportation – Moving product does not create value; this is amplified when examining the extended value stream. Unnecessary transportation is generally caused by making supplier selection decisions based on single points in a value stream rather than seeking to optimize the entire value stream. Proper selection of supplier/facility location is critical to a lean value stream.
3. Unnecessary Inventory – For the extended value stream, unnecessary inventory is generally the result of poor information flow and batch processing. Suppliers often hold inventory to support a lean customer; this ultimately gets passed on to the customer in the form of higher pricing and/or poor quality. Sometimes, suppliers and their customers are holding redundant inventory. Extended value stream mapping will expose this waste.
4. Inappropriate Processing – In the door-to-door value stream, this usually refers to using larger scale equipment than necessary; it also refers to building in rework to a process. In the extended value stream, it can also refer to using the wrong suppliers and/or the wrong process. With regards to rework, many times organizations rework parts after they come in from a supplier simple because of poor communication between facilities.
5. Waiting – This waste refers to operators waiting for machines as well as product waiting (inventory). This waste is generally the same for the extended value stream as the door-to-door value stream.
6. Excess Motion- Generally, this waste applies to production personnel having to move out of their work area to locate tools, materials, etc. Like the waste of waiting, this is essentially the same for the extended value stream as the door-to-door value stream.
7. Defects- This waste refers to defective product and information (paperwork). Its unique application to the extended value stream is defective product moving between facilities. This results in additional waste in the form of excess inventory and rework.
8. Underutilization of Employees’ Minds/Ideas – This waste could be changed to “Underutilization of Suppliers’ and Customers’ Minds/Ideas.” Organizations rarely approach their customers and suppliers to leverage their know-how with respect to manufacturing processes, information processing, and product design. This is a very important waste of the extended value stream.
“The seven wastes” is a powerful tool for implementing lean manufacturing in a facility. When analyzing the extended value stream, one must consider the seven wastes with a slightly different paradigm.
About the Author
Darren Dolcemascolo is an internationally recognized lecturer, author, and consultant. As Sr. Partner and co-founder of EMS Consulting Group, he specializes in productivity and quality improvement through lean manufacturing. Mr. Dolcemascolo has written the book Improving the Extended Value Stream: Lean for the Entire Supply Chain, published by Productivity Press in 2006. He has also been published in several manufacturing publications and has spoken at such venues as the Lean Management Solutions Conference, Outsourcing World Summit, Biophex, APICS, and ASQ. He has a BS in Industrial Engineering from Columbia University and an MBA with Graduate Honors from San Diego State University.
Toyota's Extended Lean Enterprise
Toyota's Extended Lean Enterprise
Many organizations are progressing in their Lean journey with the goal of developing into a true Lean Enterprise. To build a strong lean enterprise companies need to develop a world-class supplier network. Toyota has spent decades investing in their extended network of partners and suppliers, with the principle of challenging and helping them to improve. Most companies seem to focus on new information technologies and price squeezing with their suppliers instead of following the extended lean enterprise model of enabling and partnering with their supplier network.
Auto industry suppliers consistently report that Toyota is their best customer but also their toughest. The US auto manufacturers have a reputation for being tough; however, "tough" is defined as unreasonable or hard to get along with. In Toyota's case, "tough" is defined as having high standards of excellence, with the expectation that their partners will rise to those standards. US companies and Toyota have similar quality methods and procedures with extensive standards, auditing procedures, and rules. What sets Toyota apart is that suppliers view US manufacturers as coercive while Toyota is viewed as enabling.
Over the last few decades Toyota created a strong supplier network in Japan that has distinguished them from other automakers. As they moved to build the same network in North America with US suppliers, their demanding but fair partnership approach has received positive reactions. The principal measure of supplier relations in the American auto industry is the OEM benchmark Survey that is published by John Henke of Oakland University. Suppliers rank auto manufacturers using 17 measures from trust to perceived opportunity. In the 2003 survey Toyota ranked first followed by Honda and Nissan, while Chrysler, Ford and GM were fourth fifth and sixth. The survey also showed that Toyota's scores had improved over 7% over 2002. Another automotive supplier survey published annually comes from J.D. Power. The 2003 survey found that Toyota, Nissan and BMW are the best North American automakers in promoting innovation with their suppliers. Chrysler, Ford and GM were all rated below average.
The rewards for Toyota's investment in building a network of highly capable suppliers are obvious. Their quality that has distinguished them as a leader in the industry is a direct result of their excellence in innovation, engineering, manufacturing, and overall supplier reliability. But the investment can also pay off in other ways as seen in 1997 when a potential crisis threatened to halt Toyota's production.
Aisin is one of Toyota's largest and closest suppliers. Toyota usually dual sources most parts but was using Aisin as a sole source. Aisin produces a part called a "p-valve" which is an essential brake part used in all Toyota vehicles worldwide. In 1997 Aisin was producing around 32,500 parts a day, which was about 2 days of production inventory for Toyota. On February 1, 1997 a fire destroyed their factory and threatened to leave Toyota without any parts in 2 days. Two hundred of Toyota's suppliers self organized in an attempt to get production of the valve started in two days. Sixty-three companies pieced together engineering documentation, used their own equipment, set-up temporary lines to make parts, and as a result Toyota did not miss a day of production. A new information technology system or a coercive environment did not keep production running, but long-term relationships and an enabling environment did. To reach the level of a true Lean Enterprise with suppliers, an enabling environment needs to be created.
About the Author
David McBride is co-founder of EMS Consulting Group (http://www.emsstrategies.com), a Carlsbad, CA based engineering and management consulting firm. David has a BS in Mechanical Engineering from Ohio State University. He has a successful track record in the development and implementation of FMEA and Design for Manufacturability programs at several organizations and has greatly reduced Manufacturing costs through the utilization of Lean Manufacturing, Kaizen Events, and Manufacturing System Analysis. He has also been highly successful at developing and executing New Product Introduction processes, and Staffing and Capital Equipment Plans.
Many organizations are progressing in their Lean journey with the goal of developing into a true Lean Enterprise. To build a strong lean enterprise companies need to develop a world-class supplier network. Toyota has spent decades investing in their extended network of partners and suppliers, with the principle of challenging and helping them to improve. Most companies seem to focus on new information technologies and price squeezing with their suppliers instead of following the extended lean enterprise model of enabling and partnering with their supplier network.
Auto industry suppliers consistently report that Toyota is their best customer but also their toughest. The US auto manufacturers have a reputation for being tough; however, "tough" is defined as unreasonable or hard to get along with. In Toyota's case, "tough" is defined as having high standards of excellence, with the expectation that their partners will rise to those standards. US companies and Toyota have similar quality methods and procedures with extensive standards, auditing procedures, and rules. What sets Toyota apart is that suppliers view US manufacturers as coercive while Toyota is viewed as enabling.
Over the last few decades Toyota created a strong supplier network in Japan that has distinguished them from other automakers. As they moved to build the same network in North America with US suppliers, their demanding but fair partnership approach has received positive reactions. The principal measure of supplier relations in the American auto industry is the OEM benchmark Survey that is published by John Henke of Oakland University. Suppliers rank auto manufacturers using 17 measures from trust to perceived opportunity. In the 2003 survey Toyota ranked first followed by Honda and Nissan, while Chrysler, Ford and GM were fourth fifth and sixth. The survey also showed that Toyota's scores had improved over 7% over 2002. Another automotive supplier survey published annually comes from J.D. Power. The 2003 survey found that Toyota, Nissan and BMW are the best North American automakers in promoting innovation with their suppliers. Chrysler, Ford and GM were all rated below average.
The rewards for Toyota's investment in building a network of highly capable suppliers are obvious. Their quality that has distinguished them as a leader in the industry is a direct result of their excellence in innovation, engineering, manufacturing, and overall supplier reliability. But the investment can also pay off in other ways as seen in 1997 when a potential crisis threatened to halt Toyota's production.
Aisin is one of Toyota's largest and closest suppliers. Toyota usually dual sources most parts but was using Aisin as a sole source. Aisin produces a part called a "p-valve" which is an essential brake part used in all Toyota vehicles worldwide. In 1997 Aisin was producing around 32,500 parts a day, which was about 2 days of production inventory for Toyota. On February 1, 1997 a fire destroyed their factory and threatened to leave Toyota without any parts in 2 days. Two hundred of Toyota's suppliers self organized in an attempt to get production of the valve started in two days. Sixty-three companies pieced together engineering documentation, used their own equipment, set-up temporary lines to make parts, and as a result Toyota did not miss a day of production. A new information technology system or a coercive environment did not keep production running, but long-term relationships and an enabling environment did. To reach the level of a true Lean Enterprise with suppliers, an enabling environment needs to be created.
About the Author
David McBride is co-founder of EMS Consulting Group (http://www.emsstrategies.com), a Carlsbad, CA based engineering and management consulting firm. David has a BS in Mechanical Engineering from Ohio State University. He has a successful track record in the development and implementation of FMEA and Design for Manufacturability programs at several organizations and has greatly reduced Manufacturing costs through the utilization of Lean Manufacturing, Kaizen Events, and Manufacturing System Analysis. He has also been highly successful at developing and executing New Product Introduction processes, and Staffing and Capital Equipment Plans.
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