Productivity
depends on both
"Lean" thinking and Quality

Customers demand products / services that are

• Better,
• Cheaper,
• Faster.

This requires harmony between the design of the product / service and the processes used to produce / provide them. Processes must accommodate the variety of products / services that customers want -- easily and cost effectively. "Lean thinking" must be used to ensure that value is added in each step of the process. High quality is needed to avoid the wasted time and effort of rework. Cycle Time needs to be minimized to meet delivery requirements and minimize inventory.

The following discussion of Lean Thinking and productivity uses manufacturing termminology because the techniques originated there. However, the concepts are applicable to all processes

• Manufacturing
• Service
• Administrative

Lean Thinking

Production management focuses on optimizing the use of resources -- people and equipment. F. W. Taylor developed "scientific management" at the turn of the 20th century. Activities were broken down into their smallest individual steps. The physical actions (motions) for each step were analyzed and modified to minimize production time. Unnecessary steps were eliminated.

Henry Ford developed the assembly line to enable mass production and, thus, lower costs. Taylor's methods were used to simplify assembly -- eliminating wasted human effort. Standardization of parts and processes (for example, all Model T's were painted black) increased efficiency and reduced waste -- harmony of design and production. Ford also worked steadfastly to minimize cycle time. It took only 48 hours to convert iron ore into an engine and install it in an automobile.

The 1973 oil embargo dramatized the effectiveness of the Toyota Production System (lean production). Producing quality product only as needed and then in the shortest possible cycle time led to tremendous savings in labor, materials, and inventory. Some key elements of lean production are:

• Continuous, paced flow
• Flexible workforce
• Small lot size
• Pull system -- Just-In-Time (JIT)
• Autonomous defect control.
• Cycle time reduction

Organization

Orders must flow through production as efficiently as possible. Orders should flow continuously (Just In Time -- JIT) with queues between work stations as small as possible. Cells, like the U-shaped work area at the right, allow a single worker to operate several machines or do several operations. Maintaining a rhythm in operations (cell and otherwise) leads to better over-all efficiency. This may be referred to as line balancing or takt time (in German). The workforce is cross-trained to allow flexibility in cell operation and scheduling.

The 5 S's (Japanese words) are used to outline improvement actions workers / teams can apply in their work area. Translated these are:

• seiri -- straighten up
• seiton -- put things in order
• seiso -- clean up
• seiketsu -- personal cleanliness
• shitsuke --- discipline

Pull System -- Kanban

Work is "pulled" through production rather than "pushed." Final assembly (or final operations) is scheduled to meet customer delivery requirements. The operations just before final assembly (operations) are scheduled to meet the final assembly schedule, and so on back to the start of production. This is in contrast to starting jobs into production when orders are received or materials are received, and then trying to adjust schedules through production to maintain manpower and equipment productivity while meeting shipping requirements.

When designs and production volumes permit, Kanban systems are used. Storage space for standard components is limited to a number of standard containers. When a container is withdrawn for use in the next operation, an order is automatically generated to make another container of components. This "pulls" production orders through the system and eliminates a lot of expediting.

Eliminate Waste

Every step in production must add value -- in materials and in productive labor effort. Scrap wastes labor and materials. Non-value-added steps must also be eliminated -- especially in administrative activities. Catching quality problems as early as possible eliminates the wasted effort spent on defective materials.

Autonomous defect control is used to stop production when a defect is found so that the problem can be corrected before additional effort and materials are wasted. Autonomous defect control may utilize

• self-inspection,
• poka-yoke (mistake-proofing), and / or
• visual control systems

Cycle Time Reduction

Fast (low) cycle times allows customer orders to be shipped quickly Less money needs to be invested in inventory on the shop floor and in the warehouse. If inventories are low, there is less opportunity for product becoming obsolete before it is shipped. In that case, it is usually scrapped -- waste -- or sold at fire-sale prices -- lost revenue. Low Work-in-Progress inventory (WIP) means there is less potential scrap if defective parts are discovered after additional operations are complete.

In small batch operations and administrative processes, it is frequently easier to quantify cycle time accurately than it is to measure defects. Focusing process improvement activities on reducing cycle time (eliminating the defects that cause unnecessarily long cycle times) will usually achieve better results faster than focusing on defects alone.

Set-up / Change-over

Time spent in preparing to do a different operation (set-up) is non-value-added time. The customer doesn't want to and generally doesn't pay for it. The Japanese initially focused on the notoriously inefficient changing of dies on large presses. The goal of SMED was Single Minute Exchange of Dies. Today, the goal is to be able to change-over from doing one activity to another with as little wasted effort as possible. This allows lot sizes to be reduced (perhaps even to 1) so that the cost to produce custom orders in small lots is low -- mass customization. Efficient design strategies contribute heavily to competitive advantage.

Total Productive Maintenance (TPM) is particularly useful in focusing on the utilization of equipment including set-up / change-over and quality.

Supply Management

Many businesses have obtained sizeable cost savings through out-sourcing. Since suppliers now represent the largest costs of most manufacturers and assemblers, it is essential that the delivery and quality of suppliers be actively managed. JIT deliveries of defect-free components are required. Many companies have supplier certification programs -- based on ISO9000 / QS9000 requirements, proof of high quality processes, and a history of providing virtually defect-free materials -- that eliminate incoming inspection. The participation of suppliers in the development of new products and improvement of existing products results in greater quality improvements and cost savings.

Design for Manufacturability -- DFM

Design for Manufacturability (DFM) is a key enabler of lean production. The design of a product and the processes used to produce it must be analyzed simultaneously in order to optimize

• quality and reliability,
• materials and equipment usage,
• process cycle times,
• production scheduling, and
• in-process inventory.

Design for Assembly -- DFA

Final assembly (or the final steps of any process) are where unresolved quality issues can no longer be avoided. Everything must fit together and work as it should or the product cannot ship or the service cannot be completed. The more things that must come together, the more opportunity for problems. Consequently, the emphasis is design should be to minimize the number of parts and process steps -- fewer opportunities for error. Six Sigma reinforces this view. Combining parts allows a reduction in the number of CTQs (Critical-To-Quality characteristics).

Traditional design for assembly focuses on reducing the number of parts on the basis that one part is cheaper than two. This can be especially true when the indirect costs of maintaining part drawings, bills of material, purchasing, etc. The extensive use of plastics has led to a significant reduction of parts in a wide variety of consumer goods. Using the same components in a variety of product models further reduces costs and increases reliability and serviceability.