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1、RSMMcGladrey,Inc.isamemberfirmofRSMInternationalanaffiliationofseparateandindependentlegalentities.Make Green,Go Green,by Going Lean”PresentedByPaulV.BurnettOctober2007Paul V.Burnett,BSME,MBAIBMJohnDeereFordMotorCompanyDetroitDieselCorporationAppliedMaterialsSanmina-SCIRSMMcGladrey2How to Go Green?H
2、ow to Go Lean?Why?3Doing nothing is not an option!GovernorArnoldSchwarzeneggersignedintolawemissionreductiontargetsforCalifornia:By2010,reduceGHGemissionsto2000levels,By2020,reducetheGHGemissionsto1990levels,By2050,reduceGHGemissionsto80percentbelow1990levels4Green and Lean15-30%ofamanufacturingcomp
3、anysmonthlyenergybillcreatesgreenhousegases.Theenergymanagementwithinafacility-benchmarkcompetitors.Leanmethodologiescanbeusedtoreducewasteintheconsumptionofenergywithinamanufacturingfacility.Theultimategoal-eliminateequipmentnotneededintheprocess.Ifeliminationisnotpossible,minimizetheuseplotenergyc
4、onsumptiontopredictmaintenanceschedulesandreplacementcycles.5Analysis of Electric Industry CO2 ImpactsTheelectricindustrycannotprovidesubstantialreductionsinCO2emissionsinthenearfuturetomeetgoalsLimitedpotentialtoswitchto“greenerenergy”near-termCO2reductionmustcomefromreducingdemandsupportedbynewene
5、rgyefficienttechnologiesconservationprogramsAmarket-basedcollaborativesystematicapproachtodemandreductionisacriticalsuccessfactor(profitpotential)6The Economic Case For ChangeAssetperformancemanagementcanreduceenergyconsumptionby6%to11%.DOEhasestablishedaminimum10%energyreductionguidelineasattainabl
6、ethroughtheapplicationofpropermaintenanceandtechnologysolutions.7G.A.S.Index:Global Asset Sustainability Index G.A.S.Index=Availability*Performance*Quality*Energy EfficiencyAvailability=Alldowntime/ScheduledtimePerformance=Actualoutputforscheduledtime/DesignoutputforscheduledtimeQuality=Totalproduct
7、ionminusdefectsorrework/TotalproductionEnergyEfficiency=Designenergyconsumption/Actualenergyconsumption8Example:Motor Efficiency90,000 Watts100 HP76,000 Watts1HP=.746 kWatts15,400 Watts(17.4%)9Motor Efficiency SavingsEnergySavings=90kWx8,000hrs./yearx(1-(.828/.94)=87,336kWh/yr.Atanaveragecostof11cen
8、tsperkWh,theestimatedsavingswouldbe$9,607peryear.Motoroperatingcost:(100HPx.746kW/HPx8,000hrs.x$.11/KWh)/.94efficiency=$69,838peryr.10Repair v.BuyBreakevenanalysesmustbebasedontheincreasedcostofpurchasinganew,moreenergyefficientequipmentversustheenergyconsumptionreduction.Thecostenergytodayrangesfro
9、m10-13centsperkilowatt-hour.11Lean Definition“Aphilosophyofproductionthatemphasizestheminimizationoftheamountofalltheresources(includingtime)usedinthevariousactivitiesoftheenterprise.”-APICS Dictionary,10th ed.12Lean Enterprise“Anenterprisewithafocusonwasteeliminationandthecustomersneedsinallpartsof
10、itsoperations,manufacturingandadministration.Emphasisisgiventoleanstructuresandprocesses,flexibilityofresponseandmethodsandtechniquestocontinuallyseizenewopportunitiesastheyarise.”-APICS Lean SIG13Early Lean ProcessesMassProductionEarly1900sFordMotorCompanywasapioneerAssemblylineproductionHighvolume
11、productionLimitednumberofproductsSignificantcostreductions14TodayMorethan96%ofallU.S.companieshavelessthan250employeesGlobalcompetition/lowcostlaborDemandsbycustomers:HigherqualityInnovationMasscustomizationFlexibilityLowerCostsLimitedresourcesSource:U.S.Bureau of Census,200415What is Lean?ItisNOT:C
12、ollectionoftechniquesoramethodologyReducedstaffingorlowinventoriesItIS:AphilosophyofmanufacturingTotallydifferentwayofthinkingAdifferentvaluesystemSeekstoeliminatewaste(non-valueaddedactivitiestothecustomer)Emphasisonflowmanufacturing16What is Lean?LeanProductionTotalQualityManagement(TQM)SixSigmaCe
13、llularManufacturingBusinessProcessImprovement(BPI)JustinTimeTheoryofConstraintsZeroDefectsSPCTQCKanban17Lean CharacteristicsFocusisontheimprovementofresourceutilization:EquipmentsetuptimereducedScheduledmachinemaintenanceOrderly,cleanworkplacePullproductionbeingusedJITinventorycontrolFactorylayoutin
14、workcellarrangementbyproductsActiveerroreliminationImprovedquality,etc.18The Importance of Waste EliminationLeandealswiththeeliminationorreductionofmanytypesofnon-value-addedactivities,oftenreferredtoaswasteThedrivingforceforwasteeliminationisimprovedvalueintheproductsandservicescustomersbuy19Seven
15、Popular WastesOverproductionWaitingExcessivetransportationInappropriateprocessing(thehiddenfactory)UnnecessaryinventoriesUnnecessarymotionDefects-TaiichiOhnoToyotaProductionSystem20The Nature of Wastes1.OverproductionTargetandachievementunclearProcessesnotstatisticallycapable2.WaitingOperatorswaitin
16、gOperatorsslowerthanproductionline3.ExcessiveTransportationWidelyspacedequipmentwaitingForkliftsnotavailablewhenneeded21The Nature of Wastes(continued)4.InappropriateProcessingVariabilityinoperatorsperformanceProcessesnotstatisticallycapable5.InventoryLargesafetystocksVariableprocurementleadtimes22T
17、he Nature of Wastes(continued)6.MotionDoublehandlingNon-standardlayoutsEquipmentwidelyspacedfromeachother7.DefectsLowmaterialyieldsExcessiveprocessvariability23Correcting Wastes1.OverproductionEliminatebyreducingsetuptimes.Synchronizingquantitiesandtimingbetweenprocesses.Makeonlywhatisneedednow.2.Wa
18、itingEliminatethroughsynchronizingworkflow.Balancingunevenloadswithflexibleworkersandequipment.24Correcting Wastes(continued)3.ExcessiveTransportationEstablishlayoutsandlocationstomaketransportandhandlingunnecessary,ifpossible.4.InappropriateProcessingWhyshouldthisitembemade?Whyiseachprocessnecessar
19、y?Areanyprocessesbeingperformedthatarenotpartoftheworkflow?25Correcting Wastes(continued)5.InventoryReducebyshorteningsetuptimes.Improvingworkskills.Smoothingfluctuationsindemandfortheproduct.Reducingalltheotherwastesreducesthewasteinstocks.6.MotionStudymotionforeconomyandconsistency.Economyimproves
20、productivity,andconsistencyimprovesquality.Improvethemotions,thenmechanizeorautomate.Otherwise,thereisadangerofautomatingwaste.26Correcting Wastes(continued)7.DefectsDeveloptheproductionprocesstopreventdefects.Eliminatetheneedforinspection.Ateachprocess,producenodefects.Designprocessestobefailsafe(P
21、okayoke).Qualityprocessesyieldsqualityproductsautomatically.27Can you think of other actions to eliminate waste in your company?28Leadership FunctionInitiateneededchangebyidentifyingavisionAligningemployeestothatvisionMotivatingtoachievethatvision29Leadership Lean Change InfrastructureProject&Traini
22、ng Plans_Vision&Lean StrategyValueNoWasteFlowPullStandardWorkJITChampionCEOPlant Management/PresidentVice PresidentSponsors:Manufacturing Engineering QualityLean OfficeFacilitatorFacilitatorFacilitatorTeamTeamTeamTeamTeamTeam30Transparent Workplace31Transparent WorkplaceDefineProcessesValue-AddedAct
23、ivitiesAValue-AddedStepValueversusNon-Value-AddedValue-StreamMappingTypicalProcessFlowAnalysisVisualOrderTheFiveSsVisualControl32Aparticularmethodofdoingsomethingwhichinvolvesanumberofsteps,activities,oroperationsProcessesarefoundinmanufacturing&serviceindustriesExample:Transparent Workplace Process
24、es DefinitionGrindType ContractTurnMillDrillObtain SignatureType EnvelopeMailManufacturingOffice33Process Map SupplierCustomerStampingWeldAssemblyPaintShippingStagingWeekly OrdersWeekly OrdersWeekly Schedule 1 2 3 4 5Production ControlIIIIDailyDailyTotal Time:10DaysValue-Added Time:6minutes1 Day1 Da
25、y2 Days3 Days1 Day2 Days50 sec40 sec90 sec120 sec60 secProcess Time Line34Mapcustomerrequirements(orders)MaporderinformationflowsMapphysicalproduct/materialflowsMapplant/officeinformationflowsAddaprocesstimelineSummarizecurrentstateAsk questions at each step to determine waste or non-value-added are
26、asTransparent Workplace Value-Stream Mapping Process35The%ofvalue-creatingtimeThenumberofunitsofinventoryrequiredtosupportaproductionunitTotaltraveldistanceversusvalue-creatingdistanceTransparent Workplace Summarize Current State36Addvaluetoproducts&servicesthatcustomersarewillingtopayforImprovement
27、sthatchangeaproductsorservicesform,fitorfunctionOtheractivitiesuseresourcesbutaddnovalueSomenon-value-addedactivitiesmaybenecessaryBasedoncurrentknowledgeortechnologyLongtermgoal-EliminateRemainingnon-value-addedactivitiesshouldbeeliminatednow!Transparent Workplace What Are Value-Added Activities?37
28、AprocessthatphysicallychangestheworkpassingthroughitthatmakesitmorevaluabletothecustomerAsteprequestedbythecustomer-theyarewillingtopayforitTransparent Workplace A Value-Added Step38Transparent Workplace Value versus Non-Value-AddedValue-Added ActivitiesEnteringorderOrderingmaterials,suppliesPrepari
29、ngdrawingsAssemblingShippingtocustomersProcessingcustomerdepositsExaminingpatientsFilinginsuranceclaimsDispensingeventticketsFuelingairplaneNon-Value-Added ActivitiesWaiting/sortingMovingKitting/stagingCountingInspectingCheckingRecordingObtainingapprovalsTestingReviewingCopyingFilingRevising/reworki
30、ngTrackingwork-CharleneB.Adair&BruceA.Murray,Breakthrough Process Redesign39Value Stream Costing40Traditional Accounting and Lean ControlsSystem/IssueTraditional AccountingLeanProduction Inventory Control Work Order Production tracking Inventory Cycle Count Kanban Visual signals Five SProcurement Pu
31、rchase order approval Three way match in AP Key Suppliers Master POs Supplier CertificationQuality of Products Detailed inspection Rework or scrap Standardized work Single-piece flowProduction Cost Control Standard cost Variance Reports Analysis of Variance Cell/VS CSFs and measures Analysis of Root
32、 Cause41Costs Outside the Value StreamIdentifytasksnotrelatedtotheValueStreamExp.-ISO9000ThesecostsarenotallocatedtotheValueStreamTheyaretreatedassustainingcostsofthebusinessBudgetedControlledNoneedforfullabsorptioncostingValueStreamcostingprovesrelevant,accuratecostinfoabouttheValueStream42Observe&
33、recordtheflowsoforders,materials,goodsandinformationforaproductfamilyProductfamily:AgroupofproductvariantspassingthroughsimilarprocessingstepsthatusecommonequipmentMappingidentifieswastesituationsforimprovementsTransparent Workplace Value-Stream Mapping(VSM)43What are some value-added&non-value-adde
34、d activities at your company?44Toeliminatewaste,youmustfirstfinditVisualordermakeswasteevidentandisagoodstartingpointformanagingresourcesToyotaProduction-FiveSsasthemethodforexposingwaste&poorutilizationofresourcesTransparent Workplace Visual Order The Five Ss45SortSetinorderShineStandardizeSustainT
35、ransparent Workplace Visual Order The Five Ss46Transparent Workplace Lockheed&Boeings Six SsSORTSUSTAINSTRAIGHTENSAFETYSHINESTANDARDIZE 6 S47Sort:Classifytools,parts,instructionsintonecessary&unnecessarySet in Order:Makeitvisible&easytouse;3Es=easytosee,easytoget&easytoreturnShine:Conductcleanuptoid
36、entifyabnormalitiesStandardize:PutasysteminplacetoreadilyidentifyabnormalconditionsSafety:Identify&eliminatedangerous&hazardousconditionsSustain:Makeahabitofproperlymaintaining&followingstandardpracticesTransparent Workplace The Six Ss48AwarenessofwhatshappeningManpower:Skilllevels,performance,conti
37、nuoustrainingMachines:DevelopMaintenanceschedulesandusethemMaterials:DemandSignalsindicatingshortages;shadowboardsforlocationoftoolsMethods:StandardWorksheetsandOperatingProceduresMeasurements:PerformancetrendsDisplayscheduleQualitytargetsReductionsinsetup&leadtimesTransparent Workplace Visual Contr
38、ol49Pull versus Push Production StrategyValueValueStreamFlowPullPerfectionLean Principles50PullNooneupstreamshouldproduceanygoodorserviceuntilthecustomerdownstreamasksforitKanbanValueValueStreamFlowPullPerfectionLean Principles51PushBuildproducttoforecastExcessinventoryPoorutilization&distributionof
39、productFilleddistributionchannels50%ofallbooksmanufacturedareshreddedValueValueStreamFlowPullPerfectionLean Principles52PullDesignSchedulebasedonactualdemandsignalsProduceexactlywhatthecustomerwantsFlowtakesplacethroughoutthesupplychain,notjustinsideyourproductionfacilityValueValueStreamFlowPullPerf
40、ectionLean Principles53PullBenefitsHighthroughputExcellentprotectionagainststock-outsHigherflexibilityLesscongestionShorterleadtimesHighercustomerserviceValueValueStreamFlowPullPerfectionLean Principles54PerfectionBeginswithvisualizingthe“perfect”processContinuousprocesstoremovewastebyeliminatingeff
41、ort,time,spaceanddefectsValueValueStreamFlowPullPerfectionLean Principles55Final Thoughts Lean and GreenThereisasocialresponsibilitycomponenttosavingenergyandreducingtheamountofCO2emissions.Greenasamarketingtool.SelectansmallareawithhighvisibilityandamanageablenumberofvariablesforthefirstG.A.S.AssessmentandLeanproject.Thejourneyisnever-endinganddefinitelynoteasy(especiallyatfirst)buttheresultsarewellworththeeffort.56QUESTIONS?57Paul V.Burnett,BSME,MBARSMMcGladrey,Inc.SeniorConsultant-OperationsandFinancial2213rdAveSE,Suite300CedarRapids,IA52401319.298.529858