There are many more examples of waste. Can you think of some?

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1 © 2005 Superfactory™. All Rights Reserved. Lean Office Overview Superfactory Excellence Program™ www.superfactory.com

2 © 2005 Superfactory™. All Rights Reserved. Outline What is Lean? 5S & Visual Controls Kaizen Value Streams Pull Manufacturing Mistake Proofing Quick Changeover Six Sigma Lean Accounting Theory of Constraints Human Factors

3 © 2005 Superfactory™. All Rights Reserved. Thinking Lean Specify value can only be defined by the ultimate customer Identify the value stream exposes the enormous amounts of waste Create flow reduce batch size and WIP Let the customer pull product through the value stream make only what the customer has ordered Seek perfection continuously improve quality and eliminate waste From Lean Thinking by Womack and Jones

4 © 2005 Superfactory™. All Rights Reserved. Benefits Lean provides tangible benefits Reduces costs not just selling price Reduces delivery time, cycle time, set-up time Eliminates waste Seeks continuous improvement Improves quality Improves customer ratings and perceptions Increases overall customer satisfaction Improves employee involvement, morale, and company culture Helps “transform” organizations

5 © 2005 Superfactory™. All Rights Reserved. Toyota Production System (TPS) Quality, Cost, Delivery Shorten Production Flow by Eliminating Waste Just In Time The Right Part at the Right Time in the Right Amount Continuous Flow Pull Systems Level Production Built-In Quality Error Proofing – Poka Yoke Visual Controls Operational Stability Standardized Work Robust Products & Processes Total Productive Maintenance Supplier Involvement

6 © 2005 Superfactory™. All Rights Reserved. Eight Service Industry Wastes Errors in documents Transport of documents Doing unnecessary work not requested Waiting for the next process step Process of getting approvals Unnecessary motions Backlog in work queues Underutilized employees

7 © 2005 Superfactory™. All Rights Reserved. Examples of Office Process Waste Too many signature levels Unclear job descriptions Obsolete databases/files/folders Purchase Orders not matching quotation Errors – typo’s, misspelling, wrong data Waiting – for information, at meetings, etc. Poor office layout Unnecessary E-mails

8 © 2005 Superfactory™. All Rights Reserved. Lean vs. Traditional Major reduction in sales-order cycle time by 59 percent (from 23 hours to 9 hours) Engineering change-order cycle time by 91 percent (from two hours to two) Response time to customer’s quote requests by 83 percent (from 66 hours to 11 hours) Errors by company employees were reduced by 69 percent (Tonya, 2004)

9 © 2005 Superfactory™. All Rights Reserved. After 5S Clear, shiny aisles Color-coded areas Slogans & banners No work in process

10 © 2005 Superfactory™. All Rights Reserved. Push Vs. Pull Scheduling Push Scheduling • traditional approach • “move the job on when finished” • problems - creates excessive inventory Pull scheduling • coordinated • driven by demand (pulled through system) • extensive use of visual triggers (production/withdrawal kanbans)

11 © 2005 Superfactory™. All Rights Reserved. Everyday Poka Yoke Examples New lawn mowers are required to have a safety bar on the handle that must be pulled back in order to start the engine. If you let go of the safety bar, the mower blade stops in 3 seconds or less. Fueling area of car has three error-proofing devices: 1. insert keeps leaded-fuel nozzle from being inserted 2. tether does not allow loss of gas cap 3. gas cap has ratchet to signal proper tightness and prevent overtightening. 3.5 inch diskettes cannot be inserted unless diskette is oriented correctly. This is as far as a disk can be inserted upside-down. The beveled corner of the diskette along with the fact that the diskette is not square, prohibit incorrect orientation.

12 © 2005 Superfactory™. All Rights Reserved. Six Sigma as a Metric Sigma =  = Deviation ( Square root of variance ) Axis graduated in Sigma 68.27 % 95.45 % 99.73 % 99.9937 % 99.999943 % 99.9999998 % result: 317300 ppm outside (deviation) 45500 ppm 2700 ppm 63 ppm 0.57 ppm 0.002 ppm between + / - 1 between + / - 2 between + / - 3 between + / - 4 between + / - 5 between + / - 6 

13 © 2005 Superfactory™. All Rights Reserved. Constraints Any system can produce only as much as its critically constrained resource 60 units Per day 70 units Per day 40 units Per day 60 units Per day Constraint Maximum Throughput = 40 units per day