leanthinking

1、lean summit china 2006shanghaioctober 24, 2006lean thinking for chinajames p. womackchairman, lean enterprise instituteorigins of lean thinkinghenry ford pioneered flow production by1914alfred sloan at general motors adapted flow production to erratic, high-variety markets and added management-by-ob

2、jectives, to create mass production by the 1920s.widely copied by organizations across the world, such as general electric, to become the standard business system.toyota pioneered a new business system after 1945- wide variety, high quality and short lead times in erratic markets with continuous flo

3、w and management by process, to create lean production. (fully achieved in japan by the 1980s) elements of a lean enterpriseproduct development process.supplier management process.fulfillment process, from order to delivery.customer management process.policy management process.all linked and reinfor

4、cing, through careful process management.a process is simply a series of steps that must be conducted properly in the proper sequence that the proper time to create value for the customer. principles of lean thinking (1996)specify value from the standpoint of the customer.identify the value stream o

5、f required steps for each product (the process) and remove the wasted steps.conduct the remaining steps in continuous flow.at the pull of the customer.in pursuit of perfection. simplified principles (2006)lean = purpose + process + peoplepurpose = solving the customers problem so the enterprise can

6、prosper.process = the three key value creating processes: design: customer to concept to launch. make: fulfillment, from raw material to customer. use: from delivery through the life cycle.plus necessary support processes:lpeople = engaging everyone touching the value stream in operating and perfect

7、ing the process.what is a lean process (value stream)?one in which value is correctly specified andevery step in the process is: valuable (from henry ford & taiichi ohnos 7 wastes) capable (tqm and six sigma) available (total productive maintenance)for toyota: capability + availability = stabili

8、ty, which is the foundation for the toyota production system (tps). adequate (theory of constraints, tps) flexible (tps)what is a lean process (value stream)?and, the steps are linked by: flow (tps) by location in process sequence with right- sized tools, with single-piece flow where possible. pull

9、(tps) by reflexive signals from next downstream customer with pacemaker point, rather than cognitive information management through central decision point. leveling (heijunka) (tps) by (a) taking noise out of order flow and establishing a standard inventory at a single scheduling point so the proces

10、s can proceed smoothly from that point up stream and (b) leveling production by mix to minimize lead times & inventories. advantage of leancompared with mass production for a given amount of output with high variety dramatically reduces: manufacturing space required (50% or more.) capital requir

11、ed (50% or more.) defects (typically 90% or more.) injuries (typically 90% or more.) human effort (50-75%, with less capital.) throughput time (=order to cash) (typically 75-90%) leader time and product development time (50-90%) how can employees see a process?draw a value stream map.by having every

12、one touching the value stream take a walk together.listing the important details of the existing process (the “current state”.)envisioning a better process (the “future state”.)current-state value streamfuture-state value streamhow can employees improve a process?toyotas a3 problem solving method.st

13、ate the problem (value/purpose). (go to customer!)describe the process causing the problem. (go to the gemba and observe!)propose a better process likely to solve the problem. (drawing on accumulated knowledge in organization.)determine who must do what when to create the new process.specify a measu

14、re of performance that will verify success.creating lean enterpriseeasiest in “greenfield” situations where product, processes and workforce are new.harder but the more common challenge in “brownfield” situation where product, process technology, facilities, and workforce are already in place.two ke

15、y tools of improvement: kaikaku (revolution) to dramatically transform a process, usually in crisis. kaizen (evolution) to steadily transform a process, day-after-day, year-after-year.(a3 works for both.)the spread of lean productionfully developed by toyota in japan by 1980s (including through its

16、suppliers and retailers.)but not fully embraced in japan even today.full application requires synchronized lean product development, supplier management, customer management, fulfillment, and policy management.began diffusing to usa in early 1980s; to europe a few years later.now widely accepted in

17、principle in most countries.“we are all lean as a matter of principle.”the spread of lean productionhard to implement in brownfield operations in stagnant markets because a given amount of output requires less of everything (which is why the system is called lean.)the sad case of general motors, for

18、d, delphi and visitant: understand tools but cant create new management system or deal with legacy of excess workers and pension costs. toyota has long passed ford, now passing general motors to become the worlds largest and most consistently successful enterprise! lean wins! cautionary tale for chi

19、nese state enterprises.an accompanying revolutionat the same time lean production has become global best practice, world labor markets have opened up to greatly expand labor supply.in just a few years china, india, vietnam, mexico, turkey, etc. have become engineering and manufacturing locations com

20、pletely tied to world markets.this creates pressures on existing manufacturing and engineering locations: particularly those in usa and western europe which have too many employees. lean location logicfor every product made for a given customer there is a best location in the world for production.ma

21、ss producers look at factory costs plus slow freight.lean thinkers for each potential production site -calculate:lfactory costs.lcost of slow freight.lcost of supplied items.ltotal inventory costs from raw material to customer.lcost of quality.lcost of premium freight to provide high level of servic

22、e.lcost of out-of-stocks.lcost of remaindered goods.lean location logiclean thinkers then add:lcurrency risk.lcountry risk.lcompany risk (when contracting out manufacturing.)to calculate total cost to supply a given product for a given customer from a given location.conclusions from lean location lo

23、gicbuild products with new technologies & immature processes near technical centers (near headquarters?)build price-sensitive, time-sensitive products at the lowest wage-cost site within the region of sale. (e.g., china for east asia, mexico for north america, turkey for europe.)lbuild price-sen

24、sitive, time-insensitive products at lowest wage-cost sit in the world. (china for the moment.)note: chinese enterprises will need to globally diversify production locations for exports over time to become insiders in each region north america, europe, east asia, south asia(?).the low-cost labor revolutioncreates opportunities and risks for new-entrant global enterprises such those in china: danger of adopting mass production practices because they are quick and easy (untrained labor + fancy machinery) but hard to replace later. danger of over-dependen