Description
Techniques of Productivity Improvement in McDonalds, METSO Mining Corporation, Toyota
Mumbai Education Trust
MFM (SECOND YEAR), DIV: B Second Semester
Strategic Cost Management
Project on
TECHNIQUES OF PRODUCTIVITY IMPROVEMENT IN A COMPANY
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Presented by
Sr. No. 1 2 3 4 5 Ujval Damania Nidhi Gandhi
Name
Roll No. 69 75 81 104 114
Sameer Hathiwala Ralph Serrao Unnati Umrootkar
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Under the Guidance of: Mr. L. N. Chopde
Mumbai Educational Trust’s INSTITUTE OF MANAGEMENT (PART TIME MANAGEMENT)
CERTIFICATE
This is to certify that project titled TECHNIQUES OF PRODUCTIVITY IMPROVEMENT IN A COMPANY is based on original study conducted by the group under my guidance and this had not formed a basis for the award of any other degree of this institute / university.
Place : Mumbai Date : 28 st April 2012
( Mr. L. N. Chopde )
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TABLE OF CONTENTS
Sr. No.
Particulars
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Introduction Factors impacting the operational capabilities with regards to productivity improvement of an organisation. Barriers to Productivity Improvement Various approached to productivity Techniques of productivity improvement in McDonalds Techniques of productivity improvement in
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6 METSO Minerals Process Technology (MMPT) 7 8 Techniques of productivity improvement in Toyota Bibliography
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TECHINQUES OF PRODUCTIVITY IMPROVEMENT Introduction Productivity can be said to have improved when more output is achieved for the same input or when the same output is achieved for the less input. To improve productivity, either the process itself, the equipment and machinery used, the workforce or the indirect processes affecting production must be addressed. For productivity to improve, improvement must be seen as a continuous process. Many organisations have found that Edward C. Deming's process management cycle is useful. Deming's cycle is frequently represented as PDCA, meaning: plan, develop a course of action based on information collected; do, implement that plan; check, measure and analyze the relative success of that plan; and act, adjust the plan accordingly Qualitative Tools Sometimes, brainstorming with members of an organisation will result in the accurate identification of problem areas in the company. However, more frequently than not, companies tend to focus on the issues but not the underlying causes of those issues. As a result, plans are developed to address the problem (for example, order satisfaction and high incidence of backorders) rather than addressing the causes of the problem (for example, unreliable suppliers, high absenteeism, scheduling problems). One useful tool in productivity improvement is cause-and-effect analysis. By identifying and analyzing the issues restraining productivity, you can create a diagram of issues, the immediate causes of the issue, the causes of those causes and so on. Also called a fishbone diagram for its appearance, cause-and-effect analysis can be applied using the Theory of Constraints, which basically states that a process is only as good as its weakest input. Many people make the mistake of trying to address the "effect" rather than the causes of that effect. Quantitative Tools In developing a plan for productivity improvement, gap analysis is a useful tool. Gap analysis looks at where a company's performance is and where it wants to be. By
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looking at the "gaps" in performance a plan can be developed which targets those gaps. Statistical process controls (SPC) are a useful tool to obtain an objective, quantified measure of the state of a process or the effectiveness of improvements made. Examples of SPCs include company ratio analysis, control charts, process capability studies, etc. FACTORS IMPACTING THE OPERATIONAL CAPABILITIES WITH REGARDS TO PRODUCTIVITY IMPROVEMENT OF AN ORGANISATION. Lean Manufacturing Many of the ideas behind what is now termed lean thinking were originally developed in Toyota’s manufacturing operations. The Toyota Production System spread through their supply base during the 1970s and their distribution and sales operations during the 1980s. The term described the key elements accounting for this superior performance as lean production - ‘lean’ because Japanese business methods used less of everything (human effort, capital investment, facilities, inventories and time) in manufacturing, product development, parts supply and customer relations. The key lean-thinking principles include the following. • Recognize that only a fraction of the total time and effort in any organisation actually adds value for the end customer. By clearly defining value for a specific product or service from the end customer’s perspective, all the non-value activities or waste - can be targeted for removal. For most production operations only 5% of activities add value, 35% are necessary non-value adding activities and 60% add no value at all. Eliminating this waste is the greatest potential source of improvement in corporate performance and customer service. • Few products or services are provided by one organisation alone, so waste removal has to be pursued throughout the whole value stream - the entire set of activities across all the firms involved in jointly delivering the product or service. New relationships are required to eliminate inter-firm waste and to effectively manage the value stream as a whole.
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• Instead of managing the workload through successive departments, processes are reorganized so that the product, or design, flows through all value-adding steps without interruption. Obstacles to uninterrupted flow are identified and removed using the toolbox of lean techniques. Activities across each firm are synchronized by pulling the product or design from upstream steps at just the time when required to meet the demand from the end customer. • Removing wasted time and effort represents the biggest opportunity for performance improvement. Creating flow and pull starts with radically reorganizing individual process steps but the gains become truly significant as these process steps link together. As this happens more and more layers of waste become visible and the process continues towards the theoretical end point of perfection, where every asset and every action adds value for the end customer. In this way, lean thinking represents a path of sustained performance improvement Many of the tools and techniques associated with lean ways of working emerged from the Toyota Production System, while others have since been developed by research organisations such as the Lean Enterprise Research Centre (LERC) based at Cardiff Business School. The mission of the LERC is to be a world-class lean-thinking and supply-chain research centre. The LERC is dedicated to: • developing pioneering, leading-edge lean-thinking research tools and techniques; • helping organisations achieve world class performance through the application of lean-thinking principles and techniques; and • disseminating lean-thinking knowledge through a broad range of education programmes and management courses and by communicating with the broader management population. The aims of the LERC are to develop a detailed knowledge of lean-management principles and techniques and identify new methods of applying them for the benefit of businesses and other organisations.
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As more and more organisations strive to become lean, they will expect their suppliers to do the same. These expectations will be communicated through such things as: • The responsibility for quality inspection • The responsibility for some aspects of product development • Requests for engineering changes • Expectations of reliable quality and delivery performances. These may all be pushed further down the supply chain. In order to meet these types of requirements from larger companies, organisations will need to progress towards becoming lean themselves. It is logical that a lean manufacturer at the head of a supply chain will prefer to work with suppliers who can align their processes to comply with lean manufacturing. ERP Systems Enterprise Resource Planning (ERP) systems are software solutions that integrate and provide data in real time to users in any part of a manufacturing enterprise. A welldesigned ERP system will have separate components to control data related to each aspect of an enterprise’s operations while simultaneously providing an overall or integrated view of the entire enterprise. The components of a typical ERP system are: • Finance/accounting • Manufacturing planning/scheduling • Human resources • Distribution management • Customer order management • Cost management • Shop-floor management • Inventory management
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• Procurement management • Production control. Barriers to Productivity Improvement Various concerns may deter organisation from implementing productivity
improvements. The following are among them. • Cost: Perhaps the natural for an organisation is to react by saying, ‘We just can’t afford it’, but it may be better to focus on cost savings that result from potential improvements when considering a productivity improvement drive. The question should be ‘Can we afford not to improve productivity?’ View short-term cost as a longer-term investment to reduce more significant costs to the organisation. • Employee resistance to change even though organisations are identified as having people who are open to change, the reverse can also be true. In particular, if certain employees have been with the organisation since the organisation was founded, it may be difficult to persuade them that the way they have always done things is not in fact the most effective way of working. From the perspective of the organisation, this way has been successful, so it may be hard to accept that these productivity improvements are not just the latest management fad. • Personnel Resource it can be difficult to release employees for training in an organisation if they are multi-skilled and cannot easily be covered for by other staff. Larger companies may have staff dedicated to productivity improvement, who can dedicate their time to training and implementing productivity improvement initiatives. One way to get around the difficulty in organisations is for management to lead by example. If other members of staff see them initiating and implementing improvements as a part of their job, they may get an understanding of what the organisation is trying to achieve. • Specialist knowledge larger companies may have staff who are dedicated to productivity improvement and have gained the knowledge necessary to champion improvement initiatives. It then becomes vital for senior staff to become acquainted with at least the basic principles of some of the productivity improvement tools and techniques outlined later in this report.
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Various approaches to productivity improvement Productivity improvement can be driven by results or activity. Activity-driven approaches, though they may be successful in the short run, generally target the issues themselves rather than the underlying causes. As a result, productivity may be seen to improve briefly, only to go down again. In contrast, results-driven approaches take on a sort of "just-in-time" quality, meaning that innovations are introduced only when needed and effectiveness is measured straight off, producing a type of trial-and-error environment where the need for improvement is continually reinforced and successful results are built upon and frequently expanded. In order to stay competitive, manufacturing ORGANISATIONs need to improve their production processes in an efficient manner. This report attempts to get back to basics and examine fundamental low-cost or no-cost productivity improvement principles, some of which came to the fore in manufacturing industry worldwide as part of the well-publicized Toyota Production System in the early 1980s. JIDOKA Jidoka is a Toyota concept aimed at describing the man-machine interface such that people remain free to exercise judgement while machines serve their purpose. Machine jidoka incorporates fail-safe devices on machinery to prevent. Human jidoka allows operators to stop the process in the event of a problem. Workers have the ability to stop the line if: • • • • Equipment malfunctions; Defects are found; Work delays occur; or Materials or parts shortages occur.
The following three principles are central to the jidoka way of working. • • Do not make defects. Do not pass on defects.
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Do not accept defects.
Jidoka has two separate meanings – automation and autonomation. Automation refers to changing from a manual process to a mechanised process. The problem with this is that there is often no device for stopping the process if a malfunction occurs. Because this process can lead to a large number of defects in the event of a machine malfunction it is considered unsatisfactory by Japanese manufacturers.
‘Autonomation’, a term coined by Toyota, refers to automation that automatically controls defects. Jidoka is often referred to as ‘automation with a human mind’. Autonomation technically refers to a technique for detecting and correcting production defects that combines a mechanism for detecting defects with another for stopping the line or machine when defects occur. This defect detection system automatically or manually stops the production operation or equipment whenever an abnormal or defective condition arises. Any necessary improvements can then be made by directing attention to the stopped equipment and the worker who stopped the operation. The jidoka system shows faith in the worker as a thinker and allows all workers the right to stop the line on which they are working. HEIJUNKA Heijunka is the Toyota planning system, which focuses on achieving consistent levels of production. Toyota officially defines heijunka as ‘distributing the production of different [body types] evenly over the course of a day …’ It incorporates the principles of line balancing by attempting to equate workloads, leveling demand out by creating an inventory buffer and replenishing that buffer. For example, more advanced lean plants are using load-leveling boxes to visually represent the leveled schedule. Heijunka is a key operating concept of just-in-time (JIT) manufacturing systems. In practice, it involves load leveling and line balancing, as well as achieving uniform scheduling of production so that as one operation ends the next operation is ready to begin. If perfect heijunka is attained in a JIT manufacturing system, a uniform or rhythmic flow of mixed-model production is possible. Although the leveling aspect of heijunka typically results in more even production and process workloads, the
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underlying rule is essentially the rule of heijunka – an even work load for all employees. In heijunka, parts must also be supplied to the assembly process in very small lots without delays. It thus necessitates the use of kanban (see below). One of its benefits is that the levelled load benefits upstream parts-fabrication processes and parts suppliers too, who are freed from having to maintain high capacities solely to cope with large lots in downstream processes. Heijunka also has the capability of reducing lead times by minimising time losses due to changeovers. Multiple products are assembled simultaneously instead of first dedicating the line to one product then changing the entire line to produce another. The entire line is seldom changed over between products. JUST-IN-TIME The American Production and Inventory Control Society (APICS) define just-in-time (JIT) as: A philosophy of manufacturing based on planned elimination of all waste and continuous improvement of productivity. In practice, JIT can be applied at two levels in an organisation: 1. The manufacturing process, where the aim is to have synchronised operations with minimum quantities of raw materials, work-in-progress (WIP) and consumables, throughout the process; and 2. Related activities, applied to all functional areas of the business and all levels of the organisation from the board of directors to the shop floor. The philosophical view is concerned with the reduction of waste (i.e. non-value-adding activities) throughout the organisation. In the factory, JIT continually focuses attention on waste and in particular on the time spent on all aspects of the manufacturing process. The goal is to minimise the standard lead-time by adopting a keep-it-moving approach to manufacturing. This will not be achieved by reacting to latest developments; it requires careful planning, testing and agreement as to how all those involved with both manufacturing and support functions will act.
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The basic aim of JIT in a factory is to: • reduce lead times • minimize inventory • reduce the defect rate to zero and • accomplish all of the above at minimum cost There are three essential ingredients to effective manufacturing excellence through JIT: • JIT manufacturing techniques, which aim to promote a rapid response to customer demand while minimising inventory – for example, pull systems, short change-over times, small transfer batch sizes and plant layouts that support short movements of materials; • A total quality culture, an approach to running the organisation which pursues excellence in both the product and every area of the business, including customer service, purchasing, order taking, accounting, maintenance, design, etc.; and • People involvement, that is the involvement of all employees in the development of the organisation through its culture and its manufacturing and other business processes. To maintain continual improvement, appropriate performance measures and targets should be in place. These may include: • Factory lead time • Factory change-over times • Percentage of products right first time • Work-in-progress (WIP) or stock turns • Some measure of people involvement or contribution. Traditionally, Western manufacturing plants utilise a ‘push’ system of inventory control, whereby work is released and processed at previously scheduled times,
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typically by a material requirement planning (MRP) system. As a result, work is planned, managed and tracked to provide a finished product which meets required due dates. A push system can control WIP by limiting the release of new orders to the shop floor. However, the amount of WIP often builds up to provide ‘comfort stock’ between operations. This can lead to: • Long lead times • The need for additional prioritising systems • Progress chasing • Slow feedback of quality issues. These problems can be overcome by the use of a ‘pull’ system. Pull-system controls are an integral part of most JIT implementations. Under a pull system, work is performed at an operation only when the next operation is signalling that it is ready to accept it. This can be simplified through the use of kanban systems (see below). KANBAN The word kanban literally means visible record. In the kanban system, which has been employed as a JIT production control technique since the mid-1970s, flow is controlled by the use of cards. When implemented correctly, JIT and kanban can result in reduced inventory and higher efficiency in a manufacturing system. The Toyota system is a two-card system; it uses so-called move kanbans (also known as conveyance or withdrawal kanbans) and production kanbans. For example, imagine work centre B produces subassemblies using parts drawn from a parts container at B’s inbound stock point. A move kanban – one of which is found in each such inbound container – is removed from the container when it is exhausted and is taken to the outbound stock point of the work centre (let it be work centre A) immediately upstream. A full container of the same parts is then found there. The production kanban – one of which is found in each such outbound container – is removed from this full container. The move kanban from the exhausted container is placed in the full container, authorizing its transport from A’s outbound stock point to B’s inbound stock point. The production kanban is then placed near work centre A to authorize production of another container of parts at A for B. When work centre A has finished
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producing a full container of parts, the production kanban is then placed in this container, which is deposited at A’s outbound stock point. Another kanban system is the Kawasaki Heavy Industries single-card system. A single-card system uses a withdrawal or move kanban to trigger production. In this system, work centre A produces a part, which is moved to the storage area in containers that hold a certain number of parts. Work centre B pulls a container from storage when it needs the material and may return an empty container to the storage area. When B pulls the container, the move kanban is removed from the container. KAIZEN Imai (1986) defines total quality control as ‘organised kaizen activities involving everyone in a company - managers and workers - in a totally integrated effort toward improving performance at every level’. He continues: This improved performance is directed towards satisfying such cross-functional goals as quality, cost, scheduling, manpower development and new product development. It is assumed that these activities ultimately lead to increased customer satisfaction. Kaizen is a Japanese word meaning gradual never-ending improvement in all aspects of life. It represents a Japanese approach to improvement and can be interpreted as continuous improvement in all areas. Kaizen is at the heart of quality improvements in Japanese companies. The classical Western approach to improvement has been one of technology innovation. Large sums of money have been spent on new equipment and systems using the latest technology to give step changes in performance. This has led to dramatic improvements but they have typically not been standardised and maintained. Kaizen, on the other hand, relies on an investment in people. It is a continuous series of small improvements made on existing equipment or systems by the people who actually work in that area. It does not rely on specialist involvement but can be used to support those directly involved in making the improvement. Important aspects of kaizen are the standardisation and maintenance of the improvement, which are as crucial to the process as the improvement itself. Improvements must become standardised and maintained until further improvements are made.
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There is a structured approach to kaizen-based improvements and each step must be followed to ensure lasting improvement. The approach proceeds in the following steps. 1. Define the area for improvement. 2. Analyse and select the appropriate problem. 3. Identify its causes. 4. Plan countermeasures. 5. Implement countermeasures. 6. Confirm the result. 7. Standardise. Techniques used in facilitating kaizen include the following: • Zero defects • Just-in-time • Kanban • Total productive maintenance • 5S suggestion schemes • Robotics • Productivity improvement • Muda - eliminating waste • PDCA (Plan, Do, Check, Action cycle) • Quality circles The following principles are recognized as essential for continuous improvement. • Traceability In order to identify root causes and prevent them recurring there must be a system in place to trace defects back to their source. In assembly manufacturing,
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this normally means tracing components by lot and vendor back to the problem assembly stage. In process manufacturing, this means tracing control conditions by critical process step for the lots affected by the defect. • Design of experiments The most effective way of improving process steps in order to increase yield, shorten cycle time or make the process more robust. • Stop-in-time When defects are detected on the production line, the defective material must be stopped immediately. If a second, similar defect is discovered the process step must be stopped immediately and corrective action taken. This prevents adding waste to the defective product and prevents production of further defects. • Root cause detection Statistical data collection is a method of identifying root causes. The five Ws (who, what, where, when, why) and two Hs (how, how much), also help track down the root cause of any problems in complex production environments. WASTE REDUCTION The reduction of waste is a key area in the application of low-cost productivity improvement ideas. Taiichi Ohno originally developed the seven categories of waste concept within a manufacturing organisation. The following list should be considered a complete collection rather than a list of individual categories of waste. Any waste minimization program should aim to tackle all of the following rather than any one in isolation. • Overproduction The aim of any manufacturing operation should be to produce what the customer requires at the right time and at the right level of quality. Producing more than is required leads to undesirable stock levels. In some situations companies overproduce and move away from the idea of just-in-time to the safety of just-in-case. Some bonus systems that reward performance based on targets exceeding what is actually required will naturally encourage overproduction. In both cases high stock levels and thus waste may result. • Waiting Waste categorised as waiting occurs in situations such as the following: when raw materials wait in goods-inwards stock before processing if they are not delivered when required;
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when products wait internally between operations because the flow of production is not smooth or balanced and operators are left waiting for work (and so are not contributing or ‘adding value’ to the product); and
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when products wait for longer than necessary as finished goods to be shipped to the customer if delivery schedules are not optimised.
Transport Product movement within the manufacturing operation is often unavoidable, but adds no value to the finished item and so should be minimised wherever possible. Transporting the product not only wastes time and effort but can also result in damage during transit. Transport waste is visible and can be easily identified through productflow studies. Drawing a physical diagram of the production flow and clearly marking product movement is one method of revealing transport waste. This simple exercise can often highlight areas of product movement which may have evolved without consideration to the effect on total distance travelled by a product during the manufacturing life cycle. Often, re-location of key operations can yield large savings in transportation wastes. • Inappropriate processing In carrying out a job, it is wasteful to use tools and machinery that are not the most appropriate – for instance, CNC machinery, with its vast capability and flexibility, for producing a simple component. It is often the case that a sizeable investment in such machinery results in pressure to run it constantly, even when it is not the right tool for the job. This type of waste can also be related to machines or processes that do not have the capability to produce the required level of quality. Unnecessary inventory The ‘evils’ of stock are well documented, and include: • • • • Unnecessary storage Unnecessary transportation Interruption to the smooth flow of goods Increased lead times to accommodate unwanted items, which when complete will go directly into stock rather than to a customer • • Inability to detect defects through not seeing the ‘wood for the trees’ Deterioration of ageing stock.
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• Unnecessary motion Motion does not refer to transport of product but more to the ergonomic aspects of work to be carried out. As well as placing undue effort on the individual carrying out the operation, poor workplace design can lead to inefficient methods of working. As with transport waste, areas for potential improvement can be identified through time-and-motion studies of particular operations. • Defects the production of non-conforming product is a fundamental waste as the output will have to be either reworked or scrapped. Both of these options carry their associated costs and may be affected by any of the above waste categories. More recently, other categories of waste have been recognised. The following are taken from The Quality 60: A Guide for Service and Manufacturing by John Bicheno: • Potential or talent • Energy • Pollution • Space • Complexity. VISUAL MANAGEMENT Visual control is an essential part of a lean manufacturing environment. It can be applied to all levels and all departments within an organisation and requires the commitment and involvement of everyone. Constructing a visual factory involves the logical placement of all tools, parts, raw materials, and the prominent display of relevant production information. Everyone involved should be able to see and understand the status of the system. One aim of a visual system is to make the abnormal obvious so that action can be targeted to correct any irregular situations. Four key areas of information displayed in a visual factory are itemized below 1. Safety 2. Quality 3. Production
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4. Cost ANDON Andon devices indicate where any person or machine requires help. The call for help can be indicated by a lamp or siren as appropriate. The andon may consist of a series of lamps at each process or a board of lamps covering a whole production area. The board would be kept as simple as possible to minimise required investment. It also allows the board to present information to team members quickly and in a form that is easy to understand. In order to achieve this, the problem location is identified but details of the specific nature of the problem are not normally displayed. The simple nature of an andon helps the team member by allowing them to undertake the following actions in the most efficient manner: • Identifying the location of the problem • Physically visiting the location • Examining the situation and understanding the problem • Considering the most appropriate action and • Taking action. In the assembly area, an operator can activate the andon via a pull cord or a push button. An andon for an automated line can automatically call attention to the machine’s current condition when outside specified limits. Different coloured andon lights can be used to signify different operating conditions, for example: • Green = operating within agreed tolerances; no operator intervention required; • Amber = beginning to deviate from normal operation; operator should check the machine at agreed intervals and take corrective action where appropriate to restore normal operating conditions; • Red = machine stopped; urgently requires attention. The ultimate objective of the andon is to prevent problems from occurring.
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THE 5 S’S The five S’s stand for five Japanese words; • • • • • Seiri (proper arrangement) Seiton (orderliness ) Seiso (cleanliness) Seiketsu (standardizing) Shitsuke (discipline)
The concept was developed by Osada in the early 1980s and is used to establish and maintain all aspects of quality in an organisation. The 5 S’s are explained in more detail below. Seiri (Proper arrangement, Sorting out) • Identify what is needed and what is not needed. • Keep what is needed and eliminate what is not needed. • Do not produce waste or consume more resources than necessary. • Introduce measures to prevent the build-up of unnecessary items. Seiton (Orderliness, Tidying up) • Put things in order. • Determine a location for all identified, needed items. • Make it easy for anyone to find, use and return these items by providing information as to where things are now stored. • Use standard equipment where possible. • Find alternative storage for tools, parts, equipment and supplies that are needed but not used daily. Seiso (Cleanliness)
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• Shine equipment, tools and the whole workplace. • Eliminate dirt, dust, oil, scrap and other foreign matter to make the workplace clean. • Adopt cleaning as a form of inspection. Cleaning exposes abnormal conditions and corrects pre-failure conditions. • Integrate cleaning into everyday maintenance tasks by all staff. Seiketsu (Standardising, Housekeeping) This is a state beyond the first three S’s, in which they are thoroughly maintained by sharing information so there is no searching for information such as delivery dates, production schedules and so on. Everything is standardised and standards are made visible so that all abnormalities can be easily and immediately recognised. Shitsuke (discipline) • Maintaining correct procedures becomes a habit. • Proper training of all workers has occurred. • All workers have ‘bought-in’ and a change in work habits has been achieved. • The workplace is well ordered and run by agreed procedures. • When applied to the organisation, it could also be applied to external relationships. The 5S procedure is a process of defining the normal to see the abnormal. Strong 5S programmes can lead to improved behaviour because the abnormal becomes much more obvious (or visual) on the shop floor. In order to facilitate this visual aspect, a system of identification known as the ‘Red tag’ has been used to aid 5S implementation. A visual tag made from red paper or card is used to highlight problem areas. An example of such a red tag is shown below. There are two ways to use these red tags: • To tag an area where non-conformance to the 5S principles has occurred; or
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• On a red-tag board, where the problem areas are listed and a red tag attached to each item on the list. The red tags clearly draw attention to areas that need work to meet the 5S principles. In both cases, when the problem has been rectified the red tag can be removed. The 5S principles underpin the low-cost productivity improvements discussed in this report. All five of the five S’s can be accomplished with little or no capital investment whilst the financial returns from the resulting productivity improvements – in the form, for example, of improved storage facilities – can be quickly realised, and will offset any cost involved. Conclusion The basic concepts of continuous improvement highlighted in this report are fundamental to the improvement of productivity. That they have their roots in Japanese management techniques and have been proven in larger organisations such as Toyota and Kawasaki. The productivity improvement tools highlighted in this report are all low-cost; indeed some incur no direct cost at all. They are about working smarter rather than harder. In particular the 5S principles are easy to apply and do not require major capital investment other than training, and they should quickly identify possible areas for further productivity-improvement drives. A gradual implementation of selected tools and techniques should lead to reduction in production waste and improve the morale of employees involved as they see the immediate visual impact of their productivity improvement ideas
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TECHNIQUES OF PRODUCTIVITY IMPROVEMENT IN MCDONALDS Introduction McDonald’s, first started by Ray Krov, is now one of the most popular fast food restaurants across the world. They proudly serve more than 46 million customers in 59 different countries and have more than 30,000 different locations domestically and internationally (Food Service). The fast food industry is booming at a rapid rate, especially the healthy trend, with this in mind, McDonald’s has strategically plan to stay on top of their competitors by improving the productivity within the organisation. THE FIVE P’S Maintaining the five P’s forces (People, Product, Price, Place, and Promotion) are essential in any business to improve the productivity. Consequently, McDonald’s Corporation uses these related forces in the sense that each P creates a chain effect on each other. The following is a list of methods using the P forces. The first force is the PEOPLE working in the McDonald’s chains, which are represented by service, hospitality, and pride. The staff employed in McDonald’s are continuously trained and kept in the company to reduce the cost of training short-term inexperienced workers. Moreover, the training process has been improved to include online e-learning tools for the restaurant staff. Maintaining the workers in the company is very important to McDonald’s and the corporation rewards workers who do outstanding services. This form of incentive is motivational to the workers. The second force is the PRODUCTS which include the quality, taste, and price of the goods sold. McDonald’s is trying to establish flexibility with the changing tastes and preferences in the market, Moreover, they are also seeing growing interest in premium product and wholesome food choices. The quality and safety of the food is a main entity in maintaining the quality of the food at McDonald’s. The third force is PLACE which is represented by the clean, relevant, and modern store environments. Whether it was in the main restaurant area, the kitchen, or even the restrooms, the company ensures the safety and comfort for the consumers and staff workers. The company intends on having the gold standards for cleanliness.
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The fourth force is PRICE, which is presented in the productivity and value. The value of the product is increased when consumers gets high quality products for lower costs. Therefore, McDonald’s Corporation ensures that its customers receive the highest value of food for the price they pay. The fifth force is PROMOTION which is presented in marketing, leadership, and trust. The company has already earned its reputation for good quality food so they just focus on customers cares. They do this through community involvement and their social responsible towards the environment. This process will gain the trust of loyal customers and keep them for life. TRAINING McDonald’s realizes that its employees must understand their duties in order to fulfill the organization’s goals and to improve the overall productivity in the organisation. To ensure that all employees properly perform their assigned duties, McDonald’s invests greatly in their training program. The company continues to
receive prestigious awards for their leading-edge training, including the “Employer of Choice Award” from the Restaurant Business Magazine (“Restaurant Management”). New crew members go through a thorough orientation process consisting of several videos, followed by several days of direct one-on-one training by a trainer. After employees feel comfortable with the operations, they may be promoted to Crew Trainers. Crew Trainers undergo further training for specialized processes such as the grill area, front counter, drive-thru, and other areas. Shift supervisors are the next step in the organization, followed by Second Assistant Managers, followed by First Assistant Manager, and the top manager at each McDonald’s restaurant is the Restaurant Manager (Phillips, Eddie). Training never stops at McDonald’s, no matter which position an employee holds. Some current employees describe McDonald’s as the “best training company in the world” (Phillips, Kenny). Finally, to ensure the quality of the operations, McDonald’s does surveys periodically to get feedbacks from customers. As shown throughout this section, the McDonald’s Corporation has been doing a very good job at keeping the quality of its products and services, whether it was through using computerized equipment or to train their human resources.
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RAW MATERIAL - The Arrival & Maintenance Through the intense process of choosing and manufacturing raw materials, McDonald’s customers can be assured of a quality product. Whether arriving via
truck or train, raw materials are delivered fresh and ready to use every day. To ensure that this freshness is passed onto the customer, each arriving package is personally inspected for damage during its travel. In addition, the condition of delivery trucks are also taken into account to make sure that meat was untainted due to a filthy meat cooler. The meat cooler should always be set at 10 degrees below zero and the meat should remain at a constant temperature of 34 to 38 degrees. RESTAURANT INSPECTION Since McDonald’s believes so strongly in high quality products, Licensees are expected to obtain their desired product needs directly from suppliers rather than the McDonald’s Corporation. While this ensures that the best raw materials are purchased at a reasonable price, it often leaves the McDonald’s Corporation “in the dark” concerning the safety precautions and procedures of franchised restaurants. As a
result, the McDonald’s Corporation makes both announced and unannounced visits to international McDonald’s restaurants to ensure that proper procedures are being followed. With each visit, the restaurant being inspected is graded on their
proficiency and performance. Based on this grade, the corporation will determine eligibility for growth of new franchise locations. In addition, the failure to meet
requirements can result in a default in your franchise agreement for the following term. FORECASTING Aspects of Forecasting McDonald’s has a continual means of receiving information from customers, employees, and the industry that effects short, medium, and long term decision making and forecasting. Different kinds of information are received from all levels of the corporation and are used to learn more about the market movement and advertisement structure, to basic everyday processes in production and packaging of goods for the targeted markets. Forecasting is done in large by the corporation, as part of their responsibility to the franchisee’s and McDonald’s shareholders.
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Forecasts are vital to McDonald’s organization and significant management decisions. Forecasts provide the basis for budgetary planning, cost control, planning new products, process selection, capacity planning, and facility layout. McDonald’s uses a qualitative type of forecasting. Typically,
The main information used in
forecasting the stability and future growth of the corporation is by the number of customers going in and out the door and all voiced opinions. At the corporate level, qualitative forecasting can be seen, even with limited information that was given. Market research department takes data from talking with customers to find out how they like or feel about a particular ad campaign or a specific commercial. And product development department uses input on developing a new product or changing how the new product is prepared, priced, or packaged.
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TECHNIQUES OF PRODUCTIVITY IMPROVEMENT IN METSO MINERALS PROCESS TECHNOLOGY (MMPT) Metso Minerals Process Technology Asia-Pacific and South America (MMPT) has been working with operations around the world to increase their efficiency through ‘Mine-to-Mill’ or Process Integration and Optimisation (PIO) projects. These projects have delivered significant improvements in mine efficiency, mill throughput and reduced operating costs at mines around the world. The MMPT methodology involves rock characterisation, site auditing, data collection, modelling/simulation and implementation of integrated operating and control strategies on site. This results in significant benefits to the operations – for example, five to 20 per cent increases in concentrator throughput have been measured. MMPT’s rock characterisation utilises simple and inexpensive measurements that can be performed by trained site personnel. The advantage of these measurements is that a large amount of data can be collected in a very short timeframe, as the samples do not require shipping to an outside laboratory. Typically, a PIO project starts with a site visit to perform blasting and process audits, collect high quality data including measurements of run-of-mine fragmentation and survey data around all crushing and grinding circuits. These measurements are combined with rock characterisation and the definition of strength and structure domains to model the complete production chain. Site-specific models of the blast fragmentation, crushing, grinding and flotation processes can then be developed. This proven methodology has applications ranging from greenfield projects to long-standing operations with AG/SAG or conventional grinding circuits. Process improvements can be higher mining productivity, higher mill throughput, decreased overall operating costs and higher flotation or leach recovery. This paper discusses a recent application of PIO conducted at a large open pit operation in South America and emphasises the potential that every operation has to ‘do more with what they have’. The MMPT methodology consists of the development of integrated operating and control strategies from the mine to the concentrator that minimise the processing cost per tonne and maximise profitability. It involves rock characterisation, site auditing, data collection, modelling/simulation and implementation of integrated strategies in
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the field. This results in significant benefits to the operations – for example, five to 20 per cent increases in concentrator throughput. PIO METHODOLOGY The PIO methodology is divided into a number of components: benchmarking, material tracking, rock characterisation, high quality survey data collection in the mine and concentrator, historical operating data collection, modelling/simulation and implementation of the integrated operating strategies. Experience has found that ignoring any of these elements will result in the project being less successful. A PIO project is normally initiated with a site visit to collect data of the current operating practices and benchmark the performance of both the mine and concentrator. Particular attention is made to the rock conditions and variability in rock properties to define strength and structure domains. Once the different rock strength and structure domains are defined, data has been collected, modelling and simulation techniques are used to determine the best operating strategy and avoid costly (and often inconclusive) trial-and-error exercises. The ability to accurately model the blast fragmentation, crushing and grinding processes allows the entire ‘production chain’ to be simulated, with the impact of upstream changes being able to be predicted downstream. The conclusions and recommendations of the simulation study reveal a clear direction forward for the operation. The PIO study then enters the site implementation, support and monitoring phase. Once the changes in the mine and concentrator have been implemented and the benefits clearly demonstrated, outside assistance is only periodically required thereafter to ensure that the gains are maintained in the longer term. Benchmarking and process audits A clear understanding of the current operating practices needs to be gained before any changes can be recommended, this must be backed up with measurements and data collected at site. This involves auditing the blast design, implementation and initiation sequence, followed by material tracking (that will be described in more detail below) and fragmentation measurements along the process. Blast design implementation is
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closely observed, as an operation must be able to implement accurately and repeatedly before it can expect to gain from blast design changes. From the perspective of the concentrator or processing plant, sampling surveys of the crushing and grinding circuits provide the necessary data to model each stage of comminution. Operating practices such as stockpiling and blending of different ore types ahead of the concentrator are also reviewed with consideration of the expected variability in rock properties. Finally, the level of instrumentation and process control strategies are reviewed to ensure that the mill operating conditions are best suited to changing rock conditions. All of these measurements allow mathematical models to be developed for the complete process chain. These models are later used to simulate the impact of operational changes in the mine or concentrator on the entire process. Material tracking In some cases, where material is blended before the concentrator or when sophisticated mine monitoring and dispatch systems are not in place, there is a need to monitor material movement from the mine to the concentrator. MMPT routinely use passive Radio Frequency ID (RFID) tags to mark material and track its movement over time. Initially developed to assist in the PIO studies, MMPT have commercialized this system under the name of SmartTag. The small, epoxyencased tags can be placed in the stemming column of blast holes or post-blast on the muck pile surface. Picked up by the excavator, the tags pass through the primary crusher and are detected by antenna placed over conveyor belts at various points in the process; for example, over the primary crusher and SAG feed conveyor belts. The use of such technology allows the spatially-based mine information to be linked with the time-based concentrator information. That is, linking where the material came from to when it was processed in the mill. In conjunction with online image analysis systems, the fragmentation from different rock domains can be measured from the blast down to the grinding circuit.
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Rock Characterization The MMPT methodology for rock characterization utilizes simple and inexpensive measurements of rock strength and structure that can be performed by trained site personnel, and quite often these measurements are already being collected by the operation. The advantage of simple measurements is that a large amount of data can be collected in a very short timeframe, as samples do not need to be shipped to an outside laboratory. When attempting to characterize and map rock strength and structure of an entire ore body, density of data and their statistical significance are very important. Modelling and simulation The measurements collected while at site are combined with the rock characterisation domains to model the complete blasting and comminution process. MMPT use these data to develop site-specific models of blast fragmentation, crushing, grinding and flotation. This allows customised blast patterns to be developed that optimise both crushing and grinding performance. For each domain, blast designs are defined to generate the optimal fragmentation size for downstream processes. This may involve an increase or decrease in energy (powder factor in the blast), depending on the rock characteristics of each domain. The objective of any modified blast design is to minimise the overall cost for the entire process by distributing the energy required to fragment the rock mass, sensibly and effectively. Near-field vibration measurements and models are used to confirm that pit wall stability, damage and dilution issues are considered in the blast designs. In addition, the crushing and grinding models allow the impact of operational and control strategies to be investigated and optimised.
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TECHNIQUES OF PRODUCTIVITY IMPROVEMENT IN TOYOTA Introduction The Japanese automobile manufacturer currently has the fastest product development process in the world. New cars and trucks take 12 months or less to design, while competitors typically require two to three years. Toyota has phenomenal quality levels that rivals can only dream of matching. Toyota has turned operational excellence into a strategic weapon not merely through tools and quality improvement methods but a deeper business philosophy rooted in understanding of people and what motivates them. Its success is ultimately based on its ability to develop leaders, build teams, and nurture a supportive culture, to devise strategy, to build deep supplier relationships, and to maintain a learning organization. The Toyota Production System Toyota developed the Toyota Production System (TPS) after World War II. While Ford and GM used mass production, economies of scale, and big equipment to produce as many parts as possible, as cheaply as possible, Toyota's market in post-war Japan was small. Toyota also had to make a variety of vehicles on the same assembly line to satisfy its customers. By making lead times short and focusing on keeping production lines flexible, Toyota realized it could actually get higher quality, better customer responsiveness, better productivity, and better utilization of equipment and space. A basic premise of mass production is that machine downtime is obvious waste. A machine shut down for repair is not making parts that could make money. But TPS has challenged this notion. Often the best thing you can do is to idle a machine and stop producing parts. Over production, is a fundamental waste in TPS. Often it is best to build up an inventory of finished goods in order to level out the production schedule, rather than produce according to the actual fluctuating demand of customer orders. Leveling out the schedule (heijunka) is a foundation for flow and pull systems and for minimizing inventory in the supply chain. Leveling production
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smoothes out the volume and mix of items produced so there is little variation in production from day to days. Often it is best to selectively add and substitute overhead for direct labor. When waste is stripped away from value-adding workers, high-quality support has to be provided for them. It may not be a top priority to keep your workers busy making parts as fast as possible. Companies should produce at the rate of customer demand. Working faster just for the sake of getting the most out of workers may be counter-productive. It is best to selectively use information technology and often better to use manual processes even when automation is available and would seem to justify its cost in reducing your headcount. People are the most flexible resource. The manual process must be streamlined before it is automated. TPS starts with the customer, by asking, "What value are we adding from the customer's perspective?" Because the only thing that adds value in any type of process- be it in manufacturing, marketing, or a development process-is the physical or information transformation of that product, service, or activity into something the customer wants. TPS is all about commitment to continuously investing in its people and promoting a culture of continuous improvement. When Toyota sets up assembly lines, it selects only the best and brightest workers, and challenges them to grow in their jobs by constantly solving problems. Similarly, Toyota staffs sales, engineering, service parts, accounting, human resources, and every aspect of the business with carefully selected individuals and empowers them to improve their processes and find innovative ways to satisfy their customers. Toyota is a true learning organization that has been evolving and learning for most part of a century. Many U.S. companies have embraced lean tools but do not understand what makes them work together in a system. They do not understand the power behind true TPS. That lies in Toyota’s continuous improvement culture.
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Productivity improvements techniques in Toyota Production System Identifying waste The first question in TPS is always" What does the customer want from this process?" This defines value. Through the customer's eyes, a process is observed and the valueadded steps are separated from the non-value-added ones. Toyota has identified various types of non-value-adding waste: 1. Overproduction. Producing items for which there are no orders. This leads to overstaffing and storage and transportation costs. 2. Waiting (time on hand). Workers merely serving to watch an automated machine or having to stand around waiting for the next processing step, tool, supply, part, etc., or having no work because of stock outs, lot processing delays, equipment downtime, and capacity bottlenecks. 3. Unnecessary transport or conveyance. Carrying work in process (WIP) long distances, creating inefficient transport, or moving materials, parts, or finished goods into or out of storage or between processes. 4. Over processing or incorrect processing. Inefficient processing due to poor tool and product design, causing unnecessary motion and producing defects. Waste is also generated when providing higher-quality products than is necessary. 5. Excess inventory. Excess inventory hides problems such as production imbalances, late deliveries from suppliers, defects, equipment downtime, and long set up times. 6. Unnecessary movement. Any wasted motion employees have to perform during the course of their work, such as looking for, reaching for, or stacking parts, tools, etc. Walking is also waste. 7. Defects. Production of defective parts or correction. Repair or rework, scrap, replacement production, and inspection mean wasteful handling, time, and effort. 8. Unused employee creativity. Losing time, ideas, skills, improvements, and learning opportunities by not engaging or listening to employees.
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Toyota firmly believes overproduction is a fundamental waste. Producing more than what the customer wants necessarily leads to a build-up of inventory somewhere downstream. The material is just sitting around, waiting to be processed in the next operation. Big buffers lead to other suboptimal behavior, like reducing the motivation to continuously improve operations. Why worry about preventive maintenance on equipment when shutdowns do not immediately affect final assembly anyway? Why get overly concerned about a few quality errors when defective parts can be set aside? By the time a defective piece works its way to the later operation where an operator tries to assemble that piece, there may be weeks of bad parts in process and sitting in buffers. Just In Time (JIT) means removing, as much as possible, the inventory used to buffer operations against problems that may arise in production. Using smaller buffers means that problems like quality defects become immediately visible. This reinforces jidoka, which halts the production process. Workers must resolve the problems immediately to resume production. The requirement for working with little inventory and stopping production when there is a problem, introduces a sense of urgency among workers. In mass production, when a machine goes down, there is no sense of urgency. The maintenance department fixes the problem while inventory keeps the operations running. By contrast, in lean production, when an operator shuts down equipment to fix a problem, other operations will soon stop producing, creating a crisis. So people have to scramble to fix problems together to get the equipment up and running. Moreover, they would try to get the root of the problem so that it does not recur again. Product development The Prius (hybrid car) project, the company’s already excellent product development process has further improved in two key ways: 1. The cross-functional team and chief engineer work together almost daily in the same room {obeya}. In Toyota's traditional approach, in the planning phase, the chief engineer comes up with a concept, discusses it with the design groups and planning groups, and formulates a concrete plan. With the Prius, a team of specialists from the various design, evaluation, and manufacturing functional groups sat in a big room with the chief engineer and made decisions in real time. To facilitate the
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discussions, computer-assisted design (CAD) terminals were put into the room and it became known as "obeya" (big room). 2. Simultaneous engineering. Manufacturing engineers now work with design engineers at the concept development stage, to give input on manufacturing issues. This level of cooperation at such an early stage is unusual in the auto industry. Toyota had been incorporating simultaneous engineering for several years before the Prius. But the Prius project intensified it. There was unparalleled cooperation across divisions and between design and manufacturing to meet the tight headlines for the Prius. Towards one piece flow To become lean, companies have to create continuous flow wherever applicable. Shortening the elapsed time from raw materials to finished goods (or services) leads to the best quality, lowest cost, and shortest delivery time. Flow also tends to force the implementation of a lot of the other lean tools and philosophies such as preventive maintenance. Creating flow exposes inefficiencies that demand immediate solutions. Everyone concerned is motivated to fix the problems and inefficiencies because the plant will shut down if they don't. Traditional business processes, in contrast, have the capacity to hide vast inefficiencies without anyone noticing. Flow means that a customer order triggers the process of obtaining the raw materials needed just for that customer's order. The raw materials then flow immediately to supplier plants, where workers immediately fill the order with components, which flow immediately to a plant, where workers assemble the order, and then the completed order flows immediately to the customer. The whole process should take a few hours or days, rather than a few weeks or months. In a large batch operation, there are probably weeks of work in process between operations and it can take weeks or even months from the time a defect is caused until it is discovered. By then it is nearly impossible to track down and identify why the defect occurred. By making a product flow, we can set in motion numerous activities to eliminate all muda (wastes). In lean thinking, the ideal batch size is one. Creating flow means linking together operations that otherwise are disjointed. There is more teamwork, rapid feedback on earlier quality problems, control over the
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process, and direct pressure for people to solve problems and think and grow. Ultimately, the main benefit of one-piece flow is that it challenges people to think and improve. Quality. It is much easier to build in quality in one-piece flow. Every operator is an inspector and works to fix any problems in station before passing them on. But if defects do get missed and passed on, they will be detected very quickly and the problem can be immediately diagnosed and corrected. Real Flexibility. If we dedicate equipment to a product line, we have less flexibility in scheduling it for other purposes. But if the lead time to make a product is very short, we have more flexibility to respond and make what the customer really wants. Instead of putting a new order into the system and waiting weeks to get that product out, if lead times are a matter of mere hours, we can fill a new order in a few hours. Accommodating changes in customer demand can be done almost immediately. Higher Productivity. The reason it appears that productivity is highest when operation is organized by department is because each department is measured by equipment utilization and people utilization. But it is hard to determine how many people are needed to produce a certain number of units in a large batch operation because productivity is not measured in terms of value-added work. Much productivity is lost when people are "utilized" to overproduce parts, which then have to be moved to storage. Much time is also lost tracking down defective parts and components and repairing finished products? In a one-piece-flow cell, we can quickly see who is too busy and who is idle. It is easy to calculate the value-added work and then figure out how many people are needed to reach a certain production rate. Heijunka Heijunka is the leveling of production by both volume and product mix. Toyota does not build products according to the actual flow of customer orders, which can swing up and down wildly. The total volume of orders in a period is levelled out so the same amount and mix are being made each day. Where demand fluctuates significantly, Toyota will often keep at least a small inventory of finished goods. This seems to contradict lean thinking. But the small inventory protects the production schedule from being upset by sudden spikes in
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demand. By living with the waste of some finished goods inventory, companies can eliminate far more waste in their entire production process and their supply chain. Quality Toyota’s philosophy is to identify defects when they occur and automatically stop production so that the problem can be fixed before the defect continues downstream. Jidoka is also referred to as autonomation – equipment endowed with human intelligence to stop itself when it has a problem. In-station quality (preventing problems from being passed down the line) is much more effective and less costly than inspecting and repairing quality problems after the fact. The last thing management in traditional mass manufacturing allows is a halt in production. Bad parts are simply labeled and set aside to be repaired at another time and by another department. The mantra is to produce large quantities at all costs and fix problems later. Lean manufacturing dramatically increases the importance of building things right the first time. With very low levels of inventory, there is no buffer to fall back on in case there is a quality problem. Problems in operation A will quickly shut down operation B. When equipment shuts down, flags or lights, usually with accompanying music or an alarm, are used to signal that help is needed to solve a quality problem. Andon refers to the light signal for help. Unfortunately, for many companies, the essence of building in quality has got lost in bureaucratic and technical details. Things like IS0-9000, have made companies believe that if they put together detailed rule books, the rules will be followed. Quality planning depart-ments are armed with reams of data analyzed using the most sophisticated statistical analysis methods. Six Sigma black belts attack major quality problems with a vengeance, armed with an arsenal of sophisticated technical methods. But Toyota follows a different approach. Toyota keeps things simple and uses very few complex statistical tools. The quality specialists and team members have just four key tools: • • Go and see. Analyze the situation.
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• •
Use one-piece flow and andon to surface problems. Ask "Why?" five times.
Andon works only when employees know the importance of bringing problems to the surface. Unless there is a problem-solving process already in place and people are following it, there's no point in spending money on fancy technology. Toyota prefers to first use people and processes to solve problems, then supplement and support its people with technology. A common Toyota quality tactic is to anticipate problems as early as possible and put in place countermeasures before the problems even occur. Occasionally a time-out is required to reflect on the purpose and direction of the project before moving on. The Toyota Way emphasises stopping or slowing down to get quality right the first time to enhance productivity in the long run. Standardisation Toyota believes standardized work is the basis for empowering workers and innovation in the work place. If the process is shifting, then any improvement will just be one more variation that is occasionally used and mostly ignored. One must standardize, and thus stabilize the process, before continuous improvements can be made. Workers follow very detailed standardized procedures that touch every aspect of the organization. In the workplace, everything must be in its place. There is strict discipline about time, cost, quality ... and safety-virtually every minute of the day is structured. But Toyota also values many of the characteristics associated with flexible organizations referred to as "organic": extensive employee involvement, a lot of communication, innovation, flexibility, high morale, and a strong customer focus. Standardisation does not necessarily imply a bureaucratic approach. A coercive bureaucracy uses standards to control people, catch them breaking the rules, and punish them to get them back in line. Unlike Taylorism, the Toyota Way preaches that the worker is the most valuable resource-not just a pair of hands taking orders, but an analyst and problem solver. Toyota’s enabling systems are simply the best practice methods, designed and improved upon with the participation of the work force. The standards actually help people control their own work.
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The critical task when implementing standardization is to find that balance between providing employees with rigid procedures to follow and providing the freedom to innovate and be creative to meet challenging targets consistently for cost, quality, and delivery. The key to achieving this balance lies in the way people write standards as well as who contributes to them. First, the standards have to be specific enough to be useful guides, yet general enough to allow for some flexibility. Second, the people doing the work have to improve the standards. Nobody likes rules and procedures when they are imposed on them. Imposed rules that are strictly policed become coercive and a source of friction and resistance between management and workers. Technology Toyota introduces new technology only after it is proven through direct experimentation with the involvement of a broad cross-section of people. Before introducing new technology, Toyota will go to great lengths to analyze the impact it may have on existing processes. First, it will examine firsthand the nature of the value-added work being performed by the workers for the particular process. It will look for new opportunities to eliminate waste and even out the flow. Toyota will then use a pilot area to improve the process with the existing equipment, technology, and people. When it has accomplished as much improvement as possible with the present process, Toyota will ask again if it can make any additional improvements by adding the new technology. The technology is then carefully analyzed to see if it conflicts with Toyota's philosophies and operating principles. These include principles of valuing people over technology, using consensus decision making, and an operational focus on waste elimination. If the technology violates these principles or if there is any chance of disrupting stability, reliability, and flexibility, Toyota will reject the technology or at least delay adopting it until the problems are resolved. If the new technology is acceptable, the guiding principle is to use it to support continuous flow in the production process and help employees perform better within the Toyota Way standards. This means the technology should be highly visual and intuitive used right
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where the work is being done and be able to support the actual work process while not distracting people from the value-added work. Throughout this analysis and planning, Toyota will broadly involve all key stakeholders in a consensus-building process. Once Toyota has thoroughly gone through this process, it will quickly implement the new technology. Leadership Throughout Toyota's history, key leaders have 'been found within the company, at the right time, to shape the next step in Toyota's evolution. Toyota’s leaders are home grown. Leaders must live and thoroughly understand the company’s culture day by day. A critical element of the culture is genchi genbutsu, which is interpreted within Toyota to mean going to the place to see the actual situation for understanding. Gemba, the more popular term, refers to "the actual place" and means about the same thing as genchi genbutsu. The first step of any problem-solving process, development of a new product, or evaluation of an associate's performance is grasping the actual situation, which requires "going to gemba." Toyota promotes and expects creative thinking, but it should be grounded in a thorough understanding of all aspects of the actual situation. Leaders must demonstrate this ability and understand how work gets done at a shop floor level. Toyota believes that, a superficial impression of a situation will lead to ineffective decision-making and leadership. Someone trained in the Toyota Way, takes nothing for granted and knows what he is talking about, because it comes from firsthand knowledge. Toyota leaders are passionate about involving people who are doing the value-added work in improving the process. Yet encouraging employee involvement by itself is not enough to define a Toyota leader. In-depth understanding of the work in addition to general management expertise are also needed. So Toyota leaders, are respected for their technical knowledge as well as followed for their leadership abilities. Instead of giving orders, they lead and mentor through questioning. They will raise questions about the situation and the person’s strategy for action, but they will not give answers to these questions even though they may have the knowledge.
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For Toyota, the decision making process is just as important as the quality of the decision. In fact, management will forgive a decision that does not work out as expected is acceptable if the right process was used. But a decision that works out well, but was based on a shortcut process, is not. Toyota believes in making decisions slowly by consensus by thoroughly considering all options and then implementing them rapidly. Nemawashi is the process by which junior people build consensus by developing a proposal and circulating it broadly for management approval. In the nemawashi process, many people give their input and this generates consensus. By the time the formal proposal comes up for a high-level approval, the decision is already made. Agreements have been reached and the final meeting is a formality. Managing people Toyota has taken various steps to build high performance teams: Stage 1: Orientation. The group needs strong direction from the leader and must understand the basic mission, rules of engagement, and tools the members will use. Stage 2: Dissatisfaction. After going to work, the members discover it is harder than they thought to work as a team. In this stage, they continue to need strong direction (structure) from the leader but also need a lot of social support to get through the tough social dynamics they do not understand. Stage 3: Integration. The group starts to develop a clearer picture of the roles of various team members and begins to exert control over team processes. The leader does not have to provide much task direction, but the team still needs a lot of social support. Stage 4: Production. The group becomes a high-performing team, no longer dependent on the leader. In an assembly line, people do the same mindless task repeatedly and are responsible only for a tiny piece of an overall product. Toyota has attempted to enrich jobs in various ways. Some of the features that make the job more enriching include job rotation, various kinds of feedback on how workers are doing at their jobs, the andon system and significant work group autonomy over the tasks. Toyota became interested
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in job enrichment in the 1990s and redesigned its assembly lines so that the parts that make up a subsystem of the vehicle are installed in one specific area on the assembly line. Rather than a work group assembling electrical systems and then putting in floor mats and then door handles, a work group might focus almost exclusively on the electrical system under the hood. For white collar workers, Toyota organizes teams around complete projects from start to finish. For example, the design of the interior of the vehicle is the responsibility of one team from the design phase through production. Participation in the project from beginning to end enriches and empowers the employee. People are motivated by challenging but attainable goals and measurement of progress toward those goals. Toyota's visual management systems plus policy deployment means that teams always know how they are doing and are always working towards stretch improvement targets. Policy deployment sets challenging, stretch goals from the top to the bottom of the company. Careful measurements every day let work teams know how they are performing. Vendor management Toyota is a tough customer. Toyota has very high standards of excellence and expects partners to rise to those standards. But Toyota will also help partners to improve their standards. Toyota has made serious investment in building a network of highly capable suppliers who are tightly integrated into Toyota's extended lean enterprise. Toyota’s high quality standards result from the excellence in innovation, engineering, manufacture, and overall reliability of Toyota's suppliers. Without dependable suppliers, JIT cannot work. There is much hype about "streamlining" the supply chain through advanced information technology. What is not adequately emphasized is the enormous complexity of coordinating detailed, daily activities to deliver value to the customer. One is not likely to hear about relationships across firms-about how partners must work together toward common goals. Yet, this is one of Toyota's key strengths.
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Toyota gives new suppliers very small orders to start with. They must prove their sincerity and commitment to Toyota's high performance standards for quality, cost, and delivery. If they demonstrate this for early orders, they will get increasingly larger orders. Toyota will teach them the Toyota Way and adopt them into the family. Once inside, a supplier is not removed except in extraordinary circumstances. Toyota keeps challenging its suppliers with aggressive targets. Toyota believes in having high expectations for their suppliers and then treating them fairly and teaching them. Treating them softly or beating them up without teaching them would be very disrespectful. And simply switching supplier sources because another supplier is a few percentage points cheaper is unthinkable. Suppliers want to work for Toyota both for the prestige involved and because they know they will get several opportunities to learn and improve. Toyota is very careful when deciding what to outsource and what to do in house. Like other Japanese automakers, Toyota outsources a lot, about 70% of the components of the vehicle. But is still tries to develop internal competency even in case of components it outsources. A learning organization When processes are stable and waste and inefficiencies become publicly visible, there is an opportunity to learn continually from improvements. To be a learning organization, it is necessary to have stability of personnel, slow promotion, and very careful succession systems to protect the organizational knowledge base. To "learn" means having the capacity to build on the past and move forward incrementally, rather than starting over and reinventing the wheel with new personnel with each new project. The Toyota philosophy emphasises that true problem solving requires identifying the root cause which often lies hidden beyond the source." The answer lies in digging deeper by asking why the problem occurred. The most difficult part to learn is grasping the situation thoroughly before proceeding with five-why analysis. Grasping the situation starts with observing the situation with an open mind and comparing the actual situation to the standard. To clarify the problem, one must start by going to
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where the problem is (genchi genbutsu). For Toyota, problem solving is 20% tools and 80% thinking. For most other companies, it seems to be 80% tools and 20% thinking. A key to learning and growing, not only within Toyota but in Japanese culture, is hansei, the vehicle. Hansei is the check stage of PDCA. It is used most often at the end of a vehicle program, but is being now moved further upstream so there are several hansei events at key junctures in the program. Toyota has judiciously used stability and standardization to transfer individual and team innovation into organization-wide learning. It is one thing for individual employees to come up with innovative ways to do things. But to become organization - wide learning, the new way must be standardized and practiced across the organization until a better way is discovered. This is the foundation for the Toyota Way of learning-standardization punctuated by innovation, which gets translated into new standards. Performance measurement Toyota is not particularly strong at developing sophisticated metrics across the company. Toyota measures processes everywhere on the factory floor, but prefers simple metrics and does not use many of them at the company or plant level. There are at least three types of measures at Toyota: Global performance measures-how is the company doing? At this level, Toyota uses financial, quality, and safety measures very similar to those used by other companies. Operational performance measures-how is the plant or department doing? Toyota's measurements are timelier and better maintained than at other companies. The people at the work group level or the project manager's level painstakingly track progress on key metrics and compare them with aggressive targets. The metrics tend to be specific to a process. Stretch improvement metrics-how is the business unit or work group doing? Toyota sets stretch goals for the corporation, which are translated into stretch goals for every
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business unit and ultimately every work group. Tracking progress toward these goals is central to Toyota's learning process. Culture The Toyota Way goes to the level of basic assumptions of the most effective way to "perceive, think, and feel" in relation to problems. Things like genchi genbutsu, recognizing waste, thorough consideration in decision making, and the focus of Toyota on long-term survival are the DNA of Toyota. The Toyota Way is explicitly taught to new members. Toyota conducts seminars on the Toyota Way. The Toyota Way also gets transmitted through action in day-to-day work where leaders demonstrate by their actions. Toyota has also attempted to spread the culture to global operations. The most intensive effort has been in North America. All U.S. senior managers were assigned Japanese coordinators. The coordinators had two jobs: coordinating with Japan, where there are continuous technical developments, and teaching U.S. employees the Toyota Way through daily mentorship. Every day is a training day, with immediate feedback shaping the thinking and behavior of the U.S employees. Toyota has used trips to Japan, to influence the cultural awareness of U.S. employees. Toyota has also sent over senior executives to instill the culture in new American leaders. This started with managers from Japan and has evolved to homegrown managers in North America. Toyota has used the TPS technical systems, or "process" layer of the Toyota Way, to help reinforce the culture Toyota sought to build. By creating flow across operations using TPS and lean product development in its overseas operations, Toyota is helping change this behavior and shape the culture it seeks to nurture. Conclusion Becoming a lean enterprise involves a lot of hard work. The author recommends the following steps: 1. Start with action in the technical system; follow quickly with cultural change. The social and technical systems of TPS are intertwined. If a company wants to change the culture, it must also develop true lean leaders who can reinforce and lead that cultural
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change. The best way a company can develop this is through action to improve the company's core value streams, supported by committed leaders who reinforce culture change. Leaders must be involved in the value stream mapping and shop floor transformation so they can learn to see waste. 2. Learn by doing first and training second. The Toyota Way is about learning by doing. In the early stages of lean transformation there should be at least 80% doing and 20% training and informing. The best training is training followed by immediately doing or doing followed by immediate training. Toyota puts people in difficult situations and lets them solve their way out of the problems. 3. Start with value stream pilots to demonstrate lean as a system and provide a go see" model. Within a value stream defined by a product family, a model can be created. Often this means creating one lean product line, beginning with raw materials received and ending with finished goods. The model line should become a singularly focused project with a great deal of management attention and resources to make it a success. 4. Use value stream mapping to develop future state visions and help "learn to see." A cross-functional group consisting of managers can authorize resources and doers who are part of the process being mapped. The team members learn together as they see the waste in the current state, and in the future state they come together to figure out how to apply the lean tools and philosophy. Mapping creates a language and tool for the team to actually pick apart a specific process, see the waste, develop a lean vision, and apply it to that particular process. Value stream mapping should be applied only to specific product families that will be immediately transformed. 5. Use kaizen workshops to teach and make rapid changes. Using a talented and experienced facilitator who has a deep understanding of lean tools and philosophy with a specific problem to tackle makes all the difference in what can be accomplished. However, the kaizen workshop should not become an end in itself. In many companies, "lean efforts" revolve around having numerous workshops: the more the better. This leads to "point kaizen"-fixing individual problems without straightening out the core value stream. Kaizen workshops are best used as one tool to implement specific improvements guided by a future state value stream map.
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6. Organize around value streams. In most organizations, management is organized by process or function. In a factory, there may be the paint department, the assembly department, and the maintenance department. In a bank, there may be order processing, order fulfillment, customer complaints, etc. In other words, managers own steps in the process of creating value for customers and nobody is responsible for the value stream. Value stream managers have complete responsibility for the value stream and can answer the customer. Someone with real leadership skills and a deep understanding of the product and process must be responsible for the process of creating value for customers and must be accountable to the customer. 7. Make it mandatory. If a company looks at lean transformation as a nice thing to do in any spare time or as voluntary, it will simply not happen. 8. A crisis may prompt a lean movement, but may not be necessary to turn a company around. A sinking ship certainly mobilizes management and the work force into getting serious about lean. But the essence of lean leadership is proactive thinking and long-term learning. 9. Be opportunistic in identifying opportunities big financial impacts. When a company does not yet believe in the lean philosophy heart and soul, it is particularly important to achieve some big wins. 10. Realign metrics with a value stream perspective. Metrics are used very differently by Toyota compared to most companies. They are an overall tool for tracking the progress of the company and they are a key tool for continuous improvement. At most companies they are mainly a tool for short-term cost control by managers who do not understand what they are managing. For example, companies track indirect/direct labor ratios. The way to make the ratio look good is to have lots of direct labor and keep those people busy making parts, even if they are overproducing or doing wasteful jobs. The first step is to eliminate non-lean metrics that are wreaking havoc with those seriously invested in improving opera-tional excellence. The next step is to measure a variety of value stream metrics from lead time to inventory levels to first-pass quality and treat these metrics as seriously as labor productivity and other short-term cost metrics.
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11. Build on your company's roots to develop your own way. When it works with other companies to teach TPS, Toyota insists that these companies develop their own system. It is alright to borrow some of the insights from the Toyota Way. But companies need to put them into their language in a way that fits their business and technical context. The Toyota Way has evolved through some inspired leaders who have provided a very rich cultural heritage. Each company must build on its heritage. 12. Hire or develop lean leaders and develop a succession system. Leaders must thoroughly understand, believe in, and live the company's "way." All leaders must under-stand the work in detail and know how to involve people. Without top management involvement, the transformation will not happen. 13. Use experts for teaching and getting quick results. A company needs a sensei or teacher to provide technical assistance, facilitate the transformation, get quick results, and keep the momentum building. But a good teacher cannot do everything. To develop a lean learning enterprise, companies need to build internal expertise--senior executives, improvement experts, and group leaders who believe in the philosophy and will spread the lean culture throughout the organization over time.
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Bibliography • Dance, A, Valery, W, Jankovic, A, La Rosa, D and Esen, S, 2006. Higher productivity through cooperative effort: A method of revealing and correcting hidden operating inefficiencies, in Proceedings SAG 2006, pp IV-375. • • www.scribd.com “Bag a McMeal.” Accessed online on October 26, 2004 at: http://www.findarticles.com/p/articles/mi_m3190/is_50_35/ai_80748686. • http://www.foodservice.com/news_homepage_expandtitle_fromhome.cfm?passi d=6951 • • www.phims.com Prime Faraday Technology Watch – May 2001
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doc_332512178.pdf
Techniques of Productivity Improvement in McDonalds, METSO Mining Corporation, Toyota
Mumbai Education Trust
MFM (SECOND YEAR), DIV: B Second Semester
Strategic Cost Management
Project on
TECHNIQUES OF PRODUCTIVITY IMPROVEMENT IN A COMPANY
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Presented by
Sr. No. 1 2 3 4 5 Ujval Damania Nidhi Gandhi
Name
Roll No. 69 75 81 104 114
Sameer Hathiwala Ralph Serrao Unnati Umrootkar
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Under the Guidance of: Mr. L. N. Chopde
Mumbai Educational Trust’s INSTITUTE OF MANAGEMENT (PART TIME MANAGEMENT)
CERTIFICATE
This is to certify that project titled TECHNIQUES OF PRODUCTIVITY IMPROVEMENT IN A COMPANY is based on original study conducted by the group under my guidance and this had not formed a basis for the award of any other degree of this institute / university.
Place : Mumbai Date : 28 st April 2012
( Mr. L. N. Chopde )
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TABLE OF CONTENTS
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Particulars
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Introduction Factors impacting the operational capabilities with regards to productivity improvement of an organisation. Barriers to Productivity Improvement Various approached to productivity Techniques of productivity improvement in McDonalds Techniques of productivity improvement in
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6 METSO Minerals Process Technology (MMPT) 7 8 Techniques of productivity improvement in Toyota Bibliography
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TECHINQUES OF PRODUCTIVITY IMPROVEMENT Introduction Productivity can be said to have improved when more output is achieved for the same input or when the same output is achieved for the less input. To improve productivity, either the process itself, the equipment and machinery used, the workforce or the indirect processes affecting production must be addressed. For productivity to improve, improvement must be seen as a continuous process. Many organisations have found that Edward C. Deming's process management cycle is useful. Deming's cycle is frequently represented as PDCA, meaning: plan, develop a course of action based on information collected; do, implement that plan; check, measure and analyze the relative success of that plan; and act, adjust the plan accordingly Qualitative Tools Sometimes, brainstorming with members of an organisation will result in the accurate identification of problem areas in the company. However, more frequently than not, companies tend to focus on the issues but not the underlying causes of those issues. As a result, plans are developed to address the problem (for example, order satisfaction and high incidence of backorders) rather than addressing the causes of the problem (for example, unreliable suppliers, high absenteeism, scheduling problems). One useful tool in productivity improvement is cause-and-effect analysis. By identifying and analyzing the issues restraining productivity, you can create a diagram of issues, the immediate causes of the issue, the causes of those causes and so on. Also called a fishbone diagram for its appearance, cause-and-effect analysis can be applied using the Theory of Constraints, which basically states that a process is only as good as its weakest input. Many people make the mistake of trying to address the "effect" rather than the causes of that effect. Quantitative Tools In developing a plan for productivity improvement, gap analysis is a useful tool. Gap analysis looks at where a company's performance is and where it wants to be. By
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looking at the "gaps" in performance a plan can be developed which targets those gaps. Statistical process controls (SPC) are a useful tool to obtain an objective, quantified measure of the state of a process or the effectiveness of improvements made. Examples of SPCs include company ratio analysis, control charts, process capability studies, etc. FACTORS IMPACTING THE OPERATIONAL CAPABILITIES WITH REGARDS TO PRODUCTIVITY IMPROVEMENT OF AN ORGANISATION. Lean Manufacturing Many of the ideas behind what is now termed lean thinking were originally developed in Toyota’s manufacturing operations. The Toyota Production System spread through their supply base during the 1970s and their distribution and sales operations during the 1980s. The term described the key elements accounting for this superior performance as lean production - ‘lean’ because Japanese business methods used less of everything (human effort, capital investment, facilities, inventories and time) in manufacturing, product development, parts supply and customer relations. The key lean-thinking principles include the following. • Recognize that only a fraction of the total time and effort in any organisation actually adds value for the end customer. By clearly defining value for a specific product or service from the end customer’s perspective, all the non-value activities or waste - can be targeted for removal. For most production operations only 5% of activities add value, 35% are necessary non-value adding activities and 60% add no value at all. Eliminating this waste is the greatest potential source of improvement in corporate performance and customer service. • Few products or services are provided by one organisation alone, so waste removal has to be pursued throughout the whole value stream - the entire set of activities across all the firms involved in jointly delivering the product or service. New relationships are required to eliminate inter-firm waste and to effectively manage the value stream as a whole.
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• Instead of managing the workload through successive departments, processes are reorganized so that the product, or design, flows through all value-adding steps without interruption. Obstacles to uninterrupted flow are identified and removed using the toolbox of lean techniques. Activities across each firm are synchronized by pulling the product or design from upstream steps at just the time when required to meet the demand from the end customer. • Removing wasted time and effort represents the biggest opportunity for performance improvement. Creating flow and pull starts with radically reorganizing individual process steps but the gains become truly significant as these process steps link together. As this happens more and more layers of waste become visible and the process continues towards the theoretical end point of perfection, where every asset and every action adds value for the end customer. In this way, lean thinking represents a path of sustained performance improvement Many of the tools and techniques associated with lean ways of working emerged from the Toyota Production System, while others have since been developed by research organisations such as the Lean Enterprise Research Centre (LERC) based at Cardiff Business School. The mission of the LERC is to be a world-class lean-thinking and supply-chain research centre. The LERC is dedicated to: • developing pioneering, leading-edge lean-thinking research tools and techniques; • helping organisations achieve world class performance through the application of lean-thinking principles and techniques; and • disseminating lean-thinking knowledge through a broad range of education programmes and management courses and by communicating with the broader management population. The aims of the LERC are to develop a detailed knowledge of lean-management principles and techniques and identify new methods of applying them for the benefit of businesses and other organisations.
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As more and more organisations strive to become lean, they will expect their suppliers to do the same. These expectations will be communicated through such things as: • The responsibility for quality inspection • The responsibility for some aspects of product development • Requests for engineering changes • Expectations of reliable quality and delivery performances. These may all be pushed further down the supply chain. In order to meet these types of requirements from larger companies, organisations will need to progress towards becoming lean themselves. It is logical that a lean manufacturer at the head of a supply chain will prefer to work with suppliers who can align their processes to comply with lean manufacturing. ERP Systems Enterprise Resource Planning (ERP) systems are software solutions that integrate and provide data in real time to users in any part of a manufacturing enterprise. A welldesigned ERP system will have separate components to control data related to each aspect of an enterprise’s operations while simultaneously providing an overall or integrated view of the entire enterprise. The components of a typical ERP system are: • Finance/accounting • Manufacturing planning/scheduling • Human resources • Distribution management • Customer order management • Cost management • Shop-floor management • Inventory management
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• Procurement management • Production control. Barriers to Productivity Improvement Various concerns may deter organisation from implementing productivity
improvements. The following are among them. • Cost: Perhaps the natural for an organisation is to react by saying, ‘We just can’t afford it’, but it may be better to focus on cost savings that result from potential improvements when considering a productivity improvement drive. The question should be ‘Can we afford not to improve productivity?’ View short-term cost as a longer-term investment to reduce more significant costs to the organisation. • Employee resistance to change even though organisations are identified as having people who are open to change, the reverse can also be true. In particular, if certain employees have been with the organisation since the organisation was founded, it may be difficult to persuade them that the way they have always done things is not in fact the most effective way of working. From the perspective of the organisation, this way has been successful, so it may be hard to accept that these productivity improvements are not just the latest management fad. • Personnel Resource it can be difficult to release employees for training in an organisation if they are multi-skilled and cannot easily be covered for by other staff. Larger companies may have staff dedicated to productivity improvement, who can dedicate their time to training and implementing productivity improvement initiatives. One way to get around the difficulty in organisations is for management to lead by example. If other members of staff see them initiating and implementing improvements as a part of their job, they may get an understanding of what the organisation is trying to achieve. • Specialist knowledge larger companies may have staff who are dedicated to productivity improvement and have gained the knowledge necessary to champion improvement initiatives. It then becomes vital for senior staff to become acquainted with at least the basic principles of some of the productivity improvement tools and techniques outlined later in this report.
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Various approaches to productivity improvement Productivity improvement can be driven by results or activity. Activity-driven approaches, though they may be successful in the short run, generally target the issues themselves rather than the underlying causes. As a result, productivity may be seen to improve briefly, only to go down again. In contrast, results-driven approaches take on a sort of "just-in-time" quality, meaning that innovations are introduced only when needed and effectiveness is measured straight off, producing a type of trial-and-error environment where the need for improvement is continually reinforced and successful results are built upon and frequently expanded. In order to stay competitive, manufacturing ORGANISATIONs need to improve their production processes in an efficient manner. This report attempts to get back to basics and examine fundamental low-cost or no-cost productivity improvement principles, some of which came to the fore in manufacturing industry worldwide as part of the well-publicized Toyota Production System in the early 1980s. JIDOKA Jidoka is a Toyota concept aimed at describing the man-machine interface such that people remain free to exercise judgement while machines serve their purpose. Machine jidoka incorporates fail-safe devices on machinery to prevent. Human jidoka allows operators to stop the process in the event of a problem. Workers have the ability to stop the line if: • • • • Equipment malfunctions; Defects are found; Work delays occur; or Materials or parts shortages occur.
The following three principles are central to the jidoka way of working. • • Do not make defects. Do not pass on defects.
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Do not accept defects.
Jidoka has two separate meanings – automation and autonomation. Automation refers to changing from a manual process to a mechanised process. The problem with this is that there is often no device for stopping the process if a malfunction occurs. Because this process can lead to a large number of defects in the event of a machine malfunction it is considered unsatisfactory by Japanese manufacturers.
‘Autonomation’, a term coined by Toyota, refers to automation that automatically controls defects. Jidoka is often referred to as ‘automation with a human mind’. Autonomation technically refers to a technique for detecting and correcting production defects that combines a mechanism for detecting defects with another for stopping the line or machine when defects occur. This defect detection system automatically or manually stops the production operation or equipment whenever an abnormal or defective condition arises. Any necessary improvements can then be made by directing attention to the stopped equipment and the worker who stopped the operation. The jidoka system shows faith in the worker as a thinker and allows all workers the right to stop the line on which they are working. HEIJUNKA Heijunka is the Toyota planning system, which focuses on achieving consistent levels of production. Toyota officially defines heijunka as ‘distributing the production of different [body types] evenly over the course of a day …’ It incorporates the principles of line balancing by attempting to equate workloads, leveling demand out by creating an inventory buffer and replenishing that buffer. For example, more advanced lean plants are using load-leveling boxes to visually represent the leveled schedule. Heijunka is a key operating concept of just-in-time (JIT) manufacturing systems. In practice, it involves load leveling and line balancing, as well as achieving uniform scheduling of production so that as one operation ends the next operation is ready to begin. If perfect heijunka is attained in a JIT manufacturing system, a uniform or rhythmic flow of mixed-model production is possible. Although the leveling aspect of heijunka typically results in more even production and process workloads, the
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underlying rule is essentially the rule of heijunka – an even work load for all employees. In heijunka, parts must also be supplied to the assembly process in very small lots without delays. It thus necessitates the use of kanban (see below). One of its benefits is that the levelled load benefits upstream parts-fabrication processes and parts suppliers too, who are freed from having to maintain high capacities solely to cope with large lots in downstream processes. Heijunka also has the capability of reducing lead times by minimising time losses due to changeovers. Multiple products are assembled simultaneously instead of first dedicating the line to one product then changing the entire line to produce another. The entire line is seldom changed over between products. JUST-IN-TIME The American Production and Inventory Control Society (APICS) define just-in-time (JIT) as: A philosophy of manufacturing based on planned elimination of all waste and continuous improvement of productivity. In practice, JIT can be applied at two levels in an organisation: 1. The manufacturing process, where the aim is to have synchronised operations with minimum quantities of raw materials, work-in-progress (WIP) and consumables, throughout the process; and 2. Related activities, applied to all functional areas of the business and all levels of the organisation from the board of directors to the shop floor. The philosophical view is concerned with the reduction of waste (i.e. non-value-adding activities) throughout the organisation. In the factory, JIT continually focuses attention on waste and in particular on the time spent on all aspects of the manufacturing process. The goal is to minimise the standard lead-time by adopting a keep-it-moving approach to manufacturing. This will not be achieved by reacting to latest developments; it requires careful planning, testing and agreement as to how all those involved with both manufacturing and support functions will act.
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The basic aim of JIT in a factory is to: • reduce lead times • minimize inventory • reduce the defect rate to zero and • accomplish all of the above at minimum cost There are three essential ingredients to effective manufacturing excellence through JIT: • JIT manufacturing techniques, which aim to promote a rapid response to customer demand while minimising inventory – for example, pull systems, short change-over times, small transfer batch sizes and plant layouts that support short movements of materials; • A total quality culture, an approach to running the organisation which pursues excellence in both the product and every area of the business, including customer service, purchasing, order taking, accounting, maintenance, design, etc.; and • People involvement, that is the involvement of all employees in the development of the organisation through its culture and its manufacturing and other business processes. To maintain continual improvement, appropriate performance measures and targets should be in place. These may include: • Factory lead time • Factory change-over times • Percentage of products right first time • Work-in-progress (WIP) or stock turns • Some measure of people involvement or contribution. Traditionally, Western manufacturing plants utilise a ‘push’ system of inventory control, whereby work is released and processed at previously scheduled times,
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typically by a material requirement planning (MRP) system. As a result, work is planned, managed and tracked to provide a finished product which meets required due dates. A push system can control WIP by limiting the release of new orders to the shop floor. However, the amount of WIP often builds up to provide ‘comfort stock’ between operations. This can lead to: • Long lead times • The need for additional prioritising systems • Progress chasing • Slow feedback of quality issues. These problems can be overcome by the use of a ‘pull’ system. Pull-system controls are an integral part of most JIT implementations. Under a pull system, work is performed at an operation only when the next operation is signalling that it is ready to accept it. This can be simplified through the use of kanban systems (see below). KANBAN The word kanban literally means visible record. In the kanban system, which has been employed as a JIT production control technique since the mid-1970s, flow is controlled by the use of cards. When implemented correctly, JIT and kanban can result in reduced inventory and higher efficiency in a manufacturing system. The Toyota system is a two-card system; it uses so-called move kanbans (also known as conveyance or withdrawal kanbans) and production kanbans. For example, imagine work centre B produces subassemblies using parts drawn from a parts container at B’s inbound stock point. A move kanban – one of which is found in each such inbound container – is removed from the container when it is exhausted and is taken to the outbound stock point of the work centre (let it be work centre A) immediately upstream. A full container of the same parts is then found there. The production kanban – one of which is found in each such outbound container – is removed from this full container. The move kanban from the exhausted container is placed in the full container, authorizing its transport from A’s outbound stock point to B’s inbound stock point. The production kanban is then placed near work centre A to authorize production of another container of parts at A for B. When work centre A has finished
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producing a full container of parts, the production kanban is then placed in this container, which is deposited at A’s outbound stock point. Another kanban system is the Kawasaki Heavy Industries single-card system. A single-card system uses a withdrawal or move kanban to trigger production. In this system, work centre A produces a part, which is moved to the storage area in containers that hold a certain number of parts. Work centre B pulls a container from storage when it needs the material and may return an empty container to the storage area. When B pulls the container, the move kanban is removed from the container. KAIZEN Imai (1986) defines total quality control as ‘organised kaizen activities involving everyone in a company - managers and workers - in a totally integrated effort toward improving performance at every level’. He continues: This improved performance is directed towards satisfying such cross-functional goals as quality, cost, scheduling, manpower development and new product development. It is assumed that these activities ultimately lead to increased customer satisfaction. Kaizen is a Japanese word meaning gradual never-ending improvement in all aspects of life. It represents a Japanese approach to improvement and can be interpreted as continuous improvement in all areas. Kaizen is at the heart of quality improvements in Japanese companies. The classical Western approach to improvement has been one of technology innovation. Large sums of money have been spent on new equipment and systems using the latest technology to give step changes in performance. This has led to dramatic improvements but they have typically not been standardised and maintained. Kaizen, on the other hand, relies on an investment in people. It is a continuous series of small improvements made on existing equipment or systems by the people who actually work in that area. It does not rely on specialist involvement but can be used to support those directly involved in making the improvement. Important aspects of kaizen are the standardisation and maintenance of the improvement, which are as crucial to the process as the improvement itself. Improvements must become standardised and maintained until further improvements are made.
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There is a structured approach to kaizen-based improvements and each step must be followed to ensure lasting improvement. The approach proceeds in the following steps. 1. Define the area for improvement. 2. Analyse and select the appropriate problem. 3. Identify its causes. 4. Plan countermeasures. 5. Implement countermeasures. 6. Confirm the result. 7. Standardise. Techniques used in facilitating kaizen include the following: • Zero defects • Just-in-time • Kanban • Total productive maintenance • 5S suggestion schemes • Robotics • Productivity improvement • Muda - eliminating waste • PDCA (Plan, Do, Check, Action cycle) • Quality circles The following principles are recognized as essential for continuous improvement. • Traceability In order to identify root causes and prevent them recurring there must be a system in place to trace defects back to their source. In assembly manufacturing,
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this normally means tracing components by lot and vendor back to the problem assembly stage. In process manufacturing, this means tracing control conditions by critical process step for the lots affected by the defect. • Design of experiments The most effective way of improving process steps in order to increase yield, shorten cycle time or make the process more robust. • Stop-in-time When defects are detected on the production line, the defective material must be stopped immediately. If a second, similar defect is discovered the process step must be stopped immediately and corrective action taken. This prevents adding waste to the defective product and prevents production of further defects. • Root cause detection Statistical data collection is a method of identifying root causes. The five Ws (who, what, where, when, why) and two Hs (how, how much), also help track down the root cause of any problems in complex production environments. WASTE REDUCTION The reduction of waste is a key area in the application of low-cost productivity improvement ideas. Taiichi Ohno originally developed the seven categories of waste concept within a manufacturing organisation. The following list should be considered a complete collection rather than a list of individual categories of waste. Any waste minimization program should aim to tackle all of the following rather than any one in isolation. • Overproduction The aim of any manufacturing operation should be to produce what the customer requires at the right time and at the right level of quality. Producing more than is required leads to undesirable stock levels. In some situations companies overproduce and move away from the idea of just-in-time to the safety of just-in-case. Some bonus systems that reward performance based on targets exceeding what is actually required will naturally encourage overproduction. In both cases high stock levels and thus waste may result. • Waiting Waste categorised as waiting occurs in situations such as the following: when raw materials wait in goods-inwards stock before processing if they are not delivered when required;
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when products wait internally between operations because the flow of production is not smooth or balanced and operators are left waiting for work (and so are not contributing or ‘adding value’ to the product); and
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when products wait for longer than necessary as finished goods to be shipped to the customer if delivery schedules are not optimised.
Transport Product movement within the manufacturing operation is often unavoidable, but adds no value to the finished item and so should be minimised wherever possible. Transporting the product not only wastes time and effort but can also result in damage during transit. Transport waste is visible and can be easily identified through productflow studies. Drawing a physical diagram of the production flow and clearly marking product movement is one method of revealing transport waste. This simple exercise can often highlight areas of product movement which may have evolved without consideration to the effect on total distance travelled by a product during the manufacturing life cycle. Often, re-location of key operations can yield large savings in transportation wastes. • Inappropriate processing In carrying out a job, it is wasteful to use tools and machinery that are not the most appropriate – for instance, CNC machinery, with its vast capability and flexibility, for producing a simple component. It is often the case that a sizeable investment in such machinery results in pressure to run it constantly, even when it is not the right tool for the job. This type of waste can also be related to machines or processes that do not have the capability to produce the required level of quality. Unnecessary inventory The ‘evils’ of stock are well documented, and include: • • • • Unnecessary storage Unnecessary transportation Interruption to the smooth flow of goods Increased lead times to accommodate unwanted items, which when complete will go directly into stock rather than to a customer • • Inability to detect defects through not seeing the ‘wood for the trees’ Deterioration of ageing stock.
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• Unnecessary motion Motion does not refer to transport of product but more to the ergonomic aspects of work to be carried out. As well as placing undue effort on the individual carrying out the operation, poor workplace design can lead to inefficient methods of working. As with transport waste, areas for potential improvement can be identified through time-and-motion studies of particular operations. • Defects the production of non-conforming product is a fundamental waste as the output will have to be either reworked or scrapped. Both of these options carry their associated costs and may be affected by any of the above waste categories. More recently, other categories of waste have been recognised. The following are taken from The Quality 60: A Guide for Service and Manufacturing by John Bicheno: • Potential or talent • Energy • Pollution • Space • Complexity. VISUAL MANAGEMENT Visual control is an essential part of a lean manufacturing environment. It can be applied to all levels and all departments within an organisation and requires the commitment and involvement of everyone. Constructing a visual factory involves the logical placement of all tools, parts, raw materials, and the prominent display of relevant production information. Everyone involved should be able to see and understand the status of the system. One aim of a visual system is to make the abnormal obvious so that action can be targeted to correct any irregular situations. Four key areas of information displayed in a visual factory are itemized below 1. Safety 2. Quality 3. Production
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4. Cost ANDON Andon devices indicate where any person or machine requires help. The call for help can be indicated by a lamp or siren as appropriate. The andon may consist of a series of lamps at each process or a board of lamps covering a whole production area. The board would be kept as simple as possible to minimise required investment. It also allows the board to present information to team members quickly and in a form that is easy to understand. In order to achieve this, the problem location is identified but details of the specific nature of the problem are not normally displayed. The simple nature of an andon helps the team member by allowing them to undertake the following actions in the most efficient manner: • Identifying the location of the problem • Physically visiting the location • Examining the situation and understanding the problem • Considering the most appropriate action and • Taking action. In the assembly area, an operator can activate the andon via a pull cord or a push button. An andon for an automated line can automatically call attention to the machine’s current condition when outside specified limits. Different coloured andon lights can be used to signify different operating conditions, for example: • Green = operating within agreed tolerances; no operator intervention required; • Amber = beginning to deviate from normal operation; operator should check the machine at agreed intervals and take corrective action where appropriate to restore normal operating conditions; • Red = machine stopped; urgently requires attention. The ultimate objective of the andon is to prevent problems from occurring.
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THE 5 S’S The five S’s stand for five Japanese words; • • • • • Seiri (proper arrangement) Seiton (orderliness ) Seiso (cleanliness) Seiketsu (standardizing) Shitsuke (discipline)
The concept was developed by Osada in the early 1980s and is used to establish and maintain all aspects of quality in an organisation. The 5 S’s are explained in more detail below. Seiri (Proper arrangement, Sorting out) • Identify what is needed and what is not needed. • Keep what is needed and eliminate what is not needed. • Do not produce waste or consume more resources than necessary. • Introduce measures to prevent the build-up of unnecessary items. Seiton (Orderliness, Tidying up) • Put things in order. • Determine a location for all identified, needed items. • Make it easy for anyone to find, use and return these items by providing information as to where things are now stored. • Use standard equipment where possible. • Find alternative storage for tools, parts, equipment and supplies that are needed but not used daily. Seiso (Cleanliness)
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• Shine equipment, tools and the whole workplace. • Eliminate dirt, dust, oil, scrap and other foreign matter to make the workplace clean. • Adopt cleaning as a form of inspection. Cleaning exposes abnormal conditions and corrects pre-failure conditions. • Integrate cleaning into everyday maintenance tasks by all staff. Seiketsu (Standardising, Housekeeping) This is a state beyond the first three S’s, in which they are thoroughly maintained by sharing information so there is no searching for information such as delivery dates, production schedules and so on. Everything is standardised and standards are made visible so that all abnormalities can be easily and immediately recognised. Shitsuke (discipline) • Maintaining correct procedures becomes a habit. • Proper training of all workers has occurred. • All workers have ‘bought-in’ and a change in work habits has been achieved. • The workplace is well ordered and run by agreed procedures. • When applied to the organisation, it could also be applied to external relationships. The 5S procedure is a process of defining the normal to see the abnormal. Strong 5S programmes can lead to improved behaviour because the abnormal becomes much more obvious (or visual) on the shop floor. In order to facilitate this visual aspect, a system of identification known as the ‘Red tag’ has been used to aid 5S implementation. A visual tag made from red paper or card is used to highlight problem areas. An example of such a red tag is shown below. There are two ways to use these red tags: • To tag an area where non-conformance to the 5S principles has occurred; or
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• On a red-tag board, where the problem areas are listed and a red tag attached to each item on the list. The red tags clearly draw attention to areas that need work to meet the 5S principles. In both cases, when the problem has been rectified the red tag can be removed. The 5S principles underpin the low-cost productivity improvements discussed in this report. All five of the five S’s can be accomplished with little or no capital investment whilst the financial returns from the resulting productivity improvements – in the form, for example, of improved storage facilities – can be quickly realised, and will offset any cost involved. Conclusion The basic concepts of continuous improvement highlighted in this report are fundamental to the improvement of productivity. That they have their roots in Japanese management techniques and have been proven in larger organisations such as Toyota and Kawasaki. The productivity improvement tools highlighted in this report are all low-cost; indeed some incur no direct cost at all. They are about working smarter rather than harder. In particular the 5S principles are easy to apply and do not require major capital investment other than training, and they should quickly identify possible areas for further productivity-improvement drives. A gradual implementation of selected tools and techniques should lead to reduction in production waste and improve the morale of employees involved as they see the immediate visual impact of their productivity improvement ideas
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TECHNIQUES OF PRODUCTIVITY IMPROVEMENT IN MCDONALDS Introduction McDonald’s, first started by Ray Krov, is now one of the most popular fast food restaurants across the world. They proudly serve more than 46 million customers in 59 different countries and have more than 30,000 different locations domestically and internationally (Food Service). The fast food industry is booming at a rapid rate, especially the healthy trend, with this in mind, McDonald’s has strategically plan to stay on top of their competitors by improving the productivity within the organisation. THE FIVE P’S Maintaining the five P’s forces (People, Product, Price, Place, and Promotion) are essential in any business to improve the productivity. Consequently, McDonald’s Corporation uses these related forces in the sense that each P creates a chain effect on each other. The following is a list of methods using the P forces. The first force is the PEOPLE working in the McDonald’s chains, which are represented by service, hospitality, and pride. The staff employed in McDonald’s are continuously trained and kept in the company to reduce the cost of training short-term inexperienced workers. Moreover, the training process has been improved to include online e-learning tools for the restaurant staff. Maintaining the workers in the company is very important to McDonald’s and the corporation rewards workers who do outstanding services. This form of incentive is motivational to the workers. The second force is the PRODUCTS which include the quality, taste, and price of the goods sold. McDonald’s is trying to establish flexibility with the changing tastes and preferences in the market, Moreover, they are also seeing growing interest in premium product and wholesome food choices. The quality and safety of the food is a main entity in maintaining the quality of the food at McDonald’s. The third force is PLACE which is represented by the clean, relevant, and modern store environments. Whether it was in the main restaurant area, the kitchen, or even the restrooms, the company ensures the safety and comfort for the consumers and staff workers. The company intends on having the gold standards for cleanliness.
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The fourth force is PRICE, which is presented in the productivity and value. The value of the product is increased when consumers gets high quality products for lower costs. Therefore, McDonald’s Corporation ensures that its customers receive the highest value of food for the price they pay. The fifth force is PROMOTION which is presented in marketing, leadership, and trust. The company has already earned its reputation for good quality food so they just focus on customers cares. They do this through community involvement and their social responsible towards the environment. This process will gain the trust of loyal customers and keep them for life. TRAINING McDonald’s realizes that its employees must understand their duties in order to fulfill the organization’s goals and to improve the overall productivity in the organisation. To ensure that all employees properly perform their assigned duties, McDonald’s invests greatly in their training program. The company continues to
receive prestigious awards for their leading-edge training, including the “Employer of Choice Award” from the Restaurant Business Magazine (“Restaurant Management”). New crew members go through a thorough orientation process consisting of several videos, followed by several days of direct one-on-one training by a trainer. After employees feel comfortable with the operations, they may be promoted to Crew Trainers. Crew Trainers undergo further training for specialized processes such as the grill area, front counter, drive-thru, and other areas. Shift supervisors are the next step in the organization, followed by Second Assistant Managers, followed by First Assistant Manager, and the top manager at each McDonald’s restaurant is the Restaurant Manager (Phillips, Eddie). Training never stops at McDonald’s, no matter which position an employee holds. Some current employees describe McDonald’s as the “best training company in the world” (Phillips, Kenny). Finally, to ensure the quality of the operations, McDonald’s does surveys periodically to get feedbacks from customers. As shown throughout this section, the McDonald’s Corporation has been doing a very good job at keeping the quality of its products and services, whether it was through using computerized equipment or to train their human resources.
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RAW MATERIAL - The Arrival & Maintenance Through the intense process of choosing and manufacturing raw materials, McDonald’s customers can be assured of a quality product. Whether arriving via
truck or train, raw materials are delivered fresh and ready to use every day. To ensure that this freshness is passed onto the customer, each arriving package is personally inspected for damage during its travel. In addition, the condition of delivery trucks are also taken into account to make sure that meat was untainted due to a filthy meat cooler. The meat cooler should always be set at 10 degrees below zero and the meat should remain at a constant temperature of 34 to 38 degrees. RESTAURANT INSPECTION Since McDonald’s believes so strongly in high quality products, Licensees are expected to obtain their desired product needs directly from suppliers rather than the McDonald’s Corporation. While this ensures that the best raw materials are purchased at a reasonable price, it often leaves the McDonald’s Corporation “in the dark” concerning the safety precautions and procedures of franchised restaurants. As a
result, the McDonald’s Corporation makes both announced and unannounced visits to international McDonald’s restaurants to ensure that proper procedures are being followed. With each visit, the restaurant being inspected is graded on their
proficiency and performance. Based on this grade, the corporation will determine eligibility for growth of new franchise locations. In addition, the failure to meet
requirements can result in a default in your franchise agreement for the following term. FORECASTING Aspects of Forecasting McDonald’s has a continual means of receiving information from customers, employees, and the industry that effects short, medium, and long term decision making and forecasting. Different kinds of information are received from all levels of the corporation and are used to learn more about the market movement and advertisement structure, to basic everyday processes in production and packaging of goods for the targeted markets. Forecasting is done in large by the corporation, as part of their responsibility to the franchisee’s and McDonald’s shareholders.
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Forecasts are vital to McDonald’s organization and significant management decisions. Forecasts provide the basis for budgetary planning, cost control, planning new products, process selection, capacity planning, and facility layout. McDonald’s uses a qualitative type of forecasting. Typically,
The main information used in
forecasting the stability and future growth of the corporation is by the number of customers going in and out the door and all voiced opinions. At the corporate level, qualitative forecasting can be seen, even with limited information that was given. Market research department takes data from talking with customers to find out how they like or feel about a particular ad campaign or a specific commercial. And product development department uses input on developing a new product or changing how the new product is prepared, priced, or packaged.
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TECHNIQUES OF PRODUCTIVITY IMPROVEMENT IN METSO MINERALS PROCESS TECHNOLOGY (MMPT) Metso Minerals Process Technology Asia-Pacific and South America (MMPT) has been working with operations around the world to increase their efficiency through ‘Mine-to-Mill’ or Process Integration and Optimisation (PIO) projects. These projects have delivered significant improvements in mine efficiency, mill throughput and reduced operating costs at mines around the world. The MMPT methodology involves rock characterisation, site auditing, data collection, modelling/simulation and implementation of integrated operating and control strategies on site. This results in significant benefits to the operations – for example, five to 20 per cent increases in concentrator throughput have been measured. MMPT’s rock characterisation utilises simple and inexpensive measurements that can be performed by trained site personnel. The advantage of these measurements is that a large amount of data can be collected in a very short timeframe, as the samples do not require shipping to an outside laboratory. Typically, a PIO project starts with a site visit to perform blasting and process audits, collect high quality data including measurements of run-of-mine fragmentation and survey data around all crushing and grinding circuits. These measurements are combined with rock characterisation and the definition of strength and structure domains to model the complete production chain. Site-specific models of the blast fragmentation, crushing, grinding and flotation processes can then be developed. This proven methodology has applications ranging from greenfield projects to long-standing operations with AG/SAG or conventional grinding circuits. Process improvements can be higher mining productivity, higher mill throughput, decreased overall operating costs and higher flotation or leach recovery. This paper discusses a recent application of PIO conducted at a large open pit operation in South America and emphasises the potential that every operation has to ‘do more with what they have’. The MMPT methodology consists of the development of integrated operating and control strategies from the mine to the concentrator that minimise the processing cost per tonne and maximise profitability. It involves rock characterisation, site auditing, data collection, modelling/simulation and implementation of integrated strategies in
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the field. This results in significant benefits to the operations – for example, five to 20 per cent increases in concentrator throughput. PIO METHODOLOGY The PIO methodology is divided into a number of components: benchmarking, material tracking, rock characterisation, high quality survey data collection in the mine and concentrator, historical operating data collection, modelling/simulation and implementation of the integrated operating strategies. Experience has found that ignoring any of these elements will result in the project being less successful. A PIO project is normally initiated with a site visit to collect data of the current operating practices and benchmark the performance of both the mine and concentrator. Particular attention is made to the rock conditions and variability in rock properties to define strength and structure domains. Once the different rock strength and structure domains are defined, data has been collected, modelling and simulation techniques are used to determine the best operating strategy and avoid costly (and often inconclusive) trial-and-error exercises. The ability to accurately model the blast fragmentation, crushing and grinding processes allows the entire ‘production chain’ to be simulated, with the impact of upstream changes being able to be predicted downstream. The conclusions and recommendations of the simulation study reveal a clear direction forward for the operation. The PIO study then enters the site implementation, support and monitoring phase. Once the changes in the mine and concentrator have been implemented and the benefits clearly demonstrated, outside assistance is only periodically required thereafter to ensure that the gains are maintained in the longer term. Benchmarking and process audits A clear understanding of the current operating practices needs to be gained before any changes can be recommended, this must be backed up with measurements and data collected at site. This involves auditing the blast design, implementation and initiation sequence, followed by material tracking (that will be described in more detail below) and fragmentation measurements along the process. Blast design implementation is
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closely observed, as an operation must be able to implement accurately and repeatedly before it can expect to gain from blast design changes. From the perspective of the concentrator or processing plant, sampling surveys of the crushing and grinding circuits provide the necessary data to model each stage of comminution. Operating practices such as stockpiling and blending of different ore types ahead of the concentrator are also reviewed with consideration of the expected variability in rock properties. Finally, the level of instrumentation and process control strategies are reviewed to ensure that the mill operating conditions are best suited to changing rock conditions. All of these measurements allow mathematical models to be developed for the complete process chain. These models are later used to simulate the impact of operational changes in the mine or concentrator on the entire process. Material tracking In some cases, where material is blended before the concentrator or when sophisticated mine monitoring and dispatch systems are not in place, there is a need to monitor material movement from the mine to the concentrator. MMPT routinely use passive Radio Frequency ID (RFID) tags to mark material and track its movement over time. Initially developed to assist in the PIO studies, MMPT have commercialized this system under the name of SmartTag. The small, epoxyencased tags can be placed in the stemming column of blast holes or post-blast on the muck pile surface. Picked up by the excavator, the tags pass through the primary crusher and are detected by antenna placed over conveyor belts at various points in the process; for example, over the primary crusher and SAG feed conveyor belts. The use of such technology allows the spatially-based mine information to be linked with the time-based concentrator information. That is, linking where the material came from to when it was processed in the mill. In conjunction with online image analysis systems, the fragmentation from different rock domains can be measured from the blast down to the grinding circuit.
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Rock Characterization The MMPT methodology for rock characterization utilizes simple and inexpensive measurements of rock strength and structure that can be performed by trained site personnel, and quite often these measurements are already being collected by the operation. The advantage of simple measurements is that a large amount of data can be collected in a very short timeframe, as samples do not need to be shipped to an outside laboratory. When attempting to characterize and map rock strength and structure of an entire ore body, density of data and their statistical significance are very important. Modelling and simulation The measurements collected while at site are combined with the rock characterisation domains to model the complete blasting and comminution process. MMPT use these data to develop site-specific models of blast fragmentation, crushing, grinding and flotation. This allows customised blast patterns to be developed that optimise both crushing and grinding performance. For each domain, blast designs are defined to generate the optimal fragmentation size for downstream processes. This may involve an increase or decrease in energy (powder factor in the blast), depending on the rock characteristics of each domain. The objective of any modified blast design is to minimise the overall cost for the entire process by distributing the energy required to fragment the rock mass, sensibly and effectively. Near-field vibration measurements and models are used to confirm that pit wall stability, damage and dilution issues are considered in the blast designs. In addition, the crushing and grinding models allow the impact of operational and control strategies to be investigated and optimised.
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TECHNIQUES OF PRODUCTIVITY IMPROVEMENT IN TOYOTA Introduction The Japanese automobile manufacturer currently has the fastest product development process in the world. New cars and trucks take 12 months or less to design, while competitors typically require two to three years. Toyota has phenomenal quality levels that rivals can only dream of matching. Toyota has turned operational excellence into a strategic weapon not merely through tools and quality improvement methods but a deeper business philosophy rooted in understanding of people and what motivates them. Its success is ultimately based on its ability to develop leaders, build teams, and nurture a supportive culture, to devise strategy, to build deep supplier relationships, and to maintain a learning organization. The Toyota Production System Toyota developed the Toyota Production System (TPS) after World War II. While Ford and GM used mass production, economies of scale, and big equipment to produce as many parts as possible, as cheaply as possible, Toyota's market in post-war Japan was small. Toyota also had to make a variety of vehicles on the same assembly line to satisfy its customers. By making lead times short and focusing on keeping production lines flexible, Toyota realized it could actually get higher quality, better customer responsiveness, better productivity, and better utilization of equipment and space. A basic premise of mass production is that machine downtime is obvious waste. A machine shut down for repair is not making parts that could make money. But TPS has challenged this notion. Often the best thing you can do is to idle a machine and stop producing parts. Over production, is a fundamental waste in TPS. Often it is best to build up an inventory of finished goods in order to level out the production schedule, rather than produce according to the actual fluctuating demand of customer orders. Leveling out the schedule (heijunka) is a foundation for flow and pull systems and for minimizing inventory in the supply chain. Leveling production
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smoothes out the volume and mix of items produced so there is little variation in production from day to days. Often it is best to selectively add and substitute overhead for direct labor. When waste is stripped away from value-adding workers, high-quality support has to be provided for them. It may not be a top priority to keep your workers busy making parts as fast as possible. Companies should produce at the rate of customer demand. Working faster just for the sake of getting the most out of workers may be counter-productive. It is best to selectively use information technology and often better to use manual processes even when automation is available and would seem to justify its cost in reducing your headcount. People are the most flexible resource. The manual process must be streamlined before it is automated. TPS starts with the customer, by asking, "What value are we adding from the customer's perspective?" Because the only thing that adds value in any type of process- be it in manufacturing, marketing, or a development process-is the physical or information transformation of that product, service, or activity into something the customer wants. TPS is all about commitment to continuously investing in its people and promoting a culture of continuous improvement. When Toyota sets up assembly lines, it selects only the best and brightest workers, and challenges them to grow in their jobs by constantly solving problems. Similarly, Toyota staffs sales, engineering, service parts, accounting, human resources, and every aspect of the business with carefully selected individuals and empowers them to improve their processes and find innovative ways to satisfy their customers. Toyota is a true learning organization that has been evolving and learning for most part of a century. Many U.S. companies have embraced lean tools but do not understand what makes them work together in a system. They do not understand the power behind true TPS. That lies in Toyota’s continuous improvement culture.
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Productivity improvements techniques in Toyota Production System Identifying waste The first question in TPS is always" What does the customer want from this process?" This defines value. Through the customer's eyes, a process is observed and the valueadded steps are separated from the non-value-added ones. Toyota has identified various types of non-value-adding waste: 1. Overproduction. Producing items for which there are no orders. This leads to overstaffing and storage and transportation costs. 2. Waiting (time on hand). Workers merely serving to watch an automated machine or having to stand around waiting for the next processing step, tool, supply, part, etc., or having no work because of stock outs, lot processing delays, equipment downtime, and capacity bottlenecks. 3. Unnecessary transport or conveyance. Carrying work in process (WIP) long distances, creating inefficient transport, or moving materials, parts, or finished goods into or out of storage or between processes. 4. Over processing or incorrect processing. Inefficient processing due to poor tool and product design, causing unnecessary motion and producing defects. Waste is also generated when providing higher-quality products than is necessary. 5. Excess inventory. Excess inventory hides problems such as production imbalances, late deliveries from suppliers, defects, equipment downtime, and long set up times. 6. Unnecessary movement. Any wasted motion employees have to perform during the course of their work, such as looking for, reaching for, or stacking parts, tools, etc. Walking is also waste. 7. Defects. Production of defective parts or correction. Repair or rework, scrap, replacement production, and inspection mean wasteful handling, time, and effort. 8. Unused employee creativity. Losing time, ideas, skills, improvements, and learning opportunities by not engaging or listening to employees.
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Toyota firmly believes overproduction is a fundamental waste. Producing more than what the customer wants necessarily leads to a build-up of inventory somewhere downstream. The material is just sitting around, waiting to be processed in the next operation. Big buffers lead to other suboptimal behavior, like reducing the motivation to continuously improve operations. Why worry about preventive maintenance on equipment when shutdowns do not immediately affect final assembly anyway? Why get overly concerned about a few quality errors when defective parts can be set aside? By the time a defective piece works its way to the later operation where an operator tries to assemble that piece, there may be weeks of bad parts in process and sitting in buffers. Just In Time (JIT) means removing, as much as possible, the inventory used to buffer operations against problems that may arise in production. Using smaller buffers means that problems like quality defects become immediately visible. This reinforces jidoka, which halts the production process. Workers must resolve the problems immediately to resume production. The requirement for working with little inventory and stopping production when there is a problem, introduces a sense of urgency among workers. In mass production, when a machine goes down, there is no sense of urgency. The maintenance department fixes the problem while inventory keeps the operations running. By contrast, in lean production, when an operator shuts down equipment to fix a problem, other operations will soon stop producing, creating a crisis. So people have to scramble to fix problems together to get the equipment up and running. Moreover, they would try to get the root of the problem so that it does not recur again. Product development The Prius (hybrid car) project, the company’s already excellent product development process has further improved in two key ways: 1. The cross-functional team and chief engineer work together almost daily in the same room {obeya}. In Toyota's traditional approach, in the planning phase, the chief engineer comes up with a concept, discusses it with the design groups and planning groups, and formulates a concrete plan. With the Prius, a team of specialists from the various design, evaluation, and manufacturing functional groups sat in a big room with the chief engineer and made decisions in real time. To facilitate the
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discussions, computer-assisted design (CAD) terminals were put into the room and it became known as "obeya" (big room). 2. Simultaneous engineering. Manufacturing engineers now work with design engineers at the concept development stage, to give input on manufacturing issues. This level of cooperation at such an early stage is unusual in the auto industry. Toyota had been incorporating simultaneous engineering for several years before the Prius. But the Prius project intensified it. There was unparalleled cooperation across divisions and between design and manufacturing to meet the tight headlines for the Prius. Towards one piece flow To become lean, companies have to create continuous flow wherever applicable. Shortening the elapsed time from raw materials to finished goods (or services) leads to the best quality, lowest cost, and shortest delivery time. Flow also tends to force the implementation of a lot of the other lean tools and philosophies such as preventive maintenance. Creating flow exposes inefficiencies that demand immediate solutions. Everyone concerned is motivated to fix the problems and inefficiencies because the plant will shut down if they don't. Traditional business processes, in contrast, have the capacity to hide vast inefficiencies without anyone noticing. Flow means that a customer order triggers the process of obtaining the raw materials needed just for that customer's order. The raw materials then flow immediately to supplier plants, where workers immediately fill the order with components, which flow immediately to a plant, where workers assemble the order, and then the completed order flows immediately to the customer. The whole process should take a few hours or days, rather than a few weeks or months. In a large batch operation, there are probably weeks of work in process between operations and it can take weeks or even months from the time a defect is caused until it is discovered. By then it is nearly impossible to track down and identify why the defect occurred. By making a product flow, we can set in motion numerous activities to eliminate all muda (wastes). In lean thinking, the ideal batch size is one. Creating flow means linking together operations that otherwise are disjointed. There is more teamwork, rapid feedback on earlier quality problems, control over the
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process, and direct pressure for people to solve problems and think and grow. Ultimately, the main benefit of one-piece flow is that it challenges people to think and improve. Quality. It is much easier to build in quality in one-piece flow. Every operator is an inspector and works to fix any problems in station before passing them on. But if defects do get missed and passed on, they will be detected very quickly and the problem can be immediately diagnosed and corrected. Real Flexibility. If we dedicate equipment to a product line, we have less flexibility in scheduling it for other purposes. But if the lead time to make a product is very short, we have more flexibility to respond and make what the customer really wants. Instead of putting a new order into the system and waiting weeks to get that product out, if lead times are a matter of mere hours, we can fill a new order in a few hours. Accommodating changes in customer demand can be done almost immediately. Higher Productivity. The reason it appears that productivity is highest when operation is organized by department is because each department is measured by equipment utilization and people utilization. But it is hard to determine how many people are needed to produce a certain number of units in a large batch operation because productivity is not measured in terms of value-added work. Much productivity is lost when people are "utilized" to overproduce parts, which then have to be moved to storage. Much time is also lost tracking down defective parts and components and repairing finished products? In a one-piece-flow cell, we can quickly see who is too busy and who is idle. It is easy to calculate the value-added work and then figure out how many people are needed to reach a certain production rate. Heijunka Heijunka is the leveling of production by both volume and product mix. Toyota does not build products according to the actual flow of customer orders, which can swing up and down wildly. The total volume of orders in a period is levelled out so the same amount and mix are being made each day. Where demand fluctuates significantly, Toyota will often keep at least a small inventory of finished goods. This seems to contradict lean thinking. But the small inventory protects the production schedule from being upset by sudden spikes in
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demand. By living with the waste of some finished goods inventory, companies can eliminate far more waste in their entire production process and their supply chain. Quality Toyota’s philosophy is to identify defects when they occur and automatically stop production so that the problem can be fixed before the defect continues downstream. Jidoka is also referred to as autonomation – equipment endowed with human intelligence to stop itself when it has a problem. In-station quality (preventing problems from being passed down the line) is much more effective and less costly than inspecting and repairing quality problems after the fact. The last thing management in traditional mass manufacturing allows is a halt in production. Bad parts are simply labeled and set aside to be repaired at another time and by another department. The mantra is to produce large quantities at all costs and fix problems later. Lean manufacturing dramatically increases the importance of building things right the first time. With very low levels of inventory, there is no buffer to fall back on in case there is a quality problem. Problems in operation A will quickly shut down operation B. When equipment shuts down, flags or lights, usually with accompanying music or an alarm, are used to signal that help is needed to solve a quality problem. Andon refers to the light signal for help. Unfortunately, for many companies, the essence of building in quality has got lost in bureaucratic and technical details. Things like IS0-9000, have made companies believe that if they put together detailed rule books, the rules will be followed. Quality planning depart-ments are armed with reams of data analyzed using the most sophisticated statistical analysis methods. Six Sigma black belts attack major quality problems with a vengeance, armed with an arsenal of sophisticated technical methods. But Toyota follows a different approach. Toyota keeps things simple and uses very few complex statistical tools. The quality specialists and team members have just four key tools: • • Go and see. Analyze the situation.
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• •
Use one-piece flow and andon to surface problems. Ask "Why?" five times.
Andon works only when employees know the importance of bringing problems to the surface. Unless there is a problem-solving process already in place and people are following it, there's no point in spending money on fancy technology. Toyota prefers to first use people and processes to solve problems, then supplement and support its people with technology. A common Toyota quality tactic is to anticipate problems as early as possible and put in place countermeasures before the problems even occur. Occasionally a time-out is required to reflect on the purpose and direction of the project before moving on. The Toyota Way emphasises stopping or slowing down to get quality right the first time to enhance productivity in the long run. Standardisation Toyota believes standardized work is the basis for empowering workers and innovation in the work place. If the process is shifting, then any improvement will just be one more variation that is occasionally used and mostly ignored. One must standardize, and thus stabilize the process, before continuous improvements can be made. Workers follow very detailed standardized procedures that touch every aspect of the organization. In the workplace, everything must be in its place. There is strict discipline about time, cost, quality ... and safety-virtually every minute of the day is structured. But Toyota also values many of the characteristics associated with flexible organizations referred to as "organic": extensive employee involvement, a lot of communication, innovation, flexibility, high morale, and a strong customer focus. Standardisation does not necessarily imply a bureaucratic approach. A coercive bureaucracy uses standards to control people, catch them breaking the rules, and punish them to get them back in line. Unlike Taylorism, the Toyota Way preaches that the worker is the most valuable resource-not just a pair of hands taking orders, but an analyst and problem solver. Toyota’s enabling systems are simply the best practice methods, designed and improved upon with the participation of the work force. The standards actually help people control their own work.
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The critical task when implementing standardization is to find that balance between providing employees with rigid procedures to follow and providing the freedom to innovate and be creative to meet challenging targets consistently for cost, quality, and delivery. The key to achieving this balance lies in the way people write standards as well as who contributes to them. First, the standards have to be specific enough to be useful guides, yet general enough to allow for some flexibility. Second, the people doing the work have to improve the standards. Nobody likes rules and procedures when they are imposed on them. Imposed rules that are strictly policed become coercive and a source of friction and resistance between management and workers. Technology Toyota introduces new technology only after it is proven through direct experimentation with the involvement of a broad cross-section of people. Before introducing new technology, Toyota will go to great lengths to analyze the impact it may have on existing processes. First, it will examine firsthand the nature of the value-added work being performed by the workers for the particular process. It will look for new opportunities to eliminate waste and even out the flow. Toyota will then use a pilot area to improve the process with the existing equipment, technology, and people. When it has accomplished as much improvement as possible with the present process, Toyota will ask again if it can make any additional improvements by adding the new technology. The technology is then carefully analyzed to see if it conflicts with Toyota's philosophies and operating principles. These include principles of valuing people over technology, using consensus decision making, and an operational focus on waste elimination. If the technology violates these principles or if there is any chance of disrupting stability, reliability, and flexibility, Toyota will reject the technology or at least delay adopting it until the problems are resolved. If the new technology is acceptable, the guiding principle is to use it to support continuous flow in the production process and help employees perform better within the Toyota Way standards. This means the technology should be highly visual and intuitive used right
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where the work is being done and be able to support the actual work process while not distracting people from the value-added work. Throughout this analysis and planning, Toyota will broadly involve all key stakeholders in a consensus-building process. Once Toyota has thoroughly gone through this process, it will quickly implement the new technology. Leadership Throughout Toyota's history, key leaders have 'been found within the company, at the right time, to shape the next step in Toyota's evolution. Toyota’s leaders are home grown. Leaders must live and thoroughly understand the company’s culture day by day. A critical element of the culture is genchi genbutsu, which is interpreted within Toyota to mean going to the place to see the actual situation for understanding. Gemba, the more popular term, refers to "the actual place" and means about the same thing as genchi genbutsu. The first step of any problem-solving process, development of a new product, or evaluation of an associate's performance is grasping the actual situation, which requires "going to gemba." Toyota promotes and expects creative thinking, but it should be grounded in a thorough understanding of all aspects of the actual situation. Leaders must demonstrate this ability and understand how work gets done at a shop floor level. Toyota believes that, a superficial impression of a situation will lead to ineffective decision-making and leadership. Someone trained in the Toyota Way, takes nothing for granted and knows what he is talking about, because it comes from firsthand knowledge. Toyota leaders are passionate about involving people who are doing the value-added work in improving the process. Yet encouraging employee involvement by itself is not enough to define a Toyota leader. In-depth understanding of the work in addition to general management expertise are also needed. So Toyota leaders, are respected for their technical knowledge as well as followed for their leadership abilities. Instead of giving orders, they lead and mentor through questioning. They will raise questions about the situation and the person’s strategy for action, but they will not give answers to these questions even though they may have the knowledge.
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For Toyota, the decision making process is just as important as the quality of the decision. In fact, management will forgive a decision that does not work out as expected is acceptable if the right process was used. But a decision that works out well, but was based on a shortcut process, is not. Toyota believes in making decisions slowly by consensus by thoroughly considering all options and then implementing them rapidly. Nemawashi is the process by which junior people build consensus by developing a proposal and circulating it broadly for management approval. In the nemawashi process, many people give their input and this generates consensus. By the time the formal proposal comes up for a high-level approval, the decision is already made. Agreements have been reached and the final meeting is a formality. Managing people Toyota has taken various steps to build high performance teams: Stage 1: Orientation. The group needs strong direction from the leader and must understand the basic mission, rules of engagement, and tools the members will use. Stage 2: Dissatisfaction. After going to work, the members discover it is harder than they thought to work as a team. In this stage, they continue to need strong direction (structure) from the leader but also need a lot of social support to get through the tough social dynamics they do not understand. Stage 3: Integration. The group starts to develop a clearer picture of the roles of various team members and begins to exert control over team processes. The leader does not have to provide much task direction, but the team still needs a lot of social support. Stage 4: Production. The group becomes a high-performing team, no longer dependent on the leader. In an assembly line, people do the same mindless task repeatedly and are responsible only for a tiny piece of an overall product. Toyota has attempted to enrich jobs in various ways. Some of the features that make the job more enriching include job rotation, various kinds of feedback on how workers are doing at their jobs, the andon system and significant work group autonomy over the tasks. Toyota became interested
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in job enrichment in the 1990s and redesigned its assembly lines so that the parts that make up a subsystem of the vehicle are installed in one specific area on the assembly line. Rather than a work group assembling electrical systems and then putting in floor mats and then door handles, a work group might focus almost exclusively on the electrical system under the hood. For white collar workers, Toyota organizes teams around complete projects from start to finish. For example, the design of the interior of the vehicle is the responsibility of one team from the design phase through production. Participation in the project from beginning to end enriches and empowers the employee. People are motivated by challenging but attainable goals and measurement of progress toward those goals. Toyota's visual management systems plus policy deployment means that teams always know how they are doing and are always working towards stretch improvement targets. Policy deployment sets challenging, stretch goals from the top to the bottom of the company. Careful measurements every day let work teams know how they are performing. Vendor management Toyota is a tough customer. Toyota has very high standards of excellence and expects partners to rise to those standards. But Toyota will also help partners to improve their standards. Toyota has made serious investment in building a network of highly capable suppliers who are tightly integrated into Toyota's extended lean enterprise. Toyota’s high quality standards result from the excellence in innovation, engineering, manufacture, and overall reliability of Toyota's suppliers. Without dependable suppliers, JIT cannot work. There is much hype about "streamlining" the supply chain through advanced information technology. What is not adequately emphasized is the enormous complexity of coordinating detailed, daily activities to deliver value to the customer. One is not likely to hear about relationships across firms-about how partners must work together toward common goals. Yet, this is one of Toyota's key strengths.
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Toyota gives new suppliers very small orders to start with. They must prove their sincerity and commitment to Toyota's high performance standards for quality, cost, and delivery. If they demonstrate this for early orders, they will get increasingly larger orders. Toyota will teach them the Toyota Way and adopt them into the family. Once inside, a supplier is not removed except in extraordinary circumstances. Toyota keeps challenging its suppliers with aggressive targets. Toyota believes in having high expectations for their suppliers and then treating them fairly and teaching them. Treating them softly or beating them up without teaching them would be very disrespectful. And simply switching supplier sources because another supplier is a few percentage points cheaper is unthinkable. Suppliers want to work for Toyota both for the prestige involved and because they know they will get several opportunities to learn and improve. Toyota is very careful when deciding what to outsource and what to do in house. Like other Japanese automakers, Toyota outsources a lot, about 70% of the components of the vehicle. But is still tries to develop internal competency even in case of components it outsources. A learning organization When processes are stable and waste and inefficiencies become publicly visible, there is an opportunity to learn continually from improvements. To be a learning organization, it is necessary to have stability of personnel, slow promotion, and very careful succession systems to protect the organizational knowledge base. To "learn" means having the capacity to build on the past and move forward incrementally, rather than starting over and reinventing the wheel with new personnel with each new project. The Toyota philosophy emphasises that true problem solving requires identifying the root cause which often lies hidden beyond the source." The answer lies in digging deeper by asking why the problem occurred. The most difficult part to learn is grasping the situation thoroughly before proceeding with five-why analysis. Grasping the situation starts with observing the situation with an open mind and comparing the actual situation to the standard. To clarify the problem, one must start by going to
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where the problem is (genchi genbutsu). For Toyota, problem solving is 20% tools and 80% thinking. For most other companies, it seems to be 80% tools and 20% thinking. A key to learning and growing, not only within Toyota but in Japanese culture, is hansei, the vehicle. Hansei is the check stage of PDCA. It is used most often at the end of a vehicle program, but is being now moved further upstream so there are several hansei events at key junctures in the program. Toyota has judiciously used stability and standardization to transfer individual and team innovation into organization-wide learning. It is one thing for individual employees to come up with innovative ways to do things. But to become organization - wide learning, the new way must be standardized and practiced across the organization until a better way is discovered. This is the foundation for the Toyota Way of learning-standardization punctuated by innovation, which gets translated into new standards. Performance measurement Toyota is not particularly strong at developing sophisticated metrics across the company. Toyota measures processes everywhere on the factory floor, but prefers simple metrics and does not use many of them at the company or plant level. There are at least three types of measures at Toyota: Global performance measures-how is the company doing? At this level, Toyota uses financial, quality, and safety measures very similar to those used by other companies. Operational performance measures-how is the plant or department doing? Toyota's measurements are timelier and better maintained than at other companies. The people at the work group level or the project manager's level painstakingly track progress on key metrics and compare them with aggressive targets. The metrics tend to be specific to a process. Stretch improvement metrics-how is the business unit or work group doing? Toyota sets stretch goals for the corporation, which are translated into stretch goals for every
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business unit and ultimately every work group. Tracking progress toward these goals is central to Toyota's learning process. Culture The Toyota Way goes to the level of basic assumptions of the most effective way to "perceive, think, and feel" in relation to problems. Things like genchi genbutsu, recognizing waste, thorough consideration in decision making, and the focus of Toyota on long-term survival are the DNA of Toyota. The Toyota Way is explicitly taught to new members. Toyota conducts seminars on the Toyota Way. The Toyota Way also gets transmitted through action in day-to-day work where leaders demonstrate by their actions. Toyota has also attempted to spread the culture to global operations. The most intensive effort has been in North America. All U.S. senior managers were assigned Japanese coordinators. The coordinators had two jobs: coordinating with Japan, where there are continuous technical developments, and teaching U.S. employees the Toyota Way through daily mentorship. Every day is a training day, with immediate feedback shaping the thinking and behavior of the U.S employees. Toyota has used trips to Japan, to influence the cultural awareness of U.S. employees. Toyota has also sent over senior executives to instill the culture in new American leaders. This started with managers from Japan and has evolved to homegrown managers in North America. Toyota has used the TPS technical systems, or "process" layer of the Toyota Way, to help reinforce the culture Toyota sought to build. By creating flow across operations using TPS and lean product development in its overseas operations, Toyota is helping change this behavior and shape the culture it seeks to nurture. Conclusion Becoming a lean enterprise involves a lot of hard work. The author recommends the following steps: 1. Start with action in the technical system; follow quickly with cultural change. The social and technical systems of TPS are intertwined. If a company wants to change the culture, it must also develop true lean leaders who can reinforce and lead that cultural
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change. The best way a company can develop this is through action to improve the company's core value streams, supported by committed leaders who reinforce culture change. Leaders must be involved in the value stream mapping and shop floor transformation so they can learn to see waste. 2. Learn by doing first and training second. The Toyota Way is about learning by doing. In the early stages of lean transformation there should be at least 80% doing and 20% training and informing. The best training is training followed by immediately doing or doing followed by immediate training. Toyota puts people in difficult situations and lets them solve their way out of the problems. 3. Start with value stream pilots to demonstrate lean as a system and provide a go see" model. Within a value stream defined by a product family, a model can be created. Often this means creating one lean product line, beginning with raw materials received and ending with finished goods. The model line should become a singularly focused project with a great deal of management attention and resources to make it a success. 4. Use value stream mapping to develop future state visions and help "learn to see." A cross-functional group consisting of managers can authorize resources and doers who are part of the process being mapped. The team members learn together as they see the waste in the current state, and in the future state they come together to figure out how to apply the lean tools and philosophy. Mapping creates a language and tool for the team to actually pick apart a specific process, see the waste, develop a lean vision, and apply it to that particular process. Value stream mapping should be applied only to specific product families that will be immediately transformed. 5. Use kaizen workshops to teach and make rapid changes. Using a talented and experienced facilitator who has a deep understanding of lean tools and philosophy with a specific problem to tackle makes all the difference in what can be accomplished. However, the kaizen workshop should not become an end in itself. In many companies, "lean efforts" revolve around having numerous workshops: the more the better. This leads to "point kaizen"-fixing individual problems without straightening out the core value stream. Kaizen workshops are best used as one tool to implement specific improvements guided by a future state value stream map.
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6. Organize around value streams. In most organizations, management is organized by process or function. In a factory, there may be the paint department, the assembly department, and the maintenance department. In a bank, there may be order processing, order fulfillment, customer complaints, etc. In other words, managers own steps in the process of creating value for customers and nobody is responsible for the value stream. Value stream managers have complete responsibility for the value stream and can answer the customer. Someone with real leadership skills and a deep understanding of the product and process must be responsible for the process of creating value for customers and must be accountable to the customer. 7. Make it mandatory. If a company looks at lean transformation as a nice thing to do in any spare time or as voluntary, it will simply not happen. 8. A crisis may prompt a lean movement, but may not be necessary to turn a company around. A sinking ship certainly mobilizes management and the work force into getting serious about lean. But the essence of lean leadership is proactive thinking and long-term learning. 9. Be opportunistic in identifying opportunities big financial impacts. When a company does not yet believe in the lean philosophy heart and soul, it is particularly important to achieve some big wins. 10. Realign metrics with a value stream perspective. Metrics are used very differently by Toyota compared to most companies. They are an overall tool for tracking the progress of the company and they are a key tool for continuous improvement. At most companies they are mainly a tool for short-term cost control by managers who do not understand what they are managing. For example, companies track indirect/direct labor ratios. The way to make the ratio look good is to have lots of direct labor and keep those people busy making parts, even if they are overproducing or doing wasteful jobs. The first step is to eliminate non-lean metrics that are wreaking havoc with those seriously invested in improving opera-tional excellence. The next step is to measure a variety of value stream metrics from lead time to inventory levels to first-pass quality and treat these metrics as seriously as labor productivity and other short-term cost metrics.
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11. Build on your company's roots to develop your own way. When it works with other companies to teach TPS, Toyota insists that these companies develop their own system. It is alright to borrow some of the insights from the Toyota Way. But companies need to put them into their language in a way that fits their business and technical context. The Toyota Way has evolved through some inspired leaders who have provided a very rich cultural heritage. Each company must build on its heritage. 12. Hire or develop lean leaders and develop a succession system. Leaders must thoroughly understand, believe in, and live the company's "way." All leaders must under-stand the work in detail and know how to involve people. Without top management involvement, the transformation will not happen. 13. Use experts for teaching and getting quick results. A company needs a sensei or teacher to provide technical assistance, facilitate the transformation, get quick results, and keep the momentum building. But a good teacher cannot do everything. To develop a lean learning enterprise, companies need to build internal expertise--senior executives, improvement experts, and group leaders who believe in the philosophy and will spread the lean culture throughout the organization over time.
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Bibliography • Dance, A, Valery, W, Jankovic, A, La Rosa, D and Esen, S, 2006. Higher productivity through cooperative effort: A method of revealing and correcting hidden operating inefficiencies, in Proceedings SAG 2006, pp IV-375. • • www.scribd.com “Bag a McMeal.” Accessed online on October 26, 2004 at: http://www.findarticles.com/p/articles/mi_m3190/is_50_35/ai_80748686. • http://www.foodservice.com/news_homepage_expandtitle_fromhome.cfm?passi d=6951 • • www.phims.com Prime Faraday Technology Watch – May 2001
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