Learn lean manufacturing through this example of improving not very efficient car components production. They were able to imrove by following 5 lean principles.

this article covers:

• Introduction to the problem – is this lean?
• 5 lean principles
• Lean thinking – where to start?
• Lean principle 1
• Lean principle no 2
• Dedicated v.s. shared processes
• Lean principle no. 3
• Lean principle no 4
• Scheduling production
• Lean principle no 5
• Results after lean change
• Celebration of accomplishments
• Lean takeaways
• Download Value stream transformation list

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Introduction to the problem – is this Lean?

There is car Mania company. Facility is delivering different components to different car producers. There is mix of 40 different products going through production processes, to 5 different customers. It is hard to schedule current production, because there are shared machines. It is always hard to define, where to deliver product, for next operation, because there are often several options. So, some work cells are occupied more, than others.

Chaos and frustration is growing with growing manufacturing cycle times, and late deliveries to final customer.

Project kick off – the best way to do it – read here

Here is a link to download project charter template for your usage, with the brief description of each section.

5 lean principles

Management team have studied lean, and agreed, that by following the methodology, situation can be dramatically improved.

They have learned, there are 5 principles of being lean:

Principle 1: Precisely specify value by specific product.

Principle 2: Identify the value stream for each product.

Principle 3: Make value flow without interruptions.

Principle 4: Let customer pull value from the producer.

Principle 5: Pursue perfection.

Download 5 lean principles pdf check list:

This is what you will get (preview):

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5 lean principles were identified in the book “Lean Thinking” written by J. Womack and D. Jones.

To buy “Lean Thinking” book by J. Womack and D. Jones click on this affiliate marketing link: https://amzn.to/41h7S3i

I may receive a commission if you sign up through this link. This is not affecting final product prices.

The best continuous improvement tools? – read here

Lean thinking – where to start?

To start with changes, team needed to know customer requirements, and how car mania is fulfilling it. Current on-time delivery is on 70%, quality level on 99.4% OK products yield, which is sigma level 4. Inventory volumes are 25 million US dollars. There are supplied components required for production as well as finish goods. Finish good supermarket is used in case, of missing parts delivery to customers on-time.

Download DMAIC tools list, If you would like to follow proven method and tools to improve any process, I strongly suggest allways to use.

Lean principle 1

Voice of customers revealed that satisfaction with car mania, as a supplier, is poor. 100% on-time delivery, 99.99%, of delivered quality level is expected. It is six sigma level delivery performance expectation. Internal, Voice of the business feedback is, that inventory level should be cut to 10 million USD max.

Kaizen meeting – how to efficiently run? – read here

I strongly recommend to have Learning to See book and Mixed model Valuestream for all managers, for all supervisors, engineers and leaders. You will be able to understand how valuestream should work, how to make value flow, and implement lean in any business, any process. It is really worth it.

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I may receive a commission if you sign up through this link. This is not affecting final product pric

Lean principle no 2

Process route research identified 4 different product families. There are similar process steps used to finalize products. There are 4 potential value streams for each product family. Future state Value stream maps were created accordingly.

Voice of the customer – how to use it?- read here

Dedicated v.s. shared processes

Processes and machines dedicated for individual value stream were identified too. There are workstations, that are shared between all 4 families. Team decided to split shared manual operations, and dedicate it for each value stream.

There are 3 different machines shared too. Team will keep them shared. But work distribution organization- called work-balancing, will be key to run these shared machines properly. Work-balancing will be calculated later in the project.

Lean v.s. Six Sigma – what is the difference? – read here

A3 report template

Great tool to report out your project progress:

• A3 form Excel template
• Restaurant example – filled A3 report (above used pictures)

To download entire A3 report template –click on the link below

Lean principle no. 3

Next step team did, was Gemba walk, also called waste walk. List of identified wastes was created, which became a task list. Team developed solutions for each task, and identified owners. Each owner set task due date. Regular weekly progress reviews helped to accomplish almost all tasks on time. Waste walk activity run in parallel with layout review performed by different team.

Each value stream layout was created. Location area for each one was identified, as well as areas for shared resources. One by one product family was moved to its new location. It took 2 months to relocate all machines. It is easier to relocate only needed tools and accessories. 1^st and 2^nd step from 5S method, the sorting and set in order, were done on each work cell during each replacement. It was done by operators working in the process, monitored by area supervisor. Last 3 of 5s steps were done in machines new location.

Lean principle no 4

Manpower and machines capacities were calculated in parallel with relocation activities. It was important to do it based on real data. Engineers studied current processes, measured, and collected cycle times data product by product, process by process. There were identified bottle-neck processes. Some small improvements helped, if capacities were just above their limit. But there were some new hires required on some places. However, during this study team counted with 25% improvement across processes by eliminating wastes. Therefore, some bottle-necks disappeared spontaneously, and not all hires were needed.

Capacities measurement also showed some challenges with quality in machining and testing processes. 10% reworks prolongs total cycle time. It complicates product stream, and on-time delivery, of course. Improvement project to improve quality was launched.

How to do Brainstorming? (+template) – read here

Takt Time/ Cycle Time Excel Calculator to download:

There are 2 list in the spreadsheet. One with example described in this article, second blank. I have used 3 different colours to differentiate data needed to be filled and automatic calculations. Green fields are required to be filled by you. Yellow ones are steps automatic calculations. There are all steps described in this article. Blue are TT, CT, LT results.

There are 4 calculating windows. FIrst is about available time in a month. FIll in callendar days, weekend and hollyday days. Required is also efficiency filling you count with. I recommend to use 0.65 to 0.75 efficiency. based on how fast is you process.

Following information is about number of shifts and hours you count with in the shift. Shifts are in spreadsheet rows. Estimate discrepancy ratio, downtimes, required maintenance. Fill in customer demand or targeted production, the production you would like to reach in that particular month.

Last two windows are final calculation windows. You find Takt Time calculated first, then Cycle Time. Lead Time is in the different window. You must enter all cycle times for each process. I recommend to get those numbers by measuring real cycle times by using stopwatches.

Here is a free link to download all 3 indicators.

I do videos, blog posts, and all templates in my free time. I will appreciate if you can donate me a cup of cofee, for more energy in my creation. (1 dollar counts, too 😉 Click on this link: I would like to support Erik in his effort

Scheduling production

Team was thinking hard which point in production to be scheduled. Following set up was done.

Finish goods supermarket work as a Kanban system. It supports customer requirements. There is an empty space in the warehouse, once finished product is sold to the customer. Empty spot triggers pull order to start missing item manufacturing. New processes set up improved total lead time by 35%. New items are delivered to the empty warehouse spot very fast now.

Download DMAIC tools list, If you would like to follow six sigma tools to improve any process, I suggest allways to use this proven method.

Lean principle no 5

Team focused on controlling new processes set up. Training of people on normal situation, helped with process control. Normal situation in the production is, when all machines are running without any downtime, all people are present, all material available, there is no process interruption. To run on normal situations is ultimate goal.

Team created detailed guidance on most often non-standard situations, like machine is down, or there is sickness leave. Summer vacation scheduling was developed, to level production as much as possible.

There is daily PDCA walk around whole production. Each workstation have PDCA table with previous shifts problem descriptions. Dedicated problem owner runs immediate actions to stabilize situation. There is long term action created and progress monitored to improve problem root-cause.

Material just flows through the production now. Every team member knows what to do, how to react in most of situations. Problems are resolved much faster, people are working with much less stress. Now continuous improvement methodology is used to help improving every process in a time.

Results after lean change

Team carefully monitored new process, and reacted fast on daily challenges. Production structure was enlarged by team leaders, with responsibility of 5 to 7 people. Team leaders role is to help solving minor issues within their group. Aim of this role is to speed up routine operations.

Investments to this change were about 40 thousands US dollars. But it worth it. On-time delivery is 98%, which is fantastic result. Quality is improved to 99.98%, but there is still quality DMAIC project ongoing, that will deliver improved results within 3 months. By proper scheduling, and production leveling, inventory was reduced to 8 million dollars.

How to use Pareto? (+excel template) – read here

Celebration of accomplishments

Great accomplishments by car mania team were celebrated with entire facility team members. As a special reward, project core team went to dinner to the best restaurant in the city. Process was handovered, and it is controlled by process owner.

Lean takeaways

• Follow methodology – 5 steps
• Teach people on 8 wastes
• Start changing culture – on continuous neverending improvements
• Involve as much as team members in changes
• Encourage your team members by heart
• Do not be afraid of failures

How to run first Six Sigma green belt project? -read here

Download Value stream transformation list

This list will help you with changes. Steps in this list are following 5 lean principles.

Yes, it is little challenging, but, it is doable.

How to do Value stream mapping? – read here

There are 4 phases. Stabilize, Flow, Pull, and Level. Each phase have several steps and tools used. Understanding of current and future state is developed In the stabilize phase. Flow phase is mainly about machine and manpower capacities and balancing them. Pull phase is about scheduling products through value stream. Level phase helps with improvements standardization.

VST tool list – download for free

I do videos, blog posts, and all templates, in my free time. I will appreciate if you can donate me a cup of cofee, for more energy in my creation. (1 dollar donation counts, too 😉 Click on this link: I would like to support Erik in his effort

Do not forget to visit and subscribe my YouTube channel. I am uploading Six Sigma, Lean and Project oriented videos regurarly. So, stay tuned.

Yours sincerely Erik.