Hoshin Kanri

Hoshin Kanri

The Big Idea – Align company goals (Strategy) with the plans of middle management (Tactics) and work performed by employees (Operations) to ensure that everyone is pulling in the same direction at the same time.

  • WHAT IS HOSHIN KANRI
  • IMPLEMENTING HOSHIN KANRI
  • ADDITIONAL CONSIDERATIONS

WHAT IS HOSHIN KANRI?

Hoshin Kanri (also called Policy Deployment) is a method for ensuring that the strategic goals of a company drive progress and action at every level within that company. This eliminates the waste that comes from inconsistent direction and poor communication.

Hoshin Kanri strives to get every employee pulling in the same direction at the same time. It achieves this by aligning the goals of the company (Strategy) with the plans of middle management (Tactics) and the work performed by all employees (Operations).

Hoshin Kanri creates an organic flow of information that runs through an entire company – much like the human nervous system runs through the entire body. Goals and KPIs travel from the top down, while results are returned from the bottom up.

IMPLEMENTING HOSHIN KANRI

One way to understand Hoshin Kanri is to walk through a typical set of implementation steps.

Step One – Create a Strategic Plan

Hoshin Kanri starts with a strategic plan (e.g. an annual plan) that is developed by top management to further the long range goals of the company. This plan should be carefully crafted to address a small number of critical issues. Key items to consider when developing the strategic plan are:

Focus on Five

Focus on five goals (or less). The mere act of writing down goals can create a (false) feeling of progress – and more goals feels like more progress. In reality, a goal only expresses intent. Taking action is the hard part. Every company has finite resources and energy…and a limited attention span. Focusing on a small number of goals makes success far more likely than dissipating energy across dozens of goals. Or looking at it another way…if everything is important; nothing is important.

Effectiveness First

There is a well-known distinction between efficiency and effectiveness: efficiency is doing things right while effectiveness is doing the right things. Strategic goals need to be effective – doing the right things to take the company to the next level. If a goal doesn’t have that kind of broad impact it’s probably not strategic.

Evolution vs. Revolution

Goals can be evolutionary (incremental goals usually achieved through continuous improvement) or revolutionary (breakthrough changes with dramatic scope). Both are legitimate and important forms of improvement.

Top Down Consensus

Top management is responsible for developing the strategic plan – it’s one of their most important responsibilities. But taking the time to consult with middle management serves two useful purposes:

  • It provides additional perspective and feedback that helps craft stronger, more informed strategies
  • It creates a sense of shared responsibility for the plan and significantly more buy-in from middle management

Careful KPIs

Key Performance Indicators (KPIs) provide the means for tracking progress towards goals. They also have a considerable ability to drive behavior. So choose KPIs with care. It is essential to think through whether the selected KPIs will drive the desired behavior without unintended side effects. For example, more than one company has found that a single-minded pursuit of efficiency can lead to unintended consequences such as excess inventory (larger batches means less changeovers) and reduced quality (a subtle “fix it later” pressure creeps in to keep lines running).

Own the Goal

Every goal should have an owner – a facilitator and coach who has the skills and authority to successfully see the goal through to conclusion.

  • As a facilitator, the goal owner will remove roadblocks and smooth the path to progress
  • As a coach, the goal owner will track progress and intercede if things get off track

Step Two – Develop Tactics

At a departmental level, mid-level managers develop tactics that will best achieve the goals as laid out by top management. One of the most important aspects of this process is “catchball”…a back and forth exchange with top management to ensure that the strategy and goals are well understood, that there is strong alignment between strategy and tactics, and that the KPIs are meaningful and appropriate.

Tactics may change throughout the course of fulfilling the strategy; flexibility and adaptability are important characteristics of the process. As a result it is helpful to have regular progress reviews (e.g. monthly), at which time results are evaluated and tactics are recalibrated.

Step Three – Take Action

At the plant floor level, supervisors and team leaders work out the operational details to implement the tactics as laid out by mid-level managers. Once again, the principle of catchball applies, to ensure that activities at the plant floor (and other areas of the company) are strongly aligned with tactics and strategy.

This is the level where goals and plans are transformed into results. This is Gemba (the place where real action occurs). Therefore, managers should stay closely connected to activity at this level (e.g. regularly practicing “management by wandering around”).

Step Four – Review and Adjust

So far the steps have focused on cascading strategic goals down through levels of the company; from top management all the way down to the plant floor. Equally important is the flow of information in the other direction – information about progress and results. It is this second flow that creates a closed loop system – enabling control and adjustment of the entire process.

Progress should be tracked continuously and reviewed formally on a regular basis (e.g. monthly). These progress checkpoints provide an opportunity for adjustment of tactics and their associated operational details.

ADDITIONAL CONSIDERATIONS

It’s for Everyone

Hoshin Kanri is not as well-known or “popular” as some of the other lean tools – but it is an extremely valuable tool. Although it fits most naturally within a well-developed lean culture, where continuous improvement is firmly ingrained at all levels of a company, virtually any organization can benefit from its core principles:

  • Visionary strategic planning (focusing on the things that really matter)
  • Catchball (building workable plans through consensus)
  • Measuring progress (carefully selecting KPIs that will drive the desired behavior)
  • Closing the loop (using regular follow-up to keep progress on track)

Benefits of a Flat Management Structure

It should be pretty obvious that a flattened management structure is beneficial to Hoshin Kanri. The fewer levels there are, the easier it is to cascade goals down and the fewer opportunities there are for strategy to be diminished through successive layers of translation. Fewer layers also means faster decision making.

Some very large organizations have flat management structures. One of the best known is Nucor Steel, which has approximately 12,000 employees and only four layers of management between the CEO and line-level employees. In fact, a common joke is you can go from Janitor to CEO at Nucor with only five promotions. In contrast, a typical Fortune 500 company has 8 to 10 layers of management.

Create a Shared Vision

People perform best when they have a purpose. When they understand not just what to do – but why it’s important. One of the benefits of Hoshin Kanri is that it can help to create that purpose; providing focus and drive towards specific and important goals.

So, it’s worth putting some effort into creating a shared vision of the strategic plan (the future state; the destination) and associated tactics (the path to get there). Make sure as many employees as possible are given an opportunity to understand why the strategic goals are important and how the tactics and operational details support those goals.

Andon

Andon

  • Quick Definition
  • Expanded Definition
  • Benefits
  • Related Topics

Quick Definition

In lean manufacturing, Andon refers to any visual display that shows status information on the plant floor. Its origin is in the Japanese word for “paper lantern”. The first Andons in manufacturing were simple lights that enabled operators to signal line status based on color: green for normal operation; yellow when assistance was needed; and red when the line was down. Today, more sophisticated visual displays are often used for Andons, but their purpose – efficient, real-time communication of plant floor status – remains the same.

Expanded Definition

One of the earliest descriptions of Andons can be found in the book Toyota Production System: Beyond Large-Scale Production, written by Taiichi Ohno, creator of the Toyota Production System. Mr. Ohno describes line stop boards that show “the location and nature of trouble situations at a glance”. He outlines a three-color system of lights controlled by the operator, where green indicates normal operation; yellow indicates a call for an adjustment; and red alerts that the line is stopped.

Over time, the nature and role of Andon systems has evolved. Visual cues are sometimes reinforced with audible cues, and basic stack lights are sometimes replaced with more sophisticated message boards. Nonetheless, the basic principles remain the same:

  • Show line status at a glance (e.g. running, stopped, changeover).
  • Enable operators to call for help as needed (e.g. from maintenance or supervisors).

One of the key principles underlying Andon systems is empowerment. By giving operators the authority to stop the line and call for assistance – for instance, to address a quality issue – Andons promote employee involvement in the production process.

Another key principle underlying Andon systems is efficient communication. Andons are a simple, consistent, and instantaneous method of conveying information. Simplicity comes from focusing on a few key pieces of information. Consistency comes from applying visual cues in a standardized way (e.g. green is normal, amber is slightly deviating, and red requires immediate attention). Instantaneous comes from using lights or message boards on the plant floor that can be seen over long distances.

Andon systems also encourage companies to better define the role of plant floor employees to address questions such as:

  • What does “normal operation” mean?
  • When should an operator call for assistance?
  • When should an operator stop the line?

At their core, Andons both empower and inform the plant floor. They enable operators to add more value to the production process, and to be an integral part of process improvements. Although the underlying technologies continue to evolve, the value and benefits of timely communication and shared information remain the same.

Benefits

Andons are powerful and effective communication tools that:

  • Bring immediate attention to problems as they occur in the manufacturing process.
  • Provide a simple and consistent mechanism for communicating information on the plant floor.
  • Encourage immediate reaction to quality, down time, and safety problems.
  • Improve accountability of operators by increasing their responsibility for “good” production and empowering them to take action when problems occur.
  • Improve the ability of supervisors to quickly identify and resolve manufacturing issues.

Related Topics

Visual Factory

Visual Factory emphasizes the role of visual communication, and more broadly the role of information sharing, in empowering and motivating employees, and aligning their efforts with the goals of the company. Andons are an important part of establishing a Visual Factory.

In a lean manufacturing environment, the time and resources devoted to communicating information are considered waste, as they are not part of the value stream, or what the customer is willing to pay for. Since communication is nonetheless essential, it must be achieved in the most efficient way possible.

Information that is broadcast visually travels much faster than information conveyed verbally or in written form. It is also more “error-proof”, since everyone is seeing it first hand, rather than down a chain, where it can be misinterpreted. Thus, Andons provide a key element to efficient communication.

Jidoka

The process of stopping a production line in order to fix problems as they occur is referred to as Jidoka. Jidoka is a fundamental component of the Toyota Production System. In fact, it is one of the two main pillars of TPS (the other is Just-In-Time production).

The goal of Jidoka is to minimize defects by correcting problems at their source and thereby continually building quality into the production process. When a problem occurs, root cause analysis is used to understand the true nature of the problem, and countermeasures are implemented to help ensure that the problem does not recur.

Andons are an essential element of Jidoka, as they provide operators with a practical and effective mechanism for instantly calling attention to problems.

Hoshin Kanri

The alignment and broadcasting of strategic objectives from the top to the bottom of a company is known as Hoshin Kanri. With Hoshin Kanri:

  • Top management sets strategic goals.
  • Middle management develops tactics to achieve those goals.
  • Plant floor supervisors and operators implement the tactics – making them operational.

For example, top management may determine that, in order to stay competitive, the company must reduce production costs by 10%. Middle management then develops tactics to achieve this strategic goal. One of these tactics may be to implement a program for monitoring and improving OEE. Since OEE is a somewhat abstract concept, supervisors suggest using an Andon for the plant floor that displays Target, Actual and Efficiency information so that operators can pace their work according to Takt Time.

In this example, Andons provide a link to the plant floor that visually reinforces strategy and tactics developed at higher levels of the company. Andons can alert plant floor employees to a variety of deviations from operational goals, and when patterns of problems emerge, Kaizen techniques can be applied to make the necessary process improvements.

Kaizen / Continuous Improvement

Kaizen/Continuous Improvement

  • Quick Definition
  • Expanded Definition
  • Benefits

Quick Definition

Kaizen is the lean manufacturing term for continuous improvement and was originally used to describe a key element of the Toyota Production System. In use, Kaizen describes an environment where companies and individuals proactively work to improve the manufacturing process.

Expanded Definition

Kaizen events have become commonplace at companies that practice lean manufacturing. But these events are only a portion of the complete Kaizen process. Traditionally companies have focused on a project based path to change. Organizations that work toward a state of constant improvement understand that Kaizen events are a tool that allows them to focus resources and employees on process improvements. By understanding the current process and the future state goals you can implement Kaizen. Creating a corporate culture of continuous improvement will allow you to adapt to a changing marketplace and exceed customer expectations.

A critical component of Kaizen is an unbiased view of the current state. Particularly when companies are profitable and customers are generally satisfied, changes to any process can seem both a waste and a risk. There may be bias against change when the people who created a process are the same people who need to continuously change the process. In order to overcome this it is necessary to understand the current process, particularly any shortcomings. By studying, understanding and documenting the current process you can identify areas that would benefit from change.

Note: It is extremely important to focus on change and discard any thoughts of blame. Too many companies waste time determining who was “at fault”. Successful companies make the process better.

Once the current state is understood and documented and the future state defined you are then ready to create and implement your improvement process. The most successful improvements involve everyone who is part of the process that is being changed. The actual steps and methods of changing aren’t the focus of Kaizen. There are several tested and documented methods of improving a process. Which tools and techniques are suitable for a specific situation must be determined by all the factors involved whether it is a SMED (Single Minute Exchange of Die), Kanban, or Poka-Yoke that will best address the issue; until they are implemented they aren’t improving the process.

The nature of Kaizen actually becomes most evident after a process change. By benchmarking the process before the change and comparing the results after, the net effect can be measured. Often, after a project is completed, everyone involved moves on to other issues. Creating a company culture of continuous incremental improvement will increase the potential for success. Through a continuous cycle of identification, inspection and implementation you have the ability to become a little better every day.

Benefits

Someone is going to come up with a better, faster or cheaper way. It will either be you or your competition. Look at your lead time from 5 years ago and compare that to how you perform today. Chances are you’re a lot faster, now. When you look ahead 5 years; will you be where you need to be? Adaptation of a philosophy of continuous improvement and Kaizen will help you:

  • Proactively improve production
  • Reduce manufacturing waste
  • Increase employee involvement
  • Increase customer satisfaction

Companies that continuously improve, continuously succeed.

Lean Glossary

Lean Glossary

DEFINITIONS

5S

Organize the work area:

  • Sort (eliminate that which is not needed)
  • Set In Order (organize remaining items)
  • Shine (clean and inspect work area)
  • Standardize (write standards for above)
  • Sustain (regularly apply the standards)

Andon

Visual feedback system for the plant floor that indicates production status, alerts when assistance is needed, and empowers operators to stop the production process.

Autonomous Maintenance

A method from TPM (Total Productive Maintenance) for engaging operators to carry out basic maintenance activity (such as cleaning, lubrication, and inspection activity).

Bottleneck Analysis

Identify which part of the manufacturing process limits the overall throughput and improve the performance of that part of the process.

Continuous Flow

Manufacturing where work-in-process smoothly flows through production with minimal (or no) buffers between steps of the manufacturing process.

Drum-Buffer-Rope

A method from the Theory of Constraints for synchronizing production to the constraint while minimizing inventory and work-in-process. The “Drum” is the constraint. The “Buffer” is the inventory needed to maintain production. The “Rope” is a signal from the constraint when a specific amount of inventory has been consumed.

Gemba (The Real Place)

A philosophy that reminds us to get out of our offices and spend time on the plant floor – the place where real action occurs.

Heijunka (Level Scheduling)

A form of production scheduling that purposely manufactures in much smaller batches by sequencing (mixing) product variants within the same process.

Hoshin Kanri (Policy Deployment)

Align the goals of the company (Strategy), with the plans of middle management (Tactics) and the work performed on the plant floor (Action).

Jidoka (Autonomation)

Design equipment to partially automate the manufacturing process (partial automation is typically much less expensive than full automation) and to automatically stop when defects are detected.

Just-In-Time (JIT)

Pull parts through production based on customer demand instead of pushing parts through production based on projected demand. Relies on many lean tools, such as Continuous Flow, Heijunka, Kanban, Standardized Work and Takt Time.

Kaizen (Continuous Improvement)

A strategy where employees work together proactively to achieve regular, incremental improvements in the manufacturing process.

Kanban (Pull System)

A method of regulating the flow of goods both within the factory and with outside suppliers and customers. Based on automatic replenishment through signal cards that indicate when more goods are needed.

KPIs (Key Performance Indicators)

Metrics designed to track and encourage progress towards critical goals of the organization. Strongly promoted KPIs can be extremely powerful drivers of behavior – so it is important to carefully select KPIs that will drive desired behavior.

Line Control

A technique from the Theory of Constraints for automatically controlling machines on synchronized autonomous production lines to maximize throughput at the constraint.

Muda (Waste)

Anything in the manufacturing process that does not add value from the customer’s perspective.

Overall Equipment Effectiveness (OEE)

Framework for measuring productivity loss for a given manufacturing process. Three categories of loss are tracked:

  • Availability (e.g. downtime)
  • Performance (e.g. slow cycles)
  • Quality (e.g. rejects)

PDCA (Plan, Do, Check, Act)

An iterative methodology for implementing improvements:

  • Plan (establish plan and expected results)
  • Do (implement plan)
  • Check (verify expected results achieved)
  • Act (review and assess; do it again)

Poka-Yoke (Error Proofing)

Design error detection and prevention into production processes with the goal of achieving zero defects.

Root Cause Analysis

A problem solving methodology that focuses on resolving the underlying problem instead of applying quick fixes that only treat immediate symptoms of the problem. A common approach is to ask why five times – each time moving a step closer to discovering the true underlying problem.

Single Minute Exchange of Die (SMED)

Reduce setup (changeover) time to less than 10 minutes. Techniques include:

  • Convert setup steps to be external (performed while the process is running)
  • Simplify internal setup (e.g. replace bolts with knobs and levers)
  • Eliminate non-essential operations
  • Create standardized work instructions

Six Big Losses

Six categories of productivity loss that are almost universally experienced in manufacturing:

  • Breakdowns
  • Setup/Adjustments
  • Small Stops
  • Reduced Speed
  • Startup Rejects
  • Production Rejects

SMART Goals

Goals that are: Specific, Measurable, Attainable, Relevant, and Time-Specific.

Standardized Work

Documented procedures for manufacturing that capture best practices (including the time to complete each task). Must be “living” documentation that is easy to change.

Takt Time

The pace of production (e.g. manufacturing one piece every 34 seconds) that aligns production with customer demand. Calculated as Planned Production Time / Customer Demand.

Total Productive Maintenance (TPM)

A holistic approach to maintenance that focuses on proactive and preventative maintenance to maximize the operational time of equipment. TPM blurs the distinction between maintenance and production by placing a strong emphasis on empowering operators to help maintain their equipment.

Toyota Production System (TPS)

A manufacturing strategy developed by Toyota Motor Corporation of Japan over a period of many years. TPS focuses on the complete elimination of waste from the manufacturing process, and is the progenitor of lean manufacturing.

Value Stream Mapping

A tool used to visually map the flow of production. Shows the current and future state of processes in a way that highlights opportunities for improvement.

Visual Factory Visual indicators, displays and controls used throughout manufacturing plants to improve communication of information.

The Essence of Lean

The Essence of Lean

The Big Idea – In order to improve efficiency, effectiveness, and profitability, focus relentlessly on eliminating all aspects of the manufacturing process that add no value from your customer’s perspective.

OVERVIEW

  • SEVEN DEADLY WASTES
  • AN EIGHTH DEADLY WASTE

OVERVIEW

The core idea of lean manufacturing is actually quite simple…relentlessly work on eliminating waste from the manufacturing process.

So, what is waste? It can take many forms, but the basic idea is to eliminate anything and everything that does not add value from the perspective of your customer.

Another way to look at lean manufacturing is as a collection of tips, tools, and techniques (i.e. best practices) that have been proven effective for driving waste out of the manufacturing process.

SEVEN DEADLY WASTES

Let’s talk a bit more about waste. Traditional lean identifies seven key areas of waste – typically referred to as the Seven Deadly Wastes. These are described below along with suggested countermeasures. Don’t worry if the countermeasures are not immediately “actionable” for you – right now they can be considered simply as a roadmap for the future.

Overproduction

What is Overproduction?

Making something before it is truly needed. This is a particularly serious form of waste because it leads to excess inventory that is often used to mask other underlying problems and inefficiencies.

What are Countermeasures for Overproduction?

  • Pace production so the rate of manufacturing matches the rate of customer demand (Takt Time).
  • Use a pull system to control how much is manufactured (Kanban).
  • Reduce setup times so that smaller batches can be economically manufactured (SMED).

Waiting

What is Waiting?

Time when work-in-process is waiting for the next step in production (no value is being added). It can be truly illuminating to look at the time from order to shipment and ask – how much of that time is actually spent on true value-added manufacturing.

What are Countermeasures for Waiting?

  • Design processes so that the flow is continuous and there are minimal (or no) buffers between steps in production (Continuous Flow).
  • Use standardized work instructions to ensure that a consistent method and consistent times are used for each step of production (Standardized Work).

Transport

What is Transport?

Unnecessary movement of raw materials, work-in-process or finished goods.

What are Countermeasures for Transport?

  • Design a linear, sequential flow from raw materials to finished goods (Value Stream Mapping).
  • Make sure work-in-process is not placed into inventory (Continuous Flow).
  • Avoid continual changing of job priorities (Theory of Constraints).

Motion

What is Motion?

Unnecessary movement of people (movement that does not add value).

What are Countermeasures for Motion?

  • Ensure that work areas are logically organized (5S).
  • Consider alternate arrangements of equipment that reduce motion (Value Stream Mapping).

Overprocessing

What is Overprocessing?

More processing than is needed to produce what the customer requires. This is often one of the more difficult wastes to detect and eliminate.

What are Countermeasures for Overprocessing?

  • Compare customer requirements to manufacturing specifications (Kaizen).
  • Look for potential simplifications to the manufacturing process (Kaizen).

Inventory

What is Inventory?

Product (raw materials, work-in-process, or finished goods) quantities that go beyond supporting the immediate need.

What are Countermeasures for Inventory?

  • Bring raw materials in only as they are needed (Just-In-Time).
  • Reduce or eliminate buffers between steps in production (Continuous Flow).
  • Refer to Overproduction countermeasures (Takt Time, Kanban, and SMED).

Defects

What are Defects?

Production that is scrap or requires rework.

What are Countermeasures for Defects?

  • Design processes so they are less likely to produce defects (Poka-Yoke).
  • Design processes to detect abnormalities so they can be immediately corrected (Jidoka).
  • Look for the single most frequent defect and determine why it occurs (Root Cause Analysis).
  • Create work instructions that provide a consistent method of manufacturing the part. (Standardized Work).

Lean concepts become a lot more intuitive and easy-to-understand when they are traced to the ultimate goal – eliminating waste.

AN EIGHTH DEADLY WASTE

An extremely important form of waste that is not represented within the Seven Deadly Wastes is unused human potential. This form of waste results in all sorts of lost opportunities (e.g. lost motivation, lost creativity, and lost ideas).

One of the reasons that this from of waste is often underemphasized or even ignored at companies is that responsibility for it lies squarely on the shoulders of management. Unused human potential often results from management policies and management styles that diminish employee contributions. By way of contrast, developing strong coaching skills for managers can be very effective in strengthening employee contributions.

Top 25 Lean Tools

Top 25 Lean Tools

The Big Idea – Lean has a very extensive collection of tools and concepts. Surveying the most important of these, understanding both what they are and how they can help is an excellent way to get started.

EXPLORING LEAN

  • 25 ESSENTIAL LEAN TOOLS

EXPLORING LEAN

There are a lot of great ideas to explore in lean. So where should you begin?

One way to start is to survey the most important lean tools, with a brief description and short explanation of how each tool can improve your manufacturing operations.

If a tool captures your interest or resonates with you in some way – explore it further to decide if it is something to pursue now…or later. Many of these tools can be successfully used in isolation, which makes it much easier to get started. On the other hand, the benefits will compound as more tools are used, as they do support and reinforce each other.

25 ESSENTIAL LEAN TOOLS

5S

What is 5S?

Organize the work area:

  • Sort (eliminate that which is not needed)
  • Set In Order (organize remaining items)
  • Shine (clean and inspect work area)
  • Standardize (write standards for above)
  • Sustain (regularly apply the standards)

How does 5S help?

Eliminates waste that results from a poorly organized work area (e.g. wasting time looking for a tool).

Andon

What is Andon?

Visual feedback system for the plant floor that indicates production status, alerts when assistance is needed, and empowers operators to stop the production process.

How does Andon help?

Acts as a real-time communication tool for the plant floor that brings immediate attention to problems as they occur – so they can be instantly addressed.

Bottleneck Analysis

What is Bottleneck Analysis?

Identify which part of the manufacturing process limits the overall throughput and improve the performance of that part of the process.

How does Bottleneck Analysis help?

Improves throughput by strengthening the weakest link in the manufacturing process.

Continuous Flow

What is Continuous Flow?

Manufacturing where work-in-process smoothly flows through production with minimal (or no) buffers between steps of the manufacturing process.

How does Continuous Flow help?

Eliminates many forms of waste (e.g. inventory, waiting time, and transport).

Gemba (The Real Place)

What is Gemba?

A philosophy that reminds us to get out of our offices and spend time on the plant floor – the place where real action occurs.

How does Gemba help?

Promotes a deep and thorough understanding of real-world manufacturing issues – by first-hand observation and by talking with plant floor employees.

Heijunka (Level Scheduling)

What is Heijunka?

A form of production scheduling that purposely manufactures in much smaller batches by sequencing (mixing) product variants within the same process.

How does Heijunka help?

Reduces lead times (since each product or variant is manufactured more frequently) and inventory (since batches are smaller).

Hoshin Kanri (Policy Deployment)

What is Hoshin Kanri?

Align the goals of the company (Strategy), with the plans of middle management (Tactics) and the work performed on the plant floor (Action).

How does Hoshin Kanri help?

Ensures that progress towards strategic goals is consistent and thorough – eliminating the waste that comes from poor communication and inconsistent direction.

Jidoka (Autonomation)

What is Jidoka?

Design equipment to partially automate the manufacturing process (partial automation is typically much less expensive than full automation) and to automatically stop when defects are detected.

How does Jidoka help?

After Jidoka, workers can frequently monitor multiple stations (reducing labor costs) and many quality issues can be detected immediately (improving quality).

Just-In-Time (JIT)

What is Just-In-Time?

Pull parts through production based on customer demand instead of pushing parts through production based on projected demand. Relies on many lean tools, such as Continuous Flow, Heijunka, Kanban, Standardized Work and Takt Time.

How does Just-In-Time help?

Highly effective in reducing inventory levels. Improves cash flow and reduces space requirements.

Kaizen (Continuous Improvement)

What is Kaizen?

A strategy where employees work together proactively to achieve regular, incremental improvements in the manufacturing process.

How does Kaizen help?

Combines the collective talents of a company to create an engine for continually eliminating waste from manufacturing processes.

Kanban (Pull System)

What is Kanban?

A method of regulating the flow of goods both within the factory and with outside suppliers and customers. Based on automatic replenishment through signal cards that indicate when more goods are needed.

How does Kanban help?

Eliminates waste from inventory and overproduction. Can eliminate the need for physical inventories (instead relying on signal cards to indicate when more goods need to be ordered).

KPIs (Key Performance Indicators)

What are KPIs?

Metrics designed to track and encourage progress towards critical goals of the organization. Strongly promoted KPIs can be extremely powerful drivers of behavior – so it is important to carefully select KPIs that will drive desired behavior.

How do KPIs help?

The best manufacturing KPIs:

  • Are aligned with top-level strategic goals (thus helping to achieve those goals)
  • Are effective at exposing and quantifying waste (OEE is a good example)
  • Are readily influenced by plant floor employees (so they can drive results)

Muda (Waste)

What is Muda?

Anything in the manufacturing process that does not add value from the customer’s perspective.

How does Muda help?

It doesn’t. Muda means ‘waste’. The elimination of muda (waste) is the primary focus of lean manufacturing.

Overall Equipment Effectiveness (OEE)

What is Overall Equipment Effectiveness?

Framework for measuring productivity loss for a given manufacturing process. Three categories of loss are tracked:

  • Availability (e.g. downtime)
  • Performance (e.g. slow cycles)
  • Quality (e.g. rejects)

How does Overall Equipment Effectiveness help?

Provides a benchmark/baseline and a means to track progress in eliminating waste from a manufacturing process. 100% OEE means perfect production (manufacturing only good parts, as fast as possible, with no downtime).

PDCA (Plan, Do, Check, Act)

What is PDCA?

An iterative methodology for implementing improvements:

  • Plan (establish plan and expected results)
  • Do (implement plan)
  • Check (verify expected results achieved)
  • Act (review and assess; do it again)

How does PDCA help?

Applies a scientific approach to making improvements:

  • Plan (develop a hypothesis)
  • Do (run experiment)
  • Check (evaluate results)
  • Act (refine your experiment; try again)

Poka-Yoke (Error Proofing)

What is Poka-Yoke?

Design error detection and prevention into production processes with the goal of achieving zero defects.

How does Poka-Yoke help?

It is difficult (and expensive) to find all defects through inspection, and correcting defects typically gets significantly more expensive at each stage of production.

Root Cause Analysis

What is Root Cause Analysis?

A problem solving methodology that focuses on resolving the underlying problem instead of applying quick fixes that only treat immediate symptoms of the problem. A common approach is to ask why five times – each time moving a step closer to discovering the true underlying problem.

How does Root Cause Analysis help?

Helps to ensure that a problem is truly eliminated by applying corrective action to the “root cause” of the problem.

Single-Minute Exchange of Dies (SMED)

What is Single-Minute Exchange of Dies?

Reduce setup (changeover) time to less than 10 minutes. Techniques include:

  • Convert setup steps to be external (performed while the process is running)
  • Simplify internal setup (e.g. replace bolts with knobs and levers)
  • Eliminate non-essential operations
  • Create Standardized Work instructions

How does Single-Minute Exchange of Dies help?

Enables manufacturing in smaller lots, reduces inventory, and improves customer responsiveness.

Six Big Losses

What is Six Big Losses?

Six categories of productivity loss that are almost universally experienced in manufacturing:

  • Breakdowns
  • Setup/Adjustments
  • Small Stops
  • Reduced Speed
  • Startup Rejects
  • Production Rejects

How does Six Big Losses help?

Provides a framework for attacking the most common causes of waste in manufacturing.

SMART Goals

What are SMART Goals?

Goals that are: Specific, Measurable, Attainable, Relevant, and Time-Specific.

How do SMART Goals help?

Helps to ensure that goals are effective.

Standardized Work

What is Standardized Work?

Documented procedures for manufacturing that capture best practices (including the time to complete each task). Must be “living” documentation that is easy to change.

How does Standardized Work help?

Eliminates waste by consistently applying best practices. Forms a baseline for future improvement activities.

Takt Time

What is Takt Time?

The pace of production (e.g. manufacturing one piece every 34 seconds) that aligns production with customer demand. Calculated as Planned Production Time / Customer Demand.

How does Takt Time help?

Provides a simple, consistent and intuitive method of pacing production. Is easily extended to provide an efficiency goal for the plant floor (Actual Pieces / Target Pieces).

Total Productive Maintenance (TPM)

What is Total Productive Maintenance?

A holistic approach to maintenance that focuses on proactive and preventative maintenance to maximize the operational time of equipment. TPM blurs the distinction between maintenance and production by placing a strong emphasis on empowering operators to help maintain their equipment.

How does Total Productive Maintenance help?

Creates a shared responsibility for equipment that encourages greater involvement by plant floor workers. In the right environment this can be very effective in improving productivity (increasing up time, reducing cycle times, and eliminating defects).

Value Stream Mapping

What is Value Stream Mapping?

A tool used to visually map the flow of production. Shows the current and future state of processes in a way that highlights opportunities for improvement.

How does Value Stream Mapping help?

Exposes waste in the current processes and provides a roadmap for improvement through the future state.

Visual Factory

What is Visual Factory?

Visual indicators, displays and controls used throughout manufacturing plants to improve communication of information.

How does Visual Factory help?

Makes the state and condition of manufacturing processes easily accessible and very clear – to everyone.

Improve Production Today

Improve Production Today

The Big Idea – Amazing improvements in productivity can be achieved through small daily increments. Each day, ask three simple questions (one each for Information, Decision, and Action) that lead to one specific action.

IMPROVING PRODUCTIVITY

  • THREE SIMPLE STEPS
  • THREE SIMPLE QUESTIONS
  • TOP TIPS

IMPROVING PRODUCTIVITY

A highly successful plant manager once said that one of the secrets to great manufacturing is to do simple things exceptionally well. In other words – great results can come from mastering a simple technique and applying it consistently.

This page outlines a powerful way of using this exact idea to reduce downtime and increase output (i.e. improve manufacturing productivity).

THREE SIMPLE STEPS

One of the most powerful ways to reduce downtime is for each of your line teams to identify and fix one problem each day. One small, incremental win that can be identified and fixed within the same day – today. The key to success is to follow these three simple steps to make it happen:

  1. Use plant floor Information to identify your losses.
  2. Review the losses and determine where to focus. Make your Decision based on the biggest loss or easiest win.
  3. Agree on one Action that can be completed during the shift to reduce the loss.

Does it work? Absolutely! In many cases, OEE (Overall Equipment Effectiveness) has improved by 10% or more when managers consistently apply this strategy over a period of at least three months.

THREE SIMPLE QUESTIONS

The best way to make this happen is to head to the factory floor and ask three simple questions (one for each step) that lead to one specific action. Here are some examples:

TOP TIPS

  • Be supportive: Help your team answer the questions. Coach them. Motivate them. Make it your mission to help them focus in a positive way – the only way to fully harness their skills, knowledge and abilities.
  • Be specific: When asking for information, ask for specific numbers. If production is “pretty good today”, what does that mean? Great manufacturing is precise, so be precise with your data.
  • Keep it real: Sure – every machine can be improved if it is redesigned, but can you accomplish that today? Keep the actions real and deliverable.
  • Follow up: When your team agrees on an action, write it down and follow up to ensure that it’s completed – and to check in on the result. Not every action will result in improvement, but that is OK. Your goal is to create a habit of actively seeking out small wins that add up over time.

Agile Manufacturing

Agile Manufacturing

The Big Idea – Manufacturers can achieve a significant structural advantage over offshore competitors by leveraging proximity to local markets to deliver new and highly personalized products with unprecedented speed.

  • WHAT IS AGILE MANUFACTURING?
  • WHY IS IT EFFECTIVE?
  • KEY ELEMENTS
  • RELATIONSHIP TO LEAN
  • IS AGILE FOR ME?

WHAT IS AGILE MANUFACTURING?

Let’s take a few moments to go beyond lean manufacturing. Let’s talk about agile manufacturing.

Agile manufacturing represents a very interesting approach to developing a competitive advantage in today’s fast-moving marketplace. It places an extremely strong focus on rapid response to the customer – turning speed and agility into a key competitive advantage. An agile company is in a much better position to take advantage of short windows of opportunity and fast changes in customer demand.

WHY IS IT EFFECTIVE?

Why is agile manufacturing an effective strategy?

  • Consumers love instant gratification. They are increasingly getting used to it and they are often willing to pay for it. For example, have you ever ordered a product with overnight shipping…waiting in eager anticipation?
  • Consumers love choice. They prefer to get a product exactly as they want it…without compromise.
  • Consumers are fickle. Their interests shift and move in unpredictable ways.

Agile is effective because it directly addresses these issues. It acknowledges the realities of the modern marketplace and transforms them into a competitive advantage.

Agile is of particular value for manufacturers in countries with large, well-developed local markets and high labor costs (e.g. the United States). It leverages proximity to the market by delivering products with an unprecedented level of speed and personalization, which simply cannot be matched by offshore competitors. It turns local manufacturing into a competitive advantage.

KEY ELEMENTS

There are four key elements for agile manufacturing:

  • Modular Product Design (designing products in a modular fashion that enables them to serve as platforms for fast and easy variation)
  • Information Technology (automating the rapid dissemination of information throughout the company to enable lightning fast response to orders)
  • Corporate Partners (creating virtual short-term alliances with other companies that enable improved time-to-market for selected product segments)
  • Knowledge Culture (investing in employee training to achieve a culture that supports rapid change and ongoing adaptation)

Agile manufacturing builds on lean with four key elements: Modular Product Design, Information Technology, Corporate Partners, and a Knowledge Culture.

RELATIONSHIP TO LEAN

Lean manufacturing is generally considered to be a precursor to agile. Many lean practices are also enablers for agile manufacturing. For example, manufacturing in small batches (or even better – manufacturing with one-piece flow), fast changeovers, and a culture of continuous improvement are all foundations that pave the road to agile manufacturing.

It is quite interesting to see how lean manufacturing techniques and tools can provide benefits in areas that extend beyond the core lean objective (improving productivity and profitability by relentlessly eliminating waste). Agile manufacturing is one such area.

IS AGILE FOR ME?

For any given business segment, ask the following questions:

  • Is there a potential market for a personalized fast-delivery version of one of our current products?
  • Is there a new product that we can develop that is within our company’s sphere of competence (or alternately that can be co-developed with a partner) that would strongly benefit from personalization and fast delivery?

For example, the 3-Day Car Project (in the UK) and the 5-Day Car Project (in the EU) focused on the idea of transforming automotive manufacturing into a build-to-order system (i.e. each car built for a specific customer order) with delivery times measured in days instead of weeks or months. Considering that the actual manufacturing time for a car is on the order of 1.5 days, this is a realistic goal – although perhaps not yet an attainable goal. But without a doubt – the company that gets there first will have created a significant competitive advantage.