Introduction to Kaizen, Kyosei and Obeya How to be Creative, Innovative, Fast & FlexibleDr. John Blakemore Principal Innovation Blakemore Consulting Intrernational National President Manufacturing Society of Australia Advisor to Australian Government on Innovation and Research and Development What is Lean Manufacturing? 1. Lean manufacturing is a Japanese Pull System which maximises throughput and profit with minimum inventory and waste. 2. This method is employed with great success by Toyota, Honda, Canon, Panasonic, and all globally competitive manufacturers. 3. This method employs, Value stream mapping, pull systems, SPC, Six Sigma and other Deming techniques. 4. The key words are KAIZEN & KYOSEI & OBEYA. Kaizen & Kyosei & Obeya • Kaizen = Continuous Improvement • Kyosei = Living and Working Together for the common good • Obeya = Big Room . Waste • Expenses (P&L Bal Sheet) • Resources ($. Material etc) • Planning System . People.Plant. Enhance People skill. Use capital more effectively 6. Improve Quality 8. Maximize Value Added 7. flexibility and Teamwork 3. Develop a Pull System with Continuous Flow 2. Have Less Defective Product and Process 9. Have Less Inventory and Waste 5. Achieve Shorter Lead Times 4.Aims of Lean Manufacturing 1.Improve Information and data flow . Reduced Time to Market for new Products 10. Honda. Kawai. Mazda. John Blakemore in Sept and Oct 2006. Canon. These lessons can be applied to all manufacturers. visited some of the best companies in the world including.Lessons from The Best Companies in the World 1. To the list of Lean we now need to add Kyosei. Toyota. (inc Karakuri and the German Meister system). 3. Panasonic as part of an investigation to add to our understanding of Lean Manufacture. . 2. Value Chain Service Value Creation Strategic Advantage for Winning Value Creation Customer Core Process Customer Value Buying Decision People Marketing&Sales Innovation Finance Operations S U P P L Y . MRP = push to FG 8. CONWIP is the most Robust System .The Magic of Pull Pull Systems: 1. CONWIP = pull from FG Supermarket 7. Make by Replacement or MTO 3. Kanban = linked processes 6. Aim at Continuous WIP (CONWIP) 5. Aim at limiting cycle time variability 4. Reduce and cap Work In Process(WIP) 2. 2. Once value is added to a product. No queuing.Continuous Flow 1. idle time or stopped flow 3. the product must continue to have value added. Remove or speed up the bottlenecks 4. Synchronise…look at a Formula 1 pitstop . WIP.Minimise Waste Waste can be in the form of : • Material • Time (total. Idle Time. FG) . Cleanups. • Inventory (RM. lead etc) • Space • Money • Tampering ( Changing ) • Double Handling • Breakdowns • Band-Aid “Solutions” • Setups. Japanese Inventory . Lead Time Reduction . Effectiveness . Key Performance Indicators 1. Waste % 6. Quality Indices 7. Delivery (OTD) 2. Net Tangible Value 9. Working Capital 5. 10. Quality. VA . Lead Times 3. EBIT. Stock Turns 4. Cost. ROI. Time to Market 8. RONA. Output & Defectives 140 120 Output 100 80 60 40 20 Defectives 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 0 Months .Pirelli .. Eliminate non value added steps 6. Use clear labels 5. Maximise use of Tools and Jigs 4. Run Time/ Total Time maximised 3. Keep the product moving to customer 2.Maximise Value Added 1. Push to Pull . Value Added PROCESS PARTS (6) 1 1 2 3 4 5 6 2 3 4 5 6 Setup(Preparation) Run(The Value Added Step) Maintenance (Preventive) Breakdown(Errors & rework) Idle(available to run but not utilised Cleanup VA = 2.(3)? = Run + Preventive Maintenance Eliminate • Breakdown • Idle • Setup? ( SMED) • Cleanup Concurrent Engineering . 120 Costs in the Supply Chain Labour A Now B OS Labour C QR 1 D QR 2 100 Costs as Percentage of Sales 80 60 40 20 0 Sales Gross Profit Expenses Net Profit Before Tax Elements . Manufacturing or Service? There is no such thing as a pure Manufacturing Company All companies are Service Driven . The Solution Customer Service Driven •Cooperative Culture •Strong Relationships •Team Cross Functional Structure •High Velocity •Accurate Information •Short Time Periods •Synchronised Processes •Pull not Push •Dynamic not Static Lean . 9. Pirelli : Output doubled. Computer Supplier: Loss $60. 10.Recent Achievements 1. inventory down. CSFB: $40M fr WC .000 . Aluminium Fabricator: Productivity doubled in 6 months 8.Warkworth Mine: Productivity Gain of 16% in 6 Months 12. NP from –5% sales to 15% profit 3. Loss to $40M EBITA 4. Tannery: Colour defects eliminated from 15% defective 5. OT D 32% to 95%.5M to $60. 14 Plastics Companies: All increased bottom line in 1 yr. service up. Speedo: QR to retailer. BHP to PVA: RM Inventory reduced from $1.000 to profit $1. Hazard: 800% productivity gain in 18months 2. Steel Fabricator: Plant redesign. Mat Handling $ halved 6.Geelong Cement: Productivity Gain of 25% in 6 months 11.0M I year 7. What Has Been Done (Shaw Australia) $300M T/O EBITA for 6 Months Periods 25 20 15 Millions of Dollars 10 5 0 July Dec2001 Jan-June2002 Jul-Dec2002 Jan-June2002 Jul-Dec2003 Fcast -5 6 Months Period . Pirelli (Italy. Australia) (Loss to Profit then Float) 140 120 Output 100 80 60 40 20 Defectives 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 0 Months .Lean Production. Removing Variation. Cr in Effluent (Saving a Tannery) CHROMIUM(Cr) CONTENT(ppm) EFFLUENT 60 50 PARTS PER MILLION(ppm) 40 30 20 10 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 TWO WEEK INTERVALS . The End .