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Darren Becks

on 2 June 2015

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Transcript of LEAN


achieving a LEAN operation involves assessing demands before defining and creating the process
reducing waste and wait times to provide quality services for minimum costs
there are 6 goals, each with it's own criteria
Extend Demand
Lead Time
organizations must understand and integrate forecasting mechanisms into their processes
build forecast mechanisms into processes
building in the demand lead time gives a business the flexibility to combine and schedule resources to match demand in the most cost-effective way
anticipating demand and how to provide for that drives a successful business
Match Supply
to Demand
continually assess your ability to meet demand and match customer expectations (resource allocation etc.)
anticipating customer expectations and having only in reserve what is absolutely necessary, you can gain competitive advantage in the marketplace through customer satisfaction
Eliminate Waste
any activity that doesn't add value to the organization or its customers
has two categories in the Service Sector
Reduce Supply
Lead Time
the total amount of time it takes to deliver a service in response to customer demand. These include;
task time
wait times
lags in retrieving resources
delays in transportation
presence of wastes
Reduce Total Costs
is important to strive for absolute advantage in the market place
Define Demand
for Service
defining the desire of purchasers, consumers and internal customers for services offered
services delivered on a consistent basis for customer satisfaction and business success
plan plan plan and then the delivery process will naturally flow based on demand
Value -Adding (Value Creating)
all business transactions that support the success of the business or deliver a vital resource to the delivery of a service
Non-Value-Adding (Value Destroying)
an activity that does not add value to the service or essential business capability. In almost all operations there are 8 'wastes' that have been identified as non-value-add activity (over servicing, waiting, transport, extra processing, inventory, motion, defects, lack of employee involvement or creativity)
by reducing supply lead time, individuals are able to match supply to demand and response to changes in customer demand
increased ability to handle multiple orders and execution flexibility
response time to unplanned events improves
Absolute Advantage is having the capacity to, with the same resources, provide a greater output than the competitor
careful balance between applying enough resources to execute the service in a complete and efficient manner and not contributing to, or eliminating wastes
How Do I Do It?
begin to understand your customer demands by using a Process-Quantity analysis
helps customers understand the types of services your business delivers
helps deliver product to match consumer demand
helps management identify what products are suitable for continuous flow production
make logical decisions on how to segment your analysis
every service has an output
make sure you understand what these outputs are to understand if they can be amalgamated into another process to create efficiency
find efficiencies at the highest level to find trickle down efficiencies in other processes and transactions
operationally defined process and transactions by customer demand
ensures that processes match the primary concern of a business, customer demand
analyze demand patterns for a daily/weekly/monthly basis for the past/present and future
by understanding demand frequency, the business can anticipate needs to provide optimal service
determine the demand to create better process efficiencies
understanding demand frequency also shows management where in the process
to invest resources
operationally defined process and transactions by customer demand
results help forecast future demand to better allocate resources and find process and timelines efficiencies
estimate takt time for demand
a key concept in lean manufacturing
it is the heartbeat of a lean organization
matches actual production to customer demand
it's not a goal to be surpassed, but rather a target for which to aim
understanding the nature
of demand as outlined in Goal 1
determine demand drivers for service
determine demand drivers for service
determine if the causes of
the demand can be predicted or planned
build in practices that enable the organization & process to sense changes in demand
integrate demand information into service planning and scheduling activities
How Do I Do It?
the nature of demand in the business
delivering services on a continuous basis with consistent quality
understanding where to build in efficiencies to the process
capture and analyze market and sales data
understand what creates demand patterns to forecast for production in the future
capture and analyze data about the processes that create production
find efficiencies in production processes to reduce wastes and reduce batch times
determine the causes
that create demand
analyze these patterns
these causes become demand drivers than can guide business and operational decisions
can be business or operational practices
important that it's collaborative planning and forecasting based on consumer demand
provide communication channels for customers to express needs
emphasis on planning to create process improvements
this will aid in delivering timely service to match customer demands
construct a process route
apply queuing strategies
apply continuous flow methods
development of a standard operations combination chart
create a standard work flow diagram
conduct a capacity analysis
develop standard
operations procedures
evaluate performance
base this on the results from your analysis of customer demands and products offered
determine if services can be grouped together from similar manufacturing patterns
How Do I Do It?
How Do I Do It?
How Do I Do It?
The Eight Wastes
want the basic idea?
a deeper dive?
timing strategies to determine the best process or approach to sequencing elements of the process
employing these tactics will aid in executing services that match supply to demand
allow these to help influence the design of the optimal process or sequence of providing a service
use analysis from previous activities to estimate resources and their allocation
forecast the supply lead time to minimize customer wait times
helps to understand the components of work associated with the batch and cycle process times
aids in identifying wait time wastes
base the diagram on process route diagrams from production
isolate efficiencies and other activities to determine in physical organization can better improve flow and reduce wastes such as wait times
base the analysis on demand drivers for service resources such as
human materials
manufacturing equipment
distribute these resource based service requirements to the workforce to better understand process design and implementation strategies
aids in process performance evaluation of both product and internal services
using standard operating procedures makes this easier
can you pre-existing metrics of
cycle time
total investment in process
the worst kind of waste
occurs when we deliver offerings or perform services that are not needed
imperative in lean to only do what you need to do to deliver quality services
also known as queuing
refers to period of inactivity by the customer or service process
idling causes dissatisfaction and loss of resources
waiting can also mean people partake in 'busy work' that is not value add and further wastes resources
unnecessary movement of resources from one service activity or location to another such as
equipment materials
transport takes up a-lot of time and resources to provide often non-value add activity
Extra Processing
refers to extra operations such as unnecessary levels of
decision making
is important to plan the process ahead of time to isolate areas of inefficiency and to
'do it right the first time'
refers to excess inventory that is not directly required for delivery or offering of services
can include a backlog of work to be accomplished
is not LEAN because it involves added inventory controls and can lead to financial assets being held in products that are not going to be used or could be spoiled
refers to extra steps taken to accommodate inefficient process layouts and defects
can include too much inventory
adds no value to manufacturing and delivery processes
are aspects of service that do not conform to customer expectations or internal requirements
can have hidden costs associated with
multiple service deliveries
dispute resolution
lost sales
poor employee morale
follow up support
Lack of
Employee Involvement
and Creativity
not tapping into known and unknown employee capabilities
human capability to expertly perform
to innovate and problem solve in a way that mechanics and computers cannot
Enterprise Maps
Process Improvements
identify processes and associated processes that perform poorly or need performance improvements
use the before and after identifying LEAN principles to problem solve
Value Stream Map
repeat these steps on a scheduled basis to reduce wastes in your organization
Periodically Review
review the different processes for
cycle time

use the metrics established from the earlier state

this will help eliminate waste associated with your operation
Performance Metrics
establish methods of measuring performance and identifying wastes
train employees to be aware of the wastes and metrics of evaluation to be constantly seeking efficiencies
Team Activities
coordinate team-based waste-reduction activities
have these teams identify ineffective or inefficient services that require excess investments to perform
engage employees in the process to promote 'buy-in'
this will encourage employees to find greater efficiencies and productivity in their daily tasks
reflects service offerings and service processes
measures processes and offerings against demand requirements
uses big picture approach to find efficiencies
focus on the operation or process that provides most customer dissatisfaction or lowest internal performance
prioritize improvements based on these identified performance failures
using the enterprise map as the base, create a value stream map
this will illustrate further details and highlight inefficiencies in the processes you are review
review the map to identify the location, scale and frequency of the wastes associated with each step of the process
using LEAN will help eliminate most of the wastes
Consider constructing an enterprise map (explained in the wastes portion of the presentation)

Lead Time Reduction
team based lead time reduction activities should be used to create a value stream map as part of the mapping process for operations
this helps to find efficiencies in the processes and drives faster production times for customers
calculate the time required for value-add steps
this represents the best-case time for provided services in the process as it is currently designed
evaluate using the maps and best-case time to isolate areas of performance improvements
Apply queuing strategies to improve lead time
determine what constraints exist in the process
develop a plan to either eliminate constraints or manage them more efficiently
Continuous Flow
apply continuous flow strategies to improve lead time and reduce waste
Establish metrics for evaluation and constantly measure performance
when performance suffers, or improvements can be made, do them
it is important to be consistently aware and open to change, this is the only way to be the most effective and LEAN
Performance Evaluation
Cycle Time
the time it ts to complete the tasks required for a single work process, such as performing equipment maintenance or completing a sales order
Batch Delay
the time during which a service activity is idle while other services or transactions are completed or processed
Process Delay
the lag time during which batches must wait after one operation ends and the next one begins
Target Pricing
focuses on how the customer perceives the worth of service being offered.

is determined by looking at comparable services or alternatives available on the current market.
Target Costing
involves determining the investment costs at which a future service must be produced so that it can generate the desired profits.

broken down into three main components
resources required
internal and external operations
Value Engineering
systematic examination of service cost factors, taking into account target quality standards and price.

assigns cost factors by examining what the service does to meet customer expectations.
does so by doing
the following
Activity-Based Costing (ABC)
ABC systems allocate investments costs to activities then to processes then to customers.
Kaizen Costing
continuous improvement
focuses on driving lead time and waste-reduction activities which, through design, reduce the investment costs of delivering services and performing internal services
monitors how well your company's operations adhere to the cost standards set by the operations departments after they've planned and conducted target costing activities
Cost Optimization
activities of this nature should be built into all processes and lean activities
use value-add and non-value add methodology to determine what is cost optimizing, and cost sacrificing
Enterprise Map
apply ABC costing, Kaizen costing and/or cost maintenance if existing service offerings are your company's focus
begin this process by reviewing your company's high-investment cost capabilities and working backwards to identify priorities
Target Pricing
use target pricing, target costing and or value engineering for new service offerings
also do this prior to deciding if you want to offer a new service, it will help focus and improve planning efforts by targeting where funds are to be spent for maximum effectiveness
New or Existing?
decide whether cost-optimization efforts will begin with a new or existing service for customers
it is beneficial to also do this for internally offered services as well
How do I do It?
use an enterprise map, as shown before, to further explore cost optimization opportunities
use a 'big-picture' approach to focus on identifying LEAN initiatives that can offer the best return for internally invested effort
measure demands against outcomes to further understand where time and funds should be invested
Let's Get Started!
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