August 8, 2015

About Lean, Value, Waste, Muda, Mura & Muri

TAG: Resource: Lean system (eliminate all process wastes and maximize process efficiency), Toyota Production System (TPS), Lean Aim, Lean Expected Results, Calculating Cost, Price, Profit/Loss, What is Value? (customer willing to pay), What is Waste? (customer not willing to pay) , Types of Muda (waste) , Mura (unevenness in production) , Muri ( ‘hard to do’ and can be cause by variation in production) 

The goals of a Lean system is to do more with less:less time, less space, less human effort, less machinery & less materials.

The key objective of lean operation is to eliminate all process wastes and maximize process efficiency.

The key elements of lean operation include the following items:•Waste elimination in process•Full based production system•One piece flow•Value stream mapping•Set up time reduction•Work cells

It is a philosophy of adding value by reducing all non value adding activities and eliminating waste.

Key players in the Toyota Production System (TPS)
• Eiji Toyoda – as a young engineer studied Ford Rouge
• Taiichi Ohno considered to be a production genius of TPS
• Operations Management Consulting Division (OMCD) was established and brought the suppliers into the TPS

Lean as a Total System Approach

Aim: Total Customer Satisfaction

Expected Results:
High Quality
Low Coat
Short Delivery Time

Calculating Cost, Price, Profit/Loss
• In a closed system such prior to globalization we could calculate the following:
Cost + Profit margin = Price
• That will not work today due to the global economy and price competition. Today the model is:
Price (market place) ‐ Cost = Profit or Loss
• The market place is typically fixed or falling due to global competition

What is Value?
• Before we can improve the process we have to understand what Value is. Strictly speaking:
• Value is whatever the customer is willing pay for; everything else is some form of waste.
• To add value the process must do three things:
– It must be important to the customer; important enough for them to pay for the product or service
– There must be some kind of physical change that occurs by doing the process to make the product or perform the service
– It must be done right the first time

What is Waste?
• Waste (MUDA) is the opposite of Value, it is all things the customer is not willing to pay for.
• Consider a pallet maker – The customer is willing to pay for:
• Materials
• Cutting and assembly – Not willing to pay for:
• Rework
• Excess inventory
• Wait time
• Any other forms of muda
• Types of Muda
o Motion – this may be man or machine (i.e. poor work place set up or ergonomics, unnecessary walking, reaching or twisting, etc.)
o Waiting ‐ occurs when there is large batch production or excessive WIP, equipment problems up or down stream, and/or defective material (i.e. waiting for materials, line stoppages, etc.)
o Conveyance – caused by inefficient work place layout, overly large equipment or traditional batch production. This is typically necessary muda, but must be minimized
o Correction – simply this is rework, it comprises all necessary materials, time, and energy required to fix the defect or dispose of it.
o Over‐processing – this is doing more than what the customer is willing to pay for., often driven by engineering groups seeking to achieve certain technology goals.o Inventory – keeping unnecessary raw material, parts, or WIP. Often seen in MRP and push systems.
o Over‐production – Taiichi Ohno described this as the root
of all manufacturing evils. Examples include:
o Building and maintaining large warehouses to hold inventory
o Extra workers or equipment
o Extra energy, material handling equipment, storage containers
o Extra interest payments on loans
o It is also the root cause of other types of muda: motion, waiting, conveyance, correction, & inventory
o Knowledge disconnection – could be horizontal, vertical or temporal. This can exist within a company, between company division/plants, its customer and/or suppliers.

Mura – an unevenness in production typically due to fluctuating production plans.
Muri – this means ‘hard to do’ and can be cause by variation in production, ergonomics, poor job or tool design, and/or poor specification, etc.
• Lean is not just muda elimination, it is also the creation of Flow and the continuous involvement of workers in improvement activities.