Lean Manufacturing

Professor Deborah Nightingale September 26, 2005 Content

• General lean concepts in factory design

• Manufacturing Video

• Manufacturing System Design Framework

• Conclusions

Source: Tom Shields, Lean Aerospace Initiative

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 2 Lean from the Toyota Production System Shows How It All Relates

TPS Cost control through the elimination of waste J Right Qty I Perfect J D I Right Mix Quality Right Time O T K A

Standardized Leveled & Balanced Kaizen Work Production Engaged and Creative Workforce

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 3 Aerospace Factory Designs Have Many Things to Consider Inputs • Production volume Outputs • Product mix • Cost • Product design • Quality • Frequency of changes Factory • Performance Design • Complexity • Delivery • Process capability • Flexibility • Type of organization • Innovativeness • Worker skill/knowledge Focus Here

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 4 Benefits from a Focus on Process Rather Than Operation Improvements

• Operations O p • Value adding e r X X Part B • Transportation a • Delay (2 types) t X X Part A i • Inspection Store in Move to Store at Move By Machine o Warehouse Staging Staging AGV n • Factory Design Factory Design • Layout choices Types of Operations • Operation policies • Process Technology Storage • Tapping human Value Adding knowledge I Inspection X Transport

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 5 Traditional Manufacturing

Receiving, Injection Molding Center Incoming Inspecti on, 2 and Shipping 1

D D D L L 13 MC D D D4 L L 3 5 Machining L L Final Center 10 Assembly Center G G G 11 7 M M MC 6

G G G 8 12 M M

Heat 9 Component Subassembly Inspection and Treat Test Center

The material flow could take up to millions of different paths, creating waste of transportation and waiting at virtually every step.

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 6 Cellular Manufacturing

Receiving, Injection Molding Center Incoming Inspecti on, and Shipping D D MC MC

G M D D M L G D L G G G M G M L

Work Flow M G L M G M G G M G G L G G G L M Heat D L L D D D Treat M G D D D

Rather than route the materials required through the entire plant, materials flow to the head of each work cell, through each process in the cell, then to final assembly. This eliminates most of the transportation and waiting we would see in the traditional approach.

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 7 Only Understood Processes Can Be Improved • Establish models and/or simulations to permit understanding • Ensure process capability & maturation • Maintain challenge of existing processes

Tools • Five Whys • Process flow charts • Value stream mapping • Statistical tools • Data collection and discipline

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 8 Definite Boundaries Exist Between Flow and Pull Flow Pull • MRP used for planning • Takt time and control • Balanced production • Group technology • Level production • Reduce the number of flow paths • Response time less than lead time • Batch or single items • Standard work • Inventory to buffer flow • Single item flow • Process control • Correct problems • Minimize space & distance immediately - STOP if traveled with contiguous necessary processing established

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 9 Lean Tools Can Apply even if JIT System Not Logical

• Value stream mapping • Work groups to implement change • Visual displays and controls • Error proofing • Standardized work • Quick changeover • Total productive maintenance • Rapid problem solving • Self inspection Source: J. Miltonburg, Manufacturing Strategy ©1995, p31. • Five Sʼs

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 10 Content

• General lean concepts in factory design

• Manufacturing Video

• Manufacturing System Design Framework

• Conclusions

Source: Tom Shields, Lean Aerospace Initiative

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 11 Production Operations Transition-To-Lean Roadmap

Supply Chain/External Environment • Legal • Government Reqd. Systems • Environmental (MMAS, EVMS, etc.)

Enterprise / Production System Interface • Financial • Procurement • Quality • Training and Human Resources • Information • Engineering • Safety • Workforce/Management Partnership Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 Adopt Lean Define Identify Design Implement Total Paradigm Prepare Value Value Stream Production System Implement Flow System Pull • Build vision • Integrate with • Select initial • Record current • Develop a future • Standardize •Select • Build vision • Integrate with • Select initial • Record current • Develop a future • Standardize •Select • Establish need Enterprise Level implementation state value state value operations appropriate • Establish need Enterprise Level implementation state value state value operations appropriate • Foster lean • Establish an scope stream stream map • Mistake proof production • Foster lean Top • Establish an Lean scope stream stream map • Mistake proof production learning Operations • Define • Chart product • Identify takt time processes system control learning Leadership Operations Roadmap • Define • Chart product • Identify takt time processes system control • Make the Lean customer and requirements • Achieve process mechanism • Make the Lean customer and requirements • Achieve process mechanism commitment Implementation • Define value - information •Review control • Strive for single commitment Implementation • Define value - information •Review control • Strive for single • Obtain Sr. Commitment Team(s) Quality, flow make/buy •Implement TPM item flow • Obtain Sr. Team(s) Quality, flow make/buy •Implement TPM item flow Mgmt. buy-in •Develop Schedule, and • Chart operator decisions • Implement self- • Level and Mgmt. buy-in •Develop Schedule, and • Chart operator decisions • Implement self- • Level and implementation Target Cost movement • Plan new layout inspection balance implementation Target Cost movement • Plan new layout inspection balance strategy • Chart tool •Integrate • Eliminate/ production flow strategy • Chart tool •Integrate • Eliminate/ production flow • Develop a plan movement suppliers reduce waste •Link with • Develop a plan movement suppliers reduce waste •Link with to address •Collect • Design visual • Cross train suppliers to address •Collect • Design visual • Cross train suppliers workforce baseline data control system workforce • Draw down workforce baseline data control system workforce • Draw down changes • Estimate and • Reduce set-up inventories changes • Estimate and • Reduce set-up inventories • Address Site justify costs times • Reassign people • Address Site justify costs times • Reassign people Specific Cultural •Plan TPM • Implement cell • Re-deploy/ Specific Cultural •Plan TPM • Implement cell • Re-deploy/ Issues system layout dispose assets Issues system layout dispose assets •Train key • Implement visual •Train key + • Implement visual people controls people controls • Establish target • Establish target + objectives objectives (metrics) + (metrics) + Phase 7 + Strive for Perfection • Team development • Institutionalize 5S • Expand TPM • Evaluate progress • Optimize quality • Institute Kaizen events • Evaluate against using lean maturity Expand • Remove system barriers target metrics matrices Internally/Externally ENTRY IMPROVED ology © 2000 Massachusetts Institute of Techn COMPETITIVE POSITION

6/5/00 Content

• General lean concepts in factory design

• Manufacturing Video

• Manufacturing System Design Framework

• Conclusions

Source: Tom Shields, Lean Aerospace Initiative

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 13 Background

• Matured aerospace industry

• Industrial innovation theory

• Implications on the aerospace industry

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 14 Matured Aerospace Industry

• Customers demanding specific capabilities • Cost and affordability more prominent • Innovation characteristics have changed

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 15 UtterbackʼsDynamcsi of Innovation Model

• Rate of product innovation highest during formative years • As product matures rate of process innovation overcomes product innovation • Very mature products have low levels of both product & process innovations

Source: William Abernathy & James Utterback, 1978

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 16 Theory in Application

Utterbach's Dynamics of Innovation

Emergence of the Dominant Design

Fluid Phase: Rapid technology Transition Phase: innovation, Shakeout, competition many firms shifts to process founded Specific Phase: Stable, small number of firms competition shifts to price

Number of Firms Destabilizing changes in technology or process can destroy industry!

Time Source: Data (cars), from Entry and Exit of Firms in the U.S. Auto Industry: 1894-1992. National Academy of Science: theory concepts from Utterback, Dynamics of Innovation, 1994

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 17 Dominant Design?

1958

1995

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 18 Dominant Design?

1953

1972

2002

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 19 Extension of Theory to the Aerospace Industry Industrial evolution and the emergence of the dominant design 50 35

Typewriters: Cars: enclosed Aeronautics: Open, moving carriage steel body Jet transport and 30 40 80 jet fighter-bomber Aerospace companies 25 Number ofmajorU.S. Government intervention 30 60 motivated by cold war 20

15 20 40

Number of major Number of Number of major 10 typewriter companies typewriter automobile companies 10 20 Natural progression? 5

0 0 1860 1880 1900 1920 1940 1960 1980 2000 Source: Murman, et al ., Lean Enterprise Value, 2002 Year

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 20 Implications for the Aerospace Industry • Producibility and cost are more competitive factors • Manufacturing inputs should carry more weight • Emphasis should be on process innovation • Firm core competencies must match industrial maturity • Manufacturing strategy cannot be stepchild to platform strategy

Result:Result: HeritageHeritage equipment,equipment, facilitiesfacilities andand mindsetsmindsets drivedrive manufacturingmanufacturing systemsystem designdesign

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 21 Proposal

AA holisticholistic manufacturingmanufacturing systemsystem designdesign frameworkframework toto ensureensure processprocess considerationsconsiderations areare integraintegrall toto thethe productproduct developmentdevelopment processprocess

Characteristics • Uses principles of systems engineering • Visual depiction of “design beyond factory floor” ideas • Manufacturing as part of the product strategy • Manufacturing system design is strategy driven, not product design driven • Combines multiple useful tools • Provides insights into order and interactions

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 22 Manufacturing System Design

• Manufacturing system “infrastructure” design • Manufacturing strategy • Operating policy • Partnerships (suppliers) • Organization structure details • Manufacturing system “structure” design • Buildings, location, capacity • Machine selection • Layout • WIP

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 23 Stakeholders Society Suppliers Customers EmployeesManufacturingManufacturing Stockholders System SystemMgmt DesignDesignGovt.

Corporate Level(Corporate Strategy) [Seek approval] [Interpret] (Business Strategy) Business Unit

Product Strategy Suppliers Product Design Manufacturing Marketing

Requirements/Considerations/Constraints

Manufacturing System Design/SeOptimizinglection

Implement (pilot) Modifications Modifications

Evaluate/Validate Stakeholders ManufacturingManufacturing SystemSystem DesignDesign

Corporate Level [Seek approval] [Interpret] Business Unit

Product Strategy Suppliers Product Design Manufacturing Marketing DFMA, IPT Customer Needs Make/Buy 3-DCE Technical Feasibility Risk-sharing Partnerships Concurrent Engineering Feasible performance guarantees

- Miltenburg, - 3P, - 2D plots, Requirements/Considerations/Constraints- MSDD - AMSDD - design Kaizen

- Analytical Tools, - Simulation Tools Manufacturing System Design/Selection •VSM Fine Tune •Kaizen Modifications • Trial & Error Implement (pilot) • Kaikaku

Finalized Product Design Evaluate/Validate Insights from the Framework

• Linkage of strategy and manufacturing system design • Three important characteristics • Phase presence • Phase timing • Breadth across functions

FollowingFollowing thethe frameworkframework processprocess willwill resultresult inin thethe developmentdevelopment ofof effectiveeffective manufacturingmanufacturing systemsystem thatthat meetsmeets thethe goalsgoals ofof thethe corporationcorporation (Vaughn(Vaughn && Shields)Shields)

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 26 Conclusions

• Competitive advantage from manufacturing excellence (enterprise strategy)

• Performance more closely related to how system designed (not production volume)

• Manufacturing as a true participating partner with the other functions (coequal status)

ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 27