lean manufacturing

The concept of down time is integral to maintenance management. Production time lost due to planned or unplanned stoppages. Planned downtime includes scheduled stoppages for activities such as beginning-of-the-shift production meetings, changeovers to produce other products, and scheduled maintenance. Unplanned downtime includes stoppages for breakdowns, machine adjustments, materials shortages, and absenteeism.
See: Overall Equipment Effectiveness, Total Productive Maintenance.

Cooperation between a customer and a supplier to design both a component and its manufacturing process. Typically the customer provides cost and performance targets (sometimes called an envelope) with the supplier doing detailed design of the component and manufacturing process (tooling, layout, quality, etc.). The supplier often stations a resident engineer at the customer to ensure that the component will work properly with the completed product to minimize total cost. Design-in contrasts with work-to-print approaches in which the supplier simply is given a complete design and told to tool and produce it.
See: Resident Engineer.

Demand Amplification is the tendency in any multistage process for production orders received by each upstream process to be more erratic than actual production or sales at the next downstream process. This also is called the Forrester Effect (after Jay Forrester at MIT who first characterized this phenomenon mathematically in the 1950s) and the Bullwhip Effect. The two main causes of demand amplification as orders move upstream are: (a) The number of decision points where orders can be adjusted; and (b) delays while orders wait to be processed and passed on (such as waiting for the weekly run of the Material Requirements Planning system). The longer the delays, the greater the amplification as more production is determined by forecasts (which become less accurate the longer the forecasting horizon) and as more adjustments are made to the orders (by system algorithms adding “just-in-case” amounts). Lean Thinkers strive to use leveled pull systems with frequent withdrawals for production and shipping instructions at each stage of the value stream in order to minimize demand amplification. The demand amplification chart on p. 16 shows a typical situation in which the variation in demand at the customer end of the value stream (Alpha) is modest, about +/-3% during a month. But as orders travel back up the value stream through Beta and Gamma they become very erratic until Gamma’s orders sent to its raw materials supplier vary by +/-35% during a month. The demand amplification chart is an excellent way to raise consciousness about the degree of amplification present in a production system. If demand amplification could be completely eliminated, the variation in orders at every point along this value stream would be +/-3%, reflecting the true variation in customer demand.
See: Build-to-Order, Heijunka, Level Selling.

A one-page measurement tool comprising the critical few end-of-pipe (downstream) and process (upstream) measures related to a strategy or action plan (see illustration on p. 15). It helps a leader check and adjust a plan and provides real-time measures for real-time feedback. Value-stream maps and dashboards are complementary tools: Maps raise critical questions to be addressed during the plan phase of the plan-do-check-act cycle. Dashboards raise questions for leaders to address during the check and act phases. (Adapted from Dennis 2006, p. 62.)
See: Plan, Do, Check, Act (PDCA), Value-Stream Mapping

Related Terms Involving Time Effective Machine Cycle Time Machine cycle time plus load and unload time, plus the result of dividing changeover time by the number of pieces between changeovers. For example, if a machine has a cycle time of 20 seconds, plus a combined load and unload time of 30 seconds, and a changeover time of 30 seconds divided by a minimum batch size of 30, the Effective Machine Cycle Time is 20+30+(30/30) or 1 = 51 seconds. Machine Cycle Time The time a machine requires to complete all of its operations on one piece. Nonvalue-Creating Time The time spent on activities that add costs but no value to an item from the customer’s perspective. Such activities typically include storage, inspection, and rework. Operator Cycle Time The time it takes an operator to complete all the work elements at a station before repeating them, as timed by direct observation. Order Lead Time Production lead time plus time expended downstream in getting the product to the customer, including delays for processing orders and entering them into production and delays when customer orders exceed production capacity. In other words, the time the customer must wait for the product. Order-to-Cash Time The amount of time that elapses from the receipt of a customer order until the producer receives cash payment from the customer. This can be more or less than order lead time, depending on whether a producer is in a build-to-order or a ship-from-stock mode, on terms of payment, etc. Processing Time The time a product actually is being worked on in design or production and the time an order actually is being processed. Typically, processing time is a small fraction of production lead time. Production Lead Time (also Throughput Time and Total Product Cycle Time) The time required for a product to move all the way through a process or a value stream from start to finish. At the plant level this often is termed door-to-door time. The concept also can be applied to the time required for a design to progress from start to finish in product development or for a product to proceed from raw materials all the way to the customer. Value-Creating Time The time of those work elements that actually transform the product in a way that the customer is willing to pay for. Usually, value-creating time is less than cycle time, which is less than production lead time.

A facility that sorts and recombines a variety of inbound items from many suppliers for outbound shipment to many customers, such as assembly plants, distributors, or retailers. A common example is a facility operated by a manufacturer with many plants in order to efficiently gather materials from many suppliers. When a truck loaded with pallets of goods from suppliers arrives on one side of the dock, the pallets are immediately unloaded, and taken to several shipping lanes for loading onto outbound trucks bound for different facilities (see illustration on p. 11). A cross-dock is not a warehouse because it does not store goods. Instead, goods are usually unloaded from inbound vehicles and moved to shipping lanes for outbound vehicles in one step. If outbound vehicles leave frequently, it may be possible to clear the floor of the cross-dock every 24 hours.

Producing and moving one item at a time (or a small and consistent batch of items) through a series of processing steps as continuously as possible, with each step making just what is requested by the next step. Continuous flow can be achieved in a number of ways, ranging from moving assembly lines to manual cells. It also is called one-piece flow, single-piece flow, and make one, move one.
See: Batch-and-Queue, Flow Production, One-Piece Flow.

The process of switching from the production of one product or part number to another in a machine (e.g., a stamping press or molding machine) or a series of linked machines (e.g., an assembly line or cell) by changing parts, dies, molds, fixtures, etc. (Also called a setup.) Changeover time is measured as the time elapsed between the last piece in the run just completed and the first good piece from the process after the changeover. Also think of SMED

The leader of a lean conversion who has the willpower and drive to initiate fundamental change and make it stick. The change agent—who often comes from outside the organization —doesn’t need detailed lean knowledge at the beginning of the conversion. The knowledge can come from a lean expert, but the change agent absolutely needs the will to see that the knowledge is applied and becomes the new way of working. Compare: Sensei.

Building a Lean Fulfillment Stream will change the way you think about your supply chain and logistics networks giving you a way to act using lean principles to transform and continuously improve. In this pioneering workbook, lean logistics veterans Robert Martichenko and Kevin von Grabe explain step-by-step a comprehensive, real-life implementation process for optimizing your entire fulfillment stream from raw materials to customers, including two critical concepts: calculating the total cost of fulfillment and collaborating with across all functions and firms along the stream. Your company, like most, probably calculates costs at different points within departments, such as the piece price paid by the purchasing department. Few companies figure the total cost associated with each major function across the fulfillment stream. Calculating total cost, which to most executives is surprisingly large, lets you measure the impact of your improvement efforts on operational performance and overall income. Martichenko and von Grabe also give you guidance and tools for collaboration. Using the example company ABE Corp., the authors illustrate how the lean conversion process is a win-win for every company involved. And an accompanying analysis illustrates the financial benefits and shows you how to apply the metrics. The book, supported by 41 charts, maps, and illustrations, shows you: How to apply the eight guiding principles for implementing lean fulfillment. The seven major types of waste in logistics and supply chains. How a fulfillment-stream council of representatives from all companies gives critical guidance and support. The eight rights for assessing perfect order execution. What lean metrics to use, such as why average days on hand of inventory is a better measure than inventory turns. How to identify and eliminate waste in shipping, receiving, and yard management.