Page 44 - How To Implement Lean Manufacturing

Lean Manufacturing and the Toyota Pr oduction System 25

In fact in our rapidly changing world, although
short lead times do not guarantee success for this
Point of Clarity The way to
type of business, long lead times will almost certainly
guarantee failure. So in a nutshell, short lead times become more responsive and
for them are equal to future business. (Chap. 5 has more flexible in a manufacturing
more information about lead times.) business is by reducing lead
Initially, most engineers and manufacturing times.
managers do not see the power of lead-time reduc-
tions. It is no underestimation to say that at the very heart of a plant’s flexibility and
responsiveness is the topic of lead times but Ohno sought to reduce lead times so he
could get paid sooner.
However, once lead-time reductions are achieved, a number of other equally pow-
erful manufacturing qualities are unleashed. First, the plant becomes both more
responsive and more flexible. These are both obvious and powerful manufacturing
skills to have. However, the fact that you have a shorter lead time has a significant
impact on variation reduction, most notably the variation in the production schedule.
Think about it, how accurate is your production schedule today or one day out? Gener-
ally, the schedule is pretty good. What about one week out or even one month out?
As you go to one week out, or one month out, you can count on some demand varia-
tion. But what about six months out? How much do you think the production demand
will change? Thus, it’s simple: In order to reduce this demand variation, reduce the lead
time.

Through the Absolute Elimination of Waste
In his book, Ohno states “The TPS, with its two pillars, advocating the absolute elimination
of waste, was born in Japan out of necessity.” Think about that: the “absolute elimination
of waste.” Not the reduction of waste, but its elimination.
Ohno categorized wastes into seven principle types. They are:

• Overproduction. This is the most egregious of all the wastes since it not only is
a waste itself but aggravates the other six wastes. For example, the overpro-
duced volume must be transported, stored, inspected, and probably has some
defective material as well. Overproduction is not only the production of product
you cannot sell, it is also making the product too early. An interesting note about
overproduction is that, in my experience, I have found that nearly all of the
overproduction is planned overproduction. It is planned, and often for a variety
of good-sounding reasons. However, upon scrutiny, I find that nearly all planned
overproduction should be eliminated. For example, to assure they have sufficient
finished goods, many companies plan for extra production and purchase extra
raw materials because they will have quality fall out during the process. This
planning process is really just guesswork and adds considerably to the variation
in the process. Even worse, many companies work hard to fine-tune this
planning process so as to minimize the waste of planned-overproduction. Thus,
we have the already scarce supply of technical manpower working to remove the planned-
overproduction, which is caused really by the planning process, which saw a need because
there is a quality problem which affects production quantities. So why not attack the
quality problem and get rid of all this waste, including the waste of the lost technical
manpower? Sounds simple, but it is often overlooked.