Page 65 - Lean six sigma demystified

44 Lean Six Sigma DemystifieD

6. Standardize. To support improvement.
7. Use visual controls. So that no problems remain hidden.
8. Use only reliable technology. That supports the people and the process.

9. Compete against perfection. Not against competitors.
Toyota worked with one supplier to reduce lead time by 46%, work-in-
process (WIP) inventory by 83%, finished goods inventory by 91%, and overtime
by 50% and to increase productivity by 83% (The ToyotaWay, Jeffrey Liker).
Matsushita produces cell phones, fax machines, and security cameras. In 2002,
they had a loss of $3.7 billion; by March 2007 they’re expecting a profit of
$1.7 billion—an annual increase in profit of 23% on a 1% increase in sales. In 2002,
it was taking 60 hours for a production run to deliver its first finished product (big
batch sizes cause these delays). Using Lean, Matsushita reduced the lead time to
40 minutes (99% of the time was delay; 1% was production). It used to take 3 days
and multiple shifts to make 1500 phones; they now make 500 per shift. This has
reduced inventory costs because components spend one-third less time in the
factory. An early Lean change involved switching from production lines (big batches)
to work “cells” (small batches). They also right-sized their machines to produce
smaller batches. Faster robots on the assembly line were sitting idle waiting on
slower robots. Matsushita doubled up on slower robots to feed more quickly the
faster ones and increase flow. Despite the faster pace, defects are at an all time low.
Matsushita serves 75 different markets, and phones alone have over 1500
design variations. With over 77 parts for each circuit board, changeover from
one cell phone to another was taking too long. Matsushita designed a circuit
board that needed far fewer changes per model. As you can imagine, probably
80% of the parts were the same and 20% different. If you can keep 80% of the

board the same, it would reduce changeover time and costs.
Matsushita has seven plants worldwide producing 35 million products a year;
so they test new production concepts in the mother plant in Japan and replicate
the changes in all of their other plants. Since no two plants are of the same size
or shape, it can take up to three months to adapt the changes to fit each plant.

The Lean Mindset

Here’s the mindset shift that you will want to embrace to understand Lean.
From. If you build it, they will come (mass production).

To. When they come, build it fast (Lean production).