Introduction To 20 Keys To Improve Workplace

Introduction
Operations Analysis and Improvement

2010 Fall
Dr. Tai-Yue Wang
Industrial and Information Management Department
National Cheng Kung University
Presentation
Asian culture has had a significant impact

on the rest of the world.
Many words used in our daily languages.
Martial arts, religion or food.
Within the business environment.
Improvement tools (kaizen( ) tools)

Production philosophies such as Just-in-time.
Just-in-time philosophy is also known as Lean

Manufacturing.
Dr. Tai-Yue Wang IIM Dept.

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Presentation
Another important philosophy is the concept

developed by a Japanese consultant named
Kobayashi( ).
Based on a methodology of 20 keys leading

business on a course of continuous improvement
(kaizen).

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Presentation
The core elements of Kobayashis concepts are

presented in order to focus on production
improvements.
In addition, a measurement standard for

improvement results is also explained.

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Introduction
Continuous improvement is a management

philosophy based on employees suggestions.
It was developed in the United States at the end of

the 19th century.
Many important improvements took place

when this idea or philosophy arrived in Japan.
Japan was already utilizing tools such as quality

circles.
When they combined these two ideas, kaizen was born.

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Introduction
In 1926 Henry Ford wrote
To standardize a method is to choose out of the

many methods the best one, and use it.
Standardization means nothing unless it means
standardizing upward.
Todays standardization, instead of being a

barricade against improvement, is the necessary
foundation on which tomorrows improvement will
be based.
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Introduction
In 1926 Henry Ford wrote
If you think of standardization as the best that

you know today, but which is to be improved
tomorrow - you get somewhere. But if you think
of standards as confining, then progress stops.

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Kaizen vs Reengineering
Creating an useable and meaningful standard is key to the

success of any enterprise.
Businesses usually utilize two different kinds of
improvements.
Those that suppose a revolution in the way of working.

Those that suppose smaller benefits with less investment.

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Final situation
productivity
Kaizen
Reengineering
Initial situation
time
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The evolution consists of continuous

improvements being made in both the product and
process.
A rapid and radical change (kaikaku, )
process is sometimes used as a precursor to kaizen
activities.
Carried out by the utilization of process reengineering

or a major product redesign.

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10
Require large investments and are based on process

automation.
In the U.S., these radical activities are frequently called

kaizen blitzes.

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If the process is constantly being improved

(continuous line), the innovation effort required
to make a major change can be reduced
(discontinuous line in the left).
Otherwise, the process of reengineering can become

very expensive (discontinuous line in the right).

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Improvement Philosophies and

Methodologies
In order to find the source of a problem, it is

important to define and understand the source
and core of the problem.
Problem -> Any deviation with respect to the
standard value of a variable (quality and
production rate).
It is necessary to know what the variable objective is

(desired standard) and what is the starting situation in
order to propose a realistic objective.
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Improvement philosophies and

methodologies
Three main factors that production managers

fear.
Poor quality.
Increase of production cost.
Increase in the lead time.

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14

methodologies
Production improvements should be based

on the improvements of processes as well as
operations.
Problems can appear in any of the basic

elements that constitute the production area.

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15

methodologies
Some example of problems.
Defects, obsolete work methods, energy waste, poorly

coached workers, low rates of performance in
machines and materials.
By analyzing the production management history,

several improvement approaches can be
identified.
Just-in-time Methodologies (Lean Manufacturing).

20 Keys to Workplace Improvement (Kobayashi).
16
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methodologies
The keys to the Japanese success are.
Simple improvement methodologies.

Workers respect.
Teamwork.

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Just-in-Time--Introduction
In accordance with this philosophy principle,

nothing is manufactured until it is demanded,
fulfilling the customer requirements
I need it today, not yesterday, not tomorrow.
The plant flexibility required to respond to this kind

of demand is total, and is never fully obtained.
It is critical that inventory is minimized.
Product obsolescence can make in-process and finished goods

inventory worthless.

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In 1949 Toyota was on the brink of bankruptcy.
While in the United States Fords car production was at

least 8 times more efficient than Toyotas.
The president of Toyota, Kiichiro Toyoda, presented

a challenge to the members of his executive team.
To achieve the same rate of production as the United

States in three years.

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Taiichi Ohno( ), vice president of

Toyota, accepted his challenge.
Inspired by the way that an American supermarket

works, invented the Just-in-time method.
With the aid of Shigeo Shingo( ) and Hiroyuki

Hirano( ) .

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20
Thinking
revolution
Daiichi Ohno ( )
and Shigeo Shingo (
) wrote their goal.
They developed different

methodologies.
Visual Control
Deliver the right material, in

the exact quantity, with
perfect quality, in the right
place just before it is
needed.
Poka-Yoke
Standard
operations
Jidoka
TPM
One-Piece
flow
Multifunctional
workers
Kanban
Leveling
Production
SMED
JUST IN TIME

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Workforce optimization
The 5S
21
The systematic application of all the methodologies

create a new management philosophy.
The real value is the knowledge acquired during its

implementation.
The philosophy developed in Toyota was not

accepted until the end of the sixties.
Japan in 1973 benefited from the petroleum crisis and

started to export fuel efficient cars to the United States.
Since the 1970s, Japan has been the pioneer of work
22
improvement
methodologies.
Dr. Tai-Yue
Wang IIM Dept.
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Just-in-Time--Thinking
Revolution
The Western world employed the following formula to

obtain the price of a product.
Price = Cost + Profit.

In Japan, mainly Toyota, employed the following expression.
Profit = Price Cost.
Today, this formula is used worldwide.
In order to make sure that Toyota would work like the

supermarket it was necessary to identify and eliminate all
business and production wastes.

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Just-in-Time--Thinking
Revolution
The real cost is as big as a seed of a plum tree.
In some cases, manufacturers, let the seed (cost) grow

as big as a tree.
In reality, it is more efficient to eliminate tasks that do

not add value to the product.
Managers try to decrease the cost by cutting some leaves out.
Reducing the tree to a smaller size is equivalent to planting a

smaller seed.
The goal of Toyotas executives was to find this

plum tree seed and work hard to reduce the cost. 24

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Just-in-Time--Seven types of
Waste
Hiroyuki Hirano ( ) defined waste as

everything that is not absolutely essential.
Few operations are safe from elimination.
He also defined work as any task that adds value to

the product.
In Toyotas factories outside of Japan, they required

between 5 to 10 times more operations to produce the same
car.
Shigeo Shingo identified 7 main wastes common to

factories.
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Waste
Overproduction
Inventory.
Producing unnecessary products, when they are not

needed and in a greater quantities than required.
Material stored as raw material, work-in-process and
final products.
Transportation.
Material handling between internal sections.

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Waste
Defects.
Irregular products that interfere with productivity

stopping the flow of high quality products.

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Waste
Processes.
Operations.
Tasks accepted as necessary.

Not all operations add value to the product.
Inactivities.
Correspond to machines idle time or operators idle time.
Inventory is considered the type of waste with greater

impact

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Just-in-Time--Inventory
Inventory is a sign of an ill

factory because it hides the
problems instead of
resolving them.
For example, in order to

cope with the problem of
poor process quality, the
size of production lots is
typically increased.

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Products that will probably

never be used, get stored. 29
Just-in-Time--Inventory
If the problem that produces the

low quality is solved inventory
could be reduced without affecting
service.
Sometimes it is necessary to force
a decrease in inventory in order to
identify the production variability
that necessitated it.

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Then, the work method can be

changed.
30
Lean Manufacturing
Lean Manufacturing is the systematic elimination

of waste.
Lean is focused at cutting fat from production

activities.
Lean has also been successfully applied to administrative

and engineering activities as well.

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Lean Manufacturing
Many of the tools used in lean can be traced back

to Taylor, Ford and the Gilbreths.
The Japanese systematized the development and

evolution of improvement tools.
Lean Manufacturing is one way to define Toyotas

production system.
MUDA is the term chosen when referring to lean. In

Japanese, MUDA means waste.

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Lean Manufacturing
Lean Manufacturing is supported by three

philosophies.
Just-in-time
Kaizen (continuous improvements)

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Lean Manufacturing
Jidoka ( ).
(Automation)
Translates as autonomation.
Machinery automatically inspects each item after producing it,
ceasing production and notifying humans if a defect is
detected.
Toyota expands the meaning of Jidoka to include the
responsibility of all workers to function similarly.

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Lean Manufacturing
Traditional approximations improves the lead time

by reducing waste in the activities that add value
(AV).
Lean Manufacturing reduces the lead time by
eliminating operations that do not add value to the
product (MUDA).
95% MUDA
Lead Time
5% VA
95% MUDA
5% VA
Lead Time
98% MUDA
Lead Time
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2%
VA
90% MUDA 10% VA

Lead Time
35
20 Keys to workplace
improvement
1
7
20
16
14
17
18
2
9 11 12
Iwao Kobayashi, in 1988,

published a book explaining 20
keys to Workplace improvement.
They all must be considered in order

to achieve continuous improvement.
8
19 10 13
15

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36
improvement
1
7
20
16
14
17
18
2
9 11 12
Shows the relations between the

keys and their influence on the three
main factors.
8
19 10 13
These 20 keys are arranged in a

circle.
Quality, cost and lead time.
15

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1
Cleaning and
Organizing
11
Quality
Assurance
System
9
Maintaining
Equipment
12
Developing
your
Suppliers
7
Zero Monitor
Manufacturing
14
Empowering
Workers to
Make improvements
20
Leading
Technology
16
Production
Scheduling
5
Quick
Changeover
Technology
Quality
4
Reducing
Inventory
6
Method
Improvement
17
Efficiency
Control
18
Using
Information
systems
2
Rationalizing
the system
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Cost
19
Conserving
Energy and
Materials
Lead
time
8
Coupled
Manufacturing
15
Cross
Training
10
Time Control
And
Commitment
13
Eliminating
Waste
3
Improvement
Team
Activities
38
Quality

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Cost

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Lead Time

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improvement
1
Cleaning and
Organizing
9
Maintaining
Equipment
11
Quaility
Assurance
System
20
Leading
Technology
12
Developing
your
Suppliers
7
Zero Monitor
Manufacturing
16
Production
Scheduling
14
Empowering
Workers to
Make improvements
5
Quick
Changeover
Technology
Quality
4
Reducing
Inventory
6
Method
Improvement
Cost
Lead
time
17
Efficiency
Control
18
Using
Information
systems
2
Rationalizing
the system
There are four keys

outside the circle.
8
Coupled
Manufacturing
15
Cross
Training
19
Conserving
Energy and
Materials

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10
Time Control
And
Commitment
13
Eliminating
Waste
3
Improvement
Team
Activities
Keys 1, 2 and 3
must be
implemented before
the rest.
Key number 20 is
the result of
implementing the
other 19 keys.
42
improvement
Kobayashi divided each key into five levels and

set some criteria to rise from one level to the next.
Kobayashi offers the steps to reach the final level

gradually rather than attempting to directly reach the
top.

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improvement
1
20
19
18
17
Kobayashi presents a radar

graphic to show the
evolution of the factory
16
15
7
14
Kobayashi recommends to
improve all the keys equally.
8
13
9
12
10
11

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The scoring of each key is

represented.
In the radar graphic, the

factorys scoring will grow
concentrically.
44
Overall Equipment Efficiency

(OEE)
To improve the productivity of production equipment

Nakajima ( ) summarized the main time losses
for equipment based on the value of three activities.
Available work time -> Calendar time.
Fixed time for planned stops -> Preventive maintenance,

operators break.
The rest of the time is considered load time.

Load time

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Calendar time
Planned
stops
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Six main causes that reduce valid operation time.
Breakdowns.
Setup and changeovers.
The time that the machine is stopped by repairs.

Corresponds to the change time between models, or between products
of the same model.
Idling and minor stoppage.
Loss time caused by the processes randomness or by the workermachine cycle complexity.

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Six main causes that reduce valid operation time.
Reduced speed.
Defects and reworks.
Caused by the wear of components.

Low quality products.
Starting losses.
Machine produces defects until it reaches the operation steady

state.

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These six main losses are grouped.
Load time
Operating time
Useful time
Defects and rework
Starting losses
Idling and minor stoppages
Reduced speed

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Breakdowns
Setup and changeover
48
The previous grouped losses define three basic indicator.
Availability, performance and quality.

Overall Equipment Efficiency (OEE) = A P Q
Load time
Operating time
Overall Equipment
A P Q
Effeciency (OEE)
Useful time
Q Quality
processed units defective units

100
processed units
P Performanc e

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stardard cycle time processed units

100
operating time
A Availabili ty
load time breakdown and setup time

100
load time
49
Objectives predicted for each indicator by Nakajima.
More than 90% in the availability.

More than 95% in the rate of performance.
More than 99% in the rate of quality.
The main advantage of the implementation of these

rates is that they can show how the improvements
carried out affect directly the equipment efficiency.

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More on OEE(1/2)
The OEE definition in SEMI E79 is composed

of four components.
OEE = Available Efficiency

* Operation Efficiency
* Rate Efficiency
* Rate of Quality

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More on OEE(2/2)
Available Efficiency
= (Equipment Uptime) / (Total Time)
Operation Efficiency
= (Productive Time) / (Equipment Uptime)
Rate Efficiency
= (Actual unit output) / (Theoretical unit throughput)
/(Productive Time)
Rate of Quality
= (Actual unit output Rework - Scrap)
/ (Actual
unit output)
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Dr. Tai-Yue Wang IIM
Dept.
NCKU

Introduction To 20 Keys To Improve Workplace

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Introduction

Operations Analysis and Improvement

Asian culture has had a significant impact

Many words used in our daily languages.

Martial arts, religion or food.

Within the business environment.

Improvement tools (kaizen( ) tools)

Just-in-time philosophy is also known as Lean

Dr. Tai-Yue Wang IIM Dept.

Another important philosophy is the concept

Based on a methodology of 20 keys leading

Dr. Tai-Yue Wang IIM Dept.

The core elements of Kobayashis concepts are

In addition, a measurement standard for

Dr. Tai-Yue Wang IIM Dept.

Continuous improvement is a management

It was developed in the United States at the end of

Many important improvements took place

Japan was already utilizing tools such as quality

When they combined these two ideas, kaizen was born.

Dr. Tai-Yue Wang IIM Dept.

In 1926 Henry Ford wrote

To standardize a method is to choose out of the

Todays standardization, instead of being a

In 1926 Henry Ford wrote

If you think of standardization as the best that

Dr. Tai-Yue Wang IIM Dept.

Creating an useable and meaningful standard is key to the

Those that suppose a revolution in the way of working.

Dr. Tai-Yue Wang IIM Dept.

The evolution consists of continuous

Carried out by the utilization of process reengineering

Dr. Tai-Yue Wang IIM Dept.

Require large investments and are based on process

In the U.S., these radical activities are frequently called

Dr. Tai-Yue Wang IIM Dept.

If the process is constantly being improved

Otherwise, the process of reengineering can become

Dr. Tai-Yue Wang IIM Dept.

Improvement Philosophies and

In order to find the source of a problem, it is

It is necessary to know what the variable objective is

Dr. Tai-Yue Wang IIM Dept.

Improvement philosophies and

Three main factors that production managers

Dr. Tai-Yue Wang IIM Dept.

Improvement philosophies and

Production improvements should be based

Problems can appear in any of the basic

Dr. Tai-Yue Wang IIM Dept.

Improvement philosophies and

Some example of problems.

Defects, obsolete work methods, energy waste, poorly

By analyzing the production management history,

Just-in-time Methodologies (Lean Manufacturing).

Improvement philosophies and

The keys to the Japanese success are.

Simple improvement methodologies.

Dr. Tai-Yue Wang IIM Dept.

In accordance with this philosophy principle,

I need it today, not yesterday, not tomorrow.

The plant flexibility required to respond to this kind

It is critical that inventory is minimized.