Lean Thinking Joel cutcher- Gershenfeld Senior Research Scientist, MIT Sloan School of Management and Executive Director, MIT Engineering Systems Learning Center Presentation for: 16.682 Aerospace Industry Seminar March 9 2004
Lean Thinking Joel Cutcher-Gershenfeld Senior Research Scientist, MIT Sloan School of Management and Executive Director, MIT Engineering Systems Learning Center Presentation for: 16.682 Aerospace Industry Seminar March 9, 2004
Overview Learning Objectives Session Design (60-90 Awareness of the contrast min. between“mass"and“ean” >Two mindsets (7-10 min mindsets Appreciation of the historical Historical context(10-15 context for lean thinking min. Ability to engage in lean Applications(20-30 min thinking with respect to > Implementation debate application examples (5S'S, 7 (20-30mn) Wastes, and others Concluding comments(3-5 Appreciation for the dilemmas and challenges in lean min. Implementation A visual record of where we are at in this module Mindsets→ History Applications→ Implementation> Conclusion History C Joel Cutcher-Gershenfeld MIT 3504-2
Overview ¾ Learning Objectives ¾ Session Design (60-90 ¾ Awareness of the contrast min.) between “mass” and “lean” ¾ Two mindsets (7-10 min.) mindsets ¾ Appreciation of the historical context for lean thinking ¾ Ability to engage in lean thinking with respect to application examples (5S’s, 7 ¾ Historical context (10-15 min.) ¾ Applications (20-30 min.) ¾ Implementation debate (20-30 min.) Wastes, and others) ¾ Concluding comments (3-5 ¾ Appreciation for the dilemmas min.) and challenges in lean implementation A visual record of where we are at in this module: Mindsets History Applications Implementation Conclusion © Joel Cutcher-Gershenfeld, MIT 3/5/04 -- 2
Two mindsets Mass production” Mindset“ Lean Enterprise”" Mindset Producer“push Customer“pulp Movement of materials Flow of value High volume Flexible response Inspection Prevention Expert-driven Knowledge-driven Decomposition > Integration Periodic Continuous adjustment improvement Mindsets History> Applications> Implementation Conclusion c Joel Cutcher-Gershenfeld MIT 3/504-3
Two mindsets “Mass Production” Mindset “Lean Enterprise” Mindset ¾ Producer “push” ¾ Customer “pull” ¾ Movement of materials ¾ Flow of value ¾ High volume ¾ Flexible response ¾ Inspection ¾ Prevention ¾ Expert-driven ¾ Knowledge-driven ¾ Decomposition ¾ Integration ¾ Periodic ¾ Continuous adjustment improvement Mindsets History Applications Implementation Conclusion © Joel Cutcher-Gershenfeld, MIT 3/5/04 -- 3
Where to begin? An EXercise in Lean Thinking Small groups of 2-3 people-each assigned a number >Even numbered groups > Describe a home workbench or a student dorm room used by someone engaged in"mass thinking >Odd numbered groups > Describe a home workbench or a student dorm room used by someone engaged in lean"thinking Note: An option for this exercise would be to draw a picture on a transparency to illustrate you description Mindsets History> Applications> Implementation Conclusion c Joel Cutcher-Gershenfeld MIT 3504-4
Where to begin? ¾ An Exercise in Lean Thinking: ¾Small groups of 2-3 people – each assigned a number ¾Even numbered groups: ¾Describe a home workbench or a student dorm room used by someone engaged in “mass” thinking ¾Odd numbered groups: ¾Describe a home workbench or a student dorm room used by someone engaged in “lean” thinking Note: An option for this exercise would be to draw a picture on a transparency to illustrate you description Mindsets History Applications Implementation Conclusion © Joel Cutcher-Gershenfeld, MIT 3/5/04 -- 4
Notes From Student Responses Mass Lean dorm Dorm Basic furniture -bed desk, shelf Efficient use of space -loft bed and chair under bed storage All rooms the same Combined desk Square, long halls and every floor the Aesthetic and everything within reach same Modular and reconfigurable furniture Cheapest, reliable chairs Large double pane windows Basic cleaning New, "good for you' lights Wireless internet -basic Wireless internet Workbench Workbench Excess materials stock not used, rent equipment Lots of equipment Materials ordered based on projected Storage room use Products stored in a room Quality materials and equipment More than one bench Versatile and well organized Ability to design ourselves Ability to repair our own parts Outsource to others if they would be better to do it C Joel Cutcher-Gershenfeld MIT 3504-5
Notes From Student Responses Mass ¾ Dorm ¾ Basic furniture – bed, desk, shelf, chair ¾ All rooms the same ¾ Square, long halls and every floor the same ¾ Cheapest, reliable chairs ¾ Basic cleaning ¾ Wireless internet – basic ¾ Workbench ¾ Excess materials, stock ¾ Lots of equipment ¾ Storage room ¾ Products stored in a room ¾ More than one bench © Joel Cutcher-Gershenfeld, MIT Lean ¾ Dorm ¾ Efficient use of space – loft bed and under bed storage ¾ Combined desk ¾ Aesthetic and everything within reach ¾ Modular and reconfigurable furniture ¾ Large double pane windows ¾ New, “good for you” lights ¾ Wireless internet ¾ Workbench ¾ If not used, rent equipment ¾ Materials ordered based on projected use ¾ Quality materials and equipment ¾ Versatile and well organized ¾ Ability to design ourselves ¾ Ability to repair our own parts ¾ Outsource to others if they would be better to do it 3/5/04 -- 5
Historical context: The changing nature of work 1800 and earlier 1900 2000 and beyond Craft Production Socio: Decentralized Enterprises Mastery of Craft Tech: Custom Manufacture Specialized Tools Mass production Socio: Vertical hierarchies Scientific Management Tech: Assembly Line Interchangeable Parts Knowledge-Driven Work Socio: Network alliances Team-Based Work Systems Tech: Flexible Specialization Information Systems Mindsets History Applications>Implementation> Conclusion C Joel Cutcher-Gershenfeld MIT Adapted from: " Knowledge-Driven Work: Unexpected Lessons from Japanese and United States Work Practices (Oxford University Press, 1998) 3504-6
Historical context: The changing nature of work 1800 and earlier 1900 2000 and beyond Craft Production Socio: Mastery of Craft Tech: Custom Manufacture Specialized Tools Mass Production Socio: Vertical Hierarchies Scientific Management Tech: Assembly Line Interchangeable Parts Knowledge-Driven Work Socio: Network Alliances Team-Based Work Systems Tech: Information Systems Applications Implementation ion Decentralized Enterprises Flexible Specialization Mindsets History Conclus © Joel Cutcher-Gershenfeld, MIT Adapted from: “Knowledge-Driven Work: Unexpected Lessons from Japanese and United States Work Practices” (Oxford University Press, 1998) 3/5/04 -- 6
Historical context: Transformation initiatives 1950s1960s1970s1980s1990s2000s Associated Team Structure Human Relations Movement Work Redesign: Human group (on line/off line) Socio-Technical Work Systems(STS) Semi-autonomous teams(on-Line) Employee Involvement(E)/ El/QWL groups Quality of Work Life(QWL (off-line) Total Quality Quality circles Statistical Process Control (SPC) Management(TQM) (off-line) Work-out events Re-Engineering (off-line) Black belt led project Six Sigma teams(off-line Lean production teams Lean Production /Lean Enterprise systems Integrated Product Process teams (on-line) Mindsets History> Applications> Implementation Conclusion o Joel Cutcher-Gershenfeld, MIT Source: Auto Industry System Study by Joel Cutcher-Gershenfeld and Thomas Kochan, 2000 3504-7
Historical context: Transformation initiatives 1950s 1960s 1970s 1980s 1990s 2000s Associated Socio-Technical Work Systems (STS) Employee Involvement (EI) / Quality of Work Life (QWL) Management (TQM) Re-Engineering Lean Production / Lean Enterprise Systems ) Work Redesign Total Quality Six Sigma Statistical Process Control (SPC Human Relations Movement Team Structure Human group (on line/off line) Semi-autonomous teams (on-Line) EI/QWL groups (off-line) Quality circles (off-line) Work-out events (off-line) Black belt led project teams (off-line) Lean production teams / Integrated Product & Process teams (on-line) Mindsets History Applications Implementation Conclusion © Joel Cutcher-Gershenfeld, MIT Source: Auto Industry System Study by Joel Cutcher-Gershenfeld and Thomas Kochan, 2000 3/5/04 -- 7
Historical context: Emergence of lean Selected Elements of Toyota Production System Discussion Question Implemented over Three Decades: Pull vision It took close to 30 years for Toyota to develop all Kanban(card) system of the aspects of the Production leveling Toyota Production Reduced set-up time(Shingo) System, including the lean thinking that goes Jidoka(people giving wisdom to machines with that system. How Statistical Process Control (SPC) long do you think it Quality Circles might take a large Kaizen continuous improvement based on aerospace company such as boeing or knowledge Lockheed martin or Poka-yoke (error proofing Pratt and whitney to Adnon(visual display) build the same capability--30 years 2O years, 10 years, 5 Case Example - Kanban years? 1950s First kanban experiments 1960s Kanban introduced company-wide 1970s Kanban distributed across suppliers Mindsets History> Applications> Implementation Conclusion C Joel Cutcher-Gershenfeld MIT 3/504-8
Historical context: Emergence of lean Selected Elements of Toyota Production System Discussion Question: Implemented over Three Decades: ¾ “Pull” vision ¾ It took close to 30 years for Toyota to develop all ¾ Kanban (card) system of the aspects of the ¾ Production leveling Toyota Production ¾ Reduced set-up time (Shingo) System, including the lean thinking that goes ¾ Jidoka (people giving wisdom to machines) with that system. How ¾ Statistical Process Control (SPC) long do you think it ¾ Quality Circles might take a large aerospace company ¾ Kaizen (continuous improvement based on such as Boeing or knowledge) Lockheed Martin or ¾ Poka-yoke (error proofing) Pratt and Whitney to ¾ Adnon (visual display) build the same capability -- 30 years, 20 years, 10 years, 5 Case Example – Kanban: years? 1950s First kanban experiments 1960s Kanban introduced company-wide 1970s Kanban distributed across suppliers Mindsets History Applications Implementation Conclusion © Joel Cutcher-Gershenfeld, MIT 3/5/04 -- 8
Auto industry data: A lean story (data from The Machine That Changed the World 20 Lean 15 Market Capitalization 1998-2001 US 0 Production Anorexic Lean Japanese "Bulimic Lear Production 1947 1954 1961 1968 1975 1982 1989 Year Mindsets History Applications>Implementation> Conclusion @Joel Cutcher-Gershenfeld, MIT Source: Ted Piepenbrock 2003, Engineering Systems Division Doctoral Seminar, Massachusetts Institute of Technology 3/5/04-9 1. Data from Womack, Jones and roos, The Machine that Changed the world, The Free Press, 1990
Auto industry data: A lean story? (data from The Machine That Changed the World) Auto Production (millions) 20 15 10 5 Japanese Production US Production Chrysler Ford GM Market Capitalization 1998-2001 Lean” “Bulimic Lean” “Lean” Toyota “Anorexic 1947 1954 1961 1968 1975 1982 1989 Year Mindsets History Applications Implementation Conclusion © Joel Cutcher-Gershenfeld, MIT Source: Ted Piepenbrock 2003, Engineering Systems Division Doctoral Seminar, Massachusetts Institute of Technology 3/5/04 -- 9 1. Data from Womack, Jones and Roos, The Machine that Changed the World, The Free Press, 1990
Airline industry data: A lean story? (source: IATA Southwest Airlines Total Airline Profits (19702002) 20b Higher, Faster, Farther $15b Network Carriers Hub& Spoke Networl $10b Wide Body Planes $5b o $O b Better, Faster, Cheaper Low-Fare Carriers Point-to-Point Networks Market Capitalization -$10 b Narrow body planes 2002 -$15b -$20b 970197519801985199019952000200520102015 Mindsets History Applications Implementation Conclusion @Joel Cutcher-Gershenfeld, MIT Source: Ted Piepenbrock 2003, Engineering Systems Division Doctoral Seminar, Massachusetts Institute of Technology 3/5/04-10 L Data from the iata
Airline industry data: A lean story? (source: IATA & Southwest Airlines) Total Airline Profits ) $0 b $20 b $10 b $5 b -$5 b $15 b -$20 b -$10 b -$15 b “Better, Faster, Cheaper” “Higher, Faster, Farther” Delta Market Capitalization 2002 (1970-2002 Low-Fare Carriers Point-to-Point Networks Narrow Body Planes Network Carriers Hub & Spoke Networks Wide Body Planes All Others American Southwest 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Mindsets History Applications Implementation Conclusion © Joel Cutcher-Gershenfeld, MIT Source: Ted Piepenbrock 2003, Engineering Systems Division Doctoral Seminar, Massachusetts Institute of Technology 3/5/04 -- 10 1. Data from the IATA