Thursday, July 31, 2008

How are changes in the Takt time (change in customer demand) implemented in the production system?...Heijunka is the answer


One of the major factors on which successful lean implementation depends is the "customer demand pattern" for a "given product family." If the demand pattern is very erratic, then it poses some difficulty. Hence, many companies first try to see if the demand pattern can be smoothened out.
In Ohno's (TOYOTA Production System thinker) teaching, there is the tale of "the slower but consistent tortoise causes less waste and is much more desirable than the speedy hare that races ahead and then stops occasionally to doze. This tale is an illustration of the leveling principle in which the workload is leveled for the sake of continuity (consistency of tortoise's pace) regardless to orders variations (the dashing of the hare).
The Lean framework adapted by Boeing (Source: Jerell Smith) in which stabilization of demand is shown as a foundational block. If the demand varies from day to day or month to month (which is true in most real life situations), people would take the annual demand and smooth it out over every month, every day or every shift to arrive at the "takt" time. This is called production leveling strategy (Heijunka).

One may still argue that you are creating finished goods inventory using "takt time" concept by production leveling. Why do not we hire and fire people based on the monthly customer demand pattern? In many cases, this may cause more chaos and disrupt the "rhythm." Many people would like "one rhythm" than to deal with the chaos of following "changing daily rhythms" based on the demand pattern for that day.

How a production line supporting multiple products with different takt times runs?

Lean implementation can be more straightforward in dedicated parts of your value stream - those places where only one product is made and where one-piece flow cells are appropriate.
But what if your value stream produces more than one product? What if it produces many products in any given month, or week or hour? Mixed Model flow is the solution you may have been looking for.
The popular way of dealing with this situation (called as the mixed-model flows) is to create product families based not just on similarities of manufacturing operations but also on the operation times.
What is Mixed-Model flow? Mixed-Model flow is making value flow by taking out the waste in your value stream so that multiple products are made in each time period.
This is accomplished by making the Mixed-Model flow part perform as if it were a dedicated asset. Each product "flows" at the rate of customer demand, even though multiple products are made there. For example, if two products A & B visit similar matching stations and the cycle time for A&B differ by over say 20% then they should "not" be lumped together in one product family. They should be handled by different manufacturing cells. Now where did this 20% come from? I have seen practitioners use some numbers such as these as a heuristic. It is not a magic number but based on experience. Any other ideas???

Wednesday, July 9, 2008

What is Value and Why is it hard to define it…


The Merriam Webster dictionary defines value as “the monetary worth of something” and “relative worth, utility and importance”. With respect to product and services value is generally defined with the notion of activity in mind. A value added activity can be defined as adding form fit or function to a product or service, an activity that the customer would be willing to pay for in isolation if they knew it was being done – e.g. Processing a part, laying foundation, Creating code, implementing functionality etc. However, sometimes it is hard to define what value is, mainly because of following reasons
• Most producers want to make what they are already making, and many customers only know how to ask for some variant of what they have already been getting. Because of this it is very important to abandon conventional approach and imperative for both producers and customers to jointly identify value.
• The appropriate definition of value changes once you look at it the whole through the eyes of the customer and not from the perspective of various firms along the value stream. Producers find it hard to redefine the value from customer’s perspective. It is vital for the growth of producers to accept the challenge of redefinition and redefine their strategy to provide what customer thinks is value to them.
• The final element in value definition is to identify the target cost to deliver the product or service to the customer. This is the cost if all visible muda were removed from the process. The value of a product or service should be judged by the question "What is the muda-free cost of this product? Relentless scrutiny of every activity along the value stream, searching for muda at every step, is key to reaching the target cost and hence defining the value.

Tuesday, July 1, 2008

Lean Enterprise Approach in Health Care Organizations.


A number of health care organizations have looked to manufacturing firms to develop process improvement initiatives that address their challenges. While they use slightly different terminology of lean, they have adopted many of the lean principles and practices to improve patient care. The industry began asking the same question as Automobile and Aerospace did years before: Can lean thinking be applied to health care? The following examples show attempts to do just that.



  • Kaiser Permanente-Northern California has revamped its large primary care department using lean methods to reduce the appointment backlog (55 day wait times for an appointment) to deliver an open-access system. They collaborated with a university operations research group to develop an excel-based just-in-time scheduling system to support this new process.

  • Two cancer institutes, Cancer Treatment Centers of America and Clearview Cancer Institute (CCI), employed a value stream approach to improve their operation process. Cancer Treatment Centers of America used the value stream mapping techniques to redesign their prescription process to cut a 32 step process in half and reduce turnaround times by 20%.

  • In primary care practice, a medical clinic in Dubuque, Iowa developed improved office practices. They improve their process by observing and eliminating waste and applying standardization of tests and processes, and empowerment of nurses to identify and implement changes.

    This is of course not an exhaustive list. List your examples…