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FIELD BOOK FOR THE GOLD MINE A NOVEL OF LEAN TURN AROUND BY FREDDY

BALLE

THE GOLD MINE - A NOVEL OF


LEAN TURN AROUND
FREDDY BALLE AND
MICHAEL BALLE
A FIELD BOOK FOR
TRAINERS

C P CHANDRASEKARAN
V1
Jul-15

C P CHANDRASEKARAN JULY 2015 cpchandrasekaran@gmail.com PUBLICATION


AVAILABLE FREE

FIELD BOOK FOR THE GOLD MINE A NOVEL OF LEAN TURN AROUND BY FREDDY
BALLE

CPC
Item
no
1.1

Chapter 1 -Profit is King but profit rules


Study notes for case presentation
1 The current situation
Phil has developed a patent for new technology in high
voltage business which applied to circuit breakers.

Page
no
7

1.2

He and his friend Matt set up a small factory and


bought a competitor's factory

1.3

Since the factory was old, they put in efforts to


modernise the equipments and improve production
flows.
Current Pains
The products are profitable and required by customers,
Suppliers are not paid in time as there is no cash though
customers are paying in time

Inventory is high.
Some parts are overstocked and some are under
stocked.
Thinking on Counter measures
None
Points to debate
Constant production stoppages from missing partsWhat the team has done to find the missing parts and
root causes for their missing.
Long lead time for some parts because they are
imported from other countries possibly Brazil or Mexico.
Would efforts to source them locally offset the risk due
to dependence on imports?

9
10

2
2.1
2.2
2.3
2.4
3
3.1
4
4.1
4.2

9
9

10
10

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FIELD BOOK FOR THE GOLD MINE A NOVEL OF LEAN TURN AROUND BY FREDDY
BALLE

CPC
Item
no
1
1.1

1.2

Chapter 2-Gold in the flow


Study notes for case presentation
The current situation as it unfolds
Mechanisms are built in one part of the plant assembly is done in
another then a circuit board vendor item is installed. The panel is
wired to the specifications and product is shipped.

Page
no
16

Our competence is core but we are selling circuit breakers. (Phil


8
said)
1.3
Other than cores, parts do not cost much but assembly is labour
17
intensive
1.4
STR is the largest selling model. QST2, QST 1 are next and DG is 18
the least
1.5
Cores wait for 24 hours before they are transferred to assembly
20
for cooling
1.6
Currently they are running one shift but can sustain two shift
operation
1.7
Cabinets hung from the ceiling and moved to the next station by 22
the operator
1.8
No system in place to identify non conforming parts at
25
intermediate stages
1.9
By reducing the products to four families, inventory was also
reduced
1.10 Shipping the products once a week 50 STRs in one truck and
40
customer wants 100 a week. They ship 60 QST1 50 QST 2 and
20 DGs.
1.11 They are assembled in three lines and and sometimes DG is used 42
for STR also.
1.12 36 products STR waiting to be delivered
44
1.13 20 STRS hanging on the conveyor ie two days production
44
2
Current Pains
2.1
Materials are expensive
21
2.2
Crates filled with all sorts of metal plates for fabrication
21
2.3
Heap of vaccum cores, mountains of metal parts, racks of
23
assembled mechanisms, cabinets on conveyor
2.4
Customer rejection 5 per 1000
24
2.5
114 finished mechanisms in stock but delivery getting delayed
48
2.6
cannot deliver more than 50 though customer can buy 100 per
50
week
3
Thinking on Counter measures
3.1
Categorise waste into the seven types and observe the wastes in 25
operation.
3.2
Find a way to increase production without increasing fixed costs
26
3.3
Divide inventory into Raw material, WIP and finished goods
28
3.4
Make A,B,C list for products depending on profitability
31
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FIELD BOOK FOR THE GOLD MINE A NOVEL OF LEAN TURN AROUND BY FREDDY
BALLE
3.5
3.6
3.7
3.8
4
4.1
4.2

CP
C
Ite
m
1
1.1

Start with mechanism assembly for removing the bottlenecks


147 mechanisms/40 per person is 3.3 days lead time.
Remove 10% of resources away and improve operations then
again go for 10%
Increase STR output to 100 without increasing inventory. Collect
cash.
Points to debate
Can Phil stick to core making leaving the rest like fabrication to
others?
Why to continue production of DG when Phil knows it is obsolete?

32
42
43
51

17

Chapter 3 Takt Time

Study notes
The current situation as it unfolds
Gloria assembles the STR mechanism in 42 minutes (it takes longer
if part is missing )
1.2 Break down of the assembly is 12 mins to assemble the mechanism,
4 minutes to fit the motor, 6 mins to wire the motor, 7 mins to fit the
vaccum core capsule. 4 mins to d the wiring and 9 mins for testing

Page
no

1.3 Objective is zero defects in the process. but 20% of material is in red
bin.
2 Current Pains
2.1 Fitting the core gave Gloria some trouble
2.2 Difference between first step and second step in time
2.3 Motors from the suppliers got problems which hold up the line
3 Thinking on Counter measures
3.1 Takt time= 460 mins/40 breakers= 11.5 minutes
3.2 Maintain takt time and do not get into overproduction
Since Gloria takes 42 minutes we need 4 people If customer wants
3.3 more 5 people
3.4 But variation makes it impossible for us to maintain the time
operator should not accept defects from upstream. Jidoka or Zero
3.5 defects accepted.
3.6 No rework just ask the operator to put the faulty part in the red bin
3.7 Count the internal scrap
work on STR line along with operators to find solutions to the
3.8 defective parts
In any operation, minimum and not average time taken should equal
3.9 the takt time
3.1 Decompose every operation into basic movements
0
3.1 Do not think of job . Think of operations to be completed within takt
1 time
3.1 Operator should do the task only when the next station can accept.
2
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74

74
83
74
74
86

78
80
82
84
87
90
94
95
96
98

FIELD BOOK FOR THE GOLD MINE A NOVEL OF LEAN TURN AROUND BY FREDDY
BALLE
3.1 Establish a separate rework line
3
3.1 One square between two stations sequential and one tray one
4 product allowed in between
3.1
5
3.1
6
3.1
7
3.1
2
3.1
3
4
4.1
4.2
4.3
4.4

101
108

Start with double bin system


Operators need not do anything else except value adding work.
110
Supply materials to operators on their table
111
Worry about delivery and worry about reducing inventory
112
Andon- the signal for the operator to activate in case of
defective/line hold up
Points to debate
Dave defied Bob in usage of stopwatches.Do you think he is
Justified?
Is Gloria the correct sample for time study? (Read page no 95 also)
Should the defective Motors need to be attended to immediately?
Bob says that if demand increases to 60 then takt time will be
450/60= 7.5 mins so operators will be 42/7.5= 6 people. What are
the assumptions in this calculation?

88

69
74
86

108

4.5 Can you see me going to Quality guys and tell them to get cracking?
Said Amy. Explain what the quality guys are expected to do by Amy

CPC
Item
no

109

Chapter 4 -Standardize work

Study notes
1 The current situation as it unfolds
1.1 Motor supplier made a change in the Design which
is repsonsible for one third of the rework

Page
no

114

1.2 6 operators were producing 40 mechanisms and


now 4 were producing 32.

115

2 Current Pains
Operators do not work the same way and they
2.1 forget something or other evvery time

116

3 Thinking on Counter measures


Productivity comes from reducing the variations in
3.1 the operator's cycles
3.2 Take away all tasks which do not add value
Operators hsould work in the same sequence that
3.3 is the meaning of standardized work
3.4 Do 5S to ensure uniform way of working

Para

118
118
118
120

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FIELD BOOK FOR THE GOLD MINE A NOVEL OF LEAN TURN AROUND BY FREDDY
BALLE
3.5 Cleaning and polishing daily gives you an idea of
what is about to fail
4 Points to debate
4.1 The change which the supplier made in Motor was
not communicated to the operations. Bob is silent
on corrective action for this. What systmic
measures you would recommend to Bob to ensure
that in future this does not happen?
4.2 Do you think Amy's problem that operators may
forget something and Bob's advice that a good
operator is one who does not forget anything is an
apt starting point for Poka yoke?
4.3 Bob says that Japanese experts made him do 5S
for two years even before touching anything on
lean. Do you agree that two years are required to
get the organisation to the level of 5s

CPC
Item
no

123

114

114

125

Chapter 5 It is all about the people

Study notes
1 The current situation as it unfolds
1.1 Human Relations must work on the principle that the
operators work station is their universe and
management must build trust in that domain
1.2 The regatta team leader becomes a role model for the
factory
1.3 Zero investment is the rule of Kaizen
1.4 Dont look at the big bonanza in operator suggestions.
Look for small gains.
2 Current Pains
Try to run the line with three operators and with one
2.1 person helping from behind This is the challenge
3 Thinking on Counter measures
Kaizen - Do small improvements 10% at a time rather
3.1 than doing big improvements at one go

Page
no
128

129
131
132

132

128

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FIELD BOOK FOR THE GOLD MINE A NOVEL OF LEAN TURN AROUND BY FREDDY
BALLE
3.2 Empahsise on zero investment pat in Kaizen.
We need Kaizen to lower the takt time may be by
3.3 reducing the work content

3.4
3.5
3.6
3.7

Try to run the line with three operators and keep the
supervisor to chip in. That will create the pressure. Make
the operations into five second slices. Take readings how
operators are doing.
Use Video to produce a new standardized work chart
Gains should come from cost saving and not from cost
cutting
Have five minute meeting daily at the start of the shift
Set up a Daily Production analysis board (Value added
by the shop= Good parts /no of operators * hours)

3.8
3.9 Summary of agreed improvements
3.10 Create a sense of ownership in the work station

CPC
Item
no

131
132

132
133
134
135
144
145
148

Chapter 6 Level to Pull

Page
Study notes
no
1 The current situation as it unfolds
1.1 People problems surfaced with Final assembly guys not
coping with Gloria
152
1.2 Productivity is up by 20% and 10 parts per person on all four
lines.
152
1.3 Dave backed out. Engg Manager says HR is encroaching into
other areas
152
1.4 we get monthly orders and schedule them weekly . If we got
to deliver 100 STR 50 QST1 and 50 QST2 and 20 DGs we will
run STR on Monday Tuesday QST2 on wednesday QST 1 on
Thursday and DG on Friday
159
1.5 Gloria and Amy pick up Ester as the new leader for assembly
2 Current Pains
2.1 It is tough on assembly guys as the manufacturing has
increased its rate
153
2.2 While assembling QST STR mechanisms just pile up in the
160
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FIELD BOOK FOR THE GOLD MINE A NOVEL OF LEAN TURN AROUND BY FREDDY
BALLE
assembly area
2.3 Jake threatens to sabotage and he is sent with a golden
handshake
3 Thinking on Counter measures
3.1 Build a small inventory for regular items but do not build
inventory for those not frequently ordered
3.2 Make table of weekly demand and derive daily demand from
it. Add Takt time to it.
3.3 Make slots of ten minutes and schedule the items as per their
takt time
3.4 Moving from every part every week to every part every day
3.5 No need of a separate line for DG
3.6 Keep 4 units for one STR in the tray for the operator to pick
up
3.7 Inventory is water and as it depletes in water body the rocks
which are problems are seen

172

161
165
166
168
170
172
178

3.8 Introduce change-overs and effect delivery of products to


shipping by putting them in the shipping bay

182

3.9 If you have to ship every two hours, then you cannot
postpone solving production problems

183

3.1 10% of production time goes in change- overs as a


benchmark
3.11 Create virtual trucks in delivery area ( areas marked for
shipping)
3.12 customer supermarket to take care of customer variation and
end of process supermarket to take care of assembly
variation
3.13 There will be seven preparation areas so that when truck
arrives the materials will be loaded without any drama
3.14 six principles of lean implementation summarised
4 Points to debate
4.1 new STRX has three mechanisms instead of four which do not
work reliably. Is it a good decision to introduce this product
now and ship 40 a week?
4.2 "I told Jake it would be that way or else" Phil told Jake who did
not agree for alternating the products. How sound is this as a
HR policy?

CPC
Item
no

189
191
192
193
196

186
174

Chapter 7 Kanban rules

Study notes
1 The current situation as it unfolds
1.1 The shop floor appearance had changed with 5S
implementation
1.2 Mechanism assembly area has been transformed. Each
operator had a small container infront of his oer her work
station.

Page
no

199

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FIELD BOOK FOR THE GOLD MINE A NOVEL OF LEAN TURN AROUND BY FREDDY
BALLE
1.3 Five minute meetings have started and white boardput up for
data upload
1.4 Accident free days are being tracked
1.5 Mechanisms are produced in small numbers with less
inventory but they are pushing because it is according to
Production Planning schedule and not a replenishment for
what is consumed
2 Current Pains
2.1 Gloria supplies the items not logistics currently
2.2 Material handlers do not want to move the finished products
into truck preparation area when there is no truck in sight
2.3 Average inventory policy resulted in some too many parts
and some too less
3 Thinking on Counter measures
3.1 No customer risk!! Delivery first !!
3.2 Kanban is introduced for withdrawing components
3.3 Build a box of 20 slots and when the tray is full take them to
the operators
3.4 Play perfect customer and pick up the products as they are
finished and take them to the truck area regardless of the
truck arrival time
3.5 Construct a heijunka box or levelling box with a slot for each
product. Material handler has to move the product as per the
box every half an hour
3.6 Downstream process goes to collect the parts to the
upstream process and upstream process is allowed to
produce exactly what is to be replenished
3.7 produce what is consumed in the right order
4 Points to debate
4.1 what is the reason the material handlers are resisting the
kanban ?
4.2 Missing parts keep disrupting the levelled production. Do you
think Phil should have taken more aggressive measures?
4.3 "Phil, take this idiot (Morgan) out" says Harry. How much is
the role of Morgan in the mess of missing parts and is being
hanged for collective fault?
4.4 I'd better go looking at those presses says Dave. Any
suggestion what he should do ?

201

200
209
224
205
206
206

211
213

217
232

217
218

226
229

CPC
Chapter 8 Gemba Attitude
Item
Page
no
Study notes
no
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FIELD BOOK FOR THE GOLD MINE A NOVEL OF LEAN TURN AROUND BY FREDDY
BALLE
1 The current situation as it unfolds
1.1 Blanks are punched taken to store or just left and then they
come back to the press
1.2 CNC Puncher cuts a blank into panel in about a minute. At a
time they do 100 about two weeks of supplies at one go
1.3 43 cabinets are required per day Takt time= 11 minutes
2 Current Pains
2.1 Ohil says the problem is machine runs for 20 seconds
whereas welding takes 20 minutes
2.2
2.3
3
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8

Dave complains that the machines are down often


Thinking on Counter measures
Cabinets should flow to the conveyor
Aim for 20 minute changeover and so typically 200 min run
Sequence to implement SMED
Produce one cabinet every eleven minutes
Cleanliness in press shop is the top priority
Sequence to implement cleanliness
TPM as a process must be owned by operators
Try to replicate the defect at will so that you can set the
machine and eliminate the defect

3.9 Sequence of 5 whys


3.10 Observe the machines and do not solve problems sitting in
offices
3.11 Change the layout so that cell gets formed with presses and
press brakes close to welding area
3.12 Be prepared to do further changes in the placement of
machineries
3.13 Release the idle fork lift trucks to do the running between
assembly and truck preparation
4 Points to debate
4.1 Is Gemba attitude entrenched in the system ? Or is it a
personal trait to be found among some and not among some
like Kevin

CPC

242
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244

244
252

247
248
249
250
252
253
256
257
257
260
271
273
278

278

Chapter 9 The Heijunka way

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FIELD BOOK FOR THE GOLD MINE A NOVEL OF LEAN TURN AROUND BY FREDDY
BALLE
Item
no
1
1.1
1.2
1.3
1.4
2
3
3.1
3.2

Study notes
The current situation as it unfolds
Customer first in delivery, performance is understood
Flexibility in mix and volume
Gemba attitude
Operators have started trusting

Current Pains
Thinking on Counter measures
Make your plan asper customer's plan
Make the value stream analysis or Material and Information
Flow analysis
3.3 Sequence of doing VSM given

Page
no
284
284
284
296

292
299
300

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FIELD BOOK FOR THE GOLD MINE A NOVEL OF LEAN TURN AROUND BY FREDDY
BALLE

CPC
Item
no
1
1.1
1.2
1.3
1.4
2
2.1
2.2
2.3
3
3.1

Chapter 10 Kaizen all the way


Study notes
The current situation as it unfolds
Team changes as Amy leaves
Company gets appreciated as the best class in lean
implementation
Phil decides to build quality into products
Phil realises that Tanaka san was actually teaching him
Current Pains
Amy submits resignation as she got better offer
Tanaka san feels that they are not caring about Quality
Still the culture is one of detection not prevention
Thinking on Counter measures
Implement three quarters model a) current role b) future role
and c) who is the replacement

Page
no

311
316

312

3.2 Have a system and have people to lead the system


3.3 One operator cycle is all the time you got to respond to any
issue on the line

313
320

3.4 Phil should spend 80% of the time in the plant


3.5 Carry out Poka yoke at all work places
3.6 Standardized work is the beginning and end of the
continuous improvment
3.7 Sequence for Kaizen cycle is given

321
326
330
332

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