FACULTY OF ENGINEERING AND COMPUTING

LEAN MANUFACTURING
ASSIGNEMENT
By Donatien Peigné

SESSION DATE: 2007/2008

Module leader: Wendy Garner

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CONTENT

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1.0 Conduct a literature review to present a case to the company to employ the lean
techniques for improvement. Identify areas of benefit and concern within the lean
methodology.

Lean Manufacturing is the latest buzzword in manufacturing circles, but it is not

especially new. It derives from the Toyota Production System or Just In Time Production,
Henry Ford and other predecessors.

Lean manufacturing and Just In Time (JIT) is a manufacturing philosophy of

eliminating waste in the total manufacturing process, from purchasing through distribution.
Properly implemented, JIT enables a company to develop manufacturing into a strategic
weapon. Let’s see a case, concerning the company Hutchinson Technology, Inc., employing
the lean techniques for improvement, and let’s identify areas of benefits and concern within
the lean methodology.

Hutchinson is a 20-year-old custom manufacturer of computer components and complex

electronic assemblies. The company employs between 1000 and 1200 people at six
manufacturing facilities, all operating under one roof in Hutchinson, Minnesota.

In the 1980s, offshore competition was putting pressure on the company to reduce
costs of its six product lines. One company even gave Hutchinson an ultimatum in order that
the price of one product be reduced by 67 percent in the next 12 to 18 months. At the same
time Hutchinson was faced with its costs-cutting dilemma, the company was trying to
generate more revenue with the same number of employees. Hutchinson needed in short a
more efficient operation. The company found the solution to its problems in Just-in-Time
manufacturing. Hutchinson’s move to JIT was initiated by its president, Wayne Fortun, who
in 1983 travelled to Japan with a Rath and Strong-sponsored executive group to visit
manufacturing companies there and study Japanese manufacturing practices. Fortun was
impressed by the JIT operations he saw and wanted to implement JIT techniques at
Hutchinson.

To lay the groundwork for JIT implementation, Rath and Strong worked with
Hutchinson on a quality-improvement program that focused on changing operations on the
shop floor. Intended to stabilize Hutchinson’s manufacturing process and increase yields, the
program included a videotape course on Total Quality, a statistical problem-solving section,

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and general quality training. Quality training for managers and operators occurred over a
period of several months. Overall, the quality improvement program resulted in a 33 percent
improvement in quality yields, raising the total to over 70 percent, including many state-of-
the-art processes.

Following the success of this program, Hutchinson took its next step toward implementing
JIT. In August 1985, the company conducted a two-day JIT seminar for Hutchinson
employees. The seminar, presented to managers and supervisors, outlined the principles of
JIT, described the techniques of JIT operations, and included a discussion of JIT’s potential
benefits. In September, Hutchison created JIT implementation teams in each of its six
manufacturing divisions. Each team included the manufacturing manager, a quality
representative, a production supervisor, a process engineer, and an industrial engineer. Two
groups on the six divisions immediately implemented pilot machine cells in their areas for a
30-day trial period. In October, John Cingari, one member of at Rath and Strong travelled to
Minnesota to help Hutchinson begin to implement JIT in all manufacturing groups. From
October through the following July he spent two days each month at the plant, assisting the
six JIT implementation teams. His efforts were focused on working with Hutchinson to
understand and implement four of the five basic JIT techniques: machine cells, pull systems,
setup reduction and uniform plant load.

Specifically, Cingari helped the individual groups identify sites for pilots applications,
offered technical training on the five techniques of JIT and their principles, and helped design
and review layouts for machines cells in those groups that used them. In the early stage, he
taught members of the JIT teams how to get started with the machine cells, and helped
manufacturing managers and industrial engineers determine the best way to maximize
workers’ time and determine crew sizes that could be flexible to constantly changing demand
rates.

After three months of successful pilot applications, Hutchinson integrated JIT through
all the manufacturing functions on the plant floor. Though the JIT implementation effort was
still underway at Hutchinson as the end of 1986, the company had in just over a year realized
dramatic improvements above and beyond those realized during the quality campaign.
Specifically:

• Manufacturing lead times were reduced from 50 to 90 percent.

• Quality yields improved and additional 4 to 14 percent

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 • Setup time were reduced by as much as 75 percent

• Work-in-process was reduced 40 to 90 percent. That translated into 80 work-in-

process inventory turns and 120 inventory turns in finished goods.

These improvements in individual areas of manufacturing are only part of the

Hutchinson picture. At a time when the electronics industry was suffering, JIT helped
Hutchinson remain competitive and maintain market share. The company that had
issued the ultimatum to Hutchinson a year earlier stayed with Hutchinson and was in
1987 a major customer.

In addition, Hutchinson was able to respond to competitive pressure on its

major product line. It maintained market share by lowering its price by 30 percent
while increasing its percent profit on each unit by one third. Moreover, the quality of
Hutchinson’s product is so good that the company is able to complete in the Far East,
shipping some 30 percent of its product to Far East manufacturers.

Clearly, JIT and Quality have been a success at Hutchinson, and in a very short
time.

2.0 Assess the current manufacturing facility.

Current Value Stream Map

The value stream above shows the routes of the products from the customer to the
supplier. We can see that:

• The batch sizes are very high (1600, 400, or 1000), which is not good for JIT pillar
• The lead time, equals to 110,9 days is very long
• The VA (Value added) equals to 889s is very low
• The WIP (Work in progress) is very high (min of 819 and max of 1680)
• The flow of the product is disjointed and not balanced
• The balance of the line is poor
• The reliability of the CNC2 is not good (90%)
• The information flow is complex

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 The high ratio of the lead time and the WIP, and the not balanced flow of the product
indicate that waste, delays, complexity and slow response to customer requirements exist, so
that improvements have to be done throughout the manufacturing process. Moreover, the high
volume of the batch can be reduce in order to reduce the lead time, and furthermore, the
inventory.

The spaghetti diagram below show the routes of the products from their row state to their final
state.

SPAGHETTI DIAGRAM

In this spaghetti diagram, we can see the route of the products within the shop floor of
RAP. As shown, a few part of this shop floor are not used, so they could be removed.
With the current state map and the spaghetti diagram, we can see that at least two of the 7
waste can be identified in the RAP manufacturing process:

1 • Inventory
The inventories are very high.

1 • Movement
The electronic subassembly, which is in an adjacent building lead to unnecessary transport
of the goods

These wastes will also have to be removed within the new method of manufacturing.

GAP ANALYSIS SI J’AI LE TEMPS

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3.0 Using lean methodology and analysis techniques, design a new method of
manufacture (include as much detail in recommendations as possible).
The first step to the installation of a new method of manufacturing within the RAP is
to ensure that the 5s are respected. The 5 aims have to be completed: Organisation,
Orderliness, Cleanliness, Standardised Cleanup and Discipline.
First, a 5s promotion organisation within RAP has to be established. This organisation should
be led by some of the company’s top managers and should operate RAP wide. This promotion
plan has to ensure that the 5s objectives are regularly completed:
• Organisation: clearly distinguish needed items and unneeded items, by performing
inventories
• Orderliness: clearly indicates all storage sites, and store items inside and anywhere
else. Set up signboards for machines showing their names and processes in production
lines
• Cleanliness: ensure that all areas are the most clean as possible
• Standardised Cleanup: Maintain the three previous objectives (Organisation-
Orderliness-Cleanliness)
• Discipline: make the 5s a part of the daily habits for everyone.
The following step of the 5’s is to create a 5s campaign materials, in order to identify
useless materials, and label the most important of them. In-house education and 5s
implementation should then be carried out periodically, to maintain and improve 5s
conditions.
The next step to improve the manufacturing process within RAP is to develop a
continuous flow. The Yamazumi board below illustrates the current state.

CURRENT YAMAZUMI BOARD.

Let’s calculate the efficiency of the line:

Efficiency (%) = productive time / available time
= 889 / (13*360)
= 19%
As we can see, the efficiency is very poor. Moreover, the line is unbalanced. Thess
two weaknesses can be minimized by designing a new flow line.

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 However, before applying single piece flow, the set ups, the batch sizes and the queue
sizes have to be reduced. This can be done by implementing SMED (Single Minute Exchange
of Die). The SMED should allow a minimal loss to throughout time on equipment, the ability
to run a greater variety of product mix, and especially building on time what is needed on
time. Thus, the batch size of the sawing process, initially equals to 1600 can be reduce to 160.
The batch size of the lathe and the deburring, initially equals to 400 can be reduced to 40, and
the batch size of the heat treatment process, initially equals to 1000 can be reduced to 100.
Once the batch size reduced, single piece flow can be designed. The saw is a shared
resource and cannot be combined with other processes. However, the lathe, deburr, CNC1 and
CNC2 can be combined into a single piece flow cell, that we will call cell1. The Assembly1
(for AR124), Assembly2 (for ARE124 and AL123) and Assembly3 (for ARE124 and AL123)
can be also combined into a single piece flow cell called cell2. Finally, Assembly1 (for E124),
Assembly2 (for E124) and Assembly3 (for E124) can be also combined and form the cell3.
The following step is two calculate the number of operators necessary for each cell,
the efficiency of their work, and the total work content.
The takt time calculated equals to 360s.
• Cell1
Total time for lathe, deburr, CNC1, CNC2:
60+10+150+136=356s.
So, the number of operators necessary for cell1 = 356/360 = 0,98.
0,98 people, with continuous improvement and cycle time reduction lead to 1 people
necessary for cell1.
Let’s calculate the efficiency of these two workers:
Efficiency (%) = productive time / available time
= 356 / 360
= 98%
1 people working at a 98% efficiency gives a cycle time of 98% * 360 = 356s
The future state of the cell1 can be represented by the following Yamazumi board:

FUTURE YAMAZUMI BOARD CELL1.

The figure below is the operating sequence and layout that are applied in RAP for cell1.

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 Manual Cycle Automatic cycle
Operation no Description
(seconds) (seconds)
2 Lathe 60 0
3 Deburr 10 0
4 CNC1 10 150
5 CNC2 10 126

DESSIN

Let’s assume that the operator needs 5 seconds to walk between each process. The
following Walk Chart can thus be drawn for cell1.

Combination Chart Cell1

Using the new cell design, a new standard operation sheet can be drawn for cell1:

DESSIN

• Cell2
Total time for Assembly1 (for AR124), Assembly2 (for ARE124 and AL123),
Assembly3 (for ARE124 and AL123):
160+120+55=335s.
So, the number of operators necessary for cell2 = 335/360 = 0,93.
0,93 people, with continuous improvement and cycle time reduction lead to 1 people
necessary for cell2.
Let’s calculate the efficiency of this worker:
Efficiency (%) = productive time / available time
= 335 / 360
= 93%
1 people working at a 93% efficiency gives a cycle time of 93% * 360 = 335s
The future state of the cell1 can be represented by the following Yamazumi board:

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 FUTURE YAMAZUMI BOARD CELL2.

The figure below is the operating sequence and layout that are applied in RAP for cell2.

Manual Cycle Automatic cycle

Operation no Description
(seconds) (seconds)
8 Assembly1 160 0
9 Assembly2 120 0
10 Assembly3 55 0

DESSIN

Let’s assume that the operator needs 5 seconds to walk between each process. The
following Walk Chart can thus be drawn for cell2.

Combination Chart Cell2

Using the new cell design, a standard operation sheet can be drawn for cell2:

DESSIN

• Cell3
Total time for Assembly1 (for E124), Assembly2 (for E124), Assembly3 (for E124):
235+110+200=545s
So, the number of operators necessary for cell1 = 545/360 = 1,51.
1,51 people, with continuous improvement and cycle time reduction lead to 2 people
necessary for cell3.
Let’s calculate the efficiency of these two workers:
Efficiency (%) = productive time / available time

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 = 545 / (2*360)
= 76%
2 people working at a 76% efficiency gives a cycle time of 76% * 360 = 274s
The future state of the cell3 can be represented by the following Yamazumi board:

FUTURE YAMAZUMI BOARD CELL3.

The figure below is the operating sequence and layout that are applied in RAP for cell3.

Manual Cycle Automatic cycle

Operation no Description
(seconds) (seconds)
1 Assembly1 235 0
2 Assembly2 110 0
3 Assembly3 200 0

DESSIN

Let’s assume that the operator needs 5 seconds to walk between each process. The
following Walk Chart can thus be drawn for cell3.

Combination Chart Cell3

Using the new cell design, a new standard operation sheet can be drawn for cell3:

DESSIN

4.0 Demonstrate your vision for the future using value stream mapping,

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5.0 Propose an implementation plan.
6.0 Assess the benefits.
7.0 Discuss any issues

Bibliography

1) The website: http://www.strategosinc.com/just_in_time.htm, visited the 28th of November

2007 (Question 1.0)

2) Edward J.Hay: The Just-In-Time Breakthrough, 1988, John Wiley & Sons, Inc (Question
1.0).

3) William M.Feld: Lean Manufacturing Tools, Techniques and How to use them, 2001, The
St.Lucie Press/APICS Series on Resource Management (Question 3.0).

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