Building a Production System

Following Taiichi Ohno’s footsteps

HUST – Hanoi University of Science and Technology

 What is Industrial Engineering?
• Industrial Engineering (IE) is a branch of engineering which
deals with the optimization of complex processes, systems,
or organizations.
• Industrial Engineers work to eliminate waste of time, money,
materials, person-hours, machine time, energy and other
resources that do not generate value.
Where does the Industrial Engineer work?

• Manufacturing firms and service industries are where most

of you would first look for your engineering job.
• Businesses that hire IEs for other areas like sales and marketing,
finance, information systems, and personnel.
• Non-manufacturing industries that hire IEs are hospitals, airlines,
banks, railroads, and social services.

It’s not just for manufacturing

 Role of the Industrial Engineer
• Since an organization exists to deliver a product or service to
customers, the IE’s role is to make the process as efficient,
effective and simple as possible.
• During the engineering design process, the responsibilities of the
engineer may include defining problems, conducting and
narrowing research, analyzing criteria, finding and analyzing
solutions, and making decisions.
• Much of an engineer's time is spent on researching, locating,
applying, and transferring information.

Fact finding so you can do problem solving

Where do you want to work?
 Typical Size of Manufacturing
• The biggest companies are what people think of when
we mention manufacturing; 100’s if not 1000’s of
people employed
• In the USA 80% have less than 20 employees
• In Europe 90% have less than 20 employees
• In Vietnam*
• Large = 100+ employees – 37%
• Medium = 20-99 employees – 41%
• Small = 5-19 employees – 22 %

* Most data available is 10 years old or more.

 Economic Potential for Vietnam
• Weakest point for investment by multinationals… low
productivity
• Weakest point for export potential by local companies – low
productivity
• Consider Japan or China before their industrial growth… low labor
productivity often made cost of production too expensive in spite
of the low wages.
• It is only when they improved their manufacturing skills that
wages and productivity rose.

IE’s have a significant role to play in economic growth

 Manufacturing Variations
Products and Volumes
Very many Many
Many Several One product;
products; products;
products; low products; high very high
single order medium
volumes volumes volume
flow of each volumes
Functional
layout; flow Job
extremely Shop
varied The size of a factory is
often an indicator
Layout and Material Flows

Cellular layout;
Batch
flow varied
Flow
with patterns whether it is a high-
Toyota’s
Line flow; Operator
Paced Production volume production
operator
paced, flow
mostly regular
Line System operation or specialty
Flow
Line flow; Equipment
production operation.
equipment
paced, flow
Paced Line The common factor is
Flow
regular
they all have systems.
Continuous Continuous
flow; flow rigid Flow

Source: J. Miltonburg,
“Manufacturing Strategy”, 1995 pg. 31
 Building System Awareness

Draw pictures on how

to make toast.
Use pictures instead
of words.

Draw Toast Exercise

 Large or Small Organization
• All organizations have systems to produce and deliver
their product, service or combination of both.
• Having a system does not mean it is efficient or effective.
• First step is to develop awareness of the system
• You must become familiar with the organization
• The product or service they deliver
• What are their barriers?

“Draw Toast”
Develop Awareness

How?
 Different Levels Possible
High Level
Depending upon the
Supplier – Manufacturing - Customer
size of the organization

Mid Level
Some details at Supplier – Manufacturing - Customer

Factory Systems

Department Level Some precision

Depending upon your Process Level Detail High precision

position in the organization
Complete Value Chain
Suppliers  Factory  Customers
Flow where you can,
Pull where you can’t.
- Taiichi Ohno

LED chip
SftT
Assembly Packing
Line Line
Customer
Aging
Circuit Board Line
Line

LED Light Production

Process Grouping - Batch Production

(This is the simplest product flow model)

13
Whole Organization
This does not show the
external suppliers to each area

There are mapping options

where you can include
external suppliers.
Finding the System Problem

In any system, there is always one area that is most

likely to cause delivery issues to the customer.

Work on weak areas first.

 Basic Lean Strategy
• Flow at organization level requires stability at department level before
you can connect the departments via kanban.
• Flow at the department level requires stability at the process level,
balanced work content and balanced cycle time to synchronize
processes.
• Problem solve at the process level.
• Remove unnecessary activities.
• Balance work content.
• Synchronize processes
• Balance work pace.
• Remove excess buffer stock
• Define kanban requirements
 Example - first steps towards lean
Piling Up System Flow Line (day 1)
Step 1 – Unload most of the
materials from line.
Step 2 – Start line and adjust
speed where part arrival rate
matches operator capacity.
Step 3 – Identify steps where
people have extra time or cannot
keep up.
Step 4 – Balance work evenly
along the line. Add activities to
positions that have extra time,
make job easier for operator that
cannot keep up. Or move some
work details to another operator.
Step 5 – Set line speed to match
production targets. This may
involve adding or removing
operators and rebalancing work.
Step 6 – Make the work easier,
People expend effort to find part to Parts come to people, no searching required. The
remove unnecessary activities.
work on and pile back on line. conveyor is helping the operator. 17
Step 1 - List Activities in the Flow Sequence

ftapping at the process level

5 Inputs  5 Processes  5 Outputs

I P = O

What you add What you do What you measure

Hints on where to find your facts and how they are connected.
 Information to gather on Activities
Front Back
Activity name: Issues, barriers, problems, etc.
Current Velocity Possible Velocity
Or Target Velocity

Number of people:
Hint – items to list will be in the Input or Process field…
Upstream Process Downstream Process Outputs are how you have measured the problem

Activity

List proximity between processes

20
 1st Pass – Learning to See Flow
Defining your production flow

If factory is too disorganized

to clearly see the flow
sequences, then some basic
housekeeping is necessary.
Poorly Organized Layout

Where possible, have subassemblies

added to the flow where used or just
upstream from where it is needed.

Watch for situations where you have

people working in random locations on
the line and the materials they
produce must be transported to the
station where it is used.
Or temporary processes where
operators do not have proper working
areas… or tools
22
 Too disorganized to see flow?
• Oak Flooring Plant
• The first stage of production was in a building about the size of a
soccer field.
• You could see about 5 machines with the operators, but there
were about 60 in the whole building.
• You could not see the people or equipment because of pallets of
inventory around each machine that were stacked 2 meters high.
• Supervisor claims productivity is low because they need another
forklift.
 Saving Equipment ‘Just in Case’
• Casting and Machining Plant
• A once booming factory was now nearly idle, as their main product was no
longer in demand (it was obsolete).
• About 80% of the plant was filled with obsolete equipment that was not being
used. They were carefully maintaining it because someday they thought it
might be used.
• The current production operation was spread out all over the plant in small
spaces they could find.
• Selling some of the unused equipment would allow them to move all the
current production operations closer together so the activity sequence would
be obvious.
List Unnecessary Activities

Look Again

Removing unnecessary activity can

reduce the number of people required
to meet production targets, or enable
you to meet higher targets.
 Activity is not Work

Unnecessary Activity
“Piling-up
System”

Every time you touch the product

you should be adding value.

Waiting time, meaningless transportation, piling up of partially-finished products, the

effort of transporting two or more times, walking to pick up parts, unwrapping the
outsourced parts, taking out parts from a large pallet in small amounts to smaller bins.
 Guarding or Waiting on Machines

Are you working or just babysitting the machine?

Recognize that this is a problem, then develop a solution to eliminate. 27

 Baby Sitting the Machine
ftachine Capacity = 1090 per hour. Actual run rate about 800 per hour. Only 73% efficiency.

Poorly functioning automation does not save labor. This operator must rework from 5%, to as
many as 60% of the parts in a short series of operations.
When problems in machine design like this are not solved, the same problems show up in the next
series of equipment. It is critical to learn from the problems so they are not multiplied. 28
 Problems Reduce Productivity

List the problems at each activity: rework, machine malfunctions, Ask the
bottlenecks, difficult operations, defects, barriers, etc.
operators!
How do these issues reduce output or require extra people?

Problem 29
Practice Problem Discovery

This checklist can be used

to help leaders identify
possible problems

For best results,

ask the operators!
 Velocity = Time

System Capacity is equal to the slowest activity in the sequence.

Define the velocity (quantity per hour) and cycle time for each activity.
This will help you identify the activities that have extra capacity and those
that are the current bottleneck.
Removing unnecessary activities will change the capacity.
Solving problems (quality or productivity) can change the velocity.
Eliminating rework and sorting will change the velocity.
Velocity affects the number of people required. 31
 What velocity means…
Here is an example done by students on the ‘Down Light’ line
– recording the velocity for each activity.

The slowest activities

are the shorter bars,
the fastest are the
tallest bars.
We work to improve
the slowest activity.
We slow down the
fastest by adding work
to their activity.
 Detail on Down Lights

Dotted line is the target production needed per hour.

Simplest method to
see the capacity
differences
 Work in Process (WIP)
(Plus intermediate buffers and warehouses)

Extra space between activities is an invitation to pile up work rather than creating flow.

How much materials are stored around the activity?

How many pieces are kept between each operation? (if the materials flow)
How is the work transported if it is done in batches?
What are the sizes of the batches or containers?
Make a special note about activities that cannot keep up and must put the overflow aside to do later.
Do you have unused equipment or materials stored next to activities?
Space that would be better used if you could move another activity beside it?
Piling Up Systems
Step 2 - Weighing Options to Make a Decision
Can I start changing things now?
Option 1: System Constraint
Option 2: Productivity Issue (quality too)
Option 3: Reverse Sequence
Option 4: “Low Hanging Fruit”

Choose a problem to solve based on the current facts.

Solving a problem that will make a difference in the system performance.
Solving a problem that will make the work easier and safer for the operator.
Create a standard to improve quality and productivity.
 Option 4: “Low Hanging Fruit”
• Start with the easier to solve, obvious issues, things that you can fix in one
day with little or no money spent, this will give you some practice to
improve your skills.
• It will also provide some quick success stories; impact on the system is random.
• When you are just starting and want to practice to build your skills before tackling
more difficult projects, look through the problems list and find items that are quick
and simple to devise an experiment to test whether your idea works.
• These can be items that you have identified as things to ‘stop doing’ (unnecessary
activities), or simple ways to make the activity easier for the person doing the job.
• Look for things as simple as just moving the tools or materials closer to the work
area to reduce the need to walk and get them.
• We regularly underestimate how much time we spend getting parts or tools to do a
job, or the number of trips we make for each job.
 Option 3: Reverse Sequence
• Start at the final activity (where you deliver to the customer), then
work your way upstream.
• You can start at the packing or shipping activity, then move upstream to
where the next production operation happens.
• Stop when you get to an area that has more than a day’s worth of work
waiting.*
• Focus on creating flow in this work area. You may discover that operations
further upstream as causing disruptions. Resolve the issue and return.
• Reducing the WIP increases the velocity of this activity or work area.
• When the downstream activities flow smoothly, delivery to the customer become
predictable.

* You can reduce this number the second time you work your way upstream…
Each time you lower the threshold of the allowed backlog.
 Start at the end
• Foam packaging company - this company was just starting their
improvement program and needed an easy project to start with to
develop their skills.
• The make hundreds of different types of custom packaging products to
customer specification. One of their high volume products was a die cut
assembly of three parts that were glued together. In theory, they were
supposed to be able to assemble 15 units per hour per person (12 actual).
• The beginning observations were to done to develop a job breakdown
and understand the core activities needed to make the product.
• Minor changes were made to worktable positions and the height of the
tables.
• In one week, the productivity improved to 28-30 pieces per hour per person.
 What to fix first?
• Building fabrication company - The company defined five functional
departments, starting with cutting the materials to finishing before
loading the trucks to take the components to the customers.
• The initial analysis identified one machine in the second department as the
bottleneck.
• When the count of buffer stock was made of work in process or waiting in
each department, the largest buffers were between departments 2-3 and 3-4.
• Speeding up the bottleneck in department 2 was not going to increase the
capacity of the plant.
• All departments were struggling with where to store materials that were
waiting to be worked on, it was difficult to find a clear area to work.
• Reducing the backlog between the departments would make it easier for
them to find working space, to find the right job to work on, to be able to
move it easily to the next department, etc.
When the bottleneck
activity is not the
system constraint

The main causes were identified:

Waiting on gantry crane to move
parts.
Finding the next job to load the
machine.
First improvement was to define
location to have parts waiting on
the machine that was close by.
 Option 2: Productivity Issue
• Productivity issues can be related to production processes or quality
(yields). If you made a high level map of your top products, you might
have departments that struggle to deliver on time or have higher than
average scrap or rework.
• These can have easy first steps by defining standards in the form of a Job
Breakdown Sheet (JBS).
• Defining the current known best way and making sure it is applied will make
problem solving easier.
• Getting consistency starts with defining standards on how operators do the
job and how the machines are set up or calibrated.
 Productivity/Quality Issue
• Gravity casting operation for an aluminum intake manifold was having
to scrap about 30% due to the sand core cracking and creating an
obstruction in the air pathway.
• The ‘Heat Map’ reduced the probable source to two steps in the casting
operation.
• When the Job Breakdown was complete, many of the key points were quality
checks for defects that were created in earlier steps.
• Immediate improvement was seen with instructing the operators on how to
make sure the sand core was not damaged.
• The next step would be to improve the process for making the sand core that
included a check for mold fit before sending to casting.
 Option 1: System Constraint
• The bottleneck activity constrains the whole system’s capacity to
deliver, improving the capacity of the constraint is one option.
• Make sure this activity never runs out of work
• Sounds like the opposite of Lean, but make sure you have a buffer here so this operation
is never idle (until you meet customer demand)
• Make sure this activity is always working
• Lunch times, breaks, etc.…
• Have it start an hour or two earlier than the other operations and run an hour or two
longer.
• Resolve productivity and quality issues
• What are the main problems?
• What slows down this activity?
• Improve capacity of the activity
• Last option, add more capacity
 Drilling Constraint
• Precision Component Manufacturing Plant – Management had
defined the gun drilling operation (very deep holes relative to the
diameter) as the constraint that limited their ability to deliver
completed products.
• Observation uncovered that the machine was idle more than 90% of the time
with excuses about setup complexity and reliability of the machine.
• The first step was to make the machine operation the #1 priority for setup
and maintenance.
• Management complained about the low productivity of the machine, yet did
not allocate the labor to setup and run the machine.
 Welding Constraint
• High Speed Train Manufacturing - The frame for the trucks (wheel
assembly) is a large precision welded assembly which includes x-ray
inspection to ensure weld quality.
• The precision welding operation limited their ability to deliver, so they
invested in a robotic solution.
• Observation uncovered that they had someone busy setting up the
machine all day long, but the actual welding time was only about 2%
of the activity.
• The first step was to understand what was so difficult about the setup and
develop solutions to reduce setup times.
 Weakest Link
A System’s Capacity is Limited by its Weakest Link

Design of Experiments Dorian Shainin

“DOE” “Red X – Pink X”

K/T Analysis
Full Factorials One or two factorsdominate “Is/Is Not”
the performance of a system

Theory of Constraints (TOC)

To improve a system performance, focus on the constraint
Step 3 - Understand Root Cause of Problem
• For problems that have been around a while, the solution
not usually obvious.
• This is because the problem description is a symptom, not a
root cause.
• 5-Whys is a process for peeling back the layers to uncover
the root cause of the problem.
5 Whys + FOG
 5 Whys Process (1)
• Symptoms:
• Describe the problem, issue, barrier that is undesirable.
• The problem statement can be updated as you better understand the
problem.
• Reference:
• If you have defect rates, or other tangible evidence, list it here.
• You can refer to other reports as needed.
• Investigator(s):
• List the people participating in the investigation.
• Date:
• List the start date
 5 Whys Process (2)
• 5 Whys is only as effective as the questions that you can ask.
• Validating information at each level improves the process
• Define your area of control.
• You may find the root cause outside your area or control, or even your span of
influence. Here your solution is often limited to just containing the problem.
• Fact – Opinion – Guess
• This is the validation tool. You start by assuming every first answer is a guess.
• You can move forward by validating with facts. Something that you have seen,
have samples, can prove.
• The second choice moving forward when you have several experts agree on a
cause.
 5 Whys Process (3)
• It is possible that you get multiple reasons why something happened.
• When you have multiple possible reasons, start investigating the most likely
reason.
• Even when one is validated, do not abandon the other reasons.
• The symptom you are investigating might have multiple sources.
• A root cause is when you can no longer find a contributing cause. One
where if you remove the cause, the symptoms stop.
• You may get to the root cause in 3 ‘Whys’, or it may take seven or
eight.
• Five is just an average number to get to root cause.
 5 Whys Process (4)
• For problems that are lower frequency and difficult to research, you may
have a multiple-dependent cause. For the symptom to exist, condition A
and condition B must be present.
• The root cause might be outside of the area of your control, such as another
department or supplier. You can present your findings and try to get them to take
action to resolve the cause. It is recommended that you also implement containment
actions to limit the impact where the root cause is not eliminated.
• Process Root Cause: This is the cause inside the process that is the source
of the symptoms. Most corrective action programs address this step.
• System Root Cause: This is a more difficult cause to define, yet one critical
to make sure the symptom does not return. Look for the weakness in the
system that allows the cause to exist or misses the first symptoms in the
process sequence.
 Skill is asking the right questions
• Learning to ask the right question; is not about about trying
to motivate a behavior that you want.
• Example: Powder coating operation at the door factory.
• Management was unable to motivate the operator, even with
significant bonuses.
• We observed the actual operation and asked the manager what should it
look like. They didn’t know that anything was wrong.
• We had them watch some YouTube videos of a powder coating operation
and realized that they had an equipment malfunction that created a bad
working environment.
• Fixing the machine fixed the process, and the production requirements

It is more than asking ‘Why’

Data: is not the same as Facts
Develop the “Go See” habit

Longer black wire adds time to soldering step.

 One of the problem solving exercises
Working with actual rejects collected
over a week.
(Each line produces from 15k to 30k circuits/day.)
Practice of 5-Whys + FOG involved
many trips back to the line and
experiments to validate the guesses.

Guesses on the root cause on top 2 problems

were wrong.
Root cause identified; PPM of top defects
reduced more than 50% in one week.
56
 Iterative Problem Solving
Team 4: Defect - water leak
Started with 5-Whys and a series of
experiments to determine cause of
leaks.
Step by step they are resolving the
failure rate from a range of 8% to
15%, to less than 1%
One set of experiments identified the
‘warming’ step before installing glass
did not add value.
Job Instruction on loading process,
position of wire end, reduced
failures.
Latest experiment of 50 pieces with
new sealant on wire had no failures.
ftultiple problems hidden in a single symptom.
 Life Cycle of a Problem
Stage 7 Stage 1
Prevent Discover

Problems are easier

to solve when you
Stage 6 Stage 2
Predict React understand that they
have a sequence that
you can follow to
develop a solution.
Stage 5 Stage 3
Solve Measure

Stage 4 There are more than 200 quality and

Solutions usually require Analyze problem solving tools available…
process changes. Copyright 2003 © - Mark Warren
Tesla2, Inc.
 7-Step Problem Solving
1. Identify the Problem
2. Determine possible causes and rank their importance
3. Describe the short-term actions taken (containment)
4. Gather data and design a test to quantify their contribution (verify
causes)
5. Conduct test, analyze data, select solution
6. Plan and implement the permanent solution, fail safe where possible
7. Measure and evaluate for continuous improvement and recognize the
team.
Advanced problem solving – Corrective Action
 QRQC – Quick Response Quality Control
What is the detected problem? Create a short clear definition of the problem only. Don't be tempted to
define the solution or root cause at this stage.
Who detected it? The person that first detected it is usually the best source of information to start with.
Make sure you have facts, not opinions.
Where was it detected? Was it found during inspection or somewhere on the production line?
When was it detected? This may help you define when the problem started. This is helpful when you
start any containment or sorting action.
How was it detected? Do you have a defined way to detect the problem? Such as the machine rejects
the part. If it is a manual assembly operation, understand the operators point of view of why this is a
problem.
How many? This is to quantify the size of the problem. Such as, 10 pieces out of 500.
Why is it a problem? Describe the effect of this defect. Is it a problem in manufacture, assembly, or for
the customer?

Development of this program started at Nissan

 Get the Facts
Problems can only be
addressed with facts.

Go to the workplace.
Get samples, see the actual problem.
Observe – for more than a few minutes.
Ask questions with the intent to
understand what is happening, not to find
someone to blame.
Validate the answers, with data if possible.
Experiment to validate your guesses.
Define whether the problem is a people
Team 2 used the Job Instruction tool of making a job breakdown to define
(no standard process – training gap) or each of the production steps of the automatic machine and to hone their
process (layout, machine, methods, etc.) observation skills by defining the key points for each step. This helped to
better understand what was necessary to achieve a desirable outcome at
each step.
61
Step 4 - Weighing the Facts and
Deciding the Next Step
Is it People or Process?
 Three Questions
• Do you have a process?
• A job breakdown that you can train people to do No process?
the job ‘one best way’ Go to Step 5

• Do you follow the process?

• If you have a job breakdown, do the people Understand why
follow the process? then go to Step 5
• If not, understand why.
• Is the process capable? Not capable?
• This directs you towards improving the process. Go to Step 7
"Without a Standard, there can be no improvement."
- Taiichi Ohno
Getting to Standard Work
Processes Improvement Required

This example was so disorganized that we

did not want to develop a it as a standard.

Watch for situations where you have

people working in random locations on
the line and the materials they
produce must be transported to the
station where it is used.
Or temporary processes where
operators do not have proper working
areas… or tools
65
 End of Session
Assignment 1: Map the activity sequence for
a process you find at home, school or work.
Assignment 2: Imagine you are an Industrial
Engineer working for a company in Vietnam
(your choice). Describe the activities and
barriers of the department where you are
assigned to improve their productivity and
quality.