Transcript Lean Enterprise: - Levinson Productivity Systems

Lean Enterprise:
Made in the USA
William A. Levinson, P.E., MBA
Levinson Productivity Systems, P.C.
www.ct-yankee.com 570-824-1986
http://www.ct-yankee.com/lean/usa.ppt
© 2003 Levinson Productivity Systems, P.C.
http://www.ct-yankee.com/lean/usa.ppt
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•
•
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workshop can be purchased from Levinson
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© 2003 Levinson Productivity Systems, P.C.
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Overview
• It can be proven unequivocally that
lean enterprise originated in the
United States (not in Japan, as is
commonly believed).
• Change management benefits:
• Unquestionable bottom-line results:
sell lean to upper management in "the
language of money."
• American workers are more likely to
buy into "Made in the USA" concepts
than kaizen, poka-yoke, jidoka, etc.
• Technical benefits:
• Historical principles are still valid and
they are now fundamental elements of
what we call lean enterprise.
© 2003 Levinson Productivity Systems, P.C.
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Outline
• Background: military origins of quality
and productivity concepts
• Benjamin Franklin's lean enterprise
concepts  influence on Henry Ford
• Frank Gilbreth and motion efficiency
• Frederick Winslow Taylor and scientific
management
• Henry Ford and the lean enterprise
• Ford's bottom line: sell lean to upper
management in "the language of money"
• Lean techniques at the original Ford Motor
Company
• Ford and supply chain management
• Ford and ISO 14000
• Ford and solutions to today's health care crisis
• Conclusion
© 2003 Levinson Productivity Systems, P.C.
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Military Origins of
Productivity and
Quality Techniques
"The United States government
has already spent millions and
used many of the best of minds on
the subject of motion study as
applied to war; the motions of the
sword, gun, and bayonet drill are
wonderfully perfect from the
standpoint of the requirements of
their use. This same study should
be applied to the arts of peace."
Frank Gilbreth, 1911, Motion Study
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Muda (Waste) = von
Clauzewitz's Friction
• General Carl von Clausewitz's On War
(1831) defined friction as "…the force that
makes the apparently easy so difficult. …
countless minor incidents— the kind you
can never really foresee— combine to
lower the general level of performance,
so that one always falls short of the
intended goal."
• Henry Ford (Moving Forward, 1930): "It is
the little things that are hard to see— the
awkward little methods of doing things
that have grown up and which no one
notices. And since manufacturing is
solely a matter of detail, these little things
develop, when added together, into very
big things."
© 2003 Levinson Productivity Systems, P.C.
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Motion Efficiency and
Setup Time Reduction
• The ability to shoot more quickly at
someone who was shooting back was a
powerful incentive for armies to develop
these techniques.
• The musket cartridge, with its premeasured
powder charge, externalized the setup
operation (a key concept of SMED) of
measuring out each charge of gunpowder.
This was being done 400 or more years ago.
• Loading drills prescribed the "one best way,"
or standard, for loading muskets. Soldiers
were (per von Steuben's drill manual of 1779)
to count a second between each motion: a
forerunner of takt time?
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More on Takt Time
• The concept of rhythmic timing, or
getting everyone to work at the
same pace, is very old.
• Drums  everyone marches at the
same speed. (Synchronous flow
manufacturing's drum-buffer rope)
• Sailor's songs on wooden ships
provided rhythm for group tasks.
• Music coordinates some very complex
performances:
• Ballet dancers perform different routines
that must, however, keep pace with one
another.
• Marching bands can make very complex
formations during, for example, football
halftime performances.
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Benjamin Franklin's
Lean Enterprise
Concepts
"Nothing has happened in
our history to render out of
date the business philosophy
of Benjamin Franklin. Poor
Richard's Almanac is still the
best business compendium."
—Henry Ford, 1922. Ford
Ideals
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Franklin on Inventory
• Purchasing departments are
sometimes measured on their
ability to get "good deals" from
suppliers. Franklin warned of what
is likely to happen:
"You call them goods; but, if you do
not take care, they will prove evils
to some of you. You expect they will
be sold cheap, and, perhaps, they
may [be bought] for less than they
cost; but, if you have no occasion
for them, they must be dear to
you."
• Readers of The Goal will appreciate this concept!
• Principle adopted by Henry Ford
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The Value of Time
• "If time be of all things the most
precious, wasting time must be,' as
Poor Richard says, 'the greatest
prodigality;' since, 'Lost time is
never found again; and what we
call time enough always proves
little enough:' 
• Readers of Goldratt and Cox's The
Goal will recognize this concept as,
"Time lost at the constraint is lost
forever."
• F.W. Taylor identified the false
economy of maximizing tool life
instead of cutting (production) rate.
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The Value of Time,
contd.
• Henry Ford, 1922, My Life and
Work: "If a device would save in
time just 10 per cent. or increase
results 10 per cent., then its
absence is always a 10 per cent.
tax.
…Save ten steps a day for each of
twelve thousand employees and
you will have saved fifty miles of
wasted motion and misspent
energy."
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Franklin on Friction
For want of a nail a shoe was lost,
for want of a shoe a horse was lost,
for want of a horse a rider was lost,
for want of a rider an army was lost,
for want of an army a battle was lost,
for want of a battle the war was lost
for want of the war the kingdom was lost,
and all for the want of a little horseshoe nail.
• A defective part that costs a few cents
can make a final assembly
nonconforming or, even worse, result in a
field failure. The idea is the same.
• Ford: snap gages, go/no-go gages
rejected such parts automatically.
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Frank Gilbreth and
Motion Efficiency
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A Friction Classic
• Most of us are
familiar with
the story about
how underachievers
install a light
bulb. One
holds the bulb
while three
others turn the
ladder.
• It's funny
because no
one could be
this stupid,
right?
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Bricklaying, through late
Nineteenth Century
The brick weighs about five pounds (2.3 kg). How
much is the worker actually raising and lowering
every time he bends over for another brick?
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Bricklaying, through late
Nineteenth Century
• The brick weighs
about five pounds
(2.3 kg). How
much is the
worker actually
raising and
lowering every
time he bends
over for another
brick?
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Bricklaying, after Frank
Gilbreth
• The joke about the underachievers and
the light bulb isn't so funny any more.
• Lesson: waste can, by long habit ("living
with it," "working around it") become built
into a job.
© 2003 Levinson Productivity Systems, P.C.
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Bricklaying, after Frank
Gilbreth
• The joke about the underachievers and
the light bulb isn't so funny any more.
• Lesson: waste can, by long habit ("living
with it," "working around it") become built
into a job.
© 2003 Levinson Productivity Systems, P.C.
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In case you think I
made this up...
• Top: "The usual
method of providing
the bricklayer with
material" (Gilbreth,
Motion Study, 1911.
The photo is dated
9/5/1906, believed to
be in the public
domain).
• Bottom:
"Non-stooping
scaffold designed so
that uprights are out
of the bricklayer's
way whenever
reaching for brick and
mortar at the same
time"
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Animation of fabric
folding operation
This shows the value of videotaping
real operations (e.g. for kaizen blitz,
SMED).
Henry Ford principle: "Pedestrianism
is not a highly-paid line of work."
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Fabric Folding Operation
This shows the value of videotaping
real operations (e.g. for kaizen blitz,
SMED).
1
2
3
4
5
6
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Fabric folding, contd.
7
8
10
11
9
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Frederick Winslow
Taylor and Scientific
Management
Standardization and Best
Practice Deployment
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Standardization and Best
Practice Deployment
• Standardization and best practice
deployment are key features of Six
Sigma. Both are also basic
principles of scientific management.
• Standardization holds the gains from
continuous improvement, thus
avoiding the two-steps-forward-andone-back problem.
• Taylor speculated that trade workers often
improved their jobs, but the knowledge
was lost when they died or retired.
• Best practice deployment applies
improvements to all relevant
operations in the business.
© 2003 Levinson Productivity Systems, P.C.
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Henry Ford and
the Lean
Enterprise
Ford developed motion
efficiency and scientific
management into a
comprehensive lean
enterprise system that
equals or surpasses
anything that exists today.
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Ford and Change
Management
Use the history of Henry
Ford's lean enterprise
system to gain buy-in from
upper management and
front-line workers
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Ford's Bottom Line and
the Language of Money
• The Ford Motor Company (and the
industries that grew to support it)
was directly responsible for making
the United States the wealthiest
and most powerful nation on earth.
• The U.S. surpassed the British Empire
during the 1910s.
• During the Model T's 19 years of
production, it created more prosperity
than the estimated wealth of 35 of the
country's 48 states (Ford, 1930,
Moving Forward).
• This figure did not include railway workers,
rubber workers, oil workers, and others for
whom the Model T created jobs.
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When the Going Got
Tough…
…the Ford lean enterprise
system kept going.
• The Ford Motor Company sold 1.25
million cars during the 1920-1921
depression that followed the First
World War and the 1918 influenza
epidemic: five times as many cars
as the company sold during 19131914.
• How would this system have
performed in comparison to others
in 2000-2003?
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Ford and the Front-Line
Worker
• Henry Ford was not a professor,
"guru," or consultant.
• Ford was a self-taught mechanic and
then an engineer at Detroit Edison
before he began to make automobiles.
• He spent considerable time on the
shop floor with front-line workers.
• Ford wrote in a very practical and
hands-on manner.
• His principles and workplace
examples are easily understandable
by anyone in a modern workforce—
perhaps more so than many modern
lean manufacturing books.
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Lean: Made in the USA
or "Who do you think taught
Japan how to make cars?"
• Taiichi Ohno, the father of the
Toyota production system, said
openly that he got the idea from
Henry Ford's book and the
American supermarket.
• Ford's Today and Tomorrow (1926)
describes the benefits of just-in-time
(JIT) manufacturing explicitly.
• In a supermarket, replenishment of
shelf stock is triggered by depletion; it
is a "pull" system.
• Taylor influenced Shigeo Shingo
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Lean Methods and
Management at the
Ford Motor Company
The original Ford Motor
Company had a
comprehensive lean
enterprise system that
equals or surpasses
anything that exists today.
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Ford and Muda (Waste)
• Henry Ford's ability to recognize
waste on sight, and to teach this
skill to his organization, may have
been his chief success secret.
• Culture at Ford's River Rouge plant,
regarding waste: "It worried the men."
• If it doesn't add value, it's waste.
• "We will not put into our establishment
anything that is useless. We will not
put up elaborate buildings as
monuments to our success. The
interest on the investment and the cost
of their upkeep only serve to add
uselessly to the cost of what is
produced— so these monuments of
success are apt to end as tombs"
(Ford, 1922, My Life and Work)
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The world's first
"monuments of success"
were actually tombs.
I waited my whole
life for that
executive suite.
The ancient Egyptians bypassed the phase of
using these "elaborate buildings" to house
living executives; they stocked them directly
with dead ones.
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Kaizen, Standardization,
and Best Practice
Deployment
"To standardize a method is to choose out
of many methods the best one, and use
it. …Today's best, which superseded
yesterday's, will be superseded by
tomorrow's best."
"An operation in our plant at Barcelona has
to be carried through exactly as in
Detroit— the benefit of our experience
cannot be thrown away. A man on the
assembly line at Detroit ought to be able
to step into the assembly line at
Oklahoma City or São Paulo, Brazil."
—Henry Ford, 1926, Today and Tomorrow
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Just-In-Time (JIT)
Ford described the following
principles explicitly:
1. Materials arrive exactly, and only, when
the production line needs them.
2. Materials go, not from dock to stock, but
from dock to factory floor.
3. JIT requires reliable transportation and
a supporting logistics system.
•
•
Bad transportation (e.g. lack of a good freight
management system) requires the plant to
keep more inventory.
Ford created a very impressive freight
management system (FMS) to address this
issue.
4. Inventory reduction frees capital.
5. Cycle time reduction frees capital.
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Ford on Design for
Manufacture (DFM)
"Start with an article that suits and
then study to find some way of
eliminating the entirely useless
parts. This applies to everything—
a shoe, a dress, a house, a piece of
machinery, a railroad, a steamship,
an airplane. As we cut out useless
parts and simplify necessary ones,
we also cut down the cost of
making."
"But also it is to be remembered that
all the parts are designed so that
they can be most easily made."
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5S-CANDO at Ford
• Ford, Today and Tomorrow (1926) on a
new mine: "The first job was to clean
up— that is always the first thing to do in
order to find out what you are about. …
We cannot afford to have dirt around— it
is too expensive. … everything is painted
and kept painted a light color, so the least
bit of dirt will show. We do not paint to
cover up dirt— we paint white or light
gray in order that cleanliness may be the
order of things and not the exception."
• Norwood's Ford: Men and Methods
(1931) shows how the River Rouge plant
anticipated Disney theme parks (which
provide convenient waste containers
everywhere) by providing waste
containers within six steps of any position
on the shop floor.
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Stopping the Line
• Workers at the River Rouge plant
were authorized to stop the line (a
practice later adopted by the
Japanese) if there was a problem.
• This lit an alarm light in a control
booth. If the light stayed on for more
than two minutes, the attention of a
"trouble mechanic" was required.
• Even if the workers on the line could
fix the stoppage in less time, the
cause was still recorded for future
action.
• Closed-loop corrective action
• Tie-in with computerized maintenance
management system concept
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Ford and Supply
Chain Management
Supply chain management
recognizes the dependence
of a lean manufacturer on its
own suppliers and
distribution systems.
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Ford on Supplier
Development
• "The man finally consented to try to
manufacture at exactly one half his
former price. Then, for the first time in his
life, he began to learn how to do
business. …he found he could make cost
reductions here, there, and everywhere,
and the upshot of it was that he made
more money out of the low price than he
had ever made out of the high price, and
his workmen have received a higher
wage" (Henry Ford, 1926, Today and
Tomorrow).
• The supplier had wanted $152 per body.
Ford's Charles Sorensen built a model for
$50 in labor and materials. The supplier
then agreed to accept $72 per body.
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Ford's Freight Management
System (FMS)
• Norwood's Ford: Men and Methods
(1931, 20-24) gives an outstanding
summary of what a good FMS does.
• The Ford logistics system was a "continentspanning conveyor."
• Deliveries were coordinated, scheduled
precisely, and apparently just-in-time.
• Supply was never to exceed or fall short of
requirements.
• "Using that multitude of additional links offered
by rail, highway, water, and air, it has buttwelded them with their own time-tables and
picketed them with telegraphic checkings as
watchful as the straw bosses who supervise
progression along the conveyor lines of the
shop."
• Per Ford, the location of any rail car could be
determined to within an hour.
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Ford and ISO 14000
ISO 14000 is, if used
properly, a moneymaker as
opposed to a costly and
time-consuming annoyance
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The Basic Concept
• "He perfected new processes— the
very smoke which had once poured
from his chimneys was now made
into automobile parts" (Sinclair).
• "It is not possible long to continue
to get something for nothing, but it
is possible to get something from
what was once considered nothing"
(Ford, 1926).
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Meat Packer's Principle:
"Use Everything but the
Squeal"
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Waste to Profit
• Henry Ford:
• A wood distillation plant turned scrap
wood into methyl alcohol, charcoal,
tar, and fuel gas.
• $12000/day could pay 2000 workers
@$6/day (Ford's relatively high minimum
wage) in 1926.
• Charcoal briquettes from sawmill chips
(Kingsford charcoal)
• Blast furnace slag  cement and
paving material
• A paper plant converted waste paper
into binder board and cardboard.
• Fumes from a coating operation were
recovered by adsorption in charcoal
and reused.
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Make Parts, Not
Machining Chips
• "The machine shop produces about
14,000 [piston] rings per day say 1240
pounds of finished rings from 13,000
pounds of ring stock, 11,760 pounds of
stock, worth $294 wasted for the
pleasure of cutting it into chips and
using snap-ring piston packing"
(Arnold and Faroute, 1915, Ford Methods
and the Ford Shops).
• Ford was well aware of this problem,
and he changed processes and
designs to eliminate it.
• Less machining  less cutting fluid to
purchase and dispose of.
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The Solution
• "Our objective is always to
minimize the subsequent
machining" (Ford, 1926, 69).
• Dieter (1983) points out the virtues of
"chipless machining." The idea is to
make the part as close to its final
shape as possible, to minimize
subsequent machining.
• Ford pointed out that cast parts
require considerable (on the order of
30%) machining.
• Forge or cast small parts and then
assemble them into the desired large one.
• Tie-in with Design for Manufacture
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Keep Your Eye on the
Doughnut's Hole
• Doughnut = the product
• Hole = whatever is thrown away
• Example: metal sheet with six
stamped holes (product)
Workers ask,
"What was in
those holes?"
Most people saw scrap for
remelting and reuse. Ford's
workers saw radiator caps.
Pressing two disks made a
very strong radiator cap.
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The Doughnut's Hole,
continued
• This concept cannot be
overemphasized.
• Culture at Ford's River Rouge plant,
regarding waste: "It worried the men."
• Workers should pay close attention
to "holes" and ask questions.
• "Where did the metal go that was in
those cutout sections of the part?"
• "What becomes of cutting fluids,
solvents, and lubricants?"
• "What goes up the smokestack?"
• Metal chips or sawdust should always
invite attention!
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50
Reuse Packaging
• "Why should a crate or a packing
box once used be considered only
as so much waste to be smashed
and burned?" (Ford, 1926, 125)
• Ford allegedly asked a supplier to
package shipments in boxes whose
boards had to be specific sizes. The
latter became Model T floorboards.
• Ford's River Rouge plant often
knocked down containers and sent
them back "for another load."
• Cardboard boxes can be folded flat
and sent back for the same purpose.
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Ford and Health Care
The same kind of management
which permits a factory to give the
fullest service will permit a
hospital to give the fullest service,
and at a price so low as to be
within the reach of everyone. (1)
It is simply a matter of transferring
those precision methods, so well
established in the Ford shops,
into hospital work. (2)
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Solving the Health Care
Crisis
•
Industrial quality and productivity
techniques have the potential to
reduce health care costs by 30 to
50 percent while improving its
quality.
•
•
Blanton Godfrey, former CEO of the
Juran Institute: "Health care
providers' cost of poor quality is
estimated to be as high as 30-50
percent of the total paid for health
care. For some companies the cost
of employee health insurance is now
higher than profits."
AIAG supports the use of ISO 9000
in hospitals.
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Conclusion
1. Lean enterprise is an American
innovation.
•
•
Use Henry Ford's bottom line to sell
lean to upper management in the
language of money.
Use Ford's down-to-earth and handson approach, along with lean's "Made
in USA" label to sell lean to front-line
workers.
2. Ford showed how to make money
through ISO 14000 (before ISO
14000 existed)
3. Industrial methods can reduce
health care costs significantly.
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