Lean for the Process Industries Dealing with Complexity
PETER L KING
Ltfi] CRC Press \V
J Taylor & Francis Croup Boca Raton London New York
CRC Press is an imprint of the Taylor & Francis Croup, an informa business
A PRODUCTIVITY PRESS BOOK
Contents Acknowledgments Introduction
xv xvii
PART I Lean and the Process Industries Chapter 1 Lean Overview: Principles and Tools
3
Origins of Lean 3 TPS Becomes the New Production Paradigm 6 Essence of Lean 8 Fourteen Lean Tools 11 Lean Tool 1: Value Stream Mapping (VSM) 11 ' Lean Tool 2: Takt Time 11 Lean Tool 3: Kaizen 12 Lean Tool 4: 5S 12 "Lean Tool 5: Jidoka 12 Lean Tool 6: Single Minute Exchange of Dies (SMED) ....13 Lean Tool 7: Poka-Yoke 13 Lean Tool 8: Five Whys 13 Lean Tool 9: Standard Work 13 Lean Tool 10: Total Productive Maintenance (TPM) 14 Lean Tool 11: Cellular Manufacturing 14 Lean Tool 12: Heijunka 14 Lean Tool 13: Just-In-Time (Pull) 15 Lean Tool 14: Kanban 15 Further Information 15 Lean Today 16 Summary 17 Chapter 2 Distinguishing Characteristics of Process Industry Manufacturing Process Industries versus Assembly Operations
19 19
vi • Contents Characteristics That Distinguish the Process Industries The Three Vs: Volume, Variety, and Variability Capital Intensive versus Labor Intensive Throughput Is Limited by Equipment Rather Than by Labor Equipment Is Large and Difficult to Relocate Processes Are Difficult to Stop and Restart Product Changeover Issues Are Complex Finished Product Inventory versus WIP Hidden WIP Material Flow Patterns in Assembly and Process Plants (SKU Fan Out) Examples of "V" Type Process in Process Plants Product Differentiation Points. Summary
21 21 22 23 24 24 24 25 26 26 28 32 33
Chapter 3 The Seven (or Eight, or Nine) Wastes in the Process Industries
37
Value and Waste.:-. x Waste of Overproduction Waste of Time on Hand (Waiting) Waste in Transportation : Waste of Processing Itself...' Waste of Stock on Hand (Inventory) Capacity Differences: Rate Synchronization Bottleneck Protection Campaign Sizes Inappropriate Product Differentiation Tank Heels Waste of Movement Waste of Making Defective Parts Waste of Human Creativity Time as a Waste Necessary versus Unnecessary Waste Summary
Chapter 4 Value Stream Mapping the Process Industries
57
Introduction to Value Stream Mapping Benefits of a Value Stream Map Generating the Map Direction of Flow Product Families Takt and Cycle Time Takt Time Cycle Time Takt Rate versus Takt Time Units of Production Where td'Begin Level of Detail Process Box '. Data Boxes Customer Data Box Process Step Data Box Inventory Data Box Transportation Data Box Supplier Data Box Information Flow The Timeline An Example VSM Additional VSM Best Practices Parallel Equipment Logical Flow versus Geographic Arrangement Summary
Chapter 5 Reading and Analyzing the Current State Value Stream Map Analyzing the Current State Map Voice of the Customer Waste Non-Value-Adding Activities
89 89 90 90 91
viii • Contents Flow and Bottlenecks Variability Other Opportunities Learning from Material Flow Learning from Information Flow Tools to Get to Root Cause The Five Whys (5W) Detailed Process Mapping The Ishikawa Diagram Cross-Functional Process Mapping Creating the Future State VSM Summary
91 92 92 93 98 101 101 102 102 102 104 107
PART HI -V Lean Tools Needing Little Modification Chapter 6 Total Productive Maintenance TPM and Lean Synergy TPM in the Process Industries TPM and Reliability-Centered Maintenance The Benefits of TPM TPM Measures Overall Equipment Effectiveness Availability Performance Quality UPtime Calculation of OEE and UPtime Calculation of OEE Calculation of UPtime VSM Data Boxes: OEE or UPtime Summary Chapter 7 Setup Reduction and SMED SMED and Its Origins
Contents • ix SMED Concepts Product Transitions in the Process Industries A Changeover Where All Tasks Are Completely Manual A Changeover Completely in Chemistry and/or Physics A Changeover That Includes a Combination of Manual Tasks and Chemistry/Physics SMED beyond Product Changes A Non-Manufacturing Example Summary
Chapter 8 Visual Management Introduction to the Visual Plant Visual Work.Area Visual Displays Visual Scheduling Andons Metrics Management by Sight and Frequent Communication Process Industry Challenges Summary
Chapter 9 Kaizen Events Kaizen by Specific Events Quality Circles versus Kaizen Events Steps in the Kaizen Event Process Planning Conducting the Event Following-Up ^Appropriate Event Scope Areas Kaizen Dangers: The Root Causes of Kaizen Failures Process Industry Unique Requirements Kaizen Events as Six Sigma Projects Summary
124 126 127 128 128 130 131 132
135 135 137 138 139 144 144 145 145 147
149 149 151 151 152 153 154 154 155 157 158 160
x • Contents
,
PART IV Lean Tools Needing a Different Approach
Chapter 10 Finding, Managing, and Improving Bottlenecks Bottlenecks in Process Plants Moving Bottlenecks Recognizing Covert Bottlenecks The Root Causes of Bottlenecks Bottleneck Management: Theory of Constraints Widening the Bottleneck: Lurking Bottlenecks Summary Chapter 11 Cellular Manufacturing in the Process Industries
163 163 165 167 168 171 174 175 177
The Process Layout (Pre-Cellular Manufacturing in Assembly Plants) 177 The Product Layout (Cellular Manufacturing in Assembly Plants) 178 Cell Application in the Process Industries 180 Typical Process Plant Equipment Configurations 181 Virtual Cells... .? ~ 185 Case Study: Virtual Cell Implementation in a Synthetic Rubber Production Facility 189 The Result: Synthetic Rubber Virtual Work Cells 193 Steps in Virtual Work Cell Design 195 Step 1: Start with the Current State Value Stream Map ..195 Step 2: Determine Preliminary Asset Groups or Virtual Cells 196 Step 3: Determine Preliminary Product Groupings (Group Technology) 196 Step 4: Assign Each Product Group to a Manufacturing Cell 196 Step 5: Define a Few Swing Products 198 Step 6: Review the Plan 198 Step 7: Document Virtual Cell Arrangements, Flow Patterns, Product Lineups, and Operating Rules 199 Step 8: Mark Each Cell Visually 199
Contents • xi Step 9: Modify Scheduling Processes Accordingly Step 10: Ensure that Appropriate Managing Processes Are in Place Summary Chapter 12 Product Wheels: Production Scheduling, Production Sequencing, Production Leveling Solutions in Assembly Processes Process Industry Challenges A Process Industry Solution: The Product Wheel Concept Product Wheel Design Step 1: Determine Which Process Steps Should Be Scheduled by Product Wheels Step 2: Analyze Product Demand Variability Step 3: Determine the Optimum Sequence Step 4: Calculate Shortest Wheel Time Possible (Available Time Model) Step 5: Estimate Economic Optimum Wheel Time "(the EOQ Model) Step 6: Determine the Wheel Time (Making the Choice) Step 7: Calculate Inventory Requirements Step 8: Fine-Tune the Design... Step 9: Revise the Current Scheduling Process Step 10: Create a Visual Display Benefits of Product Wheels Some Additional Points Summary Chapter 13 Postponement in the Process Industries: Finish to Order Finish to Order Examples of Finish to Order: FTO in Assembly FTO in the Process Industries FTO within Process Plants
The Benefits of FTO Example of FTO in a Process Plant A Further Example: Bond to Order Summary
Chapter 14 Pull Replenishment Systems What Is Pull? Pull in Assembly Difficulties in Process Plants Push-Pull Interface ConWIP Development of Pull on the Sheet Goods Process Visual Signals When to Start Pulling: The Sequence of Implementation Creating Pull Value Stream Focus Traditional Pull Strategies and Signals Push in Real Life Summary „ Chapter 15 Supermarket Design Understanding the Supermarket Concept Inventory Types and Supermarkets Inventory Components Defined: Cycle Stock and Safety Stock Calculating Cycle Stock Calculating Cycle Stock: Fixed Interval Replenishment Model Calculating Cycle Stock: Fixed Quantity Replenishment Model Calculating Safety Stock Variability in Demand Variability in Lead Time Combined Variability Cycle Service Level and Fill Rate Example: The Product Wheel for Forming Machine 1
Contents • xiii Alternatives to Safety Stock Signaling Methods The Role of Forecasting Summary Chapter 16 The Importance of Leadership and Robust Business Processes
/
290 291 292 293
295
Business Practices and Targets 296 ABC Classification 296 Customer Lead Times 297 Customer Service Levels 298 MTS, MTO, and FTO 298 Demand Variability Analysis 298 ^Protection (Safety Stock or Contingency Processes).... 299 • SKU Rationalization 299 Integrated Business and Operations Planning 300 Poor Business Practices 300 Dictating Low Safety Stock Levels 300 Expecting Abnormally Short Lead Times 300 Expecting Perfect Customer Service 301 Reducing Inventory at Year End 301 Pulling Next Quarter's Sales Ahead 301 Obsessing over Cost Reduction 302 Inappropriate Use of Metrics 302 Summary 303
PART V
Appendices
Appendix A: Determination of Appropriate Raw Material Inventory
