Textbook Lean Production For Competitive Advantage A Comprehensive Guide To Lean Methods and Management Practices Nicholas Ebook All Chapter PDF
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Lean Production for Competitive
Advantage
A Comprehensive Guide to Lean Methods and
Management Practices
2nd Edition
Lean Production for Competitive
Advantage
A Comprehensive Guide to Lean Methods and
Management Practices
2nd Edition
By
John Nicholas
CRC Press
Taylor & Francis Group
6000 Broken Sound Parkway NW, Suite 300
Boca Raton, FL 33487-2742
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Foreword..................................................................................................................................xxv
Preface....................................................................................................................................xxix
Acknowledgements..............................................................................................................xxxiii
About the Author.................................................................................................................. xxxv
1 Race without a Finish Line............................................................................................1
Competitive Advantage: Better, Cheaper, Faster, More Agile.............................................. 2
Lean Production and Total Quality Management.............................................................. 3
Lean Production and the Production Pipeline.................................................................... 3
The Lean Difference........................................................................................................... 4
Evolution of Manufacturing............................................................................................... 5
The Machine that Changed the World........................................................................... 5
Craftsmanship Yields to Industrialization...................................................................... 5
Craft Production of Automobiles................................................................................... 6
Ford’s Mass Production System...................................................................................... 6
Emergence of Modern Mass Production........................................................................ 7
Mass Production Around the World............................................................................... 8
Toyoda and Ohno.......................................................................................................... 8
Toyota Production System—Prototype for Lean Production.............................................. 9
Reduced Setup Times.................................................................................................... 9
Small Batch Production and One-Piece Flow................................................................. 9
Quality at the Source....................................................................................................10
Equipment Maintenance...............................................................................................10
Pull Production.............................................................................................................11
Standard Work..............................................................................................................11
Supplier Partnerships.................................................................................................... 12
Employee Involvement and Empowerment.................................................................. 12
Continuous Improvement ........................................................................................... 12
Training within Industry...................................................................................................13
America’s Fall from Manufacturing Grace.........................................................................14
Climbing Back..............................................................................................................15
Modern Developments..................................................................................................15
The Imperative...................................................................................................................17
Organization of the Book..................................................................................................17
Questions...........................................................................................................................18
vii
viii ◾ Contents
Research Questions............................................................................................................19
Suggested Reading.............................................................................................................19
Notes................................................................................................................................ 20
Summary.......................................................................................................................... 92
Questions.......................................................................................................................... 93
Problems........................................................................................................................... 94
Suggested Reading............................................................................................................ 94
Notes................................................................................................................................ 94
4 Customer-Focused Quality..........................................................................................97
Quality Defined................................................................................................................ 97
Customer’s Perspective................................................................................................. 98
Voice of the Customer.................................................................................................. 98
Producer’s Perspective................................................................................................... 99
Quality of Design and Kano Model............................................................................. 99
Quality of Conformance............................................................................................ 100
Total Quality Management............................................................................................ 100
TQM Integrative Framework......................................................................................101
Marketing, Sales, and Finance................................................................................102
Product Design and Manufacturing Process Design...............................................102
Purchasing and Suppliers........................................................................................103
Production Management and Frontline Workers....................................................104
Customer Service....................................................................................................104
Six Sigma.........................................................................................................................104
Statistical Interpretation..............................................................................................105
Define, Measure, Analyze, Improve, Control Improvement Process............................106
Belts and Certification................................................................................................107
Statistical Process Control, SPC.......................................................................................107
Control Chart.............................................................................................................107
Process Stability..........................................................................................................109
Process Capability.......................................................................................................110
Nonstatistical Process Control.................................................................................... 111
Employee Involvement and Quality Ownership..............................................................112
Frontline Worker Responsibility..................................................................................112
Process Orientation.....................................................................................................112
Quality Training and Education.................................................................................113
Implementing TQM........................................................................................................113
Barriers to Successful TQM........................................................................................114
TQM and Lean Production.............................................................................................114
Summary......................................................................................................................... 115
Questions.........................................................................................................................116
Suggested Reading...........................................................................................................116
Notes...............................................................................................................................117
6 Setup-Time Reduction...............................................................................................147
Improve Setups? Why Bother?.........................................................................................147
Traditional Approaches...............................................................................................147
Find Another Way.......................................................................................................148
Benefits of Simplified Setups.......................................................................................149
Setup: A Case in Neglect.............................................................................................150
Setup-Reduction Methodology........................................................................................150
Shingo and Single-Minute Exchange of Dies..............................................................150
SMED Methodology for Setup Reduction.................................................................. 151
Stage 1: Identify Internal and External Steps.......................................................... 151
Stage 2: Convert Internal Steps to External............................................................152
Stage 3: Improve All Aspects of the Setup Operation.............................................153
Stage 4: Abolish Setup............................................................................................154
Minimum Setup Time..................................................................................................... 155
Techniques for Setup Reduction......................................................................................155
xii ◾ Contents
Quality Rate...............................................................................................................183
Overall Equipment Effectiveness.................................................................................184
Preventive Maintenance Program....................................................................................184
Causes of Equipment Problems...................................................................................184
Maintain Normal Operating Conditions....................................................................185
Maintain Equipment Requirements............................................................................185
Keep Equipment and Facilities Clean and Organized.................................................186
Monitor Equipment Daily...........................................................................................186
Schedule Preventive Maintenance...............................................................................187
Ways to Schedule PM.............................................................................................187
Scheduled PM and Failure Pattern.........................................................................187
Manage Maintenance Information..............................................................................190
Use Predictive Maintenance........................................................................................192
Role of Operators........................................................................................................193
Total Productive Maintenance.........................................................................................194
TPM Preventive Maintenance.....................................................................................194
In-House Capability to Restore and Redesign Equipment..........................................196
Human Error in Operation and Maintenance.............................................................196
Education and Training..........................................................................................197
Mistake-Proofing....................................................................................................197
Maintenance Procedures.........................................................................................197
Implementing TPM.........................................................................................................201
Program Feasibility.....................................................................................................201
Program Objectives and Master Plan......................................................................... 202
Target Areas............................................................................................................... 202
Target Area Committees............................................................................................ 202
Plantwide Issues......................................................................................................... 203
Management Support................................................................................................. 204
Maintenance Organization........................................................................................ 204
Decentralization.................................................................................................... 204
Central Maintenance............................................................................................. 204
Summary........................................................................................................................ 205
Questions........................................................................................................................ 206
Problems......................................................................................................................... 206
Suggested Reading.......................................................................................................... 208
Notes.............................................................................................................................. 208
8 Pull Production Systems...........................................................................................211
Production Control Systems............................................................................................212
Pull Systems and Push Systems........................................................................................212
Pull Production Process...............................................................................................213
Why Pull Production Cannot be Stockless..................................................................214
Push Production Process.............................................................................................216
Pull and Push Contrasted............................................................................................218
Containers and Cards..................................................................................................219
Rules for Pull Production........................................................................................... 220
How to Achieve Pull Production.....................................................................................221
xiv ◾ Contents
Hybrid Structure....................................................................................................261
Product Families and Focused Factories......................................................................261
GT and Product Design..............................................................................................261
To Code or Not to Code............................................................................................ 262
Focused Factory.............................................................................................................. 262
On What to Focus..................................................................................................... 263
Microdesign Issues..................................................................................................... 266
Flexible Flow Lines.................................................................................................267
Flexible U-Lines and S-Lines..................................................................................267
Working Out the Final Layout.............................................................................. 268
Product-Quantity Analysis............................................................................................. 269
Establishing Product–Machine Groups.......................................................................... 269
Coding and Classification...........................................................................................270
Visual Cluster Analysis Using Routings......................................................................270
Production Flow Analysis............................................................................................271
Binary Ordering Algorithm................................................................................... 272
Dense Blocks, Then What?..........................................................................................274
Advantages and Disadvantages of Focused Factories........................................................276
Summary........................................................................................................................ 278
Questions........................................................................................................................ 279
Problems......................................................................................................................... 279
Suggested Reading...........................................................................................................281
Notes.............................................................................................................................. 282
10 Workcells and Cellular Manufacturing....................................................................283
Workcell Concepts.......................................................................................................... 284
Workstations, Workers, and Machines....................................................................... 284
Workcell Output and Number of Workers................................................................. 284
Workcell Applications..................................................................................................... 285
Typical Workcell End Items....................................................................................... 285
Linked Workcells and Subcells................................................................................... 285
Workcell Design............................................................................................................. 288
Digression: Cycle Time ............................................................................................. 288
Assembly Workcells.................................................................................................... 289
Machining Workcells..................................................................................................293
Workcell Capacity...................................................................................................... 296
Cost–Capacity Tradeoff Analysis............................................................................... 297
Batch Size = 1.............................................................................................................. 298
Sequential Changeover Tasks..................................................................................... 299
Productivity Improvement......................................................................................... 300
Quality Control..........................................................................................................301
Workcells beyond Manufacturing....................................................................................301
Workers in Cells............................................................................................................. 302
Staffing a Workcell..................................................................................................... 302
Simultaneous Staffing of Multiple Cells..................................................................... 302
Equipment Issues............................................................................................................ 303
Machine Sharing........................................................................................................ 304
xvi ◾ Contents
Suggested Reading...........................................................................................................536
Notes...............................................................................................................................536
19 Strategy Deployment.................................................................................................539
Improvements Tied to Strategies; Strategies Tied to Vision..............................................539
In a Nutshell.............................................................................................................. 540
Origins........................................................................................................................... 540
Common Practices and Themes.......................................................................................541
I. Vision, Strategy, and Long- and Medium–Term Goals: Steps 1–4.......................... 542
II. Cascade Objectives and Plans: Steps 3–5............................................................... 543
III. Catchball and Cross-Functional Management: Steps 3–5.................................... 543
IV. Goals, Actions, and Targets: Steps 6–7................................................................. 543
V. Objectives Linked to Daily Management: Steps 5–8............................................. 543
VI. Review and Control: Steps 7–9............................................................................ 544
VII. PDCA (All Steps)............................................................................................... 544
Strategic Planning Preparation........................................................................................ 546
Develop a Future Vision................................................................................................. 546
Develop High-Level Objectives and Strategies................................................................ 546
Breakthrough Objectives............................................................................................ 546
High-Level Strategies................................................................................................. 547
Develop Annual Plan for High-Level Strategies.............................................................. 547
X-Matrix.................................................................................................................... 548
A3 Format.................................................................................................................. 549
Deploy Strategies and Plans.............................................................................................551
Deploy First Level Strategies.......................................................................................551
Deploy Second- and Next-Level Strategies..................................................................552
Roll-Up and Check Consistency.................................................................................554
Implement Plans .............................................................................................................554
Daily Management......................................................................................................554
Project Management...................................................................................................554
Review Progress...............................................................................................................555
Daily/Weekly Review..................................................................................................555
Monthly Review..........................................................................................................555
Annual Review............................................................................................................555
Standardize Processes and Work Tasks........................................................................555
Control Departments.......................................................................................................556
Strategy Deployment Calendar........................................................................................556
Top Management Initiation.............................................................................................558
Benefits and Limitations..................................................................................................558
Summary.........................................................................................................................559
Questions........................................................................................................................ 560
Suggested Reading...........................................................................................................561
Notes.............................................................................................................................. 562
Index..................................................................................................................................563
Foreword
In the outpouring of writings on lean production, the single work that tells it all and tells it well is
this book by John Nicholas. It’s fully stocked with excellent graphs, tables, photos, and mini-case
examples, and with end-of-chapter questions for use as a classroom textbook.
This second edition retains and enhances the core material that made up the 16 chapters of
the previous edition, plus the addition of three new chapters. Chapter 13 on the 3P Methodology
joins eight prior chapters in Part II, key elements of lean production. The new Part IV, Lean
Management System, tops off the book with Chapter 18 on daily lean management and Chapter
19 on strategy deployment in the cause of lean.
In Chapter 1, Race without a Finish Line, Nicholas presents lean as a force for competitive-
ness—a point of view often missing in lean lore. The chapter includes a review of lean’s evolution,
including its vibrant 1980s era under the just-in-time (JIT) banner.
Following that is Part I, Continuous Improvement, Waste Elimination, Customer Focused
Quality, which sets the stage for subsequent chapters by making it clear that lean is not a one-time
implementation—that it calls for never-ending improvement involving cutting wastes with qual-
ity in the eyes of customers.
Chapter 2 lays out the Fundamentals of Continuous Improvement and includes an expanded
treatment of value stream mapping. I like what Nicholas has done with Chapter 3, Value Added
and Waste Elimination, which, in addressing lean’s commitments to time and quality, also looks
at misunderstandings about the social impacts of lean. Chapter 4, devoted to Customer-Focused
Quality, includes all the TQ basics with special attention to the essential involvement and owner-
ship of quality by the work force.
As to lean itself, while many books and articles have been veering away from core methodolo-
gies, this book does not. The nine chapters in Part II, Elements of Lean Production, bore in on
lean’s essentials. Here are some highlights:
◾◾ Chapter 5, small lots: this chapter introduces the ideal batch size of 1—one-piece flow.
◾◾ Chapter 7, equipment maintenance and improvement: Some operations management text-
books don’t even include this topic—but the lean community places special emphasis on its
importance as pursued under total productive maintenance (TPM).
◾◾ Chapter 9, focused factories and group technology: While reviewing the classical forms of facil-
ity layout, this chapter properly answers the question, “On what to focus.”
◾◾ Chapter 10, work cells and cellular manufacturing: In lean’s early days (including the pre-lean
JIT era), cellular manufacturing was often upheld as the key trigger for dramatic improve-
ments in lead times. Unlike many other current publications on lean, this chapter convinc-
ingly retains that viewpoint.
xxv
xxvi ◾ Foreword
◾◾ Chapter 11, standard work: Too often discussions and writings on standard work limit the
topic to work instructions (standard, correct ways of doing tasks and jobs). This chapter is
comprehensive and includes, for example, standard (maximum allowable) quantities of WIP.
◾◾ Chapter 12, quality-at-the-source and mistake-proofing: Among topics here is the all-impor-
tant role of mistake-proofing, or in Japanese, pokayoking (my own terminology preference
is fail-safe-ing, which avoids negative connotations).
◾◾ Chapter 13, the new one on Production Preparation Process (3P): presents a formalized
approach to what has been called collaborative design and development, simultaneous engi-
neering, early involvement (IBM), and design build (Boeing).
Each of these chapters is presented thoroughly with plentiful examples, but what catches the eye
are special insights.
Part III, Lean Production Planning, Control, and Supply Chains, contains four chapters that
treat the traditional operations-management topic of production planning and control (PP&C)—
but from a lean point of view. Besides the nuts and bolts of these topics, Nicholas includes broad-
ened viewpoints. For example, Chapter 14, Uniform Flow and Mixed-Model Scheduling, advises
that, for the sake of practicality and feasibility, leveling the schedule must be a “cooperative effort”
carried out jointly by people from sales, marketing, engineering, production, and finance. Many
excellent examples populate this chapter and keep it lively.
Chapter 15, Synchronizing and Balancing the Process, is a close companion of Chapter 14 and
delves into line balancing under mixed-model production and adjusting to schedule changes. The
chapter’s materials on synchronization—a high-interest issue in lean manufacturing—include
how to match up different kinds of production. Scheduling around bottlenecks is part of the issue,
and here Nicholas presents a set of principles for dealing with it.
Chapter 16, Planning and Control in Pull Production, takes a higher-level system-wide
approach to the subject: centralized versus decentralized; monthly and daily planning; links with
suppliers under kanban vs. MRP (material requirements planning); capacity plans and bills of
materials; stocked shelves vs. point-of-use; and the knotty matter of operating a pull system along-
side with MRP.
Chapter 17, Lean Production in the Supply Chain, is an essential component of the book.
Besides core issues (e.g., supplier partnership, sourcing, supplier certification, orders and con-
tracts), the chapter includes discussion of the Aisin Seiki crisis in which a key Japanese automotive
supplier was nearly put out of business by a fire at the plant.
Part IV presents new materials on the Lean Management System. Chapter 18, Daily
Management, contrasts traditional management behaviors to the very different and much more
effective behaviors under lean. It addresses the challenges of maintaining process stability and
improvement, cultural and leadership aspects of management, and methods for tracking daily
progress and sustaining improvements.
Chapter 19, Strategy Deployment, offers a systematic approach to linking components of the
lean agenda to organizational strategies. The concept calls for blending high-level organizational
goals, policies, and strategies such that the many elements of lean support goals.
To sum up, Lean Production for Competitive Advantage is an adroitly written book that fills
yawning gaps in the lean discipline. Lean practitioners, consultants, teachers, and students will
not find another book so comprehensive, readable, and on target.
Richard J. Schonberger
----------------------------------------------------------------------------------------------------------------
Foreword ◾ xxvii