Measuring Success in Lean Manufacturing

Lean Manufacturing

Lean Manufacturing is also known after the name of the company that invented it as the Toyota Production System (TPS).

The term Lean refers to the systematic removal of all deficiencies and their causes during manufacturing as well as to the eradication of all sources of delay that can undermine the production cycle from inputs to the delivery of finished products.

Formally, the two sides of Lean Manufacturing are summarized as follow:

  1. To detect and remediate deficiencies during the execution of manufacturing processes to achieve the desired quality as production progresses; (Jidoka) and
  2. To highlight and eliminate the superfluous in order to produce only the quantity required according to the requested specifications and to deliver at the desired moment. (Just-in-Time / JIT)

Lean Manufacturing goes back to the 1930s and evolved considerably to the 1970s. Therefore, Lean Manufacturing was developed prior to contemporary Industrial Revolution 4.0 robotics and real-time. Let us take a look how Lean Manufacturing looks like today!

Lean Manufacturing and Industrial Revolution 4.0

Révolution 4.0 B

The Industrial Revolution 4.0 is more a continuity than a rupture. The primary goal is to systematize the generation and processing of real-time information. It is possible to integrate real-time to Jidoka and Just-in-Time, for instance with a modern Computer Aided Production Management (CAPM) software. Let us see how it works.

The Japanese word Jidoka refers to the gradual automation of processes. In the 1930s, it was not possible to think about global automation from the outset of a project. But it was possible to improve step by step manufacturing processes with the help of factory personnel. Various techniques were used to perform those improvements to production. The best known and amazing being the outright stopping of production by the personnel themselves. When that occurs, the interruption serves two purposes: first, to retrieve the defective part or good and second, to determine the cause and even the root cause of the defect to fix it definitely. This is done by factory floor personnel and all others relevant to the situation, this is why we speak of automation with a human touch.

Just-in-Time relies as well on teams’ talent to identify and correct any superfluous element in order to manufacture on demand what is really ordered and only that in order to deliver as required. Many tools are used to achieve the best possible results such as Continuous Flow, Heijunka, Kanban, Standardized Work and Takt Time. To remain within the scope of our introduction, the first thing that comes to mind in Just-in-Time perspective is the management of inventory flows downstream and upstream of production. Ensuring the presence of the parts and tools required in due course, delivering efficiently without delays, these are the first steps of Just-in-Time. However, experience shows that dislodging and eliminating unnecessary features or steps goes way beyond the usual quality controls. It requires very capable individuals and teams able to contrast production features and backgrounds that were taken for granted. For example, the emerging customer demand for a paperless environment became an improvement boon as teams discovered that paperwork was consuming considerable amount of time though it looked optimized. It is most interesting to see that it came first from customers demand.

Genuine human intellectual open-mindedness is required to capture Jidoka and Just-in-Time opportunities. But, in some cases, such as the paperless environment, technological assets such as Industrial Revolution 4.0 real-time are required to discover and fully integrate the opportunity.

Computer Aided Production Management (CAPM) software is a capability that was not available in the 1930s. Add real-time capability with a Manufacturing Execution System (MES), such as our own FACTO software, and your CAPM is now not only able to follow what is happening on the production floor, but can itself stop production accordingly as events unfold. This is how Jidoka and Just-in-Time are made smart!

The generation and processing of information in real-time is not enough to qualify as intelligent or smart a CAPM or MES. The intelligent or intelligent qualifier, as in the « smart factory » expression, characterizes a plant in which information is generated and processed in real-time, but in addition, the CAPM combined with the MES can directly intervene in the manufacturing cells or in the plant. So, yes, the CAPM with the help of the MES can interrupt production altogether when defects are detected in order to do the exact same thing as originally intended, that is to remove the defective part or product and to work on the elimination of the root cause. But it does something else, it may and can exchange pieces of information that used to go through processes on paper that are no longer required or no longer to be printed since it follows through systems electronically. Industrial Revolution 4.0 does make a difference!

Also, in Jidoka 4.0, the interruption of production by staff for quality assurance purposes may be assisted by various automated learnings better known as Machine Learning. Some manufacturing processes can be equipped with sensors connected in real-time to CAPM through the MES whose data collection makes possible automatic interruption due to various defects, anticipation of a problem, predictive maintenance or even other prescriptive optimization operations.

That’s how Jidoka and Just-in-Time are continuous improvement processes that rely on the talent of staff, their associates and real-time measurements provided through their Manufacturing Execution System (MES).

As we will illustrate below, our FACTO software is a real-time Manufacturing Execution System, an MES, which integrates CAPM tools, Computer Maintenance Management System (CMMS), machine learning capabilities useful in predictive maintenance, as well as the possibility to exchange data with input inventory management software and finished products.

There are many stories of production and business successes in Lean Manufacturing. Let us take a look to a few metrics to assess success.

OEE jinno

The Equation of Success: Overall Equipment Effectiveness (OEE)

Any quality and quantity produced are measurable over time. The OEE ratio is applicable to any scale of the production cycle, whether it is a complete installation, a manufacturing cell, a product, a specific part number or even a shift.

OEE = (Quality Q%) x (Performance P%) x (Availability D%)


Quality Q% = compliant units produced (cup) / units produced in total

The Quality Ratio is the most obvious. Only good units produced are taken into account and compared to all the units produced. If, for example, only 1 out of 2 deliverables is compliant despite a perfect sequence of operations regarding the availability of production equipment, the running of working hours and the complete absence of hazards of any kind, the resulting OEE will be 50%.

Performance P% = useful time / time required

The Performance Ratio measures the time that was actually used for manufacturing purposes, the useful time, relative to the total time during which this effort was made, the time required, and that includes many time losses in reason of production stops.

The measurement of the Performance Ratio makes it possible to examine in detail the causes of production stops. Experience shows that by carefully characterizing the causes of arrest it is possible to identify the simplest ones and correct them. The causes themselves evolve so that keeping an eye on the Performance Ratio is very useful in identifying these dysfunctional changes.

Of course, even if the quality of production is perfect, the loss of time will affect the resulting OEE.

Availability D% = useful time / opening hours of facilities

Quality and Performance are indicators of qualitative and quantitative monitoring. They allow to make corrections.

Availability refers to the opening hours of a business taking into account its normal periods of closure, such as nights or weekends. The relevance of this ratio comes from a simple reality. Most of the time, the means of production of a company are still there outside regular hours but they are not used. Therefore, this availability is a significant opportunity for improving the OEE by extending the hours of operation of the facilities.


Usefulness of the OEE and its measured ratios

The primary utility of the OEE is the daily management of production of follow-ups for operational managers, operators cell by cell as you can see it above in the table / console of operation of our software FACTO, a real-time execution system for manufacturing. Our software allows you to seize the opportunity to act in your value chain on the spot. Thus, your OEE becomes dynamic and through the various real-time measurements that compose it, such as judicious KPIs, it becomes possible to act on machines as events arise or at any other required location in the value chain.

At the strategic level, OEE calculation provides the elements required at any time to increase production and to decide on the available path(s) to capture opportunities for overall improvement. FACTO and real-time allow you to bring the action closer to all your decision makers and improve the efficiency and productivity of your company.

In our next post about Lean Manufacturing, we will have the opportunity to explore these opportunities for developing your production facilities. Until then, take the opportunity to share with us your comments and questions.

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