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LM Case.study
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Palomar Systems an ESI Company
Business
Basics, LLC 6003 Dassia Way Oceanside, CA 920567-1
Copyright © 2014 Business Basics, LLC
All rights reserved. No part of this odule
ay !e reproduced for any purpose other
than the in"house training of eployees of
copanies that have purchased this odule.
“As Vince Lombardi developed his winning football team by focusing on the basics of
football, so did Palomar Systems develop their winning manufacturing teams by focusing
on the basics of manufacturing. Many companies are a lot lie the !reen "ay Pacers
football team before the arrival of Vince Lombardi#all the potential in the world but no
focus on the basics of their business and profession. $hen % &oined such a company, the
first thing % did was to teach and obtain a commitment to the basics of Lean Manufactur'
ing. %t is ama(ing how many of the historic reoccurring problems were eliminated by a
tenacious implementation of these basics.)
"ill !aw
A Lean Manufactuin! Case "tudy
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M#$ %&OL'()O*
To Much of a Good Thing ???
+950s COM$'(%#)%D M#$
+970s CLO"%D LOO$ M#$ Manufactuin!. "/o f1oo conto1
Caacity $1annin!
+90s COM$'(#)%D M#$)) inance.Cost accountin!
+990s %#$ %n!ineein!. $oduct Data Mana!eent $DM.Coute Aided Desi!n CAD.
0-3
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MA(%#)AL #%')#%M%*(" $LA**)*
(/e a1ancin! Act
Cancel #eorder
#eschedule
$A%&'# %C(')*L'
B+LL% - $A&'#+AL
L'A)&+$'%
L& %+'%
+N/'N&#
*#C(A%'
#)'#%
#3"+N"#C'%%
5
#'6*+#'$'N&% C/'#A7'
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(/e $1anne8uye C/a11en!e
7#%% #'6*+#'$'N&%
%C(')*L') #'C'+&%
#8'C&') N"(AN)
N'& #'6*+#'$'N&%
LANN') #)'# #'C'+&
#)'# #'L'A%' )A&'
1 2 9 4 : ; < =
1: 4:1:4040 90
100
;0 20 =0 :0 9: 9: >0
10
100
100
'#+)%
: ; < = > 10 11 = > 10 11 12 19 1 2 9
1:1:40 1: 901:2: 90
'#+)%
1 91 2
?
$A%&'# %C(')*L'
-# @1LANN') #)'#% -# @? LANN') #)'#% -# @L'A) &+$' 4 L'A) &+$' ;
A#& @1
N"(AN) >:
ALLCA&') 20
%A-'& %&C3 0
L'A) &+$' 9
L& %+' 100
'#+)%
MA(%#)AL #%')#%M%*(" $LA**)*
0-5
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(/e ea1ity of statistica1 oai1ity
(:% M#$)) C#'"AD% – What went wrong !llie?
C,$1*&'#7'N'#A&')
$A%&'#%C(')*L'
C,$1*&'#7'N'#A&')$#1 &A3'" AC&+,N%
$aster %chedule%ales -orecast
1roduction B,$%ales Configurator
1rodn +nventory
1urchase ,rders
-7 +nventory
1roduct )esign
55555 D$A%&'# %C(')*L'
+N&'7#+&0
55555 D,#)'#"LA*NC( AN) C,N,L
ACC*#AC0
555D 555D
555D
555D
555D
555D
555D
555D
555D
555D
,rder 'ntry %hop ,rders
MA(%#)AL #%')#%M%*(" $LA**)*
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Wo1d-C1ass
Manufactuin!
$efoance
M#$
"O$ LOO#
CO*(#OL ";"(%M"
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AC(O#; LOO# #%AL)()%"
M#$))8%#$
Ode Launc/ < %=edite
"toc>oos
%OM "yndoe
)nside-of-1ead-tie C/aos
unctiona1 #esonsii1ity
ieac/ica1 "tuctues
&endos as Ad?esaies
&etica1 )nte!ation
Annua1 oa1 "ettin!
@LM
"euentia1 $oduction
$oint-of-use Lo!istics
$oduction Lineaity
"c/edu1e 1e=ii1ity < A!i1ity
$ocess OBnes/i
"e1f Diected (eas
"u1ie $atnes/is
*on-coe Outsoucin!
a1anced "coecad
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@A)%* A"%D L%A* MA*'AC('#)*
- @LM %$%C(A()O*"
CA*% %*%)("
Less diect sue?ision )ncease in eo1e ceati?ity
(ea eoBeent (ie1y o1e so1?in!
$ocess oBnes/i ui1t-in ua1ity
"e1f-diection %n/anced efoance
Diect counications ette decision-a>in!
A no status uoE indset - sc/edu1e f1e=ii1ity8a!i1ity
- /ea1t/ie ofit a!ins
- /i!/e in?entoy tuns
$efoance eco!nition %1oyee - Fo satisfaction
- financia1 eBad
%1oye - eo1e etention
- financia1 eBad
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(;$)CAL #%"'L(": M#$ G @LM
0 10 20 30 40 50 60 70 80 90 100
$#++ or '# 3BL$
$uc/asin! Costs
Manufactuin! Costs
actoy "ace
ui1d8(est Cyc1e (ies
ua1ity Costs
)n?entoies
#esu1ts Dis1ayed as #an!e of $ecent #eductions
%H #%D'C()O*
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$ALOMA# ";"(%M"I
AC('AL @LM #%"'L("
$#OD'C( ')LD
C;CL% )* DA;".
$#O)( MA#)*
)* H.
)*&%*(O#;
)* ('#*".
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Sequential Production
Business
Basics, LLC 6003 Dassia Way Oceanside, CA 92056
@*ffective shop floor control has proven elusive as we have
upgraded our manufacturing control system from M+P to
M+P%% and then to *+P. o capture control of shop floor act'
ivities, we need to stop beating a “dead horse) and imple'
ment the Se-uential Production Process. he winners are).
"ill !aw
3-1
A Lean Manufactuin! Case "tudy
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"%'%*()AL $#OD'C()O*
OFecti?esE (/e C/a11en!e
E (/e Aoac/ - A "e1f-diected (ea
E $oFect #euisites
E (/e Wo> Ce11 Layout
(a!ets
E Wo> ce11 f1oB 1ayouts
E Line a1ancin!E Wo>1ace inte!ity
E One-u, one-doBn ua1ity conto1
3-23-2
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(% CALL%*% "ace
$oducti?ity
Dou1e itJ
*one a?ai1a1eJ
3-3
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(% CALL%*%
OLD A$$#OAC
E Aut/oitaian
E ea of @noB1ed!e
E ea of Ko Loss
E "tatus uo
E #i!id $o1icies
E O?e-t/e-fenceE Desi!ns
E Distance fo Ma>ets
E )% $o1e "o1?in!
E Wo> on #esu1ts
"%'%*()AL $#OD'C()O*
E $aticiati?e
E Oen Discussion
E Ko "ecuity
E A *eed to Win
E Mana!eent 1e=ii1ity
E Concuent %n!ineein!
E C1ose to Custoes
E (ota1 )n?o1?eent
E Wo> on Causes
$oduction Wo> %n?ionent
3-4
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(% CALL%*%
OLD A$$#OAC
E ocus on $oducti?ity
E Loose Docuentation
E $oo "u1ie Mateia1s
E $oduction &aia1es
E Asse1y $o1es
E )nsection Conto1s
E (ia1 < %o "etu
E *ot My $o1e
E )ndi?idua1 #eBads
"%'%*()AL $#OD'C()O*
E ocus on ua1ity
E Docuentation )nte!ity
E "u1ie %=ce11ence
E "ueio $oducii1ity
E Wo> )nstuction )nte!ity
E $ocess OBnes/i
E $1u! and $1ay Menta1ity
E (ota1 )n?o1?eent
E (ea ABad "yste
ua1ity - $1u! and $1ay
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(% A$$#OAC - A "%L-D)#%C(%D (%AM
Case "tudy CoanyIs $esentation
(/e "e1f-Diected (ea Concet
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(%AM D;*AM)C"
"e1f-Diected Wo> (easE #euieents fo "uccess
E (ea C/aacteistics
E Mana!eentIs #o1e
E (ea #esu1ts
a1anced "coecad enefits
E Otiie tactica1 1an e=ecution
E )o?e decision-a>in!E %1oyee Fo satisfaction and etention
E %=ceed efoance e=ectations
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W; (%AM"
“$hen a strategic business ob&ective re-uires
various intradepartmental people sills and
nowledge, the self'directed team concept pro'vides the best option for optimal achievement.)
#ichard 3olstad
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(% "%L-D)#%C(%D (%AM CO*C%$(
WO#@" %"( W%* (%#% )" A *%%D:
E (o io?e t/e effecti?eness of co1e=
usiness ocesses
E (o ac/ie?e custoe di?en ua1ity
euieents
E (o cayout a Continuous )o?eent
$o!a
E (o otiie oduct outsoucin! oFects
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#%')#%M%*(" O# "'CC%""
E A coany cu1tue t/at encoua!es and
suots t/e tea concet
E "ufficient tie fo adeuate s>i11s tainin! and
tea de?e1oent
E A Bi11in!ness to ta>e is>s
E (ea 1eades/i - need a feB c/aions
E A?ai1ai1ity of ea1 Bo1d tea e=eience ande1ated s>i11s
E A e1e?ant efoance eBad syste
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(%AM CA#AC(%#)"()C"
E 6 to +2 ees
E Mu1ti deatenta1 eesentation
E O!anied fo /i!/ efoance8esu1t
E &aious tec/nica1 s>i11s and Fo >noB1ed!e
E (ota1 accessii1ity to e1e?ant infoation
E $o1e so1?in! o secia1 oFect focus
E uided y t/e teaIs ission stateent
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"%L-D)#%C(%D WO#@ (%AM" &"N
(% (#AD)()O*AL D%$A#(M%*(
E )ntec/an!ea1e &sN i=ed #o1es
E 1e=i1e ?sN #i!id (as>s
E Mu1tis>i11ed ?sN "ecia1ied ">i11s
E ou ?sN )ndi?idua1 Conto1
E %ua1 ?sN Diffeentia1 "tatus
E Mana!e Wit/in ?sN Mana!e Outside
E Co/esi?e ?sN Di?ided Wo> %ffot
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"%L-D)#%C(%D WO#@ (%AM" &"N
(% (#AD)()O*AL D%$A#(M%*(
E Wo> teas 1an, set ioities, o!anie,
coodinate Bit/ ot/es, easue and ta>e
coecti?e actionsN
E "o1?e o1es, sc/edu1e and assi!n Bo>and in any cases /and1e esonne1 issues
1i>e /iin! and efoance aaisa1sN
E (ea ees ecei?e e=tensi?e tainin!
in adinistati?e, inteesona1, and tec/-nica1 s>i11s euied to e se1f ana!in!
EThis was once the domain of managers"super#isors
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Mana!eents *eB #o1e
E Coac/in! (eas
E Wo> on Lon!e #an!e "tate!y
E "uot teas in t/ei inteaction Bit/ t/e
1a!e o!aniationE C/aion inno?ati?e ideas
E $ay oe attention to t/e tec/no1o!y side of
t/e usiness
E 'ndestand and attendin! to esouce needsE Wo> c1ose Bit/ su1ies and custoes
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(%AM $%#O#MA*C%
"CO#% OA#D D%&%LO$M%*(
E 'ndestand usiness state!ic e1ations/is
E Define e1e?ant tea success factos
E Ma t/e inte-e1ated usiness ocesses
E )dentify efoance easueent oints
E De?e1o secific efoance easues
E %sta1is/ a!!essi?e success facto !oa1s
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"(A%" O (%AM D%&%LO$M%*(
E oin!
E "toin!
E *oin!
E $efoin!
E (ansfoin!
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OW COM$A*)%" CA* %*%)( #OM
"%L D)#%C(%D WO#@ (%AM"CA*% #%"'L(
Less diect sue?ision #educed o?e/ead costs
%1oyee eoBeent Otiie state!ic 1an e=ecution
Less /andoffs *o fin!e ointin!
ocused effots )o?ed o?ea11 efoance
ette counications )o?ed decision-a>in!
)o?ed usiness ocesses - on1y ?a1ue added acti?ities- educed oeatin! costs
- educed in?entoy
$efoance eco!nition %1oyee Fo satisfaction and
etention
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$ALOMA# ";"(%M"I (%AM
(#A)*)* $#O#AM
Modu1e P+: )ntoduction to (eas
Q (aine: Anita (otta
Q (oics
- #u1es, o1es, !oa1s and eo1e
- "ta!es of tea de?e1oent
- De?e1oin! a tea ission
stateent
Modu1e P2: Meetin! Mana!eent
Q (aine: %d aic>Q (oics
- (oo1s to un effecti?e eetin!s
- Coonents of a eetin!
- Meetin! ocedue
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A (%AM (#A)*)* $#O#AM CO*(NNN
Modu1e P3: Conf1ict #eso1ution
Q (aine: Anita (otta
Q (oics
- oce ie1d Ana1ysis
- &ieBs of conf1ict
- Conf1ict ana!eent state!ies
Modu1e P4: Counications < $o1e "o1?in!
Q (aine: Cao1e Mondi!o
Q (oics
- Concets of Counication
- $o1e so1?in! stes
- $o1e so1?in! too1s
3 -19
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A (%AM (#A)*)* $#O#AM CO*(NNN
Modu1e P5: ua1ity Assuance
Q (aine: C/is %?ans
Q (oics
- Mana!eent ?ision, )"O-9000
- ua1ity initiati?es: "$C, C$, A"$, M- Cost of ua1ity $o!a
Modu1e P6: Custoe "ensiti?ity
Q (aine: #ae Dietsc/e
Q (oics- $ecetion ?sN ea1ity
- Ode $ocessin! ocess
- A case study - Late s/ient
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A (%AM (#A)*)* $#O#AM CO*(NNN
Modu1e P7: Coute "ystes
Q (aine: Dennis O1i/ant
Q (oics
- oecastin! and Ode $ocessin!
- Manufactuin!8Mateia1 Conto1
- inancia1 #eotin!
Modu1e P: inancia1s
Q (aine: Caen uc/e1
Q (oics
- (/e a1ance "/eet ?sN(/e $
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A (%AM (#A)*)* $#O#AM CO*(NNN
Modu1e P9: "tate!ic $1annin!
Q (aine: #ic/ @o1stad
Q (oics
- Mission stateents
- "ituation ana1ysis- OFecti?es and state!ies
- Citica1 success ta!ets
- a1anced "coecads
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A (%AM "(A#(-'$ $#OC%""
E @ic>-off Lunc/eon <
$esentation
E %sta1is/ (ainin!"c/edu1e
E Monito and "uot
(ea De?e1oent
E #ea < #eBad
enefits of (eaBo>
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(% $#OK%C( #%')")(%"
$oint-of-'se Lo!istics
"u1y C/ain De?e1oent
E "i1ify ocueent state!ies
E A focus on su1ie se1ection
E #euieents and "c/edu1e )nte!ity
E @ey "u1ie De?e1oent
enefits
E ua1ity at t/e i!/t ice
E #educes in?entoy 1iai1itiesE On-tie de1i?eies
E 'side !oBt/ otentia1
3-7
3-24
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(% $#OK%C( #%')")(%"
Cyc1e (ie Mana!eent
"eed is fo Winnes
E O!anie fo seed
E ocus on tota1 ui1d8test cyc1e tie
E Mana!eent /as a coac/in! o1e
E (ea dynaics is t/e >ey
enefits
E )o?ed oducti?ity
E )nceased sc/edu1e a!i1ity
E On-tie de1i?ey io?eent
E )o?es otto 1ineE esu1ts
3-8
3-25
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(% $#OK%C( #%')")(%"
Linea $oduction
Linea $oduction is o1d
E Deat/ to t/e oc>ey "tic>E "yndoe
E A need fo tea dynaics
E Dai1y o!ess status e?ieBs
E C1ea1y defined 1inea easueents
enefits
E O?etie eductions
E %nd of s/o f1oo c/aos
E efoance eco!nition and eBad
E Ac/ie?e !oBt/ and ofit otentia1s
3-9
3-26
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(% "$AC% $#OL%M
(/e "toc>oo Con?esion
&(' #)*C&+N
A#'A"(OC@#OOM
(/in>in! Outside t/e o=E
3-10
3-27
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(% WO#@ C%LL LA;O'(
Wo>1ace )nte!ity
E $/ysica1 o!aniation
E Docuentation inte!ity
E "i1ification and c1ean1iness
E One-u, one-doBn ui1t in ua1ity
E $e?entati?e Maintenance
E )ntena1 tea audits and eco!nition aBads
$Simply stated a place for e#erything and e#erything in its
place % % % no e&ceptions%'
3-113-28
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(% WO#@ C%LL LA;O'(
(/e ina1 Layout
(A#)A#'
BA%' A%%
$'C( A%%
'L'C& A%%
C*%&$+'
&'%& F
&*#N3'
%*B A%% $)*L'
A%%
%*B A%%
$)*L'
A%%
( A # ) 2 A # '
8+&
%*L+'#
8+&
%*L+'#
8+&
%*L+'#8+&
%*L+'#
#)*C&
-+NAL A%%
F &'%&
3-123-29
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Production Linearity
Business
Basics, LLC
6003 Dassia Way Oceanside, CA 92056
“/ompanies will never achieve their full growth and profit potential if they produce more than 012 of their monthly shipment plan in the last wee of
the month or more than 332 of their -uarterly shipment plan in the last
month of the -uarter. As companies struggle to remain competitive, one of
the strategies by which gains in speed, -uality and costs can be achieved is
to pursue and achieve linear production.)
"ill !aw
6-1
A Lean Manufactuin! Case "tudy
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$#OD'C()O* L)*%A#)(;
OFecti?esE %1iinate t/e hoc(ey stic( syndoe
E Dai1y o!ess status e?ieBs
E )o?e ateia1 a?ai1ai1ity
E $efoance easueent
(a!ets
E M#$8%#$ %ffecti?eness
E #esouce a?ai1ai1ityE Dai1y factoy 1annin!
E Action e=ecution
6- 2
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(% OC@%; "()C@ ";*D#OM%E
0
1
2
9
4
:
;
<
=
>
1 2 9 4 : ; < = > 10 11 12 19
R M i 1 1 i o n s
%(
%nd of t/e uate %O(. Cunc/
6- 3 eeG Nu!er
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(% OC@%; "()C@ ";*D#OM%E
Coe1ation etBeen Linea $oduction and $ofit Ma!in
35H
40H
45H
60H
70H 20H 90H +00H60H
$ofitMa!in
$#OD'C()O* L)*%A#)(; +00H S $efect.
#%WO#@
"C#A$
MA(%#)AL CO"("
()M% LO""8)*%)C)%*C;
(;$)CAL )-MA#)* $#OD'C(
6- 4
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(% DA)L; $O")()O*)*
#e?ieBin! Wins and Losses
6- 5
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A *eed fo $ositi?e C/an!e
E -ro confusion to focus
E -ro chaos to control
E -ro frustration to challenge
E -ro turmoil to fun
E -ro stagnation to spirited change
E -ro also)ran to winners
(% OC@%; "()C@ ";*D#OM%E
6- 6
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L)*%A#)(; M%A"'#%M%*("
OBnes/i and Accountai1ity
0
1
2
9
4
:
;
<
=
>
1 2 9 4 : ; < = > 10 11 12 19
R M i 1 1 i o n s
&A#
B&%
#,)N
%(
6- 7 Week Number
L)*%A#)(; M%A"'#%M%*("
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L)*%A#)(; M%A"'#%M%*("LoB &o1ue - i!/ Cost - +3 Wee> #o11in! "c/edu1e
#)*C&+N L+N'A#+& +N)'? H - %C(')*L') '/'N&% $+N*% H - '/'N&% B'(+N) %C(')*L' )+/+)') B H - %C(')*L') '/'N&%.
)+/+)') B H - %C(')*L') '/'N&%.
C'"(OM%#
O#D%#" $#)O# M ( W ( " M ( W ( " M ( W ( " M ( W ( " M ( W ( " M ( W ( " M ( W ( "
????????"02::=2 - C 6
????????"02:4=< C 6
????????"02:;:4 -
????????"02:2;6- 8
L)*%A#)(; M%A"'#%M%*("
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L)*%A#)(; M%A"'#%M%*("i!/ &o1ue - LoB Cost - +3 Wee> #o11in! "c/edu1e
%*(#;
DA(% 30 3+ 32 33 34 35 36 37 3 39 40
$ > ;2 == ;2 ;2 ;=
=2>> :1 >> ;2 4> ;0
=>>> > > ;< :2 ;9
=90>> ; ;; ;1 ;9
>;>> $ S $oduction S oo>ed S oecast ;: ;= 1 >9 >2 >= >= 100
L #atio B 0.;> 0.;9 0.;< 0.;< 0.< 0.<
- 'rror 1st9rd 1.2 0.> 1.1; 1.2 1.14 1.11 0.>
- 'rror should !e !etIeen .>: and 1.0:
L #atio should !e !etIeen .> and 1.1
W%%@ *'M%#
&oday
6- 9
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%sta1is/in! (odayIs OFecti?es
E %tretch !ut achieva!le
E *nderstanding and !uy"in
E %upport to aGe it happen
E Inership and accounta!ility
E Constraint anageent
E -ailure does not ean @loser
(% DA)L; $O")()O*)*
6- 10
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(/e Wa1> Aound - MWAE
E -ro agnetic !oard to spread sheet
E -ro c"roo to daily IalGing eeting
E -ro hearsay to shop floor feed!acG
E Listening to the static
E alG the talG and deliver the goods
(% DA)L; $O")()O*)*
6- 11
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"euentia1 $oduction
@%; $#OC%"" A*D (%C*)'%"
6- 12
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$oint-of-'se Lo!istics
@%; $#OC%"" A*D (%C*)'%"
(/e Layout
(A#)A#'
BA%' A%%
$'C( A%%
'L'C& A%%
C*%&$+'
&'%& F&*#N3'
%*B A%% $)*L' A%%
%*B A%%
$)*L' A%%
8+&
%*L+'#
8+&
%*L+'#
8+&%*L+'#
8+&%*L+'#
#)*C&-+NAL A%%
F &'%&
8+&%*L+'#
8+&%*L+'#
6- 13
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Cyc1e (ie Mana!eent
@%; $#OC%"" A*D (%C*)'%"
6- 14
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)(I" W%#% (% MO*%;I" A(JE
E (/e oc>ey "tic> "yndoeE
M &he end of the onth crunch
M Correlation to profit argin
M A need for positive change
E Lineaity Measueents
M Inership and accounta!ility
M (igh volue " loI cost
M LoI volue " high cost
E (/e Dai1y $ositionin!
M #evieIing Iins and losses
M 'sta!lish todays o!ectives
M &he IalG around " @$BAE @ey $ocesses and (ec/niues
M %eOuential production
M oint"of"use logistics
M Cycle &ie $anageent
6- 15
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The Make Sure You Know What You See Story
)uring the BuicG pen golf tournaent at &orrey ines 7olf Clu! in %an )iego, CA this
year, they held soe of the Oualifying rounds at y golf clu! in ceanside. $y Iife and
+ Iere Iatching the golfers tee"off fro the 1st tee and Iere aaPed at hoI far these
guys could drive the !all.
ne of the players Ias a!out to address the !all on the first tee Ihen the starters
voice cae over the loud speaGer and said, @AttentionQ &he golfer on the first tee,please ove your !all !acG to the !lue arGers. &he golfer looGed !acG at the
clu!house, shrugged and re"addressed his !all. @Attention, the golfer on the first tee in
the red hat, if you dont ind Ie are playing the !lue tees today not the Ihites, please
ove !acG to the !lue arGers.J &he golfer Iaved at the clu!house and re"addressed
his !all. &his tie the starter yelled, Jill soeone tell the guy in the red cap to ove
!acG or he Iill !e disOualified.J A!out that tie the golfer screaed !acG at the
clu!house, Jill soe"one tell that idiot that this is y second shotQJ
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All rights reserved. No part of this odule
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t/e a?ad usiness "c/oo1 $ess
"euentia1 $oduction – a1anced "coecad – )"O 2000:2000
– "tate!ic $1annin! – "u1y C/ain Mana!eent –
$oduction LineaityT @aien – Lean "i= "i!a
&a1ue "tea Main!
C/ec> it out at: /tt:88asics11cNco8LM-CetificationN/t
Lean Manufactuin! CetificationBit/ e-Coac/in! y i11 aB