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July <strong>2015</strong><br />
<strong>Edition</strong><br />
LEANFORMAZIONE<br />
<strong>Value</strong> <strong>and</strong> Waste
Dear Colleagues,<br />
in a society based on information, the promptness <strong>and</strong> reliability of “knowledge”, of knowing<br />
what is happening in order to be able to underst<strong>and</strong> what could happen, is fundamental.<br />
To inform means “to give shape”, in other words to activate a creative process of building<br />
<strong>and</strong> organising meanings <strong>and</strong> knowledge. To inform means to transmit ideas in a clear,<br />
complete, reliable <strong>and</strong> useful way so that they can be used to solve a problem, improve a<br />
situation, avoid ambiguity <strong>and</strong> obtain other useful information.<br />
We talk about communication when the information trasfer leads to the<br />
creation of a relationship <strong>and</strong> therefore generates a connection between parts.<br />
From the Greek language, Koinè (participate) <strong>and</strong> from the Latin language, Comunico (put<br />
together), communicate therefore means:<br />
✓✓to share<br />
✓✓to open up to the other person<br />
✓✓to create a place of exchange<br />
✓✓to activate a relationship <strong>and</strong> a process of interaction<br />
✓✓to stimulate the process of acquisition of new meanings <strong>and</strong> knowledge
This is why LEANFORMAZIONE has been created, the newsletter that wants to<br />
communicate to All Lima employees a periodic information on how our company is<br />
changing, in which areas this has occurred <strong>and</strong> is occurring, which other challenges we<br />
see in the future, which are the operating tools we will use as a valid help to improve our<br />
processes.<br />
LEANFORMAZIONE =<br />
INFORMATION + TRAINING about the main LEAN activities<br />
in other words the right mix of culture (learning) <strong>and</strong> knowledge (information) with the overall<br />
objective of creating <strong>and</strong> consolidating the cultural basis to eff ectively apply the methods<br />
of continuous improvement, obtain the ever greater involvement of the company’s human<br />
resources (which will be the real key to the success of the LEAN transformation) <strong>and</strong><br />
provide the information tools necessary to activate a discussion <strong>and</strong>, especially, create a<br />
movement of opinion <strong>and</strong> an environment favourable for the development of new initiatives.<br />
“Communicating <strong>and</strong> exchanging information is nature, taking into account the<br />
information given to us is culture” Johann Wolfgang Goethe<br />
Sincerely,<br />
Fabio Domevscek<br />
Lean Thinking Manager<br />
Lima Corporate
Our reorganizational journey to become a LIMA LEAN ENTERPRISE<br />
starts from one of the cornerstones of the LEAN culture: continuously<br />
searching <strong>and</strong> maximizing the value for the customer.<br />
This is the key objective of the Excellent Supply Chain area.<br />
VISION &<br />
COMMITMENT<br />
EXCELLENT<br />
PEOPLE<br />
EXCELLENT<br />
BUSINESS<br />
PROCESS<br />
EXCELLENT<br />
SUPPLY CHAIN
LEANFORMAZIONE<br />
STRUCTURE OF THE<br />
BROCHURE<br />
Learning Pill / introduces step-by-step a principle connected to one of the four areas:<br />
Vision & Commitment, Excellent People, Excellent Supply Chain <strong>and</strong> Excellent Business Process<br />
Pilot project / on which it is operationally applied what was explained in the Learning Pill<br />
Recommended book / with reference to the subject being discussed
LEANFORMAZIONE<br />
7<br />
INDEX<br />
01 LEARNING PILL: THE 7+1 “MUDA” page 08<br />
02 PILOT PROJECT: NEW ADVANCED WAREHOUSE page 12<br />
03 RECOMMENDED BOOK: THE ART OF IMPROVING page 16
01 | LEARNING PILL: THE 7+1 “MUDA”<br />
LEARNING PILL<br />
01<br />
THE 7+1 “MUDA”<br />
WHAT IS VALUE? It is everything that is worth doing <strong>and</strong> makes sense to exp<strong>and</strong> <strong>and</strong> repeat, to obtain<br />
ever greater benefit. Therefore, in a company, value is everything that the customer is willing to pay.<br />
Let’s ask ourselves then: “Is the customer willing to pay...<br />
1. The material waiting to be manufactured or to be sold?<br />
2. Defected products?<br />
3. More finished products than requested?<br />
4. Internal transportation of material, from one part of the factory to the other?<br />
5. Redundant revisions, repeated controls, unnecessary hard copies, unnecessary transactions or<br />
signatures?
LEANFORMAZIONE<br />
9<br />
6. The unnecessary movements that the workers must perform daily (i.e. cross the department to get an<br />
adjustable wrench, go to various offices to deliver paper copies)?<br />
7. An operator waiting for parts coming from the previous working phase?<br />
If the answer to these 7 questions is “NO”,then it means that all this (overstock, defects, overproduction,<br />
transportation, complex processes, operators movements, waiting time) is absolutely not value! And so,<br />
what is it? It is “MUDA”, <strong>waste</strong> (in Japanese), everything that consumes resources increasing costs,<br />
without adding value to the product.<br />
In reality, even the incorrect “use” of people is a <strong>waste</strong>! Not paying attention to the ideas or the observations<br />
of the workers is a lost opportunity for the company to enhance the skills, improve operational activities<br />
<strong>and</strong> increase the customer’s satisfaction level. Therefore, if in literature we have always talked about<br />
“7 types of <strong>waste</strong>”, recently an eighth <strong>waste</strong> has been added: the <strong>waste</strong> of unused human potential!<br />
Every process can hide “muda”: in the office, in the manufacturing area or simply in daily life (if st<strong>and</strong>ing in<br />
line at the post office had value, everyone would like to wait for hours over there!).
01 | LEARNING PILL: THE 7+1 “MUDA”<br />
But how can we “discover” them? We have TO GO AND SEE: taking time to look <strong>and</strong> analyse with critical<br />
eyes our processes, freeing up ourselves for a second from daily life <strong>and</strong> routine, we will manage to<br />
distinguish the activities with value from <strong>waste</strong>.<br />
Why, lately, do we hear so much talk about <strong>waste</strong> <strong>and</strong> the need to reduce it? Because in the past the valid<br />
equation was:<br />
PRICE = COST + PROFIT<br />
where the profi t was “just a reward” for the efforts <strong>and</strong> the costs incurred to create a product or provide<br />
a service. Now in a market in which the competitiveness between companies is at the highest levels, the<br />
equation is:<br />
PROFIT = PRICE – COST<br />
where profi t is a “privilege” obtained thanks to the reduction of costs, by applying the techniques of<br />
Lean Thinking.<br />
All improvement projects in progress <strong>and</strong> the ones that will be launched in the<br />
future will be based on the <strong>waste</strong> removal in order to maximise the value perceived<br />
by the Customer.
LEANFORMAZIONE<br />
11<br />
08<br />
Unused human<br />
potential<br />
Excessive stock<br />
in the warehouse 01<br />
Defects<br />
in Production<br />
02<br />
Overproduction<br />
07<br />
Waiting time<br />
“MUDA”<br />
03<br />
06<br />
Useless <strong>and</strong> frequent<br />
movements<br />
of employees<br />
05<br />
Complex<br />
processes<br />
Unnecessary internal<br />
04<br />
transportation
02 | PILOT PROJECT: NEW ADVANCED WAREHOUSE<br />
PILOT PROJECT<br />
02<br />
NEW ADVANCED<br />
WAREHOUSE<br />
INTRODUCTION<br />
One of the most important examples of “muda” elimination is represented by the New Advanced<br />
Warehouse. The New Advanced Warehouse project was created to increase the number of parts that<br />
could be delivered per day from the finished products warehouse of Villanova, by eliminating the activities<br />
with no value added <strong>and</strong> st<strong>and</strong>ardising the necessary ones.<br />
PROJECT STRUCTURE<br />
In line with the guiding principles of Lean Thinking the project is divided into the following phases:<br />
• mapping of the state of the art of the process, from order entry to shipping of the finished products to<br />
the final Customer;<br />
• flow analysis of the operational activities through critical observation of every single activity;<br />
• <strong>waste</strong> identification <strong>and</strong> definition of the most significant opportunities for improvement;<br />
• design of the future state characterised by the elimination of the activities with no added value (<strong>waste</strong>)<br />
<strong>and</strong> the automation of some of them.
LEANFORMAZIONE<br />
13<br />
The principal <strong>waste</strong>s we fi ghted are the following:<br />
Type of <strong>waste</strong><br />
REWORKINGS<br />
& DEFECTS<br />
Improvement activity<br />
Automatic calculation of the optimal size of the package<br />
Type of <strong>waste</strong><br />
MOVEMENTS<br />
OF PEOPLE<br />
Improvement activity<br />
Picking activities close to the conveyor belt;<br />
the items are put in the picking carts directly by the robot<br />
Type of <strong>waste</strong><br />
TRANSPORTATION<br />
OF MATERIALS<br />
Improvement activity<br />
The parts are picked one by one <strong>and</strong> placed on the conveyor<br />
belt which is next to the vertical warehouses<br />
Type of <strong>waste</strong><br />
WAITING TIME<br />
Improvement activity<br />
Processing 4 picking lists at<br />
the same time to decrease the waiting time of operators<br />
Type of <strong>waste</strong><br />
COMPLEX<br />
PROCESSES<br />
Improvement activity<br />
• Automatic second reading of items<br />
• LED system to localize the parts to be picked by the operator immediately
02 | NEW ADVANCED WAREHOUSE<br />
THIS PROJECT WILL ALLOW US TO ACHIEVE THE FOLLOWING RESULTS:<br />
Increase of the number of shipped items from an average of 2,500 to 5,000<br />
Average picking time reduction from 20 sec/pc to 5 sec/pc<br />
Automatic second reading<br />
Optimisation of occupied area<br />
Increase of st<strong>and</strong>ard operations<br />
Operators morale <strong>and</strong> well-being improvement
LEANFORMAZIONE<br />
LEANLEARNING<br />
15
03 | THE ART OF IMPROVING<br />
03<br />
RECOMMENDED BOOK:<br />
THE ART OF IMPROVING<br />
“MUDA” gets our lives worst, not only inside companies but also in our daily<br />
life, <strong>and</strong> we will get huge benefi ts by eliminating them: “muda” is “<strong>waste</strong>” (of<br />
time, of space), it is chaos <strong>and</strong> disorganisation, it is what makes us <strong>waste</strong><br />
energy which could instead be used to develop ideas <strong>and</strong> projects. When<br />
travelling, have you ever thought about how an airline company organises its<br />
processes <strong>and</strong> how the people work within them?<br />
If you don’t take a plane <strong>and</strong> prefer to travel by car making stops to eat,<br />
have you ever thought about how much <strong>waste</strong> there is in a restaurant on<br />
the highway?<br />
You will fi nd the answers to questions like these in the new book of<br />
Arnaldo Camuff o (Professor at the Bocconi University of Milan, where he teaches Lean<br />
Management), which shows us how, by observing with a critical eye what is happening<br />
around us, it is possible to improve <strong>and</strong> optimize all activities by eliminating <strong>waste</strong>.
LEANFORMAZIONE<br />
17<br />
"The art of improving - Made in Lean Italy in order to compete again", Arnaldo Camuffo, Marsilio Ed.
“Communicating <strong>and</strong> exchanging<br />
information is nature, taking into account<br />
the information given to us is culture”<br />
Johann Wolfgang Goethe
NOTES
NOTES
Limacorporate spa<br />
Via Nazionale, 52 - 33038 Villanova di San Daniele - Udine - Italy<br />
Tel.: +39 0432 945511 - Fax: +39 0432 945512<br />
E-mail: info@limacorporate.com<br />
www.limacorporate.com