Lean enterprise metinvest. Continuous improvement

At the heart of the philosophy of the organization of production relations, now known as Lean, lies the experience of the leader of the global automotive industry - Toyota. In the production workshops of this company, the basic principles of the production system, which now enjoys prestige all over the world, were formulated and tested. It was the Toyota production system (TPS), overgrown with the experience of numerous companies and repeatedly confirmed by phenomenal practical results, that formed the basis lean manufacturing. The article discusses the general principles of organization lean manufacturing, basic concepts and tools. The article can be used as an explanation to (for this purpose, the titles of the chapters completely repeat the titles of the sheets of the presentation), as well as as an independent material.

Production Formula

The transition from conventional to lean manufacturing marks a complete overhaul of the foundations of the organization of both industrial relations within the enterprise and relations with suppliers and consumers. It is no secret that for manufacturers (hereinafter, manufacturers also mean service providers) the main task of managing an enterprise is the task of maximizing profits. Favorable conditions of the recent past - high consumer demand with insufficient supply of goods and services, contributed to the fact that the price of a product was set based on the costs of the enterprise for the production of products by adding often unreasonable "cheat".

However, over time, the market situation has changed. The market for goods and services is gradually entering saturation mode. Offers from various manufacturers stimulate competition between domestic and foreign suppliers. A situation in which supply exceeds demand leads to a forced fall in the market price of goods and services, and, as a result, to a fall in the profits of the enterprise. The only way to avoid falling profits in such conditions is to reduce production costs, since prices for raw materials and resources are also determined by the market situation.

Basic concepts

The possibility of reducing production costs is not always obvious to manufacturers. The company is operating. The norms of consumption of raw materials and materials are met, productivity is growing. How can we talk about cost reduction? It would be better if the government supports domestic producers and once again changes import-export duties... However, it is becoming more and more difficult to put pressure on the government's pity in connection with integration into a single economic community. And here domestic competitors are running out. What to do?

There is only one thing left - to return to the analysis of the structure of production costs. First of all, expenses should be classified into those that are really necessary and those that can be eliminated. To do this, let's try to imagine what the consumer pays his money for by buying the produced goods. In terms of lean manufacturing, the ability of a product to meet consumer expectations is called value. The consumer is ready to pay only for the compliance of the characteristics of the product with his expectations (for functionality, quality, order lead time, price, etc.). If any activity is carried out in the production process for which the consumer does not intend to pay, i.e. activities that do not add value, such activities are called loss. In Japanese, this term has a very sonorous name - muda.

Eight types of losses

Lean identifies eight types of losses.

1. Loss of overproduction (surplus production).

2. Losses of transportation (excessive movement of raw materials, products, materials).

3. Loss of waiting (during working hours, production activities are not carried out).

4. Losses due to stocks (excess of raw materials, materials, semi-finished products).

5. Losses due to the production of products with defects (marriages).

6. Waste of redundant processing (processing that does not bring value or adds unnecessary functionality).

7. Losses on unnecessary movements (not directly related to the implementation of production activities).

8. Loss of creative potential (incomplete use of human resources).

In subsequent chapters, these losses will be considered in more detail.

Loss 1: Overproduction

One of the most obvious ways to increase profits is to increase the productivity of the enterprise. However, in the pursuit of productivity, top managers often forget that the amount of product that consumers are willing to buy is determined by market demand. Suddenly, a moment comes when the product, which was so lacking yesterday, accumulates in the warehouse (for some reason, such a moment always comes suddenly, regardless of whether we are talking about seasonal fluctuations in demand or changes in market conditions :)). Sales managers are forced to go out of their way to sell stale or spoiled goods. What a profit! To compensate for the costs, or even worse - to minimize losses! The strangest thing about all this is that this state of affairs is considered normal - the consumer, you can’t guess him! And incurring certain losses due to changes in demand is considered in the order of things (but on the wave of demand, they received a big profit).

Is it possible to exclude such losses altogether? Can. And the solution to the problem is by no means as utopian as it might seem at first glance. What do you need:

Produce only on time and only what the client wants (in fact, work only “on order”);

Produce goods in small batches that are guaranteed to be sold (if demand falls, quickly switch to another type of product);

To reduce changeover losses, reduce changeover time to a minimum, making it profitable to produce in small batches.

All this means that the time has come to forget about the profitability of production in large quantities. Current clients are demanding. They need an assortment. What is not profitable? And is it profitable to suffer losses due to the storage of illiquid assets, due to overspending of raw materials, due to problems with customers?

Loss 2: Transportation

Any more or less complex production is a sequence of operations for the transformation of raw materials or semi-finished products into the final product. But between operations, all these materials must be moved. Procedures for moving values ​​are present even in conveyor production. After all, it is necessary to bring raw materials to the conveyor or take finished products to the warehouse. Of course, transportation is an integral part of production, only unfortunately it does not create value at all, although it requires expenses for fuel or electricity, maintenance of the transport fleet, organization of transport infrastructure (roads, garages, flyovers, etc.). In addition, transportation is a waste of time and the risk of product damage.

In order to reduce losses during transportation, it is necessary to create a map of vehicle routes and conduct a thorough analysis of the feasibility of a particular movement. After that, you should try to eliminate unnecessary transportation through redevelopment, redistribution of responsibility (so that you do not have to travel through two workshops signed by the controller), eliminate remote stocks (stocks should generally be disposed of, but if they are, let them be at hand), etc. P. In addition, the system will not interfere with the transportation business: each movement of valuables must be justified by the relevant regulatory document, and no amateur performance.

Loss 3: Waiting

Losses associated with waiting for the start of processing of the material (part, semi-finished product) indicate that the planning process and the production process are not coordinated with each other. This state of affairs is not uncommon for domestic enterprises. The planning process itself is quite complicated, since it requires the analysis of a large number of factors. These factors include: the structure of consumer orders, the state of the raw materials market, equipment productivity, shift schedules, etc. Truly optimal planning requires serious mathematical training and refined interaction between sales, purchasing and production services. It is perhaps rare in any enterprise that a scientist is engaged in planning who is able to systematize all the factors and find the best solution to the problem. As a rule, the planning process is pseudo-optimal and is based on the subjective approach of people with a certain experience in production. A priori, we can assume that there is always an opportunity to improve the planning process.

In addition to suboptimal scheduling, waiting losses are significantly affected by uneven equipment throughput. In this case, the accumulation of products waiting to be processed may occur before the operation with the lowest throughput. The performance of such operations should be improved. If this is not possible, provision should be made for flexible scheduling of equipment or redeployment of personnel between operations.

Loss 4: Stocks

Probably, there are few people who cannot answer the question - why are stocks bad? Stocks are frozen money, i.e. money withdrawn from circulation and losing its value. But for some reason, the presence of stocks in production is considered quite ordinary, and most importantly, an acceptable phenomenon! After all, thanks to stocks, jumps in consumer demand can be compensated. Stocks allow the company to produce products during interruptions in the supply of raw materials. Finally, inventory allows you to level the flow of production. So is it possible to do without stocks if they are so useful? To answer this question, we need to look at the problem of stocks from a different point of view. Stocks seem to be needed, but:

As already mentioned, stocks are frozen working capital;

Inventory needs maintenance (storage space, personnel, logistics, etc.);

And most importantly, inventories hide production problems: poor planning, strained relationships with suppliers, uneven production flow, and so on.

In fact, stocks hide the loss of other species, giving the impression of a prosperous production environment.

Loss 5: Defects

The release of products that do not meet the requirements of the consumer entails the obvious costs of raw materials, working time, labor, the cost of processing and disposal of defects. The traditional measure to reduce losses associated with the release of defective products is the organization of various control departments and services. It is believed that such units should take timely measures to prevent the release of marriage. Moreover, sometimes the entire responsibility for the marriage falls on the respective services! It's just that the fact that quality control services do not have the required leverage over production units is usually not taken into account. It turns out that asking the regulatory authorities is the same as treating the symptoms of the disease, and not its causes.

Elimination of losses for the production of marriage is advisable to start with an analysis of the effectiveness of the functioning of control units. It's not about finding out whether the controllers miss the marriage or not (this, of course, is also important). The main thing is to understand how control services contribute to eliminating the causes of defective products. In any case, control is usually carried out only after the product has been produced. Consequently, controllers have no opportunity to influence the quality promptly. The only way out of this situation is to build quality management procedures into the production process.

Loss 6: Overprocessing

As already mentioned, the consumer is willing to pay only for those properties of the product that are of value to him. If a consumer needs, for example, a TV, then he expects to receive a product of the appropriate quality, endowed with the appropriate consumer properties for a certain price. Therefore, if you build, say, a holder for ski poles into a TV, while doubling the price, then it is not a fact that the TV will find its consumer. This is because additional functionality does not add value to the TV. Another example. If the consumer expects the TV case to be black (white, silver, etc.), and you only have green plastic and you repaint it in the desired color after the case is made, this is also a waste of unnecessary processing. After all, this takes time, people, equipment, paint, and the case, which really has value for the consumer, has already been made. Maintenance of automatic equipment should also be attributed to the losses of excessive processing. For example, parts move along a conveyor that regularly stops due to their skew. A special worker watches the conveyor and corrects warped parts. The work of such a worker is also unnecessary processing.

Loss 7: Movement

Extra movements that lead to losses could be called more simply - vanity, thereby emphasizing their unreasonableness and randomness. From the outside, these movements may seem like a hectic activity, but looking closer, you can see that, like the losses discussed earlier, they do not contribute to creating value for the consumer. The source of losses of this type is usually one - poor organization of work. This may include the lack of necessary instructions, poor staff training or low labor discipline. This type of loss is distinguished by the fact that they can be detected quite easily, and when found, quite obvious measures can be taken to eliminate them. Lean offers a number of tools for these purposes: standard operating procedures, workplace organization system (5S).

Loss 8: Loss of creativity

Do you know the state when you feel in yourself the strength to do more, when you have the will, knowledge, creative impulse, but circumstances do not allow you to express yourself properly? In this case, the circumstances that prevent the employee from expressing himself to the fullest include: the unreasonable will of the authorities, the lack of time and funds to implement ideas, the tense situation in the work team. All this leads to the fact that a person feels that he is only an appendage of the production system, a part that can be easily replaced by another. In such an environment, the employee formally performs his duties to the minimum necessary and hurries to leave the enterprise alien to him. Meanwhile, all people are inclined to some extent to creativity, even if the need to create is generated by the desire to avoid unnecessary work or reduce the burden of routine activities. In addition, whoever, if not an employee, that is, a person who is directly related to the creation of value, can, by observing the same activity every day, notice shortcomings and ways to improve. That is why one of the most important tasks that needs to be solved during the implementation lean manufacturing consists in the general involvement of personnel in continuous improvement activities - Kaizen (Kaizen) in order to maximize the potential of each employee.

Waste Elimination Approach

So, the main types of losses are defined. How to determine their presence in production and come close to their elimination? The approach proposed within the framework of the concept lean manufacturing, is based on a mandatory, comprehensive and detailed understanding of the mechanism for creating consumer value of manufactured products. To this end, the first step is to draw up a detailed description of the entire production process. If the production is complex, then the whole process can be divided into sub-processes, which are described and analyzed separately. To describe production processes, a visual schematic representation, called a value stream map, is used. The complete waste elimination workflow includes the following steps.

1. Development of process value stream creation maps.

2. Development of checklists to help identify the causes of losses at each stage of the process.

3. Collection of statistical information about the time of creation of value and the time of loss, as well as any other information indicating the presence of losses, using the developed checklists.

4. Building a future value stream map (lossless).

5. Analysis of the causes of losses and elimination of procedures that do not create value.

6. Standardization of work procedures and use in other processes.

The process may then be repeated. In addition, targeted efforts can be made to eliminate some types of waste using suitable lean manufacturing tools (more on that later).

Value stream map

A value stream map is a detailed description of the production process. When drawing up a map, even small and seemingly insignificant details should not be missed. If the movement of material assets is controlled by a document management system, then the types and trajectories of the documents being drawn up should be displayed on the map. Often it is the irrationality of the workflow that causes the loss of time or the accumulation of stocks. For clarity, it is necessary to highlight on the map in a special way the places of possible formation of any of the above losses (warehouses, transportation, queues, etc.). For more information on the process of developing value stream maps, see the available literature, such as the book by Mike Rother and John Shook.

Control sheets

Control sheets serve as primary documentary evidence reflecting the results of monitoring the implementation of a particular production operation. Completing the checklists should be entrusted to independent observers in order to exclude the subjective component of observations. Moreover, at the most critical points, supervision should be entrusted to several independent controllers. This will make it possible to obtain a consistent statistical sample of the results of observations. In the process of observation, controllers should make records characterizing the features of the performance of a particular operation, as well as records indicating the possible presence of one of the types of losses. Based on the analysis of checklists, a decision is made on the presence or absence of losses in operations and a value stream map is drawn up, taking into account the desired state of the stream. After that, a complex and lengthy process of eliminating the detected losses begins with the help of various tools. lean manufacturing.

Lean Tools

So, the value stream is described, the losses are identified, the desired state is described. What's next? Next is the hardest part. If up to this point you could solve problems, relying only on a narrow circle of fairly conscious people in your environment, then in order to start a direct fight against losses, you will need to use the resources of the entire workforce of the enterprise. Here I would like to emphasize that Lean you can’t just take it and implement it like new equipment. First of all, it is necessary to teach people to think in a new way. It is necessary to convey to the consciousness of all personnel the importance of analyzing their environment and their own activities from the position of searching for a rational beginning and losses. This is a separate and very difficult task, the solution of which largely depends on how ready the management of the enterprise is for this.

To eliminate losses, as well as to prevent their occurrence within the framework of lean manufacturing many methods of rational organization of production activities have been developed. It is not possible to discuss all methods within the framework of this article. Let us dwell only on the most important ones, the use of which is a prerequisite for the successful implementation of the implementation program. lean manufacturing.

Continuous Improvement - Kaizen

The concept of Kaizen comes from Japan. It is formed by two words: Kai (change) and Zen (Zen) for the better. Continuous change in small steps that do not require significant investments - this is the meaning that the concept of Kaizen encapsulates. In order to demonstrate the features of the Kaizen path, it is usually contrasted with innovative development.

Innovation
Major changes.	Slight changes.
Once every 5-10 years.	Every day.
Made by managers.	Made by workers.
They require high costs.	Costs are minimal or not required.
The effect is achieved in the future.	Improvements are noticeable immediately.
The focus is on the means of production (equipment).	The main attention is paid to industrial relations (processes).

Organization of workplaces - 5S

The 5S Workplace Methodology is a very easy to understand but very effective tool for improving the working environment. In the conditions of a busy schedule of production activities, workers stop paying attention to such “little things” as mess, dirt, extra things, etc. Meanwhile, this does not add either to the efficiency of the actions of the personnel or to the safety of the production itself. The 5S system defines five clear rules for putting things in order in the workplace: sort, keep order, keep clean, standardize, improve. Compliance with these rules significantly improves the quality of work, the level of production culture and leads to a reduction in losses due to erratic movements.

Standard Operating Procedures

At the everyday level, in our social circle, we very often reach such a level of mutual understanding that with the help of several interjections we can convey the meaning to the interlocutor. An outsider who has fallen into such a circle of communication will not understand absolutely anything. It also happens that the interlocutors themselves, entangled in the intricacies of their dialect of communication, cease to understand each other. The commonality of interests of the work collective also leads to the emergence of a kind of specific language of communication. However, if at the everyday level, mistakes are unlikely to lead to serious consequences, then in production, misunderstanding leads to significant losses of the most diverse kind.

To obtain stable results, any production activity must be carried out strictly in the prescribed manner. This procedure should be regulated in such a way that would nullify the errors in the implementation of any work procedures, and was understandable to beginners. A document that describes how to perform an operation in a visual and accessible form is called a standardized operation procedure (SOP). Ideally, employees should create SOPs for themselves. If this is not possible, then at least they should be involved in the development process, at least at the testing stage. Thus, the complete consistency of the document will be guaranteed.

Total productive equipment maintenance

The condition of the production equipment is one of the main factors in achieving the planned production indicators: quality, productivity, safety. In the best case, the equipment should work smoothly without breakdowns and accidents. Is it possible? It is quite possible if you correctly approach the problem of its maintenance.

In a normal situation, the operation of the equipment is carried out by technological (operational) personnel, and preventive maintenance and repair are carried out by repair services. The tasks facing these services are different. For the former, it is the fulfillment of production indicators, for the latter, it is the maintenance of equipment in good condition and timely repairs. Such a difference in the goals of the services leads to the fact that the operators are not interested in the problems of repair services, and the repairers are not interested in the problems of production units. Naturally, the performance of the equipment suffers.

In order to inextricably link the care of equipment and the production process, the approach to equipment maintenance should be completely revised. One of the tools allows you to do this. lean manufacturing called Total Productive Maintenance (TPM). The TPM methodology is based on the postulate that work and maintenance are inseparable. This means that all maintenance work that does not require special skills must be carried out directly by the operators of the production equipment. All maintenance procedures should be standardized. During repairs, the equipment must be fully restored and modernized to prevent the recurrence of accidents. Problem details should be recorded and analyzed to plan maintenance operations.

TPM is discussed in more detail in the article "Total Productive Service - TPM" and in.

Just in time

One of the losses discussed earlier was called waiting. Loss of waiting occurs when parts come out of a previous operation but cannot be processed in the next one. If the previous operation continues to produce parts, then another loss is formed - the stock. If inventory builds up too quickly, then it becomes necessary to transport it to the warehouse (another waste). As you can see, it is very important to submit parts for a subsequent operation only when necessary. This method of working is called Just-In-Time (JIT). In fact, JIT is work to order for the next operation. Like any bespoke job, JIT requires careful planning to achieve flexible equipment utilization. The main factor for successful planning is the reduction of the volume of processed and transferred to the next operation lot and the use of production flow control methods. Kanban cards are one of the tools for controlling the throughput of production operations.

Kanban

A kanban is a card or label that communicates the characteristics or condition of a work item. Kanban can be used to determine the number of items in a lot, to determine whether a lot needs to be processed, to determine the order in which lots are to be processed, and so on. Kanban cards usually have a bright, eye-catching design. For example, batches that must be processed first are provided with red cards. Less urgent parties - green. The use of cards helps to eliminate losses due to unnecessary movements, work just in time and improve the overall culture of production.

Quick changeover

It is traditionally believed that mass production is beneficial only with large volumes of processed batches. However, large batch sizes lead in turn to waiting losses, increased inventory and unnecessary product movements. Competition in a market economy has led to the fact that enterprises should focus not on the volume of products, but on its range. A wide assortment is possible only if the production is carried out in small batches of goods with frequent changeovers of equipment to another product range.

Changeovers are a waste of time. Therefore, it is very important to reduce the time of one changeover to the minimum possible value. In order to do this, you should use the technique of reducing changeover time. Within this technique, all changeover operations are classified, after which the operation time is reduced to the minimum possible. This is achieved by standardizing the changeover process, improving equipment, performing part of the changeover procedures before stopping or after starting the process (for example, tooling can be transported during operation without any loss of quality and productivity).

built-in quality

To achieve a high level of product quality, the vast majority of enterprises have in their organizational structure subdivisions responsible for quality control of manufactured products (here are technical control departments known from Soviet times - QCD and modern quality management departments - OUK and similar organizational units). Products that have not passed control by such departments are subject to rejection, disposal, rework, grade reduction, markdown, etc. As a result of these procedures, either there are losses for alteration (additional processing, processing and storage of defects) or the consumer value of products decreases. This is due to the fact that already released products are subject to control.

To reduce these losses, it is advisable to move quality control to earlier stages. The best solution would be to carry out quality control directly during the production operations. The technique of combining manufacturing operations and quality control operations is called built-in quality. The methodology is based on standard procedures that allow you to check the conformity of the quality of products and regulate the course of action in case of a discrepancy. Marriage should not be made - this is a kind of law that must be learned by all workers. If it is necessary to stop the conveyor for this, then this must be done. A restart can only be carried out after the causes of the non-conformities have been eliminated. Another way to reduce the likelihood of defects is the modernization of production equipment, or rather, the integration of mechanisms for the timely detection of unusable products into it.

What is needed for success

Lean it is not just a set of concepts, tools and rules. This is, first of all, a philosophy that changes established views on the organization of industrial relations, a philosophy that affects all layers in the organizational structure of an enterprise, a philosophy that requires the presence of its own oracles and followers in the enterprise. Basics lean manufacturing are simple, and their implementation does not require serious financial investments, however, the ease with which one can embark on the path of this philosophy is adjacent to the enormous difficulty of keeping on this path.

Two main components determine much of the success of the implementation of the philosophy lean manufacturing. First of all, the company needs leaders who can “ignite” their subordinates with new ideas, instill in them the confidence of the need for change and, together with them, step by step, endure all the difficulties associated with solving old problems. And the second is a system of motivation-involvement of the enterprise personnel in the common cause of implementing new approaches that is understandable to everyone. In mathematical terms, these two components are necessary condition for successful implementation lean manufacturing. Everything else (tools, techniques) is the technical side of the issue, which complements the necessary condition to the sufficient one.

Literature

1. Rother Mike, Shook John Learn to see business processes. The practice of building value stream maps / Per. from English, 2nd ed. - M.: Alpina Business Books: CBSD, Business Skills Development Center, 2006. - 144 p.

Under distant socialism, the solution of the problem of increasing labor productivity through the use of advanced achievements of science and technology in the national economy was called inventive and rationalization activity. Over time, the number of rationalization proposals and inventions slowly decreased. But already at the beginning of the new century, when in our country, as, indeed, throughout the world, competition among manufacturers intensified, there was an urgent need to restore rationalization work, and to restore it to a new, modern level. Experts in this field believe that in a market economy, one of the main components of maintaining the competitiveness of an enterprise is the continuous improvement of all its links and processes. This is also understood in Metinvest Holding, where they pay great attention to introducing innovations into production, that is, they strive for continuous improvement.

In our city, the holding is represented by LLC NPO Inkor and Co. And it was the phenol plant, as we are accustomed to call the enterprise, that became one of those who actively joined the movement for continuous improvement, called Lean Enterprise, which covered all the enterprises that are part of the Metinvest Group.

The essence of this movement is to create working conditions that allow you to organize production, eliminating losses as much as possible, it is aimed at all kinds of savings. And today the realities of our life prove that Lean Enterprise really contributes to the creation of efficient production.

He spoke in detail about the innovations at the plant Andrey Leonidovich Shabanov, General Director of LLC NPO Inkor and Co., and introducing us to the course of the matter, he noted that the main idea of ​​the "Lean Enterprise" is to involve the staff as much as possible in the processes taking place at the enterprise. “People must clearly understand how their actions affect the final result, and be interested in it, so any initiatives of employees are encouraged in every possible way,” he stressed.

Today, almost all employees of the enterprise are involved in the Lean Enterprise movement, and work in this direction is constantly being carried out, because the wider the scope, the more efficient the work of the enterprise. Interestingly, this movement is built on several important tools, including key performance indicators, a continuous improvement team, a proposal system, standard operating procedures, and the 5S system. By the way, the 5S system (sort, keep organized, keep clean, standardize, improve) is considered one of the important tools of the Lean Enterprise. Its principles allow workers to understand where in the workplace it is necessary to clean up, remove the unnecessary and bring closer what is needed at the moment. The 5S tool really helps to make production processes more rational and efficient, NPO Incor & Co LLC is convinced.

“Many people reduce this system, first of all, to putting things in order at the workplace,” says Andrey Leonidovich, “but it has clear and specific steps that need to be taken to make the workplace look very good, convenient to use and safe. And in this direction, our company is constantly working. Checks, competitions are carried out, the divisions have ratings - who in this area will receive more points. And according to the results, people and sites are awarded. And the incentives are quite tangible financially. So, last year we awarded the winners at the Metallurgist's Day celebration. The unit receives a certificate for a certain amount, which the team can use to purchase something necessary for the convenience of work. And such incentives exist in different directions.

But key performance indicators involve the selection of the most influential, significant performance indicators of the unit. Take, for example, the cost of energy resources: gas, steam, electricity, which are controlled for a certain period of time. The idea is to improve by reducing costs, by eliminating waste, and as a result, the unit will move to a more economical mode of operation. “For a year and a half, we have been monitoring and working on this, and the graphs really show effective spending for each parameter. This is also stimulated by the fact that bonuses are paid with the achievement of the best indicators. Not everyone is equally successful in moving in this direction, not all and not everywhere indicators can be controlled, however, all employees should take part in the movement,” A. L. Shabanov emphasized.

There are also competitions between departments. This process is being studied with great interest by the Holding, the performance of the phenol plant is compared with the results of other enterprises.

Widely implemented at Metinvest enterprises, including Inkor & Co, another important tool is the proposal submission system, which is aimed at encouraging the initiative of employees, their contribution to reducing production losses, and increasing the efficiency of the enterprise.

Involving employees in the process of continuous improvement allows you to activate their desire for professional growth and the development of rationalization thinking and a culture of frugality at the enterprise. Moreover, useful suggestions can be aimed at improving any area of ​​the enterprise: production, labor protection, environmental protection or improving working conditions. And the main goal of this system is to realize the creative potential of employees, because each employee can become the initiator of changes for the better in his production area and thereby increase the efficiency of the enterprise as a whole.

Each division has a person responsible for this area of ​​work, the one who accepts proposals. Employees who contribute ideas that can be implemented are encouraged. People are actively responding to this, submitting more and more proposals. Only for 10 months of the last year, 320 proposals were received from the workers of Inkor and Co., 282 of which were implemented, and 7 of them had an economic effect!

Separately, I would like to dwell on such an instrument of the Lean Enterprise movement as standard operating procedures (SOPs). Such a seemingly intricate phrase contains simple things to the point of banality - it indicates how to perform routine daily operations correctly and in what order. This is a kind of illustrated simplified instruction for a particular workplace.

“Employees are guided by such instructions, they must know them. This guarantees the same sequence of actions for each worker, which means there will be no errors and unbalance of the workflow, - Mikhail Lazarevich Shkadron, Director for Transport and Administrative Affairs of NPO Inkor and Co., told us.

Characteristically, from all of the above, a picture emerges of a completely new approach to work, but built on simple, well-known truths, as well as a new formation of workers. True, not everything and not immediately, as we were told at the enterprise, was accepted by people with a bang. In whatever area the lean manufacturing approach is applied, everywhere it requires some adaptation to specific conditions. When the plant was just starting to introduce movement, we had to face certain problems, not everything went smoothly everywhere. But both management and employees of all levels are constantly trained, knowledge is tested - the Holding pays great attention to this. People get used to, become more interested in enrichment with knowledge. To this end, as part of the Lean Production movement, Metinvest also operates experience exchange programs. Last year, people from Fenol went to Yenakiyevo coke plant, and Yenakiyevo specialists came to the plant.

“We can be proud that our enterprise, namely the press department, looks worthy, and the guys from Yenakiyevo have a lot to learn from us,” Mikhail Lazarevich noted. - We ourselves share our experience with pleasure and perceive the experience of others with interest. I hope that the visits were useful to both parties, although I think that the visit to the Enakiyev specialists of our enterprise was more useful than our trip to them.”

One of the important achievements of the implementation of the “Lean Enterprise” movement, along with the elimination of losses and a decrease in cost factors, A. V. Borisov, a leading specialist in the continuous improvement of the phenol plant, called the change in the general culture of production. If earlier there were mountains of garbage at some workplaces, today most of the sites have changed, stands with tools have appeared. Many jobs are already close to ideal.

But the deputy head of the quality working group, AS Bespalchenko, also drew attention to the fact that a lean enterprise implies respect for people, collective responsibility and work as a single team.

“We want to make today better than yesterday through continuous improvement. This is the only way to achieve high results and make the native enterprise competitive,” the employees of NPO Incor & Co LLC are sure. And they do it.

Victoria Sheyanova

"Lean Enterprise"- this is an integrated approach to solving problems that exist in production, organizing processes that require less space, materials, time and labor costs at all stages of the production cycle. This is a system of measures to reduce losses while satisfying the consumer and a fundamental key to success in achieving high results in all areas of activity.

The Khartsyzsk Pipe Plant was the first among the Ukrainian enterprises of the Metinvest Group to start implementing the Lean Enterprise program. To date, the project covers two main production shops - TESTS-2 and TSTs-4.

The program started at KhTZ in 2010. At the moment, its tools are being successfully implemented at the plant: 5C , TRM and SMED. Also at the enterprise, within the framework of the program, visual management was introduced, a system for submitting proposals, teams of continuous improvement were created in the main production shops.

During the implementation of the "Lean Enterprise" at KhTZ, positive results were achieved in almost all areas of the plant's activities:

• the culture of production has increased;
• workplaces and equipment maintenance system will be improved;
• visualized production indicators;
• increases the efficiency and productivity of the equipment.

"5C" is a workplace organization system that allows you to significantly increase the efficiency and manageability of the operating area, improve corporate culture, increase labor productivity and save time. This is the first step towards the creation of the "Lean Enterprise" and the application of other tools of the program.

TRM- a system of general care for equipment, in which operators and maintenance personnel jointly participate, ensuring an increase in the reliability of equipment

SMED- Reduced set-up times, tool changes and increased production system flexibility

visual control- means of visual control, which greatly simplify the work and increase productivity. Helps to make problems visible, keep a constant grasp of the situation in the workplace, make improvement objectives clear (set a visual target). At the same time, both current results and goals are always visible at the same time.

Continuous Improvement Teams- a group of plant employees who regularly meet on a voluntary basis to identify problems and prepare proposals for their elimination, affecting production efficiency and product quality. KhTP's continuous improvement teams have started their activities relatively recently, but have already been actively involved in the development of improvement proposals.

Proposal system - aims to encourage the participation of all employees in the process. It began to operate at KhTZ on February 21, 2011. The main focus of the development of employees is to improve the quality of products, reduce costs, eliminate losses, as well as improve labor protection and safety.

What is Lean Manufacturing? METINVEST-MRMZ LLC Lean production - reduction of lead time by eliminating waste Traditional approach Order Product Value Loss Lean production = Reduced lead time short terms 5

Src="https://present5.com/presentation/60967246_437387941/image-6.jpg" alt="(!LANG:METINVEST-MRMZ LLC What is Lean Manufacturing? Value In a typical process, the share of losses > 90%"> ООО «МЕТИНВЕСТ-МРМЗ» Что такое Бережливое производство? Ценность В типичном процессе доля потерь > 90% Только Клиент может определить действия, которые добавляют ценность Необходимые действия Разделяют три вида действий: Действия, добавляющие ценность Необходимые действия Потери 6!}

METINVEST-MRMZ LLC Lean enterprise in the industry Work on efficiency improvement based on the Lean Enterprise concept is carried out by all major steel companies of the CIS 7

Lean production in the world (1/2) METINVEST-MRMZ LLC Today, the principles of Lean production are widely used all over the world, ranging from metallurgy and engineering enterprises to the areas of medical care for the population Consumer goods production Food industry Mining industry Mechanical engineering Metallurgical industry Financial sector Trade Service sector 8

METINVEST-MRMZ LLC Lean production in the world (2/2) The Lean production system is not a dogma or an instruction for relentless use. This is a set of tools and methods using which the company builds the foundation of its own path of improvement. The well-known American company ALCOA, taking the Toyota Production System (TPS) as a basis and shifting it to its industry, has developed a corporate business system (APS - Alcoa Production System) Company General Electric went one step further by first understanding, simplifying, and eliminating non-value-adding work, and then began a focused effort to reduce variation in already streamlined manufacturing and management operations using Six Sigma methodology (a combination of Lean and Six Sigma methods) 9

METINVEST-MRMZ LLC Creation of a culture of Lean production (1/3) Ability to change: “it is impossible to do…” should be changed to: “it can be done if…” “No fault” culture: “Who is to blame…” should be changed to: “How can we – as a collective – avoid this in the future? " ten

METINVEST-MRMZ LLC Creation of a culture of Lean production (3/3) Traditional organization Recommendations are ordered from above. Responsibility rests solely with managers Employees are demotivated due to the lack of opportunity to implement changes. “They don’t listen to what we have to say” Lean manufacturing Improvement decisions are made at the lowest levels of the firm Employees are engaged, willing to make changes and participate in them Continuous improvement and communication Periodic improvements Good communication on the situation in the enterprise Limitations in access to information /limited communication in the enterprise High level of employee satisfaction Low level of employee satisfaction 12

Increasing the efficiency of the enterprise LLC "METINVEST-MRMZ" Increasing the efficiency of the enterprise is: 1. Large investments - a radical transformation of processes, technology, equipment as a result of large financial investments. Conventional understanding of job distribution Senior management Investments Middle management Masters Understanding of job distribution in terms of continuous improvement Maintenance Continuous improvement Maintenance Workers 2. Continuous improvement (C.I.) – small improvements in the course of ongoing work that do not lead to fundamental changes in technology and equipment. They are based primarily on working with people and on eliminating organizational losses. thirteen

NC and innovation - increasing the efficiency of METINVEST-MRMZ LLC Investment NC Time Ideal representation of progress with an investment strategy Investment NC Investment Time Investment plus NC - maximizing production efficiency Time A real model of progress with an investment strategy Continuous improvement not only improves production performance, but and allows more efficient investment in production 14

METINVEST-MRMZ LLC The principle of continuous improvement Improvement does not end there, but moves along the cycle of PDCA (Plan Do Check Act) – Plan Do Check Implement Plan Do (Try) Implement Check 15

LLC "METINVEST-MRMZ" Actions in terms of adding value to the product All operations and actions of the production process can always be divided into three categories 1. Actions that create value for the consumer - operations that give the product exactly those properties or characteristics that the consumer pays for ( stamping a part or welding a structure) 2. Actions that do not create value, but are inevitable for a number of reasons, for example, technological - operations that are losses of the first kind (changeover of a press or control of welds) 3. Actions that do not create value, which can be immediately exclude from the production process - operations that are waste of the second kind (repair of defects, waiting for blanks before stamping, or unnecessary movement and transportation) Focus on activities that do not create value. In the process of production optimization, losses of the second kind are first eliminated, then losses of the first kind are minimized 17

METINVEST-MRMZ LLC 8 types of losses THERE 8 TYPES OF LOSSES 1. Overproduction 2. Stocks 3. Waiting 4. Excessive processing 5. Excessive movement 6. Transportation 7. Defects 8. Unrealized potential of employees 18

METINVEST-MRMZ LLC Types of losses - Overproduction - occurs when we produce, assemble or release more than necessary Production "in reserve", without orders or in quantities greater than the client requires Creation of documents, reports until they are needed Delivery in accordance with the previous order for a subsequent one that has not yet been ordered (i.e. not yet required) 20

METINVEST-MRMZ LLC Types of losses - Stocks - any products stored directly at the plant or outside it Stocks of raw materials, materials, goods, finished products Stocks of documents waiting in line for signature or confirmation Stocks transferred between individual stages of the process Stocks of files in computer 22

METINVEST-MRMZ LLC Types of losses - Waiting - occurs when personnel, operations or partially finished products are forced to wait for further actions, information or materials Waiting for the supply of raw materials, materials, documentation, equipment Waiting for inspection, quality control Waiting for the first quality unit after changeover Waiting tools, machines Waiting for another person Waiting for a decision 24

METINVEST-MRMZ LLC Types of losses - Overworking - each additional processing or effort in excess of the required. Use of complex tools, procedures and techniques instead of simple solutions Duplication of all work Repeating the same actions many times Insufficient amount of information - the need to ask again T. n. "touched more than once" 26

Types of losses of METINVEST-MRMZ LLC 1. Overproduction 2. Inventory 5. Excessive movement 4. Excessive processing LOSS 3. Waiting 27

METINVEST-MRMZ LLC Types of losses – Excessive movement – ​​all movements of employees that do not form an added value Search for tools, parts, equipment, etc. Search for employees Walking to find out (obtaining information) Getting hard-to-reach and poorly located tools 28

Types of losses of METINVEST-MRMZ LLC 1. Overproduction 6. Transportation 2. Stocks 5. Excessive movement 4. Excessive processing LOSS 3. Waiting 29

METINVEST-MRMZ LLC Types of losses - Transportation - any movement of work in progress, materials, parts, spare parts or finished products from one place to another that does not add value Transfer / transportation of materials, raw materials from place to place All returns to the warehouse Crossing transport routes (inappropriate territory plan) 30

Types of losses of METINVEST-MRMZ LLC 7. Defects 1. Overproduction 6. Transportation 2. Stocks 5. Excessive movement 4. Overprocessing LOSS 3. Waiting 31

METINVEST-MRMZ LLC Types of losses – Defects and the need for rework – all work not done correctly, or work that requires re-doing or redoing Errors in the production process Defective products Corrections as a result of a predecessor's bad work Incorrect data or documentation 32

Types of losses of METINVEST-MRMZ LLC 8. Unrealized potential of employees 7. Defects 1. Overproduction 6. Transportation 2. Stocks 5. Excessive movement 4. Overprocessing LOSS 3. Waiting 33

METINVEST-MRMZ LLC Types of losses - unrealized potential of employees Unrealized potential of employees - Loss of time, ideas, skills, opportunities for improvement and gaining experience due to inattentive attitude towards employees who have no time to listen Employees are not involved in the improvement process Lack of motivation Unevenly distributed work among people Lack of trust in employees Qualification of people in only one area Non-use of talents, ideas, suggestions 34

System 5 C LLC "METINVEST-MRMZ" 5 System 5 C five simple principles of rational organization of the workspace 4 3 Improvement Continued improvement, continuous improvement 2 Standardization standardization of the implementation of the first three C 1 Keep the workplace clean Cleaning Systematization there is a place for everything and everything at in its place Sort discard, move to another location, sell, borrow, etc. 5 S is the first step towards creating a "Lean Enterprise" and applying other tools of lean manufacturing 36

1 C - Sorting by METINVEST-MRMZ LLC Main tasks: Garbage Divide everything that is in the working area into three categories: 1. constantly used to perform the main tasks 2. not used 3. rarely used / may be needed MAIN SORTING RULE: Quarantine zone Necessary Excess M can be achieved If there is any doubt about an object, remove it from the work area 37

OOO METINVEST-MRMZ 1 C - Sorting Three main indicators that help to assess the need for the subject The need for the subject in the performance of current activities. If the item is not needed, it should be removed from the work area. The frequency with which the item is used. If the item is rarely used, then it can be stored outside the workplace. The number of items needed for current activities. If a limited number of items are needed, the surplus can be removed or stored off-site 38

2 C - Systematization of METINVEST-MRMZ LLC 2 C. Organize: there is a place for everything and everything is in its place 4 rules for arranging things: in a conspicuous place it is easy to take it easy to use it easy to return it to its place 39

LLC "METINVEST-MRMZ" WORKING AREA UP TO 5 C 2 C - Systematization WORKING AREA IS ORGANIZED ACCORDING TO THE PRINCIPLE 5 C The containers are located in random places ... The places for storing containers are clearly defined ... There are no marked passages ... The storage places are marked ... Safe passages are provided and marked, which are always should be free … 40

METINVEST-MRMZ LLC WORKING AREA UP TO 5 C 2 C - Systematization THE WORKING AREA IS ORGANIZED ON THE PRINCIPLE OF 5 C HA! !! LU CET N Tools are stored in bulk in cabinets, drawers and on tables … Tools are arranged in fixed places according to the frequency of use … The absence of one of the tools cannot be immediately detected … There is the possibility of visual control of the absence of a tool … 41

METINVEST-MRMZ LLC 3 С – Cleanliness 3 С. Keep clean keep the workplace clean and tidy ü divide the premises into zones ü determine the people who will be assigned to a particular zone ü determine the time for cleaning and putting things in order 43

METINVEST-MRMZ LLC 3 С – Cleanliness Cleanliness in the work area is the responsibility of everyone who works in it! 44

4 C – Standardization of METINVEST-MRMZ LLC Standardization is the setting of principles and standards for compliance with the first three “Cs” Constant sorting + Constant standardization = Constant adherence to systematization rules + Constant cleanliness The purpose of the stage is not to create a package of documents, but to define and visualization of clear and simple rules, the observance of which is necessary to maintain and improve the state of workplaces 46

METINVEST-MRMZ LLC 4 C - Standardization Step 1 - Determine who is responsible for performing certain activities within the 5 S system Step 2 - prevent deviation from the 5 S system, make the responsibility for implementing the 5 S system part of the daily work Step 3 – Check how well the items of the daily routine for the implementation of the system are being implemented 5 S 47

METINVEST-MRMZ LLC 5 C - Improvement - the formation of discipline, the exact implementation of established rules, procedures and technological operations. Objectives of the stage: ь Regular audits ь Determining the necessary corrective measures 5 С audit - regular assessment of the level and dynamics of the 5 С system implementation. external audits - carried out by the curators of the structural unit; 48

METINVEST MRMZ LLC Case study of kaizen blitz MAKEEVSKAYA BRANCH OF EMZ PJSC (wiring shop of mill 390) BEFORE CHANGE AFTER CHANGE

METINVEST MRMZ LLC A practical example of kaizen-blitz at EMZ PJSC (rolling shop, mill 360, mill shop) BEFORE THE CHANGE © METINVEST HOLDING LLC 2006 - AFTER THE CHANGE

METINVEST MRMZ LLC A practical example of kaizen blitz of EMZ PJSC (rolling shop, mill 360, mill shop) BEFORE CHANGE AFTER CHANGE

METINVEST MRMZ LLC World practices of Lean Enterprise implementation CJSC ALCOA-SMZ (Russia, Samara) Horizontal press Rolling mill

LLC METINVEST MRMZ World practices of implementing Lean Enterprise CJSC ALCOA-SMZ (Russia, Samara) BEFORE THE CHANGE AFTER THE CHANGE

METINVEST MRMZ LLC World practices of Lean Enterprise implementation CJSC ALCOA-SMZ (Russia, Samara) © METINVEST HOLDING LLC 2006 -

LLC "METINVEST MRMZ" World practices of implementation of the "Lean Enterprise" "Zodiac, Nederland" (hot-dip galvanizing shop) © LLC "METINVEST HOLDING" 2006 -

METINVEST MRMZ LLC Case study of kaizen blitz PJSC MK Azovstal Forge and rebar shop OPKS BEFORE CHANGE AFTER CHANGE

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METINVEST-MRMZ LLC Visual control 1. Visual control tools that greatly simplify work and increase productivity; 2. They work right from the moment when the employee came to the enterprise. Application Used in all processes, including service delivery, to illustrate deviations from the standard course of work. Improves Process time Process efficiency Changeover time Product defects Staff awareness of company goals and losses Staff awareness of work progress Road closed 72

LLC "METINVEST-MRMZ" Visual control - the arrangement of tools, parts, materials, the implementation of actions and indicators for everyone to see so that the state of the system is clear at a glance WHERE VISUAL CONTROL IS USED ... ... there is nothing superfluous ... order and high efficiency labor … safe … standardization of procedures works … just to train new employees … deviations in work are immediately noticeable … goals are known and results of work are visible … a process of continuous improvement is possible … the goal of 100% good products is realistic An effective visual management system is when each employee can than in 5 minutes to find out who, what, where, when, why and how 73

Visual control of METINVEST-MRMZ LLC What do we see when looking at this measuring device? What exactly does it measure? Are the readings within normal limits? How far from the target value? 40 60 20 80 0 100 C 74

Visual control of METINVEST-MRMZ LLC What do we see when looking at this measuring device? What exactly does it measure? Are the readings within normal limits? How far from the target value? 40 60 20 80 0 Antifreeze temperature in the unit 7 B. Norm: 30ºС 100 C 75

Visual aid for control of deviations METINVEST-MRMZ LLC Visualization during parameter control – devices are clearly visible, the process status is available to any employee Visualization during control of loosening of bolted connections A zone of normal operation is allocated must be located in a designated area for the normal operation of the equipment Threaded connection is tightened normally - the lines coincide with each other The presence of loosening of the threaded connection - the lines do not coincide with each other 76 35 0

Visual assistance to the operator of METINVEST-MRMZ LLC MAX Availability of materials for work Inventory level Places for storing items Place for delivering materials Working area boundaries Measurements Deviations Work rhythm Coordination of actions 77

METINVEST-MRMZ LLC Visual assistance to maintenance personnel Mandatory control points during equipment maintenance Repair stages Storage of tools Search for spare parts Periods of preventive maintenance MAX Deviations in equipment operation 78

METINVEST-MRMZ LLC MAX MIN Visual error protection Permissible levels of lubrication are visually indicated - there is no possibility of making a mistake when changing the oil Storage places are visually indicated - after use the item is returned to its place node 79

Visual production LLC "METINVEST-MRMZ" "Visual production" - transparent and easy to manage Products Important operation Visual signal Visual standards Finished products Operation number Information about the line Marking Waste Status and implementation plan Volume of raw materials Designation of zones Key performance indicators Raw material storage Type of oil Number Manometer with upper and lower limit Oil pressure and its level Any person who came to the production should orient himself in the process in 3-5 minutes 80

Error Prevention METINVEST-MRMZ LLC Error Prevention System Represents the Doom Yoke Method (error protection) - a method that eliminates the very possibility of making a mistake. Includes the development of procedures, methods and devices to prevent errors where they may occur. Improves − Process time − Equipment efficiency − Cycle time − Product defects − Human productivity losses Used Error protection is used in all processes to detect errors or defects and prevent them from reaching the customer or the next operation. − Area used for the production of this product 83

METINVEST-MRMZ LLC Development history SMED (Single Minute Exchange of Dies - literally “one-minute die change”) – equipment changeover in less than 10 minutes. System Development History The founding father of the SMED system is considered to be Shigeo Shingo, a Japanese engineer who has established himself as one of the world's leading specialists in manufacturing practices and the Toyota Production System. It took Shigeo Shingo nineteen years (1950-1969) to develop the SMED system in Japan: Stage I - 1950, Mazda Toyo Industries, 50% reduction in stamping press changeovers. The changeover process is divided into two groups of operations: internal and external; Stage II - 1957, Mitsubishi Heavy Industries, 40% reduction in planer changeovers. Replacing internal operations with external ones; Stage III - 1969, Toyota Motor Company, reduction of 1000 ton stamping press changeover from 4 hours to 3 minutes. Improving the techniques and methods of internal and external adjustment, the creation and formulation of the main methods of changeover. In essence, the SMED system is a set of theoretical and practical methods that can reduce the time of equipment setup and changeover operations to ten minutes. 85

Changeover time reduction steps METINVEST-MRMZ LLC MAIN STEPS FOR REDUCTION OF THE SETUP TIME t 0 1 Determination of the changeover time. There is no distinction between internal and external operations. 2 Separation of operations into internal and external. 3 Derivation of external operations from changeover times. Performed with equipment running. 4 Transformation of some internal operations into external ones. Internal External 5 Reducing internal operations. External Internal External 6 Reduction of external operations. Changeover time Internal External External t 1 86

METINVEST-MRMZ LLC Standardization of functions, not form Standardization of functions - unification of only those parts that are used during changeover (alignment, fastening, gripping, etc.) requires minimal costs - for example, the use of corrective inserts for dies of different heights Form standardization - standardization of dimensions and dimensions of all parts and tools, a high-cost method - for example, increasing the size of the die to the largest size. 80 50 320 Gasket to unify clamping height Die B As a result: Eliminates the need to adjust the clamping height of the dies - reduced set-up time Eliminates the need to change fasteners during changeover - use the same clamps and bolts 87

METINVEST-MRMZ LLC Application of functional clamps or complete elimination of fasteners The most commonly used fasteners are bolts/screws, but their use leads to loss of time for unscrewing/tightening. A bolt with 15 threads needs to be turned 15 times, but the value is created by the last turn when tightening and the first turn when loosening. time Before improvement - screws After improvement - clamps. 88

METINVEST-MRMZ LLC Use of additional devices During changeover, workers often perform the same actions to install, connect or fix auxiliary parts, hoses, cables and tools - the use of additional devices can significantly reduce internal operations and eliminate unnecessary actions. Use of an intermediate mount to connect/disconnect several high pressure hoses at the same time Installation and use on a large press of various sets of several molds. All identical auxiliary equipment (plates) are made for placing these molds on them. While the first platen with the molds mounted on it is used in the press, the workers fix two new molds on the second platen and center them. After stopping the equipment for readjustment, the worker simply changes these toolings. Thus, the entire operation of the internal changeover and start-up of the press takes a matter of minutes. 89

METINVEST-MRMZ LLC Application of parallel operations When parallel operations are performed simultaneously by two people, changeover time is more than halved due to shorter movements. Any available unskilled workers can participate in parallel changeover operations. Even without reducing the number of man-hours for changeover operations, the parallel execution of work significantly reduces the time of the changeover itself. component storage location tool storage location Spaghetti diagram drawn up prior to improvements tool location component storage location tool location tool storage location Spaghetti diagram designed with parallel work in mind 90

METINVEST-MRMZ LLC Elimination of adjustments is possible in three ways: Using a digital scale and creating standard settings 1 Using numbers is easier and more reliable than relying on experience and intuition every time Using a digital scale, you can quickly achieve setting accuracy up to 0.5 mm 2 Visualization or physical fixation of positions along key positioning axes. The use of standardized devices for correct positioning allows you to eliminate errors as much as possible and reduce setup. Positioning of the body to be machined relative to the machine table with the help of centering devices 3 The method of the method of multiplicity and change of functions. 91 Before - the limit switch moves with continuous adjustment during each changeover to a new size After - each size has its own limit switch, changeover is carried out by turning on the desired switch 91

World SMED Practices METINVEST-MRMZ LLC Firm Unit Before SMED After SMED Total T Manufacturing 1 80 t press 4 h 0 min 4 min 18 s 98% S Metals 1 100 t press 40 min 26 s 94% 30 t press 50 extruder 4 '6” lathe 50 min 1 h 10 min 4 h 30 min 48 s 7 min 36 s 11 min 98% 89% 96% Machining center 139 min 59 s 59 min 29 s 57% AM Bottlers Bottling plant 32 min 43 s 23 min 33 sec 28% E Finishing Paint Plant 56 min 26 sec 23 min 12 sec 59% H Press 1 TT Industries Expanded Metal Co. S Engineering 93

METINVEST-MRMZ LLC Standard operating procedure - a visual standard algorithm describing the most efficient method of performing work SOP is regulated by: 1. 2. 3. 4. Sequence Content (text, diagram or photograph) Time required to complete each operation Expected result 95

METINVEST-MRMZ LLC Advantages of using SOPs 1. The work process is regulated, being a clear and understandable guide to action 2. A standard approach to the procedure in any place and on any equipment by each employee 3. Adaptation and training of employees is more efficient and faster 4. Minimized negative impact of the "human" factor 5. A stable level of product quality and work performance is maintained 6. There are clear criteria for assessing the performance of employees 96

METINVEST-MRMZ LLC Criteria for developing SOPs 1. In processes where the influence of the human factor on the result is of key importance 2. In situations where there are no clear criteria for making decisions in cases of deviation 3. If there are no clear criteria for evaluating the performance of employees 4. When the same job needs to be done by different employees 97

METINVEST-MRMZ LLC Requirements for SOP 1. Easy to read (should be written in terms of the language of the employees for whom it is intended) 2. Visually understandable (diagrams/photos) 3. Including only tested and available tools and materials 4. Verified and approved by workers and management 5. Satisfying health and safety standards 99

METINVEST-MRMZ LLC SOP development algorithm 1. 2. 3. 4. 5. 6. 7. Find out what is the “best practice” of this work Conduct observations of the “best” work Determine the sequence of operations Determine the content of each operation Take photographs of each operation Record during each operation Performers (workers) must necessarily take part in the development of SOP 8. Find out the “key points” for each operation § Response in case of deviations § Important information (tolerances, interpretation) § Warnings about possible risks for labor protection § Impact on quality 100

METINVEST-MRMZ LLC TRM (total productive maintenance) is a methodology for the general maintenance and operation of equipment, which makes it possible to ensure its highest efficiency throughout the entire life cycle with the participation of all enterprise personnel. It is a Total Equipment Maintenance System, in which operators and repairmen work together to improve the reliability of equipment. This approach significantly extends the life of the equipment and localizes problems at an early stage, preventing costly accidents. 102

METINVEST-MRMZ LLC TPM system to reduce downtime, emergency breakdowns and other losses associated with equipment shutdown by increasing its reliability SITUATION BEFORE IMPLEMENTATION SITUATION AFTER IMPLEMENTATION staff, they misuse it… We are constantly missing the job due to emergency breakdowns……. 103

Main goals and principles of TPM METINVEST-MRMZ LLC TPM goals: Zero rejects Zero errors Zero accidents TPM MAIN PRINCIPLES: 1. 2. not repair it 104

Improvement of quality through improvement of equipment Improvement of work efficiency of management and service departments Management of development and implementation of new equipment Training on maintenance and repair of equipment for operators and repairmen Improvement of the system for planning and carrying out maintenance of equipment Targeted improvements of equipment Autonomous maintenance of equipment of equipment of METINVEST-MRMZ LLC STRUCTURE OF THE TPM SYSTEM Support for Lean Production Formation of an effective production environment using 5 S Activities of small groups 105

An example of visual management in the TPM of METINVEST-MRMZ LLC Maintenance and cleaning maps of FGM No. 1 of electric pipe welding shop No. 2 of KhTZ OJSC cleaning Checking the serviceability of the mechanical parts of the LGM 3 Cleaning the LGM and the workplace 2 Monitoring the state of the control system 1. 8 2. 1 2. 2 3. 1 3. 2 3. 3 3. 4 3. 5 4. 1 4. 2 GS No. 3, GS No. 4, no leaks GShch-1, GShch-2, hydraulic motors 5 min oil shaft drive Check Should not exceed 70 0.25 min °C oil temperature mm" of oil Checking pressure Norm from 200 to 320 atm 0.25 min in oil lines Checking air pressure, absence Norm from 4.5 to 6 atm 0.25 min of leaks and condensate , 3, 4 and 5) Checking hydraulic systems norm - absence of LGM leaks (including HS No. 4) Elimination of identified oil leaks Check fasteners niya Checking the encoder sensors, the repeatability of the deflection of the deflection sensors. Checking the readings of the sensors for the position of the supports and press. Mechanism Checking the frame of the machine Checking the shafts Checking the sheet alignment mechanisms Checking the mechanisms of the roller tables Eliminating the identified problems Cleaning the fixed part of the LGM Cleaning the PU LGM 16:00 -24:00 shift 08:00 -16:00 5 min shift 00:00 -08:00 Visual on the control panel screen 0.5 min Visual, integrity 2 min Visual, integrity, no build-up of particles 5 min Visually, integrity, movement and operation of the sensor 2 minutes Visually, integrity 3 minutes 20 minutes shift 08:00 -16:00 shift 16:00 -24:00 Pay attention to integrity machine mechanisms 10 min Cleaning the control panel, stairs and passage 5 min as required -24:00 is carried out by the roller, if a deviation is detected, it is eliminated by the attendant After the oil leak has been eliminated locksmith is obliged to clean his spill! shift 08: 00 -16: 00 Responsible for inspection and maintenance: Mr. Yanukovych A. B. Mr. Dyadyura A. I. Mr. Kovalenko A. P. Mr. Belousov M. A. Mr. Pedyk A. A. shift No. 2 shift No. 3 shift No. 1 20 min by the staff, if it is impossible to eliminate it, it is necessary to issue a Red label is performed by a mechanic's day service mechanic IMPORTANT! 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 shift 00:00 -08:00 Roller 1. 3 Time Locksmith 1 2 Critical areas (norm and deviation) Roller 1 Maintenance of hydraulic and pneumatic systems 1. 1 Operation every shift No. daily Name of service every shift No. shift No. 4 106

LLC METINVEST-MRMZ Simplification of checking the condition of equipment Transparent housing on the equipment - no need to remove the cover for inspection 107

METINVEST-MRMZ LLC Area Instruments on the hydraulic panel HS No. 4 of the NKMZ plate bending machine Problem definition Lack of visualization of pump operation parameters control Action taken Result Unambiguous Drawing color boundaries of operating modes determination of normal and critical modes of equipment operation After 108

METINVEST-MRMZ LLC Proposal is an improvement idea aimed at: § improving the operation of equipment, § improving working conditions, § improving the level of safety, § reducing costs and … § … other measures that increase the efficiency of the enterprise. The following are not proposals: § regular maintenance activities; § proposals that may lead to a decrease in the reliability of the equipment and quality indicators; § proposals that worsen working conditions, the quality of work; § proposals that increase the level of environmental pollution; § proposals that set only tasks or determine only the effect (benefit) without specifying a solution; § proposals that have already been included in the enterprise plan; § 111 proposals already implemented

METINVEST-MRMZ LLC Submission of a proposal with a significant economic effect (effect more than UAH 50,000) Submission of a proposal without economic effect (or with an insignificant effect) UAH 50 for improvement at the workplace level UAH 100 for improvements at the site, shop level 1000 UAH for the implemented proposal with insignificant economic effect (UAH 10 50 thousand) Recipient Initiator UAH 500 advance payment for the proposal accepted for implementation Based on the results of implementation, depending on the effect achieved (minus the advance amount): Remuneration Effect (per year) 5 000 UAH Up to 100 thousand UAH 10,000 UAH Up to 500 thousand UAH 25,000 UAH Up to 2 million UAH 50,000 UAH More than 2 million UAH 112

METINVEST-MRMZ LLC Scheme for submitting proposals and consideration at the division level 1. The initiator draws up a form and submits it to the responsible person in the division for registration 2. The responsible person registers the proposal and checks its originality, submits the proposal for consideration by the Division Committee 3. The division committee is held at least 1 once a month. The chairman is the head of the department. Based on the results of the Committee, decisions are made: § Reject or send for revision § Accept for implementation “without significant economic effect” Pay: ü 50 hryvnia. – impact on the workplace ü 100 UAH. – impact on the site, workshop § Accept for implementation “with an effect of 10 to 50 thousand UAH. ", agree on the payment of UAH 1000 at the Enterprise Committee. § Submit for consideration by the Committee of the enterprise “with a significant economic effect” 113

METINVEST-MRMZ LLC Scheme for considering proposals at the enterprise level 1. Responsible for preparing proposals with significant savings. the effect of the unit prepares a package of documents and sends it to the Secretary of the Enterprise 2 SPP Committee. The secretary submits a proposal to the Enterprise Committee 3. The enterprise committee is held at least once a month. Chairman - Chief Engineer. Based on the results of the Committee, decisions are made: § Reject or send for revision § Approve for implementation at the subdivision level “with an effect of 10-50 thousand UAH. » UAH 1000 – payment for the proposal § Accept for implementation ü 500 UAH. - paid immediately (advance amount) A project team is created to implement the project, after implementation the annual effect is confirmed (based on statistics for at least 3 months) Based on the results of implementation, depending on the effect achieved, from 5,000 to 50,000 UAH are paid. (less advance amount) 114

METINVEST-MRMZ LLC The Continuous Improvement Team (CIC) is a group of employees who have voluntarily united to address performance improvement issues that are beyond the scope of their job descriptions. 116

METINVEST-MRMZ LLC Tasks for CSC are determined collegially within the framework of the work of the Subdivision Committee ü the list of tasks to be solved is approved by the head of the shop ü after the approval of the list, the amount of the bonus for the solution of each task is determined ü the amount of payment for the task cannot exceed 3000 hryvnia. for team 117

OOO METINVEST-MRMZ Scheme of CSC work: Choose a task from the list of CSC tasks or propose your own. The list of tasks of the KNS is at the stand of the KNS or at the assistant for the NS Fill in the form of the KNS and submit it to the person responsible for the KNS in the workshop Solve the problem Draw up a report on the work done on the form of the KNS; Get a positive decision of the workshop committee on the completion of the work of the KNS Get remuneration. 118

METINVEST-MRMZ LLC Analysis (decomposition, dismemberment) is the operation of decomposing the whole (process, problem) into its constituent parts, performed in the process of brain or practical activity. Problem Finding a solution to a problem Level 1 Level 2 Level 3 120

METINVEST-MRMZ LLC The purpose of the brainstorming method is to gather the maximum possible number of participants who are directly or indirectly related to the issue under consideration, and in the process of an active, constructive and orderly dialogue to identify the maximum possible number of ideas and proposals. Think outside the box – Use different approaches to generate ideas Don’t accept any dogmas No “ownership” of MY ideas – Don’t defend ideas – Use already put forward ideas to come up with new ones Don’t reject suggestions – – Initially consider all suggestions good Develop someone else’s idea for it improvements Don't "tell stories" – Unsubstantiated conclusions from your experience are generally not helpful in discussions Everyone participates – – – Each participant must propose at least one idea Take turns speaking, one suggestion in turn Line can be skipped Do not "kill" ideas - - Every idea is welcomed - quantity over quality Share all ideas - discussion takes place later Do not complain - Do not point out personal subjective problems if they have nothing to do with the problem being analyzed assault 122

METINVEST-MRMZ LLC Brainstorming is an operational method of solving a problem based on stimulating creative activity, in which the participants in the discussion are asked to express as many possible solutions as possible, including the most fantastic ones. Then, from the total number of ideas expressed, the most successful ones are selected that can be used in practice. Stages and rules of brainstorming 1. Statement of the problem. Preliminary stage. § At the beginning of this stage, the problem should be clearly stated. § There is a selection of participants in the assault, the definition of the leader and the distribution of other roles of the participants, depending on the problem posed and the chosen method of conducting the assault. 2. Generation of ideas. 3. Grouping, selection and evaluation of ideas. 123

METINVEST-MRMZ LLC Brainstorming Stages and rules of brainstorming 1. Statement of the problem. 2. Generation of ideas. The main stage, on which the success of the entire brainstorming largely depends. Therefore, it is very important to follow the rules for this stage: § The main thing is the number of ideas. Don't make any restrictions. § A complete ban on criticism and any (including positive) assessment of the ideas expressed, since the assessment distracts from the main task and knocks down the creative mood. § Unusual and even absurd ideas are welcome. § Combine and improve any ideas. 3. Grouping, selection and evaluation of ideas. 124

METINVEST-MRMZ LLC Brainstorming Stages and rules of brainstorming 1. Statement of the problem. 2. Generation of ideas. 3. Grouping, selection and evaluation of ideas. § At this stage, unlike the second, the assessment is not limited, but rather welcomed. § Methods for analyzing and evaluating ideas can be very different. § The success of this stage directly depends on how “equally” the participants understand the criteria for selecting and evaluating ideas 125

Spaghetti chart METINVEST-MRMZ LLC Brief description of the tool DEFINITION AS IS or raw materials along the enterprise value stream. The name arose because this trajectory is completely chaotic and looks like a plate of spaghetti. ESSENCE OF THE TO BE METHOD The essence of the method is to plot the trajectory of the movement of employees / vehicles or other objects on the enterprise plan. Such a visual representation allows you to quickly identify the main causes of long movements, determine losses. PRACTICAL SIDE Fig. 1 Spaghetti Chart example before and after process optimization The tool makes it possible to estimate the loss of movements, to understand which routes are the longest and most frequently repeated 127

LLC "METINVEST-MRMZ" "Spaghetti" Diagram Stages of drawing up the "Spaghetti" Diagram 1 Determination of the main points of the process of material objects (premises, sections) with which the process subject under study (worker, product, etc.) interacts 2 Drawing on the form of the layout scheme identified points (objects and premises) 3 Overview of the process and display on the diagram of movements from one point to the next (drawing up an “AS IS” diagram). For this, connecting lines are used to show the trajectory of movements 4 Calculation and entry in the form of distances between each process point per hour / per cycle 5 Calculation of takt time, process cycle time, production cycle time and waiting time (1, 2, 3, 4) 6 Analysis and design of solutions to reduce waste and optimize the process 7 Mapping the “TO BE” travel diagram (1) Takt time (BT) is the available production time divided by the amount of customer demand (theoretical time to produce a unit of product ordered by the consumer) (2) Cycle time (TC) - shows how often the process "gives out" a part or product (measured during observation). This is the time the operator needs to complete all actions before repeating them again, i.e. the time to perform operations on one product at one workplace (3) Waiting time (TO) - the difference between takt time and cycle time (4) Lead time (CVF) is the time it takes one product to go through the entire process or value stream from start to finish. If a part is tagged, lead time is the time it takes for the tagged part to travel from start to finish of the production cycle 128

METINVEST-MRMZ LLC Before standardization (route length 1,037 m) Spaghetti Diagram After standardization (route length 222 m) 129

METINVEST-MRMZ LLC 5 Why “5 Why” is a way to find the cause of any problem, which means that in order to find out the root cause of the problem, it is necessary to go beyond the analysis of its obvious symptoms, asking the question “why?” several times in a row. » . An example of using the method: The problem is a stopped machine. 1. Why? It was overloaded and the fuse blew. 2. Why? The bearing was not properly lubricated. 3. Why? The oil pump was not delivering enough oil. 4. Why? Worn pump shaft. 5. Why? It was not protected by a mesh, and pieces of metal got inside. Without asking "why" several times, executives would simply replace the fuse or pump and the problem would not be fixed. It is important to note that this method is not about asking exactly five questions. It is more important to keep asking questions until the root cause is found and eliminated. 131

5 Why METINVEST-MRMZ LLC Advice: The “5 Whys” tool is effective when focus is maintained during the analysis of the reasons: § We are not looking for a subjective explanation why we do not comply with what we must comply! Why? Overload fuse blown Shaft was not well lubricated with oil Overload fuse blown Oil pump not supplying enough oil The mechanic on duty did not check the lubrication Why? Because the oil filter is clogged with used lubricating oil mixed with metal dust The mechanic's salary does not motivate him to properly maintain the equipment Why? Because the filter has not been cleaned regularly According to management, profits are too low to increase bonuses Why? Prices for products are too low Purposeful Dispersal of attention 132

METINVEST-MRMZ LLC Ishikawa diagram (cause and effect diagram, fishbone) is a tool for organizing ideas that helps to identify potential problems that require additional study. Brainstorming ideas tend to be grouped into categories known as the “six Ms”: § Methods – methods § Manpower – personnel § Machines – equipment § Materials – materials § Measurements – measurements § Mother nature – environment § Important Note that cause and effect diagrams are structured brainstorming tools, not data! § The values ​​shown in such a chart do not yet indicate the true cause of the problem § The team still needs to collect data to check which potential causes could actually cause the problem. 134

LLC "METINVEST-MRMZ" Ishikawa Diagram Methodology for constructing the "Ishikawa Diagrams" 1 Formulation of the problem determination of the quality indicator for improvement (analysis) 2 The problem under study is written on the right side in the middle of a blank sheet of paper and is enclosed in a frame, to which the main horizontal arrow approaches on the left - backbone 3 Top causes (level 1 causes) affecting the problem/quality measure, the big bones, are identified and plotted. Level 1 causes are framed and connected by slanted arrows to the “backbone” 4 Next, secondary causes (level 2 causes) are plotted, which affect the main causes (“big bones”), and those, in turn, are the result of secondary causes. Secondary causes are recorded and arranged as "medium bones" adjacent to "large" ones. Level 3 causes that affect level 2 causes are arranged as "small bones" adjacent to "middle" ones, etc. (If not all causes are shown in the diagram, one arrow is left blank) 5 For effective use of the tool it is recommended to split the factors (into factors of the fourth, fifth, etc. levels) until the most simple and insignificant causes that affect the object of analysis are identified in order to find the most correct way and effective way to solve the problem 6 Causes/factors are evaluated and ranked according to their significance, highlighting the most important ones that are expected to have the greatest impact on the quality score 135

METINVEST-MRMZ LLC Ishikawa diagram Ishikawa diagram construction method (continued) 7 When drawing arrows on a diagram, their slope and size do not matter. When constructing a diagram, it is necessary to correctly display the subordination and interdependence of factors, as well as arrange the diagram in such a way that it is easy to read. Therefore, the names of reasons/factors are recommended to be written horizontally 8 All the necessary information is entered in the diagram: its name, product/process name, names of participants, date, etc. 9 It is necessary to assess the degree of influence (significance) of each smallest factor that can be influence 10 If a factor is selected for correction, which is influenced by smaller factors, then the degree of its influence on the problem is calculated by arithmetic summing up the significance of factors affecting it 11 It is preferable to use measurement data (checklists, measurement logs, etc.) to assess the influence of factors .). If this is not possible, the method of team assessment is used. 12 To improve the quality indicator, only the most significant factors should be used. To do this, it is recommended to use the Pareto chart 136

METINVEST-MRMZ LLC Pareto Chart Definition A Pareto chart is a graph that shows the dependence of certain process results (Y) on most factors/causes (X). ILLUSTRATIVE The Pareto Law states that 20% of factors X influence 80% of problematic outcomes Y 140

Pareto chart METINVEST-MRMZ LLC Brief description of the tool Pareto chart and ABC analysis A Pareto chart is usually displayed as a bar chart showing the relative contribution of each cause or component to the overall problem, with the columns arranged in descending order. To assess the degree of importance of the causes of problems plotted on the diagram, the ABC analysis technique is used: Pareto Chart An example of using ABC analysis within the framework of the Pareto chart A B C 141

Pareto diagram LLC "METINVEST-MRMZ" Brief description of the tool ABC analysis is necessary to identify three groups with three levels of importance: group A the most important, significant problems, causes, defects. The relative percentage of group A in the total number of defects (causes) is usually 75%. Accordingly, the elimination of the causes of group A has a high priority, and the activities associated with this have the highest efficiency group B causes that have a total of no more than 20% group C the least significant causes and problems An example of using ABC analysis within the framework of the Pareto diagram A B C 142

METINVEST-MRMZ LLC Control chart is a visual tool, a graph of changes in process parameters, estimated from a sample, over time. A control chart is used to provide a statistical control for stability. The purpose of building a control chart is to identify the exit points of the process from a steady state for the subsequent determination of the reasons for the deviation and their elimination. An example from the practice of capture shop No. 1 AKHZ 144

METINVEST-MRMZ LLC Control chart Temperature difference between the upper and lower welding zones of method furnace No. 2 146

Algorithm for developing organizational measures of METINVEST-MRMZ LLC To select the correct organizational measures, it is necessary to use this algorithm: Problem (factor) Is there a parameter that warns and signals about a problem? Yes organizational event Yes Is the information on the parameter reliable? * No (reason in devices) Setting / debugging metering devices * No (reason Yes Yes Is there a procedure for personnel actions? Is the described procedure being followed? ) No Introduction of control parameter. Definition: parameter control method (visual inspection, primary metering devices, automated process control systems) requirements for the parameter; periodicity and resp. for control. method of reporting on control (marks in journals, electronic database); Development of a procedure for personnel actions (SOP, additions to the production instructions, service card). Development of an algorithm for actions on deviations. Dialogue with staff. Staff training, knowledge testing. * in the case of journal accounting, the reliability of the data is verified by unscheduled visual control and comparison of information from primary metering devices and information in journals. 148

METINVEST-MRMZ LLC NS system - structured business processes that create conditions for involvement in the improvement of all personnel, changes in work culture Evaluation and adjustment Analysis Regular evaluation of results at all levels Knowledge management ZBB potential analysis, exchange of experience Regular analysis of deviations Scientific methods / best problem analysis practices. . . Leadership Dialogue with staff Personal example Implementation Goal-setting Effective organization of improvements Implementing improvement methods Ambitious goals within the KPI system Individual approach 150

Enterprise Maturity Matrix of METINVEST-MRMZ LLC For an objective assessment of the level of implementation of the NS system at the enterprises of the Group, the “Maturity Matrix” of the NS system is used. Main tasks: Increasing the objectivity of comparing enterprises in terms of the level of implementation of the NS system effect) Level/assessment of maturity in each area 2 3 4 5 2 Analysis Areas of assessment The matrix covers the main elements of the NC system Analysis: identifying the root causes of losses and deviations Goal setting: performance management through the KPI system Implementation: eliminating losses Evaluation of results and adjustment levels: involvement and support for the implementation of the NC program, personal example, communication of goals and results (Example) II R Goal setting TE Implementation Evaluation and adjustment Management leadership C&R overall assessment: average = 3 5 2 4 3. 2 Quantitative assessment according to five qualitative criteria can no be in the interval 2 5 151

LLC "METINVEST-MRMZ" ANALYSIS Analysis - how we determine the root causes of losses and deviations Analysis work is carried out on the basis of data and facts, not judgments and opinions Best practices (scientific methods) are used in order to increase the effectiveness of the analysis Analytical work is carried out in two horizons : 1) Potential analysis (long-term) - Focused analysis of losses in order to improve performance on a specific indicator. § Performed not upon the fact of a deviation, but based on the results of determining priorities for improving the efficiency of the unit § Performed either on the basis of the ZBB principle, or on the basis of experience exchange, benchmarking, expert group seminars 2) Analysis of current deviations / problems (short-term) that have arisen in the course of the current work of the unit carried out at shift reports and scheduled meetings to analyze “incidents” As a result of the analysis of potential and analysis of deviations in the unit: § measures are formed § systems for controlling incoming raw materials, technological process, equipment, measuring instruments and practices are developed / adjusted § performance standards are formed / adjusted operations (SOP) 152

METINVEST-MRMZ LLC GOAL-SETTING Goal-setting – how we define steps to achieve the goal Based on the KPI tree, the goals are set from the manager to the level of the senior worker/foreman of the shop/division Goals in the KPI System (production, quality, resource consumption): § Ambitious – set based on potential § We want a positive perception of the NC process: rewarding for over-performing instead of punishing for under-performing. KPI targets do not duplicate planned indicators. Quarterly, the staff has the opportunity to receive an additional bonus for achieving very high (ambitious) KPIs § Personalized as much as possible - goals are decomposed in such a way that each person is responsible only for what he has a direct influence on § We want to avoid blind cascading of high-level goals of directors to line managers § Transparent ways to achieve goals - people understand the ways to achieve goals, there is a clear action plan with measurable goals, responsible, budgets of money, time, labor costs We manage what we measure, so all goals must be SMART S - specific (specific) M - measurable ( measurable) A – Attainable R – Realistic & Relevant T – Time bound 153

METINVEST-MRMZ LLC IMPLEMENTATION Implementation - implementation / adjustment of control systems, focused measures to eliminate losses Targeted improvements 1) Implementation of measures to eliminate losses according to priority indicators (based on potential analysis). Formats of work / sources of events: § "Focused improvements" - a short-term separation from the main activity as a team § SB teams ("quality circles") - a permanent composition for working after hours § Proposal system - individual initiative of workers 2) Activities - reaction to incidents / deviations / problems in the existing process in the current mode: § Direct adjustments to control systems and standardization § It is important to have prescribed response algorithms for employees in case of deviation (quick response system) Infrastructure improvements (comprehensive improvements) § Implementation of auxiliary, “cultural » systems: 5 Cs, Visual management, Effective communication… § Have an indirect impact on work efficiency § Support a “lean” culture and people’s activity in NC processes § Indirectly improve performance indicators 154

LLC METINVEST-MRMZ EVALUATION OF RESULTS AND ADJUSTMENT Evaluation of results and adjustment - prompt response and corrective actions Regular assessment of departments - an indicator of progress in implementing NC practices § At the enterprise level - economic effect (through KPI) and maturity level of the NC system (maturity matrix) § At the level of workshops / sections - the effect of activities and ratings / points for NC practices Based on the results of the assessment, corrective actions are taken: § Additional training is provided for participants: professional, behavioral (leadership, teamwork ...), methods and tools to improve efficiency § Basis for training in methods and procedures for improving efficiency is a structured accessible knowledge base of the NC unit § Functions and responsibilities in the team are redistributed, additional resources are attracted to implement the tasks set § The best employees are encouraged (financially, personnel reserve, rotations, promotion), work with lagging behind 155

METINVEST-MRMZ LLC LEADERSHIP Leadership - who is in charge of improvement The success of building the NC system depends on the involvement of managers at all levels in the process At the initial stage of building the NC system, the leaders of change should be the leaders who § Develop the Efficiency Improvement Program (change plan) § Manage the implementation process Change Plan § Communicate with staff, promote NC processes within their departments Personally initiate review and development of activities Personally reward those who excel Personally participate in NC audits, committees, meetings, brainstorms and discussions Act as mentors to line managers train subordinates in the methods and tools of the Lean Enterprise As the NS system evolves, a gradual transition of the leading role from managers to workers and line managers (foremen) into the processes of the NS system is expected 156

METINVEST-MRMZ LLC Enterprise maturity matrix Planning and conducting an audit of the NS system maturity Conducting assessment according to the matrix: reporting - carried out for half a year, intermediate self-assessment is carried out monthly Auditors for reporting assessment: Commission consisting of representatives of the ONS of divisions and enterprises strategy of the Group, or a representative of the division’s ONS Auditors for self-audit: Internal commission with the participation of assistant heads of workshops for continuous improvement Coverage during assessment: selectively the main and auxiliary divisions of the enterprises being assessed processes at the level of enterprise management 157

Enterprise Maturity Matrix METINVEST-MRMZ LLC SYSTEM ELEMENT ASSESSMENT AREA 1. Knowledge base Analysis 2. Analysis of improvement potential 3. Exchange of experience 4. Analysis of current deviations 5. Setting goals based on potential Goal setting 6. Personalized goals 7. Event planning 8. Implementation of activities 9. Standardization of operations Implementation 10. SB teams 11. Proposal system 12. 5 C 13. Regular evaluation of departments Evaluation and adjustment 14. Training 15. Enterprise NS development plan Leadership 16. Motivation 17. Dialogue with staff 158

Enterprise Maturity Matrix METINVEST-MRMZ LLC SYSTEM ELEMENT PERFORMANCE LEVEL ASSESSMENT AREA 1. Knowledge base ASSESSMENT CRITERIA 5 (Excellent) add. income, analysis of bottlenecks of the enterprise and / or division, potential for all indicators from paragraph 2. 1, analysis of the causes and sources of losses, the relationship between calculations, goals for 3 5 years and 1. 1. Fixing knowledge in the knowledge base (assessment of 1. 1 measures to achieve them in the current year The analysis of losses is calculated, based on experiment or benchmarking, cannot be higher than item 2) (2) The guide is updated at least once every six months, and, in case of significant changes in processes no later than three months. after these changes (3) >80% of the staff (engineers) know the content of the guidebook in terms of their area of ​​responsibility in the unit (4) The main goal (s) of the unit was 100% fulfilled. 2. 1. Scope of identifying potential and availability of methodology (including ZBB, customer requirements, industry benchmarking) Analysis (1) The list of main KPIs and 1 3 indicators that define the main goal of the unit is defined, agreed with ONS of the division/service NS MI SMC and contains relevant indicators: the consumption of raw materials, 80% of the costs of redistribution (except for depreciation and payroll), productivity, quality and customer focus, value propositions for customers, service standard, additional. income. (2) The potential for improvement is determined by priority indicators: raw materials, productivity, by more than 80% of the processing costs (except for depreciation and payroll), by quality and indicators critical for the subsequent processing (customer focus), by value propositions to customers, by service standard, additional . income. (3) The methodology for determining the potential is agreed upon at the level of the Functional Managers/Directorates of the Management Company/Division. The methodology is the same for the same indicators of the same redistribution. 2. 2. Availability of an analysis of the factors behind the lagging of the current value of the indicator from the potentially achievable one (score 2. 2 cannot be higher than 2. 1) productivity and quality, including for all indicators that are critical for the subsequent redistribution (customer focus), for value propositions for customers, for service standards, add. income. 2) The values ​​of the factors influencing the deviation of the current indicator from the potentially achievable one are determined by calculation, based on benchmarks or based on an experiment or a customer survey. 3) The heads of the department can explain the reasons for lagging behind the potential for all indicators 4) Based on the analysis, measures have been developed. The activities are included in the roadmap to achieve the goals or the guide (clause 1. 1). 2. Analysis of the potential for improvement 159

Maturity matrix of the enterprise METINVEST-MRMZ LLC LEVEL OF IMPLEMENTATION OF THE CRITERION SYSTEM ELEMENT ASSESSMENT AREA ASSESSMENT CRITERIA 5 (Excellent) 3. 1. Communicating information about the performance of such units to the staff: better/worse and why Information is communicated to the deputy heads of the workshop/directors of branches , their deputies / directors of bases and senior foremen / section chiefs / head. warehouses, shift foremen (employees of this category know the levels of indicators of related or similar enterprises or enterprises of competitors and leaders in terms of indicators). 3. 2. Development and implementation of activities aimed at improving efficiency, based on the results of the analysis of best practices More than 3 activities per year aimed at improving the indicators from paragraph 2. 1. 4. 1. Analysis of the causes of deviations in the main KPIs of the unit (1) Root causes are identified for more than 80% of deviations (in the analysis, root cause search methods are used: 5 whys, Ishikawa, etc.). (2) The main objective(s) of the unit is 100% achieved. (3) The analysis involves line managers and employees of teams within their powers under the guidance of engineering and technical personnel. (4) Historical records and analysis of the frequency of occurrence of deviations and their causes are kept min. 12 months or 3 months. for enterprises that conduct a basic audit. 4. 2. Approach to the development of measures for current deviations (score 4. 2 cannot be higher than 4. 1) (1) Based on the results of the analysis, corrective measures are proposed for more than 80% of deviations (2) the same reason was repeated no more than 2 once. 3. Exchange of experience Analysis 4. Analysis of current deviations 160

Maturity matrix of the enterprise LLC "METINVEST-MRMZ" LEVEL OF IMPLEMENTATION OF THE CRITERION SYSTEM ELEMENT AREA OF ASSESSMENT CRITERIA OF ASSESSMENT 5. 1. Approach to determining target KPI values ​​aimed at increasing goal setting 6. Goals are personalized 7. Event planning 6. 1. Individual approach to setting goals for each employee (KPI) 5 (Excellent) (1) Goals for more than 80% of KPIs (out of 2. 1 and their derivatives) are set ambitiously (i.e. higher than historically achieved over the past 2 years with discreteness per quarter), and justified (there is a calculation, benchmark, experiment) for indicators whose values ​​are incomparable with previous periods due to the influence of external factors, changes in the market, company strategy ( 2) The main goal (whether) of the unit is 100% fulfilled. (1) More than 80% of the employees included in the KPI system know the goals for the period and can clearly describe their role in achieving these indicator values, i.e. what exactly the person will do IN THE NEW (events, processes, organization) in order to improve a specific indicator compared to the work in the previous period. 7. 1. Availability of activities to achieve target values ​​1) More than 80% of the indicators (of all performance maps in the unit) (KPIs of the unit are covered by specific activities, quality, productivity and cost) 7. 2. Planning of activities (1) More than 80% workshop activities have a clear implementation plan (date, not quarter and half year), responsible. (2) The main objective(s) of the unit is 100% achieved. 161

Enterprise Maturity Matrix OOO METINVEST-MRMZ PERFORMANCE LEVEL SYSTEM ELEMENT ASSESSMENT AREA EVALUATION CRITERIA 5 (Excellent) 1) More than 80% of activities (KPI activities, Teams, SPP, review results) and decisions to improve efficiency are completed on time. 2) The main goal (whether) of the unit is 100% fulfilled. 9. 1. Standardization of operations (1) There are SOPs. (2) Positive dynamics for more than 75% of KPIs (2. 1) (3) There is and works in >80% of cases a certain procedure for triggering standardization (in case of occurrence or repetition of problems / deviations, mainly related to the "human factor" ) [for example, as a result of the analysis of all corrective actions, 3 were identified as the development of SOPs, or revision of SOPs, or changes to other regulatory documents; it checks how many of these three are actually done]. 9. 2. Involvement of personnel in work with SOPs (1) More than 80% of employees are trained / instructed to perform work according to SOPs, and this is documented. (2) 100% of the respondents know what SOP is. 100% of the interviewed employees performing operations from the SOP know where the SOP is stored. The storage location is close to the place of operations. (3) SOPs are developed with the participation of line managers and team members. (4) SOPs are updated as necessary, but no less than the requirement of a regulatory document. 10. 1. Informing about the activities of the SB teams and the activity of the staff 8. Implementation of measures 8. 1. The level of discipline in the implementation of measures to improve efficiency (KPI measures, Teams, SPP, review results) (1) More than 80% of employees are aware of the possibility of participation in NS Teams. (2) The number of employees who took part in the work of the SB Teams, 15% or more of the number for the year. (3) The current tasks of the unit for the teams of the National Assembly are visualized. 70% of employees know the current tasks, or where to learn/see them. 10. 2. Efficiency of the Supervisory Board Teams (1) More than 80% of the assigned tasks were solved by the Supervisory Board Teams within the terms agreed with the management, i.e. the tasks are completed. (2) 100% of team decisions are directed towards specific metrics in $ or in kind that affect KPIs (2.1), team reports show the impact of activities on these metrics. (3) Positive dynamics for more than 75% of KPIs (2. 1). (4) In the list of tasks for teams, there are no tasks of the type: "Paint .... . Make cosmetic repairs .... . Restore the original level of a room or object .... Install a door / window .... etc. " 9. Standardization of operations Implementation 10. Commands of the National Assembly 162

Maturity matrix of the enterprise METINVEST-MRMZ LLC LEVEL OF IMPLEMENTATION OF THE CRITERION SYSTEM ELEMENT ASSESSMENT AREA EVALUATION CRITERIA 5 (Excellent) 11. 1. Functioning of the SPP 11. Proposal submission system According to the control sample, 3 proposals out of 3 correspond to the existing regulatory documentation. 11. 2. Presence of positive dynamics in the number of proposals Number of implemented (completed) proposals ≥ 1 pc. /year per employee in the department. 11. 3 The number of implemented (completed) proposals with economic proposals with an effect equal to or more than 0, 12 pcs. /year per employee in the department. economic effect. Implementation 11. 4. Number of proposals with The number of implemented (completed) proposals with a significant economic effect is equal to or more than 0, 005 pcs. /year per employee by economic effect in the unit (at least 1). (50 thousand UAH. . and more or 1% of the annual cost of the shop). 12. 5 C 12. 1. Informing about the 5 C system More than 80% of employees know about the steps to implement the 5 C system, they know their role in the implementation. 12. 2. Level of implementation in Score 10 12. workshop 163

Enterprise Maturity Matrix LLC "METINVEST-MRMZ" LEVEL OF IMPLEMENTATION OF THE CRITERION SYSTEM ELEMENT ASSESSMENT AREA 13. Regular assessment of units EVALUATION CRITERIA 5 (Excellent) 13. 1. Regular assessment of units ) with detail below the division level for "red zone" divisions. At least 20% of units fall into the "red zone". (2) Unit Level: For Red Zone units, corrective action plans are prepared and approved by the Unit Supervisor (if there is a supervisory system) or the Functional/CEO. (3) None of the departments is in the "red zone" for more than 4 quarters in a row. 14. 1. Planning and implementation of training Management Company (2) There is a process of regular (once a year) assessment of knowledge for all categories of personnel, taking into account this assessment, a schedule for repeated training is drawn up. after regular evaluation (from (2) above) Evaluation and adjustment 14. Training 164

Lean production is:

A systematic approach to identifying losses and finding ways to eliminate them in order to reduce the time between the customer's order and the shipment of goods;
business processes that require less human resources, capital investments, production space, materials and time at all stages.

This methodology is aimed at combating losses in all their manifestations: excess inventory, backlogs, downtime, unnecessary movements, while taking into account the convenience and safety of operations for personnel.

Action plan:

1. Determine the expected value of a particular product that has certain characteristics and a certain price through dialogue with interested consumers.
2. Determine the entire flow of creating the value expected by the consumer for each type of product: from the concept to the product that has reached the consumer.
3. Organize the movement of the flow of creating the value expected by the consumer, that is, focusing not on the enterprise and equipment, but on the product and its "needs".
4. Constantly listen to the voice of the consumer, allowing him to pull products from the enterprise when he needs it.

The main methods and ideas of lean production were proposed by G. Ford and were used at Ford factories in the 20s of the last century, but for the first time they were fully implemented in Japan. Toyota has created a system whose goal is to reduce or eliminate activities that consume resources and do not add value, that is, those for which the consumer is not willing to pay.

Today this system is known as the Toyota Production System (TPS), the principles and tools of which are reflected in its American version - the Lean Production system. Many of the elements were still in the Soviet version - the scientific organization of labor (NOT).

Lean manufacturing is approaches, methods aimed at reducing all possible costs and increasing productivity. These tools are focused primarily on the production part of the company. By changing the production system based on the principles of lean manufacturing, we reduce internal losses (stocks, movements, etc.) and at the same time people, premises, and energy are released.

The efforts of the staff are concentrated on those activities that do not add value to the product from the point of view of the consumer and, therefore, do not increase the added (incremental) value for the company.

Additional Information:

1. The concept of lean manufacturing is easy to understand, but the most difficult thing is to make it so that it becomes part of everyday work.
2. Successful implementation of lean manufacturing requires a change in company culture.
3. The concept of lean production is focused on the maximum consideration of the interests and needs of consumers.
4. If we constantly keep the focus on reducing losses of all kinds, then there is practically no limit to the benefits that can be achieved.
5. Lean production - an approach aimed at the quality of compliance of manufactured products with established requirements. The principle of working with quality according to the TPS system is described as three NOTs: do not take on defective workpieces, do not make defective products, do not transfer defective products to the next operation.
6. The abbreviation TPS - Toyota Production System (Toyota Production System) is deciphered, in particular, as follows: Thinking Production System - Thinking production system.

The high organization of processes allows us to completely avoid unnecessary costs and successfully compete in today's market.

Lack of staff involvement and difficulties in making changes in the company.

Delivery in the shortest possible time of the required products in case of receipt of an order without accumulation of intermediate stocks.

Implementation of lean manufacturing

Lean manufacturing is a management concept that focuses on optimizing business processes with maximum market orientation and taking into account the motivation of each employee. Lean manufacturing forms the basis of a new management philosophy. The goal is: minimization of labor costs and terms of creating new products; guarantee of delivery of products to the customer; maximum quality at minimum cost. The main idea is to eliminate the waste of any activity that consumes resources but does not create value.

Taiichi Ohno, the founder of this system, identified seven types of waste: due to overproduction; time due to waiting; in case of unnecessary transportation; due to unnecessary processing steps; due to excess stock; due to unnecessary movements; due to defective products. There are also two other sources of waste - "load exceeding capacity" and "uneven load", which ultimately leads to the release of defective products.

Overproduction. Overproduction is usually called the production of an excess amount of products or its premature production before real demand arises. In the shops, overproduction leads to the production of excess products, and in offices - to the creation of unnecessary documents or redundant information. The production of an excess quantity of products or their premature production does not contribute to the increase in efficiency, since they are associated with the consumption of additional material and labor resources, the need to store excess products. This forces employees to work faster than necessary, which is accompanied by other losses.

To eliminate losses caused by overproduction, it is required:

Develop technological processes in such a way that previous operations reliably provide subsequent ones;
- establish production norms and standards for each workplace of the process;
- provide signals to prevent premature start of production.

Expectation. Any expectation - people, documents, equipment or information - is always a loss. Waiting means idle work, and this causes the whole process to stop. Waiting does not create added value, and the consumer is naturally unwilling to pay for downtime. Losses of this type are the easiest to detect. They are especially annoying to workers. In any office, it is not uncommon for employees to wait a long time for signatures from superiors, the opportunity to use occupied equipment, phone calls, receipt of materials from suppliers, etc.

Analyze which signatures on documents are really needed, eliminate all unnecessary ones and standardize the new procedure;
- train employees in related professions so that they can replace each other;
- evenly distribute workloads throughout the day in order to optimally use the available labor resources;
- to provide production with all necessary equipment and timely deliveries of purchased products and materials.

Over processing. Those operations that are not needed by consumers who do not want to overpay money for their implementation are considered superfluous. Often such operations turn out to be unnecessary actions (for example, mutual checks of the work performed by different employees), obtaining an excessive number of signatures, unnecessary consideration of documents and work results.

To eliminate this type of loss, you need:

Analyze all work that creates added value, optimize or eliminate all unnecessary operations;
- determine which coordinating signatures on documents are really necessary, and eliminate all unnecessary ones.

Excess inventory. Any surplus inventory held by an enterprise is a waste. Storage of such stocks requires additional space, they can adversely affect safety by blocking aisles and production areas. These inventories may not be needed at all and become obsolete when demand for products changes. Lean manufacturing requires a radical change in the way we look at inventory. The presence of excess inventory means the need for additional efforts to manage it, it can slow down the flow of other production processes, since it is necessary to turn piles of papers and materials in search of the necessary.

To eliminate this type of loss, you need:

To produce at each site or workplace only the quantity of products required by consumers downstream of the production flow;
- standardize the layout of production sites and their loading;
- ensure that everything necessary for the subsequent sections of the production process arrives exactly at the appointed time and avoid delays in the further movement of materials through the production process.

Extra movements. Any movement not required for the successful completion of the operation in question is a waste. Such movements are considered a form of waste, since each movement made must increase the added value of the product or service. Often, inefficient organization of the labor process and incorrect layout of workplaces cause unnecessary movements of performers - walking, stretching, bending, etc.

To eliminate this type of loss, you need:

Standardize document folders, drawers and cabinets throughout the office, use color coding as widely as possible;
- Arrange files (with documents on desks or electronic files in computers) in such a way as to facilitate access to them;
- locate common office equipment in the central part of the office, purchase additional equipment to reduce the number of employees moving around the office.

Losses due to defects or alterations. The cost of reworking, or re-doing work that has already been done, in which defects are found, certainly belongs to the category of losses, since any work beyond what is necessary is unnecessary, increasing the losses of the enterprise. Losses from defects also include loss of productivity due to the interruption of the normal flow of the workflow to correct defects or rework products. This type of overhead is much easier to identify than other types of waste.

To eliminate losses from defects, it is required:

Introduce standardized working methods and forms of office documents;
- Develop and implement tools to make work easier.

Transportation. Transportation over distances greater than necessary, or the creation of temporary accommodation, storage and warehousing, unnecessary movement from place to place of materials, people, information or documents - all this leads to loss of time and energy. Materials and purchased items are often moved from place to place within a facility multiple times until they reach their final destination. Naturally, all these movements lead to losses. In addition, placing products in temporary storage places increases the likelihood of damage, loss and theft, and interferes with normal movement within the enterprise.

To eliminate losses caused by excess transportation, it is required:

Minimize the distance of any transportation;
- eliminate all places of temporary storage or storage of materials.

The problem of determining economic efficiency predetermines the need to correctly take into account and analyze the level and scope of the implementation of measures for lean production. This means that the definition of efficiency requires the use of methods of quantitative analysis and measurement, which involves establishing a relationship between the increase in the scale of implementation of the concept of lean production and the increase in the profit of the enterprise.

Lean manufacturing in the enterprise

At first glance, frugality is economy, stinginess, stinginess. In fact, lean manufacturing does not work with cost reduction, which could lead to a decrease in product quality, but with the reduction of losses that exist in every workplace, whether it be a turner, a banker, a civil servant, a director. This approach improves the quality of products and services, ensures the growth of labor productivity and the level of staff motivation, which ultimately affects the growth of the competitiveness of the enterprise.

Lean production is a production organization system aimed at continuous improvement of the organization's activities and achievement of its long-term competitiveness.

World experience shows the following results of the implementation of lean manufacturing tools:

Growth of labor productivity by 35-70%;
Reducing the production cycle time by 25-90%;
Reducing marriage by 58-99%;
Increase in product quality by 40%;
Increase in equipment uptime up to 98.87%;
Release of production space by 25-50%.

In any system, in all processes - from manufacturing and assembly to hospitality, healthcare, transportation and social services - there are hidden losses. Identifying and eliminating these wastes saves millions of dollars each year for organizations that regularly evaluate their performance against lean standards. These losses add to the cost of production without adding the value that the customer really wants. They also increase the payback period of investments and lead to a decrease in employee motivation. It is necessary to identify and then eliminate these losses.

It should be noted that the ideas of "lean manufacturing" were first formulated and implemented by Henry Ford. But these ideas were in the nature of disparate events and did not affect the very outlook of workers. A flow, low-cost production was created, and the Ford-T brand car had no competitors in the world in terms of price, quality, and level of service. But the ideas of Henry Ford did not become widespread, as the country's economy developed dynamically, the market was closed to other states, and there were opportunities for extensive development. Japan did not have such opportunities, and therefore immediately took the path of rational use of resources, eliminating all types of losses, increasing the initiative and responsibility of workers, and constantly systematically improving quality and procedures. The Toyota automobile company has become the center for the development and implementation of the principles and methods of "lean manufacturing", borrowing all the best from the production systems of companies around the world. Already by the year 80, Japan not only restored the economy and created the most efficient production system in the world, but also began active expansion to other countries.

Returning to Russia, I would like to highlight 9 reasons why it is advisable to implement lean manufacturing in an organization:

1. High production cost.
2. Low quality products.
3. Outdated technologies.
4. Outdated equipment.
5. High energy intensity.
6. High cost of production.
7. Violation of terms of deliveries.
8. Lack of qualified personnel.
9. High competition in the market.

It is the tools of lean manufacturing that allow us to solve these and other problems.

When people talk about lean manufacturing, Lean management and the achievements of the Japanese company Toyota are often mentioned. There is another word - kaizen (continuous improvement).

All these words, unusual for us, indicate that the organization sets itself a global task - to improve every day, to progress day by day. Moving forward depends on the leaders themselves, because it is not enough to introduce tools, you need to change the culture of management, the behavior of managers.

It is these issues that will be discussed at the conference in the city of Izhevsk "Vision and implementation of Lean on the example of Toyota." It is important that the conference will discuss practical issues of implementing lean manufacturing tools in a modern organization.

Lean is a way of thinking

In lean manufacturing, the attention of top management and the first person in the enterprise is important. If the first person is concerned about the implementation of lean production, the result will be, if not interested, this is a waste of time. Lean is a type of thinking. The experience of implementing lean manufacturing in Russia and in developed countries has one important feature. At Russian enterprises, great importance is given to the tools of lean production, in foreign organizations - the formation of the ideology of lean production, corporate culture of management. Note that lean production tools do not work without ideology. The primary issues are thinking and implementation of rationalization proposals. It is necessary to create a corporate culture that would facilitate the implementation of this system. Corporate culture, in turn, is always based on the behavior of the leader and his team. And actions follow from thoughts, which are important to know about. Therefore, a steam locomotive is the right way of thinking, and then the wagons are already lined up - certain Lean tools.

Rule - 5 whys

As far as the behavior of managers is concerned, in a lean manufacturing system, you will have to reorient yourself to find the cause of problems, and not to punish the employee. It is important to understand why the failure happened, what is the reason for the error? The manager's opinion that everything should be done without a hitch is wrong - in any business, no one is immune from mistakes, and lessons must be learned from them. Errors are an incentive to optimize the process, a way to ensure that it does not happen again, to eliminate it once and for all. Modern leaders in the pursuit of infallibility set themselves simple tasks, this is wrong - tasks should be complex, and mistakes made in solving them are in the order of things.

Lean tools are simple in themselves, but applying them takes effort. Following the philosophy of Toyota, Lean is a science that forces us to put forward a hypothesis, test it, look for confirmation of it. In all areas: safety, quality, costs - the main success factor will be the corporate culture and the behavior of the leader. It's impossible to quickly change his mindset (Toyota has been doing this for over 60 years). But if you show employees a new approach, help them choose a tool, then they will see for themselves all the benefits of such work.

Lean production is based on the 5 C system - a system of putting things in order, cleanliness, strengthening discipline, increasing productivity and creating safe working conditions, with the participation of all personnel. This system allows practically without cost not only to restore order at the enterprise (increase productivity, reduce losses, reduce the level of defects and injuries), but also create the necessary starting conditions for the implementation of complex and expensive production and organizational innovations, ensure their high efficiency due to radical changes consciousness of employees, their attitude to their work.

Lean manufacturing system

The presented definition of the system of lean manufacturing very concisely expresses the essence of this concept. Let's try to uncover some provisions of this definition.

An important principle of the concept of lean manufacturing is continuous improvement and participation in this process of the entire team.

“Creating well-defined customer value” involves understanding what is value to the customer. And here you can not rely on only your own knowledge. Work should be carried out to identify all components of customer value, sometimes directly with the end consumer of the product / service. This is a guarantee that the requirements of the consumer will be satisfied most fully and at the lowest cost (excessive work is excluded).

If a company is engaged in lean manufacturing, it means that it puts the interests of the customer, buyer, client, partner and its own employees at the forefront, and everyone benefits from this. Therefore, the introduction of lean manufacturing is the best business card for presenting the company to partners and customers.

“With less labor, in less space, with less capital and in less time” - in the concept of lean manufacturing, this means the elimination of all types of losses (overproduction, excessive processing, waiting losses, transportation losses, personnel movements, losses due to for defects / alterations, etc.).

The concept of lean manufacturing is based on five principles that guide managers in their transition to lean manufacturing:

Determining the value of each product family from the customer's point of view.
- Identify all stages of the value stream for each product family and eliminate, to the extent possible, activities that do not create value.
- Aligning value-creating operations in a strict sequence that ensures the smooth movement of the product in the flow directed to the client.

At the end of the formation of the flow - the creation of the possibility of "pulling" the value of the clients from the previous stage.

Once value has been identified, value streams identified, waste stages eliminated, and the pull system established—repeating the whole process as many times as necessary to achieve a state of perfection where absolute value is created and no waste occurs.

It is necessary to clarify what is push production and pull production.

Push production is the processing of products in large batches at the maximum speed based on the forecasted demand, with the subsequent movement of products to the next production stage or warehouse, regardless of the actual pace of the next process or the needs of the customer (consumer). Within such a system, it is almost impossible to implement lean manufacturing tools.

Pull production is a method of production management in which subsequent operations signal their needs to previous operations.

The supermarket pull system is the most popular. With it, at each production stage there is a warehouse - a supermarket, in which a certain volume of products manufactured at this stage is stored. At each stage, as many products are produced as were withdrawn from the supermarket. As a rule, when a product is withdrawn from a supermarket by a subsequent process - a consumer, the latter sends up to the previous process information about the withdrawal using a special card (kanban) or otherwise.

Each process is responsible for restocking its supermarket, so the operational management and search for objects of continuous improvement (kaizen) is not a big deal. However, its application is complicated in the presence of a large number of types of products.

It is advisable to use a sequential pulling system with a large range of products produced by one process, i.e. when it is difficult or almost impossible to maintain a stock of each type of product in the supermarket. Products are essentially made-to-order, with total stock in the system kept to a minimum. A consistent system requires maintaining a short and predictable lead time, and a good understanding of the order flow from the customer. The operation of such a system requires very strong leadership.

Mixed pull system - involves a combination of the two listed systems. It is advisable to apply it when the 80/20 rule is in effect, i.e. when a small proportion of product types (approximately 20%) makes up the largest part of the daily output (approximately 80%).

All kinds of products are divided into groups according to output volume: high volume, medium volume, low volume and rare orders. For the "rare orders" group, it is advisable to use a sequential pull system. For other groups - the pull system of the supermarket. With a mixed pull system, it may be more difficult to manage improvement and detect deviations.

The concept of lean manufacturing is aimed at maximizing resource savings in the production process, primarily temporary. The basic principle of this concept is to identify and eliminate processes that do not bring added value or reduce it (for example, processes that lead to excess inventory, waiting processes, processes of excess transportation, processes of excessive processing, processes that create defects, etc.) .

Value stream refers to all the activities, both value-creating and non-value-creating, that allow a product to go through all stages of the process:

1) from concept development to the release of the first product,
2) from order acceptance to delivery. These activities include the processing of information received from the client, as well as operations to transform the product as it moves to the client.

When lean production was widely introduced into management practice, it turned out that it was in dire need of a process description of the business.

Business can be characterized as a set of interrelated and interacting processes. Then, if we carefully describe each process and study the interconnections of processes, then we will understand how any business works and we can use this description for a variety of purposes.

For the practical application of the lean manufacturing system, it is necessary to be able to systematically describe business processes, that is, the most important business processes that bring us money in payment for our products or services.

How to learn to see processes? At the enterprise, first of all, we see machines, apparatus, transport systems, people engaged in their work.

A process is a sequence of actions aimed at obtaining some product and/or service. Moreover, these actions are distributed in time and space. It is rare to see these actions all at once from one point. "So what?" - you say. The processes are running, everything is working. Why document them, describe them, is it not enough to keep everything in your head, as it is now?

First of all, the description of the process speeds up the exchange of information and reduces the risks of making untimely and erroneous decisions and actions.

Processes can be described in words, but words are understood differently. In this regard, the most obvious and accessible is the visualization of business processes using a visual picture of the process.

First of all, we need a description of the process as it currently exists in order to get a starting point for further improvement. Having a current description of the process, we can build an "ideal" process and outline a transition plan to it. And only after that begins the continuous improvement of the process according to the concept of lean manufacturing.

Lean Tools

Total Productive Maintenance (TPM) is one of the Lean manufacturing tools that can be used to reduce the cost of equipment downtime due to breakdowns and excessive maintenance. The main idea of ​​TPM is to involve all the personnel of the enterprise in the process of equipment maintenance, and not just the relevant services. The success of the implementation of TPM, as well as any other tool of lean manufacturing, is related to the extent to which the ideas of the methodology are conveyed to the minds of the staff and are positively perceived by them.

The peculiarity of the TPM methodology is that on its basis a smooth and planned transformation of the existing service system to a more perfect one is possible.

To this end, it is convenient to present the TPM implementation path as a sequence of stages, each of which pursues quite specific goals and, most importantly, gives a very tangible effect:

1. Operational fault repair - an attempt to improve the existing service system and find its weaknesses.
2. Maintenance based on forecasts - organizing the collection of information about equipment problems and their subsequent analysis. Planning preventive maintenance of equipment.
3. Corrective maintenance - improvement of equipment during maintenance in order to eliminate the causes of systematic failures.
4. Autonomous service - the distribution of functions for the maintenance of equipment between operating and maintenance personnel.
5. Continuous improvement is a must for any lean tool. In fact, it means the involvement of personnel in the continuous search for sources of loss of operation and maintenance, as well as the proposal of methods for their elimination.

Visual management is the arrangement of all tools, parts, production stages and information about the performance of the production system so that they are clearly visible, and so that any participant in the process can assess the state of the system at a glance.

Visual management is implemented in several stages:

Stage 1. Workplaces are being organized, this is the stage at which you need to use all the power and capabilities of 5S.
Stage 2. Important information that is located at the workplace is visualized: information about safety, quality, how operations are performed and what and how equipment should be used.
Stage 3. The results and performance indicators of a particular process are visualized.
Stage 4. Decision making based on this visualized information is implemented.

Standard Operating Procedures (SOP) - a document that defines step by step the sequence of any production operation:

Oral instructions are forgotten and distorted, so they must be replaced with written ones - SOP.
- SOPs should not require a lot of time to understand, so they should use visual symbols, drawings, diagrams, photographs, etc.
- SOPs should be kept up to date to reflect changes in the order in which operations are performed.
- When developing the SOP, employees should be involved, this guarantees its reliability and will not cause rejection.

Just in Time (Just-In-Time - JIT) - a method of reducing the time of the production cycle, when materials, services and other resources are provided only when they are needed:

Reducing the batch size to the minimum economically viable (ideally to one unit of production).
- Balancing the number of human resources, the amount of materials and equipment.
- "Pulling" products. The performance of the current operation is determined by the needs of the next one.
- The use of audio-visual means of monitoring the status of the product and the workload of the equipment.
- Delegate the decision-making process for managing the movement of products to the lowest possible level.

Value stream mapping is a fairly simple and visual graphical diagram depicting the material and information flows necessary to provide a product or service to the end consumer. The value stream map makes it possible to immediately see the bottlenecks of the stream and, based on its analysis, identify all unproductive costs and processes, and develop an improvement plan.

Mapping is a visualized description in a certain form of the flow (material, informational) of creating the value of a business process. Mapping is carried out in the conditions of "as is", "as it should be" and "as it will be".

With this tool, a value stream map is created that will clearly identify the time of value creation and the waste that exists in the value stream.

A creation flow map is a tool that can be used to map material and information flows during value creation. Value creation time is considered to be the time to complete the work that transforms the product so that consumers are willing to pay for it. A value stream is all the activities (value-adding and non-value-adding) needed to produce a product.

Unfortunately, practice shows that our losses make up the lion's share of the process, their size reaches 80% - this is the field of activity for the Kaizen system: continuous improvement; a way of striving for excellence through the elimination of losses; proposals for eliminating losses.

Everyone knows that the needs of the consumer are constantly growing, which means that the process of improvement is also continuous, since it is aimed at transforming the needs of the consumer into specific products.

Value stream mapping includes the following steps:

At this stage, a detailed description of the process of creating any one product (or family of products) is created, indicating all the operations and states, the required time, the number of employees, information flows, etc.

The purpose of building a current state map is to identify: actions that create any consumer value, and actions that do not create it.

Of the latter, some may be necessary and cannot be eliminated (for example, accounting), such activities should be optimized as much as possible, others can be reduced or optimized (for example, transportation or warehousing). To do this, the customer's requirements for the quality and properties of the product are clarified.

Characteristics of the product that cannot be changed under any circumstances and characteristics that can be changed by agreement are determined. Only on the basis of such information can one accurately determine where customer value is created and where not.

The future state map reflects the ideal state after all the planned changes have been made. Hidden losses are also identified with a view to their subsequent elimination.

Determination of methods of transition to the future state, assignment of specific tasks, deadlines and persons responsible for implementation.

Built-in quality is a technique for managing the quality of products directly at the place of production.

Basic principles of built-in quality:

1. The ability to stop the conveyor by an employee in the event of a marriage or equipment breakdown (Jidoka).
2. Designing equipment so that deviations are detected and shutdown occurs automatically.
3. Using the production line problem notification system (Andon).
4. Using methods to prevent unintentional operator errors or technology flaws (Poka-Yoke).
5. Standardization of quality control procedures and assignment of control duties to equipment operators.

Examples of Lean Manufacturing

At the enterprises of Tatarstan, on the initiative of the Ministry of Industry and Trade of the Republic, for almost three years, active work has been carried out to introduce the "Lean Production" methodology.

Today, more than 80 enterprises and organizations of various sectors of the economy of the republic have joined the development of the project for the introduction of lean technologies: mechanical engineering, light industry, petrochemistry, energy, agriculture, transport and communications, housing and communal services, healthcare: KAMAZ OJSC, Production Association Elabuga automobile plant", Federal State Unitary Enterprise "Production Association "Plant named after Sergo", OJSC "Kazan Engine-Building Production Association", OJSC "Kazan Aviation Production Association named after S.P. Gorbunov" and others.

The work of an interdepartmental working group contributes to such a wide distribution and application of lean technologies in the production activities of enterprises of various industries.

The effect of the introduction of "Lean production" technologies at the enterprises of the republic, which have been systematically using lean technologies for several years, is especially noticeable.

As part of the implementation of projects to optimize costs and increase labor productivity, KAMAZ freed up 360,000 sq. m. m of space, an economic effect of 16 billion rubles was obtained, the cost of developing the production system amounted to less than 1% of the economic effect.

In the fall of this year, KAMAZ launched the Mayak project - a system for organizing and managing production using Lean Production technologies - a joint project between KAMAZ and Daimler. The implementation of the Mayak project on the main assembly line on only one line will increase the volume of car production up to 48 thousand units per year when working in two shifts.

More than a thousand employees have been trained at ElAZ as part of the implementation of the Lean Production philosophy, 37 internal corporate trainers have been trained. 11 reference sites have been created, about 2 thousand proposals for improvement have been introduced, 180 projects have been implemented. The economic efficiency of resource saving amounted to more than 290 million rubles.

Another example is the Kazan Motor-Building Association. Implementation of "Lean Production" tools at the pilot site of the enterprise made it possible to reduce the number of operations by 2 times, the travel distance - by 22 times, and the production cycle of part processing - by 4 times.

In general, enterprises following the path of implementing the principles and tools of "Lean Production" achieve the following results with minimal investment: increase in labor productivity - up to 70%; quality growth - up to 60%; release of production areas - up to 50%; reduction of marriage - an average of 65%; reduction of terms of implementation of investment projects - up to 20%.

It should be noted that as a result of the introduction of the philosophy of "Lean production", the psychology, mentality of workers, engineering and technical personnel and enterprise managers are changing.

Lean manufacturing concept

The concept of "Lean production" (lean production) appeared almost simultaneously with the "kaizen" system. The ideology of "lean production" is that the company focuses on the most efficient use of resources, with a minimum of marriage, waste, garbage, workspace, and does not do extra work.

The origin of the Lean Production concept is also attributed to the engineer Co. T. Ohno, who visited American factories with his colleagues in the late 1940s and laid the foundations for organizing the production system of Toyota Motor Company.

T. Ono developed a simple set of goals for building a car production system: produce a car according to customer requirements, deliver it immediately, and keep no intermediate stocks. He came to the conclusion that this can only be achieved by ensuring quality at all stages of the production process.

This system became known as the Toyota Production System (TPS), and its principles and methods were later, as it were, re-introduced and popularized in America, but under the name of Lean Production.

At the initial stage of creating TPS, the following tools were used:

1. Rejection of the “push” system that creates unnecessary stocks at all stages of production, regardless of demand, and the transition to a “pull” system of “just in time”.
2. Autonomization - granting the right to workers to stop the conveyor or production to prevent the receipt of a defective part or assembly for a subsequent operation.
3. Decentralization of management - open access to information about the production system, expanding the independence and responsibility of the performers of the work, their participation in decision-making on problems related to the performance of their work.
4. Taking into account the requirements of production in the design of products - modular design and the participation of suppliers in the design of the components they supply.
5. Exclusion of defects, since otherwise, in the absence of backlogs (stocks) of raw materials and semi-finished products, production is impossible.

In traditional mass production, there are mainly eight types of waste, the elimination of which is the goal of Lean Production:

Overproduction - production of a larger volume earlier and faster than is required at the next stage of the process;
surplus stocks - any excess flow of one-subject flow into the production process, whether it be raw materials, intermediate products or;
defective product - products requiring inspection, sorting, disposal, downgrading, replacement or repair;
additional (excessive) processing or movement - additional efforts that, in the opinion of the consumer, do not increase the surplus value (value);
waiting - breaks in work associated with waiting for human resources (labor), materials, equipment and information;
people - incomplete use of the skills and experience, mental and creative abilities of the staff;
Losses in transit - unnecessary movement of parts and materials within the production.

Many authors, in addition, identify additional types of losses, for example, "false savings", which consists in the following actions: the use of cheap and low-quality raw materials and materials; simplification of the design leading to a decrease in quality; downsizing, leading to non-fulfillment of the necessary functions; a variety of structural elements, means and methods of production, when it is possible to standardize and unify them.

The concept of "Lean Manufacturing" comes from the fact that if you constantly keep the focus on reducing waste of all kinds, then there is no limit to the benefits that can be achieved.

In addition to the previously reviewed TRS tools, the system also offers to use:

1. "5S" in order to improve the organization of labor and quality in the workplace by restoring order, maintaining cleanliness and discipline;
2. Continuous improvement "kaizen";
3. Value stream management (VSM);
4. Process mapping - a graphical representation of the process indicating the flow of information, materials, stocks, metrics (standard characteristics) of operations;
5. Error protection system - decision-making based on a multi-level analysis of risks, possible failures and consequences;
6. Reducing the batch size to a minimum;
7. Visual controls - all tools, parts, production activities and indicators are in view, so that every interested and involved person in the process can understand the status of the system at a glance. The means of visual information (cards, maps, diagrams, etc.) are widely used, showing what each operator should do;
8. A well-thought-out plan for the placement of equipment based on their optimal sequence of operations. Close and convenient placement of workpieces and tools;
9. Normalized work. Performing work in accordance with established (standardized) methods, without loss, taking into account the movements of the worker (ergonomics). Standardization and unification are used from the stage of product design and operation;
10. Teamwork, both in doing work and in making improvements;
11. Quality in the process of work. The verification and management of the quality assurance process is carried out by the executing operators, who make sure that the products entering the next stage of the process are of the required quality;
12. A place to store the necessary items. Raw materials, parts, information, tools, work standards and procedures are where they are needed;
13. Production flexibility. The ability to quickly reconfigure equipment and change tools allows you to produce a wider range of products and reduce batch sizes at the same workplace;
14. Pilot project. The bottleneck in production is selected. Using the so-called "Kaizen Blitz" (surprise attack) approach, they make breakthrough improvements and then move the actions to other most important problem areas;
15. Analysis of overall equipment efficiency and losses. Using the Pareto chart, determine the losses, the elimination of which can get the greatest return.

Deployment of Lean Manufacturing includes the following steps:

1. A management decision is made to implement "lean manufacturing". At this stage, the staff needs to explain the reasons for the decision, select goals, form a team, outline a plan and provide the resources necessary for the implementation of "lean production". Top management must constantly demonstrate their interest, participate in daily work and provide support.
2. Selection of the initial object of implementation (pilot project). For this purpose, from 1 to 3 of the most material- and labor-intensive processes are selected, the improvement of which can have a significant effect.
3. Personnel training. All participants in the deployment of "lean production", both management and ordinary executors of the processes, must undergo training. Learning objectives - understanding the goals and the means to achieve them (technologies "just in time", the means used, methods for evaluating processes and products).
4. Mapping the reorganized process "as is".
5. Calculation of characteristics (metrics) of the current process.
6. Mapping the process "as it should be."
7. Calculation of the metrics of the reorganized process, and in case of low efficiency, its additional improvement.
8. Project implementation.
9. Creation and implementation of plans for continuous improvement of the kaizen process.
10. Lean experience gained in the pilot project is being gradually extended to other processes.

The concept of "lean manufacturing" experts consider an integrated set of tools for organizing production, in the general case, defined through the system "just in time" (JIT), total quality management (TQM), total equipment maintenance (TPM) and a set of personnel management methods, including team organization work and involvement of employees in decision-making. At the same time, many experts note that in terms of tasks, content and tools used, it does not fundamentally differ from the "kaizen" system.

Lean Manufacturing Principles

Lean is a Japanese invention inspired by the history of Ford Motors in the 1950s. After seeing how an American assembly plant built cars—and they did it much more efficiently here than at home—two Japanese executives developed the Toyota Production System (TPS). This approach helped transform Toyota from a humble Japanese firm into an international automotive giant. Indeed, at a time when most automakers were suffering from a recession, Toyota recorded a 23.2% increase in net income in the first half of the year compared to the same period last year. It should be noted that this increase in profits occurred against the backdrop of an increase in corporate income by only 8%. "Today, while other companies are struggling to survive, Toyota continues to make money," says Sharma.

After the TPS system was deployed at Toyota, it became clear that many of the potential benefits of the system would remain unrealized if corporate partners were not included in it. Therefore, in the 1970s. Yoshiki Iwata and other enthusiasts of Toyota's new principles founded Shingijutsu, a consulting company dedicated to promoting the principles widely. At Shingijutsu, she worked with Danaher's Jacobs Equipment Company brake plant and helped turn it into the first "Lean" manufacturing facility in the US. As a result, after the opening of the Toyota Supplier Support Center (TSSC) in the US state of Kentucky, the TPS system has become widespread in the United States.

In the years since the invention of the TPS system, the principles of "Lean" have moved beyond the Japanese automotive industry to other industries and territories. Most of the international enterprises located in Asia are already involved in Lean programs. Automotive manufacturers in the US are already embracing Lean principles, but other industries are just beginning to take advantage of the new opportunities.

US manufacturing companies that used other methodologies, such as just in time manufacturing principles, were able to quickly implement and establish lean manufacturing practices in their factories. Industries with low profit margins, such as automotive and manufacturing companies, were among the leaders.

Lean principles are often combined with Six Sigma methodology, which allows you to ensure the impeccable quality and reproducibility of the cycle. This concept was developed in the USA when Bill Smith, a scientist and senior engineer at Motorola (USA), came up with a standardized method for counting defects. The name of the concept uses the letter of the Greek alphabet sigma, which is usually used in statistics to denote standard deviations. Used by companies as diverse as GE, Allied Signal, and Tyco, Six Sigma programs use detailed data analysis to improve all business processes. The ultimate goal of implementing this methodology is to achieve a rejection rate of no higher than 3.4 per million. The combination of Lean and Six Sigma principles helps to ensure sustainable value.

The Ten Principles of Lean Manufacturing:

1. Get support from top management. Before taking any action, enlist the support of decision makers in your company. "If you want to make your business lean, make sure senior management understands what is going to happen," says TBM's Sharma. Emerson's Hamby adds, "There needs to be an approach that involves all levels of the enterprise from top to bottom, not just middle management and executives."
2. Roll up your sleeves. Lean principles can deliver impressive results. But this is not to say that this will be easy to achieve. "Many people are looking for quick fixes to complex problems," says Sharma. "They don't realize that there is some work to be done first."
3. Communicate and learn. "We spent a lot of time communicating before, during and after the event to make sure everyone had a complete understanding," says Pella's Van Zanten. - Communication is essential. When we make progress, we really report it." Adds Stephen of Emerson: "There's a lot to learn. Create an atmosphere of awareness, educate people, and get record results."
4. Don't skimp on education. The principles of "lean" production run counter to many traditions. “Plan a long enough window of time to change the way the company thinks,” advises Parker. “Be sure to achieve the required level of understanding. change in corporate culture. It should be remembered that the implementation of Lean principles does not only change production processes; all aspects of the company's activities are subject to change - from methods for determining the productivity of employees to methods for setting dates for the delivery of finished products to customers.
5. Apply appropriate metrics. Change the way you measure success and failure. "In the old cost accounting system, results were considered very good if the most expensive equipment was running 24/7," notes Parker. "Lean principles won't work," he says, "unless the evaluation criteria are changed." The traditional criteria for success - efficiency and usability - should be replaced by efficiency, lead time, inventory turnaround time and product quality.
6. Help partners. "If you don't expand the scope of Lean beyond your own enterprise, you will cause dissatisfaction with your suppliers," warns Oracle's Modi. "Successful companies have taught Lean principles to their suppliers." In fact, the most successful Lean companies involve their suppliers in product development to improve quality and simplify production. In addition, they are working together to improve communication methods and reduce lead times throughout the supply chain.
7. Think big. As the company shortens production cycles, experiments can be done faster and more painlessly. Therefore, each attempt to improve carries a huge potential and can be implemented without serious consequences, even in case of failure. "In doubtful situations, be bolder," advises Van Zanten. "We set aggressive goals. You can't just take small steps."
8. Change landmarks. "Don't rush to declare victory," Sharma advises. And Pella's Van Zanten likes to reminisce about how, a year after implementing resource-saving practices, the CIO asked him to prepare a report on the results. "Approximately 25%," Van Zanten estimated. A year later, the CIO asked the same question, but this time the answer was 10%. This example shows that Lean is like a new pair of glasses that helps you constantly spot new ways to reduce waste and improve your business. "The more you do, the more opportunities open up for you," adds Prince of Pella Corporation.
9. Believe in success. "Continuous improvement (Kaizen) is our way of life," says Danaher, an industrial conglomerate that has been implementing resource-saving practices since the 1980s. Only constant attention and commitment to new principles will allow the company to achieve benefits. "We found that clients who embraced Lean as a religion had more visible results," says Modi.
10. Get ready for a long journey. Thrift does not stop after the first set of goals is achieved, it is not a limited project with clear start and end dates. Rather, it is a business style that must be constantly supported by management. "There needs to be vigilance on the part of management," Parker says. "There's always a better way to go," adds Robert Azavedo, director of Oracle, who oversees the discrete manufacturing industry in Europe. "The journey never ends."

Lean Manufacturing Efficiency

The LEAN approach allows you to better meet customer needs while using fewer resources, in less space, with less equipment, with less human effort, in less time.

Lean firms can approximately double productivity and speed up production times, halve production space, and halve inventories—at virtually no cost.

Not always, but often there is no need to purchase new expensive equipment, no need to switch to new materials and technologies, no need to computerize production and introduce expensive ERP systems, etc. It is only necessary to change the culture of enterprise management, the system of relationships between different levels and divisions of the enterprise, the system of value orientation of employees and their relationships.

Thus, using the principles of lean manufacturing can have significant effects. Professor O. S. Vikhansky argues that the use of tools and methods of lean production can achieve a significant increase in the efficiency of the enterprise, labor productivity, improve the quality of products and increase competitiveness without significant capital investments.

Waste in Lean Manufacturing

Lean manufacturing distinguishes seven types of waste:

1. Loss of overproduction (surplus production).
2. Losses of transportation (excessive movement of raw materials, products, materials).
3. Loss of waiting (during working hours, production activities are not carried out).
4. Losses due to stocks (excess of raw materials, materials, semi-finished products).
5. Losses due to the production of products with defects (marriages).
6. Waste of redundant processing (processing that does not bring value or adds unnecessary functionality).
7. Losses on unnecessary movements (not directly related to the implementation of production activities).

Most of the working time is spent on losses, and only 1/8 - on creating value and, accordingly, on making a profit.

It is also customary to single out 2 more sources of losses - muri and mura, which mean, respectively, "overload" and "unevenness":

Mura - Uneven work performance, such as a fluctuating work schedule, caused not by fluctuations in end-user demand, but rather by the characteristics of the production system, or an uneven pace of work on an operation, forcing operators to rush first and then wait. In many cases, managers are able to eliminate unevenness by leveling out scheduling and being mindful of the pace of work.
Muri - overload of equipment or operators that occurs when working at a higher speed or pace and with greater effort over a long period of time - compared to the design load (design, labor standards).

Loss of overproduction

One of the most obvious ways to increase profits is to increase the productivity of the enterprise. However, in the pursuit of productivity, top managers often forget that the amount of product that consumers are willing to buy is determined by market demand. Suddenly there comes a moment when the product, which yesterday was so lacking, accumulates in the warehouse.

Overproduction is the production of more goods than the customer needs.

Sources of losses:

Additional storage costs;
excessive use of materials and resources;
violation of delivery schedules;
forced sales discounts.

Ways to improve:

Produce only on time and only what the client wants;
production in small batches;
quick changeovers.

Loss of transportation

Any more or less complex production is a sequence of operations for the transformation of raw materials or semi-finished products into the final product. But between operations, all these materials must be moved. Of course, transportation is an integral part of production, only unfortunately it does not create value at all, although it requires expenses for fuel or electricity, maintenance of the transport fleet, organization of transport infrastructure (roads, garages, flyovers, etc.). In addition, transportation is a waste of time and the risk of product damage.

Sources of losses:

Loss of time for the movement of materials / products until they are delivered to an internal or external consumer;
overproduction of products and their spoilage during storage.

Ways to improve:

Controlling the ways of moving valuables, reducing unnecessary movements due to redevelopment, redistribution of responsibility, elimination of remote stocks;
reduction of distances of physical movement of valuables;
reduction of distances between the operator and the equipment.

Wait Loss

Losses associated with waiting for the start of processing of the material (part, semi-finished product) indicate that the planning process and the production process are not coordinated with each other. The planning process itself is quite complicated, since it requires the analysis of a large number of factors. These factors include: the structure of consumer orders, the state of the raw materials market, equipment productivity, shift schedules, etc. Truly optimal planning requires serious mathematical training and refined interaction between sales, purchasing and production services.

Reasons for waiting:

Different throughput of operations;
planning not for the needs of consumers, but for loading equipment;
stockpiling for high throughput operations.

Ways to improve:

Flexible production planning based on orders;
increasing the capacity of the least productive section;
suspension of the production process in the absence of orders;
flexible schedule for workers and equipment.

Losses due to inventory

Stocks are frozen money, i.e. money withdrawn from circulation and losing its value.

Sources of losses:

Special warehouses for materials and products to ensure on-time deliveries that hide production problems and do not add value to the customer;
materials and semi-finished products paid for by the enterprise, but at the stage of delivery.

Directions for improvement:

Analysis of the demand for products with a long shelf life;
analysis of the timeliness of price changes for illiquid stocks, analysis of claims for illiquid stocks;
balancing production and sales;
analysis of the dynamics of stocks and reduction of stocks of materials and raw materials between operations.

Losses due to defects

The release of products that do not meet the requirements of the consumer entails the obvious costs of raw materials, working time, labor, the cost of processing and disposal of defects.

Sources of losses:

Expenses for verification and control operations;
rework of defective products;
disposal of a marriage that cannot be corrected.

Directions for improvement:

Monitoring the effectiveness and expediency of inspections;
establishing a link between process parameters and quality;
calculation of the economic feasibility of scrap disposal in relation to production stops;
rewarding good work and punishing bad work;
embedding quality control in the production process;
embedding defect prevention systems (Poka-Yoke).

Waste of overprocessing

The consumer is willing to pay only for those properties of the product that are of value to him. If a consumer, for example, expects that the TV case should be black (white, silver, etc.), and you only have green plastic and repaint it in the desired color after manufacturing the case, this is also a waste of unnecessary processing. After all, this takes time, people, equipment, paint, and the case, which really has value for the consumer, has already been made.

Sources of losses:

Bringing the product to the state required by the consumer;
automatic equipment requiring the continuous presence of the operator;
making products better than what customers demand, adding unnecessary features or manufacturing steps that mask defects.

Directions for improvement:

Purchase of raw materials that do not require additional processing;
output of additional processing processes outside the enterprise (outsourcing);
study of the need for product improvements;
achieving stable results rather than improving them.

Losses on extra movements

Extra movements that lead to losses could be called more simply - vanity, thereby emphasizing their unreasonableness and randomness. From the outside, such movements may seem like a hectic activity, but looking closely, you can see that they do not contribute to creating value for the consumer.

Sources of losses:

Unnecessary transitions, movements, settings when doing work;
lack or incorrectness of work performance standards;
lack of labor discipline.

Directions for improvement:

Monitoring compliance of activities with the standard;
development or improvement of performance standards;
identifying and eliminating activities that do not create value;
distribution of responsibility for the result of the work;
training of personnel in correct work (5S);