Lean Manufacturing Dr Chander Arora Main Goals of

Lean Manufacturing Dr. Chander Arora

Main Goals of a Manufacturing Company �Creation of ◦ VALUE for the Customer ◦ WEALTH for the Organization Dr. Arora

Continuous Enhancement of GLOBAL COMPETIVENESS Dr. Arora

What is lean? �Lean manufacturing was developed by the Japanese automotive industry, ◦ with a lead from Toyota and utilising the Toyota Production System (TPS), ◦ following the challenge to re-build the Japanese economy after World War II. �The concept of lean thinking was introduced to the Western world in 1991 ◦ By the book “The Machine That Changed the World” written by Womack, Jones, and Roos. Dr. Arora

What is Lean �It is NOT: • Collection of techniques or a methodology • Reduced staffing or low inventories �It IS: • A philosophy of manufacturing • Totally different way of thinking • A different value system • Seeks to eliminate waste (non-value added activities to the customer) • Emphasis on flow manufacturing Dr. Arora

Lean Characteristics � Focus is on the improvement of resource utilization: ― Equipment setup time reduced ― Scheduled machine maintenance ― Orderly, clean workplace ― Pull production being used ― Inventory control ― Factory layout in work cell arrangement by products ― Active error elimination ― Improved quality, etc. Dr. Arora

The Importance of Waste Elimination �Lean deals with the elimination or reduction of many types of non-value-added activities, often referred to as waste - The driving force for waste elimination is: • Improved value in the products and services that customers buy Dr. Arora

5 Principles of Lean �Value - specify what creates value from the customer’s perspective. �The value stream – identify all the steps along the process chain. �Flow - make the value process flow. �Pull - make only what is needed by the customer (short term response to the customer’s rate of demand). �Perfection - strive for perfection by continually attempting to produce exactly what the customer wants. Dr. Arora

1. Value § Any process that the customer would be prepared to pay for that adds value to the product. ◦ The customer defines the value of product in a lean supply chain. ◦ Value-adding activities transform the product closer to what the customer actually wants. ◦ An activity that does not add value is considered to be waste. ◦ Providing the wrong good or service the right way is muda Dr. Arora

2. The Value Stream �The value stream is the sequence of processes from raw material to the customer that create value. �The value stream can include the complete supply chain. �Value stream mapping is an integral aspect of Lean. Dr. Arora

The Value Stream, cont. • “The Value Stream is those set of tasks and activities required to design and make a family of products or services that are undertaken with a group of linked functions or companies from the point of customer specification right back to the raw material source. ” (Hines et al, 2000) Dr. Arora

Value Stream Costing Dr. Arora

Value Stream Costingf Dr. Arora

3. Flow �Using one piece flow by linking of all the activities and processes into the most efficient combinations to maximize valueadded content while minimizing waste. �The waiting time of work in progress between processes is eliminated, hence adding value more quickly.

Push • Build product to forecast • Excess inventory • Poor utilization & distribution of product • Filled distribution channels Example: • 50% of all books manufactured are shredded Dr. Arora

�Pull 4. Pull = response to the customer’s rate of demand i. e. the actual customer demand that drives the supply chain. �Based on a supply chain view from downstream to upstream activities where nothing is produced by the upstream supplier until the downstream customer signals a need. �No one upstream should produce any goods or service until the customer downstream asks for it ◦ Kanban Dr. Arora

5. Perfection �The journey of continuous improvement to remove waste by eliminating effort, time, space and defects �Begins with visualizing the “perfect” process �Producing exactly what the customer wants, exactly when, economically. Perfection is an aspiration, anything and everything can be improved. Dr. Arora

Muda � Muda means “waste” � Any human activity which absorbs resources but creates no value � Mistakes which require rectification � Production of items no one wants so inventories and remaindered goods pile up � Processing steps which aren’t actually needed � Movement of employees and transport of goods from one place to another without any purpose � Groups of people in a downstream activity standing around waiting because an upstream activity has not delivered on time � Goods and services which don’t meet the needs of the customer Dr. Arora

Seven Popular Wastes MUDA �Overproduction �Waiting �Excessive transportation �Inappropriate processing hidden factory) �Unnecessary inventories �Unnecessary motion �Defects Dr. Arora (the

Waste Often Hides in Plain View �We cannot eliminate the waste of material, labor, or other resources until we recognize it as waste. ◦ A job can consist of 75 percent waste (or even more). �Classic example: brick laying in the late 19 th century Dr. Arora

Waste is Often Built Into Jobs Dr. Arora

BRICK LAYING - ALTERNATIVE The solution is obvious (in retrospect), but first we have to know that we have a problem! Dr. Arora

Waste in Operations �Overproduction ◦ Producing items we cannot immediately use or sell �Waiting ◦ For parts, machines and downstream operations �Transporting ◦ Moving items nedlessly Dr. Arora

Waste in Production cont. �Processing ◦ Unnecessary steps that do not add value �Inventory ◦ Storing, retrieving, counting, insuring, taking up space and money �Movement ◦ Searching for tools, parts, instruction, approval �Defects ◦ Rework and scrap �Talent �Underutilization and skills or worker knowledge Dr. Arora

7 Service Related Wastes � Delay – customers waiting for service. � Duplication – having to re-enter data, repeat details etc. � Unnecessary movement - poor ergonomics in the service encounter. � Unclear communication – having to seek clarification, confusion over use of product/service. � Incorrect inventory – out of stock. � Opportunity lost – to retain or win customers. � Errors – in the transaction, lost/damaged goods. Source – John Bicheno, Lean Toolbox (2003) Dr. Arora

The 5 S’s �Simple but effective methods to organise the workplace. �The methodology does however, go beyond this simple concept, and is concerned with making orderly and standardized operations the norm, rather than the exception. �Posters bearing the 5 S terms can be found on the walls of Japanese plants, and are a visual aid to organisational management. Dr. Arora

The Japanese Origin �Seiri Sort �This requires the classifying of items into two categories: � necessary � unnecessary and disregarding or removing the latter. "When in doubt, throw it out. " Dr. Arora

The Japanese Origin - Straighten �Seiton Straighten �Once Seiri has been carried out, Seiton is implemented to classify by �Use or arrange items to minimize � search time and effort. �The items left should have a designated area � with specified maximum levels of inventory for that area. "A place for everything and everything in its place. " Dr. Arora

The Japanese Origin - Shine �Seison means cleaning the working environment. �It can help in the spotting of potential problems as well as reducing the risk of fire/injury � by cleaning away the potential causes of accidents. Cleaning (Neatness) Dr. Arora

The Japanese Origin - Systematise �Seiketsu means keeping one's person clean, by such means as: �wearing proper working clothes, safety glasses, gloves and shoes, as well as maintaining a clean healthy working environment. �It can also be viewed as the continuation of the work carried out in Seiri, Seiton, and Seison. Discipline Dr. Arora

The Japanese Origin - Sustain �Shitsuke Sustain ◦ Shitsuke means self-discipline. �The 5 S‘s may be viewed as a philosophy, with employees following established and agreed upon rules at each step. �By the time employees arrive at Shitsuke they will have developed the discipline to follow the 5 S‘s in their daily work. Ongoing improvement hold the gains Dr. Arora

Can you think of other actions to eliminate waste in your company? Dr. Arora

Leadership Function �Initiate needed change by identifying a vision �Aligning employees to that vision �Motivating to achieve that vision �I AM ◦ Initiate ◦ Align ◦ Motivate Dr. Arora

Transparent Workplace – 5 S’s �Sort: Classify tools, parts, instructions into necessary & unnecessary �Set in Order: Make it visible & easy to use; 3 Es = easy to see, easy to get & easy to return �Shine: Conduct cleanup to identify abnormalities �Standardize: Put a system in place to readily identify abnormal conditions �Sustain: Make a habit of properly maintaining & following standard practices Dr. Arora

Benefits of Lean Manufacturing • Lean manufacturing delivers an insurmountable competitive advantage over competitors who don't use it effectively.

Benefits of Lean Production �Reduced inventory �Improved quality �Lower costs �Reduced space requirements �Shorter lead time �Increased productivity Dr. Arora

Benefits of Lean Production (cont. ) �Greater flexibility �Better relations with suppliers �Simplified scheduling and control activities �Increased capacity �Better use of human resources �More product variety Dr. Arora