ABV-Indian Institute of Information Technology and Management, Gwalior, M.

Operation Management
Presentation Document: Lean Management
April 22, 2013

Submitted By: Neha Hemraj (2009_IPG_37) Sakshi Sharma (2009_IPG_37) Deepesh Singh (2009_IPG_14)

Submitted To: Dr. P. Acharya

What is Lean Manufacturing? According to the definitions gathered, the term Lean Manufacturing could be coined in two types of description. It was understood that Lean Manufacturing, also called Lean Production, is a set of tools and methodologies that aims for the continuous elimination of all waste in the production process. The main benefits of this are lower production costs; increased output and shorter production lead times. Lean Manufacturing can be considered as a systematic approach to identifying and eliminating waste and NVA (non-value added activity) through continuous improvement and the flow of the product at the pull of the customer in pursuit of perfection.

History of Lean Manufacturing Henry Ford was the first person to truly integrate an entire production process. In 1913, he integrated consistently interchangeable parts with standard work and moving conveyance to create what he called flow production. Ford lined up fabrication steps in process order wherever possible. This was a revolutionary break from shop practices of the American system that usually consisted of general-purpose machines grouped by process. Fords problem is that he could not provide the variety needed. Japanese engineers at Toyota reviewed Fords concepts, and felt that a series of simple solutions might make it possible to provide consistency in process flow in a variety of products. As a result they invented the Toyota Production System. This system shifted the focus to the flow of the product through the entire process. Toyota adjusted their production capabilities to the actual volume needed, introduced self-monitoring machines to ensure quality, lined up the machines in process sequence, and pioneered quick changeovers, so that each machine could make small volumes of many parts, and having each step sequence notify the previous step of its current needs for materials (a pull system). This allowed Toyota to obtain low cost, high variety, high quality, and rapid throughput times to meet customer needs. The though process of lean is described in 1990 in the book The Machine That Changed the World, by James P. Womack and Daniel T. Jones. In a later book, Lean Thinking, in 1996, Womack and Jones stressed five principles in lean:

Specify the value required by the customer. Identify the Value Stream for each product. Make the product flow continuously through the remaining value-added steps.

Introduce a pull system where possible

Manage towards perfection, so that the number of steps and the amount of time and information needed to serve the customer is continually reduced. The term "lean" is used because Japanese business methods used less human effort, capital investment, floor space, materials, and time in all aspects of operations. The resulting competition among U.S. and Japanese automakers over the last 25 years has led to the adoption of these principles within all U.S. manufacturing businesses.

Literature Review

L. N. Pattanaik & B. P. Sharma, "Implementing lean manufacturing with cellular layout: A Case Study", International Journal of Advance Manufacturing Technology (2009) 42:772-779 An applied methodology of scientific, objective techniques to minimize the non-value adding activities. 36% of US based manufacturing companies (2009) Core concept : Pull Production Driven by demand : Downstream to upstream Machines are grouped Max. Cell independence Reduces Material Handling, WIP Time, Wafting Time, Bottlenecks

Cellular Manufacturing System (CMS)

A case study on implementing a cellular production layout for a series of intermediate production processes at Franklin Corp., a US manufacturer of upholstered furniture, reported a 36% increase in labor productivity as a result of implementing a lean manufacturing system.

7 types of Wastes

1. Defects work performed incorrectly that must ultimately be accurate in order to create value 2. Work In Process build-ups of queues and transactions which have not been completed to the customers specifications. Partially completed work consumes resources, but the customer is not willing to pay for it 3. Overproduction doing activities earlier than necessary. Typically leads to accumulated work in process 4. Waiting people and transactions idled due to work imbalances, defects or other root causes

5. Motion unnecessary human movement required to complete a transaction or customer request 6. Transportation movement, either physically or electronically, of a customer transaction which consumes resources and costs, but is not required to satisfy the customer 7. Over-processing excess activity or steps that do not add value to the service or product for the end customer

Key Principles of Lean Manufacturing

1. Recognition of waste 2. Standard Processes 3. Continuous Flow 4. Pull Production 5. Quality at the Source 6. Continuous Improvement Latech, US Manufacturing Company after implementing LM Model (Compare to Batch Based Production) 1. Manufacturing space per machine was reduced by 45%; 2. Defects were reduced by 90% 3. Production cycle time was reduced from 16 weeks to 14 hours - 5 days; and 4. Product delivery lead time was reduced from 4-20 weeks to 1-4 weeks. Key Implications of Lean Manufacturing

Case 1 In the years of reconstruction following the Second World War, Toyota based in Japan faced a major problem. How to rebuild a shattered manufacturing base without recourse to either the huge market or the economies of scale available to Western (specifically US) companies, and in the face of severe credit restrictions imposed by the occupying forces? Taiichi Ohno, the companys Assembly Shop Manager, took in hand the task of redesigning production. Ohno redefined production Toyota Production System clearly focusing on getting the best out of limited investment. 1. Build only what is needed 2. Eliminate anything which does not add value 3. Stop if something goes wrong 4. 1970s saw them overturn the dominance of the local industrial giants Ford and GM. More significantly Toyota and other large Japanese companies expanded in the 1980s to set up new manufacturing centers in Europe and the Americas. The design and development of a new product takes 12 months for Toyota while the primary American and European competitors need 2-3 years to develop a new model. Case 2 Poli-film America Inc.- a division of a German owned company manufactures protective masking to prevents abrasion and staining of exposed surfaces during manufacturing and delivery. Problem was an enterprise resource planning system that encompassed an unstable database leading to loopholes in inventory management resulting in inefficiency and resource wastage. 1. Chose a new program to implement in later 2003 aiming on lean manufacturing principles 2. Greatest impact on companys inventory flow and order distribution 3. Real time traceability allowed to cut down on the 2 mil lbs. of film and other materials by more than half and maintain a sufficient safety stock for when it is time to reorder and restock 4. Time and money has seen dramatic cuts 5. Instead of 20 min to fill an order, takes less than 5 min currently 6. Allowed company to expand for more regional coverage 7. Been simplified for reports 8. Reduce time taken to accomplish certain tasks and add more responsibilities

Methods of Practicing Lean Manufacturing 1. Five Ss Model Set of rules to organize each workers work area for maximum efficiency. a. Sort i. Frequency of usage ii. Sorting what is needed or what is not. Reduce time. b. Set in order i. Arrange essential things in order for easy access. ii. Reduce Motion c. Scrub (Shine) i. Keep machines and work areas clean ii. Remove Dust through painting d. Stabilize (Standardize) i. Implement clear procedures for sorting, straightening and scrubbing. e. Sustain i. Promote, communicate and train

2. Total Productivity Maintenance

a. Includes basic preventative maintenance work b. inspection, Cleaning, Tightening and Lubricating c. Responsibilities given to workers i. To Identify, monitor and correct the cause of problem ii. Training for higher value added or complicated machines d. Reduce Machine downtime e. Increase Machine output or lifetime

3. Cellular Manufacturing a. Production work stations and equipment are arranged in a product-aligned sequence. b. Increased production velocity and flexibility

c. Aims to move products through the manufacturing process one-piece at a time, at a rate determined by customer demand (the pull). 4. Just-In-Time a. Leverages the cellular manufacturing layout to reduce significantly inventory and work-inprocess (WIP). b. Enables a company to produce the products its customers want, when they want them, in the amount they want c. Relies on the use of physical inventory control cues.

References
1. Mekong Capitals Introduction to Lean Manufacturing, June 4, 2004. 2. Peter Hines & David Taylor: Going Lean. Lean Enterprise Research Centre, January 2000.