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Contemporary Issue on Seminar


A Study On

“LEAN MANUFACTURING SYSTEM


IN MANAGEMENT”

In The Partial Fulfillment of


MBA Degree
2007-2009
Rajasthan Technical University, Kota

Submitted By: Submitted To:


Dipti rathore Mrs. Mahima rai

Apex Institute of management


& Science, Jaipur
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Acknowledgement
The beatitude, bliss and euphoria that accompany successful completion of any
task would not be complete without the expression of appreciation of simple
virtues to the people who made it possible. So, with reverence, veneration honor I
acknowledge all those whose guidance and encouragement has made successful in
winding up this.
I take this opportunity to thank Mrs. Mahima Rai for her support and
encouragement which helped me in the completion of this report.
I extend my gratitude and thankfulness to apex institute of management & science.
Last but not the least I’m also grateful to my parents for providing me the
continuous support to motivate me to successfully complete my report.

Date: Submitted By:


Place: Jaipur Dipti Rathore
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Preface

The underlying aim of the seminar on contemporary issue as an integral part of


M.B.A programme is to give presentation by the students on the issue. The topic of
my seminar is ‘LEAN MANUFACTURING SYSTEM IN MANAGEMENT’
contains information about the Iean manufacturing and its management. Lean
manufacturing means optimal way of producing goods through the removal of
wastes. It derived from the philosophy of Toyota Production System. It includes
techniques like Just in time (JIT),Kaizen, 5 S Approach,Six Sigma Approach etc.
These techniques are very useful as they improve quality and eliminate waste
which helps in reducing time and cost of production.

DIPTI RATHORE
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Table of contents
S. No Contents P. No.

1. Introduction of lean manufacturing 5


2. overview 7
3. History 11

4. Types of waste 17

5. Lean implementation 20

6. Lean services 25

7. Techniques of lean manufacturing 26

8. Case study : six sigma at Motorola 36

9. Conclusion 41
10. Bibliography and webliography 42
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INTRODUCTION

Lean manufacturing is a systematic approach for identifying


and eliminating waste in operations through continuous
improvement for doing everything more efficiently, reducing
the cost of operating the system and fulfilling the customers
desire for maximum value at the lowest price. Many
organizations have realized the capability of producing high
quality products more economically even in lower volume
and if half the time and space using just a fraction of the
normal work in processes inventory. For the enterprises keen
to win and retain customer confidence, to realize efficiency
and effectiveness in all business processes and to improve
the chance of making profit consistently , Lean
Manufacturing has proved to be a very reliable “good
management practice”.

WHAT IS LEAN MANUFACTURING ?


Lean manufacturing evolved out of lean thinking, the
antidote to waste . Waste specifically means any activity
which absorbs resources but creates no value and lean
thinking provides a way to specify value, line up value-
creating actions in the best sequence, conduct these
activities with less and less human effort, less equipment,
less time, and less space, while coming closer and closer to
providing customers with exactly what they want
Many organizations in Japan, USA, Germany, India, UK and
other countries have benefited tremendously by translating
their lean thinking into world class organizations. These
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organizations achieved superior quality, higher productivity,


perfect delivery performance, overall customer satisfaction
and enterprise excellence all with lower cost.

The actual scenario may be different, but the overall


approach was based on defining the value, value stream
analysis, getting the value to flow by putting in place a
proper flow system, quest for perfection and people
empowerment with proper change management.
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OVERVIEW

For many, Lean is the set of "tools" that assist in the


identification and steady elimination of waste. As waste is
eliminated quality improved while production time and cost is
reduced. The "tools" consist of value stream mapping, 5-S,
Kan-ban (pull systems), and poka-yoke (error-proofing).

There is a second approach to Lean Manufacturing,


which is promoted by Toyota, in which the focus is upon
improving the "flow" or smoothness of work (thereby steadily
eliminating "unevenness") through the system and not upon
'waste reduction' per se. Techniques to improve flow include,
"pull" production levelling (by means of kanban) . This is a
fundamentally different approach to most improvement
methodologies which may partially account for its lack of
popularity.

The difference between these two approaches is not


the goal but the prime approach to achieving it. The
implementation of smooth flow exposes quality problems
which already existed and thus waste reduction naturally
happens as a consequence. The advantage claimed for this
approach is that it naturally takes a system-wide perspective
whereas a waste focus has this perspective, sometimes
wrongly, assumed. Some Toyota staff have expressed some
surprise at the tool-based approach as they see the tools as
work-arounds made necessary where flow could not be fully
implemented and not as aims in themselves.

Both Lean and TPS can be seen as a loosely connected


set of potentially competing principles whose goal is cost
reduction by the elimination of waste. These principles
include: Pull processing, Perfect first-time quality, Waste
minimization, Continuous improvement, Flexibility, Building
and maintaining a long term relationship with suppliers,
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autonomation, Load leveling and Production flow and Visual


control.

The disconnected nature of some of these principles


perhaps springs from the fact that the TPS has grown
pragmatically since 1948 as it responded to the problems it
saw within its own production facilities. Thus what one sees
today is the result of a 'need' driven learning to improve
where each step has built on previous ideas and not
something based upon a theoretical framework. Toyota's
view is that the main method of Lean is not the tools, but the
reduction of three types of waste: muda "non-value-adding
work", muri "overburden", and mura "unevenness", to
expose problems systematically and to use the tools where
the ideal cannot be achieved. Thus the tools are, in their
view, workarounds adapted to different situations, which
explains any apparent incoherence of the principles above.

The TPS has two pillar concepts: Just-in-Time (JIT) or


"flow", and "autonomation" (smart automation). Adherents
of the Toyota approach would say that the smooth flowing
delivery of value achieves all these improvements as a side-
effect.

If production flows perfectly then there is no inventory, if


customer valued features are the only ones produced then
product design is simplified and effort is only expended on
features the customer values. The other of the two TPS
pillars is the very human aspect of autonomation, whereby
automation is achieved with a human touch. This aims to
give the machines enough intelligence to recognise when
they are working abnormally and flag this for human
attention. Thus humans do not have to monitor normal
production and only have to focus on abnormal, or fault,
conditions. A reduction in human workload that is probably
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much desired by all involved since it removes much routine


and repetitive activity that humans often do not enjoy and
where they are therefore not at their most effective.

Lean implementation is therefore focused on getting the


right things, to the right place, at the right time, in the right
quantity to achieve perfect work flow while minimizing waste
and being flexible and able to change. These concepts of
flexibility and change are principally required to allow
production levelling, using tools like SMED, but have their
analogues in other processes such as research and
development (R&D).

The flexibility and ability to change are not open-


ended, and therefore often not expensive capability
requirements. More importantly, all of these concepts have
to be understood, appreciated, and embraced by the actual
employees who build the products and therefore own the
processes that deliver the value.

The cultural and managerial aspects of Lean are just as,


and possibly more, important than the actual tools or
methodologies of production itself. There are many examples
of Lean tool implementation without sustained benefit and
these are often blamed on weak understanding of Lean in
the organization.

Lean aims to make the work simple enough to


understand, to do and to manage. To achieve these three at
once there is a belief held by some that Toyota's mentoring
process (loosely called Senpai and Kohai), is one of the best
ways to foster Lean Thinking up and down the organizational
structure. This is the process undertaken by Toyota as it
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helps its suppliers to improve their own production. The


closest equivalent to Toyota's mentoring process is the
concept of "Lean Sensei", which encourages companies,
organizations, and teams to seek out outside, third-party
experts, who can provide unbiased advice and coaching.
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HISTORY

1.1PRE 20TH CENTURY


Most of the basic goals of lean manufacturing are
common sense and documented examples can be seen back
to at least Benjamin Franklin. Poor Richard's Almanack says
of wasted time, "He that idly loses 5s. [[[shilling]]s] worth of
time, loses 5s., and might as prudently throw 5s. into the
river." He added that avoiding unnecessary costs could be
more profitable than increasing sales: "A penny saved is two
pence clear. A pin a-day is a groat a-year. Save and have."

Again Franklin's The Way to Wealth says the following


about carrying unnecessary inventory. "You call them goods;
but, if you do not take care, they will prove evils to some of
you. You expect they will be sold cheap, and, perhaps, they
may [be bought] for less than they cost; but, if you have no
occasion for them, they must be dear to you. Remember
what Poor Richard says, 'Buy what thou hast no need of, and
ere long thou shalt sell thy necessaries.' In another place he
says, 'Many have been ruined by buying good penny
worths'." Henry Ford cited Franklin as a major influence on
his own business practices, which included Just-in-time
manufacturing.

The concept of waste being built into jobs and then


taken for granted was noticed by motion efficiency expert
Frank Gilbreth, who saw that masons bent over to pick up
bricks from the ground. The bricklayer was therefore
lowering and raising his entire upper body to get a 5 pound
(2.3 kg) brick but this inefficiency had been built into the job
through long practice. Introduction of a non-stooping
scaffold, which delivered the bricks at waist level, allowed
masons to work about three times as quickly, and with less
effort.
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1.2 20TH CENTURY


Frederick Winslow Taylor, the father of scientific
management, introduced what are now called
standardization and best practice deployment. In his
Principles of Scientific Management, (1911), Taylor said:
"And whenever a workman proposes an improvement, it
should be the policy of the management to make a careful
analysis of the new method, and if necessary conduct a
series of experiments to determine accurately the relative
merit of the new suggestion and of the old standard. And
whenever the new method is found to be markedly superior
to the old, it should be adopted as the standard for the whole
establishment."

Taylor also warned explicitly against cutting piece rates


(or, by implication, cutting wages or discharging workers)
when efficiency improvements reduce the need for raw
labor: "…after a workman has had the price per piece of the
work he is doing lowered two or three times as a result of his
having worked harder and increased his output, he is likely
entirely to lose sight of his employer's side of the case and
become imbued with a grim determination to have no more
cuts if soldiering [marking time, just doing what he is told]
can prevent it."

1.3 FORD STARTS THE BALL ROLLING


Henry Ford continued this focus on waste while developing
his mass assembly manufacturing system. Charles Buxton
Going wrote in 1915:
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Ford's success has startled the country, almost the


world, financially, industrially, mechanically. It exhibits in
higher degree than most persons would have thought
possible the seemingly contradictory requirements of true
efficiency, which are: constant increase of quality, great
increase of pay to the workers, repeated reduction in cost to
the consumer. And with these appears, as at once cause and
effect, an absolutely incredible enlargement of output
reaching something like one hundredfold in less than ten
years, and an enormous profit to the manufacturer.

Ford, in My Life and Work (1922), provided a single-


paragraph description that encompasses the entire concept
of waste:

I believe that the average farmer puts to a really useful


purpose only about 5%. of the energy he expends.... Not
only is everything done by hand, but seldom is a thought
given to a logical arrangement. A farmer doing his chores will
walk up and down a rickety ladder a dozen times. He will
carry water for years instead of putting in a few lengths of
pipe. His whole idea, when there is extra work to do, is to
hire extra men. He thinks of putting money into
improvements as an expense.... It is waste motion— waste
effort— that makes farm prices high and profits low.

Poor arrangement of the workplace—a major focus of


the modern kaizen--and doing a job inefficiently out of habit
—are major forms of waste even in modern workplaces.

Ford also pointed out how easy it was to overlook


material waste. A former employee, Harry Bennett,
wrote:
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One day when Mr. Ford and I were together he spotted


some rust in the slag that ballasted the right of way of the D.
T. & I [railroad]. This slag had been dumped there from our
own furnaces. 'You know,' Mr. Ford said to me, 'there's iron
in that slag. You make the crane crews who put it out there
sort it over, and take it back to the plant.'

In other words, Ford saw the rust and realized that the
steel plant was not recovering all of the iron.

Design for Manufacture (DFM) also is a Ford concept. Ford


said (in My Life and Work)...entirely useless parts [may be]
—a shoe, a dress, a house, a piece of machinery, a railroad,
a steamship, an airplane. As we cut out useless parts and
simplify necessary ones, we also cut down the cost of
making. ... But also it is to be remembered that all the parts
are designed so that they can be most easily made.

The same reference describes just in time


manufacturing very explicitly.

While Ford is renowned for his production line it is often


not recognized how much effort he put into removing the
fitters' work in order to make the production line possible.
Until Ford, a car's components always had to be fitted or
reshaped by a skilled engineer at the point of use, so that
they would connect properly. By enforcing very strict
specification and quality criteria on component manufacture,
he eliminated this work almost entirely, reducing
manufacturing effort by between 60-90%. However, Ford's
mass production system failed to incorporate the notion of
"pull production" and thus often suffered from over-
production.

1.4 TOYOTA DEVELOPS LEAN THINKING


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Toyota's development of ideas that later became Lean


may have started at the turn of the 20th century with
Sakichi Toyoda, in a textile factory with looms that stopped
themselves when a thread broke, this became the seed of
autonomation and Jidoka. Toyota's journey with JIT may
have started back in 1934 when it moved from textiles to
produce its first car. Kiichiro Toyoda, founder of Toyota,
directed the engine casting work and discovered many
problems in their manufacture. He decided he must stop the
repairing of poor quality by intense study of each stage of
the process.

In 1936, when Toyota won its first truck contract with


the Japanese government, his processes hit new problems
and he developed the "Kaizen" improvement teams.

Levels of demand in the Post War economy of Japan


were low and the focus of mass production on lowest cost
per item via economies of scale therefore had little
application. Having visited and seen supermarkets in the
USA, Taiichi Ohno recognized the scheduling of work should
not be driven by sales or production targets but by actual
sales. Given the financial situation during this period over-
production had to be avoided and thus the notion of Pull
(build to order rather than target driven Push) came to
underpin production scheduling.

It was with Taiichi Ohno at Toyota that these themes came


together. He built on the already existing internal schools of
thought and spread their breadth and use into what has now
become the Toyota Production System (TPS). It is principally
from the TPS, but now including many other sources, that
Lean production is developing. Norman Bodek wrote the
following in his foreword to a reprint of Ford's Today and
Tomorrow:

I was first introduced to the concepts of just-in-time


(JIT) and the Toyota production system in 1980.
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Subsequently I had the opportunity to witness its actual


application at Toyota on one of our numerous Japanese
study missions. There I met Mr. Taiichi Ohno, the system's
creator. When bombarded with questions from our group on
what inspired his thinking, he just laughed and said he
learned it all from Henry Ford's book." It is the scale, rigour
and continuous learning aspects of the TPS which have made
it a core of Lean.
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TYPES OF WASTE
While the elimination of waste seem like a simple and
clear subject it is noticeable that waste is often very
conservatively identified. This then hugely reduces the
potential of such an aim. The elimination of waste is the goal
of Lean, and Toyota defined three types of waste: muda,
muri and mura.

To illustrate the state of this thinking Shigeo Shingo


observed that only the last turn of a bolt that tightens it—the
rest is just movement. This ever finer clarification of waste is
key to establishing distinctions between value-adding
activity, waste and non-value-adding work. Non-value
adding work is waste that must be done under the present
work conditions. One key is to measure, or estimate, the size
of these wastes, in order to demonstrate the effect of the
changes achieved and therefore the movement towards the
goal.

The "flow" (or smoothness) based approach aims to


achieve JIT, by removing the variation caused by work
scheduling and thereby provide a driver, rationale or target
and priorities for implementation, using a variety of
techniques. The effort to achieve JIT exposes many quality
problems that are hidden by buffer stocks; by forcing smooth
flow of only value-adding steps, these problems become
visible and must be dealt with explicitly.

Muri is all the unreasonable work that management


imposes on workers and machines because of poor
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organization, such as carrying heavy weights, moving things


around, dangerous tasks, even working significantly faster
than usual. It is pushing a person or a machine beyond its
natural limits. This may simply be asking a greater level of
performance from a process than it can handle without
taking shortcuts and informally modifying decision criteria.
Unreasonable work is almost always a cause of multiple
variations.

To link these three concepts is straightforward.


Firstly, muri focuses on the preparation and planning of the
process, or what work can be avoided proactively by design.
Next, mura then focuses on implementation and the
elimination of fluctuation at the scheduling or operations
level, such as quality and volume. Muda is discovered after
the process is in place and is dealt with reactively. It is seen
through variation in output. It is the role of management to
examine the muda, in the processes and eliminate the
deeper causes by considering the connections to the muri
and mura of the system. The muda and mura inconsistencies
must be fed back to the muri, or planning, stage for the next
project.

Some of the common wastes in manufacturing are:

• Overproduction (production ahead of demand)


• Transportation (moving products that is not actually
required to perform the processing)
• Waiting (waiting for the next production step)
• Inventory (all components, work-in-progress and
finished product not being processed)
• Motion (people or equipment moving or walking more
than is required to perform the processing)
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• Over Processing (due to poor tool or product design


creating activity)
• Defects (the effort involved in inspecting for and fixing
defects)
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LEAN IMPLEMENTATION

PROCESS OF LEAN IMPLEMENTATION

Lean is about more than just cutting costs in the factory.


One crucial insight is that most costs are assigned when a
product is designed. Often an engineer will specify familiar,
safe materials and processes rather than inexpensive,
efficient ones. This reduces project risk, that is, the cost to
the engineer, while increasing financial risks, and decreasing
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profits. Good organizations develop and review checklists to


review product designs.

Companies must often look beyond the shop-floor to


find opportunities for improving overall company cost and
performance. At the system engineering level, requirements
are reviewed with marketing and customer representatives
to eliminate those requirements which are costly. Shared
modules may be developed, such as multipurpose power
supplies or shared mechanical components or fasteners.
Requirements are assigned to the cheapest discipline. For
example, adjustments may be moved into software and
measurements away from a mechanical solution to an
electronic solution. Another approach is to choose connection
or power-transport methods that are cheap or that used
standardized components that become available in a
competitive market.

Lean Leadership

The role of the leaders within the organization is the


fundamental element of sustaining the progress of lean
thinking. Experienced kaizen members at Toyota, for
example, often bring up the concepts of Senpai, Kohai, and
Sensei, because they strongly feel that transferring of Toyota
culture down and across the Toyota can only happen when
more experienced Toyota Sensei continuously coach and
guide the less experienced lean champions. Unfortunately,
most lean practitioners in North America focus on the tools
and methodologies of lean, versus the philosophy and culture
of lean. Some exceptions include Shingijitsu Consulting out
of Japan, which is made up of ex-Toyota managers, and
Lean Sensei International based in North America, which
coaches lean through Toyota-style cultural experience.
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One of the dislocative effects of Lean is in the area of


key performance indicators (KPI). The KPIs by which a
plant/facility are judged will often be driving behaviour,
because the KPIs themselves assume a particular approach
to the work being done. This can be an issue where, for
example a truly Lean, Fixed Repeating Schedule (FRS) and
JIT approach is adopted, because these KPIs will no longer
reflect performance, as the assumptions on which they are
based become invalid. It is a key leadership challenge to
manage the impact of this KPI chaos within the organization.
A set of performance metrics which is considered to fit well in
a Lean environment is Overall Equipment Effectiveness, or
OEE.

Similarly, commonly-used accounting systems


developed to support mass production are no longer
appropriate for companies pursuing Lean. Lean Accounting
provides truly Lean approaches to business management and
financial reporting.

Key focus areas for leaders are

• PDCA thinking
• Genchi Genbutsu "go and see" philosophy
• Process confirmation

Differences from TPS

Whilst Lean is seen by many as a generalization of the


Toyota Production System into other industries and contexts
there are some acknowledged differences that seem to have
developed in implementation.

1. Seeking profit is a relentless focus for Toyota


exemplified by the profit maximization principle (Price –
Cost = Profit) and the need, therefore, to practice
systematic cost reduction (through TPS or otherwise) in
order to realize benefit. Lean implementations can tend
to de-emphasize this key measure and thus become
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fixated with the implementation of improvement


concepts of “flow” or “pull” sometimes destroying some
of the benefit they deliver.

2. Tool orientation is a tendency in many programs to


elevate mere tools (standardized work, value stream
mapping, visual control, etc.) to an unhealthy status
beyond their pragmatic intent. The tools are just
different ways to workaround certain types of problems
but they don’t solve them for you or always highlight
the underlying cause of many types of problems. The
tools employed at Toyota are often used to expose
particular problems that are then dealt with, as each
tool's limitations or blindspots are perhaps better
understood. So, for example, Value Stream Mapping
focuses upon material and information flow problems (a
title built into the Toyota title for this activity) but is not
strong on Metrics, Man or Method. Internally they well
know the limits of the tool and understood that it was
never intended as the best way to see and analyze
every waste or every problem related to quality,
downtime, personnel development, cross training
related issues, capacity bottlenecks, or anything to do
with profits, safety, metrics or morale, etc. No one tool
can do all of that. For surfacing these issues other tools
are much more widely and effectively used.

3. Management technique rather than Change


agents has been a principle in Toyota from the early
1950’s when they started emphasizing the development
of the production manager's and supervisor’s skills set
in guiding natural work teams and did not rely upon
staff level change agents to drive improvements. This
can manifest itself as a "Push" implementation of Lean
rather than "Pull" by the team itself. This area of skills
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development is not that of the change agent specialist,


but that of the natural operations work team leader.
Although less prestigious than the TPS specialists,
development of work team supervisors in Toyota is
considered an equally, if not more important, topic
merely because there are tens of thousands of these
individuals.

4. Specifically, it is these manufacturing leaders that are


the main focus of training efforts in Toyota since they lead
the daily work areas, and they directly and dramatically
affect quality, cost, productivity, safety, and morale of the
team environment. In many companies implementing Lean
the reverse set of priorities is true. Emphasis is put on
developing the specialist, while the supervisor skill level is
expected to somehow develop over time on its own.
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LEAN SERVICES
Lean, as a concept or brand, has captured the
imagination of many in different spheres of activity.
Examples of these from many sectors are listed below.

Lean principles have been successfully applied to call


center services to improve live agent call handling. By
combining Agent-assisted Voice Solutions and Lean's waste
reduction practices, a company reduced handle time,
reduced between agent variability, reduced accent barriers,
and attained near perfect process adherence.

A study conducted on behalf of the Scottish Executive,


by Warwick University, in 2005/06 found that Lean methods
were applicable to the public sector, but that most results
had been achieved using a much more restricted range of
techniques than Lean provides.

The challenge in moving Lean to services is the lack of


widely available reference implementations to allow people
to see how it can work and the impact it does have. This
makes it more difficult to build the level of belief seen as
necessary for strong implementation. It is also the case that
the manufacturing examples of 'techniques' or 'tools' need to
be 'translated' into a service context which has not yet
received the level of work or publicity that would give
starting points for implementors. The upshot of this is that
each implementation often 'feels its way' along as must the
early industrial engineers of Toyota. This places huge
importance upon sponsorship to encourage and protect these
experimental developments.
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TECHNIQUES OF LEAN
MANUFACTURING

TQM
TQM is a combination of quality and management tools
through which management and employees can become
involved in the continuous improvement of the process of
production of goods and services. TQM has been defined as

“ A management philosophy which seeks to integrate all


organizational functions ( marketing, finance, design,
engineering, production, customer service….) to focus on
meeting customer needs and organizational objectives.”

It is a culture in the sense that it tries to change the


values of organization and its employees as well as their
behaviour in multiple areas.

Total :

Every one in an organization should be involved in the


improvement process.

Quality:

The focus of TQM is on the customer of the product or


services. Customer can be both internal and external

Management:

TQM is a system of management, not just a program


that is put in place and then remotely managed.
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GOALS OF TQM:

The primary goal of TQM is total customer satisfaction.


Many organizations are now suggesting that the goal is to
delight and surprise customers to make them so satisfied
that they will become loyal, long term customers.

Second goal of TQM include the ability to “do it right the


first time” that is , to ensure that the product or service is
delivered correctly at the first attempt.

JUST IN TIME
Just-in-time (JIT) is an inventory strategy implemented
to improve the return on investment of a business by
reducing in-process inventory and its associated carrying
costs. The process is driven by a series of signals, which can
be Kanban, that tell production processes when to make the
next part. Kanban are usually 'tickets' but can be simple
visual signals, such as the presence or absence of a part on a
shelf. When implemented correctly, JIT can lead to dramatic
improvements in a manufacturing organization's return on
investment, quality, and efficiency. Some have suggested
that "Just on Time" would be a more appropriate name since
it emphasizes that production should create items that arrive
when needed and neither earlier nor later.

Quick communication of the consumption of old stock


which triggers new stock to be ordered is key to JIT and
inventory reduction. This saves warehouse space and costs.
However since stock levels are determined by historical
demand any sudden demand rises above the historical
average demand, the firm will deplete inventory faster than
usual and cause customer service issues. Some have
suggested that recycling Kanban faster can also help flex the
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system by as much as 10-30%. In recent years


manufacturers have touted a trailing 13 week average as a
better predictor for JIT planning than most forecastors could
provide.

KAIZEN
KAIZEN is Japanese word for improvement. It is a
Japanese philosophy that focuses on continuous
improvement throughout all aspects of life. When applied to
the workplace, Kaizen activities continually improve all
functions of a business from manufacturing to management
and from the CEO to the assembly line workers. By
improving the standardized activities and processes, Kaizen
aims to eliminate waste (see Lean manufacturing). Kaizen
was first implemented in several Japanese businesses during
the country's recovery after World War II, including Toyota,
and has since spread to businesses throughout the world.

5S
5S is a method for organizing a workplace, especially a
shared workplace (like a shop floor or an office space), and
keeping it organized. It's sometimes referred to as a
housekeeping methodology, however this characterization
can be misleading because organizing a workplace goes
beyond housekeeping (see discussion of "Seiton" below).

The key targets of 5S are workplace morale and


efficiency. The assertion of 5S is, by assigning everything a
location, time is not wasted by looking for things.
Additionally, it is quickly obvious when something is missing
from its designated location. 5S advocates believe the
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benefits of this methodology come from deciding what


should be kept, where it should be kept, and how it should
be stored. This decision making process usually comes from
a dialog about standardization which builds a clear
understanding, between employees, of how work should be
done. It also instills ownership of the process in each
employee.

In addition to the above, another key distinction


between 5S and "standardized cleanup" is Seiton. Seiton is
often misunderstood, perhaps due to efforts to translate into
an English word beginning with "S" (such as "sort" or
"straighten"). The key concept here is to order items or
activities in a manner to promote work flow. For example,
tools should be kept at the point of use, workers should not
have to repetitively bend to access materials, flow paths can
be altered to improve efficiency, etc.

The 5S's are:

• Seiri : Sorting. Refers to the practice of going through


all the tools, materials, etc., in the work area and
keeping only essential items. Everything else is stored
or discarded. This leads to fewer hazards and less
clutter to interfere with productive work.

• Seiton : Simplifying. Focuses on the need for an orderly


workplace. "Orderly" in this sense means arranging the
tools and equipment in an order that promotes work
flow. Tools and equipment should be kept where they
will be used, and the process should be ordered in a
manner that eliminates extra motion.

• Seisō : Sweeping, Systematic Cleaning, or Shining.


Indicates the need to keep the workplace clean as well
30

as neat. Cleaning in Japanese companies is a daily


activity. At the end of each shift, the work area is
cleaned up and everything is restored to its place,
making it easy to know what goes where and to know
when everything is where it should be are essential
here. The key point is that maintaining cleanliness
should be part of the daily work - not an occasional
activity initiated when things get too messy.

• Seiketsu : Standardizing. This refers to standardized


work practices. It refers to more than standardized
cleanliness (otherwise this would mean essentially the
same as "systemized cleanliness"). This means
operating in a consistent and standardized fashion.
Everyone knows exactly what his or her responsibilities
are. In part this follows from Seiton where the order of
a workplace should reflect the process of work, these
imply standardized work practice and workstation
layout.

• Shitsuke: Sustaining. Refers to maintaining and


reviewing standards. Once the previous 4S's have been
established they become the new way to operate.
Maintain the focus on this new way of operating, and do
not allow a gradual decline back to the old ways of
operating. However, when an issue arises such as a
suggested improvement or a new way of working, or a
new tool, or a new output requirement then a review of
the first 4S's is appropriate.
31

POKE YOKE OR (FOOL PROOFING)


Often an extremely cost-effective lean manufacturing
tool, using very simple devices to prevent the production of
defective products. There are typically three types: 1.
Contact Type, 2. Constant Number Type, 3. Performance
Sequence Type.

STATISTICAL PROCESS CONTROL (SPC)


In lean manufacturing environments this is considered
to be an extremely effective quality tool, requiring only
periodic measurement of system output variables, and thus
low administrative costs, yet because it is preventive, also
reduces process non-conformance dramatically. SPC is a core
element within the six-sigma toolkit. It involves establishing
the limits of statistical variability for a system output
parameter in steady state conditions (see Machine Capability
Studies). Limits for the variability of the process are
calculated and control limits set, which mean that when not
under steady state conditions and the output variable either
falls below the lower control limit, or climbs above the upper
control limit the process, the process can be halted and
remedial action taken. If the system is "capable", then the
upper and lower control limits will be within the tolerance
required of the system and the remedial action can be taken
before the output variable is out of tolerance.

SIX SIGMA
Six Sigma has grown to become an entire range of
quality tools and techniques in its own right. In environments
like GE, the six sigma approach has broadened to include
such things as programme and project management tools
and rules all of which are complementary to lean
manufacturing. The original concept however that is
32

embodied by SPC and Capability Studies - that is; the need


for ever tighter consistency of process variables.

REDUCING CYCLE TIMES/REDUCING LEAD


TIMES-CELLULAR MANUFACTURING
ARCHITECTURE
Since in many organizations, the sum of machine cycle
times is typically only 5% of the entire lead time for the
manufacturing of that product, (best practice is 50%) the
driver of product lead times is not the speed at which
machines process components. Often the most significant
driver of lead times (and therefore work in progress & cash)
is the number of changes in ownership during a component's
manufacturing route. This is often the case in "process" or
"functional" manufacturing architectures, where similar
processes are grouped together and components travel many
times between groups of processes, changing ownership
throughout. On the other hand, a "Cellular" manufacturing
architecture, can be introduced to minimize changes of
ownership; grouping disparate processes together for
components with similar characteristics. Moving from a
"functional" to a "cellular" manufacturing architecture can
reduce WIP and lead times by at least 50%, and can also
reduce the need for substantial indirect labor (e.g.
expeditors, material handlers, supervisory staff etc).
Typically headcount reductions of between 20-30% are
realizable. See our articles: Cellular Lean Manufacturing
Consultant and Lean Manufacturing Implementation for more
information about cellular manufacturing architectures.
33

KANBAN
Kanban means "sign" in Japanese, and is a visual
reactive re-order point control system. Reactive in the sense
that without intervention it cannot anticipate peaks or
troughs in demand and adjust accordingly, and a re-order
point system because when a minimum inventory level is
reached, a reorder Kanban is launched. A lean manufacturing
consultant can select an optimum design from a number of
variations on the theme; single card Kanbans (move and
make card), dual card Kanbans (move card and make card).
True Kanban however, can be applied to components of any
value, but is most reliable when demand is predictable and
flat. As with any reactive reorder point system Kanban can
be caught out by peaks in demand, and can hold
unnecessary costly work-in-progress if demand drops. As
such, it works best in an environment which is subject to
Level Scheduling. A two-bin system is a variation on the
Kanban theme, used for low value components, where
inventory value is negligible and level scheduling isn't
necessary.

LEVEL SCHEDULING
Ask any lean manufacturing consultant and they'll tell
you that Level Scheduling is a very under-rated technique,
because it is often a major cost driver and is a key pre-
requisite for robust and low WIP Kanban implementations. It
relies heavily upon quick changeovers (SMED) to ensure that
manufacturing processes can make say components A, B & C
in smaller quantities every day of the week, rather than A for
3 days, then B for 2 days and then C for 2 days. This ensures
that demand throughout the manufacturing system for
upstream specialist resources (e.g. a special process for
34

component B) doesn't come in peaks, but is spread evenly.


This enables the number of scarce specialist resources in a
lean manufacturing system to be minimized (e.g. reduced
labour, machines etc), and Kanbans to recirculate more
frequently and for their re-order point levels to be dropped
(reducing WIP). It is a key means of driving out variability in
a lean manufacturing environment.

MIXED MODE MANUFACTURE


Involves the development of tooling which rather than
performing an operation on multiples of one type of
component (e.g. an eight cavity plastic injection moulding
tool for salt shaker lids and another for pepper shaker lids)
can be replaced by an eight cavity tool split into four cavities
for salt shakers and four cavities for pepper shakers. This
eliminates changeovers and ensures that production
schedules can be "levelled".

BOTTLENECK PROCESS MANAGEMENT


Unfortunately bottlenecks move depending upon mix, but
because they govern the output from the entire system, if
capacity is stretched multi-shift them, work them through
breaks, minimize changeover times and minimize downtime
using Total Productive Maintenance techniques etc.

TOTAL PRODUCTIVE MAINTENANCE (TPM)


Another lean manufacturing tool, which is focused on
the objective of zero breakdowns. Significant emphasis is on
35

first line preventive maintenance by operators, which is then


supported by a regime of preventive maintenance provided
by specialists. In order to make planned or preventive
maintenance work successfully, it is often necessary to
separate it organizationally from breakdown maintenance.

SIMULATION
There are two types of manufacturing system
simulation: computer and manual. Whilst real-time computer
graphics are great fun to watch, but lean manufacturing
specialists find the greatest value is achieved when manual
simulations are played by operators (like a board game) to
test the robustness of a manufacturing system design and in
particular to design Kanban systems. This approach enables
operators to "buy-in" to the design of the manufacturing
system.

Benefits of lean manufacturing

• Productivity improvement
• Total Manufacturing time saved
• Less equipment utilization (machine time, wear and
tear)
• Less scrap - material cost saved
• Low inventory levels – stock holding cost saved
• Quality improvement
• Plant space saved – more efficient layout
• Better labor utilization
• Safety of operations
36

CASE STUDY
SIX SIGMA AT MOTOROLA
“In 1986, Motorola invented Six Sigma, a quality and
business improvement methodology that is
revolutionizing industry.Two decades and two Malcolm
Baldridge Quality Awards later, Motorola is still finding
new ways to reinvent itself using this techniques.”
-Dan Tegel,Global Director, Digital Six Sigma
Business Improvement, Motorola.

INTRODUCTION

In 2002, the US –based Motorola Inc. achieved the unique


distinction of receiving the Malcolm Baldrige National Quality
Award for the second time.Motorola became the only
company in the world to have received this award twice,
having won it earlier in 1988.For Motorola, quality
improvement leading to total customer satisfaction is the
key.In 1981, the company launched an ambitious and
innovative quality drive for a ten-fold improvement in the
quality of its products and services, after the company lost
business to its Japanese competitors.Motorola’s Six Sigma
quality target aimed at achieving not more than 3.4 defects
per million producyts.Between 1986 and 1988 alone,
Motorola rweceived 50 quality awards.Motorola Senior
Corporate, Vice President and Quality Director,said “ Six
Sigma is not a product you can buy. It’s a
commitment.”

THE SIX SIGMA INITIATIVE AT MOTOROLA

The term ‘Six Sigma’ comes from the field of Statistics.Six


Sigma is a measurement standard in product
variation.Looking at the initiation of Six Sigma ; the US
37

economy was experiencing a downtrend in the 1980s.As a


technology-based company, Motorola faced several
problems.Most worrying of all, the company started
receiving an increasing number of complaints about warranty
claims for defective products.Motorola was strongly criticized
by the US media when it sold its TV division, Quasar,to
Matsushita, a Japanese consumer electronic company.Under
Japanese management, the factory began to produce TV sets
with 1\20th number of defects that were made under
Motorola’s management.
Later, when Motorola executives toured the Quasar factory,
they were surprised to observe these changes.They focused
on preventing errors at the source, there by dramatically
reducing the defects and costs for rectifying them.This
correlation between cost and quality-that the best quality
resulted in lowest cost, surprised Motorola
executives.Eventually, Motorola realized that its quality
standards were very poor compared to its Japanese peers.

Smith and Dr. Mikel Harry, a senior staff engineering at


Motorola’s Government Electronics Group(GEG),developed a
four-stage problem-solving-approach-
Measure,Analyse,Improve and control (MAIC).Later, the
MAIC discipline became the road map for achieving Six
Sigma quality standards.

FOUR STAGE PROBLEM SOLVING APPROACH-MAIC

 MEASURE PHASE : Measure the existing systems.

 ANALYZE PHASE : Analyze the system to identify ways


to eliminate the gap between the current performance
and the desired goal.

 IMPROVE PHASE : In this phase, project teams seek


the optimal solution and develop and test a plan of
action for implementing and conforming the solution.
38

 CONTROL PHASE : Control the new systems.

THE IMPLEMENTATION

On January 15,1987,Galvin launched a long-term quality


program, called “ The Six Sigma Quality Program,” with the
goal of achieving not more 3.4 defective parts per million.He
said, “There is only one ultimate goal: zero defects in
everything we do.”
Motorola followed a six step program to achieve Six Sigma
standards :

1. Identify the product you create or the service that you


provide.[What do you do?]
2. Identify the customers(s) for your product or services,
and determine what they consider important.[Who uses
your product and services and why?]
3. Identify your needs (to provide a product/service that
satisfies the customer).[What do you need to do in your
work?]
4. Define the process for doing the work.[How do you do
your work?]
5. Mistake-proof the process and eliminate wasted effort.
[How can you do your work better?]
6. Ensure continuous improvement by measuring,
analyzing and controlling the improved process.[How
perfectly are you doing your customer-focused work?]

Other measures for implementing Six Sigma are :


1. All departments of Motorola were taught ‘benchmarking’
techniques to analyze competitor’s products and assess
their manufacturing process, reliability, manufacturing
cost and performance.Then, the employees were asked to
exceed the competitor’s standards.
2. Motorola managers carried with them printed cards
bearing the corporate objective ‘total customer
satisfaction’
39

3. Corporate executives and business managers carried


pagers to make themselves available to customers all the
time.
4. They regularly visited customers to find out their likes
and dislikes regarding Motorola’s products and services.
5. Based on feedback, along with the information collected
through extensive customers surveys, complaint hotlines
and field appraisals, new action plans designed for
improvement.

However, by 1992, Motorola aimed to achieve the


overall quality level of 5.4 defects per million, a
little less than Six Sigma.

EMPLOYEES TRAINING IN SIX SIGMA TOOLS

Training the employees in statistical tools of quality


control was the most important part of Six Sigma
implementation at Motorola. Six Sigma training program
was designated with Karate-related titles :

a) GREEN BELTS:
• This was the basic level training program.
• performing These candidates were employees at all
levels who served as high- team members.
• Their role was to assist the black belts in more
effective and quick completion of the projects.
• Green belt training took only six days.

b) BLACK BELTS :
• The black belt holders were technically oriented
employees, responsible for defining the
organizational goals and looking after change
management.
• They were expected to master a wide variety of
technical tools in a relatively short period of time.

c) MASTER BLACK BELT :


40

• This was the highest level of technical proficiency.


• The master provided technical leadership of the Six
Sigma program.
• These were individuals who had a few years of
experience as black belt.
• They received additional training in advanced
statistical tools, business skills and team\leadership
skills.

d) CHAMPIONS :
• Champions were high-level individuals like Vice
Presidents who had a high level of accountability and
responsibility for the implementation of Six Sigma
projects.

e) LEADERSHIP :
• The leadership program was intended for the top-
most personnel like the CEO.
• The training program was conducted for two days.

THE BENEFITS

After implementing Six Sigma, Motorola reaped the following


benefits between 1987 and 1994 :

• Reduced in- process defect levels by a factor of 200.


• Reduced manufacturing costs by $ 1.4 bn.
• Increased employee production on a dollar basis by
126%.
• Four-fold increase in stockholders share value.

CONCLUSION
41

Upper management at the time generally thought


increasing quality meant increasing cost.The use of
Six Sigma proved the opposite was true.One of
Motorola’s most significant contributions was to
change the discussion of quality from the one where
quality levels were measured in percentages(parts
per hundred) to a discussion of parts per
million.During inspiration from Motorola, many
other corporates across the world began to adopt
the Six Sigma methodology and the concept began
to be loosely described as “ The Second Industrial
Revolution.”
42

BIBLIOGRAPHY WEBLIOGRAPHY

Bibliography:
1. Production planning and inventory control
-By Seetharama L. Narasimhan Dennis W. Mc
Leavey Peter T. Billington
2. Icfai journal of operations management Vol 6 No. 2
3. Production and Operations Management
-By Dr. Ranjit Singh B. K Sharma

Webliography:
1. “ Malcolm Bridge National Quality Awards 1988 Winner
Motorola Inc.” www.quality.nist.govt,1988
2. www.1000ventures.com
3. www.hrqmc.com