Chapter 13 - Lean Production

World Class
Manufacturing
Lean Production System
World Class Manufacturing (WCM)

After completing this chapter you will understand

Meaning of Lean production
Principle of lean production
Key lean production technique. +
Lean Production system
Implementation stages
Advantages and disadvantages
03/07/2014
Mr Hemkant Deshpande

Introduction
Lean manufacturing, lean enterprise, or lean production, often simply,
"lean", is a production practice that considers the expenditure of resources
for any goal other than the creation of value for the end customer to be
wasteful, and thus a target for elimination.
Working from the perspective of the customer who consumes a product or
service, "value" is defined as any action or process that a customer would
be willing to pay for.
Essentially, lean is cantered on preserving value with less work.
Lean manufacturing is a management philosophy derived mostly from
the Toyota Production System (TPS) and identified as "lean" only in the
1990s.
The core idea is to maximize customer value while minimizing waste.
Simply, lean means creating more value for customers with fewer
resources.
A lean organization understands customer value and focuses its key

processes to continuously increase it.
03/07/2014

The ultimate goal is to provide perfect value to the customer through a

perfect value creation process that has zero waste.
To accomplish this, lean thinking changes the focus of management from
optimizing separate technologies, assets, and vertical departments to
optimizing the flow of products and services through entire value streams
that flow horizontally across technologies, assets, and departments to
customers.
Eliminating waste along entire value streams, instead of at isolated points,
creates processes that need less human effort, less space, less capital, and
less time to make products and services at far less costs and with much
fewer defects, compared with traditional business systems.
This system is not only used in auto industry but also in other nonauto industries involved in assembling process.
03/07/2014

Overview:
Lean Manufacturing is sometimes called the Toyota Production System (TPS)
because Toyota Motor Companys Eiji Toyoda and Taiichui Ohno are given
credit for its approach and innovations.
Lean principles are derived from the Japanese manufacturing industry. The
term was first coined by John Krafcik in his 1988 article, "Triumph of the Lean
Production System," based on his master's thesis at the MIT Sloan School of
Management.
Krafcik had been a quality engineer in the Toyota-GM NUMMI joint venture in
California before coming to MIT for MBA studies. Krafcik's research was
continued by the International Motor Vehicle Program (IMVP) at MIT
03/07/2014

7 QC Tools
Better Awareness of the Best (Them)

1) What they are doing
2) How they are doing it.
How well they are doing it.
1) Benchmarking is a more efficient way to make improvements.

2) Managers can eliminate trials and errors.
3) Benchmarking speeds up organizations ability to make improvements.
4) Benchmarking has the ability to bring your performance up as a whole
significantly.
5) Learn from others experiences
6) Set realistic but ambitious targets.
03/07/2014

For many, lean is the set of "tools" that assist in the identification and steady
elimination of waste (muda). As waste is eliminated quality improves while
production time and cost are reduced.
A non exhaustive list of such tools would include: SMED, Value Stream
Mapping, Five S, Kanban (pull systems), poka-yoke (error-proofing), Total
Productive Maintenance, elimination of time batching, mixed model
processing, Rank Order Clustering, single point scheduling, redesigning
working cells, multi-process handling and control charts (for checking mura).
There is a second approach to lean Manufacturing, which is promoted by
Toyota, called The Toyota Way, in which the focus is upon improving the
"flow" or smoothness of work, thereby steadily
eliminating mura ("unevenness") through the system and not upon 'waste
reduction' per se.
Techniques to improve flow include production levelling, "pull" production (by
means of kanban). This is a fundamentally different approach from most
improvement methodologies, which may partially account for its lack of
popularity.
03/07/2014

The difference between these two approaches is not the goal itself, but rather
the prime approach to achieving it. The implementation of smooth flow
exposes quality problems that 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 sometimes wrongly assumes this perspective.
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, Autorotation, Load levelling and
Production flow and Visual control. 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.
03/07/2014

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. From
this perspective, the tools are workarounds adapted to different situations,
which explains any apparent incoherence of the principles above.
Purpose of Lean
The purpose of lean is to remove all forms of waste from the value stream.
Waste includes cycle time, labor, materials, and energy.
The chief obstacle is the fact that waste often hides in plain sight, or is built
Into activities.
03/07/2014

Concept:
At the base, we have operational stability, which means creating consistency

in methods and tasks, equipment, workplace organization, and output of
..
work.
There are two pillars that we speak of as well. Just-In-Time means providing
the next downstream customer with what they need when they need it and in
the right quantity.
Built in Quality or Quality at the Source, the second pillar, essentially means
never knowingly passing defective product or information to the next
downstream customer.
These concepts, combined with respect for people and a culture of
continuous improvement, lead to the best quality, lowest cost, and shortestlead-time products and services.
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10

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11

If production flows perfectly (meaning it is both "pull" and with no

interruptions) 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
autorotation, whereby automation is achieved with a human touch. In
this instance, the "human touch" means to automate so that the
machines/systems are designed to aid humans in focusing on what
the humans do best.
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.
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These concepts of flexibility and change are principally required to allow

production leveling (Heijunka), using tools like SMED.
The flexibility and ability to change are within bounds and 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 possibly more important
than the actual tools or methodologies of production itself.
Lean aims to make the work simple enough to understand, do and
manage.
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13

Principles of Lean
The five-step thought process for guiding the implementation of lean
techniques is easy to remember, but not always easy to achieve:
1. Specify value from the standpoint of the end customer by product

family.
Any process that the customer would be prepared to pay for that adds value
to the product.
1. The customer defines the value of product in a lean supply chain.
2. Value-adding activities transform the product closer to what the customer.

actually wants
3. An activity that does not add value is considered to be waste.
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14

2. Identify all the steps in the value stream for each product family,
eliminating whenever possible those steps that do not create value
1. The value stream is the sequence of processes from raw material to

the customer that create value.
2. The value stream can include the complete supply chain.
3. Value stream mapping is an integral aspect of Lean.
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15

3. Make the value-creating steps occur in tight sequence so the product

will flow smoothly toward the customer.
1. Using one piece flow by linking of all the activities and processes into
the most efficient combinations to maximize value-added content while
minimizing waste.
2. The waiting time of work in progress between processes is eliminated,
hence adding value more quickly.
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4. As flow is introduced, let customers pull value from the next upstream
activity.
1. Pull = response to the customers rate of demand i.e. the actual
customer demand that drives the supply chain.
2. 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.
5. As value is specified, value streams are identified, wasted steps are

removed, and flow and pull are introduced, begin the process again and
continue it until a state of perfection is reached in which perfect value is
created with no waste.
(Continuous Improvement of Quality and Productivity).
1. The journey of continuous improvement.
2. Producing exactly what the customer wants, exactly when,

economically.
.
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3. Perfection is an aspiration, anything and everything is able to be

improved
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18

Other important points to be remembered as a principles are as

follows:
-To reduce batch sizes and inventories.

-To cross-train workers in order to deal with inherent variability.
-Selective use of automation.
-To instil a Continuous Improvement competence.

03/07/2014
19

Key Lean manufacturing Methodology

There are many tools and concepts that lean companies employ to support
the above principles.
Takt Time
The heartbeat of the customer; the average rate at which a company must
produce product or execute transactions based on customer requirements
and available working time.
Standardized Work
A description of methods, materials, tools, and processing times required to
meet takt time for any given job
One Piece Flow or Continuous Flow
A methodology by which product or information is produced by moving at a
consistent pace from one value-added processing step to the next with no
delays in between.
.
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Pull Systems and Kanban

A methodology by which a customer process signals a supplying process
to produce product or information or deliver product/information when it is
needed. Kanban are signals used within a pull system
Five Why's
A thought process by which the question "why" is asked repeatedly to get to
the root cause of a problem.
Quick Changeover / SMED
A 3-stage methodology developed by Shigeo Shingo that reduces the time
to changeover a machine by externalizing and streamlining steps. Shorter
changeover times are used to reduce batch sizes and produce just-in-time.
Mistake Proofing / Poka Yoke
A methodology that prevents an operator from making an error.
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21

Heijunka / Leveling the Workload

The idea that, although customer order patterns may be quite variable, all of
our processes should build consistent quantities of work over time (day to
day, hour to hour).
Total Productive Maintenance (TPM)
A team-based system for improving Overall Equipment Effectiveness (OEE),
which includes availability, performance, and quality.
Five S
5S is a five step methodology aimed at creating and maintaining an
organized visual workplace.
A-3 Problem Solving / PDCA
A system for identifying and solving problems to their root cause and then
implementing countermeasures with monitoring. Typically these are
reported using A-3 reports (on A-3 or 11 X 17 size paper).
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Lean Production System.
Lean was generated from the Just-in-time (JIT) philosophy of

continuous and forced problem solving
Just-in-time is supplying customers with exactly what they want

when they want it
With JIT, supplies and components are pulled through a system

to arrive where they are needed when they are needed
Pre JIT: Traditional Mass Production
03/07/2014
23

Post-JIT: Lean Production
Tighter coordination along the supply chain. Goods are pulled along
Only make and ship what is needed
Smaller shipments
Minimal
or no
inventory
holding
cost
03/07/2014
Smaller lots
Faster setups
Less inventory, storage space
PULL material to next stage
Goods are pulled out of

plant by customer demand
24

Just-in-Time means PRODUCING:
a) Only what is needed
b) in necessary quantity
c) at necessary time
Main Components of JIT

Leveled Production
Pull System
Continuous Flow Processing
Takt Time
Flexible Workforce (Shojinka)
3 Ms
5S
03/07/2014
25

1. Levelled Production
Levelled production means producing various models on the same
production line to cater the customer demand. See the following diagram.
The various products are shown in the form of different geometrical shapes.
Assume they are different models of vehicles being produced on the same
production line.
Levelled ProductionFlexible production line
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26

2. Pull System (Dont Push)

Produce only when your customer demands the product in the required
quantity.
Run the production according to this demand.
Production activities begins as a result of the pull generated by customer in
form of order
Confirmation by them.
3. Continuous Flow Production
In TPS it means arranging work inside each process to flow smoothly from
one step to other.
In continuous flow production you can not maintain inventory. You pass
through all the work
Station in a continuous manner so that there is no chance of inventory
management. If any defect Occurs and remains undetected, it will remain
limited to the same or very few component.
If it is detected, counter measures are taken immediately
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27

4. Takt Time: Takt is a German word meaning meter.

It is the time to finish a given amount of work-doing a single operation,
making one component, or assembling an entire car.
5. Flexible Workforce (Shojinka)

Flexible workforce or shojinka means to alter (decrease or increase) the
number of operators within a shop, to equip with demand changes.
Flexible work force can be developed continuous training and development
03/07/2014
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6. 3 M S
3 Ms
MUDA = Non-Value Added

MURA = Overburden
MURI = Unevenness
Lets understand it with the help of an illustration. Assume that you have to
carry 12 tons of load in a truck having capacity of 4 tons maximum. You can
take this load in either of the following ways:
4th Qtr
13%
1st Qtr
13%
2nd Qtr
17%
3rd Qtr
57%
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29

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7. 5S
03/07/2014
1.
SEIRI
SIFTING
2.
SEITON
SORTING
3.
SEISO
SWEEPING
4.
SEIKETSU
SPICK N SPAN
5.
SHITSUKE
SUSTAINANCE
31

Implementation.
Stages
Three stages in the implementation of Lean Manufacturing
03/07/2014
Data collection stage
Data analysis and development of solution Stage
Implementation Stage
32

Process of Implementation Lean Manufacturing
03/07/2014
33

Action Plan
While every individual or company embarking on a lean journey will have
different challenges based on their particular set of circumstances, there are
several crucial steps that can help reduce resistance, spread the right
learning, and engender the type of commitment necessary for lean
enterprise.
Getting Started
Find a change agent, a leader who will take personal responsibility for the
lean transformation.
Get the lean knowledge, via a sensei or consultant, who can teach lean
techniques and how to implement them as part of a system, not as isolated
programs
Find a lever by seizing a crisis or by creating one to begin the

transformation. If your company currently isnt in crisis, focus attention on a
lean competitor or find a lean customer or supplier who will make demands
for dramatically better performance.
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Forget grand strategy for the moment.

Map the value streams, beginning with the current state of how material
and information flow now, then drawing a leaner future state of how they
should flow and creating an implementation plan with timetable.
Begin as soon as possible with an important and visible activity.
Demand immediate results.
As soon as youve got momentum, expand your scope to link
improvements in the value streams and move beyond the shop floor to
office processes.
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Creating an Organization to Channel Your Value Streams
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Reorganize your firm by product family and value stream.
Create a lean promotion function.
Deal with excess people at the outset, and then promise that no one will
lose their job in the future due to the introduction of lean techniques.
Devise a growth strategy.
Remove the anchor-draggers.
Once youve fixed something, fix it again.
Two steps forward and one step backward is O.K.; no steps forward is
not O.K.
36

Install Business Systems to Encourage Lean Thinking.
Utilize policy deployment
Create a lean accounting system.
Pay your people in relation to the performance of your firm.
Make performance measures transparent.
Teach lean thinking and skills to everyone.
Right-size your tools, such as production equipment and information

systems.
Completing the Transformation
Convince your suppliers and customers to take the steps just described
Develop a lean global strategy.
Convert from top-down leadership to leadership based on questioning,

coaching, and teaching and rooted in the scientific method of plan-docheck-act
03/07/2014
37

Advantages:
1) Productivity Improvement
2) Total manufacturing time saved
3) Less scrap
4) Low inventory
5) Quality improvement
6) Plant space saved
7) Better labour utilization

8) Safety of operations
Transition to Lean is difficult since a company must build a culture where
learning and continuous improvement are the norm.
Success of lean requires the full commitment and involvement of all
employees and of the companys suppliers
03/07/2014
38

How people benefit from Lean
03/07/2014
Element
Traditional
Lean
Improvement
Communication
Slow & Uncertain
Fast & Positive
Quality & Coordination
Teamwork
Inhibited
Enhanced
Effective Teams
Motivation
Negative, Extrinsic
Positive,
Intrinsic
Strong Motivation
Skill Range
Narrow
Broad
Job Enrichment
Supervision
Difficult and
Fragmented
Easy &
Localized
Fewer Supervisors
39

How Customers Benefit from Lean
03/07/2014
Element
Traditional
Lean
Improvement
Response
Weeks
Hours
70-90%
Customization
Difficult
Easy
Competitive Advantage
Delivery Speed
Weeks-Months
Days
70-90%
Delivery Reliability
Erratic
Consistent &
High
Up to 90%
Delivery
Quantities
Large Shipments
JIT as
Required
Locks in JIT Customers
Quality
Erratic
Consistent &
High
Delighted Customers
40

Economics
Reduction of Inventory
Less space necessary to hold inventory
Reduced Waste
Decreased Production Cost
Increased market share
Able to provide what the customer wants quickly
Increased competitive advantage
Faster response to the customer

Lower Cost
Higher Quality
Disadvantages:
Difficulty involved with changing processes to implement lean principals

Long term commitment required
Very risky process - expect supply chain issues while changing over to lean
03/07/2014
41

Summary
03/07/2014
Lean manufacturing was developed by the Japanese.
Lean is a philosophy that seeks to eliminate waste in all aspects of a firms

production activities.
Lean is principally associated with manufacturing industries but can be also

equally applicable to both service and administration processes.
Works on 5 basic principles.
Cornerstone of Lean is the Toyota Production System.
Considers 7 Wastes (muda).
Business activities can contain enormous quantities of built-in waste (muda,

friction).
The greatest obstacle to the waste's removal is usually failure to recognize it.
Lean manufacturing includes techniques for recognition and removal of the

waste.
This delivers an overwhelming competitive advantage.
Utilises 5 S methodologies.
42

Thank You
03/07/2014
43

Chapter 13 - Lean Production

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World Class

World Class Manufacturing (WCM)

After completing this chapter you will understand

Advantages and disadvantages

World Class Manufacturing (WCM)

A lean organization understands customer value and focuses its key

World Class Manufacturing (WCM)

The ultimate goal is to provide perfect value to the customer through a

World Class Manufacturing (WCM)

World Class Manufacturing (WCM)

Better Awareness of the Best (Them)

1) Benchmarking is a more efficient way to make improvements.

World Class Manufacturing (WCM)

World Class Manufacturing (WCM)

World Class Manufacturing (WCM)

World Class Manufacturing (WCM)

At the base, we have operational stability, which means creating consistency

World Class Manufacturing (WCM)

World Class Manufacturing (WCM)

If production flows perfectly (meaning it is both "pull" and with no

World Class Manufacturing (WCM)

These concepts of flexibility and change are principally required to allow

World Class Manufacturing (WCM)

1. Specify value from the standpoint of the end customer by product

1. The customer defines the value of product in a lean supply chain.

2. Value-adding activities transform the product closer to what the customer.

World Class Manufacturing (WCM)

1. The value stream is the sequence of processes from raw material to

2. The value stream can include the complete supply chain.

3. Value stream mapping is an integral aspect of Lean.

World Class Manufacturing (WCM)

3. Make the value-creating steps occur in tight sequence so the product

World Class Manufacturing (WCM)

2. Based on a supply chain view from downstream to upstream activities

5. As value is specified, value streams are identified, wasted steps are

2. Producing exactly what the customer wants, exactly when,

World Class Manufacturing (WCM)

3. Perfection is an aspiration, anything and everything is able to be

World Class Manufacturing (WCM)

Other important points to be remembered as a principles are as

-To reduce batch sizes and inventories.

-To instil a Continuous Improvement competence.

World Class Manufacturing (WCM)

Key Lean manufacturing Methodology

World Class Manufacturing (WCM)

Pull Systems and Kanban

A methodology that prevents an operator from making an error.

World Class Manufacturing (WCM)

Heijunka / Leveling the Workload

World Class Manufacturing (WCM)

Lean Production System.

Lean was generated from the Just-in-time (JIT) philosophy of

Just-in-time is supplying customers with exactly what they want

With JIT, supplies and components are pulled through a system

World Class Manufacturing (WCM)

Goods are pulled out of

World Class Manufacturing (WCM)

Main Components of JIT

World Class Manufacturing (WCM)

Levelled ProductionFlexible production line

World Class Manufacturing (WCM)

2. Pull System (Dont Push)