REDUCING WIP INVENTORY BY IMPLEMENTING LEAN TOOLS

T.NITHISH BABU, R.GOUTHAM

FINAL YEAR M.E. INDUSTRIAL ENGG,PSG COLLEGE OF TECHNOLOGY,COIMBATORE.

ABSTRACT: Inventory is the worst form of all the seven wastes of Lean Manufacturing.
It is making products in too great a quantity or before it is actually needed leading to
excessive inventory. Principle of Lean Manufacturing is application of what is
required and when is required by the customer, pulling only what is ordered through
the work flow. Heavy inventories lead to cash crunch leading to failure of business
houses as lot of money has already been put in the inventory lying idle. All of this is a
cost to business and can be converted to useful savings and uplifting the profits. The
objective of this study was to apply lean manufacturing techniques to a production
job shop environment to reduce the lead time from the current average to an
acceptable average established by customer demand. To accomplish the objective,
the following procedure was followed. The independent variable was identified as the
manufacturing process. Dependent variables were lead time, WIP, and material flow.

KEY WORDS: WIP inventory, Lean Manufacturing principles.

INTRODUCTION: three sources of loss: waste, variability

Lean manufacturing is a production
philosophy that strives to eliminate
waste in all activities within an
organization. The elimination of waste
allows a product to flow through the
manufacturing process in smaller
quantities than that required by the
batch and queue process. Lean
manufacturing incorporates a pull
system to move the product through
the production process. According to
the lean operating system consists of
the following:
• A lean operating system follows
certain principles to deliver value to the
customer while minimizing all forms of
loss.
• Each value stream within the
operating system must be optimized
individually from end to end.
• Lean tools and techniques are
applied selectively to eliminate the
and inflexibility.
Lead time is the difference between
the times recorded as the product is
released as a raw material, and when
the product is completed. Reduction in
lead time allows the manufacturer to
more quickly recover investments in
time and material. Lean manufacturing
addresses lead time by removing non-
value-added steps that create waste in
the production cycle. Every value
added and non value added activity
required to bring a product through the
production flow from raw material to
the customer is called the value
stream. The purpose of value stream
mapping is to highlight the sources of
waste and eliminate them by
implementation of a future state value
stream. The current-state value stream
map establishes a baseline of the
current process under investigation.
Work In Process (WIP) causes the
most non value added time during a
production process. Mass production
techniques group equipment by similar
function not by product groups, which
create material inventories at each
operation. Production facilities that use
the mass production strategy have
equipment located in all areas of the
plant. Plant layouts following this
strategy create physical distance
between subsequent operations.
Storage racks or staging areas are
necessary because products flow
through the facility in large lot sizes
waiting for the next operation.
LITERATURE REVIEW:
Lean is a systematical approach to
identify and eliminate waste through
continuous improvement following the
product at the pull of customer in
pursuit of perfection. In lean
manufacturing, the value of product is
defined solely by the customer[1]. Goal
of lean manufacturing is to reduce the
wastage in any form such as human
effort, inventory, time to market, space
to become highly responsive to
customer demand. Value added
activities make the product more
closely resemble what the customer
wants. Non value Non-value added
activities do not create customers
value. Anything that is not adding
value is defined as waste.
Womack et. al, (1990) explained the
several features of lean, According to
studies that were initially performed in
the automobile industry [2].
1. Lean is a dynamic process of
change driven by a systematic set of
principles and best practices aimed at
continuously improving;
2. Lean refers to the total enterprise,
from the shop floor to the executive
suite, and from the supplier to
customer value chain;
3. Lean requires rooting out everything
that is non- value added; and
4. Becoming lean is a complex
business - there is no single thing that
will make an organization lean.
Burton and Boeder (2003) reported the
five lean manufacturing principles are
as under:
1. Accurately specific values from the
customer’s perspective for both
products and services.
2. Identify the value stream for
products and services and remove
non-value-adding waste along the
value stream.
3. Make the product and services flow
without interruption across the value
stream.
4. Authorize production of products
and services based on pull by
customer.
5. Strive the perfection by constantly
removing the waste.
Chrisrmansson et al (2002) discussed
a material kitting case study using
alternative methods like picker to –
material principle and material – to –
picker approach. The material kitting
was video recorded and pickers
physical exposure were assessed. The
material kitting shows improved
productivity as compared with other
kitting methods[3]. The analysis and
evaluation of the effect of process
parameters on the performance of
manufacturing systems were done
using two softwares Arena 10.0 and
SPSS 9.0 statistical package by Ekren
and Ornek[4].
3. CASE STUDY:
The project was done at an Sri Krishna the influence of an efficient layout on
Techno Components Private limited to the manufacturing function: it makes it
improve productivity & WIP inventory. smooth and efficient. Operating
efficiencies, such as economies in the
STATEMENT OF PROBLEM : cost of handling materials,
 Excessive Waiting time and minimization of production delays and
transportation time of materials avoidance of bottlenecks all these
in various stages of the process depend on a proper layout.
 Large WIP inventory and
finished goods inventory
 Lack of maintenance of
machines leading to higher
downtime
Objectives:
 To Reduce the transportation
and waiting time by optimizing
the layout.
 To reduce the inventory by
providing conveyor system for
transportation.

METHODOLOGY:

FIG 2. AS-IS model of the plant

TIME STUDY DATA OF CASE

GOVERNOR:

Fig 1. Methodology
4. ANALYSIS:

Factory Layout:
The importance of a layout would be
better appreciated if one understands
Table 1. Time study data

LAYOUT OPTIMIZATION
 The proper set up of layout or
machine orientation will help
reduce the NVA time
 Witness simulation can be
used to predict the performance
improvement of modified layout
and inclusion of conveyor
system
 The performance measures like
mean waiting time, mean flow
time(LT),Travel distance and
cycle time for each component
are to be checked.
FIG 3. CURRENT STATE VSM
Inferences from current state VSM
Total lead time =1870 min
VA time=90 min
WIP=439 min
 The large lead time is due to
high finished goods waiting to
dispatch and raw material
waiting to process
 Lack of proper transportation
facility to supplier and customer
 In process inventory (i.e. WIP )
may be improved by
implementing material handling
system like conveyor
 Preventive maintenance may
help reduce downtime
FIG 4. FUTURE STATE VSM
INFERENCES FROM FUTURE
STATE VSM:
Total lead time =1548 min
VA time=86 min
WIP=375 min
The work in process inventory time
and the total lead time of the process
is reduced by optimizing the layout and
by removing the unwanted process in
the system.
ARENA MODEL:
The simulation is done using arena
software. It is an user friendly software
that enables data input and analysis
this can be used to simulate any
manufacturing system and therefore
we have used arena to simulate
aluminium die casting process, the
process model and details are as CONCLUSION:
follows: Our main objective was to reduce the
work in process inventory using
various lean tools and also the
manufacturing cycle time has been
reduced by line balancing and value
stream mapping. The simulation model
was used to improve the performance
of the existing system there by
increasing the productivity of the plant.

REFERNCES:

Fig 5. Simulation model 1. Burton, T.T., Boeder, S.M., “The

The simulation results Lean Extended Enterprise: Moving
VA time – 71 % beyond the Four Walls to Value
Stream Exellence,” APICS, The
NVA time – 29 %
education society of resource
WIP – 34 numbers management (2003).
2. Womack, J.P., and D.T. Jones,
“From Lean production to the Lean
RESULTS:
Enterprise”, Harvard Business Review,
Thus, by various implementation of pp. 93-103(1994).
lean tools, the lead time for the 3. Chrisrmansson, M., Medbo, L.,
Hansson, G.A., Ohlsson, K., Unge, J.,
process is reduced by 15% and the
Bystrom, Moller, T. and Forsman, M.
inventory in the plant has been “A case study of a principally new way
reduced to the optimum level thereby of materials kitting –an evaluation of
reducing the WIP inventory. The time consumption and physical
workload”, International Journal of
proposed model coupled with process
Industrial Ergonomics, Vol. 30, pp. 49-
control has the potential to achieve null 65,2002.
defect castings at the least cost. This 4. Ekren B. Y. and Ornek A. M., A
Simulation based experimental design
work gives up many challenges that
to analyze factors affecting production
need a new generation of researchers flow time”, Journal of Simulation
to come forward and help the mother Modeling Practice and theory, 16,
2008, 278-293.
of all industries.