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INTRODUCTION TO

LEAN

Dr.R.RAJU
ASSOCIATE PROFESSOR
DEPARTMENT OF INDL., ENGG.,
ANNA UNIVERSITY, CHENNAI -25.

INTRODUCTION
Slow processes are expensive and wasteful.
Inventory slows down the process and turns up in high

prices.
A process must deliver many different products with high
velocity, high quality, low cost and minimal invested capital.
The goal of lean is to quickly make to order different
products with low cost.
Henry Ford was the first person to understand the impact of
process speed on cost, the first to understand that
inventory slowed down his process, and that slow
processes are wasteful processes.

INTRODUCTION
Low cost combined with high quality and high speeds

were first achieved by Toyota.

But, their system was limited to the repetitive

manufacture of a limited variety of high-volume products.

The lean enterprise is a generalization of the Toyota

production system (also known as just-in-time) to all


processes.

The principle of speeding up processes applies to non-

manufacturing (transactional) processes as well as


manufacturing.

DEFINITION
Lean means speed; it applies to all process.
PURPOSE:
To eliminate wasted time, effort, and material.
To provide customer with make to order products.
To reduce cost while improving quality.
FEATURES OF LEAN
Materials spend more than 95% of its time waiting.
Waiting for value to be added or waiting in finished goods
inventory for a customer.
The goal of lean is to virtually eliminate wait time.
Every operation must be flexible that the actual usage by
the customer crates a demand on the factory to build only
the amount consumed by the customer.

FEATURES OF LEAN
(CONTD)
The lean factory must be flexible to efficiently

build in small batches to keep up with


consumption.
When this goal is achieved, parts will move
directly from one workstation to another at high
velocity and reduce the waiting time, work in
process, and finished goods inventory by 50% 80%.
Think of a factory as a water hose. If water is
moving slowly, a larger diameter pipe is needed
to deliver a given volume per minute, so lots of
water (work-in process) is effectively trapped in
the pipe.

FEATURES OF LEAN
(CONTD)
Lean can increase the velocity by a factor of five, so we

can reduce the cross-section and hence WIP by a factor


of five.

As velocity increases, the cost of stock rooms, materials

movers and equipment, expeditors, scrap, rework,


obsolescence, excess capital expenditures - the
HIDDEN FACTORY will be removed.

As a rule of thumb, if the waiting time is reduced by 80%,

the manufacturing overhead and quality cost will drop by


20%.

VALUE ADDED TIME


Every product or service has valid.
The value gets added at every process stage.
The customer plays a very important role in

fixing the value of the product/service.


The value of a product/service is decided by
what the customer is willing to pay for it.
A manufacturing organisation buys raw material
and converts it into a product through a series
of processes duly adding value at every stage.

EXAMPLE:A SIMPLE MACHINING


PROCESS
Receive
material

Inspect

Drill two
location holes

Rework

Inspect

Bore bearing
hole

Inspect

Inspect

OK

Drill four holes

Table.1 Manufacturing Process Details


Part

PS WP/CAS/MC/001

Name: Casting water pump


Operation

Process

Set-up

Number

Operation

Time
(min)

Receive material

Inspect castings

(min)

0
0

60

Time

0
20

(me
600

Inspection

Drill two location holes

Inspect two drilled holes

15

20

Inspect

Send not ok castings for rework

10

20

Rework

Drill and Ream four holes

20

Loading

30

30

100

Loading

Contd
7.Inspect four drilled/reamed holes

20

20

Inspection

10

20

Rework

30

20

Loading

8.Send not ok castings for rework


9.Bore bearing hole

on the m/c
10.Final inspection

15

20

Parts not

ok are Scrapped
11.Dispatch ok castings to assembly

500

Fork lift

NON VALUE ADDING


ACTIVITIES
Inspection Four times
Waiting at all stages
Transporting the castings 1360 metres
Rework at all stage
Scrap at final stage

WASTE

TOP SEVEN WASTES


1.

Transport

2.

Inventory

3.

Move Or Movement

4.

Waiting

5.

Over production

6.

Over processing

7.

Delay

NEED FOR LEAN


High cost of quality
Delayed supply
High manufacturing cost and reduction in

profit margin
High inventory of raw material/finished goods
Fire fighting on the shop floor
Order lost to a competitor complaints/returns
Competitor bringing new products faster.

METHODS TO MEET CUSTOMER


REQUIREMENTS
Improve all process
Increase productivity
Enhance quality
Improve inventory management
Concurrent product development

ELEMENTS OF LEANMANUFACTURING
Customer value
Value stream
Value flow

Plant layout
Quality of Raw materials
Product quality
Product design
Tooling
Down time
Maintenance
Inventory management
Over time and low productivity
Communication
Customer pull
Perfection by continuous improvement

LEAN PRINCIPLES
Materials usually spends 95% of its time waiting,

which is due to the time delay injected by fewer than


20% of the workstations, which are known as time
traps.
Time traps can be prioritized and eliminated.

THE LEAN METRIC


The hidden factory can be eliminated through the

application of lean methods.

Process cycle efficiency =value-added time/total lead time.

A lean process is one in which the value added time in

the process is more than 25% of the total lead time of


that process.

Process cycle efficiency varies by application, but an

average of 25% is world class.

Any process with low cycle efficiency will have great

opportunities for cost reduction.

TYPICAL AND WORLD CLASS


CYCLE EFFICIENCIES

THE LEAN METRIC


Increasing process cycle efficiency from 5% to 25% will

allow the reduction of manufacturing over head and


quality cost by 20%.
Since less than 20% of workstations are the time traps

that inject 80% of the delay, focusing on these time traps


gives the improvement process enormous leverages.
The slowness of most process and their low cycle

efficiency guarantees that there is a large amount of


WIP at any given time, either on the plant floor or
finished goods in stock rooms.

THE LEAN METRIC


Much of the plant space is tied up with idle inventory, idle

machines, stock rooms, rework labour, quality control,


expeditors, schedulers and related non-value added
activities.
WIP generates hidden cost in overhead, rework, scrap,
manufacturing overhead, invested capital and unhappy
customers and in consequence puts a company in constant
jeopardy of losing existing business as well as revenue
growth.
When process cycle efficiency raises above 20% much of
these non-values added activities can be eliminated.
The hidden factory can be eliminated through the application
of lean methods.

BENEFITS OF SHORTER LEAD


TIME
Shorter lead time can increase revenue growth

dramatically.
Less handling reduces the demand for people

and equipment.
Less cost for storage, floor, and stock room

space.
Fewer customer service activities.

BENEFITS OF SMALL
INVENTORY
Parts shortages caused by inflexible workstations can be

avoided.
There is no need for extra operators, expeditors,
supervision, and overtime.
Cost towards peak capacity of property, plant and
equipment (PP&E), inspection, test and overhead can be
avoided.
There is less likelihood that defects will be shipped to
customers, necessitating expensive field repair and loss
of subsequent sales.
By dramatically reducing overhead cost, managers are
no longer tempted to overproduce to absorb overhead.

HIDDEN TIME TRAPS


(longest time delay)
Finding time trap is not a matter of guess work.
In general the delay time can be computed from the

following equation:
Delay time = work station turnover time/2
Customer demand rate=min batch size/workstation time.
Delay time = min batch size / 2 x customer demand rate.
Using the equation we can find the delay time in each
work station.
Applying Pareto principle (80/20) the vital few
workstations (20% or less) that have injected longest
delay time can be identified.