lean manufacturing
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OPERATIONS MANAGEMENT - IIPGDM(PT) : 2015
Course Instructor:
Dr. Goutam Sengupta
MANUFACTURING
Lesson: 2
It is about doing more with less – less time, less space, less people, less money and so on.
The word ‘Manufacturing’ in defining Lean Manufacturing at times is misrepresented, as the concepts and the techniques are equally applicable in all types of organizations, be it manufacturing or service. The basic focus of this concept is in ‘Getting More with Less’.
Lean systems encompass the company’s strategy, processes, quality management, constraint management, layout, supply chain design, technology and innovation, and can be used by both service and manufacturing firms. Like a manufacturer, each service business takes order from a customer, delivers the service and collects revenue. Each of these activities typically contains huge amounts of waste. Lean principles can be applied to make service processes lean, whether they are front office, hybrid office, or back office designs.
LEAN MANUFACTURING
Lean is a philosophy. It is primarily a set of management techniques focusing on continuous elimination of waste in order to add value to every process or task to get the desired output at a cost for which the customer is willing to pay for.
Top management must embrace the lean philosophy and make it a part of organizational culture and learning, as was done by Toyota. The Toyota Production System (TPS) is an excellent example of Lean Systems.
LEAN MANUFACTURING…. contd.
Lean Benefits
Half the hours of human effort in the factory Half the defects in the finished product One-third the hours of engineering effort Half the factory space for the same output A tenth or less of in-process inventories
“The Machine That Changed The World”; James P. Womack, Daniel T. Jones & Daniel Roos
What is Waste?
Waste is an activity that does not add value to the end customer. Toyota Production System (TPS) was designed using Japanese concept of waste – ‘muda’, ‘Mura’ and ‘Muri’. These three words beginning with the prefix ‘mu’ which in Japan are widely recognized as a reference to improvement program or campaign. Muda is a traditional Japanese Term for an activity that is wasteful, while Mura means unevenness and Muri means overburden.
Waste
• muda – waste• mura - inconsistency • muri - overburden
Anything that adds cost to the product or service without adding value.
The 3M’s of the processes are the wastes in different forms:
Value Added & Non-Value Added Activity
Value Added
Any activity that delivers value to the customer. (these are things the customer is willing to pay for)
Non-value addedOnce value added activities are separated then remaining activities are all wastes (these are things the customer is not willing to pay for) which can be further sub-divided into ‘needs to be done but non-value adding waste’ or ‘pure waste’. The identification of ‘needs to be done but non-value adding waste’ vis-à-vis ‘pure waste’ is crucial with respect to identifying the assumptions and beliefs behind the current processes and to challenge them in due course in future.
9
Lean = Eliminating the WastesValue Added
The Eight Wastes
• Defects• Over-production• Waiting• Transportation• Inventory• Motion• Over Processing• Latent Skill (the eighth waste identified)
Typically 10% to 40% turnover of an organization goes into cost of non-quality
TIMWOODS (Mnemonic)
The 7 Wastes
Overproduction
Waiting
Inventory
Transportation Motion
Over Processing
Rework
1
6
7
5 4
3
2
To produce sooner,fasteror in greater quantitiesthan customer demand.
Raw material, work in progressor finished goods
which is not having value added to it.
People or parts that wait for
a work cycle tobe completed.
Unnecessary movementof people, parts ormachines within
a process.Unnecessary movement of peopleor parts between processes.
Non rightfirst time.Repetitionor correctionof a process.
Processing beyondthe standardrequired by thecustomer.
is the Japanese word for WASTE.MUDA
Seek it out and get rid!1
234
56
7
An 8th waste is the wasted
potential of people
THE EIGHT TYPES OF WASTE OR MUDA1. Overproduction Manufacturing an item before it is needed, making it difficult to detect
defects and creating excessive lead times and inventory.2. Inappropriate Processing Using expensive high precision equipment when simpler machine would
suffice. It leads to overutilization of expensive capital assets. Investment in smaller flexible equipment, immaculately maintained older machines, and combining process steps when appropriate reduce the waste associated with inappropriate processing.
3. Waiting Wasteful time incurred when product is not being moved or processed. Long production runs, poor material flows, and processes that are not tightly linked to one another can cause over 90 percent of a product’s lead time to be spent waiting.
4. Transportation Excessive movement and material handling of product between processes, which can cause damage and deterioration of product quality without adding any significant customer value.
5. Motion Unnecessary effort related to the ergonomics of bending, stretching, reaching, lifting and walking. Jobs with excessive motion should be redesigned.
6. Inventory Excess inventory hides problems on the shopfloor, consumes space, increases lead times, and inhibits communication. Work-in-progress inventory is a direct result of overproduction and waiting.
7. Defects Quality defects results in rework and scrap, and add wasteful costs to the system in the form of lost capacity, rescheduling effort, increased inspection, and loss of customer good will.
8. Underutilization of Employees
Failure of the firm to learn from and capitalize on its employees’ knowledge and creativity impedes long-term efforts to eliminate waste.
Lost Sales Overtime to correct errorsProcess downtime Loss of goodwill
Extra inventory Paperwork errorsLost discounts Delays
Damaged goods Obsolete inventoryPremium freight costs Incorrect orders shippedCustomer allowances Extra process capacity
Reprocessing
Rejects Sorting Inspection
Customer Returns
Warranty Downgrading expenses of products
Hidden costs of poor quality
Waste Elimination
Value Add Waste
Traditional Focus• Work Longer-Harder-Faster• Add People or Equipment
Lean Manufacturing• Improve the Value
Stream to Eliminate Waste
LEAD TIME
The value adding parts of the process are obvious, so companies mistakenly focus on them go faster. The waste is not obvious, so it is not addressed. Lean focuses on eliminating the waste.
2
3
4
6
Cost per Unit
Quality
Profit per Unit
Cost of non-quality could be as high as 10%-30% of firms revenue
- Lesser down time- Lesser rework- Lesser customer complaint- Lesser leakages- Lesser paper work
$
Quality
LEAN TRANSITION IN QUALITY, COST & PROFIT
Tools of Lean Kaizen (continuous improvement) 5S SMED Kanban Just-in-Time (JIT) Andon Jidoka (autonomation) Poka-yoke (visual signals) Flexible manufacturing Lean Quality Circle Ishikawa Diagram (Fishbone Diagram) Glass Wall Management (GWM) Mini Company Technique (MCT) Value Stream Mapping Lean Six Sigma
KAIZENKaizen is based on the simple principle that, whatever the filed in our lives, be it social life, working life, domestic life or even leisure life, we need continuous improvement in order to progress and advance as opposed to status quo and stagnancy. For such an effort we must have participation and involvement of one and all whether it is society or an enterprise.
MASAKI IMAI
The Japanese economic miracle is attributable to this unique approach in all walks of their lives and we could see the demonstrative evidence of this continuous improvement in all their products or service.
In Industry, they felt that, to stay in business and compete, there should be an unending improvement and progress to provide the leverage against other competitors.
Japanese term – “Kai” means “Change” (Continuous) “Zen” means “Good” (Improvement)
Standardize Improvement (S) Small step continuous improvements (K)
Automatically stopping the process when something is wrong and then fixing the problems on the line itself as they occur is also known as Jidoka in the Toyota production System (TPS). Jidoka represents a visual management system whereby conformance at all stages of production flow is clearly visible to workers on the floor at all times. An opposite to Jidoka or quality at the source is the traditional practice of pushing problems down the line to be resolved later. This approach is often ineffective.
JIDOKA
One successful approach for implementing quality at the source is to use poka-yoke, or mistake proofing methods aimed a designing fail-safe systems that attack and minimize human error. A company makes modular products. The company could use the poka-yoke method for making different parts of the modular product in such a way that allows them to be assembled in only one way – the correct way. Similarly, a company’s shipping boxes could be designed to be packed only in a certain way to minimize damage and eliminate all chances of mistakes. At Toyota plants, every vehicle being assembled is accompanied by an RFID chip containing information on how many nuts and bolts need to be tightened on that vehicle for a given operation at a given workstation. A green light comes on when the right number of nuts have been tightened. Only the does the vehicle move forward on the assembly line.
• Error-proofing makes it difficult or impossible to do the job the wrong way.
• Slots and keys, for example, prevent parts from being assembled the wrong way.
• Process recipes and data entry also can be error-proofed
POKA-YOKE
Shigeo Shingo
The term adopted, by Shigeo Shingo as part of the Toyota Production system
Another tool for implementing quality at the source is andon, which gives machines and machine operators the ability to signal the occurrence of any abnormal condition such as tool malfunction, shortage of parts, or the product being made outside the desired specifications. It can take the form of audio alarms, blinking lights, LCD text displays, or chords that can be pulled by workers to ask for help or stop the production line, if needed. Stopping a production line can, however, cost a company hugely. Needless to say, management must realize the enormous responsibility this method puts on employees and must prepare them properly.
ANDON
Ishikawa Diagram (Fish Bone Diagram)Cause-and-Effect Diagram
The technique was first developed by Kaoru Ishikawa.
The cause-and-effect diagram sometimes is called a fishbone diagram. The main performance gap is labeled as the fish’s ‘head’, the major categories of potential causes as structural ‘bones’, and the likely specific causes as ‘ribs’. When constructing and using a cause-and-effect diagram an analyst identifies all the major categories of potential causes for the problem. These might be personnel, machines, materials, and processes. For each major category the analyst lists all the likely causes for the performance gap. Under personnel might be listed ‘lack of training’, ‘poor communication’, and ‘absenteeism’. Creative thinking helps the analyst identify and properly classify all suspected causes. The analyst then systematically investigates the causes listed on the diagram for each major category, updating the chart as new causes become apparent. The process of constructing a cause-and-effect diagram calls management and worker attention to the primary factors affecting process failures.
Kaoru Ishikawa
SUPPLY SOURCES
PURCHASING SYSTEMS
POOR DELIVERY
RELIABILITY
Multiple Unreliable Vendors
No ESI
No Supplier Joint Planning
No self certified vendor
No Partnership
Forecasts not integrated with market
Manual & discrete
Frequent changes
Adhoc
PLANNING PROCESSES
Fragmented, not coordinated
No cross-functional process
Little focus on Evaluation & Rating
No Upstream Management
Inspection & Rework
No Vendor Certification Programme
No PQC
QUALITY MANGEMENT
PROCESSES
Low Morale
No TQM
Low Motivation
PEOPLE
Discrete and non-continuous
No compatibility with suppliers or
customer’s systems
Too many manual interventions
INFORMATION MANAGEMENT
PROCESS ES
FINDING OUT THE ROOT CAUSE OF POOR DELIVERY RELIABILITY
SUPPLIERS
HIGH INVENTORY
Poor Quality of Supplied Parts
Unreliable Supplier Base
No Self Certified Vendor
Over ordering
Lack of coordination
PURCHASE & STORES
Inaccurate Forecast
Frequent changes in forecast
Changes in shopfloor schedule
PLANNING
QUALITY
Multiple Supplier
Low Supplier Morale
Ordering not as per plan
Poor morale of Staff
Vendors are ignorant of specifications
High rejection
Lack of rework
Limited visibility to marketing and customer plans
No Rolling PlanNo Review
No Process Control
FINDING OUT THE ROOT CAUSE OF HIGH INVENTORY
Lean Quality Circle
Quality Circle (QC) activities are in practice in Japan since 1962. This was adopted by many countries including India where Quality Circle activities commenced from 1981.
Quality Circle activities are carried out by a small group of First Line employees, normally number of members are 6 to 8 in a group, who operate autonomously in solving problems found in their work place, products and services. They use simple Quality Circle tools and techniques for which they were trained. These activities aim at promoting self and mutual development of members, enhance capabilities, and contribute to building a pleasant and vibrant work place in addition to solving chronic quality problems encountered by them in their work place. They typically follow 12 problem solving steps in a conventional QC exercise as depicted below:
Problem Solving Steps followed by conventional QC
Step 1 - Identification of ProblemsStep 2 - Selection of ProblemStep 3 - Define the ProblemStep 4 - Analysis of the Problem Step 5 - Identification of causesStep 6 - Finding out the root causesStep 7 - Data AnalysisStep 8 - Developing SolutionStep 9 - Foreseeing probable resistanceStep 10 - Trial implementation and check performanceStep 11 - Regular implementationStep 12 - Follow up review
Overview of the simple Tools & Techniques
No. Name of Tool Purpose / use1. Flow Diagram To enable understanding of the process/flow and locate a problem
2. Brainstorming For generation of ideas in problem listing; listing of causes in problem analysis and for finding solutions.
3. Data Collection To understand the magnitude of the problem and understand the problem. It is the foundation for statistical analysis.
4. Graphs Presentation of large amount of data in a cohesive manner in the pictorial form to enable better understanding of the data and the problem and also to comprehend the trend at a glance.
5. Stratification To segregate data according to contributing source (Suppliers, machines, operators, etc.)
6. Cause & Effect Diagram To map out all probable causes and relate the logical linking of causes to the problem to help narrow down to the cause or causes.
7. Pareto Chart For identification / selection of major problem or area for improvement or control; to differentiate between vital and trivial problems.
8. Scatter Diagram For examining relationship between two variables, nature and strength of relationship between process factors and product quality. In a way, it is also a cause and effect approach between two variables.
9. Histogram For study of process variation and asses process capability. This is an off-line quality control method.
10. Control Charts For maintaining running control on a process. It is a tool for on-line quality control.
Emergence of Knowledge Workers – Need for higher challenges and emergence of Lean Quality Circles
Emergence of Knowledge Workers who has learned to use advanced statistical tools like process capability, six sigma levels, design of experiments etc and who can view the organization holistically and not only from section or department’s perspective gave rise to Lean Quality Circle (LQC) concept. In LQC, the 12 problem solving steps of conventional QC are reduced to Five Steps using the similar concept as used by six sigma teams, as DMAIC; D (Define), M (Measure), A (Analyse), I (Improve) and C (Control). In LQC, unlike conventional QC, where members are from same workplace, the members are from cross-functional areas and even two members can form a LQC group. Unlike conventional QC, in LQC the team meetings take place as per the need and there are no regular fixed meetings. Management can also assign chronic quality problem to LQC team, whereas in conventional QC the members choose their own problems from their work place. In LQC, gain in terms of space, time, people, money, safety are important whereas in conventional QC, learning and solving work related issues are important. In summary, Lean Quality Circles work on the principles of ‘Lean’ where the Circles are focused with few Knowledge Workers who form cross functional team to bring larger gains for the organization in lesser time spans.
FIVE S Practices
Five S (5S) is a methodology for organizing, cleaning, developing, and sustaining a productive work environment. It represents five related terms, each beginning with an S, that describe workplace practices conducive to visual controls and lean production. These five practices of sorting, straightening, shining, standardizing and sustaining are done systematically to achieve lean systems. They are not something that can be done as a stand-alone program. As such, they serve as an enabler and an essential foundation of lean systems. Table below shows the terms represent the 5S and what they imply.
5S TERM DEFINITION
1. Sort Separate needed items from unneeded items (including tools, parts, materials and paperwork) and discard the unneeded.
2. Straighten Neatly arrange what is left with a place for everything and everything in its place. Organize the work area so that it is easy to find what is needed.
3. Shine Clean and wash the work area and make it shine.4. Standardize Establish schedules and methods of performing the cleaning and sorting.
Formalize the cleanliness that results from regularly doing the first three S practices so that perpetual cleanliness and a state of readiness are maintained.
5. Sustain Create discipline to perform the first four S practices, whereby everyone understand, obeys, and practice the rules when in the plant, implement, mechanisms to sustain the gains by involving people and recognizing them through a performance measurement system.
It’s commonly accepted that 5S forms an important cornerstone of waste reduction and removal of unneeded tasks, activities, and materials. 5S practices can enable workers to visually see everything differently, prioritize tasks, and achieve a greater degree of focus. They can also be applied to a diverse range of manufacturing and service settings including organizing work spaces, offices, tool rooms, shop floors, and the like. Implementation of 5S practices have been shown to lead to lowered costs, improved on time delivery and productivity, higher product quality, better use of floor space, and a safe working environment. It also builds the discipline needed to make the lean systems work well.
FIVE S (5S)
1S SEIRI (Shift and Sort) (Organize)2S SEITON (Stabilize) (Orderliness)3S SEISO (Shine) (Cleanliness)4S SEIKETSU (Standardize) (Adherence)5S SHITSUKE (Sustain) (Self-discipline)
Objective
To highlight the information related to concerned zone about the details of the members, Five S score obtained, problems identified and graphical representation of the score achieved for the successive audits.
Five S Score Board
Details on the Five S Score Board
Group / Zone name:
Leader :
Dy Leader:
Members:
1.
2.
3.
4.
5.
SCORE
1 2 Average
Jan
Feb
Mar
…..
…..
Nov
Dec
Problem of the section
S.N Problem Date of Identification
1.
2.
3.
4.
5.
6.
Scor
e %
Jan Feb AprMar
Graph
FIVE ‘S’ AUDIT SHEET (PLANT)
Dept./ Section _____________________
Zone Name ________________________
Date ________________
Zone No. ________________
Sl. No. Check Item Evaluation Criteria Marks
1 Parts & Material i) How spare parts/ work in progress kept?ii) Are they having proper identification?iii) Is their proper place for materials a. To be repaired b. To be replaced c. for disposable and defective items
2 Machine & Equipment
i) How equipments are identified?ii) Do they have caution boards in unsafe areas?iii) Do they have proper guards in required area as per safety
requirements?iv) How clean equipments are?
3 Visual Control Can all unnecessary items be distinguished at a glance?
4 Standard for disposal Is there clear standards for disposal?
5 Storage Labels i) Do they stock and store at prefixed place?ii) Condition of items in almirahs and tool boxesiii) Have they been properly identifiediv) Is storage space properly marked for maximum and minimum level
of storing?
6 Ease of use Is Storage designed for easy and faster access?
7 Orderly Storage Is everything stored in a fixed location?
8 Aisles & display areas
All dividing lines, path ways and notice boards. Have they clearly marked?
Sl. No. Check Item Evaluation Criteria Marks
9 Floors i) Are there grooves, cracks or bumps on the floor which hinder work or safety?
ii) Is the floor always clean (bolts, nuts components papers and other materials are not found on the floor)?
10 Working Area i) How clean and neat?ii) Do they have adequate lighting and ventilation?iii) Are safety measures proper and is noise level with in control?
11 Lubrication i) Have they marked in proper place lubrication point schedules? ii) Have they provided lubricant identification marking and oil
spillage tray?
12 Wastage Storage System of waste storage and removal
13 Lunch Room i) Is there spillage of water inside the lunch room?ii) Is there any foul odouriii) Is condition of lighting and ventilation system is proper?iv) How they ensure general cleaning and neatness?
14 Water Taps i) Are they neat and clean?ii) Is there any water leakage?iii) Is there sign board for drinking water and display of water
conservation related slogans?
15 Toilets i) Is there any water leakage?ii) Is there any foul odour?iii) Condition of lighting and ventilation systemiv) General cleaning and neatness
16 General Alertness Do all employees use safety appliances?
Sl. No. Check Item Evaluation Criteria Marks
17 Uniform Has wearing uniform become a habit?
18 Participation What is the level of participation of all employees in Five S activities?
19 Retrievability Is it possible to retrieve of all items in one minute?
20 Rules and Regulation
Are all rules and regulation strictly observed?
Total
Marking Criteria
1 = Very Bad
2 = Bad
3 = Average
4 = Good
5 = Very Good
Auditor’s Name and Signature
Please conduct an 5S Audit of your workplace and submit in next class
HOME ASSIGNMENT
Kanban System
One of the most publicized aspects of lean systems, and the TPS in particular is the Kanban system developed by Toyota. Kanban meaning ‘card’ or ‘visible record’ in Japanese, refers to cards used to control the flow of production through a factory. In the most basic kanban system, a card is attached to each container of items produced. The container holds a given percent of the daily production requirements for an item. When the user of the parts empties a container, the card is removed from the container and put on receiving post. The empty container is then taken to the storage area and the card signals the need to produce another container of the part. When the container has been refilled, the card is put back on the container, which is then returned to a storage area. The cycle begin again when the user of the parts retrieves the container with the card attached.
Lean System whether in a manufacturing or in a service organization can never be implemented without changing the culture of an organization. It is thus highly recommended to go for a transparent work place culture where all members of the organization can view the discrepancies in the process vis-à-vis the best competition in the market place. Knowledge of discrepancy stimulates the motivation for change. This is a proven and established concept followed by many global organizations such as Philips world-wide, Motorola and others
ENERGY FOR CHANGE
AWARENESS OF DISCREPENCY
GLASS WALL MANAGEMENT
MINI COMPANY
TECHNIQUE
Like Glass Wall Management, the Mini Company Technique is related to change of organizational culture to facilitate introduction of lean system in a manufacturing or in a service organization. This concept works on the power of employee empowerment, where the feeling of ‘ownership’ enhances the level of organizational commitment of the employee and helps in rapid implementation of lean system.
Lean Building Blocks
ValueStreamMapping
Visual Controls
The Lean Factory
5S System
Quick SetupsMistake Proofing
PULL / Kanban Cellular Layout TPM
Standard Work
Self Inspection
Batch Reduction
41
Value Stream Mapping
Value Stream Mapping (VSM) is a widely used qualitative lean tool aimed at eliminating waste or muda. Waste in many processes can be as high as 60 percent. Value Stream mapping is helpful because it creates a visual ‘map’ of every process involved in the flow of materials and information in a product’s value chain. These maps consist of a current state drawing, a future state drawing and an implementation plan. Value Stream Mapping spans the entire supply chain, from the firm’s receipt of raw materials to the delivery of the finished good to the customer. Thus, it tends to be broader in scope. Creating such a big picture representation helps managers identify the source of wasteful non-value-added activities.
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