lean chapter 1

7/31/2019 Lean Chapter 1

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CHAPTER ITHE PROBLEM AND ITS BACKGROUND

This chapter presents the background of the study which focuses mainlyon what the research is all about, its objectives, framework, significance andscope, limitations and delimitation. This chapter also includes the definition oftechnical terms used in the entire study.

Introduction

There is a change occurring in any manufacturing industries. Most of themare now engaged in different philosophies leading not only in increasedprofitability but also in environmental consciousness. In the past, the rule of

traditional business in the manufacturing industry was dictated by high volume ofproducts offered at low costs in the market. Today, Lean Manufacturing has beena great interest for manufacturers not only in the United States but the wholeworld. It is because this principle affects companies of all sizes. Throughadaptation of lean manufacturing system, companies gain improvements inquality, customer satisfaction and profitability due to decreased costs and wastesand shorter lead time. Moreover, lean manufacturing principles provide safeworking environment, flexible work hours and improvement of manpowersefficiency.

Although lean manufacturing has grown from the Toyota Production

System (TPS), it can still be applied to shipbuilding. Shipbuilding first of all has afixed layout. It is made to order and also highly customized. It is not appropriateto mass produce it since the product itself takes more than a month to complete.In here comes the role played by Lean Manufacturing principles, the basicprinciples of giving customers what they want with shortened lead times byeliminating waste applied to any process, high volume or low volume, customizedor standardized.

Worlds shipbuilders located in the Philippines indeed needs a leanmanufacturing system that would attract higher orders and profit. KeppelShipyard, situated in Bauan, Batangas is one of these shipbuilding companies

aiming to achieve higher profit by reducing wastes in its operations. Uponknowing this, the researchers had seen its potentials to acquire a system inwhich the wastes including high inventory, transportation and motion, idle time,defects in manufacturing and overprocessing are reduced as the quality isimproved, the response time is shortened, and continuous improvement is

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2. What is the extent of implementation of the following lean manufacturingconcepts at Keppel Batangas Shipyard?

2.1 5S

2.2 Flexible manpower2.3 Flexible working hours2.4 Production flow/process2.5 Group/team work models2.6 Continuous improvement2.7 Supplier development2.8 Level Production2.9 Quality control2.10 Fast-response systems2.11 Fast set up2.12 Standardized workflows

2.13 Total Productive maintenance2.14 Visual Management2.15 Value stream methodology

3. What is the measure of efficiency affected by lean manufacturingimplementation at Keppel Batangas shipyard?

3.1 Manpower3.2 Materials3.3 Methods3.4 Machines, equipment and tools

4. Is there a significant relation between the extent of lean manufacturingimplementation and operational efficiency at Keppel Batangas Shipyard?

Conceptual Framework

The researchers conducted a research regarding the impact of leanmanufacturing in increasing productivity, waste reduction and competitiveadvantage. The researchers believe that there was a need to measure thecurrent efficiency rating of the shipyard with regard to shipbuilding and repair

operations. This study also determined the current condition of the KeppelBatangas shipyard with regard to the quality and maintenance of their operationsin shipbuilding and repair and with its success in continual improvements. Theresearchers also considered the fact that before any implementation of a leanmanufacturing system occurs, there is a need to understand first the measure of

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the shipyards efficiency. Hence, this study involved the assessment of the leanmanufacturing system in increasing operational efficiency at Keppel BatangasShipyard.

Figure 1 is a paradigm that shows the assessment on the implementationlean manufacturing system in increasing operational efficiency on shipbuildingand repair at Keppel Batangas Shipyard. There are three frames formulated todescribe the independent variables, intervening variables and the dependentvariables. The paradigm of the study shows the variables involved in theassessment of lean manufacturing system at Keppel Batangas Shipyard. Theindependent variable is the lean manufacturing system which comprises thequality of the operations, the total productive maintenance, waste reduction andsafe working environment, the vision towards continuous improvements andother lean manufacturing concepts. This also includes extent of efficiency on

manpower, materials, machines and methods which affect the inventory andinventory level, transportations cost, processing costs, waiting time, and thenumber of volume of defects which can either be scrapped or reworked. Thesevariables are common wastes in any manufacturing industry which would lead toincrease in costs and operation. The intervening variables are those that affectthe data collected from the respondents. These cover their demographic profilewhich includes the age, educational attainment, length of service and position ofthe respondents. It also comprises the companys profile, year of leanimplementation and its operations. Dependent variables on the other handcomprise the correlational study which serves as the output of the study, thusshowing if there is a relationship between the extent of lean manufacturing

implementation and the operational efficiency of Keppel Batangas Shipyard.

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Figure 1Paradigm of the Study

5

Lean Manufacturing Implementation

5S

Flexible manpower

Flexible working hours

Production flow/process

Group/team work models

Continuous improvement

Supplier development

Level Production

Quality control

Fast-response systems Fast set up

Standardized workflows

Total Productive maintenance

Visual Management

Value stream methodology

Independent Variables

Extent of efficiency in

Manpower

Machine

Materials

Methods

Dependent Variables

Respondents Profile

Age

Educational attainment

Length of service

Companys profile

Year of implementation

Intervening Variables


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Significance of the Study

This research study entitled, Correlational Study between the extent of

the implementation of Lean Manufacturing and Operational Efficiency in KeppelBatangas Shipyard:, is important not only to the Shipyards management team,but also to the workers, to the customers, to the suppliers, to other ship makingindustries, to the researchers and to the future readers of this research study.Since the study aimed to assess the system of lean manufacturing implemented,the researchers believe that it would help the Keppel Batangas Shipyard indetermining if the implementation affects its efficiency in fabricating different shipdesign so as with ship repair.

To the Keppel Batangas Shipyard, this study would measure if the extentof implementation of lean manufacturing has positive effects in manpower,

machines, methods and materials efficiency. Hence, the main goal of leanmanufacturing system is waste reduction and improved customer satisfaction.Through this, the Keppel would know the effects of lean manufacturing and theadvantages and disadvantages it would bring as the company considers andunderstands its relation to operational efficiency. This would also help them indetermining if the implementation of lean manufacturing relates in generatinghigher profit through reduced costs of manufacturing and inventory. Thus, thisstudy regarding the relationship of the degree of lean manufacturingimplementation and efficiency is intended to create a quality driven type ofmanufacturing of ships.

To the workers of Keppel Batangas Shipyard, through this assessment ofthe lean manufacturing system, they would be guided on how to improve theirperformance in a more efficient way. Thus, lean manufacturing system isprincipled in greater employee involvement which would guarantee better workperformance. Moreover, as the employees read the study and find out therelation of lean manufacturing implementation to their efficiency, they would bemotivated in doing their duties and responsibilities for being one of the majorfactors that relate to the changes brought to the company by lean manufacturingimplementation.

To the Keppel Batangas Shipyards customers, this study would earn

credit as the main goal of the lean manufacturing system is customersatisfaction. They would become satisfied if the ships are made in a shorterperiod of time, without longer waiting times and defects. This study looked on theimportance of quality intended not only to reach but even to surpass theirrequirements.

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To the researchers, this study would give them additional knowledge onthe importance of lean manufacturing as a means of waste identification and

reduction as well as quality observance as part of their endeavor in the world ofindustrial engineering.

To the future researchers, this would serve as their basis in assessing theroles of lean manufacturing in increasing efficiency not only in line with theshipbuilding industries but also in other manufacturing firms.

Other groups benefited by the study but not as direct as theaforementioned are the suppliers, other shipbuilding industries and thegovernment. To the suppliers, through this study, the Keppel Batangas shipyardwould become more aware on how important the supply chain is. To other

shipbuilding industries, this study would serve as a basis as they becomeenthusiastic towards greater efficiency and lesser waste. Since, the trend isspinning towards the reduction of waste in the operation which include defects,scrap and rework, high inventory and stocks, high transportation costs, longwaiting times, overproduction and over processing, more firms would beencouraged to pursue a system that alter these seven common wastes. One ofthe ways is through lean manufacturing. To the government, this study wouldserve as a forefront in establishing projects involving construction. Thus, thestudy would give them ideas that wastes in operations are no longer acceptableand must be avoided and that the Philippines should understand the importanceof each resource, knowing that they are limited.

Hypothesis

There is no significant relationship between the implementation of leanmanufacturing at Keppel Batangas Shipyard and the shipyards operationalefficiency.

Scope, Limitations and Delimitation

This research aimed to determine if there is a relationship between theextent of the implementation of lean manufacturing system at Keppel BatangasShipyard and its operational efficiency. The sample population consisted ofemployees working at the said shipyard. The sample also included theengineers, supervisors and managers. Based on the information from Keppel

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Batangas Shipyard, there are around 1100-strong dedicated workforce whoseskills and expertise are continuously upgraded to keep up with technologicaladvancements in the marine industry.

The number of respondents was limited to only 39 persons based on thecomputation to be presented in the following chapters. Also, the respondentsinclude those who have at least one (1) year of experience working in theshipyard, making them capable to answer the questions raised by theresearchers. The research design, data gathering techniques and statisticaltreatment are discussed in the Chapter 3. Unrestricted random sampling wasused in the study (no restrictions imposed) and every member of the populationhad equal chance of inclusion in the sample.

Correlational survey method was used in this study with the use of the

questionnaire to determine the relationship between the extent of leanmanufacturing implementation and the operational efficiency at Keppel BatangasShipyard.

The results of the study were interpreted with the use of weightedarithmetic mean and spearman rank correlation coefficient after testing thenormality of the data using skewness and kurtosis.

This study has the following limitations. First, the data collected relied onworkers views which could be prone to evoke bias. Although it is considered tobe primary data, the survey relies mainly on the employers recall of their

experiences and what they know. Also, the data gathering instrument used,survey questionnaires have inherent limitations which may call for response bias.The respondents may not have revealed the truth and have answered withcaution especially for information that they feel must be kept private. In additionto this, the questionnaire is composed of limited parts that limit the respondentsviews about the lean concepts. Hence, the questionnaire was only composed offour (4) parts considering the objectives of the study. Moreover, only manpower,machines, methods and materials were considered as factors in determiningoperational efficiency.

The study was also prone to selection bias since the current study sample

was not representative of the actual number of workers employed in the KeppelBatangas Shipyard, and there were limitations on selecting respondents sincethe shipyard allowed the researchers to give questionnaires to workers duringtheir vacant times only. Thus, the researchers opted for 5% level of significancedue to its higher degree of accuracy with 95% reliability.

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The researchers resorted to assess the views of the workers in the qualityassurance and inspection department and production department of the said

shipyard regarding the importance of the lean manufacturing in their operations.The researchers believed that the department was committed and had deeperunderstanding about the importance of the lean manufacturing system. With this,the study limited itself to gather the responses of the workers at QA/QC andProduction departments as they played part as the respondents of the study.Twenty nine from Production Department and the remaining came from theQA/QC Department because of accessibility of respondents.

Based on the above conditions, the findings of the study were descriptiveof the employees in production and QA/QC departments when the research wasconducted in the Academic Year 2011-2012. The results and conclusions drawn

would, therefore, be true for this group of subjects and for the period of time.However, the results could be used as basis for similar studies that might beobserved and made use of in any future plan regarding the correlation betweenthe extent of lean manufacturing implementation and operational efficiency inother shipbuilding industries.

Definition of Terms

To further understand the study, the following terms were presented withtheir corresponding meaning.

5s. This refers to a very popular tool in staring lean implementation. It involvescleaning up the workspace and placing the tools needed close to their point ofuse. (Schlichting, 2009). It is the methodology of organizing, cleaning, developingand sustaining a productive work environment.

Cellular manufacturing. It is the actual practice of the pull system. The ideal cellis basically a pull system in which one piece is pulled by each machine as itneeds the piece for manufacturing. (Faharani et al, 2011). It is a manufacturingapproach in which equipment and workstations are arranged to facilitate small-lot, continuous flow production.

Competitive Advantage. This term accrues to companies that possessdistinctive capabilities. (Kotler and Keller, 2006) Competitive can be achieved byuniqueness in the operations, low cost leadership and flexible, quick and reliable

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response to the customers. In the study, competitive advantage meanscompanys lead over other shipbuilding and repair industries.

Customer Lead Time. It is the length of time beginning when a customer placesan order and ending when the customer receives goods to fill that order. Itencompasses the Production Lead Time plus the time required to transmit theorder to the factory and the time to ship the product to the customers. Customersare also referred to as the clientele.

Defects. This term refers to a product or services non-fulfilment of an intendedrequirement or reasonable expectation for use. An error is the result of improperprocessing of the part, which leads to a defect only when the part is inspectedand fails. Thus, errors can be fixed before they become defects.

Efficiency. This term refers to doing things or jobs well. It results when theoutput is obtained at the least possible cost. It means doing things right. (Hiezeret al, 2010). It is the result of integration of increased productivity, wastereduction and competitive advantage.

Employee involvement. This refers to getting employees involved with processimprovement. (Zandin, 2004) Employee involvement will lead to enhanceddevelopment of their knowledge, skills, and attitudes.

Ergonomics. It is the science of fitting the job to the worker. It seeks to minimizethe physical demands on workers and optimize system performance. (Helms,

2006)

Inventory. This refers to storage and stock goods. It constitutes waste andunnecessary items. Inventory is commonly used to compensate for inflexibility.Toyota considers inventory to be an indicator of weakness in the process, andthe inventory is a constant reminder of the need to strengthen the process. (Likerand Meier, 2006)

Inventory Control. This terms refers to a planned approach of determining whatto order, when to order and how much to order and how much to stock so thatcosts associated with buying and storing are optimal without interrupting

production and sales. (Kumar et al, 2008)

Just-in-time. It refers to a set of principles and practices based on thephilosophy that firms should hold little or no inventory beyond that required forimmediate production or distribution.(Helms, 2006) It is the production control

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philosophy based on the concept- produce necessary units, in the necessaryquantities and at necessary time.

Kaizen. It is a Japanese term which means, Continuous Improvement. Inimplementing lean manufacturing, kaizen can be done in large scale or small-scale projects. It is a management philosophy emphasizing employeeparticipation, in which every process is continuously evaluated and re-evaluatedfor the elimination of waste.

Lean manufacturing. Lean manufacturing is a manufacturing philosophy thatshortens the time between the customers order and the product build/shipmentby eliminating sources of waste. It is a set of principles used in identification andelimination of wastes.

Manufacturing. This refers to the process of converting raw materials,components, or parts into finished goods that meet a customers expectations orspecifications. Manufacturing commonly employs a man-machine setup withdivision of labor in a large scale production.

Mass Production. This means manufacturing of a product on a large scale. Themass production of items is often done by using an assembly line, or anotherefficient means of production. The process is often carefully determined, to try toproduce the greatest quantity of items while using the fewest resources such aslabor and/or time.

Operational Productivity. This refers to the capability of an industry to operatein the most economical ways. In the study, it is synonymous to efficiency.

Overproduction. This refers to producing a product that is made faster than issold. It is one of the seven wastes in any manufacturing organizations. In theshipyard industry, example of overproduction is when more pieces are cut inadvance of need in order to use up all the material in the stock.

Poka-yoke. This refers to a mistake-proofing device or procedure used toprevent defects from entering a work process. Poka-yoke is a technique foravoiding simple human error in the workplace. Also known as mistake proofing,

goof-proofing, and fail-safe work methods, poka-yoke is simply a systemdesigned to prevent inadvertent errors made by workers performing a process.The idea is to take over repetitive tasks that rely on memory or vigilance andguard against any lapses in focus. (Helms, 2006)

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Pull System. It involves the replenishment of depleted and used goods only. Italso refers to a system wherein each operation is responding to what theimmediate customer needs.

Quality Control. It provides the statistical techniques necessary to assure andimprove the quality of products. (Chandra, 2001) Quality controls describe theextent of variation in processes or products that is considered acceptable. Qualitycontrols influence the ultimate product or service outcome offered to customers.

Scrap. This term refers to the waste that either has no economic value or onlythe value of its basic material content recoverable through recycling.

Standardization. This refers to a set of process acceptable to the managementthat the operation has been complied at.

Strategic Planning. This term refers to the process of determining a companyslong-term goals and then identifying the best approach for achieving those goals.

Supply Chain Management. Supply chain management (SCM) is a broadenedmanagement focus that considers the combined impact of all the companiesinvolved in the production of goods and services, from suppliers to manufacturersto wholesalers to retailers to final consumers and beyond to disposal andrecycling. (Helms, 2006)

Teamwork. It refers to a job done by a team. A team is a collection of individuals

organized to accomplish a common purpose, who are interdependent, and whocan be identified by themselves and observers as a team. Teams exist within alarger organization and interact with other teams and with the organization.(Helms, 2006)

Total Productive Maintenance. Total productive maintenance (TPM) ispreventive maintenance plus continuing efforts to adapt, modify, and refineequipment to increase flexibility, reduce material handling, and promotecontinuous flows. It is operator-oriented maintenance with the involvement of allqualified employees in all maintenance activities. (Helms, 2006)

Variability. This refers to the range of possible outcomes of a given situation. Itbelieved that it has a indirect relationship to quality whereas the quality increaseswhen the variability is reduced.

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Value Stream. This refers to the way to keep track of goods and materials asthey move through the product creation process that helps business boostproductivity and reduces waste. A typical value stream mapping process will

begin with the delivery of raw materials, proceed through intermediate states ofproduction, and then conclude with the creation of a finished product ready forsale to consumers.

Value Stream Mapping. Value Stream Mapping (VSM) is a hands-on process tocreate a graphical representation of the process, material and information flowswithin a value stream. It is a waste recognition and elimination process.

Waste reduction. The second important principle involved in lean manufacturingstrategy is minimizing the waste. It suggests that wasteful activities which do notadd to the significant improvement of the company, be eliminated. So, the

companys resources (land, capital and people) are made use of efficiently.

Waiting Time. This term refers to non-productive time, during which anemployee is still paid, of employees or machines, or both, due to work stoppagefrom any cause. It is also called idle time, allowed time, or downtime.

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