lean management chapter 1

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Lean ManagementIntroduction

Module - 1


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Program ObjectivesTo present

Lean Management philosophy

Lean Thinking as a proven strategy for managing plantsand factories.

Underlying principles

Various Lean tools and practices

To Learn in detail the tool of Value Stream Mapping


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Ultimate Goal of anOrganization

Making Profits

Survival

Growth


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Rate of Improvement Matters


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Rate of Improvement Matters


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Profits = Revenue - Cost



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Who wants what.


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Revenue depends on ability to provide aRevenue depends on ability to provide aRevenue depends on ability to provide aRevenue depends on ability to provide aCustomer preferable product Customer preferable product Customer preferable product Customer preferable product



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PreferableQuality

PreferableQuality

Ability to

customize

Ability tocustomize

AvailabilityAvailability

Preferable

Price

PreferablePrice

Preferable

Product

PreferableProduct



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The challenge is to make what the customer wants, when the customer wants it,

at a price the customer is willing to pay.

Organizational Challenge


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CRAFT MANUFACTURING - Late 1800s

Car built by workers who walked around the car

Built by craftsmen with prideComponents hand-crafted, hand-fitted

Excellent quality

Very expensiveFew produced



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Starting about 1910, Ford and his right-hand- man, Charles E. Sorensen , fashioned thefirst comprehensive Manufacturing Strategy .

They took all the elements of a manufacturingsystem-- people, machines, tooling, andproducts-- and arranged them in a continuoussystem for manufacturing the Model Tautomobile.



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Ford is considered by many to be the firstpractitioner of Just In Time and Lean

Manufacturing.



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Assembly line - Henry Ford

Low skilled labor, simplistic jobs, no pride inwork

Interchangeable partsAffordably priced for the average family

Millions produced - identical



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Customer Expectation Much better quality

More customized variants Just-in-time delivery

Shorter lead times

And freedom to order in small quantities

..At Lower & Lower Prices


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Profit

Loss

How to survive

Cost Vs. Selling Price


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How to Survive? During 1970s, Japanese were redefining themanufacturing paradigms.

Began to incorporate quality

into cost focused strategy

Discovered the power of FLOWUse of TIME as a new competitive dimension

Toyota Production System was born


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What if Flow is not proper? Traffic jam

Trains/ flight not on time

Blood pressure Heart attack

Flood/ draught

High Inventory High lead time

Increased cost

What else


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Taiichi Ohno All we are doing is looking at the time line from the

moment the customer gives us an order to the point when

we collect the cash.


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Toyota ManagementCells or flexible assembly lines

Broader jobs, highly skilled workers, proud of product

Low lead time

Excellent quality mandatory

Costs being decreased through process improvement.

Global markets and competition


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Lean Management During 1980s Americans realized that the

things are not the same anymore. Japanese were not only making better

cars, they were also doing it cheaply.

Toyota was making cars in America at25% less cost.

Severely denting American market share.


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Lean Management PhilosophyAn outcome of study of Toyota Production Systems, by ateam of researchers in USA, led by James Womack &Daniel Jones.

Their books detailing how Toyota has emerged, as theworlds most efficient automaker popularized Lean

Manufacturing as a new manufacturing philosophy.The first book was published in 1990 as

The Machine That Changed the World


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Lean ManagementPopularized by another book in 1996.

Lean Thinking - Banish Waste

and Create Wealth

in Your Corporation.


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Jim Womacks Comments

We also know that lean thinking is spreadingacross the world.

This summer, when Dan Jones, Jose Ferro, andI visited India for the first Lean Summits, wewere amazed to find some of the leanestoperating practices we have ever encounteredoutside of Toyota City.


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In Order to SurviveWe have to make our Organizations Lean

by understanding the Lean philosophyand promoting Lean Thinkingthroughout the organization .


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Lean

As defined by Webster Dictionary :- Adj

1. Containing little or no fat


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The term lean is used because lean

manufacturing uses lessLabor in the factory

Manufacturing space

Capital investmentMaterials

Time between the customer order and the productshipment

Definition of Lean


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The purpose of Lean Management is to make yourcompany strong and fast.

Strong = High performance, repeatable performance

Fast = Easily adapts to fluctuations in market conditions

Reduced operating costs and improved customersatisfaction are natural by-products of being Lean

Lean Management: Purpose


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Lean Management:Philosophy

A management philosophy that demands shorter

lead times to deliver high quality, low cost productsthrough improved flow in the value stream.


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Lean Management


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Lean Management: SystemAn integrated system to ensure

Value for the customer

Improvement in flow in Product development,

process engineering,

operations management &

corporate governance processes

Respect for people


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WORKER

Respect forhuman dignity

CUSTOMER

Highest

satisfactionof needs

Machine1

Machine2

Machine3

Machine4

PROCESS

Total elimination of muda or waste

The Three Objectives

lean management chapter 1

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