2. History of Manufacturing
CRAFT
• Made customer specific
• Each product is unique
• Variable quality /expensive
MASS
• Interchangeable –Whitney
• Division of labor-Fredrick Taylor
• Assembly lines and flow variety-Ford
LEAN
• High variety
• Small batches
• Six sigma quality
3. What is LEAN?
• “Lean is the elimination of anything not absolutely
required to deliver a quality product or service, on
time, to our customers.”
• LEAN is fundamentally different business logic
• LEAN is based on eliminating unnecessary action
• LEAN links value activity in a continuous sequence
• “Only a small fraction of total time and effort in an
organization adds value for end customer”
4. Why LEAN?
• Severe Competitions in all walks of business
• Firms face reduction in margins to keep the
market share
• Every little saving will improve the economy
• Time for every available resource to perform the
best
• Operation cost reduction is critical to our survival
• Profits =price-cost (price dictated by the market
and cost incurred by us)
• Cost = activities involved (VA+NVA)
5. LEAN- Some myths
• LEAN is a factory thing
• LEAN will not work here
• We tried it, it is another kaizen event
• 5S is all about cleaning up your office or
workstation
• We are different, it can’t apply to our business
• Its an excuse to take our jobs away
• Zero inventory
6. LEAN System -Benefits
The Hard ones (typical)
• 15% growth in 1 year
• 12% Productivity increment in one year
• 20% space saving in one year
• 90% on time delivery in full
• 28% throughputs lead time reductions
• Improved supplier performance
• Improved customer quality
• Progressive MUDA elimination
7. LEAN System -Benefits
The Soft ones
• Flexible structures assigned to business goals
• Roles & Responsibilities assigned to business
goals
• Process driven culture
• Visual demonstration of achievements
• Increased employee ability and morale
• Visual abnormal situations
• Focused application of resources for best return
• Believable prediction of results
8. LEAN Principles
• Specify what creates value from customer’s
perspective
• Identify all steps across the whole value
stream
• Make those actions that create the value flow
at the pull of the customer
• Involve and power emplyoees
• Strive for perfection by continually eliminating
the successive layers of waste
9. What is Value?
• Value is what the customer wants, when they
want it in the expected quantity and quality
• To establish the “customers wants” employ
the QFD (Quality functional deployment)
technique
• To analyze the customers wants using KANO
model
10. KANO Model
• Classify Characteristics as Basic, performance
and delighter
• Ask two questions
1. What if the characteristics is present?
2. What if the characteristics is absent?
• If 1=neutral, & 2=bad it is basic
• If 1=good & 2=neutral, it is delighter
11. Define values in the eyes of customer
• What product / service?
• What attribute / features?
• What quality levels?
• What delivery?
- Rate
- Response time expectations
• Are we measuring it? If yes, how?
12. What is a Value Stream?
A value stream involves all the steps in a process, both
value added and non value added, required to complete a
product or service from beginning to end.
What is a Value Stream Map?
• Visual Representation of a Value Stream or the work process
• Pencil & Paper Tool with lots of post its
• Helps Reveal Waste & Problems with the Flow
• It Establishes a common language to document a process
• Provides a blueprint for improvement
13. What is WASTE?
Any Activity that DOES NOT increase the
Market Form or Function of the Product or
Service based on the Critical Customer
Requirements.
These are things the customer is NOT
willing to pay for.
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14. Value Added
Any activity that increases the market form or function of
the product or service. (These are things the customer is
willing to pay for.)
Non-Value Added
Any activity that does not add market form or function or
is not necessary. (These activities should be eliminated,
simplified, reduced, or integrated.)
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15. Where is the Waste?
• Defects – incomplete or incorrect information
• Overproduction – releasing work before next
process can work on them, unbalanced work loads
• Waiting – unbalanced work loads, slow system response,
incomplete information, approvals
• Not Utilizing Employees – old guard thinking, politics, high
turnover, low investment in training
• Transportation – poor layout, poor flow
• Inventory – large batches, complexity to complete task
• Motion – poor organization, no standard work
• Excess Processing – excess communication, lack of
communication, unnecessary approvals, customer
requirements are not clearly understood
Typically 95% of all lead time is non-value added
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16. Prerequisites of Value Stream
Mapping
•Understanding the Process
•Information and Material Flow
•Data Driven Decision Process
94% if Failures are due to Poor Systems
6% are caused by Worker Mistakes
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17. Taiichi Ohno’s 7 Wastes (muda)
types of waste:
overproduction
waiting time
transport
process
inventory
motion
defective goods
18. 7 Service Wastes
• Delay – customers waiting for service.
• Duplication – having to re-enter data, repeat details etc.
• Unnecessary movement - poor ergonomics in the service encounter.
• Unclear communication – having to seek clarification, confusion over use of
product/service.
• Incorrect inventory – out of stock.
• Opportunity lost – to retain or win customers.
• Errors – in the transaction, lost/damaged goods.
19. The 5S’s
• The 5S‘s are simple but effective methods to organise the
workplace.
• The methodology does however, go beyond this simple
concept, and is concerned with making orderly and
standardized operations the norm, rather than the exception.
• Posters bearing the 5S terms can be found on the walls of
Japanese plants, and are a visual aid to organisational
management.
20. The Japanese Origins
• Seiri Sort
• This requires the classifying of items into two categories,
necessary and unnecessary, and disregarding or removing the
latter.
• Seiton Straighten
• Once Seiri has been carried out Seiton is implemented to classify
by use, and arrange items to minimise search time and effort. The
items left should have a designated area, with specified maximum
levels of inventory for that area.
• Seison Shine
• Seison means cleaning the working environment. It can help in the
spotting of potential problems as well as reducing the risk of
fire/injury by cleaning away the potential causes of accidents.
21. The Japanese Origins
• Seiketsu Systematise
• Seiketsu means keeping one's person clean, by such
means as wearing proper working clothes, safety
glasses, gloves and shoes, as well as maintaining a clean
healthy working environment. It can also be viewed as
the continuation of the work carried out in Seiri, Seiton,
and Seison.
• Shitsuke Sustain
– Shitsuke means self-discipline.
• The 5 S‘s may be viewed as a philosophy, with
employees following established and agreed upon rules
at each step. By the time they arrive at Shitsuke they
will have developed the discipline to follow the 5 S‘s in
their daily work.
22. Lean Building Blocks
KAIZEN
Pull/Kanban Cellular/Flow TPM
Quality at Source POUS Quick Changeover
Standardized Work Batch Reduction Teams
Value
5S System Visual Plant Layout Stream
Mapping
Principles for Implementing
Lean Manufacturing
23. Push Production/Distribution Systems
• A push system produces finished goods
inventory in advance of customer demand using
a forecast of sales.
• Parts and subassemblies are “pushed” through
the operating system based on a predefined
schedule that is independent of actual customer
demand.
• A traditional automobile factory and distribution
system is a good example of a push system.
24. TAKT time
• The available operating time to satisfy
customer demands
• Establishes the pace, beat or cadence of the
process
• TAKT time is used to balance the various loads
and identify the bottlenecks in the process
25. Flow
• Using one piece flow by linking
of all the activities and
processes into the most
efficient combinations to
maximize value-added content
while minimizing waste.
• The waiting time of work in
progress between processes is
eliminated, hence adding value
more quickly.
26. Pull
• Pull = response to the customer’s rate of
demand i.e. the actual customer demand that
drives the supply chain.
• Based on a supply chain view from
downstream to upstream activities where
nothing is produced by the upstream supplier
until the downstream customer signals a
need.
27. Perfection
• The journey of continuous
improvement.
• Producing exactly what the customer
wants, exactly when, economically.
• Perfection is an aspiration, anything
and everything is able to be
improved.
28. Summary
• Lean manufacturing was developed by the Japanese.
• Lean is a philosophy that seeks to eliminate waste in all
aspects of a firm’s production activities.
• Lean is principally associated with manufacturing industries
but can be also equally applicable to both service and
administration processes.
• Works on 5 basic principles.
• Cornerstone of Lean is the Toyota Production System.
• Considers 7 Wastes (muda).
• Utilises 5 S methodology.
