P. 1
Lean Manufacturing

Lean Manufacturing

|Views: 161|Likes:
Published by Dhaval
this just an our all look on topic of lean manufacturing form especially only management point of view rather the engg details
this just an our all look on topic of lean manufacturing form especially only management point of view rather the engg details

More info:

Published by: Dhaval on Mar 19, 2010
Copyright:Attribution Non-commercial


Read on Scribd mobile: iPhone, iPad and Android.
download as DOCX, PDF, TXT or read online from Scribd
See more
See less





Traditional Manufacturing

(In flowchart symbols)


Lean Manufacturing


Alternative process

Predefined Process


Manual Operation Manual Input

A Project on Lean Manufacturing
Submitted to Prof. Salma By Dhaval Shah Sohil Jewani Murtuza Bhanpurawala 49 41 37


Lean Manufacturing

Sr no.


Page No.


Lean Manufacturing
2) 3) 4) 5) 6) 7) 8) 9) 10) 11) What is LM? Concept of Waste Key Lean Principles Four Pillars of LM Implementation of LM Systems Advantages of LM Traditional verses LM Hurdles / Obstacles on the Lean Path Conclusion Case Study: 1) Mahindra & Mahindra Ltd. 2) Toyota Motor Company 17) References 12 04 05 05 06 07 08 08 09 10 11

Despite enjoying nearly ten years of globalizations, most of the Indian automobile manufacturer steel follow the customize mass production (batch mode) system. Consequently they suffer from abnormally high inventory levels, high cycle times and enormous wastage. It results in increase inventory cost, which in turn elevates cost of

Lean Manufacturing
production. And the high cycle time lead to reduced customer satisfaction. Manufacturer cannot afford the comp lances that they enjoyed in the pre liberalizations era. Why? Because the global village is continuously spreading with new players and innovations, taking the competitions and quality standards to a new height. Given this scenario, it is high time the automobile manufacturer quit the traditional path and plunged in to something more innovative and productive. The lean manufacturing technique is a tried and tested system that carries many promises for the Indian automobile manufacturer. Over the past 10 years or so, lean manufacturing has been receiving an increasing amount of attention as one source for productivity improvements and cost reductions in manufacturing. Hailed by its proponents as a breakthrough means to analyze and improve production and the factory floor environment, lean manufacturing is abroad collection of principles and practices that can improve corporate performance. The argument is that lean manufacturing offers revolutionary rather than evolutionary efficiency improvements.

What is lean manufacturing?
Lean manufacturing is a production strategy that aims at high levels of production using lesser effort, time and material. It is a combination of Japanese s concept and technique that works together to improve the productivity of the organization, and consequently elevate the organization to a competitive position. It is an integrated business approach adopted to eliminate non -value added activity from the customer delivery cycle in the operation. This approach enables the companies to response quickly and profitably and changes in customer demand. Many people wrongly confine lean to the shop floor; actually lean is the way of thinking, and attitude. The technique of lean can be applied to every situation in a company, by finding out what the customer want, eliminating, waster from process and making the value flow continuously according to the customers pull. The idea is to create a culture in which people in an organization are continuously improving their productivity every day, in every way.


Lean Manufacturing The concept of waste:
It is essential to be able to understand and identify what we mean, by wastage in an organization. Simply if it doesn t add value, it is waste. According to Boeing the term waste indicates unnecessary complexity in work, processes, redundant labor, excessive production, unimaginative use of space, loss of energy, high rate of defect, unnecessary use of material, loss of time and unrequited transportation. A western has been the bone of manufacturing sector that directly affects the bottom line. Though unavoidabl e, it is possible to cut to waste through proper planning and efficient work process. Through the implementations of the lean manufacturing system, the company intends to organize the system by identifying and eliminating the waste the ultimate aim being to increase productivity, customer satisfaction and revenue.

Key lean principles:
Eliminations of the waste is the fundamental principle of lean manufacturing and to achieve this following principles should be practice. LM s essences lies in producing with as few people as little inventory and as little waste as possible. Lean ensures that each production stage processes exactly what , how much and exactly when the next stage wants it. Lean allows enormous variety in product without the kind of change over cost that customizes mass production involves. Lean embraces every fact of organization accounting and strategic planning. sourcing, manufacturing, marketing,

Four pillars namely, 1) Just In Time (JIT) concept 2) Supply Chain Integration 3) Cellular Manufacturing and


Lean Manufacturing
4) Kaizen Support LM

The JIT concept requires the raw materials for each step in a process to reach the shop floor at exact time and not earlier. This leads to a huge fall in the inventory cost. The goal JIT is achieved by using techniques like standardizations of processes, TPM and Kanban throughout lean manufacturing and ultimately through JIT. The manufacturing unit can achieve following goals. 1) Reduce set time. 2) Guaranty that material will be there without excess handling. 3) Guaranty of machine availability and reliability. Advocate of JIT claims it is a revolutionary concept that all manufacturers have to adopt in order to remain competitive. Also known as Kanban is continuously reduces product cost by storing the elimination of waste; no rejection, no delay, no stock piles, no idleness and no useless motion. To achieve low cost high quality, on time production , the JIT system removes stock accumulations between successive operations. It does so by organizing around a production quantity of 1 which means the ideal lot size for each part is 1. Because no safety stock is allowed, no part can faulty. The responsibility for eradicating defective work and equipments failures is placed on individual operations. Output Quotas are inviolable and fluctuations in daily schedules are minimizing to maintain nearly uniform flow rate. Results from applying these principles, along with a concentrated effort to improve productivity, have frequently been spectacular.

The lean system can be effective only if it is executed all along the production chain i.e. from the supplier s supplier to customer s customer. Every link along this chain is affected if a single member does not deliver. It is a long process involving several interfaces,


Lean Manufacturing
and s manufac urers need to take ste s towards strateg c sourc ng and organizing the

3 C L L LA
§ ¦ ¥

C N L G : 

In the traditional batch mode or assembly line manufacturing process the layout of shop floor is done according to the activities Not so in the lean manufacturing system, where manufacturing cell is designed to

process parts of the product in separate fixed areas, thus eliminating value-added non

Ultimately, layout creates


This reduces the order flow time, work-in-progress, material handling

cost, and so on, thus customer satisfaction profits and elevating

4 KA Z N:



the a




¦ ¨ ©


supply base






Lean Manufacturing
Lean manufacturing produces optimum results only if it is implemented as an ongoing improvement process, involving everyone at every level. Kaizen technique is another essential for lean manufacturing system. Masaki Imai, the founder of kaizen institute, expounds kaizen as Continuous Improvement, without spending much money using common sense . It doesn t cost money but it changes

the way people do the job. It is about making the most about 5 -M of the organization i.e. 1) Manpower 2) Material 3) Method 4) Machine 5) Measurement The practice of this technique is based on strong assumption that every individual or group of individuals always carries a hidden capacity to keep on improving the output in terms quality and quantity. The goals of kaizen are Continues improvements & Self -motivation and development.

Kaizen is top-to-bottom program. It is responsibility and interest of the top management to inspire the human resource of the organization and inform them about what s, Why s, and How s of kaizen. The basic steps to incorporate kaizen as an enterprise -wide program consists of the 4I s. 1. Inspire 2.Inform 3.Implment 4.Im prove

IMLPEMENTATION OF LEAN MANUFACTURING SYSTEM:After understanding the concept and basic principle of lean manufacturing it is important to see how it is implemented because theory without practice is sterile and practice without theory is futile. The process of going lean starts with attitude level, not at the shop floor level.


Lean Manufacturing
First requirement is a clear vision in top management second would be the cultivation of the right attitude or work culture, which would perhaps be more important than superb products, good ideas or technical innovations. The third need for championship mentality and team work. So far the implementation of lean manufacturing is the company particularly for the small scale manufacturing units. The arrangement has to bring about the following TECHNICAL CHANGES: 1) The first step towards the lean production is to make such process of consistent and predictable production. 2) Standardize the process sequence for all this similar looking / type / ca tegory parts, which may have minor difference in size. This will help in shop layout for continuous material flow. 3) Make the fixture, holders, tolling, adaptable to all parts with zero or minimum setup change time. 4) Simple and autonomous machines. 5) Preventive maintenance of machine for zero break downs during production. The management should also bring about the following ADDITIONAL CHANGES: 1) Converting skill and will into military drill. 2) Pre-emptying future problems at planning stage. 3) Catching defect upstream. 4) Checking to be done to ensure safe future production. 5) Responsibility to be passed on downwards. 6) Use of statistical tolls and imbible statistical thinking particularly cause and effect and frequency distribution. 7) Satisfy customer expectations. Lean manufacturing works in association with Total Productive Maintenance (TPM). TPM aims at zero accidents, zero breakdowns and zero defects. TPM again is enhanced by the calculation of Overall Equipment Effectiveness. (OEE) OEE = Availability * Performance Rate * Quality.

Advantages of LM:

Lean Manufacturing
1) since LM involves the JIT inventory levels (raw material, WIP, finished goods) can be brought down to nearly nil, thus reducing cost 2) LM uses simple multitask machinery where by product of different design can be produced on the same machine. 3) Transition between various designs takes only a few minutes. This enables increase in flexibility and better response to customer requirements. 4) It also reduces customer lead time, cost of product ion and wastage. 5) Lm is an effective competitive tool, not in then least due to dramatic saving in productivity and cycle time to WIP inventory. LM helps to unleash the power of the work force, ultimately taking the organization to, a competitive position. Hence LM about making the company trim, fit, strong and swift.

TRADITIONAL MASS PRODUCTION Business Strategy Product-out strategy focused on


Customer focused strategy focused on


Lean Manufacturing
exploiting economies of scale of stable product designs and nonunique technologies Customer Satisfaction Makes what engineers want in large quantities at statistically acceptable quality levels; dispose of unused inventory at sale prices Leadership by executive command identifying and exploiting shifting competitive advantage.

Makes what customers want with zero defect, when they want it, and only in the quantities they order


Leadership by vision and broad participation Flat structures that encourage initiative and encourage the flow of vital information that highlights defects, operator errors, equipment abnormalities, and organizational deficiencies.


Hierarchical structures that encourage following orders and discourage the flow of vital information that highlights defects, operator errors, equipment abnormalities, and organizational deficiencies. Based on price Information-weak management based on abstract reports

External Relations Information Management

Based on long-term relationships Information-rich management based on visual control systems maintained by all employees Harmonious culture of involvement based on long-term development of human resources Human-scale machines, cell-type layout, multi-skilling, one-piece flow, zero inventories


Culture of loyalty and obedience, subculture of alienation and labor strife Large-scale machines, functional layout, minimal skills, long production runs, massive inventories


Operational capability

Dumb tools that assume an extreme Smart tools that assume standardized division of labor, the following of work, strength in problem identification, orders, and no problem solving skills hypothesis generation, and experimentation Maintenance by maintenance specialists "Isolated genius" model, with little input from customers and little respect for production realities. TRADITIONAL MASS PRODUCTION Equipment management by production, maintenance and engineering
Team-based model, with high input from customers and concurrent development of product and production process design




Production schedules are based on«

Forecast ² product is pushed through the facility

Customer Order ² product is pulled through the facility


Lean Manufacturing
Products manufactured to« Production cycle times are« Manufacturing lot size quantities are« Replenish finished goods inventory Weeks/months Fill customer orders (immediate shipments) Hours/days

Large, with large batches moving between operations; product is sent ahead of each operation By department function

Small, and based on one-piece flow between operations

Plant and equipment layout is« Quality is assured« Workers are typically assigned« Worker empowerment is« Inventory levels are«

By product flow, using cells or lines for product families 100% at the production source With one person handling several machines High ² has responsibility for identifying and implementing improvements Low ² small amounts between operations, ship often

Through lot sampling One person per machine

Low ² little input into how operation is performed High ² large warehouse of finished goods, and central storeroom for in-process staging Low ² 6-9 turns pr year or less Low ² difficult to handle and adjust to

Inventory turns are« Flexibility in changing manufacturing schedules is« Manufacturing costs are«

High ² 20+ turns per year High ² easy to adjust to and implement

Rising and difficult to control

Stable/decreasing and under control

An organization that wants to get lean may face a few problems that require serious thought. Obstacles in transformation to lean enterprise:


Lean Manufacturing
1) Top management lacks strategic understanding of lean. 2) Lack of specific skills or knowledge regarding lean enterprise. 3) Culture, ego, organizational inertia. 4) Management reluctance to empower employees. 5) Fear of change of loss of organizational power. 6) Internal system causing hurdles. 7) Old engineering concepts. 8) Inflexible accounting methods. Manager to coach is difficult change and it is to be expected that there would be initial difficulties. People would go through stages of refusal, anger, bargaining and finally accepting the change but stay firm against initial resistance and battle would be own

With increased from foreign competitors especially China all the businessman in India, need to rethink about these business on a war footing. With the adoption of LM the working space requirements have been reduced productivity, gains have been of ord er of 30-40% the inventories of raw material and components work in process and finished goods have came down. There, reducing the working capital needs and interest burden. The quality of total service has noticeably improved leading to delighted custome rs, loyal customers . Thus, beating the competition. It may be noted that the most important part required for implementation of LM is the commitment from top management and championship mentality in the minds of our manufacturers. It is precisely for Indian industries that LM is an essential tool to respond quickly to customer, to work effectively and to reshape their business.



Lean Manufacturing
Most of the hurdles on the lean path can be overcome through effective forecasting and planning, as it is done by Mahindra & Mahindra .(one of the largest player in the Indian automotive industry). The Mahindra group follows a policy of non-retrenchment. Once upon a time, at Mahindra & Mahindra, Kandivali, 1134 employed produced 75 en gines per day. After they went lean, they progressed to a production of 128 engines a day with 770 people. The rest of the employees were transferred to their Nasik plant. Today the plant at Kandivali has around 7800 workers in the automotive sector. Altho ugh the issue of the human resource may be delicate. The problem can be easily overcome, if handled with care and sensitivity. Despite the difficulties associated with the implementation of lean , several companies have implemented it successfully and moved ahead. Mahindra & Mahindra selected the route of operational excellence to fight their competition. Regarding their success with the lean mode of operation, Mr. Rajan Narayan, (M & M s Vice -President) says that they have achieved an improvement in the work culture, productivity and revenue at Mahindra & Mahindra solely due to the lean way. Mahindra & Mahindra are not the only ones who have opted for the lean method. Bajaj Auto Ltd., Pune, Lucas TVS Ltd., Chennai and LML Ltd., Kanpur and are few of the

companies that seem to the trading to the lean route successfully.

By 2010, Toyota wants to make a millions vehicles and rule over a third of Indian passenger car market by following lean way only. From laggard to leader: Rarely does Toyota ever enter a new market first. Invariably, it allows competitors to lead and waits for the market initial characteristics to be revealed before firming up its own strategy. Far from suffering from it, Toyota has actually been able to read market better and because of that overtake the early entrants in the market share. For example, it didn t get into the Indonesian market until 1973; two years after General Motors entered the country

Lean Manufacturing
through a tie-up with Isuzu. But today Toyota leads the market with a 28% share. Even in Vietnam, the Japanese major has been able to combat fierce competition and raise its market share to 36% from 29% over the last two years. The only exception to its successful run in Asia seems to be Thailand, where its market share has dropped from 36% to 28% , and could slide further in 2001, but few doubt Toyota s ability to bounce back. But the battles that Toyota really wants to win are in China and India, where it has only recently entered. Both the mar kets are growing. The Chinese for example, are expected to buy 9 lakh cars a year by 2005. Toyota got an improved to manufacture in China only last year and will have to beat General Motors, which has set the biggest foreign automotive plants (at cost of $2 billion).



Vehicles Sold

Total Revenue $184.63 billion

Net Profits

Market Capture

General Motors Ford Daimler Chrysler Toyota

8.59 million

$4.44 billion

$23.30 billion

7.42 million 4.19million

$180.59 billion $152.44 billion

$3.46 billion $7.41 billion

$32.01 billion $ 34.23 billion

6.0 million

$121.41 billion

$4.26 billion

$102.30 billion


Lean Manufacturing

LEAN THINKING by James P. Womack & Daniel T. Jones. PRODUCTION SYSTEM by James L. Riggs. QUALITY CONTROL SYSTEM by J. R. Taylor, Tata McGraw Hill Publication. Web addresses: http://lean.mit.edu/public/index.html. http://www.toyota.com/html/about/opertions/manufacturing/manu -locations/tmmk.html.

History of lean manufacturing


Lean Manufacturing
It is a popular fact that JIT system started in the initial years after the World War II in Japan for the Toyota automobile system. Toyoda family in Japan decided to change their automatic loom manufacturing business to the automobile business. But they had few problems to overcome. They could not compete with the giants like Ford in the foreign markets. Therefore Toyota had to depend upon the small local markets. They also had to bring down the raw materials from outside. Also they had to produce in small batches. They haven t had much of capital to work with. Therefore capital was very important. With these constrains Taiichi Ohno took over the challenge of achieving the impossible. With his right hand man Dr. Sheigo Shing o for next three decades he built the Toyota production system or the Just-In-Time system. Although the concept was mastered in Japan for the Toyota production system, the roots of this concept goes into the sixteenth century. Eli Whitney s concept of interchangeable parts said to be the very initial beginning of this concept. But first or at least famous implementation of something similar to JIT happened a century later in manufacturing of Ford Model T (in 1910) automobile design. Manufacturing was based on line assembly. Every part moved without interruptions to the next value adding point. Parts are manufactured and assembled in a continuous flow. Even Henry Ford may not have understood the basics behind his system. But it saved lots of money and made Henry Ford a richest on the planet at that time. Although very successful in the initial years, Ford system had it drawbacks. One of the major drawbacks was that its inability to the change. This was due to the push strategy implemented in the Fo rds system. They relied on keeping machine busy without thinking about the final outcome. They had huge stocks in the form of finished goods and in the form of Work In Progress. This led to the inflexibility of the system. Also this wasted money unnoticed. Another major drawback of the system was the poor handling of the human resource. This led to have a less motivated set of peopl e in the organization. But in Japan, they studied the system very well and saw the problems that Ford system had. But the core concept of the Ford system was obeyed. This is the continuous flow of value system. Anything distracting it treated as a waste. Various pioneered work from people like Deming and Juran in the field of quality improvement was


Lean Manufacturing
used in the system. This bought built in quality to the system. More importantly Ohno and Shingo understood the drawbacks in the push system and understood the role played by the inventory. This led to Pull system rather than the push system, where the parts are produced only when they are pulled by the process before that. This is similar to the concepts in the super markets. When the shells are being emptied (that is when people buy the product), they are refilled with new ones. This system developed in Toyota from 1949 to 1975 virtually unnoticed by the others even within Japan. But in the oil crisis in 1973 Japan economy suffered and most of the industries had losses. But Toyota overcame these problems. They stood out from the r est. This was the eye opener for other Japanese firms to implement this system. But this system got popular in the western world with the book The machine that change the world written by James Womack in 1990. This book was aim ed to give the history of the automobile with the plant details of some of these manufacturers. He gave the name Lean Manufacturing to this system . This was the eye opener for the western world about this system. Thereafter the concepts were practiced all over the world. Experiences and knowledge vastly improved the system. This system developed in Toyota from 1949 to 1975 virtually unnoticed by the others even within Japan. But in the oil crisis in 1973 Japan economy suffered and most of the industries had losses. But Toyota overcame these problems. They stood out from the rest. This was the eye opener for other Japanese firms to implement this system. But this system got popular in the western world with the book The ma chine that change the world written by James Womack in 1990. This book was aimed to give the history of the automobile with the plant details of some of these manufacturers. He gave the name Lean Manufacturing to this system . This was the eye opener for the western world about this system. Thereafter the concepts were practiced all over the world. Experiences and knowledge vastly improved the system. But there were many people who just tried to use the tools in lean manufacturing without understanding the meaning of them. They eventually failed. But there are number of places this system is working well. The complete elimination waste is


Lean Manufacturing
the target of the system. This concept is vitally important today since in today s highly competitive world there is nothing we can waste. Even today this system adds to its history. Therefore there will be a lot to add to this chapter in the coming years.


You're Reading a Free Preview

/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->