APO E LEARNING PROGRAM “INTEGRATING LEAN

MANUFACTURING SYSTEM AND INDUSTRY 4.0

CONCEPT”
Module 1: Overviewing Lean Manufacturing System
 Evaluation of manufacturing system
 Birth of Lean manufacturing system
 Beyond Lean with Industry 4.0
 Quiz

Slide 1
Evaluation of manufacturing system
To buy a car in 1890s will be not as simple as we thought in present day,
the buying process will be complicated, time consuming and the cost of
car will be relatively high.
May not easy to buy a
car in 1890s

Slide 2
Evaluation of manufacturing system
The buyer who wanted a car will have to find a local car repair
workshop which represent and link to others related services provider
such as paint shop, metal fabrication workshop, furniture shop and etc.
Several meeting will be call to understand the buyer requirements and
needs in detail while in the progress of works, the buyer may get
involve directly to ensure fulfillment of pre determined requirements.

Find a workshop, paint

shop, metal fabrication
shop…..

Slide 3
Evaluation of manufacturing system
Once the car finally assembly, the buyer may test drive himself and may
further modify accordingly to his wish, the final produced car will be
unique and one of a kind.
Such production process refer as craft production and generally costly
and low in production volume

Test drive and modify

your car…..

Slide 4
Evaluation of manufacturing system
Craft production or job shops where highly skilled based workforce
treated each job and product uniquely had the following characteristics

• Low production volumes, high prices

• General purpose machines (e.g. cutting, drilling and grinding, etc.)

• Decentralized organization

• Unpredictable quality

• Customized to fit personal needs

Slide 5
Evaluation of manufacturing system
Craft production in the 1900s were attempted to develop into the
process of product replication beyond the craft jobs based to more
efficient mode of mass production stage, nevertheless, some craft
production continued to survive till present day in tiny niches and
luxury market.
Companies such as Ferrari, Lamborghini, Hermes, etc. continue to
produce small volumes of product for customer who willing to pay high
prize for the product or services.
Craft production in present day ?

Slide 6
Evaluation of manufacturing system
Inn the late 1800s, various industries attempted to move from craft
production to more larger scale of production with more efficient
operation. Instead of making one product at one time which take
longer time and higher cost, the new trend aim to more efficient
approach to produce goods with consistent quality, shorter lead time
and lower cost.
Mass Production

The mass production concept emphasizing

standardized and interchangeable parts, less depends
on highly skilled workers, simplified and documented
procedures, use of mechanization or procedures,
process quality control, etc.

Slide 7
Evaluation of manufacturing system
Mass production
• Frederick W. Taylor (1856 -1915)
• Father of scientific management and efficiency movement
• Application of scientific principles into manufacturing
• Identify the best way to do job using industrial engineering
techniques
Among the initiative of mass production concept, the major breakthrough was
made by Frederick W. Taylor (1856 -1915), with his publication “The principles of
Scientific Management” layout the fundamental of mass production.
Taylor believed the best way of increase efficiency and effectiveness of a
production process should be applying scientific principles into manufacturing
through scientific study and analysis.
He suggested the planning of production to be separated from production which
result establishment of industrial engineering

Slide 8
Evaluation of manufacturing system
Mass production

• Taylor 4 principles

Taylor believed that there Development of a Scientific selection of

was only one best true science the workman
method of works that
could maximized the
efficiency and
effectiveness of
production processes.
Intimate and friendly
Scientific education
corporation between
and development of
management and
workman
workman

Slide 9
Evaluation of manufacturing system
Taylor stated the best way of increase efficiency and effectiveness of a
production process should applying scientific principles into
manufacturing through scientific study and analysis. With his
introduction of standardization of work methods result the establishing
of industrial engineering
• Separating planning from production

Develop scientific
Establish goals for
methods for doing Time & motion study Work standards
productivity
work

Train the personnel in Improved

Establish systems of
how to use the Equipment management
rewards for meeting
methods and thereby standardization communication
goals
meet the goal system

Slide 10
Evaluation of manufacturing system
Mass production
Among the innovation from Taylor’s work,
1.Standardizes work lead to identifying the best
and most efficient way to do works
2.Reduce cycle time lead to tangibilize the time Standardized work
require for a given process which layout the
fundamental of baseline measure for Reduce cycle time
subsequent improvement initiative
Time and motion study
3.Time and motion study: as a tool for
establishing standardized works Measure and analysis
4.Measure and analysis as fundamental or
prototype of today famous PDCA, Plan Do
Check Act which continually improve the
processes
Slide 11
Evaluation of manufacturing system
Mass production: The ford system
Another key feature in the era of mass production will be Henry Ford Sr. (1863- 1947)
Between 1908 to 1920 Ford type of mass production reached the peak of producing 2
million units of car per year and also well know of his $ 5 a day salary which was double
the market rate of average similar types of work.
Ford’s approach was not limited to the production system but also applicable to
finance, the supplier of Ford will get pay after 25 days of part delivered, however the
manufacturing cycles as less than a week and the logistic took another week but
payment from dealer will be cash on delivery, therefore those money collected from
car sales was in the bank at least 1 week ahead of the supplier part payment due date.

• Ford model T, 1908-1920s (2 millions unit per year)

• Double the wages for assembly workers: $5 / day

• Complete turn the inventory every few day

Slide 12
Evaluation of manufacturing system
Mass production: The ford system
Initially, Ford started his car assembly with car being stationary and the subassemblies
and assemblies works moving from worker to workers which eventually lead to the
final assembly area flood with workers and huge pending works.
The situation improved after team decided to assemble the car in a row, where the car
were pulled along by a rope and wench. The car assemble in a row was a benchmarked
result of watching a moving conveyor of carcasses in a Chicago slaughterhouse.
The modified version of car assembly causing the set up of a big wench and thick rope
to pull the car along the assembly, the assembly line further divided into 15 process
steps which allow the rope to be pulled along every hours. Components and parts were
send to each of the 15 processes together with three or four worker for each processes
in balancing manner.
The improved version of assembly in a row results reduce of chassis assembly time
from 12 hours to less than 3 hours

Slide 13
Evaluation of manufacturing system
Mass production
Key features of The Ford system

Quality Supplier
Continues flow Which not only effective in car
inspector control assembly but also effective in
many different production lines
such as B-24 bomber building
during world war II, 55 minutes to
Workload Production
Profit sharing build one bomber consist of more
balancing control parts compare to a car
The landmark text by Henry Ford
“Today and Tomorrow” was
Employees published in 1926 remain the
Employee
Error proofing can stop the classic reference of today lean
improvement
production line manufacturing system.

Slide 14
Evaluation of manufacturing system
Mass production
The traditional mass production system which consist of Taylor’s system, Ford’s
innovation mix with others guru concepts and developments of labor trend started
to show sign of weakness such as:-
1. Worker, which long worker hour result endless battles between Union and employer for reducing working hours, lead
to poor sense of belonging among workers
2. Quality were not always priority where end of line inspection more emphasized with team of workers allocated for
repair after the final inspection
3. Machinery become larger based on accounting principles which justify the expense of machinery investment. A larger
machine will tend to over production that lead to others type of waste such as unnecessary inventory, work in progress
and additional storage space.
4. Engineering works from the design getting more
Workers
myriad specialties where lead to poor communication
among engineer and longer development time for new
Machinery
product that results potential design problems

Despite these limitation of mass production system, it

remain the dominate approach of manufacturing till the Quality
raise of lean manufacturing system Engineering

Slide 15
Birth of Lean Manufacturing System
Toyota Motor’s Engineer Eiji Toyoda
visited Ford, 1950 in order to seek for solution to his
family automobiles business

Ford’s Rouge plant: 7,000 unit cars versus Toyota

plant: 2,685 unit cars

Nevertheless upon his discussion with Taiichi Ohno,

they concluded that:-

1. “Mass production would NOT work in Japan”

2. There are some possibilities to improved the
production system
Slide 16
Birth of Lean Manufacturing System
The challenge

Japan
Domestic Others
Economy
market competitor
after WW2

After reviewing the mass production study findings, both Eiji and Taiichi concluded the mass production
system will not work at Japan, whereby:-

1. The domestic market was too small but demanded a wide range of vehicles from large trucks to small
truck for farmers, luxury car for those rich people, while in nature environment of Japan, small car may
be suitable for Japan narrow road and energy cost
2. Japan economy after world war II was starved for capital, which investment of large machinery and
new technology was not practical
3. That’s many foreign car manufacturer compete in the Japan market
Slide 17
Birth of Lean Manufacturing System
1950. Firing a quarter of worker
Faced bankruptcy !
Problems at Toyota to survive ?
Union negotiation
A quarter worker Totally new
In 1950, Japan was in the depression while Toyota faced terminated employment contract
bankruptcy, The president would like to terminate at least a
quarter of workers as his plan for the company to survive,
however the company union was in strong bargaining
position after the enforcement of labour law in1946 which Kiichiro Toyoda resigned Cooperation, flexibility
the union holding the right of restrict the company owner to
terminate employees. & mutual benefits
After the long negotiation between the company and union,
the final compromised solution as Kiichiro Toyoda step down Life time employment
from company president to take the responsibilities for
company failure, a quarter of workers was terminated as Company & worker =
originally planned while the remaining workers will be
guarantees for lifetime employment and pay steeply graded Pay steeply graded to partners
to seniority and their bonus shall tied with company
profitability. seniority & bonus tied to
The remaining workers also received access to Toyota
facilities such as housing and recreation while the employee company profitability
also agreed to be flexible in work assignments and active in
support the interest of company with improvement
initiatives.
Completing Lean
Such remarkable agreement layout the foundation of lean Manufacturing System Condition of Lean
manufacturing which the company and workers are
becoming partners based on corporation, flexibility and Production
mutual benefits.
Solving Toyota
problems
Slide 18
Birth of Lean Manufacturing System

Dedicating 1
stamping
machine to a
single part

To dedicate one stamping machine to a single part was very common in the big three.
As machinery becoming larger and more specific to produce single special part in pursuit the mass
production concept.
Huge quantity of work in progress build up rapidly regardless with or without confirmed customer order.
However in the context of Toyota which barely survive from bankruptcy, allocation of dedicated machinery
and produce specific parts without confirmed order was not any option, the team lead by Taiichi Ohno
have to explore alternate improved approach with existing facilities and machinery

Slide 19
 Birth of Lean Manufacturing System
Dedicating
stamping
machine Stamp multiple
part from each Change over
for 1 part within minutes
machine
Change over
within 1 day Less stocks
Quick change over
The limitation of budget having dedicated machine for 1 specific
parts result innovation in usage of machine. Less defects
Machine use for produced multiple types of parts require quick
change over from one part to another part, therefore the Smaller batches
change over time significant reduce, a day die change over at
mass production dedicated machine now can change over
within several minutes. And smaller was produced compare Cost saving
with mass production dedicated machine, small production lock
contributed in quality improvement which defects could be
detected more quickly and reduce quantity of defects. Small Foundation of LEAN: Make
batches and quick change over contributed to cost saving and
lead to establishment of Lean foundation.
more with less
Slide 20
Birth of Lean Manufacturing System
Lean at Toyota: The Pioneer

The origin of Lean manufacturing at Toyota tune over generations, among them, three of the most refer pioneer who creating the lean
manufacturing system at Toyota refer to Sakichi Toyoda the founder of Toyota group, his son Kiichira Toyoda and a remarkable production
engineer Taiichi Ohno.
Sakichi Toyoda invented the loom that stop automatically when any of the threads snapped. Such invention lead to automated loom works
where dozens of looms could be supervised by a single operator. The invention lead to the foundation of designing machinery automatically stop
whenever detected defect which prevent subsequent large quantity of reject.
When the Toyota group started the automobile manufacturing, Kiichiro Toyota visited the United State to benchmark the large scale mass
production system which eventually concluded the mass production system will be not working at Toyota. Nevertheless Kiichiro improving the
system to only provide the right kind and quantity of part to the car assembly process when they needed them. The car assembly process took
place simultaneously and synchronously throughout the production processes which laid the ground work for Lean just in time production.
Taiichi Ohno with his well know concept of pull production which inspired by observing the American supermarket in stock management. Taiichi
with strong support from Toyota management manage to fine tune the lean manufacturing concept at Toyota thru out 30 years with various
tools developed such as Kanban system in implementing lean.
In 1969 Taiichi established the Production Research Office which later know as Operations Management Consulting Division to setting out joint
task group with major key supplier for continuous Kaizen project that link to annual cost reduction program

Slide 21
Birth of Lean Manufacturing System
Lean at Toyota: The basic condition

Making Lean work at Toyota

Cultivating
Top management All Employee
leadership

Strong and Establish a

Every one in the
visible system to
organization
commitment to cultivating
must participate
the system, capable leaders
in the
directly and provide
companywide
implementation necessary skilled
activities
and involvement

Slide 22
Birth of Lean Manufacturing System
Lean at Toyota: Supplier Burden
Making Lean work at Toyota ?
Benefits
?

Suppliers Suppliers

Just in time and others elements in Lean manufacturing require the supplier supply the right parts at the right time
and right quantity and quality. Which always refer as whether such arrangement is kind benefits or more toward
burden to supplier.
The Lean manufacturing require synchronizing activity throughout the production processes and the supplier
participate in Toyota supplier program reported reduce in inventory and quality performances. The improvement may
also beyond the manufacturing process to employee management relationship where the system provided
expanded role for employees in designing and managing their own work which lead to joint effort of employee and
employer in pursuing improvement in quality, productivity and working condition.

Slide 23
Birth of Lean Manufacturing System
Lean at Toyota: Workers
Stimulating
Making Lean work at Toyota ?
Stressful
?

Worker at Toyota given with lot of responsibilities and also flexibilities. Whereby team of Toyota worker
can design/decide the standard operation procedure at their work places and also looking into potential
further improvement.
At Lean manufacturing, worker encourage to acquiring multiple skills which any member of the team
could inter change and replaceable in the absent of others.
As the lean manufacturing system emphasize on waste elimination, the workers also empower to stop
any non value added including stopping the production line.
After all the lean manufacturing workplace also refer as stimulating workplace where employee can
take charge of their own works

Slide 24
Birth of Lean Manufacturing System
Lean at Toyota: Customer
Customer (including both of us) always want
the cheapest price (free in possible), best
Making Lean work at Toyota
product, and best quality and want it as soon
as possible.

Lean manufacturing fulfilling such needs for

customer demand efficiently and promptly Best
by linking all production activity to sales Lowest product
representative right to the moment customer prices
confirming the order
Best
The key elements to ensure fulfilling quality
customer demand should consist of
following:-

1. Leveled production system

2. Continued flow processing
3. Pull production
4. Takt time As soon as possible

Slide 25
Birth of Lean Manufacturing System
Lean at Toyota: Pull Production
The supermarket stock management
represent the key feature of the lean
manufacturing system which the way
of links all production system to
market real demand.
As customer goes to supermarket to
withdrawn a can food from the rack
when it need its, the supplying process
will supplier the stock to replenish
what was withdrawn.
Therefore in the application of lean
manufacturing system at Toyota, the
system inly initiated when the
customer confirmed the car order at
the dealer show room that trigger the
pull process to call for parts from
supplier and subsequent assembly
processes.

Slide 26
Birth of Lean Manufacturing System
Lean at Toyota: Flow
Separately positioned processing Continuous flow processing

The flow elements of Lean manufacturing lead to the continuous flow processing at Toyota which ideally only once piece
flow thru the processes. However, change over of product may happened in manufacturing processes result waiting or
idle time. To counter time wasted during change over, the Single minutes die exchange (SMED) concept was introduce
not only to reduce change over time but also to improve quality and reduce batches size to save on inventor storage. The
lead time of single unit also significant reduce due to smaller batches.

Slide 27
Birth of Lean Manufacturing System
Lean at Toyota: Takt time
As lean manufacturing at Toyota links all the production processes to
the customer demand, the linkage that triggering the start from
customer demand will be Takt time. Takt time represent the pace of
sales from the market and it shall determine the pace of production
process.
The number of workers may change depends on takt time, when the
take time getting shorter, number of worker may increase in order to
cope with the takt time. While if takt time getting longer, number of
worker shall be reduce

Slide 28
Birth of Lean Manufacturing System
Lean at Toyota: Multi Skilled Workers

When the market demand change (which consistently change all

the time), the takt time will change and will trigger number of
workers assigned on the production line change. With
considering the consistent in change and flexibility in man power
arrangement.
The workers as Toyota train to be multi
skilled workers as when fewer workers
on the production line, the broader
range of works require for 1 single
workers.
Such flexibility in arranging workers only
possible when people train to master a
board range of skills in Toyota.

Slide 29
Birth of Lean Manufacturing System
Lean at Toyota: Build in quality
To stop work when ever problem occur and preventing the defective parts or product
proceed to the next process simply refer as Jidoka in Toyota Lean application. The call
of stop may refer to design of machine automatically stop function when defective
spotted or could be stop by the operator.
The moving assembly line will not be stop immediately however the operator will be
informing their line leader or supervisor some any potential nonconformance or
suspicion. Than the leader shall review the problem before the fixed position.
If the leader not able to solved the problem before than, the moving assembly line will
be stop at the fixed position where more resources shall be deploy to solve the
problem before it move to the next process

Slide 30
Birth of Lean Manufacturing System
Lean at Toyota: Kaizen Standardized works

Improvement

Works Equipment
Kaizen Kaizen

Kaizen, the key to Japan’s competitive success, remain as important elements in Lean application in Toyota.
The Kaizen initiative consist of defining the standardized work and follow by the improvement which could be
improvement on works arrangement, machine or equipment improvement or combination of both.
At Toyota, consideration on 3 main element before structuring the work.
1. Takt time
2. Working sequence
3. Standard in process stock
The initiate standardized needed to establish the baseline prior any improvement activities which degree of
improvement could be measure upon Kaizen activities.
While the improvement itself could be on the work approach or the machine/equipment use or in both,
however usually the improvement will be relatively easy to start with work approach kaizen than the
equipment kaizen.
Slide 31
Beyond Lean with Industry 4.0
Lean at Toyota: Evolution beyond Lean
Raw material
Ind. 4.0 supply

New Upstream Globalization

technology
Lean at Toyota
After sales Beyond
Automotive automotive
services Downstream

Lean at Toyota always serve the fundamental goal of customer satisfaction, while the scope and context of
Lean at Toyota keep improve in respond to the changing world. The tools and techniques of Toyota Lean
changing as emerging of industrial 4.0 with new technology in cloud computing, big data, etc.
The expand of scope in both upstream and downstream and scope of business beyond the automotive.
Opportunities of Lean could extent to the upstream of raw material supply while down stream could beyond
the product and up to the services after sales.

Slide 32
Beyond Lean with Industry 4.0
Over years, organizations have widely
Supplier feedback Pull Production implemented Lean manufacturing tools and
Supplier development Continuous flow achieved plan improvements, nevertheless
Just in time (JIT) Set up reduction classical lean tools are losing edge over time
and getting increasing challenge to achieve
further improvement. While the introduction
Supplier Process of industry 4.0 with principles of cyber physical
factors factors system, internet and future oriented
technologies could further enhance human
machine interaction that may lead to new
dimension of improvement. However
Control & executing the Industry 4.0 could be cost
Customer intensive for most of the small and medium
human
factors enterprise and also surface issue of whether
factors
technology replacing the human works itself.
Various research conducted pertaining
Total productive whether Industry 4.0 replacing Lean or
maintenance (TPM) integrate with Lean. In the following modules
Customer
Statistical process we will explore the possibilities of application
involvement
control (SPC) of Industry 4.0 technologies and concepts into
Employee involvement the Lean dimension.
Slide 33