Lean Production System

Prepared by:
Hazel A. Caparas, MSIE, PIE
“We can’t solve problems by using the
same kind of thinking we used when
we created them”
- Albert Einstein
We Spend 75-95% of
Our Time Doing
Things That Increase
Our Costs and Create
No Value for the
Customer!
Lean Production

The word “lean” is an adjective

pertaining to something
containing little
Lean Production

Its objective is to utilize less of

human effort, engineering and
developing hours for new
products.
Lean Production

Lean Production is lean as the

term coined by John Krafcik, a
researcher of International Motor
Vehicle Program.
Lean Production

It includes methods of identifying and eliminating

muda on the process flow.

Muda means “waste” or any human activity which

absorbs resources but creates no value to the
product (Womack, Jones & Roos, 1990, 2007).
Lean Process
Business as Usual
CUSTOMER WASTE SERVICE
ORDER DELIVERY

TIME
LEAN PROCESS

CUSTOMER SERVICE
ORDER Waste DELIVERY

TIME (SHORTER)
8 Wastes
 Defects  Extra Processing
 Waiting time  Unnecessary
 Extra Motion Transportation
 Excess Inventory  Unutilized Talents
 Over Production
 Lean Principles

Lean thinking has five

essential approaches in
order to cater what the
customers’ desires and to
minimize wastes on the
process flow.
Lean Principles
Value
- Specify the value from the perspective of the
customers

Value Stream
- Identify the process creating the value and
remove the waste
Lean Principles

Flow
- Place the value creating steps in continuous flow

Pull
- Let the customers pull the product as needed
Lean Principles

Perfection
- Seek perfection by means of continuous
improvement
Value

 Specifying the value of the product based on

customers’ requirement at a specific time and
price is the critical starting point of lean thinking.
Value Stream
 Set of all activities involved in bringing value to the
product.
 It is comprised of a variety of functions starting
from concept generation, designing and
engineering, production launching, scheduling to
delivery, and converting raw materials to finished
goods.
Value Stream

 Activities can be categorized into three types:

(1) steps that explicitly create value to the products
(2) steps that create no value but unavoidable or
type one muda
(3) steps that create no value and could be
immediately eliminated or type two muda
Flow

 The idea of flow in lean thinking displays the

advantages and disadvantages of “batch-and-
queue” from “continuous flow” of production line.
Pull
 Excessive production and then pushing it to
customers does not guarantee a high returns for the
products.
 MRP is a push system normally a scheduled-based
system. On the other hand, Kanban system as an
element of JIT provides visible records that trigger a
requirement for more parts.
Perfection
 The most important control for lean production
system is striving for perfection.
 Ideal condition merely served as a guiding principle
for continuous improvement (Kaizen).
 Transparency for easy discovery of better ways to
create value is essential in chasing a perfect
production system.
Lean Consumption

Production is a process
- A series of actions manufacturers must perform
properly in the proper sequence to create value
for the consumers
Lean Consumption

Consumption is a process
- A series of actions consumers must perform
properly in the proper sequence to obtain the
value they seek
Lean Consumption

Provision is a third process

- The action that someone must perform between
the factory and the customers to achieve the
objectives of both parties
Lean Solutions
 Solve our (consumer, provider and manufacturer)
problems completely
 Stop wasting our time
 Provide exactly what we want
 Exactly where we want
 Exactly when we want
 And eventually permanently solve our major
problems
Evolution of Lean Production System
Craft Production
 Numbers of highly skilled workers and simple but
flexible tools were required to create products one
at a time as what the customers requested for
Lean Production

 Production of goods or services is lean if it

is accomplished with minimal buffering
costs.
 Lean is about more than waste elimination.
Lean Production

 Variability reduction is key to lean.

 Choosing the right mix of inventory,
capacity and time buffering is also
important.
Buffer Flexibility

Buffer Flexibility Corollary

 Flexibility reduces the amount of variability
buffering required in a production system.
Inventory Buffering

 Protect the throughput of the system from

inevitable variability
 Locating buffers is critical
Evolution of Lean Production System
Craft Production
 The main advantage of craft productions was
giving full attention to individual customers’
requirements
 Some disadvantages of craft production were
only rich could afford to buy cars due to its high
production costs
Evolution of Lean Production System
Mass Production
 More inclined on producing high volume
products with standardized designs to be able
to compensate for high operating cost thus
reducing the cost per unit of output
 Producing large volume of products in order to
balance different uncontrollable cost
Evolution of Lean Production System
Mass Production
 Intended to have complete and interchangeable
parts and was easy to assemble (Ford’s 1908
Model T)
 In 1908, a Ford assembler’s could complete an
operation at an average of 514 minutes or 8.56
hours.
Evolution of Lean Production System
Mass Production
 By 1913, due to full familiarity with a single task,
the worker could perform from 514 to 2.3
minutes.
 Ford introduced a moving assembly line which
brought the car go by the stationary assembler
and cut the cycle time from 2.3 to 0.19 minutes
Evolution of Lean Production System

Mass Production
 Henry Ford’s mass production system
dominated the automobile industry for more
than half a century as other type of industry in
America and Europe also adapted the principle.
Evolution of Lean Production System
Lean Production
 Started by young Japanese engineer Eiji Toyoda
together with his colleague Taiichhi Ohno, they
visited Ford’s Rouge plant in Detroit 1950
 They had a comparative analysis of their
existing practice with mass production of
Rouge plant
Evolution of Lean Production System
Lean Production
 Toyota being located in Nagoya has been
tagged as the most efficient and highest-quality
producer of motor vehicles in world (Womack,
Jones & Roos, 1990, 2007)
Evolution of Lean Production System

Lean Production
 Various dilemmas Toyota has faced were:
1. The domestic market was small but with a
wide range demand for variety of vehicles.
2. Flexibility on staffing policies was restricted
and the growing demands of labor unions.
Evolution of Lean Production System
Lean Production
3. Acquiring Western production technology
was impracticable due to the effect of war on
Japanese economy
4. The global competition of motor-vehicle
producers
Evolution of Lean Production System
Lean Production
 Develop simple techniques that would cut
changing of die from a traditional of two to three
months down to two to three hours
Evolution of Lean Production System
Lean Production
 Ohno had proved two things on his
breakthrough, the possibility of producing small
batches that would minimized holding an
inventory cost and would immediately identify
mistakes on the production line.
Evolution of Lean Production System
Just-in-Time
 JIT is an assortment of attitudes, philosophies,
priorities and methodologies that have been
practiced by numbers of Japanese companies
with notable success
Evolution of Lean Production System
Just-in-Time
 Schonberger (1983,55) summarized seven
principles that described Japanese quality
practices:
1. The Japanese ensured that their production
processes were operating properly or in
control.
Evolution of Lean Production System
Just-in-Time
2. The Japanese provided wide-ranging visual
displays of quality measures.
3. The attitude of quality comes first and output
second that exhibits a strict insistence on
compliance.
Evolution of Lean Production System
Just-in-Time
4. The Japanese gave the workers an authority
to stop the line to correct quality problems
5. The Japanese required the workers that
produced a defective item to fix it, thus
giving the workers full responsibility for
quality.
Evolution of Lean Production System
Just-in-Time
6. The Japanese used an N=2 method where
the first and last parts were inspected to see
if both items were good implying that
intermediate parts were also satisfactory.
7. The Japanese strived for the ideal of zero
defects.
14 TOYOTA WAY PRINCIPLES
1. Base your management decisions on a long-
term philosophy, even at the expense of short-
term financial goals
2. Create continuous process flow to bring
problems to the surface
3. Use “pull” systems to avoid overproduction

Liker (2004, pp.37-41)

14 TOYOTA WAY PRINCIPLES
4. Level out the workload (heijunka) – work like
the tortoise, not the hare.
5. Build a culture of stopping to fix problems, to
get quality right the first time.
6. Standardized tasks are the foundation for
continuous improvement and employee
empowerment.

Liker (2004, pp.37-41)

14 TOYOTA WAY PRINCIPLES
7. Use visual control so no problem is hidden.
8. Use only reliable, thoroughly tested
technology that serves your people and
processes.
9. Grow leaders who thoroughly understand the
work, live the philosophy and teach it to
others.

Liker (2004, pp.37-41)

14 TOYOTA WAY PRINCIPLES
10. Develop exceptional people and teams who
follow your company’s philosophy.
11. Respect your extended network of partners
and suppliers by challenging them and helping
them improve.
12. Go and see for yourself to thoroughly
understand the situation (genchi genbutsu).

Liker (2004, pp.37-41)

14 TOYOTA WAY PRINCIPLES
13. Make decisions slowly by consensus,
thoroughly considering all options; implement
decisions rapidly.
14. Become a learning organization through
relentless reflection (hansei) and continuous
improvement (kaizen).

Liker (2004, pp.37-41)

THANKS!

Any questions?