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An Assessment on the Proposed Lean Manufacturing System in Increasing Efficiency at Keppel Batangas Shipyard

A Research Study Presented to the Faculty of College of Engineering University of Batangas

In Partial Fulfilment of the Course Requirements For the Degree of Bachelor of Science In Industrial Engineering

By Borsoto, Liezel Bulanhagui, Jon Bernard Cabatay, Mariz Caringal, Amiel Castillo, Joven

Submitted To: Engr. Marizen Contreras

December 2011

This research proposal is intended to give the overview of whole study, its significance and objectives. It presents the methods involve on gathering information, sampling plan and statistical treatments and the scheduled activities the researchers has to undertake. Furthermore, the proposal provides the estimated budget for the whole study.

Background of the Study

Manufacturing is an important commercial activity, carried out by companies that sell products to customers. The type of manufacturing performed by a company depends on the kinds of products it makes. All of these products must comply with the needs and demands of the people who serve as the judges for an industrys operations.

Every man has his own ways to think, ways to act and behave. We are all different. However, no matter how much that difference is, still, any company is eager to reach its mission in providing the best possible product that the consumers got satisfied at. They must undergo formulation of courses of actions, the alternatives, before any decisions have been made. In here come the benefits of strategic planning, a way to acquire the path aiming on satisfaction.

There is a shift occurring in any manufacturing industries. Most of them are now engaged in different philosophies leading not only in increased profitability but also in environmental consciousness. With their initiative to minimize the wastes and appreciate how Toyota achieves its excellence in the automobile industry, these industries are bestowing a new production system- the so-called Lean Manufacturing. As said by Liker (2000) lean manufacturing is a system that flexibly responded to customer demand and

was efficient at the same time. Besides, customers are not as loyal to their suppliers as they used to be. What they want for a product to have are better quality, faster delivery and service at the least possible price.

Authors Womack and Jones define lean manufacturing or thinking as a set or collection of 'efficiency tools' that can unleash the business to save money, reduce cost and waste and deliver consistent and effective service that is affordable and pleasing to customers. It is about vision and tools for reducing variability and cutting down on waste, being efficient and running a smooth and competitive, even profitable operation, well. The thinking was initially championed by pioneers like Toyota and it was eventually adopted by the Japanese automakers as the principle upon which they wanted to build, run and grow their businesses.

Because of the strategy aiming towards competitive advantage, manufacturers are motivated to convert their factories to Lean for a variety of reasons. According to Hobbs (2004), through lean manufacturing, the response time that can be offered to the customer would be shortened. Also, it may help in improving inventory and so reduces additional capital investment. Moreover, lean manufacturing could enhance quality, improved productivity, better floor space utilization, reductions in scrap and rework, increased employee participation, and simplified administrative routines available. All of these reasons can be achieved by embracing a good lean manufacturing system.

Knowing that lean manufacturing has grown from the Toyota Production System (TPS), Toyota is in the automobile industry which is different to shipbuilding. Shipbuilding first of all has a fixed layout. It is made to order and also highly customized. It is not appropriate to mass produce it since the product itself takes more than a month

to complete. In here comes the role played by Lean Manufacturing principles, the basic principles of giving customers what they want with shortened lead times by eliminating waste apply to any process, high volume or low volume, customized or standardized.

Based on the studies conducted by Liker and Lamb (2004), a model of lean manufacturing and a set of principles have made many different industries far more competitive than what is possible through traditional mass production methods. Lean manufacturing is a philosophy, a way of thinking, not a set of individual tools which can be cherry picked. Moreover, lean manufacturing requires an enterprise-level view of the value streamfrom raw materials to the finished ship delivered to the customer. They also presented lean manufacturing as a system of production; many of the examples are from world class Japanese shipyards. These shipyards did not start out with a course on lean manufacturing. In fact, by and large, the ship industry was insulated from the development of the Toyota Production System in Japanese automotive. But a similar underlying philosophy can be seen in the best practices in Japanese ship building. They said that there is a focus on flow, use of standardized methods, built-in-quality, continuous improvement, and a high degree of involvement by flexible, motivated employees. Moreover, they concluded that lean manufacturing can be applied in American Shipyards and it was proven to be successful. However, most of them still rely on traditional ways and are trying to work on it better making them less competitive.

As been discussed further by Liker and Lamb (2004), it is anticipated that implementing lean manufacturing principles in shipbuilding could improve productivity by at least 50% and shorten build time by 100%. Such achievements would certainly assist U.S. shipbuilders to improve their prospects for the future.




in the




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manufacturing system that would attract higher orders and profit. Keppel Shipyard, situated in Bauan, Batangas is one of these shipbuilding companies aiming to achieve higher profit by reducing wastes in its operations. Upon knowing this, the researchers had seen its potentials to acquire a system in which the wastes are reduced as the quality is improved, the response time is shortened, and continuous improvement is penetrating; all towards improved productivity and competitive advantage.

Keppel Batangas Shipyard is a major ship care center in the Philippines servicing international and local ship-owners. It specializes in the repair, conversion and building of various types of vessels as well as the fabrication of marine and industrial structures. It is a subsidiary of Keppel Philippines Marine Inc, a member of the Keppel Offshore and Marine Group of Singapore, which has business in ship repair and shipbuilding, rig building, property, engineering, telecommunications, shipping and logistics.

Its ISO 9001:2000 certified for ship repair and shipbuilding affirms the Company's commitment to deliver quality services and products to the satisfaction of its clientele. Managed by Keppel Shipyard, Keppel Batangas has an experienced management team and a 900-strong dedicated workforce whose skills and expertise are continuously upgraded to keep up with technological advancements in the marine industry. (

The researchers intend to create a lean manufacturing system that is aimed to the aforementioned statements. It also aims to identify the wastes that lessen the productivity and competitive advantage of the Keppel Batangas Shipyard. Furthermore,

this study is intended to serve a basis for other shipbuilding industries in applying lean manufacturing.

Statement of Objectives

The purpose of this study is to determine the significance played by the application a lean manufacturing system in increasing customer satisfaction, productivity improvement and competitive advantage of Keppel Batangas Shipyard.

Specifically, it aims to determine

1. the profile of the respondents in terms of 1.1 gender 1.2 educational attainment 1.3 position of the employee and 1.4 length of years in the current position

2. the extent of how the following scales affect the measure of productivity as to: 2.1 Overproduction 2.2 Inventory 2.3 Transportation 2.4 processing 2.5 Waiting time and 2.6 Defects on manufacturing

3. the extent do the concept of lean manufacturing as to: quality 5s cellular manufacturing waste reduction Poka-yoke continuous improvements flexibility pull system and supply chain management

4. the significant

relationship between lean manufacturing and increasing

productivity as well as competitive advantage of Keppel Batangas Shipyard.

Research Methods

Research Design

In order to gather the needed information, the researchers will use both descriptive and experimental method of research. According to Briones (2008), descriptive research involves collection of data in order to test the hypothesis or answer the questions concerning the current state of the study. In descriptive method, the relationship between lean manufacturing and productivity as well as competitive advantage will be concretized by means of a questionnaire, interview and observation. The experimental approach on the other hand will be used to find out the numerical

figures necessary to measure the productivity on the shipbuilding. Relevant to this are the measures of output and input, quality and wastes.

Moreover, documentary analysis, data analysis and field type of research will also be used for the clarification of the study.

Subjects of the Study

The researchers will make use of a purposive sampling which focussed on Keppel Batangas Shipyard as the subject of the study. The research study will use Slovin to determine the number of workers in shipbuilding operations to be given a questionnaire. In addition to this, the researchers will conduct several interviews to the project managers, engineers if possible and to some workers.

Data Gathering Instrument

In order to gather the necessary data, the researchers will use questionnaires, distribute it to the respondents and conduct interviews and observations.

Time Scale Gantt Chart The table below illustrated the activities and the number of weeks it was scheduled for an activity to work on.

Activities 1 2 3 4 5 6 Search for the topic Work on the project proposal and its parts Research of Related Literature and Studies Construct the parts of Chapters I to III Submission of Chapters I to III Revision of Chapters I to III Prepare the questionnaire and interview questions Gather information by means of questionnaire Tabulate the results and do the analysis Construction of Chapters IV & V Submission of Chapters IV & V Revision of Chapters IV & V Revision of paper works Defense

No. of Weeks 7 8 9 10 11 12 13 14 15 16


The following figures showed the estimated budget in relation to the cost to be incurred in the entire study. These figures are all assumptions and may subject to change.

Entry Cost.500.00 Travelling cost:....300.00 Printing cost:.200.00

Total Estimated Cost of the Study

Php 1 000.00

References Books Hobbs, Dennis P. LEAN Manufacturing Implementation: A Complete Execution

Manual for Any Size Manufacturer J. Ross Publishing, 2004

Liker, Jeffrey and Meier, David, The Toyota Way Field book Mc GrawHill, 2006

Unpublished Thesis Schlichting, Christopher, Sustaining Lean Improvements, unpublished master thesis, Worcester Polytechnic University, 2009