Presents

Business Excellence Series

Through Lean Thinking
Lean Introduction CII’s 2 Day Workshop on
Lean Thinking in March 2020

Faculty
Mr. Jayant Shrikhande
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 World Class Companies’ Pre-requisites
 
Reduce Lead Time in all
Speed up Time to Market
activities
 
 
Cut Operation Costs Exceed Customer Expectations

Manage the Global Streamline Outsourcing

Enterprise Processes
 

 
Improve Business
 
Performance
 
JJShrikhande 2
 WCM – What does it Involve

World Class Manufacturing usually involves implementation of the following:

•
Make-to-order Zero Defects
Streamlined flow Just-in-time
Small lot sizes Variability reduction
Families of parts High employee involvement
Doing it right the first time Cross functional teams
Cellular manufacturing Multi-skilled employees
Total productive Visual signalling
maintenance Statistical process control
Quick changeover
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1 New Approach to Quality

• Resolve problems that cause poor quality rather

than merely detect them.
• Reduce the reject rate gradually and
systematically to zero.
Four Pillars of • Place the quality control responsibility on the shop
World Class floor with the production operators.
Manufacturing • Provide the operators tools and equipment necessary
to inspect their own work.
• Provide education and cross training to the
operators.
• Give them the authority to stop the production line
if they detect quality problems.
• Create quality circles for devising long term solutions
to quality problems

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2 Lean Management -Just in Time Manufacturing

Techniques

• Change the shop floor layout to reduce the

movement of materials.

Four Pillars of • Reduce production setup times so that products

can be made in very small batches. (Ideally a lot size
World Class of one.)
Manufacturing
• Synchronize the manufacturing process so that
subassemblies and components are available just
when they are needed and not before (or after).

• Create mutually beneficial relationships with

Suppliers

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3 Change in management of the workforce

Transfer of responsibility.
Transfer to the production shop floor personnel responsibility for :
• Product quality.
• Production target attainment.
• Production Scheduling. &
Four Pillars of • Preventive maintenance.

World Class Education and cross training.

Provide to the shop floor personnel ongoing training in:
Manufacturing • Just-in-time manufacturing.
• Quality control &
• Customer service.
• Train the operators to do a wide range of jobs to have more flexibility
Problem solving and quality circles.
• The purpose of a quality circle approach is to have every employee involved in
solving production (and other) problems. Each one contributes his skill or
experience.

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4 A more flexible approach to meeting customer needs.

Production flexibility.
Production flexibility is achieved when:
• A company can offer short lead times.

Four Pillars of • The product mix within the plant can be changed significantly
from day to day.
World Class • The people within the plant are cross-trained to manufacture a
wider range of products.
Manufacturing
Design flexibility.
Design flexibility is related to the company's ability to introduce:
• New products &
• Modifications to the current products

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 Strategic Vision
Customer Needs

New Products Current Products

Order Fulfillment
New Product Competitive Dimensions
after sales
Development and requirements
service

Quality Dependability Flexibility

Price Speed

Enterprise Capabilities

Operational Capabilities

Supplier Capabilities

R& D Technology Distri

People butio
Systems n

E
Financial Support PlatformsInformation
Managemen
Management
Human Resource t
Management
JJShrikhande 8
 Operation’s Contribution to Strategy
Operation’s Decisions Specific Strategy Used Competitive Advantage

Quality A Flexibility
* Design
Product * Volume

B Low Price
Process Differentiation
C Delivery
Location * Speed ( Better )
* Dependability
Layout
D Quality
Human * Conformance
Resources * Performance
Cost Leadership Response
Supply Chain E After Sales
Service ( Cheaper ) ( Faster )
Inventory
F Broad Product
Scheduling Line
Maintenance
JJShrikhande 9
Journey towards World Class Manufacturing

World Class Company

5
Business / Operations Strategy to
Achieve Growth
4
Lean Six Sigma in Operations & Business
Processes
3
Total Quality Management

2
Lean Manufacturing Practices

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 Contents – Introduction to Lean Techniques

7 Tools of Quality
5 Lean Principles
Kanban -Pull System
Wastes - 8 Defects
SMED ( Single Minute Exchange of
Wastes - 6 Losses
Dies ) – Reduce Set up Time
Benefits of Lean System
Poka Yoke ( Zero Defect Production
Traditional Manufacturing
System )
vs Lean Manufacturing
Lean Six Sigma
5 S Principles – House Keeping
Kaizen
Value Stream Analysis
TPM –Total Productive Maintenance

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J J SHRIKHANDE

Traditional “mass production” manufacturing systems are characterized by:

• High volume production of identical products.(Low variety/high volume)

• High direct labour costs.
• Production organized around large “batches” between operations.
• High inventory levels (raw, WIP, finished).
• Long lead times and long cycle times.
• A focus on individual labour and machine efficiency.
• Management of quality through inspection and rework rather than prevention.
Traditional • Strong functional organizations and strong divisions between the functions.

Manufacturing • In these manufacturing companies, there are very high levels of inventory, and
long
delays in the time from purchasing raw materials to actually selling the product
and
receiving revenues.
• In traditional companies lead times often exceed three to six months, and
inventory can
equal to 30% to 40% of total annual sales. These systems are increasingly being
replaced by “lean” manufacturing systems based on the Toyota Production
System.

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Lean Principles

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 Typical Waste we Look for in Companies ( Physical )
While Lean Company looks into “ Hidden waste “( e.g Fat in Body )

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3 M’S (MUDA, MURI, MURA)

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 8 8 Types of Waste

8 Skills mismatch J J SHRIKHANDE 16

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Define value in from the
customers perspective and
express value in terms of a
specific product
Five Lean Principles
1 2 Map all of the steps…value
Specify Value Map the added & non-value added…
Value Stream that bring a product of service
to the customer

3
5 Establish
Work to Flow
Perfection
The complete elimination of The continuous movement of
waste so all activities create products, services and
value for the customer information from end to end
through the process
4
Implement
Pull
Nothing is done by the upstream process
until the downstream customer signals the
need

The Tools get you there…The Principles keep you there

Advanced Lean J J SHRIKHANDE 21

 What is Lean Transformation?

Lean Transformation Lean Transformation

of of how we
Tools and Methodologies Think and Manage

Lean does not work for us

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 Lean System - Components
Translate Voice of
Customer , define Modify & Simplify
value & revisit to Thought Processes to eliminate
understand waste
constraints

Service
Level Process

Measure individual Eliminate Some

performance and align activities & combine or
individual reward Restructure others
projects Lean System
Performanc Organizatio
e Evaluation n
& Rewards Structure

Skills &
Improve Training Programs , Competencie Tools & IT Automate Tasks , aggregate
hiring policies , individual s
and share information and
development plans & career goals initiate alert mechanisms

JJShrikhande 23
 There are a few concepts to be discussed in detail so that
the management can be come clear focused and lean
thereby creating value for their products which fulfills the
customers. Some among them are:

Lean 1. Value
Manufacturing 2. Value stream
Concepts 3. Waste
4. Equipment reliability
5. Continuous Flow
6. Pull production
7. Continuous improvement
8. People involvement

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J J SHRIKHANDE

1. 5 S System : Work Place Organization, Sort, Set in Order, Shine

,Standardize ,Sustain
2. Visual Control : Cartoons ,Charts ,Light Signals ,Lane Marking ,Safety
Instructions Warning Signal ,Poka Yoke Instructions
3. Standard Operating Procedures ( SOP’s ) : Written Instructions instead
of Verbal .
4. Just in Time ( JIT ) : Right Product at Right time , Shortest Cycle time
,Zero in Process
Lean 5. Kanban System : Issue Materials only when required

Techniques 6. Cellular Layout : Family wise Component Completion

7. Value Stream Mapping : Layout existing Processes both Value adding
and Non Value Adding & Work to reduce non value adding activities
8. Poka Yoke ( Mistake Proofing ) : Aim for Zero Defects, rework
9. Single Minute Exchange of Dies ( SMED ) : Reduce Setup time
10. Total Productive Maintenance ( TPM ) : Reducing downtime due to
Maintenance -Everyone’s involvement required
11. Rapid & Continuous Improvement ( Kaizen ) : Team approach,
suggestions

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 Lean Tools Overview
A number of Lean Tools and Techniques are available
Actions Tools and Techniques

Bring Organization & 5S Framework

Cleanliness to work
area
Understand Value Stream Mapping
Value
Implement pull- Kanban, Just-in Time
based flow
Reconfigure work U-Shaped Cells
areas
Institute continuous Kaizen Events
improvement philosophy
Benefits
Realized

Appropriate Tools and Techniques are to be used depending on the need

J J SHRIKHANDE 26
 Lean Thinking

A principle driven, tool based philosophy that focuses on eliminating

waste so that all activities/steps add value from the customers
perspective.

Lean Thinking is all about continuous waste elimination !

Imagine Office Processes with:

• Higher Customer Satisfaction
• Shorter Lead Time )O ffice
( B a ck- ge
Higher Flexibility i ng n t a
dv a
•
Mak ic a
• Higher Quality s tr a teg
a
• Lower Costs
• Higher Employee Satisfaction

Advanced Lean
 Lean Explained

What is Lean?
A strategy, philosophy, process and leadership approach for operating in a
superior way. Results include:
 Reduced cycle times (product development and production)
 Increased quality
 Reduced costs and inventory
 Increased capacity potential
 Improved customer service
 High levels of worker involvement, ownership and commitment
 Improved financial returns

Lean concepts apply across all processes and industries

Advanced Lean
 Lean Explained
The conventional way: Price = cost +Profit
Increase profit by Price Increase

Price to sell

Some profit
Bigger profit

Cost to produce

But may lose customers!

Advanced Lean
 Lean Explained
The new way: Price - cost =Profit
Increase profit by Cost Reduction

Price to sell

Some profit
Bigger profit
Cost to produce

Advanced Lean
Concept of Muda – Waste Contd.
6 Normal Losses
Availability Losses

Machine Breakdowns

Machine Set ups

Performance Losses
Reduced Machine Speed

Small Stops

Quality Losses
Start up Rejects

Production Rejects 31
OEE - Overall Equipment
Effectiveness Model
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Transport

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Inventory

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Reducing / Removing Motion Waste

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Reducing / Removing Motion Waste

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Reducing / Removing Motion Waste

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Reducing / Removing Motion Waste

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Reducing / Removing Motion Waste

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Reducing / Removing Motion Waste

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Over Production

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 Waste of Skills ( Skills Mismatch )
Higher levels skilled person doing a Low skill job
Results in
Lower
Productivity & Quality

Lower Level Skilled person doing a High Skill Job

Results in
Improper job & Rejections

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 Goals of Lean Management
  Eliminate the wastes, which are
considered no value to the customers; Identify & map the value stream.
reducing the WIP time.

  The ability to change to the customer

Creating goods in favor of the customer in
  small batches and not in large.
requirement swings; understanding the pull
strategy.

Creating an interest for the working

Efficient handling of human resources. environment for the employees in the company
or factory.

A continuous improvement every day  

which therefore leading to new process
everyday which is the flexibility of the Creating fool-proofing methods
organization.
 
  Higher Quality , Higher Profit, Higher Customer
  Delight
Overall Improved Performance
JJShrikhande 51
Manufacturing Flow Process Control
1 Product /quality assessment 1 Total Productive Maintenance
2 Process Mapping 2 Poka Yoke
3 Routing Analysis ( process , work, content, volume) 3 SMED
4 TAKT Calculations 4 Graphical Work Instructions
5 Workload Balancing 5 Visual Controls

6 Kanban Sizing Organization 6 Continuous Improvement

7 Cell Layout 1 Product Focussed Multi Disciplined Team 7 Line Stop

8 Standard Work 2 Lean Manager development 8 SPC
9 One Piece Flow 3 Labour Cross Training skill Matrix 9 5 S Housekeeping

Metrics 4 Training ( Lean Awareness ,Cell control Logistics

1 On time delivery metrics , SPC, Continuous Improvement) 1 Forward Plan
2 Process Lead Time 5 Communication Plan 2 Mix Model Manufacturing
3 Total Cost 6 Roles & Responsibilities 3 Level Loading
4 Quality Yield 4 Workable Work

5 Inventory Turns 5 Kanban Pull Signal

6 Space Utilization 6 ABC Parts Handling
7 Travel Distance 7 Service Cell agreements
8 Productivity 8 Customer / Supplier alignment
9 Operational Rules

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OHE – Overall Human Effectiveness
Model
 Business
Excellence
Series
Jayant
Production System
J J SHRIKHANDE 55
 Some Best Practices/ Management Concepts
From Western World From Japan
• Outsourcing 3 PL , 4 PL • Hoshin Kanri
• ERP • Employee Involvement / Empowerment
• Six Sigma • Single Piece flow
• Customer Delight • JIT/Kanban
• Strategic Postponement • SMED – Single Minute Exchange of die
• VMI - Vendor Managed Inventory • 5S
• CPFR - Collaborative Planning , • Jidoka
Forecasting ,Replenishment • TPM
• SCOR – Supply Chain Operations • TQM
Reference • Poka Yoke
• Genchi Genbutshu – Go & See
• Nemawashi – Consensus Building
• Kaizen
• Hezunka – Work Load levelling

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GLIMPSE : THE TOYOTA WAY

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 TAIICHI OHNO, 1988

“The slower but consistent tortoise causes less

waste and is much more desirable than the
speedy hare that races ahead and then stops
occasionally to doze. The Toyota Production
System can be realized only when all the
workers become tortoises.”

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Toyota Production
System 4 P’s Problem Solving
Continuous Improvement & Learning
Kaizen - Continuous Learning
Genchi -Genbutsu – Go & See yourself
Nemawashi - Consensus building ,Rapid Actions

People & Partners

Respect , Challenge & Grow them
Grow Leaders who live the Philosophy
Respect , Develop & Challenge People
Respect , Challenge & help Suppliers

Process ( Eliminate Waste )

Create Process flow to ‘Expose Problems’
Kanban - Use Pull System to avoid Overproduction
Hezunka - Level out the workload
Jidoka - Stop when there is a Quality Problem
Standardize Tasks for Continuous Improvement
Use Visual Controls to ensure no problems are hidden
Use only Reliable & Thoroughly Tested Technology

Philosophy ( Long Term Thinking )

Base Management actions based on long term philosophy
Advanced Lean even at the expense of short term financial Goals 67
 TBP – Toyota Business Practices
Concrete Actions and Processes Drive and Dedication
• Customer First
1. Clarify the Problem
• Always Confirm the Purpose of
Toyota
2. Break Down the Problem
Your Work
Business Practices
Toyota

P
Problem Solving

3. Set a Target • Ownership and Responsibility

TOYOTA WAY
4. Analyze the Root Cause • Visualization
5. Develop Countermeasures • Judgment Based on Facts
6. See Countermeasures • Think and Act Persistently
D Through 68
• Speedy Action in a Timely
7. Monitor both Results and Manner
C • Follow Each Person with
Progress
Sincerity
8. Standardize Successful
and Commitment
Process • Thorough Communication
A
• Involve All Stakeholders

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 Knowledge and Skills

Lean Knowledge Lean Skills

To know, to understand the Be able to solve problems and
meaning correctly and to be able advance the organization by using
to teach proper Lean Knowledge

Kanban, Pull system, Jidoka, Use Lean Knowledge to motivate

Supermarket, TPM, SMED, JIT, people, achieve results, reduce
Kaizen, STW, 5S, WCT, VSM, costs, improve the operation and
Gemba, Takt Time, etc … address business needs

Can you Play a

I know this! Violin?

J J SHRIKHANDE
 TBP - Create a “Learning Organization”
1. Hoshin Kanri
(True North – Management
Direction)

Toyota Way 2001

2. PPS 3. OJT
(Practical Problem (On-the-Job-
Solving) 4. Rapid PDCA Training)
(Plan-Do-Check-Act)
70

1. Management directed initiatives – True North

2. Utilizing Problem Solving Methodology
3. Sustained through On-the-Job-Training
4. Achieved using rapid PDCA by all associates

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 Toyota Way - Drive and Dedication
 Customer First
 Always think and act for the benefit of customers, and place their interests ahead of
all others.
Toyota Way 2001  Subsequent processes are also considered our customers.
 Always Confirm the Purpose of Your Work
 Constantly question the purpose of your work seeking your own answer.
Toyota
Business Practices
Toyota
 Do not lose sight of the overall goal and purpose when focused upon a specific task.
Problem Solving

 Ownership and Responsibility

TOYOTA WAY 71

 Be aware that you are the main person who is responsible for your work.
 Recognize the mission, value and pride in your work, and envision your goal.

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 Toyota Way - Drive and Dedication
 Visualization
 Promote visualization and clarify problems for everyone to understand.
 Information should be shared on a timely basis for the benefit of all.
Toyota Way 2001
 Judgment Based on Facts
 Without prejudice or preconception, investigate all the facts: go and see the situation
as it truly is.
Toyota
Business Practices
Toyota
Problem Solving
 Think and Act Persistently
 Think deeply and commit to the completion of a task with a strong belief in not
TOYOTA WAY 72

giving up.
 Speedy Action in a Timely Manner
 Be adaptable to customers’ needs, and fulfill them quickly.
 If necessary, use temporary measures until you can implement countermeasures.

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 Toyota Way - Drive and Dedication
 Follow Each Process with Sincerity and Commitment
 Be committed to follow the process without taking shortcuts. Listen to others’
opinions with an open mind. Possess a sense of responsibility towards your own
Toyota Way 2001 actions.
 Thorough Communication
 Thoroughly and sincerely communicate with stakeholders until they gain deep
Toyota
Business Practices
understanding.
Toyota
Problem Solving
 Involve All Stakeholders
TOYOTA WAY  Involve relevant members and partners to increase knowledge and wisdom as well as
73

to maximize the efficiency and output of the group.

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 Lean vs. Other Improvement Technologies
Lean focusses on
1 Flow :
Reduce time from Raw Materials to Finished goods stage through elimination of wastes like 8 Wastes
and 6 Losses
2 Focus on Immediacy :
Focus on immediate recognition and response to disruptions in quality or flow
Hence emphasis on Visual Management & Control or error proofing and in process inspection ,
rigid work place organization , , use of Kanban cards for inventory Management
3 Focus on Rapid Change :
Lean tend to involve compression of improvement processes that emphasizes rapid and real time
improvement ( Discontinuous Improvement vs Continuous Improvement ) like Kaizen – which
compresses the improvement activity into a 2 to 5 day time frame as opposed to TQM or other
improvement philosophies

J J SHRIKHANDE 74
 Definition of a Lean Enterprise
• Lean enterprises are organizations that systematically eliminate
waste from their processes in order to achieve the highest quality,
fastest delivery and best price for their customers.

•Systematically – Improvement is built into the daily work of the

organization; it is not a “project” or “program.”
•Eliminate – Waste is permanently removed; it is not taken out on a
“one time” basis.
•Waste – Waste is anything that does not add value to the product
or service
•Quality, delivery and price – Waste elimination applies to all
dimensions of the company (product development, sales and
marketing; support; etc.) not just manufacturing.

J J SHRIKHANDE 75
 How to Implement Lean

Knowledge Driven Business NEEDS driven

“So what ?“ 1. USE KPIs to understand your Current
Leveled
? Status
schedule 2. Set goals and objectives
B
VSM
Supe 3. Start solving problems
Kanban rmark
SMED 4. Check progress
et
Jidoka 76
and measure
results
Heijunka TPM Pull
Poka
Yoke

I know Lean T
Engineering driven 5S r
Hobby driven u
e
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The Importance of Benchmarking

• Why bother with benchmarking?

• Because it gives you an external perspective on
your business, which helps quantify performance.
• While you may be able to determine your rate of
improvement based on your company’s historical
performance data, without benchmarking you have
no concrete way of establishing your success as
compared to industry leaders that set the tone in
your field.
• Companies may also find it useful to conduct internal
benchmarking, which can compare intra-
organizational performance – of both people and
processes.

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Best Practices for Performance Benchmarking

• Once you understand why benchmarking is important, you must understand how to

effectively engage in benchmarking so that your organization reaps the most benefit from
the practice.

• For benchmarking to be effective you must establish why your organization is

concerned with benchmarking.

• Gathering benchmarking data is great, but without a reason for doing it, or a plan for
how you will implement the information into your company operations, the data will be
useless.

• Consider the reasons for measuring targets that are important in the context of a
specific goal. If you plan to measure benchmarks related to operational procedures,
you may have as a goal to improve operations in order to streamline your output and
increase gross revenue.

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Lean Benefits Recap…

Cycle Time
Wait Time
(non value
add)
Before
Work Time
(value add)
After
Same work
completed in
Productivity less time
Cost Customer satisfaction Cost/Chaos
Defects Profit
Lead time Customer responsiveness
Inventory Capacity
Space Quality
Waste! Cash flow
Cycle time
On time delivery

Relentless Focus on Reducing non value adding activities

J J SHRIKHANDE 106
J J SHRIKHANDE

ADVANTAGES OF LEAN
 
1. Reducing Waste
2. Increasing Productivity
Advantages 3. Reducing Floor space
Of 4. Reducing Inventory
Lean 5. Cleaner working environment
6. Introducing Innovative Practices
7. Imbibing a culture of Continuous Improvement
8. Inculcating good Management Systems
9. Keeping Customers delighted for increased business

107
Toyota Kaizen Results

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 Summary
Feature
•
of
Production Mix
Lean Vs Traditional Manufacturing
Traditional Manufacturing
High volume production of identical products (Low
Lean Manufacturing
Low volume production of many variants. (High variety/low
variety/high volume) volume)
•Long lead times •Short lead times and cycle times

Labour Costs High Direct Labour Costs
Production •Production for inventory (Just In Case)
Practices •Production dictated for all steps by an MRP or other
production scheduling system.
•Production organized around large batches to maximize
machine utilization
•High inventory levels (raw, WIP, finished)
•Assembly-line flow; each worker does one function
•Infrequent changeovers; long set up times
•Messy, cluttered and dirty shop floor
Continuous •Management of quality through inspection and rework.
Improvement •Infrequent changes in production practices.
Measurement •Management by reports done by outsiders
•Focus on individual labour and machine efficiency
•Setting of arbitrary improvement targets
Supplier Large volume of direct suppliers
•Suppliers deliver in frequent large batches based on
Relationship volume
s discounts.
•Frequent supplier changes based on price differences.
Management •Many layers of Top Down management.
Structure •Strong functional organizations and clear separation
between functions (“silos”) J J SHRIKHANDE •Strong team-based structure , Visual Control Systems
Direct labour is a small percentage of total labour costs.
•Difficult to distinguish between direct and indirect labour
•Production on demand (Just In Time)
•Manufacturing schedule sets the initial order volumes only; all
other
production is driven by “pull” signals (Kanban)
•One-piece flow
•Inventory levels are radically reduced
•Cell production; each worker performs multiple operations
•Frequent product changeovers; short set up times
•Spotless shop floor with visual management
•Management of quality through prevention.
•Continuous changes to improve efficiency and productivity
•Visual management and shop floor indicators
•Focus on process availability and through put
•Data used to improve system stability and capability
Reduced number of suppliers
•Supplier responsibilities for maintaining inventory levels
•Long term supplier relationships
•Fewer layers of management , Team Measurement Systems
109
•High levels of team autonomy
 Breakthrough Results achieved
Some Break through Results achieved
 Achieved excellent results in Improving Overall Efficiency of the Organizations worked for, including some path breaking improvements,
employing Lean Management, TQM implementation and Lean -Six Sigma techniques in mass scale manufacturing.
 Small Scale Chemicals Manufacturing Company ( Family Business )
 Revenue Increased 15 Times in 5 Year’s time
 Hard Disc Drive Manufacturing Company for 100 % Exports in less than 1 year
 98 % Improvement in Scrap level of major Part ( Reduction from 16 % to 0.3 % )
 90 % Improvement in WIP ( Work in Process ) level ( From 33 days to 3 days )
 20 % Improvement in Productivity
 Electronics Manufacturing Mass Production in China for leading MNC’s
 Achieved 100 PPM level Product Quality
 Made the whole factory Data Transparent to MNC Clients ,through Internet through introduction of Quality Information management System
 Revenue increased 3 times in 15 Months only
 Customer base ( MNC Clients ) increased 3 times in 15 months
 Major Oil & Gas Equipment manufacturing( 50 Years old Co.) -Working on Presently
 Overall Equipment Efficiency increased 3 times- Conservative Estimate( from about 30 % to 90 % or Increase of 6 times – Optimistic Estimate
( From 15 % to 90 % )

 Overall Conversion cost reduced by 50 % ( Conservative Estimate ) or 75 % (Optimistic Estimate )

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 Lean Never Ends
It is the beginning of the end of In-efficiency

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