Introduction of Lean Concept

By Eng. Surendra Perera

This has been used to improve company's methods and make
huge profits
LEAN Concept

• Value Added Activity

• Non Value Added Activity

• Necessary Non Value Added Activity

Value Added Activity

Anything that changes the shape, form and functions of the product and

services and customer are willing to pay for it

Raw material Necessity Pre stage Post stage

Shape No specific shape No specific shape

Sugar, Milk
powder, tea, Nature Solid and Liquid Liquid
hot water
Function to enhance the taste of
adding to the tea
the tea
Non Value Added Activity

Any activity that absorbs or consumes resources without creating value

wash
once

wash
three
times
After one wash After washing three times

shape
not
nature changed

function

shape, nature or the functionality are not

changed

customer doesn’t like to pay

Necessary Non Value Added Activity

Any activity that do not add value, But necessary under the present
operating system or equipment
 tea in the
strainer must
be replaced
after every tea
Tea infuser that has The tea strainer has
been used more than been replaced after
once using one time

shape
not
nature changed

function

shape, nature (to an certain extent), and the

functionality do not change

customer doesn’t like to pay

But, we can’t stop
using it
7 Wastes (Muda in Japanese word)

1.Transportation

2.Inventory

3.Motion

4.Waiting

5.Over Production

6.Over Process

7.Defects/Re-work
Waste of Transportation

long
distance

short
distance
Waste of Inventory

weekly consumer demand is

500 packs
weekly production is 1000
Additional payment
packs 500 nos of
need to be done for
packs are in
extra space
shape, nature and the functionality of the state of
the milkpowder have been changed with non value
regards to 1000 packs adding Manufactured goods
customer will pay only for 500 will be expired if
packs stocked for longer
periods
Waste of Motion

Father advised to go to the table and study because you fell

asleep while studying from bed

1. The 2. Father's need

characteristics of has been Adds value
studying have fulfilled
changed in
relation to the
Get the book and go to the table two cases
Here the
In spite of the ability to bring second move is
an unnecessary
the book and the mirror at move
once, there have been
movements on two occasions

go back to the bed and get the eyeglasses

Waste of waiting

When visiting
certain
government
institutions
 Waste of over production

weekly consumer demand is bigger

500 packs effect
weekly production is 1000
Additional payment
packs 500 nos of
need to be done for
packs are in
extra space
shape, nature and the functionality of the state of
the milkpowder have been changed with non value
regards to 1000 packs adding Manufactured goods
customer will pay only for 500 will be expired if
packs stocked for longer
periods
Defects and Re-work

Time, effort and

cost must be
spent on re-work
Definition of the lean concept
Business under normal conditions

wastes
Discharge of
receiving the completed
order order

time
Business under lean concept Discharge of
receiving the completed
wastes
order order

less time period

When there is no competition
cost + profit = price
A great
market
price

selling large
price profit
some profit

cost

The cost increases

(row material,
labour, capitol etc

time
When there is competition
cost + profit = price
gradually declines as
other sellers sell at
lower prices

selling
loss
price
some profit

cost
The cost
increases (row
material, labour,
capitol etc

time
When there is competition
cost + profit = price
gradually declines as
other sellers sell at
lower prices

selling
price
some profit
large
cost profit

cost
manufacturing
increases cost reduced
through Lean
concept
time