1. Lean Manufacturing
Dr. Chander Arora

2. Main Goals of a Manufacturing Company
Creation of
VALUE for the Customer
WEALTH for the Organization
Dr. Arora

3. Continuous Enhancement of GLOBAL COMPETIVENESS
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4. What is lean?
Lean manufacturing was developed by the Japanese automotive industry,
with a lead from Toyota and utilising the Toyota Production System (TPS),
following the challenge to re-build the Japanese economy after World War II.
The concept of lean thinking was introduced to the Western world in 1991
By the book “The Machine That Changed the World” written by Womack, Jones, and Roos.
Dr. Arora

5. What is Lean It is NOT: Collection of techniques or a methodology
Reduced staffing or low inventories
It IS:
A philosophy of manufacturing
Totally different way of thinking
A different value system
Seeks to eliminate waste (non-value added activities to the customer)
Emphasis on flow manufacturing
Dr. Arora

6. Lean Characteristics
Focus is on the improvement of resource utilization:
― Equipment setup time reduced
― Scheduled machine maintenance
― Orderly, clean workplace
― Pull production being used
― Inventory control
― Factory layout in work cell arrangement by products
― Active error elimination
― Improved quality, etc.
Dr. Arora

7. The Importance of Waste Elimination
Lean deals with the elimination or reduction of many types of
non-value-added activities,
often referred to as waste
- The driving force for waste elimination
is:
Improved value in the products and services that customers buy
Dr. Arora

8. 5 Principles of Lean
Value - specify what creates value from the customer’s perspective.
The value stream – identify all the steps along the process chain.
Flow - make the value process flow.
Pull - make only what is needed by the customer (short term response to the customer’s rate of demand).
Perfection - strive for perfection by continually attempting to produce exactly what the customer wants.
Dr. Arora

9. 1. Value
Any process that the customer would be prepared to pay for that adds value to the product.
The customer defines the value of product in a lean supply chain.
Value-adding activities transform the product closer to what the customer actually wants.
An activity that does not add value is considered to be waste.
Providing the wrong good or service the right way is muda
Dr. Arora

10. 2. The Value Stream
The value stream is the sequence of processes from raw material to the customer that create value.
The value stream can include the complete supply chain.
Value stream mapping is an integral aspect of Lean.
Dr. Arora

11. The Value Stream, cont.
“The Value Stream is those set of tasks and activities required to design and make a family of products or services that are undertaken with a group of linked functions or companies from the point of customer specification right back to the raw material source.”
(Hines et al, 2000)
Dr. Arora

12. Value Stream Costing
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13. Value Stream Costingf
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14. 3. Flow
Using one piece flow by linking of all the activities and processes into the most efficient combinations to maximize value-added content while minimizing waste.
The waiting time of work in progress between processes is eliminated, hence adding value more quickly.

15. Push Build product to forecast Excess inventory
Poor utilization & distribution of product
Filled distribution channels
Example:
50% of all books manufactured are shredded
Build to Forecast – limited flexibility to changes in demand
Dr. Arora

16. 4. Pull
Pull = response to the customer’s rate of demand i.e. the actual customer demand that drives the supply chain.
Based on a supply chain view from downstream to upstream activities where nothing is produced by the upstream supplier until the downstream customer signals a need.
No one upstream should produce any goods or service until the customer downstream asks for it
Kanban
Dr. Arora

17. 5. Perfection
The journey of continuous improvement to remove waste by eliminating effort, time, space and defects
Begins with visualizing the “perfect” process
Producing exactly what the customer wants, exactly when, economically.
Perfection is an aspiration, anything and everything can be improved.
Dr. Arora

18. Muda Muda means “waste”
Any human activity which absorbs resources but creates no value
Mistakes which require rectification
Production of items no one wants so inventories and remaindered goods pile up
Processing steps which aren’t actually needed
Movement of employees and transport of goods from one place to another without any purpose
Groups of people in a downstream activity standing around waiting because an upstream activity has not delivered on time
Goods and services which don’t meet the needs of the customer
Dr. Arora

19. Seven Popular Wastes MUDA
Overproduction
Waiting
Excessive transportation
Inappropriate processing (the hidden factory)
Unnecessary inventories
Unnecessary motion
Defects
These are the classical seven examples of waste that you see in all of the Lean books and classes and it’s comprehensive.
Dr. Arora

20. Waste Often Hides in Plain View
We cannot eliminate the waste of material, labor, or other resources until we recognize it as waste.
A job can consist of 75 percent waste (or even more).
Classic example: brick laying in the late 19th century
Dr. Arora

21. Waste is Often Built Into Jobs
Dr. Arora

22. Brick Laying - Alternative
The solution is obvious (in retrospect), but first we have to know that we have a problem!
Dr. Arora

23. Waste in Operations Overproduction Waiting Transporting
Producing items we cannot immediately use or sell
Waiting
For parts, machines and downstream operations
Transporting
Moving items nedlessly
Dr. Arora

24. Waste in Production cont.
Processing
Unnecessary steps that do not add value
Inventory
Storing, retrieving, counting, insuring, taking up space and money
Movement
Searching for tools, parts, instruction, approval
Defects
Rework and scrap
Talent
Underutilization or worker knowledge and skills
Dr. Arora

25. 7 Service Related Wastes
Delay – customers waiting for service.
Duplication – having to re-enter data, repeat details etc.
Unnecessary movement - poor ergonomics in the service encounter.
Unclear communication – having to seek clarification, confusion over use of product/service.
Incorrect inventory – out of stock.
Opportunity lost – to retain or win customers.
Errors – in the transaction, lost/damaged goods.
Source – John Bicheno, Lean Toolbox (2003)
Dr. Arora

26. The 5S’s Simple but effective methods to organise the workplace.
The methodology does however, go beyond this simple concept, and is concerned with making orderly and standardized operations the norm, rather than the exception.
Posters bearing the 5S terms can be found on the walls of Japanese plants, and are a visual aid to organisational management.
Dr. Arora

27. The Japanese Origin Seiri Sort
This requires the classifying of items into two categories:
necessary
unnecessary
and
disregarding or removing the latter.
"When in doubt, throw it out."
Dr. Arora

28. The Japanese Origin - Straighten
Seiton Straighten
Once Seiri has been carried out, Seiton is implemented to classify by
Use or arrange items to minimize
search time and effort.
The items left should have a designated area
with specified maximum levels of inventory for that area.
"A place for everything and everything in its place."
Dr. Arora

29. The Japanese Origin - Shine
Seison Shine
Seison means cleaning the working environment.
It can help in the spotting of potential problems as well as reducing the risk of fire/injury
by cleaning away the potential causes of accidents.
Cleaning (Neatness)
Dr. Arora

30. The Japanese Origin - Systematise
Seiketsu Systematise
Seiketsu means keeping one's person clean, by such means as:
wearing proper working clothes, safety glasses, gloves and shoes, as well as maintaining a clean healthy working environment.
It can also be viewed as the continuation of the work carried out in Seiri, Seiton, and Seison.
Discipline
Dr. Arora

31. The Japanese Origin - Sustain
Shitsuke Sustain
Shitsuke means self-discipline.
The 5 S‘s may be viewed as a philosophy, with employees following established and agreed upon rules at each step.
By the time employees arrive at Shitsuke they will have developed the discipline to follow the 5 S‘s in their daily work.
Ongoing improvement hold the gains
Dr. Arora

32. Can you think of other actions to eliminate waste in your company?
Dr. Arora

33. Leadership Function Initiate needed change by identifying a vision
Aligning employees to that vision
Motivating to achieve that vision
I AM
Initiate
Align
Motivate
Dr. Arora

34. Transparent Workplace – 5 S’s
Sort: Classify tools, parts, instructions into necessary & unnecessary
Set in Order: Make it visible & easy to use; 3 Es = easy to see, easy to get & easy to return
Shine: Conduct cleanup to identify abnormalities
Standardize: Put a system in place to readily identify abnormal conditions
Sustain: Make a habit of properly maintaining & following standard practices
Dr. Arora

35. Benefits of Lean Manufacturing
Lean manufacturing delivers
an insurmountable competitive advantage
over competitors
who don't use it effectively.

36. Benefits of Lean Production
Reduced inventory
Improved quality
Lower costs
Reduced space requirements
Shorter lead time
Increased productivity
Dr. Arora

37. Benefits of Lean Production (cont.)
Greater flexibility
Better relations with suppliers
Simplified scheduling and control activities
Increased capacity
Better use of human resources
More product variety
Dr. Arora