An overview of Concept of waste, Concept of value, concept of lean, lean thinking and lean methodologies Write back at nkchawla@gmail.com

1. Lean Manufacturing
nareshchawla@tqmbizschool.org
© PTU's Gian Jyoti School of TQM & Entrepreneurship 1

2. History & Evolution
Before 1850 Craft manufacturing
1850
Eli Whitney (Interchangeable parts)
American
Civil War Drawing conventions, Tolerances
Modern machine tool development
Fredrick Taylor (Standardized work, time study & work standards)
1900
Frank Gilbreth (Process charts, motion study)
World War I
Henry Ford (Assembly lines, flow lines,
manufacturing strategy)
World War II Deming & Juran (SPC, TQM)
1950
Eiji Toyoda, Taiichi Ohno, Shigeo Shingo
Toyota production system, JIT
Stockless production, World class manufacture
1990
Lean Manufacture
© PTU's Gian Jyoti School of TQM & Entrepreneurship 2

3. Industry’s Concerns
Rising Cost of Input
Govt. Policies (Raw material, Energy)
Competency of
Global
employees
Competition
Accountability to
shareholders &
financers
Above all SUSTAINABLE
Improvement
© PTU's Gian Jyoti School of TQM & Entrepreneurship 3

4. Survival Kit
• Create precise customer value
- goods and services with higher quality
and fewer defects
– with less human effort, less space, less
capital, and less time than the traditional
system of mass production.
• Remove ‘waste’
– Consume ‘just enough’ recourses
– Do more with less
© PTU's Gian Jyoti School of TQM & Entrepreneurship 4

5. Defining Value and Waste
• Defining value - an item or feature for
which a customer willing to pay.
• Every thing else – waste
• Waste - activities that consume time,
resource and/or space but do not add
value.
• Lean - Production of product to meet
demand on daily basis with minimum lead
time & non value added activities
eliminated or minimized
© PTU's Gian Jyoti School of TQM & Entrepreneurship 5

6. Focus on Waste
© PTU's Gian Jyoti School of TQM & Entrepreneurship 6

7. Value Added Activity
• Test for value added activities
- Transforms product in some way
- Customer sees & willing to pay
- Will the customer know if eliminated
© PTU's Gian Jyoti School of TQM & Entrepreneurship 7

8. Seven Wastes
MUDA is the Japanese word for WASTE. An 8th waste
is the wasted
potential
5 7 2 of people
1 4 3 6
Overproduction To produce sooner,faster
or in greater quantities
Seek it out and get rid!
than customer demand.
Over Processing 1 Inventory
Processing beyond
the standard
required by the
7 2 Raw material,
work in progress
customer. or finished goods
which is not having
value added to it.
Rework
Non right Waiting
first time.
Repetition 6 3 People or parts
or correction that wait for
of a process. a work cycle to
be completed.
Transportation 5 4 Motion
Unnecessary movement
of people, parts or
Unnecessary movement of people machines within
or parts between processes. a process.
© PTU's Gian Jyoti School of TQM & Entrepreneurship 8

9. Eliminating Waste
7 steps
1. Reduce lead time
2. Cut operations costs
3. Improve business performance visibility
4. Speed time to market
5. Exceed customer expectations
6. Streamline outsourcing processes
7. Manage global operations
© PTU's Gian Jyoti School of TQM & Entrepreneurship 9

10. Lean manufacturing is a systems
approach
“Lean manufacturing is not a collection of best
practices from which manufacturers can pick
and choose. It is a production philosophy, a
way of conceptualizing the manufacturing
process from raw material to finished goods
and from design concept to customer
satisfaction. Lean is truly a different way of
thinking about manufacturing.”
- Running Today’s Factory: A Proven Strategy
for Lean Manufacturing, Charles Standard.
© PTU's Gian Jyoti School of TQM & Entrepreneurship 10

11. Comparison of lead time
Business as Usual
Customer Waste Product
Order Shipment
Time
Lean Manufacturing
Customer Product
Order Shipment
Waste
Time (Shorter)
© PTU's Gian Jyoti School of TQM & Entrepreneurship 11

12. Main Features of Lean Manufacturing
• Greater Product Variety
• Fast Response (Flexibility)
• Stable Production Schedules
• Supply Chain Integration
• Demand Management
• Broader jobs, highly skilled workers, proud of
product
• Excellent quality
• Reduced costs
• Ability to meet global market & competition
© PTU's Gian Jyoti School of TQM & Entrepreneurship 12

13. Typical benefits of waste elimination
initiative
© PTU's Gian Jyoti School of TQM & Entrepreneurship 13

14. Lean Thinking, Lean Tools &
Supporting Strategies
© PTU's Gian Jyoti School of TQM & Entrepreneurship 14

15. Lean Tools to Lean Management
• Lean thinking
“The basics of Lean Thinking is ‘the customer
first”
• How do we do that?
“By creating thinking people”
• And how do we do that?
“By creating workplaces that are more human
and encourage people to think”
© PTU's Gian Jyoti School of TQM & Entrepreneurship 15

16. Lean Thinking Principle #1
……‘Define Value’
???
Quality
Flexibility
Service
Variety
----VALUE----
Variability
Response-
Time
Cost
The critical starting point for Lean Thinking is
value as defined by the ultimate customer.
© PTU's Gian Jyoti School of TQM & Entrepreneurship 16

17. Lean Thinking Principle #2
……‘Identify the Value Stream’
All the actions required to bring a specific
product or service through the three critical
transformation processes:
• Idea transformation: concept to market launch
• Information transformation: order-take through
scheduling to delivery
• Physical transformation: raw materials to final
customer
Value-add
Inventory Waiting Setup Transportation Waiting Inspect
time (Hours)
Typical value-add to lead-time ratio ~ 1%
Waste
Value-add activity
© PTU's Gian Jyoti School of TQM & Entrepreneurship 17

18. Lean Thinking Principles #3,4,5
#3: Make the work flow
• Every time the flow of work stops we
consume resources that adds costs but
generates no value
#4: Respond only when the customer pulls work
• Overproduction is the worst form of waste
as it generate all other waste types e.g.
transportation, inventory, waiting,…..
#5: Strive to seek perfection
• The real benchmark is zero waste, not
what your competitors are doing!
© PTU's Gian Jyoti School of TQM & Entrepreneurship 18

19. Lean Tools & Supporting Strategies
• 5S
• Visual control
• Team building
• Problem solving
• Standardised processes
• Value stream mapping
© PTU's Gian Jyoti School of TQM & Entrepreneurship 19

20. Lean Tools & Supporting Strategies
• Pull system
• Kanban
• Takt time – rate of customer
demand
• Manufacturing Cells
• Heijunka
• 5Ws & 1H
© PTU's Gian Jyoti School of TQM & Entrepreneurship 20

21. Lean Tools & Supporting Strategies
• Kaizen
• Total Productive Maintenance
• SMED (setup reduction)
• Poka-Yoke or mistake-proofing
• Cycle time reduction
• Andon – signalling system to stop line
© PTU's Gian Jyoti School of TQM & Entrepreneurship 21

22. 5S
A method for organizing a workplace, and
keeping it organized.
Benefits
1.Improve safety
2.Decrease down time
3.Raise employee morale
4.Identify problems more quickly
5.Develop control through visibility
6.Establish convenient work practices
© PTU's Gian Jyoti School of TQM & Entrepreneurship 22

23. © PTU's Gian Jyoti School of TQM & Entrepreneurship 23

24. Visual Control
Any communication device used in the work
environment that tells us at a glance how work
should be done and whether it is deviating from
the standard
Benefits
1. Increase productivity
2. Improve quality
3. On-time delivery
4. Reduce inventory
5. Increase equipment reliability
6. Boosts bottom-line profits
© PTU's Gian Jyoti School of TQM & Entrepreneurship 24

25. Visual controls show
• Where items belong?
• How many items belong there?
• What is the standard procedure for doing
something?
• Status of work in process.
• Many other types of information critical to
the flow of work activities.
© PTU's Gian Jyoti School of TQM & Entrepreneurship 25

26. Visual management
• Visual management maintains an orderly
work environment.
• Employees have quicker and safer access to
items that are needed.
• Colour-coding is often used to remind
employees of where items belong.
• If order is not continually stressed, disorder
will result and create an unfriendly work
atmosphere.
© PTU's Gian Jyoti School of TQM & Entrepreneurship 26

27. Team Building
Lean Tool Introduction Benefits
1. Improves morale and
leadership skills.
2. Finds the barriers that
thwart creativity
An active process by 3. Clearly defines objectives
which a group of and goals
individuals with a 4. Improves processes and
Team
common purpose are procedures
Building
focused and aligned to
5. Improves organizational
achieve a specific task
productivity
or set of outcomes
6. Identifies a team’s
strengths and weaknesses·
7. Improves the ability to
problem solve
© PTU's Gian Jyoti School of TQM & Entrepreneurship 27

28. Problem Solving
Lean Tool Introduction Benefits
The Problem Solving is a
systematic approach with a
sequence of sections that fit
together depending on the
type of problem to be
solved. These are:
1. Problem Definition 1. Leads to identify root
Problem
2. Problem Analysis cause(s) of chronicle
Solving
problems
3. Generating possible
Solutions
4. Analyzing the Solutions
5. Selecting the best
Solution(s)
6. Sustaining the gains
© PTU's Gian Jyoti School of TQM & Entrepreneurship 28

29. Standardized Process &
Value stream Mapping
Lean Tool Introduction Benefits
1. Better decision making
2. Cost reduction and increase in
Standardization is efficiency
the process of 3. Effective information sharing
Standardized developing and 4. Easier international transfer of
Process agreeing upon marketing skills
technical
5. Simplifying the coordination
standards.
and control between
subsidiaries and business
functions
1. Enable Visualizing the
production process
A tool for guiding 2. Identifies waste in each step of
Value stream improvements by the production process.
Mapping identifying waste & 3. Provides a plan for
isolated processes implementing improvements to
the production process to
reduce costs.
© PTU's Gian Jyoti School of TQM & Entrepreneurship 29

30. Pull system
Lean Tool Introduction Benefits
1. Reduce lead times
A method of controlling 2. Minimize work in process
the flow of resources 3. optimize floor space usage
Pull system
by replacing only what
has been consumed 4. Simplify production signals
and improve on-time
delivery to customers.
© PTU's Gian Jyoti School of TQM & Entrepreneurship 30

31. Kanban
Lean Tool Introduction Benefits
1. Reduces waste and scrap
2. Provides flexibility in
production
3. Increases Output
A system of continuous 4. Reduce Preventing Over
supply of components, Production
parts and supplies, such 5. Minimizing Wait Times and
Kanban
that workers have what Logistics Costs
they need, where they
need it, when they need it 6. Reduce Stock Levels and
Overhead Costs
7. Save Resources by
Streamlining Production
8. Reduce Inventory Costs
© PTU's Gian Jyoti School of TQM & Entrepreneurship 31

32. Takt time – Rate of customer
demand & Manufacturing Cells
Lean Tool Introduction Benefits
1. Gives the rhythm at which
system should operate
2. Smooth production planning
& reduced interruptions in
The rate that a operations
Takt time –
completed product
rate of 3. System synchronization with
needs to be finished in
customer customer requirement
order to meet customer
demand 4. Enable pull scheduling
demand
5. No over production
6. No rush hours in work
7. WIP reduced
Comprises a group of 1. Flexible Operation
equipment, that is 2. Setup Time Reduction
Manufacturing
dedicated to the
Cells 3. Process Simplification
complete production of
a family of similar parts 4. Schedule Variety
© PTU's Gian Jyoti School of TQM & Entrepreneurship 32

33. Heijunka & 5Ws & 1 H
Lean Tool Introduction Benefits
1. Stability of manpower
the leveling of 2. Reduction of unnecessary
production by both overtime
Heijunka
volume and product 3. Reduction in inventory levels
mix
4. Reduction of stress levels in
the production area
1. Identify root cause
It is a method of 2. Identify current and future
needs for organizational
questioning that leads
improvement.
5Ws & 1 H to the identification of
the root cause(s) of a 3. Develop a logical approach to
problem problem solving; using data
that already exists in most
operations.
© PTU's Gian Jyoti School of TQM & Entrepreneurship 33

34. Kaizen &
Total Productive Maintenance
Lean Tool Introduction Benefits
1. Increased Space utilization
2. Increased product quality
3. Better Use of capital
Kaizen Continuous Improvement
4. Communications
5. Production capacity
6. Employee retention
A maintenance
philosophy designed to 1. Improve Productivity
integrate equipment 2. Reduce breakdown leading
maintenance into the to Zero breakdown concept
Total
manufacturing process.
Productive 3. Leads to multi-skilling of
The goal is to keep
Maintenance workers
equipment producing only
good product, as fast as 4. Better safety
possible with no 5. Improve quality of products
unplanned downtime.
© PTU's Gian Jyoti School of TQM & Entrepreneurship 34

35. SMED (Set up reduction) & Poka-
yoke or mistake proofing
Lean Tool Introduction Benefits
1. WIP and lot size reduction
2. Finished goods inventory
The practice of reducing reduction
the time it takes to
SMED (Set up
change a line or machine 3. Improved equipment
reduction) utilization/yield
from running one product
to the next 4. Increased profitability
without new capital
equipment purchase
A techniques that help
operators avoid mistakes 1. Better safety
Poka-yoke or in their work caused by
mistake choosing the wrong part, 2. Reduce breakdown
proofing leaving out a part,
installing a part 3. Improve Productivity
backwards, etc.
© PTU's Gian Jyoti School of TQM & Entrepreneurship 35

36. Cycle Time reduction
Lean Tool Introduction Benefits
1. Reduced costs
Reduction of total time
taken from start of the 2. Increased throughput
production or service to 3. Streamlined processes
Cycle Time its completion. It
4. Improved communications
reduction includes processing
time, move time, wait 5. Reduced process variability
time, and inspection 6. Schedule integrity
time
7. Improved on-time delivery
© PTU's Gian Jyoti School of TQM & Entrepreneurship 36

37. Andon–Signaling system to stop
line
Lean Tool Introduction Benefits
1. Bring immediate attention to
problems as they occur in the
manufacturing process.
2. Provide a simple and consistent
mechanism for communicating
information on the plant floor.
A Japanese term refers to
the warning lights on an 3. Encourage immediate reaction
to quality, down time, and
Andon – assembly line that light up
safety problems.
Signaling when a defect occurs.
system to When the lights go on, the 4. Improve accountability of
stop line assembly line is usually operators by increasing their
stopped until the problem responsibility for “good”
is diagnosed and corrected. production and empowering
them to take action when
problems occur.
5. Improve the ability of
supervisors to quickly identify
and resolve manufacturing
issues.
© PTU's Gian Jyoti School of TQM & Entrepreneurship 37

38. Thank You
© PTU's Gian Jyoti School of TQM & Entrepreneurship 38