Lean manufacturing

Lean manufacturing is a business model and collection of tactical methods that

emphasize eliminating non-value added activities (waste) while delivering quality
products on time at least cost with greater efficiency.
Lean manufacturing is underpinned by 5 principles:

1.
2.
3.
4.
5.

Specify what creates value from the customers perspective

Identify all the steps along the process chain
Make those processes flow
Make only what is pulled by the customer
Strive for perfection by continually removing wastes

The main driver for Lean is to compress the time period from customer order to banking
payment. The way that this is achieved is by identifying and eliminating waste. In a conventional
supply chain and in individual businesses, there are potentially huge amounts of different wastes,
known as The 7 Wastes:
The correct application of Lean tools and techniques will show you how to peel away layer after
layer of waste. Its like peeling an onion - you take away the biggest outer layers first but there's
always more. 'Muda' is Japanese for waste and you'll quickly develop 'Muda' spectacles - seeing
waste everywhere! Much of Lean will seem like common sense, although it certainly challenges
some conventional wisdoms!
The great thing about Lean is that it is not about buying the latest piece of kit or having state of
the art facilities: it's about developing a different mental approach to work. It's therefore not
expensive to get started and is suitable for businesses large and small.
Lean is a journey of continuous improvement rather than a destination. Once you have taken
the first steps you'll almost certainly want to continue.
From Wikipedia, the free encyclopedia

Model of the "lean"-production process

Lean manufacturing or lean production, often simply "lean", is a systemic method for the
elimination of waste ("Muda") within a manufacturing process. Lean also takes into account waste
created through overburden ("Muri") and waste created through unevenness in work loads ("Mura").
Working from the perspective of the client who consumes a product or service, "value" is any action
or process that a customer would be willing to pay for.
Essentially, lean is centered on making obvious what adds value by reducing everything else. Lean
manufacturing is a management philosophy derived mostly from the Toyota Production
System (TPS) (hence the term Toyotism is also prevalent) and identified as "lean" only in the 1990s.
[1][2]

TPS is renowned for its focus on reduction of the original Toyota seven wastes to improve overall

customer value, but there are varying perspectives on how this is best achieved. The steady growth
of Toyota, from a small company to the world's largest automaker,[3] has focused attention on how it
has achieved this success.
Lean principles are derived from the Japanese manufacturing industry. The term was first coined by
John Krafcik in his 1988 article, "Triumph of the Lean Production System," based on his master's
thesis at the MIT Sloan School of Management.[4]Krafcik had been a quality engineer in the ToyotaGM NUMMI joint venture in California before coming to MIT for MBA studies. Krafcik's research was
continued by the International Motor Vehicle Program (IMVP) at MIT, which produced the
international best-selling book co-authored by Jim Womack, Daniel Jones, and Daniel Roos
called The Machine That Changed the World.[1] A complete historical account of the IMVP and how
the term "lean" was coined is given by Holweg (2007).[2]
For many, lean is the set of "tools" that assist in the identification and steady elimination of waste
(muda). As waste is eliminated quality improves while production time and cost are reduced. A non
exhaustive list of such tools would include:SMED, value stream mapping, Five S, Kanban (pull
systems), poka-yoke (error-proofing), total productive maintenance, elimination of time batching,

mixed model processing, rank order clustering, single point scheduling, redesigning working cells,
multi-process handling and control charts (for checking mura).
There is a second approach to lean manufacturing, which is promoted by Toyota, called The Toyota
Way, in which the focus is upon improving the "flow" or smoothness of work, thereby steadily
eliminating mura ("unevenness") through the system and not upon 'waste reduction' per se.
Techniques to improve flow include production leveling, "pull" production (by means of kanban) and
the Heijunka box. This is a fundamentally different approach from most improvement methodologies,
which may partially account for its lack of popularity.[citation needed]
The difference between these two approaches is not the goal itself, but rather the prime approach to
achieving it. The implementation of smooth flow exposes quality problems that already existed, and
thus waste reduction naturally happens as a consequence. The advantage claimed for this approach
is that it naturally takes a system-wide perspective, whereas a waste focus sometimes wrongly
assumes this perspective.
Both lean and TPS can be seen as a loosely connected set of potentially competing principles
whose goal is cost reduction by the elimination of waste. [5] These principles include: pull processing,
perfect first-time quality, waste minimization, continuous improvement, flexibility, building and
maintaining a long term relationship with suppliers, autonomation, load leveling and production flow
and visual control. The disconnected nature of some of these principles perhaps springs from the
fact that the TPS has grown pragmatically since 1948 as it responded to the problems it saw within
its own production facilities. Thus what one sees today is the result of a 'need' driven learning to
improve where each step has built on previous ideas and not something based upon a theoretical
framework.
Toyota's view is that the main method of lean is not the tools, but the reduction of three types of
waste: muda ("non-value-adding work"), muri ("overburden"), and mura ("unevenness"), to expose
problems systematically and to use the tools where the ideal cannot be achieved. From this
perspective, the tools are workarounds adapted to different situations, which explains any apparent
incoherence of the principles above.

Lean Manufacturing Concepts and Tools and Quality Management By Hristina Koycheva
2. What is Lean?
o Lean is an Operational Excellence Strategy that enable you to change for
the better- in fact the Japanese often use Kaizen which use by lean
practitioners to describe incremental improvements ;
3. What is Lean?
o Persistent process in elimination of waste MUDA describes any activity
thats done, but add no real value to the product or service.
4. What is Lean?

o Respect for people

o High Quality and Stable Processes
5. Where?
o At all level there is a strong desire to be better;
o A culture of lean is visibly prioritised and practice from the top to the
bottom of the workforce;
o The key is understanding the customer and delivering his requirements;
6. How?
o Improves business performance using simple practical tools and
techniques to enhance quality, cost, delivery and people contribution;
o Exposes the wastes in the system;
o People need to change their long standing work practices and ideas;
o Senior management need to drive lean principles forward with total
commitment to its success;
o Not a bolt on technique, more a way of life leading to a total change in
culture .
7. Short History
o 1913: Henry Ford (Start of mass manufacturing with the moving line)
o 1938 JIT Born
8. Short History
o 1950: Eiji Toyoda brings the ideas of continuous moving line in Japan
9. Short History
o 1960: Toyota production System, main principles of lean manufacturing
o 1991: Lean Management
10. Main Principals
o Identify the customer
o Map the flow
o Make a product or service flow
o Create polls based on customer demands
o Continually find ways to improve
11. Lean Tools
o Assessment and planning- fundamentals and understanding where we are
today and creating and design for tomorrow.
o Plan, Do, Check, Act
12. Lean Tools
o 5 S
o Visual control
o Standardize work
o Total productive maintenance
13. Select the key
o Reduce cost of production
o Increase customer satisfaction
o Improve quality
Select the key Map Process Eliminate Waste Make Process Flow Establish Customer Poll
14. What Is Waste?
o Waste of overproduction (largest waste)
o Waste of time on hand (waiting)
o Waste of transportation

o Waste of processing itself

o Waste of stock at hand
o Waste of movement
o Waste of making defective products
15. Lean Thinking Key Principals of Lean Thinking
o Value - what customers are willing to pay for;
o Value Stream the steps are delivered value;
o Flow organizing Value Stream to be continuous;
o Polls responding to downstream customer demand;
o Perfection relentless continuous improvement (culture);
Lean Thinking, Womack and Jones,1996
16. Conclusion
o Lean is:
o A systematic approach to identifying and eliminating waste (non-value
added activities) through continuous improvement by flowing the product
at the pull of the customer in pursuit of perfection .
17. Production System
o Two pillars:
o Jidoka
o Just-in-time
18. What is Jidoka?
o Jidoka means autonomous . The responsibility of each associate to
deliver Quality to the customers.
o - Intense Motivation Training;
o - Explained Information;
19. Just-in-time
o Aims of zero inventory;
o Parts are not kept in warehouse;
o Parts arrive when needed;
20. Quality system
o Quality means compliance with specifications- no less, no more;
o No need for inspections!
21. Quality Assurance
o When we focused on this we will consistently deliver what the customer
expects;
o Trust raises everyones commitment

forecasting
A planning tool that helps management in its attempts to cope
with the uncertainty of the future, relying mainly on data from
the past and present and analysis of trends.

Forecasting starts with certain assumptions based on

the management's experience, knowledge, and judgment.
These estimates are projected into the coming months or
years using one or more techniques such as Box-Jenkins
models, Delphi method, exponential smoothing, moving
averages, regression analysis, and trend projection. Since
any error in the assumptions will result in a similar or magnified
error in forecasting, the technique of sensitivity analysis is used
which assigns a range of values to the
uncertain factors (variables). A forecast should not be confused
with a budget.

Forecasting is the process of making statements about events whose actual outcomes (typically)
have not yet been observed. A commonplace example might be estimation of some variable of
interest at some specified future date. Predictionis a similar, but more general term. Both might refer
to formal statistical methods employing time series, cross-sectional orlongitudinal data, or
alternatively to less formal judgmental methods. Usage can differ between areas of application: for
example, in hydrology, the terms "forecast" and "forecasting" are sometimes reserved for estimates
of values at certain specific future times, while the term "prediction" is used for more general
estimates, such as the number of times floods will occur over a long period.
Risk and uncertainty are central to forecasting and prediction; it is generally considered good
practice to indicate the degree of uncertainty attaching to forecasts. In any case, the data must be up
to date in order for the forecast to be as accurate as possible.[1]

Forecasting
Forecasting helps managers and businesses develop meaningful plans and reduce uncertainty of events
in the future. Managers want to match supply with demand; therefore, it is essential for them to forecast
how much space they need for supply to each demand.
Two important aspects associated with forecasting are the expected level of demand and the forecast's
degree of accuracy. Two general approaches to forecasting are qualitative and quantitative. Also, there
are three types of forecasting techniques:

1.

Judgmental forecasts,

2.

Time-series forecasts, and

3.

Associative models.

Judgmental forecasts rely on subjective inputs from various sources. Time-Series forecasts projects
patterns identified in recent time-series observations. A time-series is a time-ordered sequence of
observations taken at regular time intervals. Associative models are based on the development of an
equation that summarizes the effects of predictor variables. Predictor variables are used to predict values
of the variable of our interest.
It is important to know how to calculate a forecast error: Error = Actual - Forecast. There are three ways
of measuring the accuracy of forecasts: MAD, MSE, and MAPE. MAD weighs all errors evenly. MSE
weighs errors according to their squared values. Lastly, MAPE weighs according to relative error.
Qualitative forecasting is subjective, while quantitative forecasting involves projecting historical data, or
developing associative models. Judgmental forecasts are qualitative, while time-series forecasts and
associative models are both quantitative. Quantitative forecasting methods include the Nave forecasting
method, the moving average method, the weighted average method, and the exponential smoothing
method. Forecasts are never 100% accurate; hence, there is always room for improvement.
Chapter 3 introduced different kinds of forecasting techniques; however no single technique works best in
every situation. Random variation is always present within forecasts and there will always be a degree of
residual error within forecasts. Forecasts are the basis for an organization's schedule, and therefore the
accuracy of these forecasts will dictate how many resources must be used, the output production, and the
timing of a production schedule.The higher the accuracy the higher the cost, therefore the best forecast is
generated from some combination of accuracy and cost. The availability of historical data, computer
software, as well as the time needed to gather and analyze data must be taken into consideration when
selecting a forecast technique. Computers play an important role in preparing forecasts based on
quantitative data.Because forecast error equals the actual value minus the forecast value. Positive errors
will occur when the forecast is too low and negative errors will occur when the forecast is too high.

There are a wide variety of forecasting techniques that can broadly be classified in
three main approach

1.

Judgmental Forecasts: Useful when forecasts must by done in a short period of time, when
data is out dated, unavailable, or there's limited time to collect it.

2.

Time Series Forecasts: Most Common, are used to identify specific patterns in data and use
them to project future forecasts

3.

Associative models: identify related variables in order to predict necessary forecasts.

Forecasting is a method used to predict and place all information mainly in design and operating systems.
They both estimate what that information will look like in the future. In order to do so, one must determine
the purpose, establish a time horizon, select a forecasting technique, make it, and then monitor the new
forecast. The methods used to decrease error include: Delphi method, naive method, and weighted

average method. A major issue in forecasting is seasonal variations because it has a repeating
movement. This is where the control chart becomes important mainly because it monitors forecasting
errors.

ForecastsForecasting Demands
Forecasting is an important part of a business because a forecast results in a more accurate inventory.
Main uses for forecasts include: Plan the system (long-range plans) and plan the use of the system
(short-range plans). The four common types of forecasts are naive forecasts, moving average, weighted
moving average and exponential smoothing.
Having an accurate forecast is very important. Chapter 3 also focuses about forecast error. Error is
calculated by subtracting the forecast from the actual error. Its also important that firms use the most
accurate forecasting method. The three most common ways to measure the errors in forecasts are the
mean deviation, the mean squared error, and the mean absolute percent error.

Forecasting is a statement pertaining to the future value of a variable of interest. Its crucial for good
forecasting to be reliable, cost effective, simple and concise. Its very important for a forecast to be correct
and that their be as few errors as possible. Errors greatly effect forecast accuracy and are calculated as
Error = Actual - Forecast. If their are too many errors in a forecast, then action is required to correct those
errors.There are two main approaches in forecasting. One approach is quantitative forecasting which
relies on past variables and data. The other is qualitative forecasting which is more about opinions,
fundamental analysis, and intuitions.

SUMMARY - Judgmental Forecasts

This section covers Judgmental forecasts, which are useful when need to make a quick forecast or if
historical data is not available.

Judgmental forecasts include executive opinions, sales-force opinions, consumer surveys, and the Delphi
method. Executive opinions utilizes a small group of upper-level managers to develop a forecast. Salesforce opinion method uses the sales staff or the customer service staff to make forecasts based on

information obtained through direct contact with customers. Consumer surveys are used to gather
information directly from customers to generated a forecast.

William J. Stevenson lists a number of characteristics that are common to a good

forecast:

Accuratesome degree of accuracy should be determined and stated so that

comparison can be made to alternative forecasts.

Reliablethe forecast method should consistently provide a good forecast if the

user is to establish some degree of confidence.

Timelya certain amount of time is needed to respond to the forecast so the

forecasting horizon must allow for the time necessary to make changes.

Easy to use and understandusers of the forecast must be confident and

comfortable working with it.

Cost-effectivethe cost of making the forecast should not outweigh the benefits
obtained from the forecast.

Forecasting techniques range from the simple to the extremely complex. These
techniques are usually classified as being qualitative or quantitative.

Inventory control
Inventory Control is the supervision of supply, storage and accessibility of items in order to ensure
an adequate supply without excessive oversupply.
It can also be referred as internal control - an accounting procedure or system designed to promote
efficiency or assure the implementation of a policy or safeguard assets or avoid fraud and error etc.
Inventory control may refer to:

In economics, the inventory control problem, which aims to reduce overhead cost without
hurting sales

In the field of loss prevention, systems designed to introduce technical barriers to shoplifting

It answers the 3 basic questions of any supply chain: 1. When? 2. Where? 3. How much?

Inventory control involves the procurement, care and disposition of materials. There
are three kinds of inventory that are of concern to managers: Raw materials, Inprocess or semi-finished goods, Finished goods. If a manager effectively controls
these three types of inventory, capital can be released that may be tied up in
unnecessary inventory, production control can be improved and can protect against
obsolescence, deterioration and/or theft,
The reasons for inventory control are: Helps balance the stock as to value, size,
color, style, and price line in proportion to demand or sales trends. Help plan the
winners as well as move slow sellers Helps secure the best rate of stock turnover
for each item. Helps reduce expenses and markdowns. Helps maintain a
business reputation for always having new, fresh merchandise in wanted sizes and
colors. Three major approaches can be used for inventory control in any type and
size of operation. The actual system selected will depend upon the type of
operation, the amount of goods.