A
BRIEF
HISTORY
OF
LEAN
MANUFACTURING
In 1900s U.S. manufacturers like Henry ford brought the concept of mass
production. U.S. manufacturers have always searched for efficiency strategies that help
reduce costs, improve output, establish competitive position, and increase market share.
Early process oriented mass production manufacturing methods common before World War
II shifted afterwards to the results-oriented, output-focused, production systems that control
most of today's manufacturing businesses.
Japanese manufacturers re-building after the Second World War were facing declining
human, material, and financial resources. The problems they faced in manufacturing were
vastly different from their Western counterparts. These circumstances led to the development
of new, lower cost, manufacturing practices. Early Japanese leaders such as the Toyota Motor
Company's Eiji Toyoda, Taiichi Ohno, and Shingeo Shingo developed a disciplined, processfocused production system now known as the "lean production." The objective of this system
was to minimize the consumption of resources that added no value to a product.
The "lean manufacturing" concept was popularized in American factories
in large part by the Massachusetts Institute of Technology study of the
movement from mass production toward production as described in The Machine
That Changed the World, (Womack, Jones & Roos, 1990), which discussed the
significant performance gap between Western and Japanese automotive
industries. This book described the important elements accounting for superior
performance as lean production. The term "lean" was used because Japanese
business methods used less human effort, capital investment, floor space,
materials, and time in all aspects of operations. The resulting competition among
U.S. and Japanese automakers over the last 25 years has lead to the adoption of
these principles within all U.S. manufacturing businesses. Now it has got global
acceptance and is adopted by industries world over to keep up with the fast
moving and competing industrial field.
WHAT IS LEAN MANUFACTURING?
Lean manufacturing is a manufacturing system and philosophy that was
originally developed by Toyota, Japan and is now used by many manufacturers
throughout the world.
Lean Manufacturing can be defined as:
"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."
The term lean manufacturing is a more generic term and refers to the
general principles and further developments of becoming lean.
The term lean is very apt because in lean manufacturing the emphasis is
on cutting out FAT or wastes in manufacturing process. Waste is defined as
anything that does not add any value to the product. It could be defined as
anything the customer is not willing to pay for.
Manufacturing philosophy is pivoted on designing a manufacturing system
that perfectly blends together the fundamentals of minimizing costs and
maximizing profit. These fundamentals are Man (labour), Materials and Machines
(equipments) called the 3 Ms of manufacturing. A well-balanced 3M is resulted
through lean manufacturing.
WASTES IN MANUFACTURING
The aim of Lean Manufacturing is the elimination of waste in every area of
production including customer relations, product design, supplier networks, and factory
management. Its goal is to incorporate less human effort, less inventory, less time to develop
products, and less space to become highly responsive to customer demand while producing
top quality products in the most efficient and economical manner possible.
Essentially, a "waste" is anything that the customer is not willing to pay for.
Typically the types of waste considered in a lean manufacturing system include:
Overproduction
To produce more than demanded or produce it before it is needed. It is visible as
storage of material. It is the result of producing to speculative demand. Overproduction
means making more than is required by the next process, making earlier than is required by
the next process, or making faster than is required by the next process.
Causes for overproduction waste include:
Just-in-case logic
Misuse of automation
Long process setup
Unleveled scheduling
Unbalanced work load
Over engineered
Redundant inspections
Waiting
For a machine to process should be eliminated. The principle is to maximize the
utilization/efficiency of the worker instead of maximizing the utilization of the machines.
Causes of waiting waste include:
Unbalanced work load
Unplanned maintenance
Long process set-up times
Misuses of automation
Upstream quality problems
Unleveled scheduling
Inventory or Work in Process (WIP)
This is material between operations due to large lot production or processes with long
cycle times.
Causes of excess inventory include:
Protecting the company from inefficiencies and unexpected problems
Product complexity
Unleveled scheduling
Poor market forecast
Unbalanced workload
Unreliable shipments by suppliers
Misunderstood communications
Reward systems
Processing waste
It should be minimized by asking why a specific processing step is needed and why a
specific product is produced. All unnecessary processing steps should be eliminated.
Causes for processing waste include:
Product changes without process changes
Just-in-case logic
True customer requirements undefined
Over processing to accommodate downtime
Lack of communications
Redundant approvals
Extra copies/excessive information
Transportation
This does not add any value to the product. Instead of improving the transportation, it
should be minimized or eliminated (e.g. forming cells).
Causes of transportation waste include:
Poor plant layout
Poor understanding of the process flow for production
Large batch sizes, long lead times, and large storage areas
Motion
Motion of the workers, machines, and transport (e.g. due to the inappropriate location
of tools and parts) is waste. Instead of automating wasted motion, the operation itself should
be improved.
Causes of motion waste include:
Poor people/machine effectiveness
Inconsistent work methods
Unfavorable facility or cell layout
Poor workplace organization and housekeeping
Extra "busy" movements while waiting
Making defective products
This is pure waste. Prevent the occurrence of defects instead of finding and repairing
defects.
Causes of processing waste include:
Weak process control
Poor quality
Unbalanced inventory level
Deficient planned maintenance
Inadequate education/training/work instructions
Product design
Customer needs not understood
Underutilizing people
Not taking advantage of people's abilities.
Causes of people waste include:
Old guard thinking, politics, the business culture
Poor hiring practices
Low or no investment in training
Low pay, high turnover strategy
Nearly every waste in the production process can fit into at least one of these
categories. Those that understand the concept deeply view waste as the singular enemy
that greatly limits business performance and threatens prosperity unless it is relentlessly
eliminated over time. Lean manufacturing is an approach that eliminates waste by
reducing costs in the overall production process, in operations within that process, and in
the utilization of production labor. The focus is on making the entire process flow, not the
improvement of one or more individual operations.
ELEMENTS OF LEAN MANUFACTURING
Those concepts that lead to the implementation of lean manufacturing successfully
are called elements of lean manufacturing. The basic elements of lean manufacturing are
waste elimination, continuous improvement, pull system, one-piece workflow, cellular
manufacturing and 5Ss. When these elements are focused in the areas of cost, quality and
delivery, this forms the basis for a lean production system.
Elimination of waste
Waste is anything that doesnt add value to the product. Seeing whether the process is
adding value to the product or not is the best way to identify wastes.
Is the activity adding value?
If YES
Is this the best way to do it?
eliminated?
If NO
Can it be
If not, can it be
reduced?
Out of the complete processes in an industry only about 5 % actually add value to the
product. Rest of the process does not add any value. Rest 35% activities are such that even
though this doesnt add any value but still it cannot be eliminated as it is necessary. For eg.
Inventory cannot be completely reduced, scrap materials cannot be made zero, it may take
few minutes to load unload and load for next operation etc. So focus should be on complete
elimination of waste activities and reducing the necessary non-value adding activities
Continuous improvement
Japanese looked at improving their work every time they do it. This lead to
the development of concept called continuous improvement. Japanese rather
than maintaining the improvement they have achieved they concentrated in
continuously improving their work. This improvement can be in any field like
quality, error proofing, lead-time reduction etc. So the focus should be on how
you can improve your work than the same done last time.
Improvement is classified into innovations and kaizen. Innovations are
those improvements which cause drastic changes. These occur due to huge
technological advancements in the field of research and development. These are
mostly done by high level engineers. Kaizen include small small improvements
done by lower order employees.
According to the level of employees the type of improvements each
should focus are as shown below:
In order to achieve continuous improvement the work culture of the workers should
be modified. The workers should be aimed at improving their work each time they do it.
Pull system
Manufacturing system can be divided into two
1) Push system Here the products are made according to the market
forecast and not according to the current demand. So here the information flow
is in the same direction as the product flow. So there may chance of piling of
finished goods as there are always fluctuation in demand. Thus the product is
pushed through the production line.
Information Flow
Fin.
Ra
Supplier w
Ma
Process
A
Process
B
Part Flow
Process
C
Customer
2)Pull system- Here the product is made according to the customer
demand. So the information of the quantity and type of product flow in the
opposite direction to that of the product. Here no piling of finished products
occurs as the production is according to the customer demand. Hence the
customer pulls the product through the production line.
Information Flow
Supplier
Ra
w
Process
A
Process
B
Part Flow
Process
C
Fin.
Customer
One-piece flow
One piece flow is one of the important techniques in implementing lean
manufacturing. Traditional batch production in mass production is replaced by
one piece flow in lean manufacturing. Here batch size is reduced to almost one.
This reduces the total lead time and also reduces waiting between operations or
queuing.
Following figures show how effective is one piece flow over batch
production.
Batch & Queue Processing
Process
Process
Process
10 minutes
10 minutes
10 minutes
LeadTime:
30+ minutes for total order
21+ minutes for first piece
One piece flow
ProcessProcessProcess
12 min. for total order
3 min. for first part
From the above example it is clear that the lead time can be reduced to
almost 40% of the lead time when it was batch production. Also it can be noted
that it takes about 85% less time for the first part to be produced. Thus product
can be produced according to current demand quickly.
Cellular manufacturing
In traditional mass production machines are arranged according to its
functions. But in cellular manufacturing machines are arranged according to the
processes involved in production. The plants layout is designed in such a way
that transportation between machineries is reduced to minimum. For the
implementation of such a good plant layout deep knowledge of processes as well
as proper analysis of processes involved in production is necessary.
Following figures shows the diagrammatic representation of both forms of
floor arrangement.
FUNCTIONAL
CELLS
CELL ADVANTAGES OVER FUNCTIONAL DEPARTMENT
1. Shorter Lead Time
2. Improved Quality - Quicker problem identification
3. Improved Quality - Less potential rework or scrap
4. Less Material Handling
5. Improved Coordination
6. Reduced Inventory
7. Departmental conflicts eliminated
8. Simplified Scheduling
9. Less Space Required
4.6 The 5 Ss
It is the Japanese method of keeping the work place clean and tidy. This helps in
reducing many unnecessary movements. The 5Ss are:
Sort (Seiri) - Perform Sort Through and Sort Out, by placing a red tag on all
unneeded items and moving them to a temporary holding area.
Within a
predetermined time the red tag items are disposed, sold, moved or given away.
Set in Order (Seiton) - Identify the best location for remaining items, relocate
out of place items, set inventory limits, and install temporary location indicators.
Shine (Seiso) - Clean everything, inside and out.
Standardize (Seiketsu) - Create the rules for maintaining and controlling the
first 3Ss and use visual controls.
Sustain (Shitsuke) - Ensure adherence to the 5S standards through
communication, training, and self-discipline.
CHAPTER-5
KEYS TO LEAN SUCCESS
Following are some considerations to successful lean implementation:
Prepare and motivate people
Widespread orientation to Continuous Improvement, quality, training and
recruiting workers with appropriate skills
Create common understanding of need to change to lean
Employee involvement
Push decision making and system development down to the "lowest
levels"
Trained and truly empowered people
Share information and manage expectations
Identify and empower champions, particularly operations
managers
Remove roadblocks (i.e. people, layout, systems)
Make it both directive yet empowering
Atmosphere of experimentation
Tolerating mistakes, patience, etc.
Willingness to take risks
Installing "enlightened" and realistic performance measures,
evaluation, and reward systems
Do away with rigid performance goals during implementation
Measure results and not number activities/events
Tie improvements, long term, to key macro level performance targets (i.e.
inventory turns, quality, delivery, overall cost reductions)
After early wins in operations, extend across ENTIRE organization.
COMPARISON BETWEEN TRADITIONAL AND LEAN
MANUFACTURING
For years manufacturers have created products in anticipation of having a market for them.
Operations have traditionally been driven by sales forecasts and firms tended to stockpile inventories
in case they were needed. A key difference in Lean Manufacturing is that it is based on the concept
that production can and should be driven by real customer demand. Instead of producing what you
hope to sell, Lean Manufacturing can produce what your customer wants with shorter lead times.
Instead of pushing product to market, it's pulled there through a system that's set up to quickly
respond to customer demand.
Lean organizations are capable of producing high-quality products economically in lower
volumes and bringing them to market faster than mass producers. A lean organization can make
twice as much product with twice the quality and half the time and space, at half the cost, with a
fraction of the normal work-in-process inventory. Lean management is about operating the most
efficient and effective organization possible, with the least cost and zero waste.
OVERALL ORGANIZATIONAL CHARACTERISTICS:
TRADITIONAL MASS PRODUCTION
LEAN PRODUCTION
Business Strategy
Product-out strategy focused on
Customer focused strategy focused on
exploiting economies of scale of stable identifying and exploiting shifting
product designs and non-unique
competitive advantage.
technologies
Customer
Satisfaction
Makes what engineers want in large
quantities at statistically acceptable
quality levels; dispose of unused
inventory at sale prices
Makes what customers want with zero
defect, when they want it, and only in
the quantities they order
Leadership
Leadership by executive command
Leadership by vision and broad
participation
Organization
Hierarchical structures that encourage
following orders and discourage the
flow of vital information that highlights
defects, operator errors, equipment
abnormalities, and organizational
deficiencies.
Flat structures that encourage initiative
and encourage the flow of vital
information that highlights defects,
operator errors, equipment
abnormalities, and organizational
deficiencies.
External Relations
Based on price
Based on long-term relationships
Information Management
Information-weak
management based on
abstract reports
Information-rich management based on
visual control systems maintained by all
employees
Cultural
Culture of loyalty and
obedience, subculture of
alienation and labor strife
Harmonious culture of involvement based
on long-term development of human
resources
Production
Large-scale machines,
Human-scale machines, cell-type layout,
functional layout, minimal
multi-skilling, one-piece flow, zero
skills, long production runs, inventories
massive inventories
Operational capability
Dumb tools that assume an
extreme division of labor,
the following of orders, and
no problem solving skills
Smart tools that assume standardized
work, strength in problem identification,
hypothesis generation, and
experimentation
Maintenance
Maintenance by
maintenance specialists
Equipment management by production,
maintenance and engineering
Engineering
"Isolated genius" model,
Team-based model, with high input from
with little input from
customers and concurrent development of
customers and little respect product and production process design
for production realities.
6.2 MANUFACTURING METHODS:
TRADITIONAL MASS
PRODUCTION
LEAN PRODUCTON
Production schedules are
based on
Forecast product is pushed Customer Order product is pulled
through the facility
through the facility
Products manufactured
to
Replenish finished goods
inventory
Fill customer orders (immediate
shipments)
Production cycle times
are
Weeks/months
Hours/days
Manufacturing lot size
quantities are
Large, with large batches
moving between operations;
product is sent ahead of each
operation
Small, and based on one-piece flow
between operations
Plant and equipment
layout is
By department function
By product flow, using cells or lines for
product families
Quality is assured
Through lot sampling
100% at the production source
Workers are typically
assigned
One person per machine
With one person handling several
machines
Worker empowerment is Low little input into how
operation is performed
High has responsibility for identifying
and implementing improvements
Inventory levels are
High large warehouse of
finished goods, and central
storeroom for in-process
staging
Low small amounts between
operations, ship often
Inventory turns are
Low 6-9 turns pr year or
less
High 20+ turns per year
Flexibility in changing
manufacturing schedules
is
Low difficult to handle and High easy to adjust to and implement
adjust to
Manufacturing costs are Rising and difficult to control
Stable/decreasing and under control
BENEFITS OF LEAN MANUFACTURING
According to the study conducted in various industries world over the main benefits
achieved by implementation of lean manufacturing is as shown below.
Percentage of Benefits Achieved
0
25
50
75
100
Lead Time Reduction
Productivity Increase
WIP Reduction
Quality Improvement
(From ERC staff meeting, march
20,2002,Maryland University)
Establishment and mastering of a lean production system would allow you to achieve
the following benefits:
Lead time is reduced by 90%
Productivity is increased by 50%
Work in process is reduced by 80%
Quality is improved by 80%
Space utilization is increased by 75%
These are areas in an establishment that directly affects its survival. There are many
other benefits also which directly or indirectly affects the performance of the industry.
OTHER BENEFITS
Reduced scrap and waste
Reduced inventory costs
Cross-trained employees
Reduced cycle time
Reduced obsolescence
Lower space/facility requirements
High quality & reliability
Lower overall costs
Self-directed work teams
Lead time reduction
Fast market response
Longer machine life
Improved customer communication
Lower inventories
Improved vendor support and quality
Higher labor efficiency and quality
Improved flexibility in reacting to changes
Allows more strategic management focus
Increased shipping and billing frequencies
However, by continually focusing on waste reduction, there are truly no ends to the
benefits that can be achieved.
CONCLUSION
LEAN can be said as adding value by eliminating waste being responsive to
change, focusing on quality and enhancing the effectiveness of the work force.
Although lean has its origin in the automobile industry it is being successfully used in
other production industries. Lean manufacturing is now extended to fields like I.T, service etc
in order to reduce production cost and meet changing customer needs.
Since lean is completely customer oriented it is here to stay. It is also important
as it emphasis customer satisfaction.
Lean has made its way into curriculum of major universities around the world. In
universities like MIT, Maryland university etc Lean manufacturing is included into the
syllabus and it is given importance to new entrepreneurs. Many consulting firms are also
functioning for proper guidance to those who are interested in lean.
Lean manufacturing cannot be attained in one day or one week or one month or in a
year. It needs lot of commitment and hard work. Also there is no end in lean manufacturing.
The more you eliminate waste the more you become lean. That is why it is said that:
lean is a journey
REFERENCES
1. Besterfield, Dale H.: Total quality management,
(Pearson education)
2. www.advancedmanufacturing.com
3. www.1000ventures.com
4. www.mamtc.com
