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Lean manufacturing concept: The main factor in improving manufacturing

performance - A case study

Article  in  International Journal of Manufacturing Technology and Management · March 2009

DOI: 10.1504/IJMTM.2009.023961 · Source: DBLP

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Int. J. Manufacturing Technology and Management, Vol. 17, No. 4, 2009 353

Lean manufacturing concept: the main factor in

improving manufacturing performance – a case study

N. Zakuan*
Lecturer, UTHM, Parit Raja,
Johor 86400, Malaysia
E-mail: [email protected]
*Corresponding author

M.Z. Mat Saman

Senior Lecturer, UTM, Skudai,
Johor 81310, Malaysia
E-mail: [email protected]

Abstract: In this ever-competitive business environment, the company that can

deliver a product that can thoroughly satisfy the manufacturing outputs will
attain the most market share. Besides that, cost cutting is key in competing with
lower labour cost region in the world. Inability to execute cost reduction
programme effectively will result in loss of contract to competitors. In relation
to that, lean manufacturing approach offers tools to pursue reduce operational
cost through reduction of waste of resource in the manufacturing industry. This
paper has attempted to analyse the current production system of the company.
The results show that, the company have to redesign the production system in
order to satisfy the current needs. They have to setup a new strategy in order to
achieve these needs. Based on that, lean manufacturing concept was suggested
to the company and several analyses have been done in order to improve the
current performance.

Keywords: lean manufacturing; manufacturing outputs; manufacturing

performance; cost reduction; value stream analysis.

Reference to this paper should be made as follows: Zakuan, N. and

Mat Saman, M.Z. (2009) ‘Lean manufacturing concept: the main factor in
improving manufacturing performance – a case study’, Int. J. Manufacturing
Technology and Management, Vol. 17, No. 4, pp.353–363.

Biographical notes: N. Zakuan is a Lecturer in Faculty of Mechanical and

Manufacturing Engineering, UTHM. She received her MSc from Coventry
University, UK and her BSc from UTM. Her current research is in quality
engineering.

M.Z. Mat Saman is a Senior Lecturer in Faculty of Mechanical Engineering,

UTM. He received his PhD and MSc from Coventry University, UK and his
BSc from UTM. His current research interests are manufacturing system,
product life cycle and industrial engineering.

Copyright © 2009 Inderscience Enterprises Ltd.

354 N. Zakuan and M.Z. Mat Saman

1 Introduction

The performance of a company can be defined as the sum of each strategy of its
component functions such as manufacturing, finance, marketing, service, research and
development, etc. In a successful firm, these strategies interlock to provide maximum
competitive advantage of which the firm is capable (Chin and Mat Saman, 2004).
In many manufacturing companies, employees both inside and outside the manufacturing
function realise that manufacturing is struggling to provide what the company needs to
be successful in this ever-competitive marketplace. The reality is the company that can
deliver a high quality and low cost product at the right time to the marketplace will win
the most market share. Hence, getting company to meet market expectations can be
accomplished only by realigning manufacturing system, continuous improvement,
increasing manufacturing capabilities and simultaneously seeking to reduce waste in the
system. This paper begins with the analysis of the current situation of the company’s
production system and then followed by a proposed recommendation of the production
system. Following this, several elements involved in the proposed recommendations are
elaborated. Lastly, discussion and conclusions are briefly described.

2 Literature review

Productions systems can be categorised into four main groups that is, craft, mass, agile
and lean. Womack et al. (1991) published their output on the research of the world
automotive industry in The Story of Lean production. It was a research under the
International Motor Vehicle Program (IMVP), Massachusetts Institute of Technology
(MIT), which spend five years and USD$5 millions to complete. The researchers of the
programme comprised of a worldwide team with diverse professional background. The
team visited 90 automotive assembly plants in 17 countries around Europe, Northern and
South America, Japan, Korea and Australia (Womack and Jones, 1996).
Generally, lean operations are characterised by five key principles (Robertson and
Jones, 1999),
1 Value: Specify value by specific product based on customer requirements.
2 Value Stream: Identify the route of each product that is from raw material to the
customer.
3 Flow: Develop a value flow of the process, which can provide a short lead time,
high quality and low cost.
4 Pull: Develop a pull system (Just in Time (JIT) concept). The flows of the
process are driven by the customers.
5 Perfection: Implementation of the continuous improvement concept at all time
in order to produce good results.
A success implementation of the lean operations system has been proven by Davidson
Instrument Panels Company (Miltenburg, 1995). Davidson Instrument Panels in
New Hampshire had changed its batch flow production system to a physical flow JIT
production system. The layout and material flow was changed from a functional layout to
a product focused lines. As a result, setup times are reduced from 8 hr to just 10 min.
Production rate for each line can be synchronised with customer requirements and
 Lean manufacturing concept 355

products can be produced and shipped JIT. The result is decrease in manufacturing cost,
an improvement in quality and a drop in manufacturing Cycle Time (CT). Inventory
turns increased from 7.5 to 28 turns per year over the four-year period. Result of study
by Standard and Davis (1999) (Table 1) illustrated a significant improvement gained
by companies that embraced the lean Concept.

Table 1 The results of implementation of lean concept

Selected competitive advantage Company realising advantage (%)

Reduce customer lead time 63
Steady or reducing price 63
Increase market share 61
Reduce time to launch new product 39
Increase product diversity 24

Result from this study indicated that about 60% of lean companies improved their
competitive advantages in the area of lead time, pricing and market share. In the area of
time to launch new product and product diversity, respectively, 39% and 24% of lean
companies claimed to experience improvement after switching to lean approach.
All these improvements significantly increase their competitiveness. Another study done
on companies in the UK also indicated a direct relation between the improvements in
company performance and the adoption of lean approaches (London Business
School, 1993).

3 Product summary and problem identification

The case study of this project is an automotive component (a car seat) (Coventry
University, 2005). Based on company production data, a product family containing two
parts, that is AL123 (Left-Hand Side (LHS)) and ARE124 (Right-Hand Side (RHS)).
A car seat consists of two LHS, AL123 and two RHS, ARE124. ARE124 has an
additional electronic subassembly. The company manufacturing facility is a mass
production principle. The process includes conventional machining and electronic
assembly and final assembly. The production starts with sawing of bars to size in the raw
material stores. The product is transferred in a batch size of 400 to a conventional lathe,
followed by deburing. Next process is for CNC machining operations which define LHS
and RHS features. Then, in batches 1000, heat treatment process is carried out. After
that, grind process to be done for the finishing face. At this phase, the products are split
to different operations. AR is transported to operation 8, where electronic subassembly to
be added while AL being transported directly to operation 9.
The electronic subassembly is produced in a manual assembly in an adjacent
building, where 3 operations are carried out. The final electronic subassembly product is
transported to manual assembly and combined with AL product to operations 9 and 10.
Finally, the finished assemblies are then loaded to the LHS and RHS designated carriers
and ready for shipment. This gives the overall picture of the company’s operation in
producing its high volume runner products. Based on initial observations, it shows that
there are several waste areas that can be improved such as waiting, overproduction,
356 N. Zakuan and M.Z. Mat Saman

rework, motion, processing, inventory and transportation. Then, the following analysis
looks at the overall operations from lean manufacturing approach to cut waste throughout
the operations and subsequently lowering operational cost and maximising company
profit.

4 Current state mapping

4.1 Takt time

From the data collected on customer demand (4200 units per month), Takt time which is
the maximum CT of an operation in producing a product in order to meet customer
demand can be determined.
Takt time = Available production time / Total daily quantity required

where
Available production time = (7 × 3) × 60 × 60 = 75,600 sec

and
⎛ 4200 ⎞
Total daily quantity required = ⎜ ⎟ × 4 = 840 parts required
⎝ 20 ⎠
so
75,600
Takt time = = 90 sec
840

4.2 Analysis of current state mapping

There are eight main steps to construct current state mapping; icons, data box, enter
shipping and receiving data, manufacturing operations, enter process attributes, show
information flow, show inventory icons and finally push locations. Once all information
is gathered, current state mapping had been constructed as shown in Figure 1. Referring
to documented current state mapping, lean metrics can be identified and analysed to
achieve future state goals. Eliminating waste can make the company stronger and more
competitive. Based on current state mapping, main assembly total production lead time is
39.54 days and value added time is 859 sec + 4 hr.
Lead time = 9.54 × 24 = 948.96 hr

Value added time = 859 sec + 4 hr = 6.38 hr

Therefore, ratio of lead time to value added time for main production,
948.96/6.38 = 148.7.
The ratio of lead time to value added time is 148.7. This ratio is a comparison
between the total time for the whole process from raw materials to finished products and
the total of operation time. A smaller ratio is the best value to illustrate the productivity
 Lean manufacturing concept 357

of the company. Based on the lead time and the ratio calculated, the company has to take
further action to improve this situation in order to satisfy customer demand and remain in
competitive market. The company has to investigate.

Figure 1 Current state mapping (see online version for colours)

358 N. Zakuan and M.Z. Mat Saman

1 Long lead time: the production lead time, consists of three components which
are processing time for supply lots, waiting time and conveyance time between
processes (Monden, 1997). Basically, the components of production lead time
are queue time before processing, setup time, run time, waiting time after
processing and moving time (Tapping et al., 2002). Lead time can be reduced
by shortening processing time, for example introducing single-unit production
and conveyance system especially at assembly and subassembly production.
Even if a process does not involve single-unit production, the operation is still
limited to a small production lot size. To achieve this, multiprocess holding by
multifunction workers is efficient. The layout needs to change so that each
worker could handle several different types of machines at the same time.
With this method, only one item of stock is involved in the work in process
in each machine. The inventory level is minimised and production lead
time is reduced.

2 High batch/lot size and setup time: lead time can be reduced by shortening
process time through small sized lot production. In this case study the CT
per unit of operation 2 (lathe) is 1 min and the lot of size is 400, then the total
processing amount to 6.6 hr. However, by reducing the lot size to 100, its CT is
only 1.6 hr. For example, the processing of operation 2 (lathe) has decreased to
1.6 hr from 6.6 hr just by reducing the lot size. This simple logic is basic to
shortening the lead time by reducing the lot size. However, from current state
mapping, it is visualising that for heat treatment process, the CT is too long
which took 4 hr complete.

If the setup time in changeover of the lots is kept constant, the total setup time will
increase in proportion to the increased number of changes of the lots. Therefore, the
setup time must also be shortened when lot of size is reduced. Based on current state
mapping, it can be seen that setup time in changeover of each process is too
high. For example, the changeover time for the grinding process is 45 min. Further
study needs to be carried out to reduce the changeover time.

3 High inventory and waiting time: high inventory will increase the production
lead time and waiting time as well. As for waiting time, the first type of waiting
time is often caused by a delay in a preceding process making the subsequent
process. The second is often caused by a delay in a subsequent process making
the preceding process wait. Therefore, both causes are the result of unbalance
production time between processes and resulted high in inventory.

Based on the current state mapping, unbalance line can be figured out as shown
below. To construct operator balance chart, it is focused to the main assembly line
which involve operation 1 until operation 10 except heat treatment process.
However, electronic subassembly line in not consider in the main assembly line.
So, the CT is,

CT = 10 sec + 60 sec + 10 sec + 150 sec + 126 sec + 84 sec + 84 sec

+ 160 sec + 120 sec + 55 sec = 859 sec

4 Rearrange the layout: as discussed earlier, the lead time can be reduced by
rearranging the layout. The purpose of rearranging the layout is to reduce the
travel distance. The material flow for current situation is not smooth.
 Lean manufacturing concept 359

For example, after the CNC process, the next process is heat treatment but
location of heat treatment is quite far and it is affected to the lead time because
after that the product needs to proceed to grinding process which makes
material flow not consistent. Rearranging the layout will give a better flow of
the material.

4.3 Summary
As a summary, current state mapping can help to promote good visual management on
the factory floor. Mapping material and information flow will allow to,

1 visualise the entire manufacturing material and information flow

2 visualise how operations currently communicate with production control and
with each other
3 see problem areas and sources of waste from the analysis
4 provide a common language for all manufacturing personnel
5 gain insight into how the operation truly is running that day.

Based on the analysis that have been carried out, the current manufacturing situation
need to improve to ensure the company satisfy customer demand and remain in the
competitive market. The subsequent section will discuss on the evaluation of future state
mapping.

5 Future state mapping

The next step is to design future state mapping. The process for mapping the future state
mapping takes place in three stages which are customer demand stage, flow stage and
levelling stage. Figure 2 shows the future states mapping which highlighted the
involvement of lean operations such as cell design and supermarket kanban systems.

5.1 Analysis of future state mapping

Referring to future state compared to the current state, the future state mapping shows a
significant reducing in lead time, CT, changeover time and inventory as well comparing
to current state mapping. The first stage, the company should focus on customer demand.
The elements should be included are takt time, target and identifying which improvement
method to be implemented. Next, the production flow should be established such as
perform line balancing, plan for work cells and determine which control methods need to
be used. The detail of this continuous flow will be discussed later.
In the final stage of future mapping is considering the elements that will help
the level of production. Levelling of production means designing a system in
which information flow regarding customer demand is integrated with the flow of
material. Lead time and CT are also included to the future state mapping to see the
improvement.
360 N. Zakuan and M.Z. Mat Saman

Figure 2 Future state mapping (see online version for colours)

The result, six cells have been identified which are; Cell 1 combining 3 operations.
The operations are saw, lathe and deburing. Cell 2 is combining 2 operations which are
CNC1 and CNC2. In order to balance the work load, the company have to invest an
additional machine each for CNC1 and CNC2. Cell 3 is only 1 operation which is heat
treatment and Cell 4 is only 1 operation which is grinding. Cell 5 is combining assembly
 Lean manufacturing concept 361

productions which are assembly 1, assembly 2 and assembly 3. Cell 6 is electronics

subassemblies which contains electronic subassembly 1, electronic subassembly 2 and
electronic subassembly 3. However, the CT and lead time for electronics subassembly is
calculated separately. This is because electronic subassembly is considered independent
of the main production line.
An example on how CT has been calculated for Cell 5 is,
Takt time = 90 sec
Takt time for assembly = 160 + 120 + 55 = 335 sec

335
Number of operator = = 3.7
90
Its need 3.7 people, with continuous improvement and CT reduction, its can reduced to 3
people. Three people working at a 98% efficiency gives a CT, CT = 98% × 90 = 88.2 sec

and
Total Work Content (TWC) = 88.2 × 3 = 265 sec
Furthermore, for the lead time, it is assumed that the lead time for each process is one
day except raw material lead time, 1.5 days.
So that
Total lead time = 11.5 days

Value added time = 671 sec + 4 hr

Therefore, the ratio of lead time to value added time for main production,
Lead time = 11.5 × 24 = 236 hr

Value added time = 671 sec + 4 hr = 5.86 hr

So

236
Ratio = = 40.27
5.86

As mentioned earlier, a smaller ratio means an increase in productivity. Finally, now is

the time for the company to create detail plans that will guide to improve the value
stream.

5.2 Line balancing

In the current system, some operations take longer than others, leaving operators with
nothing to do while waiting for next operation. On the other hand, some operators take
more than takt time for 1 operation. So bottleneck will occur in the production line. Line
balancing is the process which distributes the work element evenly within a value stream
in order to meet takt time. Line balancing helps optimise the operator and balance
workloads so that no one is doing too little or too much.
362 N. Zakuan and M.Z. Mat Saman

6 Discussion

Generally, lean operations provide an extraordinary opportunity to improve quality,

customer service and profitability. The benefits to the company by implementing lean
operations are:
1 Reduce lead time: the reductions of lead time for the future production system
are given in Table 2.
2 Lower manufacturing cost: by implementing lean operations, the number of
operators can be reduced from 10 to 7 as shown in Figures 1 and 2 in previous
section.
3 General: there are a lot of benefits of implementing lean operation such as
increase in productivity, lower selling price, increase market share and also
increase profit for the company.

Table 2 Comparison between current state and future state

System Raw Machine CNC Heat Grind Assembly Finish Total

material shop transfer goods (days)
Current 5 14.6 3 3 2.25 2.69 9 39.54
Future 1.5 3 2 1 1 0 3 11.5

The benefits of lean operations can be quite dramatic, and this explains why so many
companies are undertaking the difficult transition. In an increasingly competitive
environment, lean operations can provide advantages that are not easily duplicated by
rival companies.
Based on the analysis, compared to current state mapping, the main assembly line
shows a 70.9% reduction of total lead time, a 21.8% reduction in value added time and
for the electronic subassembly line, a 33.7% reduction in total lead time and a 51.3%
reduction in value added time as shown in sample calculation below.
Main Assembly Line:
Current state: Total lead time = 39.54 days and Value added time = 859 sec
Future state: Total lead time = 11.5 days and Value added time = 671 sec

⎡ (39.54 − 11.5) ⎤
Total lead time reduction = ⎢ ⎥ × 100% = 70.9%
⎣ 39.54 ⎦
Comparing to current state mapping, instead of making every part every two weeks, the
company target is now changing to making every part every day. Even though, it has
been in business for 40 years, the company will gain a significant benefit by
implementing lean operations.

7 Conclusion

From the presentation of this paper, the company have to redesign the manufacturing
environment in order to satisfy the market demands and also to become a world class
manufacturing. Without changing the manufacturing environment, the company will not
 Lean manufacturing concept 363

be able to stay in competitive business in the next few years. Based on the analysis, this
company has a potential to become a more competitive manufacturer through adaptation
of lean operations concept. Successful implementation of this concept can help the
company improve customer satisfaction, improve quality, reduce costs, reduce inventory,
reduce delivery time and eliminate the wastes. Generally, the proposed future state
developed using lean manufacturing approach offers significant operational benefits that
will improve company’s competitiveness. Besides that, to ensure the success of future
state mapping, detail proposed implementation methodology need to be carried out.
There are a few methods of lean operations that can be implemented. These are
continuous flow, work cell, Single Minute Exchange of Die (SMED), in-process
supermarkets, kanban system, first in first out rule and 5S.

References
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production system’, Business Process Management Journal, Vol. 10, No. 5, pp.570–583.
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Industry, London.
Miltenburg, J. (1995) Manufacturing Strategy, Portland Oregon: Productivity Press.
Monden, Y. (1997) Toyota Production System: An Integrated Approach to Just-in-Time,
3rd edition, USA: Engineering and Management Press.
Robertson, M. and Jones, C. (1999) ‘Application of lean production and agile manufacturing
concepts in a telecommunications environment’, International Journal of Agile Management
System, Vol. 1, No. 1, pp.14–17.
Standard, C. and Davis, D. (1999) ‘Running today factory: a proven strategy for lean
manufacturing’, Society of Manufacturing Engineers, USA.
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Womack, J.P., Roos, D. and Jones, D.T. (1991) The Machine that Changed the World, New York:
Simon and Schuster.

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