Chapter 1 Introduction To Lean Manufacturing

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BPE3533 / BPE4143

Mohd Ghazali bin Maarof


Email: mohdghazali@ump.edu.my
CHAPTER 1: M: +60107123936
Office: 1st Floor Cabin Office KKB222
INTRODUCTION TO LEAN
CHAPTER OUTLINE
1. Toyota Production System
2. Evolution of Manufacturing
3. Waste, Value added & Non-Value-added
4. Lean Principles and lean thinking
Toyota Production System
• TPS arose in response to the circumstances surrounding the company.
❖The concepts of Jidoka was created in 1902 by Sakichi Toyoda with the notion
to build quality at the Toyoda Spinning and Weaving Company(Looming
process)
❖The concepts of Just-in-Time (JIT) was coined by Kiichiro Toyota in 1937 after
the start of Toyota Motor Corporation due to cost constraint
❖Taiichi Ohno further improve operational productivity by bringing in the
concepts of JIT and Jidoka during 1945-1955 and later known as TPS
Pillars of Toyota Production System/Lean

Four goals of TPS


TOYOTA PRODUCTION SYSTEM “HOUSE”
1. Provide world class quality and
service to customers
2. Develop each employee’s potential,
based on mutual respect, trust and
cooperation
3. Reduce cost through waste
elimination
4. Develop flexible production based on
market demand
Toyota Production System (TPS)
• https://youtu.be/HjuyonqrBzY
• https://youtu.be/HjuyonqrBzY?t=217
Focus area of TPS
1. Elimination of waste aimed at improving quality, cost, productivity,
safety and morale.
2. The result is greater satisfaction to customers, employees and
investors.
3. Complete elimination of waste encompasses all factors that do not
add value to the product or service.
Waste?
Anything other than the minimum
amount of resources, which is
essential to add value to the products
and services.
Waste
: Non-value added activities.
: Consumes resources, but no added value…

Must be eliminated!
Types of Waste
Transportation
Unnecessary movement of parts, people, information between
processes.

Inventory
Components, raw materials, WIP & finished products not being
used.
Types of Waste

Movement/Motion
Unnecessary movement of parts or people within a process.

Waiting
Waiting for the next process.
People or parts sitting idle during production.
Types of Waste
Over-processing
Additional processing due to poor tools or product design.
Processing beyond the demand from customers.
Searching, handling, multi-tasking.

Over-production
Producing ahead of demand.
Producing too much, too early &/or too fast.
Types of Waste

Defects
Mistakes & errors that need to be reworked.
Cost & effort involved in quality inspection & fixing defects
(reworks).
Sorting, repetition or making scrap.
T I M W O O D
Skill
Not using full potential & ability of workers.
Unused creativity & underutilized human capital
(intelligence & intellect).
What is
Lean Manufacturing
Quotes for Lean Manufacturing
“There is nothing so useless as doing efficiently that
which should not be done at all.”
–Peter F. Drucker

“If it doesn’t add value, it’s waste”


- Henry Ford
Meaning of Lean Manufacturing
▪ Manufacturing is where the lean movement originated from.

▪ Jim Womack and Dan Jones in his book “The Machine that Change the World”
has identified a set of principles and techniques that made Japanese
carmakers far more productive than their Western competitors.

▪ Toyota Production System (TPS) is the root to Lean Manufacturing (LM)

▪ When applied to manufacturing, lean tools allow for the optimization of


production processes and the systematic elimination of waste (muda, muri
and mura – respectively, non-value-adding work, overburden and
unevenness).
ISSUES SURROUNDING THE
INDUSTRIES:
▪Product quality is too bad!
▪Production is not flexible at all!
▪Labor productivity is too low!
▪Costs are increasing!
How to gain more profit?
An approach aiming to improve performance through
waste elimination
It is a manufacturing/management without
waste
Apply Lean thinking?
• Lean Thinking is about creating the most value for the customer at
the minimum cost, which is achieved by minimizing resources, time,
energy and effort.
• https://youtu.be/hu1h2lUYhRM
A mind-set of relentless war on waste.
It is about maximizing value through
waste elimination!

The idea was introduced by Womack et al.,


(1991) through their book ‘The Machine That
Changed the World’.
Lean Thinking Principles
1. Value: Specify what creates value from the
customer’s perspective.
2. The value stream: Identify all the steps along
the process chain.
3. Flow: Make the value process flow.
4. Pull: Make only what is needed by the
customers (short term response to the
customer’s rate of demand).
5. Perfection: Strive for perfection (continually
attempting to produce exactly what the
customer wants).
Lean Thinking Principles

Identify & eliminate all types of


waste.
Focus on creating values to
customers.
1. Traditional
2. Lean Thinking
Thinking
PRICE
PRICE PRICE PRICE
PROFIT PROFIT PROFIT
PROFIT

COST COST COST


COST

Cost + Profit = Price Price – Cost = Profit


Conventional vs LM
Conventional Lean
Forecast – Push Scheduling Customer order - Pull
Stock Production Customer order
Long Lead Time Short
Large & queue Batch Size Small – continuous flow
Sampling – by inspectors Quality control 100% - at source by
workers
Low Flexibility High
Low Empowerment High
Lean
Manufacturing
Practices
Pull system | Uniform production levels | Small lot production
Quick setups | Quality control | Cellular layouts
Flexible resources | Supplier networks | TPM | etc.
Any
benefits
of doing these?
Improves quality, flexibility, & productivity
Reduces inventory level, lead time, & costs
Enhance profitability, sales, & customer satisfaction
Practices
Benefits of LM
Pull system
Uniform production level
Small lot production Indicators
Quick setup Quality Indicators
Flexible resources Manufacturing flexibility
Cellular layouts Lead time reduction Profitability
Quality control Inventory minimization Sales
Supplier networks Productivity Customer satisfaction
TPM Cost reduction

Lean Operations Business


Management Performance Performance
Benefits of LM
Elements Benefits
Capacity 10%-20% gains in capacity by optimizing bottleneck
Inventory Reduction of 30%-40% in inventory
Cycle time Throughput time reduced by 50%-75%
Lead time Reduction of 50% in order fulfilment
Product development time Reduction of 35%-50% in development time
Space 35%-50% space reduction
First-pass yield 5%-15% increase in first-pass yield
Service Delivery performance of 99%

Source: Davis & Heineke (2005)


Who is LM applicable to?

Hotels Hospital University Manufacturing


LM, TPS, & JIT
Slack et al. (2010) & Schonberger (2007)
LM & JIT are similar; practices under LM are same as JIT’s.

Heizer & Render (2014)


There was a little difference between TPS, JIT & LM in practice, as a
result, the 3 terms were often used interchangeably.
LM, TPS, & JIT
Chavez et al. (2013)
LM refers to a manufacturing system founded by Toyota (TPS).

Arif-Uz-Zaman & Ahsan (2014)


The foundation of LM is TPS, which is based on JIT.

Due to the TPS has been widely spread to any other companies
throughout the world, beyond its original industry; then the term LM is
preferable.
THANK YOU
Evolution of Manufacturing

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