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INTERNATIONAL JOURNAL OF INDUSTRIAL ENGINEERING RESEARCH AND DEVELOPMENT (IJIERD)

ISSN 0976 6979 (Print) ISSN 0976 6987 (Online) Volume 3, Issue 1, January- June (2012), pp. 13-20 IAEME: www.iaeme.com/ijierd.html
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International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 3, Issue 1, January - June (2012), IAEME

IJIERD
IAEME

LEAN IMPLEMENTATION IN MANUFACTURING INDUSTRY: A CASE STUDY


S.K. Gupta1, Dr. R.V. Singh2, Dr. V.K. Mahna3, Rajender Kumar4
1

Research Scholar, Department of Mechanical Engineering, FET, Manav Rachna International University, Faridabad, India-121003 2 Head, Department of Mechanical Engineering, FET, Manav Rachna International University, Faridabad, India-121003 3 Professor, Department of Mechanical Engineering, FET, Manav Rachna International University, Faridabad, India-121003 4 Asst. Prof., Department of Mechanical Engineering, FET, Manav Rachna International University, Faridabad, India-121003 E-Mail: gupta.sarojkumar@gmail.com, rajender629@yahoo.com

ABSTRACT In the present business environment, overproduction refers to excess of production over demand of products being offered to the market. This leads to excessive inventory in terms of finished and semi finished goods. Excess production is only relative to a given demand, and insufficient demand is only relative to a given production and thus consider overproduction and under consumption equivalent. Overproduction is the root cause of imbalances, in production sections thereby; the men & machines are either unutilized or being used for over production. The principles of lean manufacturing are very loud in the subject matter and overproduction is the worst form of waste. In this present case, XYZ Company manufacturing automotive products of the same type but in wide variety was chosen for this comprehensive study. This company has problems in-hand regarding movement of material on shop floor, accumulation of material on shop floor, and waiting time in assembly line etc. The probable solution for above mentioned problems is to apply optimization approaches on production system. Keywords: Overproduction, Lean Manufacturing, Inventory and Waste 1.0 INTRODUCTION Often, key questions in examining manufacturing processes are: what are the value-added ratio of these supporting processes to the organization and the current plans of 13

International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 3, Issue 1, January - June (2012), IAEME

manufacturing. The plan of manufacturing may remain internal or extend i.e. outsourced. Principally the decision in this regard is of strategic nature therefore, the manufacturing has to be maintained inside the plant, except any change in volumes, may constraint to push the partial production outside and also the equipments, which have become redundant may not be replaced. Waste is an activity that does not add value. Overproduction is the ability to produce far more products than can possibly be offered to the customer against the actual requirement. This leads to a struggle for sale of the undesired products and creating a situation wherein the marketing department need to apply all resources at their command to recover the invested money. Look around place of work and it can be noticed that there are excessive raw materials, excessive floor space unnecessarily occupied, excessive material handling, and accrued profits on downside. They are just the flags that there is a cause for these to be identified and addressed. Therefore, symptoms and causes need to be identified and resolved. The normal symptoms are excessive raw material, extra inventory, unregulated material flow, excessive need of space for storage etc. This kills the efficiency and profitability of the organization. "A more liberal and extensive reciprocity in the production and sale of commodities is necessary, so that the overproduction of the companies can be satisfactorily disposed off to the market. The root causes of over production are unleveled scheduling, unbalanced capacity of each section, unreliable suppliers, unreliable process, misuse of automation, wide variety redundant inspection, unreliable tooling etc. Therefore answer is in usage of 5S and 5WHY as application of these tools is to help in identifying the problems related to over-production. 2.0 LITERATURE REVIEW Successful lean implementation is approached from a strategic perspective and companies seek to reach certain goals with lean initiatives. As creating a lean workplace requires changing the corporate culture a robust change management strategy is needed (Parks, 2002). Such abrupt policy changes require a top-down approach to decision making (Kobayashi, 1995). Mader (2005) emphasizes the need for strong top management leadership in the implementation process. Carefully selected Kaizen events should support the organizations strategy and vision. Only seeing lean as a quick fix, may give some employees the impression that Lean might not work in certain environments, i.e. in low volume operations. Spear (2004) says that at Toyota managers act as enablers and in that sense coach co-workers in solving problems instead of just fixing them. Womack and Jones (1998) and Moore (2006) have stated that, the organizations of many types are implementing lean manufacturing, or lean production, practices to respond to 14

International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 3, Issue 1, January - June (2012), IAEME

competitive challenges. They have mentioned that lean initiatives can be taken up in the fields of automotive sector, aerospace, and consumer goods industries around the world. Moore has discussed various implementation tools of Lean Manufacturing, which can be incorporated in the industries. Wheatley (2005) discussed five business factors for lean application. These factors are Operational Performance, Competitive advantage in Price and service, Profit Improvement, Shorter Lead-Times and reduction in prices. On analyzing these factors Wheatly concluded that Operational Performance can be improved up to 90%, Competitive advantage in Price and service up to 82%, Profit Improvement up to 80%, Shorter Lead-Times up to 75% and reduction in prices up to 62%. 3.0 CASE STUDY On the maiden visit to XYZ Company manufacturing automotive parts, there were many surprises, which were not affecting the operating management. The people walk day-in and day-out on the shop floor and are still unaware of the problems which remain hidden and are a cost to the company. The aisles were full of trolleys loaded with WIP and further every nook and corner was having no. of trays filled with WIP. Also, many of the trays didnt carry the material identification including the quantities lying therein. This did represent the waste which was generated by the principle of inventory management like First in last out i.e. inventory getting dumped one above the other. This type of planning attitude must provide for obsolescence and scrap. This further reveals that there was good amount of overproduction which is again type of waste that is producing more than the requirement. The principles of 5S have been used to identify, analyze and evaluate the existing manufacturing system. The fact regarding over production has been established as per production data: planned v/s actual. A total of 21 models were identified for overproduction and this is 10% of the existing models. The period under study is from Jul2011 to Dec2011 and model wise-month wise planned v/s actual production data of these 21 models is as per Table 1 and graphically presented in Figure 1. Table 1 Production Data: Planned v/s Actual
Model No. 3220 3247 3289 3316 3601 3711 3728 3900 4315 4321 6124 6132 Jul'11 Plan Actual 0 1560 150 150 4192 4872 1100 680 0 4050 6124 6286 8820 7554 4522 4160 270 3780 1000 920 0 0 0 0 Aug'11 Plan Actual 1740 1296 0 0 2000 2769 0 0 200 975 7428 7650 13266 14511 5000 4416 1600 1331 2000 1950 200 144 300 216 Sep'11 Plan Actual 84 0 0 0 4520 6334 150 0 0 3750 8278 5198 8795 9120 7234 5328 270 420 0 0 56 0 84 60 Oct'11 Plan Actual 84 236 0 0 0 0 650 528 6250 7512 9000 11402 6675 7840 9306 11481 0 0 600 0 56 192 24 0 Nov'11 Plan Actual 0 0 0 0 0 0 6 0 5800 5600 8598 9740 5680 7416 4325 4848 0 0 0 0 0 0 0 0 Dec11 Plan Actual 3050 3360 0 648 1000 1152 0 948 4200 4055 1858 2824 4714 5414 2627 4018 0 552 500 1368 48 192 84 476

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International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 3, Issue 1, January - June (2012), IAEME 6133 6138 6143 6213 6226 6229 6241 6268 6288 Grand Total 1000 180 2300 5000 5000 959 3140 500 44257 1830 220 2380 4770 3921 1077 4470 248 52928 2040 200 920 0 0 0 8170 270 45334 2796 0 1055 1798 2220 220 8210 543 52100 8 200 565 0 11114 0 7460 0 48818 0 192 619 0 20147 0 7780 0 58948 8 8 546 12300 16167 0 5080 0 66754 0 192 635 13099 16595 0 8280 0 77992 0 0 1200 0 15500 0 1850 0 2080 45039 0 0 1055 0 21560 0 3206 0 4704 58129 0 0 745 7200 2200 1200 3244 0 0 32670 0 0 857 11668 2789 1093 3636 0 648 45698

Month Wise Production Data: Planned v/s Actual


90000 80000 70000 60000 50000 40000 30000 20000 10000 0 Production Q uantity

(In Num bers)

Planned Production Actual Production

The compiled data in Table 1 has been analyzed and incorporated in Table 2 below. It is the application 5 Whys which have led to establishing long setup times, unbalanced interdepartmental production, staying busy, unbalanced scheduling, larger plans, old machines and failure of implementation of preventive plans. The analysis of data in Table 2 reveals that 30% of total production falls under the category of over production. This results that there is an extra inventory to the tune of 2% of monthly production. In one of the item the over producing for 778 days that is item not to be produced for two years. This situation is quite alarming. Therefore, the obvious results are excessive material on shop floor, extra material requirement, additional shop floor space, blockage in material flow and high utility course. This leads to inefficient operations and cutting down in profitability. The slogan of staying busy has to be deleted including improvement in redundant inspection and also reduction in setup times. 16

Ju l'1 A 1 ug '1 1 S ep t'1 1 O ct '1 N 1 ov '1 D 1 ec '1 1


Months

Figure 1 Planned v/s Actual Production

International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 3, Issue 1, January - June (2012), IAEME

Table 2 Production Data Analysis Summery


Model No. 3220 3247 3289 3316 3601 3711 3728 3900 4315 4321 6124 6132 6133 6138 6143 6213 6226 6229 6241 6268 6288 Grand Total Plan 4958 150 11712 1906 16450 41286 47950 33014 2140 4100 360 492 3056 588 6276 24500 49981 2159 28944 770 2080 282872 Actual 6452 798 15127 2156 25942 43100 51855 34251 6083 4238 528 752 4626 604 6601 31335 67232 2390 35582 791 5352 345795 Excess Quantity 1494 648 3415 250 9492 1814 3905 1237 3943 138 168 260 1570 16 325 6835 17251 231 6638 21 3272 62923 Monthly average 826 25 1952 318 2742 6881 7992 5502 357 683 60 82 509 98 1046 4083 8330 360 4824 128 347 Days 54 778 52 24 104 8 15 7 332 6 84 95 92 5 9 50 62 19 41 5 283

Model-Wise Overproduction Inventory


900 800 700 600 500 400 300 200 100 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Model Serial Number Overproduction Inventory

(In Days)

Figure 2 Inventory Optimization

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International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 3, Issue 1, January - June (2012), IAEME

Table 3 confirms that, there is no relation between planned production and actual production. The data depicted in Table 3 is covering the entire range of monthly production of XYZ company manufacturing automotive parts. There is a wide gap between these two, this may be an indication of projecting consistently more, which cant be produced and henceforth the desired objectives cant be achieved. Table 3 Gross average monthly production
Months Jul'11 Aug'11 Sept'11 Oct'11 Nov'11 Dec'11 Average Planned Production 222521 250428 266333 248845 186317 176038 225080 Actual Production 151431 156504 152994 209559 149798 150009 161716

Overall Performance: Planned v/s Actual


P d c n Q a tity ro u tio u n 300000 250000 (In N .'s o ) 200000 150000 100000 50000 0 Planned Production Actual Production

Months

Figure 3 Gross average monthly productions It is concluded in Table 4 that the Production Planning and Control Department of said company is working with no exposure to the technological advancements. It is evident that the production data doesnt match with the planned production. In most of the categories, it is underproduction followed with overproduction and further very small percentage matching with the planned data.

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A ug '1 1 S ep t'1 1

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Ju l'1 1

International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 3, Issue 1, January - June (2012), IAEME

Table 4 Actual Performance: Planned v/s Actual Production Data Production at Par Over Production Under Production Total Percentage: Planned v/s Actual 10% 30% 60% 100%

Production Percentage: Planned v/s Actual

10%

Production at Par 30% 60% Over Production Under Production

Figure 4 Production Percentage 4.0 CONCLUSION The strength of any business organization is related to availability of cash. Materials are the major constituent of the products and hence lot of engagement of funds, which need to be controlled for effective functioning. One of the biggest concerns of product manufacturers and company employees is eliminating Lean waste. It is very important to do away with this waste and reduced the cost of final product. The waiting time shall automatically get reduced creating a Pull Production in place of Push Production. The processes, especially the tooling, need to be improved to facilitate easy and positive changeover. Such controls once put in positions will provide free flow of material including better utilization of available man power. The paper reveals the one of important issue in organizations that is Overproduction-Inventory. The contributions of overproduction items lead towards the excessive unutilized funds including unnarrated inefficiencies due to the wastes. REFERENCES 1) Kobayashi, I. (1995). 20 keys to workplace improvement, Productivity Inc., Revised edition, Portland, OR, USA. 2) Mader, R. P. (2005). Lean thinking works in construction too, Contractor, February 2005. 19

International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 3, Issue 1, January - June (2012), IAEME

3) Moore, R. (2006). Selecting the right manufacturing improvement tools, Elsevier Science & Technology Books, ISBN: 0750679166. 4) Spear, S. J. (2004). Learning to lead at Toyota, Harvard Business Review, May 2004, pp.78 86. 5) Parks, C. M. (2002). Instill lean thinking, Industrial Management, Sept. Oct. 2002, pp. 5 18. 6) Wheatley, M. (2005). Think lean for the long term, Manufacturing Business Technology, June 2005. pp. 36 38. 7) Womack, J.P., and Jones, D.T. (1998). Lean thinking: Banish waste and create wealth in your corporation, Free Simon & Schuster, New York. 8) Womack, J.P., and Jones, D.T. (2005). Lean solutions: How companies and customers can create value and wealth together, Free Press, New York.
AUTHORS BIBLIOGRAPHY

S.K.Gupta holds Bachelor in Production Engineering, Masters in Manufacturing and Automation and persuing PhD in Mechanical. Currently, he is working as an Assistant Professor in the Department of Mechanical Engineering at Manav Rachna International University, Faridabad, Haryana, India. His area of interest is Productivity Improvement, Man-Management, Lean and Green Manufacturing, and Six-Sigma etc. Dr. R.V. Singh completed B.Sc. in Engg. (Mechanical) with distinction from MIT Mujhafarpur, Masters in Engg. (Production) with distinction from D.C.E., Delhi, PhD. from IIT Delhi. He is associated with FET, MRIU as a Professor and Head of Mechanical Engineering Department. He has more than 16 years experience in teaching and 15 research papers to his credit at National or International Level. His area of interest is Production Engineering, modeling and optimization, Precision Engineering. He has guided 9 M.Tech. Dissertations and currently he is supervising 6 research scholars. He is life member of IEI, India, ISTE, ISME, and MSI. Dr. V.K. Mahana is doctorate from IIT Delhi. He is associated with FET, MRIU as a Professor in Mechanical Engineering Department at Manav Rachna International University, Faridabad, Haryana, India. He has more than 39 years experience in teaching. and 20 research papers to his credit at National or International Level. His area of interest is Design, modeling and optimization of Quality.
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Rajender Kumar holds Diploma in Plastic and Railway Engineering, Bachelor in Mechanical Engineering, Masters in Mechanical Engineering. Currently, he is working as an Assistant Professor in the Department of Mechanical Engineering at Manav Rachna International University, Faridabad, Haryana, India. He has 15 research papers to his credit at National and International Level. His area of interest is Productivity Improvement, Quality Management, Lean and Green Manufacturing, and Six-Sigma etc. He is also associated member of IEI, India.

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