Académique Documents
Professionnel Documents
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By
Dhaval Shah 49
Sohil Jewani 41
Murtuza Bhanpurawala 37
Lean Manufacturing
Acknowledgement
INDEX
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Lean Manufacturing
1) Introduction 04
2) What is LM? 04
3) Concept of Waste 05
4) Key Lean Principles 05
5) Four Pillars of LM 06
6) Implementation of LM Systems 07
7) Advantages of LM 08
8) Traditional verses LM 08
9) Hurdles / Obstacles on the Lean Path 09
10) Conclusion 10
11) Case Study: 1) Mahindra & Mahindra Ltd. 11
2) Toyota Motor Company
17) References 12
INTRODUCTION:
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Lean Manufacturing
Despite enjoying nearly ten years of globalizations, most of the Indian automobile
manufacturer steel follow the customize mass production (batch mode) system.
Consequently they suffer from abnormally high inventory levels, high cycle times and
enormous wastage. It results in increase inventory cost, which in turn elevates cost of
production. And the high cycle time lead to reduced customer satisfaction. Manufacturer
cannot afford the comp lances that they enjoyed in the pre liberalizations era. Why?
Because the global village is continuously spreading with new players and innovations,
taking the competitions and quality standards to a new height.
Given this scenario, it is high time the automobile manufacturer quit the traditional
path and plunged in to something more innovative and productive. The lean manufacturing
technique is a tried and tested system that carries many promises for the Indian automobile
manufacturer.
Over the past 10 years or so, lean manufacturing has been receiving an increasing
amount of attention as one source for productivity improvements and cost reductions in
manufacturing. Hailed by its proponents as a breakthrough means to analyze and improve
production and the factory floor environment, lean manufacturing is abroad collection of
principles and practices that can improve corporate performance. The argument is that lean
manufacturing offers revolutionary rather than evolutionary efficiency improvements.
Many people wrongly confine “lean” to the shop floor; actually lean is the way of
thinking, and attitude. The technique of lean can be applied to every situation in a company,
by finding out what the customer want, eliminating, waster from process and making the
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Lean Manufacturing
value flow continuously according to the customers pull. The idea is to create a culture in
which people in an organization are continuously improving their productivity every day, in
every way.
A western has been the bone of manufacturing sector that directly affects the
bottom line. Though unavoidable, it is possible to cut to waste through proper planning and
efficient work process. Through the implementations of the lean manufacturing system, the
company intends to organize the system by identifying and eliminating the waste the
ultimate aim being to increase productivity, customer satisfaction and revenue.
LM’s essences lies in producing with as few people as little inventory and as little
waste as possible.
Lean ensures that each production stage processes exactly “what”, “how much” and
exactly “when” the next stage wants it.
Lean allows enormous variety in product without the kind of change over cost that
customizes mass production involves.
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Lean Manufacturing
The JIT concept requires the raw materials for each step in a process to reach the
shop floor at exact time and not earlier. This leads to a huge fall in the inventory cost. The
goal JIT is achieved by using techniques like standardizations of processes, TPM and Kanban
throughout lean manufacturing and ultimately through JIT. The manufacturing unit can
achieve following goals.
To achieve low cost high quality, on time production, the JIT system removes stock
accumulations between successive operations. It does so by organizing around a production
quantity of “1” which means the ideal lot size for each part is 1. Because no safety stock is
allowed, no part can faulty. The responsibility for eradicating defective work and
equipments failures is placed on individual operations. Output Quotas are inviolable and
fluctuations in daily schedules are minimizing to maintain nearly uniform flow rate. Results
from applying these principles, along with a concentrated effort to improve productivity,
have frequently been spectacular.
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Lean Manufacturing
The lean system can be effective only if it is executed all along the production chain
i.e. from the supplier’s supplier to customer’s customer. Every link along this chain is
affected if a single member does not deliver. It is a long process involving several interfaces,
and so manufacturers need to take steps towards strategic sourcing and organizing the
supply base.
3. CELLULAR TECHNOLOGY:
In the
traditional batch
mode or assembly
line manufacturing
process, the layout
of shop floor is
done according to
the activities. Not
so in the lean
manufacturing
system, where
manufacturing cell
is designed to
process parts of the
product in separate
fixed areas, thus
eliminating non
value-added
activities.
Ultimately, the layout creates a single-piece flow. This reduces the order flow time, work-in-
progress, material handling cost, and so on, thus elevating customer satisfaction and profits
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Lean Manufacturing
4) KAIZEN:
Kaizen technique is another essential for lean manufacturing system. Masaki Imai,
the founder of kaizen institute, expounds kaizen as “Continuous Improvement, without
spending much money……… using common sense”. It doesn’t cost money but it changes
the way people do the job. It is about making the most about 5-M of the organization i.e.
1) Manpower
2) Material
3) Method
4) Machine
5) Measurement
The practice of this technique is based on strong assumption that every individual or group
of individuals always carries a hidden capacity to keep on improving the output in terms
quality and quantity. The goals of kaizen are Continues improvements & Self-motivation and
development.
The basic steps to incorporate kaizen as an enterprise-wide program consists of the 4I’s.
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Lean Manufacturing
TECHNICAL CHANGES:
1) The first step towards the lean production is to make such process of consistent and
predictable production.
2) Standardize the process sequence for all this similar looking / type / category parts,
which may have minor difference in size. This will help in shop layout for continuous
material flow.
3) Make the fixture, holders, tolling, adaptable to all parts with zero or minimum setup
change time.
4) Simple and autonomous machines.
5) Preventive maintenance of machine for zero break downs during production.
The management should also bring about the following ADDITIONAL CHANGES:
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Lean Manufacturing
Advantages of LM:
1) since LM involves the JIT inventory levels (raw material, WIP, finished goods) can be
brought down to nearly nil, thus reducing cost
2) LM uses simple multitask machinery where by product of different design can be
produced on the same machine.
3) Transition between various designs takes only a few minutes. This enables increase
in flexibility and better response to customer requirements.
4) It also reduces customer lead time, cost of production and wastage.
5) Lm is an effective competitive tool, not in then least due to dramatic saving in
productivity and cycle time to WIP inventory. LM helps to unleash the power of the
work force, ultimately taking the organization to, a competitive position.
Hence LM about making the company trim, fit, strong and swift.
TRADITIONAL MASS LEAN PRODUCTION
PRODUCTION
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Lean Manufacturing
Customer Makes what engineers want in large Makes what customers want with zero
Satisfaction quantities at statistically acceptable defect, when they want it, and only in
quality levels; dispose of unused the quantities they order
inventory at sale prices
Operational capability Dumb tools that assume an extreme Smart tools that assume standardized
division of labor, the following of work, strength in problem identification,
orders, and no problem solving skills hypothesis generation, and
experimentation
Engineering "Isolated genius" model, with little Team-based model, with high input from
customers and concurrent development of product
input from customers and little
and production process design
respect for production realities.
TRADITIONAL MASS LEAN PRODUCTON
PRODUCTION
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Lean Manufacturing
Manufacturing lot size Large, with large batches moving Small, and based on one-piece flow
quantities are… between operations; product is between operations
sent ahead of each operation
Plant and equipment By department function By product flow, using cells or lines for
layout is… product families
Workers are typically One person per machine With one person handling several
assigned… machines
Worker empowerment Low — little input into how High — has responsibility for identifying
is… operation is performed and implementing improvements
Inventory levels are… High — large warehouse of Low — small amounts between
finished goods, and central operations, ship often
storeroom for in-process staging
Inventory turns are… Low — 6-9 turns pr year or less High — 20+ turns per year
Flexibility in changing Low — difficult to handle and High — easy to adjust to and implement
manufacturing adjust to
schedules is…
Manufacturing costs Rising and difficult to control Stable/decreasing and under control
are…
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Lean Manufacturing
Manager to coach is difficult change and it is to be expected that there would be initial
difficulties. People would go through stages of refusal, anger, bargaining and finally
accepting the change but stay firm against initial resistance and battle would be own
CONCLUSION:
With increased from foreign competitors especially China all the businessman in
India, need to rethink about these business on a war footing. With the adoption of LM the
working space requirements have been reduced productivity, gains have been of order of
30-40% the inventories of raw material and components work in process and finished goods
have came down. There, reducing the working capital needs and interest burden. The
quality of total service has noticeably improved leading to “delighted customers, loyal
customers”. Thus, beating the competition.
It may be noted that the most important part required for implementation of LM is
the commitment from top management and championship mentality in the minds of our
manufacturers.
Most of the hurdles on the lean path can be overcome through effective forecasting
and planning, as it is done by “Mahindra & Mahindra”.(one of the largest player in the
Indian automotive industry).
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Lean Manufacturing
Mahindra & Mahindra are not the only ones who have opted for the ‘lean’ method.
Bajaj Auto Ltd., Pune, Lucas – TVS Ltd., Chennai and LML Ltd., Kanpur and are few of the
companies that seem to the trading to the ‘lean’ route successfully.
By 2010, Toyota wants to make a millions vehicles and rule over a third of Indian
passenger car market by following lean way only.
Rarely does Toyota ever enter a new market first. Invariably, it allows competitors to
lead and waits for the market initial characteristics to be revealed before firming up its own
strategy. Far from suffering from it, Toyota has actually been able to read market better and
because of that overtake the early entrants in the market share. For example, it didn’t get
into the Indonesian market until 1973; two years after General Motors entered the country
through a tie-up with Isuzu. But today Toyota leads the market with a 28% share. Even in
Vietnam, the Japanese major has been able to combat fierce competition and raise its
market share to 36% from 29% over the last two years. The only exception to its successful
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Lean Manufacturing
run in Asia seems to be Thailand, where its market share has dropped from 36% to 28% ,
and could slide further in 2001, but few doubt Toyota’s ability to bounce back.
But the battles that Toyota really wants to win are in China and India, where it has
only recently entered. Both the markets are growing. The Chinese for example, are expected
to buy 9 lakh cars a year by 2005. Toyota got an improved to manufacture in China only last
year and will have to beat General Motors, which has set the biggest foreign automotive
plants (at cost of $2 billion).
REFERENCES:
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Lean Manufacturing
Web addresses:
http://lean.mit.edu/public/index.html.
http://www.toyota.com/html/about/opertions/manufacturing/manu-locations/tmmk.html.
It is a popular fact that JIT system started in the initial years after the World War
II in Japan for the Toyota automobile system. Toyoda family in Japan decided to
change their automatic loom manufacturing business to the automobile business. But
they had few problems to overcome. They could not compete with the giants like Ford in
the foreign markets. Therefore Toyota had to depend upon the small local markets. They
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Lean Manufacturing
also had to bring down the raw materials from outside. Also they had to produce in small
batches. They haven’t had much of capital to work with. Therefore capital was very
important. With these constrains Taiichi Ohno took over the challenge of achieving the
impossible. With his right hand man Dr. Sheigo Shingo for next three decades he built the
Toyota production system or the Just-In-Time system.
Although the concept was mastered in Japan for the Toyota production system, the
roots of this concept goes into the sixteenth century. Eli Whitney’s concept of
interchangeable parts said to be the very initial beginning of this concept. But first or at least
famous implementation of something similar to JIT happened a century later in
manufacturing of Ford Model T (in 1910) automobile design. Manufacturing was based on
line assembly. Every part moved without interruptions to the next value adding point. Parts
are manufactured and assembled in a continuous flow. Even Henry Ford may not have
understood the basics behind his system. But it saved lots of money and made Henry Ford
a richest on the planet at that time. Although very successful in the initial years, Ford
system had it drawbacks. One of the major drawbacks was that its inability to the change.
This was due to the push strategy implemented in the Fords system. They relied on keeping
machine busy without thinking about the final outcome. They had huge stocks in the form
of finished goods and in the form of Work In Progress. This led to the inflexibility of the
system. Also this wasted money unnoticed. Another major drawback of the system was the
poor handling of the human resource. This led to have a less motivated set of people in the
organization.
But in Japan, they studied the system very well and saw the problems that
Ford system had. But the core concept of the Ford system was obeyed. This is the
continuous flow of value system. Anything distracting it treated as a waste. Various
pioneered work from people like Deming and Juran in the field of quality improvement was
used in the system. This bought built in quality to the system. More importantly Ohno and
Shingo understood the drawbacks in the push system and understood the role played by the
inventory. This led to Pull system rather than the push system, where the parts are
produced only when they are pulled by the process before that. This is similar to the
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Lean Manufacturing
concepts in the super markets. When the shells are being emptied (that is when people buy
the product), they are refilled with new ones.
This system developed in Toyota from 1949 to 1975 virtually unnoticed by the others
even within Japan. But in the oil crisis in 1973 Japan economy suffered and most of the
industries had losses. But Toyota overcame these problems. They stood out from the rest.
This was the eye opener for other Japanese firms to implement this system. But this
system got popular in the western world with the book “The machine that change the
world” written by James Womack in 1990. This book was aimed to give the history of the
automobile with the plant details of some of these manufacturers. He gave the name
“Lean Manufacturing to this system”. This was the eye opener for the western world about
this system. Thereafter the concepts were practiced all over the world. Experiences and
knowledge vastly improved the system.
This system developed in Toyota from 1949 to 1975 virtually unnoticed by the others
even within Japan. But in the oil crisis in 1973 Japan economy suffered and most of the
industries had losses. But Toyota overcame these problems. They stood out from the rest.
This was the eye opener for other Japanese firms to implement this system. But this
system got popular in the western world with the book “The machine that change the
world” written by James Womack in 1990. This book was aimed to give the history of the
automobile with the plant details of some of these manufacturers. He gave the name
“Lean Manufacturing to this system”. This was the eye opener for the western world about
this system. Thereafter the concepts were practiced all over the world. Experiences and
knowledge vastly improved the system.
But there were many people who just tried to use the tools in lean
manufacturing without understanding the meaning of them. They eventually failed. But
there are number of places this system is working well. The complete elimination waste is
the target of the system. This concept is vitally important today since in today’s highly
competitive world there is nothing we can waste.
Even today this system adds to its history. Therefore there will be a lot to add to this chapter
in the coming years.
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