LEAN

PRODUCTION

Aditi Phadke
TY-C
Roll No.: 3120

WHAT IS LEAN?
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 The core idea is to maximize customer value while minimizing waste.
Simply, lean means creating more value for customers with fewer resources.
A lean organization understands customer value and focuses its key
processes to continuously increase it. The ultimate goal is to provide perfect value
to the customer through a perfect value creation process that has zero waste.
To accomplish this, lean thinking changes the focus of management from
optimizing separate technologies, assets, and vertical departments to optimizing the
flow of products and services through entire value streams that flow horizontally
across technologies, assets, and departments to customers.
Eliminating waste along entire value streams, instead of at isolated points,
creates processes that need less human effort, less space, less capital, and less time
to make products and services at far less costs and with much fewer defects,
compared with traditional business systems. Companies are able to respond to
changing customer desires with high variety, high quality, low cost, and with very
fast throughput times. Also, information management becomes much simpler and
more accurate.

Lean for Production and Services

A popular misconception is that lean is suited only for manufacturing. Not true.
Lean applies in every business and every process. It is not a tactic or a cost
reduction program, but a way of thinking and acting for an entire organization.
Businesses in all industries and services, including healthcare and
governments, are using lean principles as the way they think and do. Many
organizations choose not to use the word lean, but to label what they do as their
own system, such as the Toyota Production System or the Danaher Business
System. Why? To drive home the point that lean is not a program or short term
cost reduction program, but the way the company operates. The
word transformation or lean transformation is often used to characterize a
company moving from an old way of thinking to lean thinking. It requires a
complete transformation on how a company conducts business. This takes a long-
term perspective and perseverance.
The term "lean" was coined to describe Toyota's business during the late 1980s by
a research team headed by Jim Womack, Ph.D., at MIT's International Motor
Vehicle Program.

The characteristics of a lean organization and supply chain are described in Lean
Thinking, by Womack and Dan Jones, founders of the Lean Enterprise Institute
and the Lean Enterprise Academy (UK), respectively. While there are many very
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good books about lean techniques, Lean Thinking remains one of the best
resources for understanding "what is lean" because it describes the thought
process, the overarching key principles that must guide your actions when applying
lean techniques and tools.

Purpose, Process, People

Womack and Jones recommend that managers and executives embarked on lean
transformations think about three fundamental business issues that should guide
the transformation of the entire organization:
- Purpose: What customer problems will the enterprise solve to achieve its own
purpose of prospering?
- Process: How will the organization assess each major value stream to make sure
each step is valuable, capable, available, adequate, flexible, and that all the steps
are linked by flow, pull, and leveling?
- People: How can the organization insure that every important process has
someone responsible for continually evaluating that value stream in terms of
business purpose and lean process? How can everyone touching the value stream
be actively engaged in operating it correctly and continually improving it?

"Just as a carpenter needs a vision of what to build in order to get the full benefit of
a hammer, Lean Thinkers need a vision before picking up our lean tools," said
Womack. "Thinking deeply about purpose, process, people is the key to doing
this."

HISTORY OF LEAN MANUFACTURING

Lean Manufacturing is the latest buzzword in manufacturing circles. It is not

especially new. It derives from the Toyota Production System orJust In Time
Production, Henry Ford and other predecessors.
The lineage of Lean manufacturing and Just In Time (JIT) Production goes
back to Eli Whitney and the concept of interchangeable parts.This article traces the
high points of that long history.

Early Developments
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 Eli Whitney is most famous as the inventor of the cotton gin. However, the
gin was a minor accomplishment compared to his perfection of interchangeable
parts. Whitney developed this about 1799 when he took a contract from the U.S.
Army for the manufacture of 10,000 muskets at the unbelievably low price of
$13.40 each.
For the next 100 years manufacturers primarily concerned themselves with
individual technologies. During this time our system of engineering drawings
developed, modern machine tools were perfected and large scale processes such as
the Bessemer process for making steel held the center of attention.
As products moved from one discrete process to the next through the logistics
system and within factories, few people concerned themselves with:
• What happened between processes
• How multiple processes were arranged within the factory
• How the chain of processes functioned as a system.
• How each worker went about a task

This changed in the late 1890's with the work of early Industrial Engineers.
Frederick W. Taylor began to look at individual workers and work methods.
The result was Time Study and standardized work. Taylor was a controversial
figure. He called his ideas Scientific Management. The concept of applying science
to management was sound but Taylor simply ignored the behavioral sciences. In
addition, he had a peculiar attitude towards factory workers.
Frank Gilbreth (Cheaper By The Dozen) added Motion Study and invented
Process Charting. Process charts focused attention on all work elements including
those non-value added elements which normally occur between the "official"
elements.
Lillian Gilbreth brought psychology into the mix by studying the motivations of
workers and how attitudes affected the outcome of a process. There were, of
course, many other contributors. These were the people who originated the idea of
"eliminating waste", a key tenet of JIT and Lean Manufacturing.
The Ford System
And then, there was Henry Ford.
Starting about 1910, Ford and his right-hand-man,Charles E. Sorensen, fashioned
the first comprehensive Manufacturing Strategy. They took all the elements of a
manufacturing system-- people, machines, tooling, and products-- and arranged
them in a continuous system for manufacturing the Model T automobile. Ford was
so incredibly successful he quickly became one of the world's richest men and put
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the world on wheels. Ford is considered by many to be the first practitioner of Just
In Time and Lean Manufacturing.
Ford's success inspired many others to copy his methods. But most of those who
copied did not understand the fundamentals. Ford assembly lines were often
employed for products and processes that were unsuitable for them.
It is even doubtful that Henry Ford himself fully understood what he had done and
why it was so successful. When the world began to change, the Ford system began
to break down and Henry Ford refused to change the system.
For example, Ford production depended on a labor force that was so desperate for
money and jobs that workers would sacrifice their dignity and self esteem. The
prosperity of the 1920's and the advent of labor unions produced conflict with the
Ford system. Product proliferation also put strains on the Ford system. Annual
model changes, multiple colors, and options did not fit well in Ford factories.
At General Motors, Alfred P. Sloan took a more pragmatic approach. He
developed business and manufacturing strategies for managing very large
enterprises and dealing with variety. By the mid 1930's General Motors had
passed Ford in domination of the automotive market. Yet, many elements of Ford
production were sound, even in the new age. Ford methods were a deciding factor
in the Allied victory of World War II.
Ironically, Henry Ford hated war and refused to build armaments long after war
was inevitable. However, when Ford plants finally retooled for war production,
they did so on a fantastic scale as epitomized by the Willow Run Bomber plant that
built "A bomber An Hour."
Just In Time and
The Toyota Production System
The Allied victory and the massive quantities of material behind it (see "A Bomber
An Hour") caught the attention of Japanese industrialists. They studied American
production methods with particular attention to Ford practices and the Statistical
Quality Control practices of Ishikawa, Edwards Deming, and Joseph Juran.
At Toyota Motor Company, Taichii Ohno and Shigeo Shingo, began to
incorporate Ford production and other techniques into an approach called Toyota
Production System or Just In Time . They recognized the central role of inventory.
The Toyota people also recognized that the Ford system had contradictions and
shortcomings, particularly with respect to employees. With General Douglas
MacAurthur actively promoting labor unions in the occupation years, Ford's harsh
attitudes and demeaning job structures were unworkable in post-war Japan. They
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were also unworkable in the American context, but that would not be evident for
some years. America's "Greatest Generation" carried over attitudes from the Great
Depression that made the system work in spite of its defects.
Toyota soon discovered that factory workers had far more to contribute than just
muscle power. This discovery probably originated in the Quality Circle
movement. Ishikawa, Deming, and Juran all made major contributions to the
quality movement. It culminated in team development and cellular manufacturing.
Another key discovery involved product variety. The Ford system was built around
a single, never changing product. It did not cope well with multiple or new
products.
Shingo, at Ohno's suggestion, went to work on the setup and changeover
problem. Reducing setups to minutes and seconds allowed small batches and an
almost continuous flow like the original Ford concept. It introduced a flexibility
that Henry Ford thought he did not need.
All of this took place between about 1949 and 1975. To some extent it spread to
other Japanese companies. When the productivity and quality gains became
evident to the outside world, American executives traveled to Japan to study it.
They brought back, mostly, the superficial aspects like kanban cards and quality
circles. Most early attempts to emulate Toyota failed because they were not
integrated into a complete system and because few understood the underlying
principles.
Norman Bodek first published the works of Shingo and Ohno in English. He did
much to transfer this knowledge and build awareness in the Western world. Robert
Hall and Richard Schonberger also wrote popular books.
World Class Manufacturing
By the 1980's some American manufacturers, such as Omark Industries, General
Electric and Kawasaki (Lincoln,Nebraska) were achieving success.
Consultants took up the campaign and acronyms sprouted like weeds: World Class
Manufacturing (WCM), Stockless Production, Continuous Flow Manufacturing
(CFM), and many other names all referred to systems that were, essentially, Toyota
Production.
Gradually, a knowledge and experience base developed and success stories became
more frequent.
Lean Manufacturing

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In 1990 James Womack wrote a book called "The Machine That Changed The
World". Womack's book was a straightforward account of the history of
automobile manufacturing combined with a study of Japanese, American, and
European automotive assembly plants. What was new was a phrase-- "Lean
Manufacturing."
Lean Manufacturing caught the imagination of manufacturing people in many
countries. Lean implementations are now commonplace. The knowledge and
experience base is expanding rapidly.
The essential elements of Lean Manufacturing are described at our page
"Principles of Lean Manufacturing." They do not substantially differ from the
techniques developed by Ohno, Shingo and the people at Toyota. The application
in any specific factory does change. Just as many firms copied Ford techniques in
slavish and unthinking ways, many firms copy Toyota's techniques in slavish and
unthinking ways and with poor results. Our series of articles on implementation
includes a "Mental Model" to assist the thinking process and guidance on strategy
and planning.
There is no cookbook for manufacturing. Each firm has its own unique set of
products, processes, people, and history.While certain principles may be
immutable, their application is not. Manufacturing Strategy will always be a
difficult, uncertain, and individual process. Strategy ("The General's Art") is still,
largely, an art. But, that should not prevent us from bringing the available science
to bear on the problem.

Overcoming lean manufacturing challenges

The road to a lean manufacturing implementation isn't always a smooth one.

Forming a strong implementation strategy will make the journey easier. In this
book chapter excerpt, learn how to overcome lean manufacturing challenges, and
find out how to plan ahead to ensure lean manufacturing success.

Before examining what can done to improve the thrust of implementation and
more quickly gain the benefits across a broad scale of U.S. manufacturing, it is
important to summarize the flaws that have served to hamper progress:

1. The lack of an appropriate focus on a plant's key production

equipment in setting the stage for an aggressive application of Lean across the
entire operation.

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 2. A general failure in the utilization of the Industrial and Manufacturing
Engineering functions in the process.
3. A growing trend away from a "just do it" mentality to establishing a
proof-based comfort level before change of any kind is allowed.
After retiring, I was called on by various firms to assist in setting the foundation
for a Waste Free Manufacturing environment. In every case, some very
pronounced accomplishments were made. Work-in-process inventory levels were
reduced as much as 90%. Productivity, in terms of the actual number of people
required to perform the work, improved as much as 30%. Required floor space was
reduced up to 50% and quality measurements, in the form of scrap, rework, and
obsolescence, were lowered 50% and more.

Under any form of evaluation these would have to be classified as

phenomenal accomplishments, especially considering the change was made over a
very short period of time. On the other hand, there was more than one occasion
where completing implementation on a plant-wide basis fell short of the goal.
Although it would have been easy to say there simply wasn't strong enough
management support, that wasn't the case. Management was more than willing to
see Lean become a success and to fully support it -- up to a point. That point, of
course, was when Lean began to seriously distract from achieving other factory
obligations, such as dealing with expenses and meeting customer demand.

There are those, including myself, who would like to see plant management
much more driven as to the need for Lean and more willing to step forward in
defense of the process. Still, we have to face reality. In the vast majority of cases,
this isn't something that can be depended on to keep a Lean initiative at the
forefront of priorities. Consider the case of Avery Manufacturing (Case 1-1):

Case 1-1 Avery Manufacturing

Avery Manufacturing, which has been in business for well over two decades,
produces plastic extruded components for the automotive industry. For much of its
existence, it enjoyed steady growth and improved market share. But as competitive
pressures grew, it slowly began to lose business to overseas competition. As a
result, profits and share of market began to spiral. After much deliberation,
management decided there was a need to pursue a Lean Manufacturing initiative.
After communicating to employees, Avery hired the services of a well-respected
consulting firm. As a first step, an area of the factory was selected as a pilot
project. A special event was conducted involving a number of key factory
personnel, including the plant manager and various members of his staff.
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The event went extremely well. Participants received training in the basic tools and
techniques. As is usually the case, the chosen pilot area was totally revised. Floor
space was reduced, required work-in-process inventory levels were lowered, direct
labor was redistributed, and manpower adjustments were made. Unneeded items
consisting of inventory, old and infrequently used equipment, and such were
removed from the area and stored in a special zone until a decision could be made
as to disposition. In addition, work stations were redesigned with input from the
operators; numerous visual controls were installed.

Afterwards, enthusiasm ran high. Work began on spreading the change plant wide.
Twenty-four months later, however, one could find little evidence of a successful
turnaround. Factory inventory levels remained as high as ever and slippage was
evident in the selected pilot area, especially regarding work-place organization.
Although a substantial number of smaller in-house events were conducted after the
pilot, focus had been placed on making small improvements within the confines of
larger production departments, which tended to be suffocated by the batch
environment going on around them. As added competitive pressures grew, more
and more effort was shifted from implementing Lean to addressing and resolving
immediate production issues (firefighting). The strong enthusiasm on the front end
slowly began to ebb and largely turned to skepticism on the part of employees.
They began to view Lean as just another program, among the many that had started
and died over the years.

This case is, for the most part, a fictional account. But it points to what's
transpiring in much of U.S. industry. Initial efforts are generally impressive and
filled with unique accomplishments and high enthusiasm. Following this, however,
things frequently begin to slow, principally as a result of not fully understanding
what to attack first, second, and so on (see Figure 1.1).

Figure 1.1 How to Go About the Job

• Establish clear levels of accomplishment: Level I through Level IV*
• Determine the tools needed: Poke-Yoke, TPM, SMED, etc.
• Train and communicate
• Enlist the workforce

*Details spelled out in Chapter Two, Figure 2.2

To emphasize what I'm driving at, I once worked with a well-known firm where,
six months after a highly successful event, I returned for a follow-up review. I was
astonished to see that outside of some rather insignificant changes on the factory
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floor, little progress had been made. In addition, the pilot area, which was designed
to be a showcase for how the process should both look and feel, had shifted back to
a push system of production, after initially being targeted as the first pull area of
the factory.

Upon further investigation, it became apparent that the objectives established for
the change effort had in no way been met. In fact, no machine in the factory had a
setup time less than twenty minutes in duration and some machines took hours to
change over. On two projects where team members had placed some effort, the
post-pilot goals for setup reduction were far from achieved and no work
whatsoever had been applied to error-proofing equipment. Even more
disappointing, I learned in a follow-up meeting with plant management that they
were pleased with the work accomplished. They noted that although the goals
hadn't been fully achieved (a vast understatement), the team had improved setup on
two pieces of equipment.

Much of their response was an effort to justify where progress stood, in order not
be seen as lacking in their commitment. But as politely as I could under the
circumstances, I cautioned them that the degree to which they expressed satisfied
or disappointment said a lot about where they ultimately intended to take the
process.

The silence was almost deafening as I told them that I didn't think Lean was really
all that important to them. The plant manager, in particular, was visibly upset and
asked me to provide the reasons I felt that way. In response, I proceeded to give
each of them a copy of the participant feedback form I have team members
complete on a follow-up visit. Among the findings:

1. No meetings had been conducted by management to check on how

things were going or to redirect the activities of the team as needed, in
achieving their stated objectives.
2. Collectively less than eighteen hours over a six-month period had
been made available for team members to work on stated objectives.
3. Although a majority of the team believed management thought Lean
was important, all of them noted that "other things" came first, including:
• Meeting production schedules
• Meeting forecasted operating expenses
• Providing support to higher priority or more important plant and
corporative objectives

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I noted that anything more than single minute changeover fell short of World-
Class. It wasn't insignificant to the decision making process for issues such as
adding business, increasing line rates, etc. I further reminded them that other
pressing matters and higher priority objectives will always be there, in one form or
another. In order to move a Lean initiative forward at a reasonable level of speed,
there has to be a commitment to dedicate some number of resources to the process
on a full-time basis, or at minimum some pre-determined period of time.

I should note that management was in no way disinterested or thought that Lean
was less important than other things. They were simply typical manufacturing
managers, working under typical conditions, which strongly influenced an
operating mentality that said:

• "Things are always going to get in the way, so never overstate an objective.
If anything, strive for a goal that's something less than possible and offer a pat
on the back for any improvements made."
• "The most important thing is to keep banging out parts and components,
even if it takes an abundance of downtime, scrap, and rework -- and if and
when inventory becomes an issue, we'll take our limps and move on."

The problem many manufacturing managers have is that they simply refuse to get
out of the way of progress. They do not believe machines can run without breaking
down and without producing scrap and rework. They do not believe setup can be
reduced to near zero and that errors inherent to specific pieces of equipment and
processing can be entirely eliminated. What they do believe, however, is there's no
magic that would serve to make manufacturing anything other than a day-to-day
chaotic exercise. Otherwise, they'd be pushing the hardest for the change and, in
most cases, would be staying after hours and weekends to make it happen.

Admittedly, implementing Lean puts a strain on expenses, drains needed resources,

creates unneeded downtime, and for the most part has no immediate impact on the
big picture. But place the initial thrust on effectively improving a plant's key
production equipment, which for years has served as the one thing that poses the
greatest stumbling block to achieving Lean's stated objective, and attitudes will
shift dramatically.

The Japanese and more specifically a number of ex- Toyota managers were the
first to bring the general philosophy of the Toyota Production System to U.S.
shores. The thing they never seemed to clarify, however, was precisely what
should come first, second, and so forth, in order to move the process across the
entire factory. There could have been many reasons for this, including the
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possibility they simply didn't look at it in those terms. The skeptic, of course,
would say it wasn't in their best interest to show the United States how to gain
parity. I lean toward the theory that they didn't view the process in terms of speed
of implementation, but rather in making certain that participants understood how
the various tools and techniques were intended to work.

Anyone who knows anything about Lean Manufacturing has a special admiration
for Toyota and what it accomplished. They have served as the basic role model for
Lean initiatives in the United States. But suppose Toyota was placed in the
position of having to do it again. Would they take the same basic steps we're using
to implement the process?

I posed that question to a number of people who were implementing Lean in

various organizations; they generally had to think about it a bit because it was
something they had never considered. The majority came to the conclusion that
Toyota would follow the same path we are currently using. Those who didn't
respond in like fashion admitted they really didn't know for certain. No one was
convinced Toyota would go about it in an entirely different manner.

I believe if Toyota had to do it again, they would first gear their equipment to
support Lean, through a highly professional application of SMED (Single Minute
Exchange of Dies) and Poke-Yoke (a Japanese term related to mistake proofing
equipment). In fact, Toyota applied much more attention to their equipment than
has come to be recognized -- not because they were striving to hide something
from us, but because we did not pay close enough attention to what the recognized
father of the Toyota Production System, Taiichi Ohno, was trying to tell us.

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