Lean Management

Analysis of Traditional System of Manufacturing

Starts in factory

• Production plan based on demand forecast

• Material procurement to meet production plan

• Material receipt and inspection

• Storage of materials and components till required for processing

• Actual production in various process stations with stress on maximizing production

...Contd.

Analysis of Traditional System of Manufacturing

• Storage of components required for assembly• Assembly , final inspection and packaging• Storage of finished goods in company godowns and zonal depots• On the shelf in retail outlets.

Ends with the customer

Since the product is pushed from factory to the customer, this system is also known as ‘PUSH’ system.

Weakness of Traditional System

• Risk related to forecasts.

• Long overall business process cycle.

• Good comfort level at various stages leading to slack in the system.

• It hides the problems, waste and obstacles in the business flow.

• Encourages departmental focus as their efficiency is judged on the basis of output. (departmental enterprise)

Pushes up costs and affects competitiveness..

New Management system to reduce waste

• Developed in Japan by Toyota Motors.

• Challenged fundamental concept of economies of scale.

• Revolutionary approach by reversing the sequence of production cycle.

Leads to new management system known as Lean Manufacturing System.

What is Lean Manufacturing System (LMS)

Basic Objective of LMS is to do more and more with less and less human effort, less equipment, less time and less space. At the same time coming closer and closer to providing customers what exactly they want.

It concentrates on business process time line.

Order cash

It aims to reduce the time line by reversing the sequence of activities and eliminating non value added operations.

Time line

Flow in Lean Manufacturing System

• Order acquisition by marketing• Production planning• Just in time receipt of material• Pull system of production down the entire process chain by kanban, a

control tool starting from sales dispatch section.

Since the customer pulls the product, it is also called pull system of manufacture.

Starts with customer

Ends with primary producers

Why LMS?

- Varying needs of consumers even in the same customer segment

- Rapid changes in technology and development of new models

- Smaller orders from distributors to:

a) reduce stock of unsold items to save on inventory cost

b) prevent degradation and obsolescence in storage

c) Intense competition due to globalization

Methodology of Establishing Lean Manufacturing System

Methodology of LMS... (Contd.)

1. Better workplace management by use of 5S

Seiri. (sorting)

Seiton (orderly arrangement)

Seiso (cleaning machines and work place)

Seiketsu (personal upkeep)

Shitsuke (self disciline)

Methodology of LMS... (Contd.)

2. Just in Time (J.I.T)

• Value stream mapping and analysis

• Establish a flow of value by eliminating non value adding activities

• Create a pull.

Methodology of LMS... (Contd.)

3. Process optimization

• Improving conversion efficiency of material.

• Reducing consumption of indirect material and energy.

• Action to shorten cycle time by reducing set up time and operational time.

• Documentation of optimized process and its strict implementation.

Methodology of LMS... (Contd.)

4. T P M

To prevent equipment related losses viz.,

• Break down loss

• Set up and adjustment loss

• Speed loss

• Defective work loss

Methodology of LMS... (Contd.)

- Eliminate cast system among departments

- Establish internal customer focus

- Encourage information on problems

To ensure that all business operations are carried out as a relay race.