LEAN

PRODUCTION

Aditi Phadke

TY-C

Roll No.: 3120

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WHAT IS LEAN?

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.

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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 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.

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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 DevelopmentsEli 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

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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 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 andThe Toyota Production SystemThe 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.

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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 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 ManufacturingBy the 1980's some American manufacturers, such as Omark Industries, General Electric and Kawasaki (Lincoln,Nebraska) were achieving success. 

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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 ManufacturingIn 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

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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.

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

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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.

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).

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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 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:

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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

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.

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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 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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