Lean Manufacturing-Case Study at MACPL

Lean Manufacturing- a case study at MACPL

Chapter 1

History of lean manufacturing

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 also had to bring down the raw materials from out side. 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 it’s 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. Another major draw back 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 brought 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 pr

Dept of Mechanical Engineering, JNNCE, Shimoga 1


ocess before that. This is similar to the 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.

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 of 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.



Chapter 2INTRODUCTION

2.1 What is Lean Manufacturing?

Much as mass production was the production system of the 20th century, lean manufacturing, which focuses on the elimination of waste in the production process, has been heralded as the production system of the 21st century. Although the Japanese automaker Toyota pioneered the concept, the term lean manufacturing itself was coined in the early 1990s by three researchers from the Massachusetts Institute of Technology. The National Institute of Standards and Technology (NIST) Manufacturing Extension Partnership’s Lean Network offers the following definition of lean manufacturing:

“A systematic approach to identifying and eliminating waste through continuous improvement, flowing the product at the pull of the customer in pursuit of perfection.”

Although the NIST definition is brief, it is packed with information. First, the approach to becoming lean must be systematic. You can try to improve certain areas of the business and have some degree of success, but to truly realize the benefits of lean; you must start with an overall strategy and put it into place in the right order. Second, a lean strategy focuses on eliminating waste. Later in this paper, you will learn about common types of waste and the methods used to identify and eliminate them. Third, note the phrases continuous improvement and pursuit of perfection. Perfection can never be achieved, but each step closer increases the profitability and viability of your company. The process of developing a lean enterprise never ends. Lean is not a destination but a journey. There is always something else that you can do to reduce waste or improve a process.



2.2 The Principles of Lean Manufacturing

As with most other production philosophies and management practices, lean principles cannot be universally applied. However, because they are fundamentally customer value driven, they are suitable for many manufacturing environments 3. There are five basic principles of lean manufacturing:

Understanding Customer Value —Value must be externally focused. Only what your customers perceive as value is important.

Value Stream Analysis — Once you understand the value that you deliver to your customers, you need to analyze all the steps in your business processes to determine which ones actually add value. If an action does not add value, you should consider changing it or removing it from the process.

Flow — Instead of moving the product from one work center to the next in large batches, production should flow continuously from raw materials to finished goods in dedicated production cells.

Pull — Rather than building goods to stock, customer demand pulls finished goods through the system. Work is not performed unless the part is required downstream.

Perfection — As you eliminate waste from your processes and flow product continuously according to the demands of your customers, you will realize that there is no end to reducing time, cost, space, mistakes, and effort.

These five lean principles work together and are fundamental to the elimination of waste. You can revisit each of them as improvements in one provide an opportunity for improvements in another.

All five lean principles can be applied nearly anywhere, but lean principles do not always apply when customer demand is unstable and unpredictable.



2.3 Definition Of Work Components

2.4 The Lean Definition of Waste

Waste is anything that does not add value to your product or service.

It is anything other than the minimum amount of equipment, materials, parts, space and employees' time which is absolutely essential to add value to the product or service.

Necessary activities add Value.

Unnecessary or wasteful activities add Cost.

2.5 Seven Basic Types of Waste

Waste from overproduction

Waste from waiting times

Transportation waste

Processing Waste

Inventory Waste

Waste of motion

Waste from product defects



2.6 Can all the wastes be avoided?

Yes you can avoid all the wastes in the system in theory. But in practical situations removing all the wastes might not be possible. Some might be not possible due to technical concerns; some are due to various obvious factors. For an example you have to transport the goods at least a little amount even within the working flow without adding any value to that. Anyway you will have to get down the raw materials for the manufacturing of product from far places. These can not be avoided. If you try to avoid some of these wastes that will cost you much more in the bigger picture. Always remember the bigger picture is what that always matters.

Therefore it is very important to categorize the wastes according to availability of them. When you do that all the wastes in the organization will fall in to the one of the following two categories.

o .. wastes that are avoidable o .. wastes that are unavoidable

Deciding what are the avoidable and what are unavoidable will require some good decision making. Lot of learning, experimenting and thinking has to go into this process. When you decide on this or at least have some idea about the wastes which are avoidable, then it is the time to understand the importance of removing each waste from the system. A tool like Pareto curve will be an ideal tool to understand the problems according to their importance of removing them.

Always you have to give the importance to the bigger picture to stop creating a new waste in the system in the effort of removing one. Always an overall reduction should be there.

What about the other wastes which we thought irremovable. Should they remain untouched? No, not at all. With the time there are new technologies, and many developments coming on. Also when you are removing some of the problems from the avoidable category, you fill find the ways to tackle some problems in this category as well. Therefore nothing is permanent. You will get tons of chances to overcome these problems.



Chapter 3

Lean Manufacturing tools

. Lean manufacturing is based on continuous finding and removal of the wastes. Value is defined from the customer’s point of view. Therefore all the tools in lean manufacturing aim to identify and remove wastes from the system continuously. There are four steps in implementing lean manufacturing. They are;

1. Identifying the fact that there are wastes to be removed

2. Analyzing the wastes and finding the root causes for these wastes

3. Finding the solution for these root causes

4. Application of these solutions and achieving the objective

When this is done go back to the stage 1 and continue this loop over and over again. To become lean it is very necessary to understand the fact that wastes are there. You must also be able to find out where these wastes do exist. Then you will be able to find out the root causes for these problems and then come up with a way to solve it. To find out where in the process these wastes exist there is a very powerful and simple tool. This well known tool is process mapping.

Process map simply maps all the processes and the activities which are carried out in bringing a specific product or a service in to a reality. Irrelevant of the value they add to the final product or the service, the process map includes all the activities from the point of development or order inquiry to making and shipping the goods and up to the point where customer collects the goods.

By sticking to a single product or a service you will find it very easy to make the process map. This also makes it easy to understand the process when someone refers to the process map. Or another way you can create a map which is simpler and easy to understand is by creating an overall map with all the departments and their interconnectivity, and then map the processes within the departments separately. This way you will get a good map which is simpler to understand and much more conclusive. You can use the standard symbols used in the process mapping to create a process map which can be understand by all the people easily.



When you map the process, you will start to see the;

1. Value added and

2. Non value added activities

You will also have better idea of what are the avoidable, non value added activities and what are the non value added unavoidable activities.

After understanding these clearly, you have to create the process map for the future. This will include only the value added activities and the non value added but unavoidable activities. The process changes and the lay out changes etc are also possible in creating this ideal layout. This is so important since there after your aim is to get this ideal position. This will be the aim for your future.

By now you have clearly understand the wastes that you have to remove from the system. But what should be given the priority. Finding the order of the problems that should be according to the priority of talking is one of the very important issues to be addressed correctly.

After finding out the order of talking of the problems, you have to find out the root causes for these problems in order to avoid these problems. For an example if you have frequent machine breakdowns, you will find the cause for this problem is untrained workers, poor maintenance, poor quality machinery used etc. then you will be able to analyze these causes again find out the causes for them as well. For an example why the staff is not trained properly is because most of them are new and have not had enough time to be trained. Then you will be able to come up with a way of training people when they just join in so that you will avoid this problem. It is generally advised that not to go than three steps down the line in finding root causes.

Ok, now you know what are the wastes that your organization as and you also know what is the taking order for these problems. You also know the root causes for the selected problems. After knowing all these facts, now is the time to move to the problem solving process.

Lean manufacturing offers few readymade and well proven solutions for any industry. But always you have to customize these solutions to suit your organization. Always keep in mind, lean manufacturing does not start with the tools, it starts with lean thinking.



3.1 JIT (Just In Time)

Often this term JIT is used with JIT interchangeably. It is that much interconnected with lean manufacturing; in fact JIT is the backbone of the lean manufacturing. Actually the concept grew first with the Toyota system was the JIT. Then it developed to the lean manufacturing. JIT is one key way to get read of most of the wastes which we have already discussed in the early chapters. JIT concepts are based on the pull demand model. Everything is done when they are actually needed. JIT has three main areas:

JIT purchasing

JIT Production

JIT distribution

Purchasing is done when the goods are actually needed by the production. No large stocks are maintained. Often purchasing is done in small batches continuously. This allows production to run smoothly. This will also reduce the costs due to storage, and also will minimize the degrading of the goods. This way it is easy to monitor quality defects and correct them if there are any in the subsequent batches. Also this will help to achieve shorter lead-times in the production.

But achieving this has problems to overcome. First of all the supplier base of the organization should be manageable. Then they have to agree to produce in small batches and send them in the continuously. Minimum order quantity issues must be solved. The supplier must be able to adjust to the changes fast and also he must be able to keep the correct quality from batch to the other. And there may be much more problems to overcome. To overcome this corporate level involvement is very much required. When achieved this will mutually benefit both you and your supplier.

JIT manufacturing might be the most talked topic of all lean manufacturing techniques. This requires very good internal coordination and planning. Even within the manufacturing area, pull demand concepts are used. The items are produced only when they are required by the process following it. No stocks are maintained. This will reduce the costs due to WIP. This will also reduce the cycle time of the product, and therefore will improve the flexibility of the system immensely. This will also reduce the lead time considerably. Quality defects will be much lower since WIP is very low.

Achieving JIT manufacturing is again not an easy task. Most of the time this requires a radical change in the organization. Work will change from the conventional departmental thinking to the new team thinking. Manufacturing will change from the line system to the



module or work cell based manufacturing. Every problem will cause the system to stop since there is no WIP to work with. All the problems hidden in the WIP will be revealed. Some people might not like the system. In short there will be tons of problems to be solved. This requires some courage and temperament.

It is true to say that most of the problems in achieving JIT manufacturing is has to deal with the human side of the problem. People do not like to change if there is no motivation to do so. People will fear about their jobs. They can bring lots of negative thoughts to this. Of cause negative thoughts are important.

You will have to deal with these problems very carefully. One thing that you have to do first of all is driving out the fear with this change. Specially regarding their jobs. You have to take their participation in the process and let them to understand themselves that this is not something that should be feared about. You have to motivate people by continuous education about the new system. One smart idea may be to use the same names which they are familiar before for the new systems. For an example use the word bin card instead of a kanban card. People will feel immensely comfortable with the names they have been using before. You also will not loose anything, as far as you are applying the kanban techniques in your production.

Apart from these problems there are very serious of problems which has to be dealt with transporting the goods. Since there will not be much of a stock to rely on, every load of goods is very important for smooth production run. Any delay will be very costly.

To achieve a smooth production without any delays in production and to distribute the goods in small batches to the buyers in continuous basis, it is very important to keep a good transportation management system. Generally this is known as the JIT distribution. Without this any of the lean objectives might not be possible. Most often this function is given to a third party logistic company, who will take care of JIT distribution. On time, uninterrupted data exchange is very vital in this. Therefore it is advisable of using an electronic way of data interchange. It is also very much necessary to automate this data transfer function to avoid any delays and mistakes in duplication.

3.2 JIDOKA- Automation with a human touch

Jidoka is one of the main tools of lean. In fact it is treated as one of the main pillars of lean manufacturing. Although Jidoka is very important tool, as most of lean tools it stays simple both to understand and practice.

Jidoka is often explained as “Automation with a human touch”. In other words this means automation with some degree of human involvement. When your machinery runs



normally and processes are being followed properly, there is nothing you should worry about. But if your processes and machinery are not producing expected results, and if it continues to run, you have a problem in your hand. You will end up with tons of faulty goods.

This is where the concept of Jidoka comes to play. If there is something wrong in your operation, Jidoka suggests you to stop immediately and then fix the problem before start running your process gain. This will ensure you remove the problem from the process so you will not be making piles of faulty items. Jidoka is often used with Pokayoke and Visual control concepts. Visual indicators are used to highlight the errors and Poka yoke is practiced to avoid the identified problems in future.

Jidoka makes it very hard to hide problems. When you stop the line, you create a crisis. If you have no solution to the problem, you will not be able to continue with manufacturing. So solving problems becomes a must.

Although it is simple enough to understand and implement, for an organization to come to the point of Jidoka implementation it take some change. Implementing Jidoka calls for a complete shift in traditional management mentality. Traditionally, stopping the manufacturing line is treated as a crime, something you should not do at all. People are encouraged to continue the work regardless of the problems which may come through.

So changing the mentality will not be easy. This will be the main problem associated with implementing Jidoka in any organization.

3.3 5 WHY? Simple but effective

Just like any good mechanic, a good lean expert should have many tools to help them do their job. While a mechanic may be fixing something under the hood of a car, a lean expert will be fixing something under the hood of a business. Unlike a mechanic’s troubleshooting, sometimes the real reason why something is not functioning inside a business isn’t readily apparent, and there isn’t a manual to troubleshoot it. Additionally, it may be masked by other problems that appear to be the real reason, or “root cause”, when in truth, it is only a diversion. Avoiding this is a very important job of all people who work in a company, primarily a lean expert, or someone who works on the quality team. There are many ways in which the quality team can approach the problem, and the 5 why technique is one of them. It is designed to help get to the real root cause of a problem, so the cause can be addressed through a short term or long term corrective action. The corrective action, then, can be tracked for its effectiveness.


http://www.learnleanblog.com/2009/06/use-poka-yoke-to-rest-easy.html

http://www.learnleanblog.com/2009/09/visual-workplace.html

http://www.learnleanblog.com/2009/09/visual-workplace.html


The 5 why system is one in which the simple question “why?” is asked at 5 different levels of a problem to get to the bottom of the situation. It was first used in the early 1970’s by the Toyota Company, who is often credited with being the pioneer of modern quality. If used correctly, it can provide a way to help identify the true root cause of the problem by using a feedback system. An added benefit is that it can be used both on an individual basis as well as a part of a group attack.

The 5 why technique is a great tool when used in conjunction with other tools as an aide in finding the root cause of a problem. Like any other tool, it should be wielded by someone who understands how to thoroughly investigate problems and conduct a solid root cause analysis.

The 5 why technique is a great tool when used in conjunction with other tools as an aide in finding the root cause of a problem. Like any other tool, it should be wielded by someone who understands how to thoroughly investigate problems and conduct a solid root cause analysis



Chapter 4Advantages of lean manufacturing

Lean Manufacturing is a buzzword. More often it is used with the terms like benefits, cost reduction, lead-time reduction etc. but if you have not started implementing lean manufacturing yet and if you have not started benefiting from lean manufacturing yet, you will need some numbers to be motivated. We shall look into some quantified benefits of lean manufacturing where the principles of lean are implemented successfully. Lean manufacturing is normally known to reduce the;

Lead time by 50% at least (some reports says stories where lead time is being reduced up to 90%)

Reduced WIP up to 80% Floor space savings around 30 %( sometimes more than 50%) Increased productivity at least by 30%. (even more than 100% in some cases) Quality improvement by a factor of two Overall cost reduction

Above are only the quantified and most common advantages. But there are ore and more other advantages come with lean manufacturing. Among them are:

Good team spirit which will drive your organization to the excellence Innovative culture in the organization Self driven people Pleasant working conditions Worker involvement and improved worker satisfaction Longer machine life Systematic approach to work Improved flexibility Environmentally friendly & Built in quality

There are many other advantages which are not listed here. Even these advantages are not listed in any order. These will be more or less important to you according to your immediate requirements.

Some successful lean manufacturers claim that they have achieved some unexpected good result when they shifted to lean manufacturing. The reason for this is the chain effect created by the lean manufacturing implementation.



One improvement always stimulates a better change in some other area. This will lead to a huge change in the organization, even in the areas where you not intended to have an improvement with the action you took. Therefore the synergy effect is very important advantage in lean manufacturing.

One more thing to remember in evaluating the advantages of lean manufacturing. You should never count the individual improvements, like how well a department performs or how well a particular team operates. All the advantages must be weighed in the bigger picture. All the advantages must be weighed according to their importance to the improvement of the total system. Therefore always remember to have the full picture in your mind.



Chapter 5

Objectives

To compare the existing production technique (after lean implementation) with the techniques used in MACPL before lean implementation.

To obtain a universally applicable method to identify areas of large inventories, long lead time, over production and lack of information co-ordination.

To guide the other industries to see the waste in their value stream and identify the lean tools that best fit the environment

Primary idea of the project is to help the industries to take initiatives to adopt such as lean in order to become more competitive in today’s global market.



Chapter 6

Study of Wastes at MACPL

6.1 Waste of Overproduction

If you make more product than is required by the next process, make it earlier than is required by the next process, or make product faster than is required by the next process, you overproduce.

The word over production can be used to describe a type of waste which is in most of the places and we never think this as a waste. This is producing something before it is actually required. This can be applied to the bigger picture or in more localized sense.

In the bigger picture, this is equivalent to create a product or a service before it is actually required. Lean manufacturing always trusts on pulling rather than pushing. This means that every service or product must be pulled from the process immediately after that. Therefore a product or a service must be pulled by the customer. In much more simpler way, customer must have the real requirement for the product or the service being produced. If you produce the goods without any stimulation from the market, then either you will have to keep the product with you until there is a market for that product or you have to create the market stimulation with huge advertis



ing campaigns etc. this is known as the push strategy. Still you will not have the guaranty that this will be able to sell the products without wastages.

In the much smaller picture, the word over production might mean producing a part of a product before it is required by the assembly line or the process after that. For an example there is no point of making more receivers than the phones intended to be produced. The extra amount will be a lost.

Over production accounts for many loses. One is the waste due to unnecessary parts. This also will make the WIP higher. Flow will not be smoother. This obviously leads to low quality products and defects as quality problems are hidden in the WIP maintained due to over production.

The waste of making too much, too soon, too fast compared to the needs of the next process. Certain causes for over-production are Just-in-case logic, Misuse of automation, Long process setup, Non-level scheduling, Unbalanced workload, Misunderstood communications, and Unreliable shipment by suppliers. After the implementation of lean in MACPL the over-production was reduced from13.8 tones in the year 2007-08 to 9 tones in 2009-10. The graph below gives a clear view of tones of production in three consecutive years. The pink bar shows a considerable decrease in over-production after the implementation of lean. .

Fig 6.1: Graph of over-production

6.2 Waste from Waiting times



Operator or machine idle time.

Causes of Waiting Waste.

Unbalanced work load & un-level scheduling.

Unplanned maintenance.

Long process set-up times.

Upstream quality problem.

Even a single minute lost in waiting can not be recovered in the process there after. Analyze how long the products are waiting against the time used for processing them. This is one big contributory factor for the higher lead times. This simply means you take 100 hours or more to complete work which is worthier only 10 hours. Ninety hours or more is lost and added to the lead time. No waiting means you can deliver the goods within 10 days which actually took 100 days earlier. The flexibility obtained with this was only imaginable before lean. If you can do this, you are there to compete with the changing markets and react to the changes very fast, even before your competitors. This will also reduce the WIP and tons of related problems. Also considerable savings on the production space and reduction in work in capital can be achieved. Among the cause of this problem is due to the high volume machinery, unawareness of the people, and conventional thinking of the people play leading roles.

Any activity that consumes time without adding value, especially equipment downtime, waiting for materials, setup, etc., are termed as waiting time. Causes for waiting may be due to Poor machine maintenance, Line imbalances, Poor setup discipline, and Poor communication between processes.



Fig 6.2: Graph of process time

The graph above depicts the average status of casting waiting time over the period of four years and it can be clearly seen that after implementation of lean strategy there has been a considerable decrease in waiting time from 23days to 15 days. This could be possible due to the implementation of mold heating or mold baking oven that reduced the mold curing time from four hours to two hours. Increasing the size of the sand hopper for storing reclaimed sand from five tones to ten tones. Installation of bailing machine to squeeze the loose scraps before being fed into the furnace, this has helped in reduction of melting time. It is possible to extract thirteen melts per day as compared to ten melts earlier.

6.3 Waste of Transportation



Poor plant layout Poor understanding of the process flow for production Large batch sizes, long lead times, and large storage areas.

No matter how well you do transporting. It does not add value to the end product. Therefore simply transportation is one of the wastes that have to be eliminated from the production system. This accounts for the quality defects, maintenance of a higher WIP, and additional cost of transporting the goods. Transportation often caused by poor work place organization. Inflexibility of the layout plays a big role here. This can be avoided with careful re-designing of the layouts.

Transporting parts and materials around the plant, stacking and un-stacking, etc., without any value add to the component is a real waste to the company which causes loss of precious working time. The cast products moved in zigzag pattern around the shop floor for different processes to be carried out on them such as knock out, riser separation, welding etc., but now the same processes are carried out on the cast products but in a more appropriate way. Flow concept has been introduced thereby curbing the zigzag movements of materials. With flow concept the alloy steel products and stainless steel products are moved in different streams, this has reduced the time and labor needed for bifurcation of the products at the end of the stream as done earlier before the final dispatch.



Fig 6.3: Process flow before lean implementation



Fig 6.4: process flow after lean implementation



6.4 Processing Waste

Effort that adds no value to the product or service from the customers’ viewpoint. This is the using incorrect tools for the job. This does not mean that you should use complicated or expensive tools to do the job. It is about using the correct tool for the correct job. Low cost automation is one program where Toyota found to be really effective. Developing such tools can be done with the aid of workers, because they know the job they do more than anyone. Then this will become a very good way of motivating people as well. The enemy for this system is the mind set of the people who work in the organization. People naturally think like best equipment for the job is expensive and complex. So how to overcome this problem, which will not only save money for you but also motivate people immensely. Change the mind set of the people by education and training. Also create a culture of continuous improvement. Then people will always look for the better ways of doing things, which creates opportunity for these kinds of innovations.

Reprocessing has to be done due to the processing error or any minor flaw detected during the inspection stage. It is considered as a waste as it consumes valuable time of production. When considered the monthly analysis of production i.e. in 2007-08 total production was 185tones of which 15tones was reworked and 5 tones was rejected considering the same for 2009-10 actual production was 212 tones of which 36 tones was reworked and 6 tones rejected. It is known from the graph that the year 2006-07 and 2007-08 the percentage of rework was well above 16% but after the implementation of lean concepts it has been reduced to 8.1% in 2008-09 and to almost nil in the current financial year.



Fig 6.5: Graph of re-processing



6.5 Inventory Waste

Maintaining excess inventory of raw materials, parts in process, or finished goods.

Protects the company from inefficiencies and unexpected problems.

Product complexity

Unbalanced workload, unleveled scheduling

Poor Market forecast

Unreliable shipments by suppliers

Reducing inventory is an important goal of the lean organization. Carrying inventory has many costs associated with it. Obvious costs include: capital tied up in inventory and the associated loss of interest on that capital, loss due to material handling damage, increased labor costs for material handling, and increased space and storage requirement. A cost from excess inventory that is not so obvious is quality. The reasoning is that if an upstream process is producing parts on a machine and defects occur halfway through the batch, in an organization with low levels of inventory the next downstream process will discover the defects sooner. An organization with low inventory levels can stop the process when the defect is discovered, throw out the defective inventory, and request the previous process to start another batch. The organization with lower inventory levels will also be more effective at determining what caused the defect because the batch that the defect occurred in is fresh in the minds of both production and maintenance.

Inventory can be termed both as waste and also a factor of protection in times of unexpected problems a company faces. Causes of inventory being not understanding the costs, inadequate education/training/work instructions, Lack of standards, Customer needs not understood. Saving optimum amount of inventory for production and placing an order for the same at the prefixed level is the beauty of lean. Just in time manufacturing (JIT) is the practice of maintaining and manufacturing just enough inventory to fulfill the orders that have been placed, and not a single piece more Kanban-push to pull processing system along with activity based costing is applied here. If JIT is the entire system that defines the pull version of production and manufacturing, then Kanban is the signal that triggers the production when the inventory level reaches a level of exhaustion triggering a card places an order and the supplier responds to this pull and supplies the items. ABC analysis is done to group the different items needed for production in groups like A, B and C depending on their cost and amount of that particular item consumed per day. JIT also takes care that only the needed inventory is delivered, excess storage and wastage of space is eliminated.



MATERIAL DAILY LEAD BUFFER STOCK ACTUAL VALUE RATE/KG



CONSUMPTION TIME-IN STOCK12.03.2010 STOCK

QTY IN KGS DAYS D.C*L.T

A ITEMS

S.S.316L SCRAP 1039 15 15585 6075 6075 783675 129

PURE NICKEL 143 40 5720 1309 1309 1106105 845

M.S.SCRAP 5367 2 10734 23270 23270 442130 19

S.S.304 SCRAP 447 10 4470 1810 1810 132130 73

FE.MOLYBDENUM 38 15 570 438 438 365730 835

FENOTEC 543 3 1629 3750 3750 255000 68

B ITEMS

S.S.SCRAP 2205 127 15 1905 5532 5532 746820 135

0.05 FERRO CHROME 227 6 1362 5910 5910 916050 155

SILICA SAND 32371 4 129484 126800 126800 176252 1.39

NICKEL SCRAP 45% 25 40 1000 0 0 0 834

PURE MOLYBEDENUM 11 10 110 541 541 1000850 1850

0.03 CHROME 297 6 1782 3806 3806 704110 185

MOULD COATING 315 6 1890 3620 3620 282360 78

E.L.C.M.S. 863 4 3452 11705 11705 362855 31

S.S.2507 40 15 600 0 0 0 292.32

HARDNER H160 60 6 360 550 550 96800 176

IRON MELTING FLAKE 427 6 2562 1945 1945 83635 43

S.K.O 250 5 1250 2550 2550 94350 37

HARDNER-120 68 6 408 650 650 95550 147

SELENIUM METAL 2 10 20 48 48 120000 2500

SATACORE PART A 150 15 2250 2000 2000 133000 66.5



6.6 Waste of motion

Any movement of people or machines without adding value

Poor people/machine effectiveness

Inconsistent work methods

Unfavorable facility or cell layout

Poor workplace organization and housekeeping

This waste is often overlooked. When performing a certain task people have to repeat their motions again and again. Although we do not realize, in many places people will have to move, bend or reach to collect some part or to reach a machine. If a time study can be done to check the percentage of the time for these unnecessary movements, you will see it is actually very high than you think. Even the other ergonomic conditions like correct lighting, tool arrangement, work process management is essential to achieve a good productivity from the people poor conditions are not good for the health of the worker obviously. Also this will waste large amounts of time. Workplaces will become very untidy. Workers will get tired easily. The reason for this is poor workplace organization.

Poor workplace layout is the main cause of wasted motion hence to rectify that the whole plant has been replanned to restrict wasted motion as much as possible. Before implementing lean all the major work equipments were constituted in hall 1 itself. Sand mixer, molding, sand reclamation and mixer, knock out, riser separation, shot blasting machine, inspection and repair welding and sand storage yard & sand transporter were all under single hood. The scrap was stored in scrap yard in open area. The old company layout below shows that entire casting operation was carried out in hall 1, the components moved out for machining process and later would undergo inspection and dispatch.



Fig 6.6: Old layout of M.A.C.P.L

This layout posed problems mainly for the workers as the fumes from welding would cause irritation and fatigue among workers and the movement of casting in the shop floor was in zigzag pattern causing restriction in motion. After implementation of lean the plant layout was changed according to flow concept.

Hall 1 & 2 now comprises of sand mixing and molding section, melting furnace and pouring section, riser separation, shot blasting, inspection & repair welding, heat treatment with risers(normalizing) unit.

Hall 3 is now completely available for rework grinding and inspection work.

Hall 4 was newly constructed after relayouting and it comprises of 3 heat treatment furnaces (2 shifted from hall3 and a new furnace), shot blasting and 2 grit blasting machines. The new plant layout looks as below:



Fig6.7: New layout of MACPL



Table 6.1: Specification of layout

Sl no PARTICULARS IDENTIFICATION

1 Induction Furnace IF1 & IF2

2 Continuous Mixer CNSM1& CNSM2

3 Sand reclamation SR

4 Shot Blasting machine SB1&SB2

5 Heat treatment furnace HT1 – HT$

6 Welding Rectifier W1- W9

7 Lathe Machine LH

8 Drilling machine DR

9 Hydro testing machine HD

10 Grit blasting machine AGB1 &AGB2



6.7 Waste from product defects

“All the time and cost incurred due to getting something wrong”

Weak process control

Poor product & process design

Deficient planned maintenance

Inadequate education/training/work instructions

Misunderstood Customer needs.

The entire above are wastes them. But they lead to another waste which is extremely costly. These are the defected product. In the case of services this is the poor quality of the service. Defects call for higher inspection and related costs. If you find a defect, you will have to remove it. The raw materials, time, effort and the money put in to this product will be wasted. Even worst, if this defected product goes to the customers hand you will loose the image for your organization. Also there is a risk of claims. In the long run this will be a big cost for the organization. As I mentioned earlier all the above wastes, poor raw material, mistakes from the workers, problems in the system, machinery problems and much more accounts for this problem. So removing this from the system is long time task. Making the system fool proofed, getting good quality raw material, educating people are among the solutions for this.

Waste of inspection, repair and scrapping of material to which value has already been added accounts to much more loss to the company than any other defects. Steps should be taken to eliminate defects at the last stage and incur huge losses. This has been made possible by introducing spot inspection. Training the worker to inspect the product before leaving his work cell for further processing. Incorporating quality system like GO and NO-GO gauges to check the dimensions and visual inspection for any defects. The rejection rate has been decreased to 3.5% in the year 2009-10 compared to 4.68% in year 2008-09 for production exceeding 2000tones in every year during comparison.

6.8 Energy Waste



Power is the major raw material for the foundries, as the induction furnace consumes more power for converting the raw material charge to liquid metal. The power consumption per ton of liquid metal varies depending upon various parameters, viz

1. Furnace power input: Higher the kilowatt of the furnace, lower the power consumption. The consumption of energy is directly proportional to the power input.

2. Quality of Raw-material: Quality of scrap directly affects the power consumption, rusty scraps, generates more slag there by increases the power consumption.

3. Physical property of Scrap: The shape of scrap material directly affects the power consumption, scrap of odd shape occupies more space in the furnace, leaving hollow space inside the furnace, thereby increases the power consumption. Bundled scrap requires less time for melting as at a time heavy mass will be inserted inside the furnace leaving no space in between the scarp, hence power losses would be reduced.

4. Pouring pattern of liquid metal: The pouring sequence also affects the power consumption, as intermittent pouring leaving gap in between the ladles increases the power consumption. Un necessary holding of liquid metal inside the furnace increases the power consumption and the quality of casting also gets affected due to absorption of gas which creates gas / pin-hole in the castings.

Applying the above parameters on the working of the company, the company has enhanced the kilowatt of induction furnace from 350kw to 450kw, hence the over all power consumption has drastically come down when compared to earlier years.The company has standardized purchase of good quality mild steel and stainless steel scrap from the approved sources, who supply good quality material.

The company, wherever possible has instructed all its vendors to supply scrap in bundled condition so that the melting time would be reduced, which would reduce the power consumption. Apart from this bailing machine costing Rs.5.5 lakhs has been installed to bundle loose scraps. The Melt plan of the company is meticulously done to reduce intermittent gap while pouring of metal. Where ever possible entire metal is taken in one ladle so that the next melt can be started immediately without any delay, thereby reduce the power consumption.

The table shows the power consumption details over the period of four years. The graph below shows a clear picture of the decrease in power consumption for melting per ton of metal. Considerable decrease can be seen after the implementation of lean principles in production.



2006-2007 2007-2008 2008-2009 2009-2010TOTAL POWER COST

(in Rs.)27897292 31837080 27181239 28675005

TOTAL PRODUCTION(in tons)

2194 2508 2222 2375POWER COST/TON OF

PRODUCTION(Rs.)12715 12694 12233 12074

TOTAL SAVINGS FOR THE YEAR(Rs.)

21 -482 -159Table 6.2: Annual power cost.

Fig 6.6: Graph for power savings



Chapter 7

Analysis using Lean Tools

7.1 5 Y Analyses

The main tool used by the Malnad Alloy Castings for Lean implementation is WHY analysis the main theme of this analysis is to keep asking the question WHY? For a problem until u find the solution. Below are the some data regarding the solutions obtained for some of the problems with the help of employees by the analysis

1-10-100 rule.

1- To catch and fix problem in the work area. 10-to catch and fix problem after it leaves work area, but before it leaves factory.

100-to catch and fix problem at the customer place.

GAS POROSITY:

Tool to be made for gas vent:

M.s. Plate with rods

Fix nail on pattern (big) and use 6mm pipe for locator (flat and round each on job)

Provide locator on the pattern and release the pattern with the locator only to shop floor for production.

Gas:

Why gas- improper venting

Why-proper tool not provided

Why-design proper tool and provide the same to shop floor

Solution: Try to procure- paper tubes if available in the size of 6mm 8mm 12mm and 25mm.



Gas 2:

Why-less permeability in sand

Why-high resin content in the mixed sand

Why-why high resin in sand. Why-sand is less in the mixer

Why-sand gate is not opened to the required level

Why-air pressure is not there/lock nut is loose

Why-sluggishness in the movement of piston

Solution: Provide magnetic level switch and proper air pressure

Gas 3:

Why- boiling in the sleeve

Why-moisture in sleeve

Why-sleeve exposed to atmosphere

Why-mould was not poured/kept for long time

Why-liquid metal not available for that particular grade

Why-liquid metal was not prepared as per standard

Solution: Make a standard band for liquid metal

CRACK:

Why-stress due to contraction

Why-restriction for contraction (free space not available)

Why-high strength/poor collapsibility of core

Why-core strength was high

Why-grain size surface area was more

Why-iron oxide percentage was more



Why-iron oxide is not properly weighed

Solution: Prepare a packed suitable for 100kg of sand

Crack below the raiser:

Why: crack below the raiser having large cross sectional area

Why: stress developed while cutting the raiser

Why: variation in temperature at the cutting area

Why: no constant temperature at the cutting area

Solution: Preheat the castings at required temperature and separate the raisers. Heat the castings and cut while the castings are in hot condition cut top raiser immediately after knockout.

For crack below the raisers: irrespective of cross sectional area, preheat the castings before raiser separation.

SAND INCLUSION:

Sand inclusion in smaller casting less than 40kgs:

Why: sand got entered into the casting

Why: loose sand in down spruce

Why: improper ramming of mould

Why: ramming time is not enough

Why: operator is deciding the time of ramming machine is given with foot paddle

Solution: change the foot paddle with timer so that the vibrator switches off automatically. Monitor mould hardness for 5 melts.



SLAG:

Slag entered into the mould along with liquid metal

Why: slag always floats on the surface of liquid metal

Why: because of low density compared to molten metal

Solution: Always keep molten metal in the ladle above the spout to avoid metal entering the mould box.

Slag entered in the mould along with liquid metal

Why: there is no restriction to avoid flow of slag to mould

Why: pouring speed is not proper

Why: no standard for pouring speed

Why: swirling action to be created to float the slag on the surface

Solution: Area of spruce should be more than by 1.2times the area of the runners.



Chapter 8

8.1 Major changes done in MACPL after Lean Implementation

Implementation of Bailing machine worth Rs.5.5lakhs:

Earlier loose scrap was melt in the furnace but now with the help of bailing machine the loose scrap is squeezed into rectangular boxes which saves the melting time and increases the capacity of the furnace.

The furnace lining is reduced by .25 inches keeping in mind the safety factor. Optimization of the furnace lining thickness has increased the capacity of the furnace and also the melting time has been reduced considerably. At peak capacity the furnace could only produce ten melts per day but after add-on’s like squeezed scrap input and optimization of lining thickness of furnace thirteen melts are possible.

Earlier scraps was stored in open air without proper shelter but after implementation of lean shelters are provided for scraps with a concrete partition and ceiling which cost Rs.50000 protecting it from rain.

Zigzag movement of casting in the shop floor was the common sight in the foundry before. After lean implementation Flow concept was adapted and castings are moving in main two streams after raiser separation:

1. Alloy steel & 2.Stainless Steel

Grit blasting and Shot blasting machines shifting and revamping cost the company Rs.1.2lakhs were introduced.

Raw materials are stored in inventory on the basis of ABC analysis. (which will be detailed later)

Increased the size of sand hopper for storing the reclaimed molding sand. The sand hopper costs Rs.1.2lakhs.

Fresh molding sand from the storing yard was transported by manual laborers but after lean implementation overhead pipeline was constructed where the sand from storage area to the molding section was pumped with the help of compressed air. Total cost of the entire unit is Rs.5.45lakhs.

Trolley and trail movement of materials was introduced throughout the shop floor in the foundry for Rs.75000.



8.2 Capital cost

However such flexibility and ease in services comes at a cost. This may be one time investment like capital investment paid at bulk sums for once or investments that have to be made whenever needed. Some of the new equipments and shifting of machinery due to changes made in re-layouting of the plant will have its financial burden on the company.

Cost Table

Sl.no PARTICULARS Rs in lakhs

1 Roller bed & mold baking oven 3

2 Sand hopper 1.2

3 Sand reclaimer 0.75

4 Bailing machine 5.5

5 Shot blasting (shifting & revamping) 1.2

6 Scrap yard(concrete partition) 0.5

7 Sand storage and transporter(with pipe line) 5.45

8 Trolley and trail movement 0.75

TOTAL 18.35

Rs 18.35 lakhs worth of investment has been made on equipments and a new building worth Rs.15lakhs has been constructed after implementing lean strategy.



Photo 1: Bailing Machine



Photo 2: Loose Scraps



Photo 3: Grit Blasting Machine



Photo 4: Shot Blasting Machine



Photo 5: Sand Hopper



Photo 6: Baked Molds on roller conveyor.

Chapter 9Dept of Mechanical Engineering, JNNCE, Shimoga 46


Benefits

As per the study of production techniques at Malnad Alloy Castings Pvt Ltd., the major benefits of implementing lean manufacturing strategies are:

Rate of over-production is reduced by 34.7%

Waiting time for a cast component is reduced from 21days to 15days (reduction of about 40%)

Re-planning of the plant layout has improved the flow of components around the shop floor and reduced worker fatigue.

Re-processing or re-working of the components has reduced considerably from 16.9% to 8.1%.

Energy consumed per melt has also been reduced from 620 units to 580 units.

Storage of excess inventory has been restricted. Storage is restricted to pre-fixed buffer level needed for continuous production.

Unproductive motion of workers and components around the plant has been restrained. Better work cell conditions are being provided.

Defective products and rejection rate has been decreased from 2.8% to 2.6%.

Chapter 10



Conclusion

The task of this project was to compare the existing production techniques (after lean implementation) and the techniques used before lean implementation. It shows that certain techniques such as 5Y, Jidoka, JIT and pull system would help for the betterment of the productivity of the plant. Primary idea of the project is to help the industries to take new initiatives such as lean in order to become more competitive in today’s global market.

The study can systematically guide the industries to see the wastes in their value streams and identify the lean tools that best fit the environment.

The considerable increase in profitability though there has been a reduction in the yearly turnover is the proof to conclude that lean manufacturing is the ideal manufacturing strategy. The graphs below depict the statement.

Fig 8.1: Graph for profit



Fig 8.2: Graph for company turnover

The reduction in turnover in 2009-10 has been due to recession and other market problems but there has been a substantial growth in profit levels. The main contribution to this has been due to lean and product mix. By this it is now understandable that lean is a process for all seasons and is not limited to discreet manufacturing environment. It is seen that lean is an ideal strategy to expose the waste in the production room.

It is now clear that companies now see the need to implement lean to drive their costs down and become more competitive by reduction of cost, increased customer satisfaction, reduction of machining downtime, having better and safer workplace.



References

“LEAN THINKING” by James P. Womack & Daniel T. Jones.

Lean Manufacturing Basics by Aza Badurdeen

Introduction to Lean Manufacturing by Mekong Capital Integrated Lean Thinking & Ergonomics by Jon Walder, Carter Kerk and Jennifer

Karlin. South Dakota School of Mines

Web addresses:

http://lean.mit.edu/public. http://www.toyota.com/html/about/opertions/manufacturing/manu-locations/

tmmk.html. http://www.techhelp.org

http://www.leanmanufacturingconcepts.com


http://www.leanmanufacturingconcepts.com/

Lean Manufacturing-Case Study at MACPL

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Transcript of Lean Manufacturing-Case Study at MACPL