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Introduction

There are some possibilities to improve the production system...

Lean Manufacturing Eiji Toyoda at Ford Rogue Plant, 1950
BMT6179
MOD U LE I

Types of Production Systems

Craft Production: ◦ Disadvantages:
◦ Characteristics: ◦ Only rich can afford
◦ A workforce comprising quasi-independent tradesmen skilled at ◦ Unpredictable quality
design, machining and fitting.
◦ Decentralized organization. ◦ Overcoming these problems
◦ Small machine shops provide most parts. ◦ Henry Ford
◦ Owner coordinates with the contractors, workers and customers. ◦ Fred Winslow Taylor
◦ General-purpose machines
◦ Low production volumes and high prices

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Types of Production Systems Mass Production

Mass Production: ◦ Innovations in FW Taylor’s Mass Production:
◦ F W Taylor, Father of Scientific Management coined the term ◦ Standardized work
◦ The ‘best way’ to do the job based on scientific principles, ◦ Reduced cycle time
◦ Short cycles ◦ Time and motion study
◦ Repetitive tasks ◦ PDCA Cycle
◦ Paved the way to ‘Industrial Engineering’ ◦ The Ford System:
◦ Henry Ford achieved designed Model T in August 12, 1908
◦ Easy to manufacture
◦ Easy to repair & assembly
◦ Standardization of parts
◦ Design innovations
◦ Reduced number of moving parts in engines.

Mass Production (cont...) Mass Production (cont...)

◦ Ex. Ford’s engine casting comprised of a single complex block
◦ Advantages:
◦ Huge savings and cost reductions
◦ Easy repair by the user
◦ Reduced amount of human effort required
◦ Increased the wages to twice
◦ Innovations:
◦ Moving assembly line that brought the car past the stationary worker.
◦ Reduction in walk time
◦ Linked sequential processes

Ford’s Model T 1908 Ford’s Model T Engine 1908

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Mass Production (cont...) Birth of Lean Production

Other developments Eiji Toyoda, during his visit to Ford’s Rouge plant in Detroit in 1950, founded
◦ The managerial and marketing innovation of Alfred Sloan and General ◦ Production of 7000 units per day in contrast to 2685 units per day at Toyota.
Motors. Small domestic market – looking for wide range of vehicles in low volumes.
◦ Required professional management
◦ Decentralization of vast operations High competition in the global market, and established carmakers to setup their plants in
Japan
◦ Each run by a General Manager reports to a small headquarters .
◦ This shook Japan and its economy into depression.
◦ Each centre uses a standard measures. (by the numbers)
◦ Generally Accepted Accounting Practice (GAAP) developed. The America attacked the inflation by restricting credit
Due to the downfall in car sales, bank loans became exhausted, Toyota faced bankruptcy.

Resurrection of Toyota Resurrection of Toyota (Cont...)

With the inclusion of labour laws in 1946, The foundation was created for an entirely different
◦ Strengthened the rights of unions employment contract
◦ Cooperation
◦ Restrictions on the ability of owners to fire employees
◦ Flexibility and
◦ A quarter of the workforce was terminated
◦ Mutual benefits
◦ Kiichiro Toyoda resigned as president to take responsibility for the company's failure
◦ The remaining employees received two guarantees The workers and company became partners
◦ Lifetime employment
◦ Pay steeply graded to seniority and tied to company profitability through bonuses
Taiichi Ohno – replaced Kiichiro Toyoda as President
◦ Workers were the most valuable resource
◦ Involvement of team members in improvement lead to a novel
concept – Lean Production

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The Virtue of Necessity Lean Revolution at Toyota

30 years of hard work to solve the problems at Toyota led to the In 1969 Taiichi Ohno established the Production Research Office (now
evolution of Toyota Production System (TPS) called ‘Operations Management Consulting Division [OMCD])
◦ Each step depended on the skill and creativity of the shop-floor team ◦ Set up joint working groups among suppliers
members ◦ Each group assigned to a team leader
◦ Led to the development of batch production ◦ Conducting one major kaizen with the assistance of OMCD
◦ Changeover time reduced to minutes from hours ◦ Review
◦ Small batches improved ◦ This transformation made Toyota to have price reductions in part costs every year
◦ Quality
◦ Reduced lead-time
◦ Less work-in-progress

The Lean Production System Lean Manufacturing

Known as TPS, means Lean is defined as a set of management practices to improve efficiency
and effectiveness by eliminating waste. The core principle of lean is to
◦ Doing more with less reduce and eliminate non-value adding activities and waste.
◦ time, space, human effort, machinery, materials
– American Society for Quality
◦ giving customers what they want.
Lean manufacturing, or lean production, is a system of techniques and
◦ Rooted in manufacturing can be tailored as per the situation activities for running a manufacturing or service operation. The
techniques and activities differ according to the application at hand but
they have the same underlying principle: the elimination of all non-value-
adding activities and waste from the business.
– American Society for Quality

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Lean Production & Profit Lean Production & Profit

The New Economies The sustainable way of reducing cost is
◦ Setting prices to
◦ Cost + Profit margin = Price (Traditional Method) ◦ involve the team members in Profit Fixed Price
◦ Shared
◦ New equation forms as
◦ Standardized improvement activities,
◦ Price (fixed) – Cost = Profit
Benefits go directly to the bottom line

Cost reduction
◦ In this context, only the cost can be reduced to increase the profit.
◦ Reducing cost without
◦ Decimating team members
Finally
◦ Cost + Profit margin = Price (Old Equation)
◦ Cannibalizing maintenance budgets
◦ Price (fixed) – Cost = Profit (New Equation)
◦ Weakening the company in the long term
◦ The key to profitability is
◦ Cost reduction

Cost

Just In Time
JIT is defined as:
◦ A philosophy of manufacturing based on planned elimination of all waste and
continuous improvement of productivity.

◦ It encompasses the successful execution of all manufacturing activities required to

Just–in–Time produce a final product, from design engineering to delivery and including all
stages of conversion from raw material onward.

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Primary elements of JIT Usage of JIT Terminology

◦ To have only required inventory, Eliminating waste IBM : Continuous Flow Manufacturing
◦ Improve quality to zero defects ◦ Overproduction
◦ To reduce lead times by reducing
HP : Stockless Production & Repetitive Manufacturing
◦ Waiting
◦ Setup times, ◦ Transportation GE : Management By Sight
◦ Queue lengths and
◦ Unneeded production
◦ Lot sizes Motorola : Short Cycle Manufacturing
◦ Work-in-process inventories
◦ To incrementally revise the
operations ◦ Motion or effort Japanese firms : The Toyota System
◦ To accomplish all these activates ◦ Defective products Other companies : Time-based Competition
at minimum cost
Total Quality Management
Parallel Processing

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Benefits of JIT

JIT Manufacturing Philosophy

Inventory levels are drastically reduced:
The JIT philosophy can eliminate large inventories in favor
of producing just enough products to fill customers’ orders. Total product cycle time drops
Product quality is improved
Manufacturing cumulative Lead Time Scrap and rework costs go down

Manufacturing Forces managers to fix problems and eliminate waste.

Customer Lead Time
Places
Order Engineering
Scheduling
Distribution
and Customer
Focus on time-based competition to capture market share
Entry Design Service
Order Purchasing
Lead Time
JIT method to reduce order-to-delivery cycle
Prerequisites must be present to successfully implement JIT
behave like repetitive manufacturing
Total Elapsed Time stable schedules
The Time-from-Order-to-Delivery Cycle

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Mental Models Basic Image of Lean Production

CONVENTIONAL MODEL TOYOTA/LEAN MODEL Goal

Customer Focus:
Highest quality, lowest cost, Shortest lead time
Make as much as you can, Go as fast Make only what the customer has ordered. by continually eliminating waste
as you can. (Push System) (Pull System)
Make big batches and move them Make things` one at a time and move them Just-in-time Jidoka
slowly through the system. (Batch and quickly through the system. (Flow)
queue)
Involvement:
Thou Shalt! (Leader=Boss)
What do you think? (Leader=Teacher)
Flexible, motivated team members
Engineers and other specialists create continually seeking a better way
standards People closest to the work develop
standards.
Don’t get caught holding the bag!
Make problems visible.

Standardization
Do-Do-Do-Do!
Plan-Do-Check-Amend (PDCA)
Stability

Lean Activities

Customer Focus •
Customer Focus:
Hoshin Planning, takt, heijunka
• Involvement. Lean design, A3 thinking
Goal for Lean Production: Customer Focus
◦ Highest quality, lowest cost, Shortest lead time by continually eliminating waste Just-in-time Jidoka
◦ PQCDSM Involvement:
◦ Productivity • Flow • Standardized work • Poka-yoke
• Heijunka • 5S • Zone control
◦ Quality •
• Takt time TPM • Visual order (5S)
◦ Cost • Pull system • Kaizen circles • Problem solving
• Kanban • Suggestions • Abnormality control
◦ Delivery time
• Visual order (5S) • Safety activities • Separate human
◦ Safety and environment • Robust process • Hoshin planniing and machine work
◦ Morale • involvement • involvement

Standardized work Visual order (5S)

Standardization Hoshin planning
Kanban

Standardized work TPM, Heijunka,

5S, Jidoka
Stability Kanban

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Muda (Waste) Human motion

Muda means 3 categories:
◦ Waste, or ◦ Actual work:
◦ Any activity for which the customer is not willing to pay ◦ Any motion that adds value to the product.
◦ Ex.: customer ready to pay for cutting, welding, painting but unwilling to pay for wait time,
rework, or excess inventory or any other forms of muda ◦ Auxiliary work:
◦ Motion that supports actual work; usually occurs before or after the actual work
◦ Muda:
◦ Motion that creates no value

Work Vs Muda Types of Waste

Actual
Work Muda

Motion

Work

Auxiliary Work

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Muri Vs Mura Vs Muda

Other variations of Muda
Mura
◦ Unevenness or
◦ Fluctuation in work
Muri
◦ Hard to do
◦ Caused by variations in
◦ Production
◦ Poor job design
◦ Poor part fit
◦ Unclear specifications