MODULE 4

Principles of Lean Manufacturing(LM) – Basic elements of LM– Introduction to LM Tools-

Concept of wastes in LM and their narration - stages of 5S and waste elimination –
Conventional Manufacturing versus Lean Manufacturing - Need for LM. Agile manufacturing
- Definition, business need, conceptual frame work, characteristics, and generic features -
Approaches to enhance ability in manufacturing - Managing people in agile organization

4.1 Lean Manufacturing (LM):

Also referred as ‘Toyota Production System (TPS)’. ‘Lean’ is focused at cutting fat from
the production activities. LM is a collection of tactical methods that emphasize eliminating
waste, while delivering quality products on time at least cost with greater efficiency. LM
considers all expenditures of resources for anything other than the addition of value to the
end consumer to be ‘waste’. The goal of LM is to create more value with less work.

4.1.1 Seven Wastes in Lean Manufacturing (LM):

Shiego Shingo, a Japanese JIT authority and engineer at the Toyota Motor Company
identified seven wastes as being the targets of continuous improvement in production
process.

• Overproduction: - Production of more quantity than actually required by the customers

(due to incorrect forecasting, compulsion to exploit the full service of employees)
• Excessive Inventory: - Excessive inventory wastes resources through cost of storage, and
locks up the capital
• Unnecessary Motion:-Increased motion of the employees will lead to the wastage of time
and sometimes money too due to the loss of service hours. Work study, ergonomics are
the solutions
• Waiting: - Any delay in the processing of activities get transferred to their subsequent
stages. To avoid this, a realistic schedule is to be prepared
• Transportation: - It is the process of moving something from one place to another, which
should be minimized as much as possible. It can be minimized by applying concepts like
Cellular Manufacturing and by utilizing CNC machines

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• Inappropriate Processing: - A process that produces near net shaped component is always
preferred
• Defects: - Refers to a product not meeting the quality standards or specifications

4.1.2 Principles of LM:

Value:- Value is created by the manufacturer or service provider, but it is defined by the
customer. The company must strive to eliminate waste and cost from its business processes
so that customer’s optimal price can be achieved at the highest profit to the company.

Map the value stream:- Here, the goal is to use the customer’s value as a reference and
identify all the activities that contribute to these values. Activities that do not contribute value
to the end customer are considered as ‘waste’. Waste can be broken into 2 categories (i) non-
valued added, but necessary; (ii) non-valued and unnecessary. The latter is pure waste and
should be eliminated, while the former should be reduced as much as possible

Create flow:- After removing the wastes from the value stream, the following action is to
ensure that the flow of the remaining steps run smoothly without interruptions or delay

Establish a pull system:- A pull system works by only commencing work when there’s
demand. Pull system allows just in time delivery and manufacturing where products are
created at the time that they are needed and in just the quantities needed.

Achieve perfection:- The pursuit of perfection, via, continued process improvements is also
known as ‘Kaizen; as created by Toyota Motor Corporation founder Kiichiro Toyoda. LM
requires ongoing assessment and improvement of processes and procedures to continually
eliminate waste in an effort to find the perfect system

4.1.3 Lean Manufacturing Tools:

The Japanese term for waste is ‘muda’, which is termed as uselessness. Lean tools are
designed to reduce ‘muda’ in organizations and improve quality control. Important Lean Tools
are:

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4.1.3.1 5-S:-

5-S is a method for organizing a workplace (like a shop floor/office space). Also called
housekeeping steps for quality improvement. 5S implementation helps to have improved
morale, safety, productivity and maintenance and also helps in reduction of waste. 5S
represents Japanese words that describe the steps of a workplace organization process.

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4.1.3.2 Kanban

‘Kan’ means ‘visual’ and ‘ban’ means ‘card’ or ‘board’ and ‘Kanban’ is a term related
to JIT manufacturing. Kanban is a signaling card system to trigger action, such as to produce
goods where the consumption of goods is the trigger. A Kanban system allows a company to
use JIT production and ordering systems, which allow them to minimize their inventories
while still satisfying customer demands. Kanban is a signal card used in any ‘pull system’. A
Kanban can take several forms such as a coloured card, a bin, an email or some alternative
form of visual signal.

‘Toyota pull system’ is a ‘dual card system’ in which each work area has production
cards (p cards) circulating inside the area to trigger production, while move cards (m cards)
circulate between work areas to move material in to and out of production.

In a ‘single card Kanban’ scheduling system, a signal Kanban card is taken from the
Kanban location once a defined minimum quantity has been reached. The card is then placed
on, say, a Kanban board signaling the need for a stock replenishment order. The supplier,
responsible, schedules its production and replenishes the Kanban location. The minimum
stock quantity that triggers the replenishment request needs to assure that the remaining on
hand inventory is sufficient to meet the demand until the replenishment stock arrives.

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Advantages of Kanban:

• Optimized inventory
• Reduced waste and scrap
• Helps to identify problems with production quickly

Disadvantages of Kanban:

• Rush in demand and not suitable for industries where demand fluctuates
• Not suitable for short production runs and highly variable products
• Breakdown in Kanban system results in the entire line shutting down

4.1.3.3 Kaizen

Kaizen was created in Japan following World War II. The word Kaizen means
‘continuous improvement’. It is originated from the Japanese words ‘Kai’ meaning ‘change’
and ‘Zen’ meaning ‘for better’. Kaizen means improvement, which is an ongoing, never ending
in nature and by involving everyone from managers to workers. To support the higher
standards, Kaizen also involves providing the training, materials and supervision that is
needed for employees to achieve the higher standards and maintain their ability to meet
those standards on an ongoing process.

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Benefits of Kaizen:

• Involves every employee in making small, incremental changes.

• Focuses on identifying problems at their source, solving them at their source and changing
standards to ensure the problem stays solved.
• Continual small improvements result in improved productivity, quality, safety, faster
delivery, lower costs and greater customer satisfaction.
• Reduces wastes in areas such as inventory, waiting times, transportation, over production
and in processes.

4.1.3.4 P-D-C-A Cycle:

P-D-C-A stands for Plan-Do-Check-Act. It is also known as Deming cycle and is widely
used for problem solving with never ending cycle of improvement. In P-D-C-A cycle, one
improvement test result serve as the take-off point for another continuous improvement
study.

Process of P-D-C-A:

• Plan:- Identify the challenges in improvement and then plan the test of the change and
desired results.
• Do:- Put the plan into practice. Then test the change by collecting data.
• Check:- Study the results thus obtained.
• Act:- Take actions to standardize or improve the process.

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Benefits of P-D-C-A Cycle:

• Stimulates continuous improvement of processes.

• Prevents the process from recurring mistakes.
• Provides a standardized method to achieve continuous improvement.

4.1.3.5 Poka-Yoke:

‘Poka-Yoke’ means ‘mistake proofing’, name coined by Japanese Industrial Engineer,

Dr. Shigeo Shingo. Poka-Yoke helps people and processes to work tight at the very first time
(by avoiding possibilities of mistakes). These techniques can drive defects out of products and
processes and substantially improve quality and reliability. Poka-Yoke is simple and failsafe
mechanisms to avoid incorrect installations, mistakes and mix-ups or the supply of faulty
components.

Uses:

• Missing out/forgetting steps

• Processing/operating mistakes
• Faulty/missing components
• Installation/set-up errors

Advantages:

• Elimination of errors and improved quality

• Simplified and improved housekeeping
• Increased safety
• Lower costs
• Lower skill requirements

4.1.3.6 Quality Circles:

It is defined as a small group of employees of the same work area, doing similar work
that meets voluntarily and regularly to identify, analyze and resolve work related problems.
Members of quality circles are met periodically, and proposed solutions are presented to the
management for consideration, approval and implementation. A senior officer from the same

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department (workshop) is nominated as facilitator who guides all the allied activities. A
management committee at senior level is also formed, which overview the progress of quality
circles. Training of members and facilities are given to improve the efficiency of the
programme. Quality circles help to build mutual trust and greater understanding between
management and workers

Characteristics of Quality Circles:

• A form of participative management

• Helps to identify and resolve work related problems for improving quality and
productivity
• Memberships of quality circle are voluntary and are led by a supervisor
• The members meet regularly or according to an agreed schedule

Advantages:

• Improve quality, productivity, safety and cost reduction

• Help to build team spirit among workers
• Helps o improve quality of work life and safety of employees
• Helps to identify work related problems and solve them effectively

Disadvantages:

• Chances of errors increase initially and hence, overall productivity may decrease initially
• Over-excitation of some employees who are too excited initially may turn to
disappointment
• Quality circles may threaten traditional authority structure

4.1.3.8 Cellular Manufacturing:

Cellular manufacturing is based on the principle of Group Technology (grouping of parts that
have similar processing requirements, known as ‘part family’). Here, the machines are
arranged in an efficient sequence that allows a continuous and smooth movement of
inventories and materials to produce products from start to finish in a single process flow,
while ensuring minimal transport or waiting time. Thus a cell is created that includes all the
equipment, facilities and human skills required to produce that part family. Cellular

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manufacturing thus allows product variety at reduced costs and response times available with
mass production.

Benefits:

• Part movement, set up time and wait time between operations are reduced resulting in a
reduction of WIP
• Closeness of cell members help to improve communication
• Workers become multi-skilled and more adaptable to the future needs of a business

4.2 Agile Manufacturing:

Agile’ means ‘quickly adaptable’. A strategy that enables companies to adapt quickly
to rapid change in customer needs and unpredictable market place. Applies to environments
where customized, configurable, or specialized order offer a competitive advantage.

4.2.1 Characteristics:

• Products:- Solutions to customer’s individual problems and is centered on customer

perceived value of products
• Rapid response:-The human and physical resources can be quickly reconfigured to adapt
to changing environment and market opportunities
• Flexibility:- Ability of a manufacturing plant to produce variety products efficiently, with
acceptable quality
• Modularity:- Divide a system into smaller parts called modules, which can be
independently created, modified, replaced or exchanged with other modules or between

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 different systems. Modular design is an attempt to combine the advantages of both
standardization and customization
• Information Technology:- Proper IT infrastructure drives agile manufacturing and ensures
that employees are updated with every managerial decision and technological
advancements

4.2.2 Advantages:

• Quick response to customer needs leads to a successful organization

• Highly flexible to respond to changing environments
• Capability to reorganize themselves quickly
• Can easily deal with contingencies, which cannot be predicted
• Low inventories and associated costs
• Low lead time and flexible manufacturing quantities
• Encourages creativity in employees, thus leading to high job satisfaction
• Superior product quality can be maintained

4.2.3 Disadvantages:

• High capital investment required for the flexibility in the production and assembly sections
• Highly trained employees are demanded
• Continuous need to keep the machinery and workers up to date to new technologies, and
to keep the company competitive due to the short life of product life cycle
• Costs associated with maintenance to keep the machinery in good working conditions

4.2.4 Conceptual Framework of Agile Manufacturing:

• Physically distributed partners:- The development of modern transportation facilities

widened both the market and production all round the globe. The physically distributed
partner enterprises located all over the world contributes its core competency to take
advantage of a specific business opportunity

• Rapid partnership:- Improving the responsiveness of a firm to a changing market, requires

a shared partnership between firms. The advent the Internet, Electronic Data Interchange
(EDI) have greatly facilitated the task of forming partnerships quickly

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• Concurrent Engineering:- A term used to describe processes or activities proceed in a
parallel, coordinated fashion. To achieve agility, every team member in every company
must do everything relevant to a project concurrently to the extent possible

• Integrated business information systems:- Communication of information are central to

agility. The companies, to have an efficient agile system, must be well aware of
implementing a well computer assisted logistics management system

• Rapid prototyping:- A prototype is a preliminary model of a system solution that end users
and/or designers can interact with and analyze. The prototype is constructed quickly,
cheaply, ideally, within days or weeks

• Virtual Organization:- A reconfigurable global networked organization which shares

information, knowledge, skills and other resources and processes to meet the fast
changing market needs. People in the virtual organization work together by
communicating by phone, email and the internet, rather than going to a regular office to
work. Virtual organizations can respond quickly to business opportunities

4.2.5 Approaches to enhance ability in manufacturing:

Companies seeking to be agile have to try to organize (the production system)

themselves based on the tactical approaches.

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• Master mass customization:- A company engaged in mass customization can excel at
designing products that are readily customizable and can go for product variety
• Design modularity:- The product should be designed so that it consists of several modules
that can be readily assembled to make a finished item.
• Use reconfigurable manufacturing systems:- Must be able to changeover their
manufacturing systems to exploit new market opportunities.
• Frequent new product introduction:- Must be able to maintain a high rate of new product
introductions. Even for products that are successful in the marketplace, the company
introduces new models to remain competitive
• Design products that are upgradable and reconfigurable:- Ability to offer the customers
to upgrade and reconfigure the purchased product without drastic and time consuming
redesign effort
• Pricing by customer value:- The price of the product is determined according to its value
to the customer rather than according to its own cost

4.2.6 Managing people in Agile Organization:

Developing effective person-to-person relationships is a critical component in

achieving agility in organizations, the relationships can be internal or external:

• Internal Relationship:- Exist within the firm between coworkers and between supervisors
and subordinates. To achieve agility (i) make the work organization adaptive; (ii) provide
cross functional training; (iii) encourage rapid partnership formation and (iv) provide
effective electronic communications capability
• External relationship:-Exist between the company and external suppliers, customers and
partners. To achieve agility (i) Establish interactive, proactive relationships with customers;
(ii) Provide rapid identification and certification of suppliers; (iii) To install effective
electronic communications and commerce capability and (iv) To encourage rapid
partnership formation for mutual commercial advantage

4.2.7 Barriers to Agile Manufacturing:

• Lack of top management support and commitment

• Fear and resistance to organizational change
• Inappropriate measurement of qualitative benefits and agility

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• Lack of methodologies to enhance agility
• Insufficient training, education and rewards system
• Unavailability of appropriate technology

4.2.8 LEAN V/S AGILE MANUFACTURING:

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4.2.9 Mass v/s Agile Manufacturing:

Mass Production Agile Manufacturing

Standardized products Customized products

Long market life expected Short market life expected

Production based on forecast Production based on order

Pricing by production cost Pricing by customer value

4.2.10 Traditional v/s Lean Manufacturing:

Traditional Manufacturing Lean Manufacturing

Push system based on Pull system scheduled by customer

forecasting requirements

Large batch size Small batch size

Large inventory Small inventory

High WIP Low WIP

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 MODEL QUESTIONS

1. Enumerate the objectives and key principles of lean manufacturing paradigm.

2. Explain the basic elements of lean manufacturing.
3. What are the 5S principles?
4. Explain the concept of lean manufacturing.
5. How cellular manufacturing is implemented?
6. Explain value stream mapping.
7. Compare traditional and lean manufacturing paradigms.
8. List and describe any ten components of agile manufacturing system.
9. Explain with a sketch, the road map to agile manufacturing to achieve business need
10. Explain the conceptual frame work for agile manufacturing.

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