LEAN MANAGEMENT

 Lean management is a new philosophy of operations

management that provides a set of tools & techniques to
compete in the marketplace
 It is an organizational mechanism for defining value &
thereby creating a value stream for customers
 Lean management is based on the premise that by
identifying waste in any system and removing it, it is
possible to create a value stream for products & services
 The concepts to be considered include: value added
[VA], non value added [NVA] & necessary but non value
added activities [NNVA].
LEAN PRODUCTION
 Lean production or lean manufacturing
 Lean was generated from the Just-in-time (JIT) philosophy of
continuous and forced problem solving
 Lean manufacturing is the production of goods using less of
everything compared to traditional mass production: less
waste, human effort, manufacturing space, investment in tools,
inventory, and engineering time to develop a new product
 Lean production is an approach to management that focuses
on cutting out waste, whilst ensuring quality.
 This approach can be applied to all aspects of a business –
from design, through production to distribution. 
 Lean production aims to cut costs by making the business
more efficient and responsive to market needs.
 This approach sets out to cut out or minimise activities
that do not add value to the production process, such as
holding of stock, repairing faulty product and
unnecessary movement of people and product around the
business.
 Lean production originated in the manufacturing plants
of Japan, but has now been adopted well beyond large
and sophisticated manufacturing activities
 It is an organizational mechanism for defining value &
thereby creating a value stream for customers
OBJECTIVES OF LEAN PRODUCTION

 Doing the simple things well

 Doing things better
 Involving employees in the continuous process of
improvement
 and as a result, avoiding waste
 Waste: any process or set of activities that does not add
value as perceived by customer is called as waste. It
consists of both NVA & NNVA

 Value stream : all activities that need to be performed

[VA & NNVA] from the time the customer order is
received to the time the order is fulfilled make up the
value stream for an organization
SOME COMMON SOURCE OF WASTE IN
PRODUCTION UNITS
category Manufacturing organizations Service organization
Inventory related waste Accumulating inventory Overflowing ‘in baskets’
Waiting for material to work Duplication of work
on Excessive paper works
Temporary storage Incomplete information
Parts shortage
Stock for verification
Waste due to process Defects and rework Payments not made on time
Machine breakdowns Wrong service delivery
Watching the machine run proposals not completed on
time
Customers orders taking too
long to be filled
Complicated office layout
Waste due to planning Looking for tools Poorly planned meetings
Carrying heavy pieces Documents handled many
Transferring parts over long times before a decision is taken
distance Teams with incomplete or no
overproduction directions
7 WASTES
 Overproduction – producing more than the customer orders
or producing early. Inventory of any kind is usually waste.
 Queues – idle time, storage, and waiting are wastes

 Transportation – moving material between plants, between

work centres, and handling more than once is waste
 Inventory – unnecessary raw material, work-in-process
(WIP), finished goods, and excess operating supplies
 Motion – movement of equipment or people

 Over processing – work performed on product that adds no

value
 Defective product – returns, warranty claims, rework and
scrap
The key aspects of lean production are:
 Time based management

 Simultaneous engineering

 Just in time production (JIT)

 Cell production

 Kaizen (Continuous improvement)

 Quality improvement and management

 
HISTORY
 It started in Japan at the Toyota Motor Company

 Lean production is sometimes called the Toyota

Production System (TPS) because Toyota Motor
Company’s Eiji Toyoda and Taiichui Ohno are given
credit for its approach and innovations
TECHNIQUES OF LEAN PRODUCTION

 5S
 Single Minute Exchange of Dies
 Kanban
 Cellular Manufacturing
 5s - Strategy for creating a well organized, smoothly
flowing manufacturing process

 Single Minute Exchange of Dies (SMED)- Method that

focuses on the rapid conversion from manufacturing one
product to the next
 SMED needs to be treated as a constant improvement
program
 Setup times can not be minimized overnight
 Continuous evaluation and exploration of further
improvements is absolutely necessary
 Kanban- A system that uses replenishment signals to
simplify inventory management

Signals (usually cards) hold product details like What to make,

when to make it, how much to make, and where to send it

 Cellular Manufacturing - Dividing the manufacture of

products into semi-autonomous and multi-skilled teams
known as work cells

Another important factor is

 People -Transition to Lean is difficult since a company must
build a culture where learning and continuous improvement
are the norm. Success of lean requires the full commitment
and involvement of all employees and of the company’s
suppliers
LEAN PRINCIPLES
VALUE

 In terms of Lean, the value should always be considered from a

customer perspective
 value is what customers really want, along with the price they are
willing to pay
 The Lean approach begins with a detailed understanding of what
value the customer assigns to product and services. This is what
determines what the customer will pay.
 Establishing value allows organizations to create a top-down
target price. The cost to produce the products and services is then
determined. The organization focuses on eliminating waste so that
they can deliver the value the customer expects at the highest
level of profitability.
.
THE VALUE STREAM
 The value stream is the totality of the product’s entire life-cycle from the raw materials
through to the customer’s use of, and eventual disposal of, the product.
 In order to eliminate waste, there must be an accurate and complete understanding of
the value stream.
 Processes are examined to determine what value is added. Steps, materials, features,
and movement that do not add value are eliminated. According to Womack and
Jones, value stream mapping will almost always reveal three types of muda. (Muda is
Japanese for waste).
 Many steps will be found to unambiguously create value.
 Many other steps will be found to create no value but to be unavoidable with current
technologies and production assets.
 Many additional steps will be found to create o value and be immediately avoidable

FLOW
 Understanding flow is essential to the elimination of waste. If the value stream stops
moving forward at any point, waste is the inevitable by-product.
 The lean manufacturing principle of flow is about creating a value chain with no
interruption in the production process and a state where each activity is fully in step
with every other.
PULL
  pull system is a lean manufacturing strategy used to reduce waste in the production
process. In this type of system, components used in the manufacturing process are only
replaced once they have been consumed so companies only make enough products to
meet customer demand.
 The lean principle of pull helps ensure flow by making sure that nothing is made ahead
of time, building up work-in-process inventory and stopping the synchronized flow.
 Rather than using the traditional American manufacturing approach of pushing work
through based on a forecast and schedule, the pull approach dictates that nothing is
made until the customer orders it. This requires a great deal of flexibility and short
design to delivery cycle times. It also requires an efficient way of communicating what
is needed to each step in the value chain.

PERFECTION
 Lean practitioners strive to achieve nothing short of perfection. The march toward
perfect process happens step by step as continuous improvements address root
causes of quality problems and production waste. The relentless pursuit of perfection is
what drives users of the approach to dig deeper, measure more, and change more often
than their competitors.
BASIC LEAN TOOLS
 5S
 Continuous flow
 Heijunka (Level Scheduling)
 Jidoka (Automation)
 Just In Time (JIT)
 Kaizen ( Continuous Improvement)
 Poka Yoke (Mistake Proofing)
 Value stream mapping (VSM)
 Key Performance Indicator (KPI)
 Visual Management
 Kanban (Pull System

[also include techniques of lean]

5S
The 5 ‘S’ includes
 Sort (Eliminated what is not needed)

 Set to order [Organize what is needed]

 Standardize (Standardize the best practices)

 Sustain(Regularly Follow the Standards)

 Shine (Clean and organize the work area)

Advantages-
 Helps in saving time

 Saves time in looking for the items/tools.

 Improves workplace condition

 Clean, spacious work centres helps in increasing safety.

 Helps in increasing productivity

 Unnecessary items and dirt get in the way of employees and negatively impact
productivity. This can be avoided
 Helps in eliminating other waste like Waste of motion and Waste of waiting 
CONTINUOUS FLOW
 Work-in-process smoothly flows through production cycle with
minimal (or no) buffers between steps of the manufacturing process.

 Advantages
 Helps in establishing the flow
 Reduces batching, establishes process flow, minimising waiting
between steps, improves quality and reduces lead time.
 Helps in eliminating
 Waste of inventory
 Waste of waiting
 Waste of transportation
 Helps in increasing the profit
 Continuous flow in production cycle helps in increasing the
production with minimal waste which in turn increases the profit
HEIJUNKA (LEVEL SCHEDULING)
 Heijunka means sequencing, or smoothing of production.
 By multiplying the tasks, [and distributing them better, and by standardising
them,] better use can be made of the working time available for creating value.
 Work is appropriately distributed and no individual has too much or too little
work

Advantages-
  Helps in monitoring and load balancing

 Provides a performance dashboard to help monitor the work at all levels in

real time.
 Helps in better utilization of resources

 The use of resources (factories, shop floor, machinery) has to be maximised

by improving their use so that more is produced with existing resources.
 As it help in eliminating different types of wastes, It helps in standardising the
work
JIDOKA (AUTONOMATION)
 Built in quality at the source
 It is a tool that provides machine and operators the ability to automatically stop
the work if any abnormality occurs.
 Jidoka is based on
 Don’t accept defects
 Don’t make defects
 Don’t pass defects on

 Advantages-
 Eliminates waste of defect
 It prevents defective products from passing to the next process.
 Helps in saving time and waste of raw material.
 Ensures client/customer satisfaction
 Helps in maintaining the quality of the product.
 Reduces labor cost
 Workers can frequently monitor multiple work stations at a time.
 Reduces lead time/ Turn around time
JIT
 Production as per the customers demand
 The production is done as per the customer demand and not as per
the projected demand.
 Relies on many lean tools, such as Continuous Flow, Heijunka,
Kanban, Standardized Work

Advantages-
 Effective in reducing the Inventory level

 As the production is done after receiving the customer order,

inventory storage is not required. Hence, reduces the storage space.
 Helps is Improving the cash flow

 As less cash is invested in inventory more of liquid cash is available.

 Helps in eliminating like Waste of overproduction , Waste of Idle

time and Waste of Inventory 
KAIZEN(CONTINUOUS IMPROVEMENT)
 . Kaizen is the Japanese word for "improvement"
 Kaizen is a concept referring to business activities
that continuously improve all functions and involve all
employees from the CEO to the assembly line workers.

Advantages
 Helps in assigning responsibility/ segregation of duties

 Helps in providing strategy where employees work together

proactively to achieve regular, incremental improvements in the
manufacturing process.
 Helps in eliminating wastes

 Combines the collective effort of the employees of a company

to create a continues process of eliminating waste. 
POKA YOKE (MISTAKE PROOFING)
Ensure that the process is error free
 Make the process in such a way that it is impossible to make
errors.
 Use low cost ways, reliable devices or innovation for
preventing or detecting errors by people or system in a process. 

Advantages
 Helps in eliminates waste as the defects are limited

 Helps in detecting and preventing the occurrence of defects in

a process.
 in case of manufacturing processes, It helps in detecting defects
in products and prevents their further processing
VALUE STREAM MAPPING (VSM)
 It is the process of Material and information flow mapping
 Commonly used in manufacturing, healthcare, software &
product development, logistics, supply chain, and service
industries
Advantages
 Helps in mapping the flow of the process

 Helps in mapping the current and future state of value stream.

 Helps in streamlining the process

 Helps to visualize the entire process, identifying bottlenecks

where the processes can be streamlined or improved.
 Helps in eliminating the wastes

 Provides a read map to find the non value added activities or

wastes which can be eliminated from the process
KEY PERFORMANCE INDICATORS (KPI’S)
KPI can be defined as the Metrics designed to track the
progress towards the goals of the organization by
assessing, analyzing and tracking processes

The best manufacturing KPI’s can be –

 Production per hour/per batch

 Waste of raw material per hour/ per batch

 Rate of production ( slow rate will reduce the output &

increased rate may lead to quality defects)
 Performance targets (based on production, rate and
quality)
 Overall equipment effectiveness (OEE)

 Down time/ changeover time

Advantages-
 Helps in achieving the organization goal

 Organisations use KPI’s to assess, analyze and track the

performance of the process.
 Helps in driving the desired behavior

 Helps in training employees to work in a KPI-driven

environment to achieve the strategic objectives.
 Helps in exposing and eliminating the wastes

 KPI’s helps in keeping a close eye on the production

cycle, quality, wastes and downtime
VISUAL MANAGEMENT
 Process of displaying critical information such as KPI’s relating to
production output, efficiency, quality and downtime on the
production floor.

Advantages-
  Helps in driving the KPI’s

 It drives productivity throughout the organization by increasing

efficiency, quality and uptime.
 Helps in increasing the performance/productivity

 It provides information to the supervisors in real time to better

monitor the performance and the area of improvements.
 Helps in increasing the production and profit

 Production is increased by tracking the productivity, wastes and

down time, which in turn helps in controlling the operation cost,
labour cost, inventory cost and increasing the overall profit. 
KANBAN (PULL SYSTEM)

 Pull system follows the concept of ‘Replacing only what has

been consumed and only what is immediately deliverable’.

 It is to have a measured queue of materials (raw materials,

work-inprocess, components, whatever) ready to be “pulled”
by the next process step. After the materials are “pulled” a
signal is sent to the preceding process step to replace what
was taken.
Advantages
 Helps in controlling flow of cash [ Less cash is required as
the inventory is not stored in bulk].
 Helps in preventing overproduction and over-ordering

 Replenish only what has been used, and reorder based on

rate of consumption, delivery frequency, and minimum
order quantity.
 Increase customer satisfaction

 High quality of goods is achieved as the goods are

produced as per the customer order
 Helps in reducing

 overall inventory

 work in process (WIP)

 order turnaround time/lead time

STATISTICAL QUALITY CONTROL
CONCEPTS
Statistical techniques are used in identifying the variation
in the process that ultimately affect the quality of final
product/service. The methods include
 control chart

 Acceptance plan
CONTROL CHARTS
 used to monitor quality
 concept of all control chart is that different
measurement criteria are plotted on the chart
with a central line and 2 control limits above &
below central value
 It the noted attribute fall between control limit,
the process is said to be in control
 If it falls outside limit, process is out of control
& remedial actions should be taken
ACCEPTANCE PLANS
 Used to verify the quality of raw materials,
purchased parts & components & finished goods
 It is used to verify both incoming raw materials
& outgoing finished materials quality
 on the basis of acceptance plan, a manager can
accept or reject a lot
 If the lot of raw material is accepted, it is placed
in the inventory for use and if rejected, it is
returned to the supplier
 The key information is an acceptance plan is the
criteria for accepting or rejecting a lot
Acceptance plan and acceptance sampling can be
described using
 average outgoing quality (AOQ) curve

 operating characteristics (OC) Curve

AOQ CURVE
 AOQ indicates the average defects in the lot and all
defects/ defective items have been removed
 as the proportion of defective items in the lot increases,
the chance or probability of rejecting such lots increases
 these rejected lots are subjected to 100% inspection. As
a result of more lots being subjected to 100 % inspection
AOQ level is improved
 It is a curve plotted against percent defectives
The curve takes an upward trend as the number
of defective units increases. The point ‘P’
indicates the maximum level for AOQ
 If the defectives exceed this critical point (P),
the entire lot is rejected & every item in the lot is
inspected. As a result of increased inspection, the
defectives in the outgoing lot decreases thus
improving the AOQ
OC CURVE
 Inspection of all items in a lot is not practical or feasible
 Even after drawing a random sample from a lot, one
cannot be certain about the quality of items in the lot
 OC curve is an important feature of acceptance plan. It
shows how well an acceptance plan differentiates
between good & bad lots
 The two errors that may occur includes type I and type
II error
 OC curve are not used to make day to day
decision about accepting or rejecting lots. They
show a particular acceptance plan discrimination
between good & bad lots
 Acceptance sampling is an important field of statistical
quality control that was popularized by Dodge and
Romig and originally applied by the U.S. military to the
testing of bullets during World War II. If every bullet
was tested in advance, no bullets would be left to ship.
If, on the other hand, none were tested, malfunctions
might occur in the field of battle, with potentially
disastrous results.

 Acceptance sampling is "the middle of the road"

approach between no inspection and 100% inspection.
There are two major classifications of acceptance plans:
by attributes ("go, no-go") and by variables. The
attribute case is the most common for acceptance
sampling
 A point to remember is that the main purpose of acceptance
sampling is to decide whether or not the lot is likely to be
acceptable, not to estimate the quality of the lot.

 Acceptance sampling is employed when one or several of the

following hold: 
Testing is destructive
The cost of 100% inspection is very high
100% inspection takes too long

Quality Control is not the same as Acceptance Sampling. The latter

depends on specific sampling plans, which when implemented
indicate the conditions for acceptance or rejection of the immediate
lot that is being inspected. The former may be implemented in the
form of an Acceptance Control Chart. The control limits for the
Acceptance Control Chart are computed using the specification
limits and the standard deviation of what is being monitored.
ACCEPTANCE SAMPLING BY VARIABLES &
ATTRIBUTES
 Attribute plans are generally easier to use than variables plans.
A sample of n units is selected randomly from a lot of N units.
If there are c or fewer defectives, accept the lot. If there are
more than c defectives, reject the lot. For example, suppose
you have a shipment of 10,000 bolts. You will inspect 89 of
them. If there are 0, 1, or 2 defective bolts, then you may
accept the shipment. If there are more than 2 defectives, then
reject the entire lot of bolts.
 For variables sampling plans, you can only examine one
measurement per sampling plan. For example, if you need to
inspect for wafer thickness and wafer width, you need two
separate sampling plans. Variables sampling plans assume that
the distribution of the quality characteristic is normal.
However, the main benefit from using variables data is that a
variables sampling plan requires a much smaller sample size
than an attributes sampling plan.
SEVEN TOOLS OF ANALYSIS
For analysis & improving process quality, quality control
methods are used. There are 7 established methods for
this purpose such as
 check sheets

 Flow charts

 Histogram

 Pareto analysis

 Fish bone diagram

 Control charts

 Scatter diagram
CHECK SHEET
 The check sheet is a form (document) used to collect
data in real time at the location where the data is
generated. The data it captures can be quantitative or
qualitative.
 When the information is quantitative, the check sheet is
sometimes called a tally sheet.
 simple data recording device.
 systematically record and compile data from sources.
 HISTOGRAM
A histogram is a bar graph that shows frequency data. It is
used to graphically summarize and display the
distribution and variation of a process data set. It
provides the easiest way to evaluate the distribution of
data

 PARETO CHART
The Pareto chart can be used to display categories of
problems graphically so they can be properly prioritized.
A Pareto chart or diagram indicates which problem to
tackle first by showing the proportion of the total
problem that each of the smaller problems comprise.
This is based on the Pareto Principle: 20% of the sources
cause 80% of the problem.
HISTOGRAM REPRESENTATION
CAUSE AND EFFECT OR FISHBONE DIAGRAM.
 One analysis tool is the Cause and Effect or Fishbone diagram.
These are also called Ishikawa diagrams because Kaoru Ishikawa
developed them in 1943. They are called fishbone diagrams since
they resemble one with the long spine and various connecting
branches.

advantages
 Helps determine the root causes of a problem or quality characteristic using
a structured approach.
 Encourages group participation and utilizes group knowledge of the
process.
 Uses an orderly, easy-to-read format to diagram cause and effect
relationships
 Indicates possible causes of variation in a process.
 Increases knowledge of the process by helping everyone to learn more
about the factors at work and how they relate.
CONTROL CHARTS
 Control charts, also known as process-behavior charts, in
statistical process control are tools used to determine if a
manufacturing or business process is in a state of statistical
control.
SCATTER DIAGRAM
 A scatter diagram shows the correlation between two
variables in a process.
 The scatter diagram graphs pairs of numerical data, with
one variable on each axis, to look for a relationship
between them.
 If the variables are correlated, the points will fall along a
line or curve. The better the correlation, the tighter the
points will hug the line.
FLOWCHART
 A flowchart is a formalized graphic representation of a
logic sequence, work or manufacturing process,
organization chart, or similar formalized structure.

 Symbols commonly used:

 Arrows
 Rectangular Box
 rhombus
NEW SEVEN ANALYSIS TOOLS
The new product development does require wide range of
data and those cases in which all the data are not
available, the new 7 management tools find useful. The
tools are also useful in arranging verbal data into
meaningful form that is suitable for decision making.
The tools are used in following areas
 product quality improvement

 Cost reduction

 New product development

 Policy development
 Affinity Diagrams
 Relations Diagrams
 Tree Diagrams
 Matrix Diagrams
 Arrow Diagrams
 Process Decisions Program Charts
 Matrix Data Analysis
HISTORY
 Committee of J.U.S.E. - 1972
 Aim was to develop more QC techniques with design
approach
 Work in conjunction with Basic Seven Tools
 New set of methods (N7) – 1977
 Developed to organize verbal data diagrammatically.
 Basic 7 tools effective for data analysis, process control,
and quality improvement (numerical data)
 Used together increases TQM effectiveness
BENEFITS
Organize verbal data Change proactively
Generate ideas  Get things right the first time
Improve planning Assess situations from various
Eliminate errors and omissions angles
Explain problems intelligibly Identifies problems
 Secure full cooperation Gives importance to planning
Persuade powerfully Stresses the importance of the
Clarify the desired situation process
Prioritize tasks effectively Prioritizes tasks
Proceed systematically  Encourages everyone to think
Anticipate future events Systematically
RELATIONS TO “OLD” TOOLS
 Similarities:
 Both are graphics rather than language based
 Helps in elements analyzing

 Universal understanding (pictures)

 Differences:
 New tools are more relational and network oriented
 New tools may take more practice to develop proficiency
 They can and should be used together
AFFINITY DIAGRAMS
 It is used for Pinpointing the Problem in a Chaotic Situation and
Generating Solution Strategies

 Gathers large amounts of intertwined verbal data (ideas, opinions, issues)

 Organizes the data into groups based on natural relationship
 Makes it feasible for further analysis and to find a solution to the problem

 Advantages:
 Facilitates breakthrough thinking and stimulate fresh ideas
 Permits the problem to be pinned down accurately
 Ensures everyone clearly recognizes the problem
 Incorporates opinions of entire group
 Fosters team spirit
 Raises everyone’s level of awareness
 Spurs to the group into action
CONSTRUCTING AN AFFINITY
DIAGRAM
GROUP METHOD APPROACH
 Select a topic
 Collect verbal data by brainstorming
 Discuss info collected until everyone understands it
thoroughly
 Write each item on separate data card
 Spread out all cards on table
 Move data cards into groups of similar themes (natural
affinity for each other)
 Combine statements on data cards to new Affinity statement
 Make new card with Affinity statement
 Continue to combine until less than 5 groups
 Lay the groups outs, keeping the affinity clusters together
RELATIONS DIAGRAMS
 For Finding Solutions Strategies by Clarifying Relationships
with Complex Interrelated Causes
 Resolves tangled issues by unraveling the logical connection
 Allows for “Multi-directional” thinking rather than linear
 Also known as Interrelationship diagrams

Advantages
 Useful at planning stage for obtaining perspective on overall
situation
 Facilitates consensus among team

 Assists to develop and change people’s thinking

 Enables priorities to be identified accurately

CONSTRUCTING A RELATIONS
DIAGRAM
 Express the problem in form of “Why isn’t something
happening?”
 Each member lists 5 causes affecting problem
 Discuss info collected until everyone understands it thoroughly
 Write each item on a card
 Move cards into similar groups
 Asking why, explore the cause-effect relationships, and divide
the cards into primary, secondary and tertiary causes
 Connect all cards by these relationships
 Further discuss until all possible causes have been identified
 Review whole diagram looking for relationships among causes
 Connect all related groups
TREE DIAGRAMS
 For Systematically Pursuing the Best Strategies for
Attaining an Objective
 Develops a succession of strategies for achieving objectives
 Reveals methods to achieve the results.
 Also known as Systematic diagrams or Dendrograms

Advantages:
 Systematic and logical approach is less likely that items are
omitted
 Facilitates agreement among team

 Are extremely convincing with strategies

CONSTRUCTING A TREE DIAGRAM
 Write Relations Diagram topic (Objective card)
 Identify constraints on how objective can be achieved
 Discuss means of achieving objective (primary means,
first level strategy)
 Take each primary mean, write objective for achieving it
(secondary means)
 Continue to expand to the fourth level
 Review each system of means in both directions (from
objective to means and means to objective)
 Add more cards if needed
 Connect all levels
MATRIX DIAGRAMS
 For Clarifying Problems by “Thinking Multidimensionally”
 Consists of a two-dimensional array to determine location
and nature of problem
 Discovers key ideas by relationships represented by the cells
in matrix.

Advantages
 Enable data on ideas based on extensive experience

 Clarifies relationships among different elements

 Makes overall structure of problem immediately obvious

 Combined from two to four types of diagrams, location of

problem is clearer
CONSTRUCTING A MATRIX DIAGRAM

 Write final-level means from Tree diagram forming vertical axis

 Write in Evaluation categories (efficacy, practicability, and rank) on
horizontal axis.
 Examine final-level means to identify whom will implement them
 Write names along horizontal axis
 Label group of columns as “Responsibilities”
 Label right-hand end of horizontal axis as “Remarks”
 Examine each cell and insert the appropriate symbol:
 Efficacy: O=good, E=satisfactory, X=none
 Practicability: O=good & P=satisfactory, X=none
 Determine score for each combination of symbols, record in rank column
 Examine cells under Responsibility Columns, insert double-circle for
Principal and single-circle for Subsidiary
 Fill out remarks column and record meanings of symbol
ARROW DIAGRAMS
 For Working Out Optimal Schedules and Controlling Them Effectively
 Shows relationships among tasks needed to implement a plan
 Network technique using nodes for events and arrows for activities
 Used in PERT (Program Evaluation and Review Technique) and CPM
(Critical Path Method)

Advantages
 Allows overall task to viewed and potential snags to be identified before
work starts
 Leads to discovery of possible improvements

 Makes it easy to monitor progress of work

 Deals promptly with changes to plan

 Improves communication among team

 Promotes understanding and agreement among group

CONSTRUCTING AN ARROW DIAGRAM
 From strategies on Tree diagram, select one (Objective of
Arrow Diagram)
 Identify constraints to Objective
 List all activities necessary to achieving Objective
 Write all essential activities on separate cards
 Organize cards in sequential order of activities
 Remove any duplicate activities
 Review order of activities, find sequence with greatest
amount of activities
 Arrange parallel activities
 Examine path, number nodes in sequence from left to right
 Record names and other necessary information
PROCESS DECISIONS PROGRAM
CHARTS
 For Producing the Desired Result from Many Possible Outcomes
 Used to plan various contingencies
 Used for getting activities back on track
 Steers events in required direction if unanticipated problems occur
 Finds feasible counter measures to overcome problems

Advantages:
 Facilitates forecasting

 Uses past to anticipate contingencies

 Enables problems to pinpointed

 Illustrates how events will be directed to successful conclusion

 Enables those involved to understand decision-makers intentions

 Fosters cooperation and communication in group

 Easily modified and easily understood

CONSTRUCTING AN PDPC
 Select a highly effective, but difficult strategy from the Tree diagram
 Decide on a goal (most desirable outcome)
 Identify existing situation (Starting point)
 Identify constraints of objective
 List activities to reach goal and potential problems with each activity
 Review list. Add extra activities or problems not thought of
previously
 Prepare contingency plan for each step and review what action is
needed if step is not achieved
 Examine carefully to check for inconsistencies and all important
factors are included
 Examine to make sure all contingency plans are adequate
MATRIX DATA ANALYSIS [PRINCIPAL
COMPONENT ANALYSIS]
 Technique quantifies and arranges data presented in Matrix
 Based solely on numerical data
 Finds indicators that differentiate and attempt to clarify
large amount of information

Advantages:
 Can be used in various fields (market surveys, new product
planning, process analysis)
 Can be when used when Matrix diagram does not give
sufficient information
 Useful as Prioritization Grid
CONSTRUCTING A MATRIX DATA
ANALYSIS
 Determine your goal, your alternatives, and criteria for
decision
 Place selection in order of importance
 Apply percentage weight to each option
 Sum individual ratings to establish overall ranking (Divide
by number of options for average ranking)
 Rank order each option with respect to criterion (Average
the rankings and apply a completed ranking)
 Multiply weight by associated rank in Matrix
 Result is Importance Score
 Add up Importance Scores for each option
 Rank order the alternatives according to importance
 DEVELOPMENT OF SIX SIGMA
 Motorola launched the Six Sigma program in the 1980s
 General Electric initiated the implementation of Six Sigma in
the mid-1990s
 Organizations in all industries have applied Six Sigma in recent
years
 Six Sigma has replaced TQM and BPR as the key strategy for
quality improvement
 DEFINITIONS

s – Standard Deviation, a measure of variability

 Six Sigma – A quality improvement philosophy that focuses on
eliminating defects through reduction of variation in a process
 Defect – A measurable outcome that is not within acceptable
(specification) limits
 TQM VERSUS SIX SIGMA

TQM Six Sigma

A management philosophy A philosophy that focuses on
of quality improvement defect reduction and cost
reduction
Encourages involvement of Relies on a selected group of
all employees highly-trained employees
Senior management Senior management is held
provides direct support accountable for results
 KEY SUCCESS FACTORS FOR
SIX SIGMA
 Committed leadership from top management
 Integration with existing initiatives, business strategy, and
performance measurement
 Process thinking

 Disciplined customer and market intelligence gathering

 A bottom-line orientation and continuous reinforcement and

rewards
 Training
 SIX-SIGMA METRICS –
MEASURING DEFECT RATE

 Defects per unit (DPU) = number of defects discovered  number

of units produced
 Defects per million opportunities (DPMO) = number of defects
discovered  opportunities for error  1,000,000
 ESTIMATING DEFECT RATE – PROCESS
CAPABILITY INDEX (CP)
 USL/LSL : Upper & Lower Specification Limit
 Cp = (USL –LSL) / (6s)
 Example : Time to process a student loan application (Standard =
26 working days)
 Specification Limits : 20 to 32 working days

s : 2 working days
 Cp = (32 – 20)/ (6*2) = 1.00 (Three Sigma)
 Six-Sigma Quality (Cp =2 with
Mean Shifting from the Center)
Ensuring that process variation is half the design
tolerance (Cp = 2.0) while allowing the mean to shift as
much as standard deviations.
 K-SIGMA QUALITY LEVELS

 Six
sigma results in at most 3.4 defects per million
opportunities
DFSS [DESIGN FOR SIX SIGMA]
 DFSS is a business-process management method related to
traditional Six Sigma
  It is used in many industries, like finance, marketing, basic
engineering, process industries, waste management, and
electronics.
 It is based on the use of statistical tools like linear regression
 DFSS has the objective of determining the needs of customers and
the business, and driving those needs into the product solution so
created.
 DFSS is relevant for relatively simple items / systems.
 It is used for product or process design in contrast with
process improvement.
  Measurement is the most important part of most Six Sigma or
DFSS 
GE’S SIX-SIGMA
PROBLEM SOLVING APPROACH/ DMAIC

1. Define
2. Measure
3. Analyze
4. Improve
5. Control
 DMAIC - DEFINE

 Identify customers and their priorities

 Identify business objectives
 Select a six sigma project team
 Define the Critical-to-Quality (CTQ’s) characteristics that the
customers consider to have the most impact on quality
 DMAIC - MEASURE

 Determine how to measure the processes

Identify key internal processes that
influence CTQ’s
Measure the defect rates currently generated
relative to those processes
DMAIC - ANALYZE

 Determine the most likely causes of

defects.
Identify key factors that are most likely
to create process variation.
 DMAIC - IMPROVE

 Identify means to remove causes of the defects.

 Confirm the key variables and quantify the effects on CTQ’s
 Identify maximum acceptable ranges for the key variables and
a system to measure deviations of the variable
 Modify the process to stay within the acceptable ranges
 DMAIC - CONTROL

 Determine how to maintain the improvement

Put tools in place to ensure that the key
variables remain within the maximum
acceptable ranges under the modified process
 ORGANIZATION FOR SIX SIGMA

 Project Champions – project selection and

management, knowledge sharing
 Master Black Belts – instructors, coaches, technical
leaders
 Black Belts – project team leaders and team
members
 Green Belts – project team members, temporary team
members
TOYOTA PRODUCTION SYSTEM
TPS is the system that emphasizes continuous
improvement, respect for people, and standard work
practice

TPS emphasizes employee learning and empowerment in

an assembly-line environment
AIM / OBJECTIVES
 Make what the customer needs, when it is needed, in the right
amount
 Minimize inventories
 Separate machine work from human work and fully utilize both
 Build quality into the process and prevent errors from happening
 Reduce lead-times to allow for rapid, flexible scheduling
 Produce a high mix of low volume products efficiently

Thus it can be stated that the main goals of TPS includes:

i. To design out overburden (Muri)
ii. Smooth Production (Mura)
iii. Eliminate Waste
TERMS USED IN TPS
 Muri (overburden)
 Mura (unevenness)
 Muda (waste)
 TPS is the Operational Blueprint for a Lean Enterprise
 Kaizen- continuous improvement
 JIT
 Kanban- According to Taiichi Ohno, the man credited
with developing JIT, kanban is a means through which
JIT is achieved.
 Jidoka
CONCEPT OF TPS
 The Toyota Production System (TPS) was established
based on two concepts:
 The first is called "jidoka"(which can be loosely
translated as "automation with a human touch") which
means that when a problem occurs, the equipment stops
immediately, preventing defective products from being
produced;
 The second is the concept of "Just-in-Time, " in which
each process produces only what is needed by the next
process in a continuous flow
POKE- YOKE [FAIL SAFING OR FAIL
PROOFING]
 Poke from word ‘poka’ meaning inadvertent errors and yoke
from word ‘yokeru’ meaning to prevent
 Defects in production is due to omitted process or operations,
process errors, missing part/ components, equipment error etc
 A good process design prevents defects from occurring at all
 This is called by Japanese as ‘zero defect program’ or ‘zero
quality control’

 ZQC consist of following

 Source inspection
 100 percent inspection
 Immediate action
Source inspection
Checking for factors that cause errors, not the resulting
defects

 100 percent inspection

The operator inspects the work themselves or inexpensive
poke-yoke device inspect automatically for errors or
defective operation condition

 Immediate action
Stopping operation instantly when a mistake is made
 Poke – yoke is an approach for fail safing or mistake
proofing process using automatic devices or methods to
avoid simple human error
 It was developed by Shigeo Shingo, the japanese
manufacturing engineer who developed ‘Toyota Production
System’
 Its idea is to avoid repetitive tasks or actions that depend on
vigilance / memory and thus to free worker’s mind and time
and thus make them allot time for creative and value added
activity
 It is creative approach but expensive in nature

 2 aspects focused by poke yoke are

i. prediction – or recognizing that a defect is about to occur
ii. Detection – or recognizing that defect has occurred and
thus stopping the process
 Poke yoke in service sector is of 2 types based on the
type of error they are designed to prevent
a. Service error
b. Customer error

 Service error results from the task, treatment or

tangibles of the services
i. Task error- include doing work incorrectly, working
slowly or work in wrong order
ii. Treatment error- occur during the contact between the
server and customer like lack of courteous behavior,
failure to listen / acknowledge
iii. Tangible error- include physical elements like unclean
facilities, dirty uniform, inappropriate temperature
 customer error occur during preparation, the service
encounter or during resolution
Eg of customer error – failure to bring necessary material to
the encounter

 2 types
i. Customer error during encounter- it is due to inattention,
misunderstanding or memory lapse
Eg. In poke yoke implemented system, ATM machine gives
beeper signal to customers to make them remember to
remove ATM cards from machines

ii. Customer error at resolution stage – failure to signal service

inadequecies, to execute post encounetr action etc
Poke yoke Eg. Hotels might enclose small gift certificate to
encourage the guests to provide the feed back
JIDOKA
 Japanese name for automation
 Idea pioneered by Taiichi Ohno, Japanese Quality
Specialist
 It describes the technological features of equipm,ents and
processes that detects problems while system is running. It
should then flag this problem to operator
 In this system, an automatic mechanism stops the entire
production system whenever a defective part is found along
process line
 It adheres to principle of prevention rather than cure
 It helps to save on work allocation time, since worker need
to attend the machine when it stops because of a problem
It involves 2 mechanisms

i. One that detects abnormalities or defects and

ii. Second, that automatically stops the machine or

process when a defect or abnormality is detected
CONCEPT OF ZERO WASTE
MANAGEMENT
 The concept of Zero Waste aims to minimize use of
resources and maximize the ongoing benefits of the
essential value within the waste generated by society.
Definition:
  “Zero Waste” is a philosophy of eliminating the
generation of materials that have no viable or economic
option for end-of-use management
OR
 Zero Waste is a set of principles focused on waste
prevention that encourages the redesign of resource life
cycles so that all products are reuse
Initially we had the concept of 3 Rs are:
 Reduce - reduce generation of waste at the source.

 Reuse - maximise recovery of materials for reuse.

 Recycle - maximise recycling of discarded material.

Now its 5R
 Reduce - Reduce the amount of waste

 Reuse - Reuse resources

 Recycle - Recycle resources

 Refuse - Refused to receive unnecessary objects

 Repair - Repair things for their prolonged use

OBJECTIVES
 Too see a reduction in the amount of waste (in tonnes)
send to landfill (target is 66% resources recovery rate by
2014
 Encourage people to avoid waste, and to reuse and
recycle more
 Awareness on environmental waste issues and behaviour
change on those issues
FOCUS OF ZERO WASTE CONCEPT
 Full awareness among citizens
 Segregated organic waste collection & treatment
 Separate collection for residential & commercial waste
 De-centralized Biogas Generation
 De-centralized Composting
 Savings in transportation cost, great savings in natural resources,
80%
 Generation of green employment
 Will advance the development of resource recovery
 Promote recycling
 Will reduce carbon foot print and thus GHG emissions
 Eliminate waste or its consignment to landfill
 Promote ecological sustainability
STEPS IN ZERO WASTE
AN EFFECTIVE ZERO WASTE
PROGRAMS FOR MANUFACTURING
CONCERNS
5 STEP WASTE MANAGEMENT CYCLE
How it is done?
 Recycling can be done in many ways. The most common form of
recycling by using the waste and reprocess it all over again. This is done
by collecting the waste of a specific type, such as plastic, or polythene and
bring it back to the factory. This material is then cleaned and sterilized.
Once that is done, it will be used as raw material for fresh polythene bags
and plastic accessories. The process can be continued for a long time,
which is a huge benefit of recyclable materials.
Can it be used indefinitely?
 recycling can be used as many times as we want, but the quality of the
material must be checked after each cycle. Keep in mind that there are
standards that must be met at all costs. If the material fails to meet the
standard, then it is discarded and eliminated. Materials are carefully
chosen from the waste. Once that process is done, recycling begins.
Are there any hazards?
 Recycling requires a lot of care and stringent quality control. The raw
material that is being used to prepare goods was retrieved from waste,
which is why it is important to focus on the quality. Once that is done, the
process of manufacturing is checked multiple times before production is
given a go ahead
IN EXAMINATION POINT OF VIEW
Concept of lean can also be included in this topic [zero
waste management concept]
 Like types of waste

 Concept of waste & value stream [VA & NNVA]