Introduction

• Lean operations are replacing traditional procedures in

business organizations in order to remain competitive
in the global economy.
• Lean operations are adaptable, resource-efficient
systems that outperform non-lean systems in terms of
productivity, cost, cycle time, and quality.
• Lean systems, also known as just-in-time (JIT) systems,
are a philosophy and methodology that focuses on
eliminating waste and streamlining operations.
 Brief History of Lean operations

• Lean operations, originating from Toyota in the mid-1900s, focused on

eliminating waste and inefficiency in automobile production.
• The concept gained widespread interest after the publication of The
Machine That Changed the World in 1990.
• Toyota's focus was on eliminating waste from every aspect of the process.
• A successful example of lean manufacturing was the successful adoption of
lean methods in a Fremont, California, auto plant in the mid-1980s.
• The plant was reopened as a joint venture of Toyota and GM, called NUMMI
Cont….
• . By 1985, productivity and quality improved dramatically, surpassing
all other GM plants and reducing absenteeism.
• Other North American companies recognized the need for major
organizational and cultural changes and the outmoded mass
production approach.
• Lean methods involve demand-based operations, flexible operations
with rapid changeover capability, effective worker behaviors, and
continuous improvement efforts.
 Characteristics of Lean Systems

Waste reduction —A hallmark of lean systems

Continuous improvement—Another hallmark; never-ending efforts to improve
Use of teams—Cross-functional teams, especially for process improvement
Work cells—Along with cellular layouts allow for better communication and use
of people
Visual controls—Simple signals that enable efficient flow and quick assessment
of operations
High quality—In processes and in output
Cont…….
Minimal inventory—Excess inventory is viewed as a waste
Output only to match demand—Throughout the entire system;
referred to a “demand pull”
Quick changeovers—Enables equipment flexibility and output variety
without disruption
Small lot sizes—Enables variety for batch production
Lean culture—The entire organization embraces lean concepts and
strives to achieve them
Five principles lean systems
• Identify customer values.
• Focus on processes that create value.
• Eliminate waste to create “flow.”
• Produce only according to customer demand.
• Strive for perfection.
Benefits of Lean Systems
• Reduced waste due to emphasis on waste reduction.
• Lower costs due to reduced waste and lower inventories.
• Increased quality motivated by customer focus and the need for high-
quality processes.
• Reduced cycle time due to elimination of non-value-added
operations.
• Increased flexibility due to quick changeovers and small lot sizes.
• Increased productivity due to elimination of non-value-added
processes.
Risks of Lean Systems
• Increased stress on workers due to increased responsibilities for
equipment changeovers,
• problem solving, and process and quality improvement.
• Fewer resources (e.g., inventory, people, time) available if problems
occur.
• Supply chain disruptions can halt operations due to minimal inventory
or time buffers.
The Toyota Approach

• Many of the methods that are common to lean operations were

developed as part of Japanese car maker Toyota’s approach to
manufacturing. Toyota’s approach came to be known as the Toyota
Production System (TPS), and it has served as a model for many
implementations of lean systems, particularly in manufacturing. Many
of the terms Toyota used are now commonly used in conjunction with
lean operations, especially the following:
The Toyota Approach
• Muda: Waste and inefficiency. Perhaps the driving philosophy. Waste and
inefficiency can be minimized by using the following tactics.
• Kanban: A manual system used for controlling the movement of parts and
materials that responds to signals of the need (i.e., demand) for delivery of parts
or materials.
• Heijunka: Variations in production volume lead to waste. The workload must be
leveled; volume and variety must be averaged to achieve a steady flow of work.
• • Kaizen: Continuous improvement of the system. There is always room for
improvement, so this effort must be ongoing.
• • Jidoka: Quality at the source. A machine automatically stops when it detects a
bad part.
SUPPORTING GOALS
Lean aims for a balanced system with smooth, rapid material flow and efficient resource
use, with the overall goal based on achieving supporting goals:
• Eliminate disruptions: Disruptions in lean systems, such as poor quality, equipment
breakdowns, schedule changes, and late deliveries, negatively impact product flow,
reducing uncertainty and improving efficiency.
• Make the system flexible: A flexible system can handle various products daily and
output changes while maintaining balance and speed. Lean systems prioritize reducing
setup and lead times to improve flexibility.
• Eliminate waste: Waste, including excess inventory, overproduction, waiting time,
unnecessary transporting, processing waste, inefficient work methods, product
defects, and underused people, can be eliminated to free up resources and enhance
production. The lean philosophy identifies eight wastes, including excessive inventory,
overproduction, waiting time, unnecessary transporting, processing waste, and
product defects.
The kaizen philosophy for eliminating waste
• 1. Waste is the enemy, and to eliminate waste it is necessary to get
the hands dirty.
• 2. Improvement should be done gradually and continuously; the goal
is not big improvements done intermittently.
• 3. Everyone should be involved—top managers, middle managers,
and workers.
• 4. Kaizen is built on a cheap strategy, and it does not require spending
great sums on technology or consultants.
• 5. It can be applied anywhere.
The kaizen philosophy for eliminating waste
• 6. It is supported by a visual system: a total transparency of
procedures, processes, and values, making problems and wastes
visible to all.
• 7. It focuses attention where value is created.
• 8. It is process oriented.
• 9. It stresses that the main effort of improvement should come from
new thinking and a new work style.
• 10. The essence of organizational learning is to learn while doing.
LEAN TOOLS
The tools that are used for process improvement in lean systems are:
• Value stream mapping is a visual tool used to examine the flow of
materials and information in a product or service, originated at
Toyota. It aims to increase customer value by identifying process
bottlenecks, errors, variation, and waste. Data analysis can uncover
improvement opportunities by asking key questions, such as waiting
times, unnecessary transportation, processing waste, inefficient work
methods, mistakes, and underused people.
• 5W2H approach: A method of asking questions about a process that includes
what, why, where, when, who, how, and how much. This approach can be
used by itself or in conjunction with value stream mapping.
• Lean and Six Sigma: Lean and Six Sigma are often considered alternate
methods for process improvement, but they can be complementary when
used together. Lean focuses on eliminating non-value-added activities,
maximizing process velocity, and improving flow. Combining these
approaches can lead to better results, ensuring a balanced flow and quality
system.
• JIT Deliveries and the Supply Chain: Direct suppliers must support frequent
just-in-time deliveries of small parts, potentially increasing transportation
costs and congestion. Close coordination among supply chain partners is
crucial for JIT delivery, preventing production interruptions due to stockouts.
Just In Time (JIT)
• JIT service offers a competitive advantage by providing services when
needed, requiring provider flexibility and clear communication. This
eliminates the need for continual requests and reduces provider
flexibility, potentially reducing costs. However, implementing lean
principles in service organizations is challenging due to the lack of
reference applications and strong commitment among workers to
achieve a lean service system.
• In some instances, companies allow suppliers to manage restocking of
inventory obtained from the suppliers. A supplier representative
works right in the company’s plant, making sure there is an
appropriate supply on hand. The term JIT II is used to refer to this
practice. JIT II was popularized by the Bose Corporation. It is often
referred to as vendor-managed inventory (VMI).
OPERATIONS STRATEGY
• Lean operations offer new perspectives on operations, but managers
must consider their current systems and the benefits of converting.
Converting can be sequential, allowing management to gain
experience. Just-in-time (JIT) inventors should be weighed against
risks, and supplier management is crucial. Success relies on leadership
commitment, involvement, support, a lean thinking culture, and
effective teamwor
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