Lean Manufacturing

Naga Vamsi Krishna Jasti

BITS Pilani Assistant Professor
Department of Mechanical Engineering
Hyderabad Campus
 BITS Pilani
Hyderabad Campus

Lean Manufacturing
 Topics to be covered
 Global Scenario
 History
 Necessity of LM
 Lean production definition
 Why Lean production
 Toyoda Family and contributions
 US scenario
 LM Elements
 3M’s
 System and System Thinking
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Global Scenario
 The current business climate is one where
manufacturing and service companies face
challenges due to increased globalization,
competition, changing consumer tastes,
technology, governmental regulations and
environmental considerations.
 The challenges make it necessary for
organizations to rethink how they have been
doing business. In the older days, demand
exceeded supply and the companies could afford
a lot of slack in their operations.
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Global Scenario
 Today, the companies cannot take it for granted
that they will make money. They need to ensure
that they meet customer requirements,
governmental requirements, environmental
considerations, while keeping costs down.
 Companies have to learn to be flexible as there is
greater uncertainty with respect to the business
environment

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Competitive Priorities

 Price
 Quality
 Delivery
 Service

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Types of Production Systems
 Craftsman Production
 Mass Production
 Lean Production

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Craft Manufacturing

 Each product unique

 Long lead times
 Inconsistent quality
 Close interaction between producer and the
customer
 High cost

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Mass Manufacturing

 Advent of the moving conveyor

 Establishment of standardized, interchangeable
parts
 Development of standard methods of production
 Increased productivity
 Lower costs

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Lean Production
 Lean manufacturing grew from craft and
mass manufacturing.
 In craft manufacturing, the artisan was in
touch with the customer and controlled all
functions.
 In mass manufacturing, while efficiency went
up, the size of the organizations, grew while
the workers were isolated from customers.

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Lean Production
 In lean manufacturing we have retained the
efficiency of mass manufacturing, while bringing
the operator closer to the customer, as it was
during craft manufacturing.

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Necessity of LM
 At Toyota to understand that our problems today
are those Toyota faced in 1950:
– Fragmented markets demanding many
products in low volumes.
– Tough competition.
– Fixed or falling prices.
– Rapidly changing technology.
– High cost of capital.
– Capable workers demanding higher levels of
involvement.
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 What It Means
 Focus on
– The customer
– Value and waste
– Doing more with less
– The entire purchasing experience
– Flexibility
– Partnerships
– Longer term thinking
 Move away from
– Numbers games
– Production focus alone
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Lean production definition
 Adopt the new philosophy…we are in a new economic
age-----------------------------------------W. Edwards Deming
 Lean production, also known as the Toyota Production System,
means doing more with less—less time, less space, less human
effort, less machinery, less materials—while giving customers
what they want.
 Two important books popularized the term lean:
 The Machine that Changed the World, by James Womack, Daniel
Jones, and Daniel Roos and published by Simon & Schuster in
1990.
 Lean Thinking, by James Womack and Daniel Jones, published by
Simon & Schuster in 1996.
 Although lean principles are rooted in manufacturing, found that
they apply universally. Our challenge is to translate, tailor, and
apply them to our particular situation.
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Why Lean Production?
The New Economics
 It used to be that companies could set their prices
according to the following formula:
Cost + Profit margin = Price
 The accounting department would determine cost based
on the principles of cost accounting and a profit margin
typical for the industry would be added. The price would
be passed on to the customer, who, more often than not,
paid it.
 This is no longer true. The profit equation is now as
follows:
Price (fixed) − Cost = Profit
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Why Lean Production?
 In most industries, price is fixed (or falling).
Customers are more powerful than ever before.
They have a wealth of choices, unprecedented
access to information, and demand excellent
quality at a reasonable price.
 In such an environment, the only way to improve
profit is to reduce cost. The great challenge of the
twenty-first century is not information technology.
It is cost reduction. Can your company continually
improve quality and enlarge customer choices
while reducing cost?
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The Goal is Cost Reduction

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Origins of LM
 The origins of lean may be multifold, but the main
development was done by Toyota.
 As Japan went through the devastation of WW II,
the manufacturers in Japan were looking to
recreate their industry.
 Taiichi Ohno was given the task of managing the
production at Toyota and he used the problems of
shortage of space and capital, along with a threat
of foreign competition, to create the Toyota
Production System

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Toyoda Family: Sakichi Toyoda
 Saw his mother and other women use manual
looms
 Developed the automatic loom to relieve the
efforts of the women weavers.
 Started the Toyoda Automatic Loom Works
 He focused on the need to solve a specific
problem
 He was obsessed with continually improving the
design to make the loom easier to use

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 Toyoda Family: Kiichoro Toyoda
 Sakichi’s son Kiichiro Toyoda started making
automobiles as a division of the Toyoda
Automatic Loom Works
 Kiichiro Toyoda visited the US to learn about car
manufacturing
 Most of the early ideas came from Ford and from
observing supermarkets
 When Kiichiro returned to Japan, he realized that
he had constraints of capital and land

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Role of Ohno
 Kiichiro hired Taiichi Ohno and gave him the charge of
developing the manufacturing system that would
become the Toyota Production System (TPS).
 TPS was Ohno’s solution to Toyota’s problems
bringing machines close to each other and using
general purpose machines
 In order to be able to overcome the shortcoming of
less capital, Toyota invested in its people. This is
evident at Toyota even today.
 From the 1950s to the present Toyota has grown to
become the largest global producer of automobiles,
refining and evolving the Toyota Production System
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US Scenarios
 Frederick Winslow Taylor –Scientific
management
 Henry Ford- Standardization work
 Walter Shewart/ W. E. Deming: Quality Gurus
and proposed PDCA
were developing methods and techniques that
would revolutionize manufacturing

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US Scenarios
 Somehow the advent of mass
manufacturing saw the US industry move
away from the basics of lean, which the
Japanese adopted and perfected.

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Lean elements
 The term Lean was first used by Womack and
Jones and includes 5 elements
– Value,
– Value Stream,
– Flow,
– Pull, and
– Perfection.

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Value and Waste
 Value
– Value is what the customer sees in a product or
service
– It is what the customer is willing to pay for – It
has no relation with cost
 Waste
– Anything that does not add value, from a
customer standpoint, but adds cost, is a waste
and must be eliminated

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Value and Waste

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Value Adding Vs Non Value Adding

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Value Addition

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Importance of value addition

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 Value Stream
 Ideally, the time spent by the product from its
initial stages until it is in the hands of the
customer should be value adding
 It would be best if this could include requirements
generation, conceptualization, design,
procurement, manufacturing, testing,
transportation and any major activity that affects
the time spent by the part

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 Flow
 Elimination of discontinuities in the process
 Why do discontinuities occur?
– Batch mentality
– Focus on maximizing utilization of expensive
equipment
– Lack of flexibility in the system
– Lack of trust
 Focus on the root causes of discontinuities and
address them

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 Pull
 Do what is necessary,, and when it is necessary
 Let the customer “pull” production
 Have a streamlined process so that the system
responds quickly to demand and changes in
requirements
 Eliminate “inventory”
 Eliminate “batches”

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Perfection
 Continuous improvement/Kaizen
 PDCA/PDSA Cycle

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3M’s
 Lean focuses on aggressively attacking and
eliminating waste.
 The term for Waste in Japanese is Muda.
 Muda is created by 2 other Ms, i.e., Mura and
Muri.
 Mura is Unevenness, which leads to Muri, which
is Overburden. Overburden, in turn, leads to
waste.

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 3M’s : Example

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Conventional Vs Lean Production
Conventional Toyota/Lean
Move the metal! Make your numbers! Stop production—so that production
never has to stop! (Jidoka concept)
Make as much as you can. Go as fast as Make only what the customer has
you can. (Push system) ordered. (Pull system)
Make big batches and move them slowly Make things one at a time and move them
through the system. (Batch and queue) quickly through the system. (Flow)
Thou shalt! (Leader = Boss) What do you think? (Leader = Teacher)
We have some standards. (Not sure where We have simple, visual standards for all
they are or of they're followed…) important things.
Engineers and other specialists create The people closest to the work develop
standards. The rest of us do what we're standards and pull in specialists as
told. required.
Don't get caught holding the bag! Make problems visible.
Only grunts go to the shop floor. Go and see for yourself.
Do-Do-Do-Do! Plan-Do-Check-Adjust (PDCA)

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Idea of Lean Manufacturing
 One piece flow
 It is a myth that "Toyota received their inspiration for
the system, not from the American automotive
industry (at that time the world's largest by far), but
from visiting a supermarket."
 The idea of Just-in-time production was originated by
Kiichiro Toyoda, founder of Toyota.
 The question was how to implement the idea. In
reading descriptions of American supermarkets, Ohno
saw the supermarket as model for what he was trying
to accomplish in the factory.
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Idea of Lean Manufacturing
 While low inventory levels are a key outcome of the
Toyota Production System, an important element of
the philosophy behind its system is to work
intelligently and eliminate waste so that only minimal
inventory is needed.

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Need of Understanding
 Many American businesses, having observed Toyota's
factories, set out to attack high inventory levels
directly without understanding what made these
reductions possible.
 The act of imitating without understanding the
underlying concept or motivation may have led to the
failure of those projects.

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Systems and Systems Thinking

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 Discussion
 Discussion questions
– How has globalization affected your company?
Your job?
– How has competition affected the mindset in
your organization?
– What is the way in which your organization
approaches new technology? Do you feel
technology is well understood and integrated in
your organization?
– Does your organization use aspects of lean
manufacturing? How were these introduced?
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 Discussion

 What does waste mean to you? Is there a culture

of waste reduction in your organization? How
effective is it?
 Do you use PDSA (or PDCA) in your
organization? Can you describe an example?
 Do you view Value from a customer perspective?
How is this reflected in what you do?
 Do you witness unevenness and overburden in
your organization? What is the result of this?
How might you tackle this problem?

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 Thank you

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