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What is Lean Manufacturing?

 
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Lean Manufacturing is a production philosophy that seeks to supply exactly what the customer wants, when the customer wants it. Furthermore, Lean Manufacturing aims at supplying these goods and services with minimum waste, where waste in production is reduced through continuous improvements of the production processes. The core idea is that eliminating waste along entire value streams, creates processes that need less capital, human resources, less production space, and reduces the time to make products and services. This philosophy can therefore, if implemented effectively, reduce the cost of producing goods and services, reduce the number of defect products and produce and deliver goods quickly to customers.

Likewise, Lean Manufacturing is seeking a production design that can handle both internal and external variability, where variability in production efficiency, product quality and customer orders are sought handled and absorbed through the total design of the Lean Manufacturing system.

The wastes sought eliminated in a Lean Manufacturing system are often described as the "Seven Types of Wastes", which are listed below:

 

  1. Overproduction
  2. Queues
  3. Transportation
  4. Inventories
  5. Motion
  6. Overprocessing
  7. Defective Products

All these types of waste will potentially add costs to the final product, and are sought minimized in the Lean Philosophy.

   

The potential economic gains of implementing Lean Manufacturing are therefore:

 

§      Greater quality of products

§      Fewer costs of producing goods and services

§      Quicker response time - faster delivery of goods and services

 

Below, some different elements in Lean Manufacturing are described, which can be seen as some of the different tools companies may use in creating a lean organization. This article does not claim to bring forth all different Lean Manufacturing tools, but the article contains the most important tools found in a Lean Manufacturing system.

At the bottom of this article the illustration of the "Lean House" is presented.  The roof of the House is seen as the potential benefits obtained by the use of Lean Manufacturing, which were already pointed out above. The pillars and the fundament of the house indicate which tools may support the achievement of these great benefits. Therefore, Lean Manufacturing can be seen as a system of its own, where each element of the house contributes to the success of the entire structure.

The remaining text describes useful tools found in the pillars and fundament of the Lean House, which can support the achievement of successful Lean Manufacturing.

 

Just-In-Time (Left Pillar)

Lean Manufacturing is driven by the "pull" of the customer's order, where production is ideally only initiated when orders are received from customers. The concept of Just-In-Time (JIT), is fundamental to Lean Manufacturing, and will potetially help to reduce a lot of waste. A JIT system is a pull system, which means that materials are only acquired when needed, and that no production is initiated before a given order.

When companies pursue JIT, they will potentially reduce inventory, because materials will only be acquired when production is initiated.

The reduction of inventory will also potentially increase quality of prducts and manufacturing processes. If no inventory exists, people cannot hide waste or defunct parts by using e.g. spare parts from the inventory. Therefore, quality in each part of a product, process or service must live up to the required standards; so that the idea of JIT's continuous flow in production will not be interrupted by e.g. defect parts that will clock up the flow of the system.

Furthermore, it is very important for companies pursuing JIT that they have good partnerships with suppliers, who will be able to support the idea of JIT, and thus help the company in reducing its inventories, shortening production times and finally reducing costs.

 

Heijunka - level schedules (Left Pillar)

Heijunka deals with the sequencing and smoothing of the production. The objective of Heijunka is to make production schedules and plans as flexible as possible, and to produce as small batch sizes as possible that will satisfy the needs and orders of the customers. Regarding this, it would be beneficial to produce different products and services at the same production line, so that the initiation of production will be sequenced according to actual demand.  It is the principle of "one piece flow".

This can potentially be achieved by mowing from production lines previously dedicated to a single product, to more flexible production lines that are capable of manufacturing several types of products.

By doing this, the capacity of the production line will potentially be maximized, so that more is produced with existing resources. This can be done be enhancing the technological capabilities of each production line, and by enhancing the capabilities of the personnel working on these.

 

Kanban inventory (Left Pillar)

The purpose of a Kanban inventory system is to minimize inventory levels, and to keep materials at hand when needed in e.g. production lines or production cells. Any given inventory should ideally only hold the amount of e.g. raw materials and parts that will keep production flowing.

Production at both internal and external suppliers should therefore only be initiated, when customers or linked production lines demand new materials or finished products. Excess inventory that is not needed immediately, and hence put in stock, can be regarded as waste, and will only add costs to the products supplied by the company.

Kanban is the Japanese word for "card". This "card" can be seen as the authorization for the next production of products, parts or materials to begin.

In a Kanban inventory, a card will appear at the level of reordering. For instance, an inventory of a certain spare part may have a card placed on top of containers in the inventory, where each container contains a specific amount of e.g. spare parts. When a container has been emptied, the card at the top of the next container is reached.  This card signals that a new order of parts must be placed to other production lines or suppliers. The card will then be given to internal or external suppliers, physically or electronically, which will signal that production of this part or product must begin.

The Kanban inventory therefore tries to maintain a constant flow of production, and tries to "pull" inventory through the shop floor based on actual customer demand. Likewise, Kanban inventories try to minimize the waste of excess inventories, where no production will ideally be initiated before a specific customer order penetrates the shop floor.

However, this system often uses some amount of safety stock, that can potentially absorb variability en e.g. quality or production times from suppliers.

The exact size and numbers of Kanbans in an inventory in front of e.g. the final assembly line can be calculated this way:

 

Kanban Calculation - optimum number of Kanbans (containers) in given inventory

 

Number of Kanbans in Inventory =

Demand during lead time + Safety Stock

Container Size (Based on EOQ)

   

 

EOQ = Economic order quality

EOQ is an inventory-control technique that minimizes the total of ordering and holding costs.

 

Link to the use of EOQ formula here

 

Example:

Company X sells bicycles that are made to order. In the production line's final assembly line, the seat of the bicycle is mounted. Every bike is, as said, made to order, and the company wishes to know how many Kanbans should be put in the inventory of seats.

 

Daily demand = 1000 seats

Production lead-time = Wait time + Material handling time + Processing time = 4 days

Safety stock = 1 day

Container size of seats (Determined on EOQ basis) = 50

 

Number of Kanbans in Inventory =

1000 + 250

=  5

250


 

 

In this example, five Kanbans (containers) will be in circulation in this particular Kanban inventory with seats.

 

Jidoka (Right Pillar)

Jidoka is a typical Lean Manufacturing term that revolves around maintaining a continuous high level of quality in each product and process. The consequence of low quality in products and processes can e.g. be production standstills, longer lead-times and faulty end products. Bad quality will most likely disrupt the continuous flow of production that is pulled by the customer, and also create an enormous amount of wasted labor, materials etc.

Jidoka can be seen as the pillar in the Lean house that secures quality, which will ultimately reduce lead-times, costs and increase the overall quality of the products being made.

 

The main elements of Jidoka are probably:

§      Create Poka-Yokes - bullet proof checklists of wanted quality control

§      The checking of parts during production

§      Immediate feedback on defects

§      Find the root cause of defects and solve it immediately

§      Never pass on defects

§      Resolve problems or stop linked production steps

§      Use JIT, small batches and small inventories to reveal lack of quality

§      Empower people to take individual action to secure quality

 

TPM, 5S and Kaizen (Fundament of Roof)

These three terms can be used as the foundation for the successful implementation of Lean Manufacturing. The fundament aims at stabilizing production and reducing variability by avoiding e.g. machine failure. Likewise, the fundament of the house tries to ensure the continuous focus on constant improvements.

 

TPM

Total Productive Maintenance (TPM) revolves around the day to day maintenance of the equipment used to produce the products, which will potentially stabilize production, and hinder eventual standstill due to equipment breakdown. TPM is a maintenance approach that places the responsibility for routine maintenance on the workers who operate the machinery. TPM is a group effort where the entire organization works together to maintain and improve the equipment.

This will therefore, as said, reduce the variability caused by internal failures in equipment, and strengthen the flow of production.

 

Some potential key elements of TPM are listed below:

§      Improve equipment effectiveness by targeting the major losses

§      Involve operators in daily routine maintenance of their equipment

§      Improve the efficiency and effectiveness of the daily maintenance

§      Training for operators on maintenance everyone involved

§      Design and use equipment that is easy to maintain

 

5S

The 5S program is focusing on the establishment of visual order, organization, cleanliness and standardization. By introducing 5S the company can achieve improved profitability, efficiency, service and safety for the employees.

The 5 principles all appear to be simple and based on common sense, and can relatively easy be implemented in almost all businesses.

 

The 5S principles are listed below:

 

  1. Sort - The first step in making things cleaned up and organized

  1. Set In Order - Organize, identify and arrange everything in a work area

  1. Shine - Regular cleaning and maintenance

  1. Standardize - Make it easy to maintain - simplify and standardize

  1. Sustain - Maintaining what has been accomplished

The implementation of 5S in the workplace will potentially have the following advantages:

 

§      Reduction of Inventory

§      Less time used for searching e.g. spare parts and tools

§      Reduction of accidents

§      Improve working conditions

§      Reduction of production standstill

 

Kaizen

As with all human endeavors, production is heavily dependent on the resources and ideas found in humans. Kaizen is a Japanese philosophy on continuous improvements, where every aspect of a process is sought improved. It is a structured approach to reveal wastes, and involves people in the identification of wastes and better ways of operating.

This continuous focus on improvements may create the needed culture behind Lean Manufacturing, where every member of the organization is focused upon reducing waste and creating better processes. Many companies use Kaizen meetings, where employees and employers discuss better ways of operating, which can potentially strengthen all aspects of Lean Manufacturing.

 

Use of Lean Manufacturing

Lean Manufacturing seems very useful to all production facilities around the world. However, a full implementation of Lean Manufacturing may be most feasible in companies having great customer and production variability. However, it seems feasible for every company to adopt some of the elements mentioned above, which might all individually have great benefits for companies of all kind.

 
 
 
 
 
Date Created: 2009-09-03
Posted by: Admin
 
 
 

Related resources:

What is Total Preventive Maintenance (TPM)?
What is 5S Production?
What is Lean Manufacturing?
Kanban Inventory System
JIDOKA
What is Concurrent Engineering?
Reference(s)
 
Operations Management
Render, Barry. & Heizer, Jay; (2007); 8th edition; Pearson Prentice Hall
Lean Thinking: Banish Waste and Create Wealth in Your Corporation
Womack, James P. & Jones, Daniel T.; (2003); 2nd edition; Free Press
Keywords:
Online MBA, Online MBA Courses,Lean Manufacturing, KANBAN, JIDOKA, seven wastes, lean house

 


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