How Lean Manufacturing will help to improve Productivity



Lean is the term which has core philosophy of doing more and more with less and less.  Lean System can also be referred as FIT without Fat. Origin of Lean is from Manufacturing set up in Japan which had always valued its scare resources which is primarily space. Thought process on working with less space happened when Taiichi Ohno, the then shop-floor supervisor of engine manufacturing plant went to his boss and asked for more space to store inventory.  Having already reeling under less resources of money and space, Taiichi Ohno was asked to explore how the inventory can be reduced so that it needs less space. This thought has triggered a big revolution in the manufacturing arena in the form of Toyota production System 

which is popularly known as Lean manufacturing.

Lean is the term which has core philosophy of doing more and more with less and less.  Lean System can also be referred as FIT without Fat. Origin of Lean is from Manufacturing set up in Japan which had always valued its scare resources which is primarily space. Thought process on working with less space happened when Taiichi Ohno, the then shop-floor supervisor of engine manufacturing plant went to his boss and asked for more space to store inventory.  Having already reeling under less resources of money and space, Taiichi Ohno was asked to explore how the inventory can be reduced so that it needs less space. This thought has triggered a big revolution in the manufacturing arena in the form of Toyota production System which is popularly known as Lean manufacturing.
Unlike mass production where economics of scale, low variety and high volume were the norm. Japanese companies had to be managed with very low volume and high mix production capabilities in their early years of establishing.
Increase in production is possible through productivity improvement.  For this, Lean manufacturing works in increasing value and reducing waste.  In non-lean environment, Value addition of any activity in a value stream – Customer order to delivery will be less than 5%.  Value is considered under the following conditions.
  • Change of shape,
  • Change of Size
  • Change of properties
  • Any thing else the customer is willing pay.
Even in the above condition, minimizing waste is one of the focus area to improve productivity. From the lean perspective, waste is anything which does not add Value.  This will be typically 95% of the time which is shocking but reality in most non-lean companies. This is due to result of having the following conditions.

  • Overproduction :

    Producing before the time of need or more quantity than desired for next operation (both internal and external customer) to consume. One of the common reasons for overproduction is due to perceived notion of the need for high batch quantity where change-over for product A to product B is more.

  • Inventory:

    Keeping RM, WIP or Finished goods more than the required quantity or getting before the required time.  One of the common for excess inventory is also due to overproduction.

  • Overprocessing:

    Doing an activity more than needed or higher than what the customer is willing to pay.

  • Defects:

    Not doing things first time right.  This results in re-work and eventually rejected if not handled well.  Defect increases the cost of poor quality.

  • Transportation:

    Movement of materials from one station to the other station. This increases the time for value addition and does not help in continuous flow.

  • Motion:

    Where operators are needed to move from one station to other during which there is no value addition takes place.  This could be due to lack of ergonomic workstations and effective storage of essential tools and materials.
Lean manufacturing addresses the above issues through its time tested Way of thinking  also called Lean Thinking. Some of the lean solution for above issues of waste is by thorough elimination. When there is no waste, rest is value addition.  Value addition leads to improved productivity.
To avoid overproduction, Lean thinking has solution in the form of applying Pull System as against push system followed in tradition manufacturing. The pull System calls for one station pulling material from the previous station with defined set of rules.  A work station can produce only what its immediate customer can consume .. i.e. Can process further. Such system can be seen in Lean food chain such as Mc Donald’s where they produce only against order or keep very small quantity FG where they are certain that those which are produced by them will get consumed in matter of minutes.
In order to minimize costs associated with inventory, lean companies focus on Just in time procurement and usage of Kanban based inventory management for all runner product raw materials.  Also, ordering is done in such a way that right quantity, right mix is made available when it is needed. Supplier development is one of the concepts which is widely used for collective growth. Milk run, Vendor managed inventory, Jumbiki are some of the other concepts used by Lean companies.
In order to minimize the over processing, various point kaizens are introduced at the work place which is also called Gemba.
Defects prevention is worked out through poka-yoke or mistake proofing, skill development through TWI – Training within Industry concepts.  Elimination of overproduction also helps in reduction of defects.
Transportation is reduced through introduction of concepts such as Cellular Manufacturing, continuous flow, lean layouts and single piece flow.  High amounts of discipline, standard operating procedures are to be followed to make the systems successful.
Motion waste is minimized through effective application of Applied 5S, Visual Management and point of use storage. Ergonomic workstations also help in minimizing the waste of motion. Low cost automation and point kaizen further improve the value addition thereby reduction of motion waste.
In order to get full benefits in realizing no waste ideal, there are many culture factors which are to be aligned through Total Employee involvement or TEI.  There are many other complimenting methodologies such as structured TPM – Total Productive Maintenance methodologies are needed to be deployed to make improvement in productivity through effective machine availability and machine performance.
  • Seven Steps Business Transformation Systems is helping organisations in their quest for improving productivity through their unique methodologies. We use combination of TPM, TQM, Lean, Six Sigma and TOC concepts apart from soft skills, change management, top management involvement and bottom-up team support. Setting Long term Vision and Strategies to achieve the same
  • Setting up right organization structure with clear roles and responsibilities
  • Improvement of Sales
  • Facilitation in improving On time Deliveries
  • Facilitation in implementation of Visual Workplace
  • Reduction of Defects (Cost of poor quality)
  • Reduction of Manufacturing Lead time
  • Improved and measurable Teamwork.
  • Improved responsiveness to customers.
  • Effective utilization of machines with minimal down time.
  • Optimize inventory
  • Release space/ capacity for future expansion.
  • Improve Morale of employees
  • Release Quality time of Top management to focus on growth and long-term objectives.
End results of implementation of Excellence initiatives are:
  • Improved productivity
  • Improvement in MTBF and MTTR.
  • Improved Delivery Performance.
  • Reduced cost of poor Quality
  • Improved involvement of people across all levels.
  • Reduction in customer complaints
  • Improved responsiveness to the customer
  • Improved business
  • Improved profits.
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