lean thinking

1. Lean Think in Manufacturing Industries
Presented By:
Kassu Jilcha
A PhD Candidate at Addis Ababa Institute of
Technology
School of Mechanical and Industrial

2. Presentation outline
Introduction
Definition of Lean
Background of Lean
 Comparisons of traditional and lean
organization
Benefit of Lean
Ethiopian Manufacturing Industries
Why Postgraduate Training program
development?

3. Introduction
Industrial development strategy is the main Goal of
GTP2.
In transforming industries from ground level planned
stage, it needs lean thinking approach as one of the
bests transforming change
It also needs strong participation of higher institution
in manpower development like IOT’s and Industrial
sectors
The over all growth transformation of Ethiopia is
based on education quality and over all coverage
When Citizen knowledge and innovation improved,
then transform the growth to the next platform
5/8/2023 Lean manufacturing through education 3

4. Definition
Lean reduces cost, improves quality, and speeds delivery by
eliminating non-value added activity in a process by identifying
and eliminating waste.
Lean is defined as a process that includes five steps: the
first step is defining customer value, then defining value
stream, making it ‘flow’, establish pull, and last is
striving for excellence (Nadia et al,2006)
Waste is defined as any human activity which absorbs
resources but creates no value
 Value is defined by (Womack & Jones, 1996) as a capability
provided to a customer at the right time at an appropriate
5/8/2023 Lean manufacturing through education 4

5. Background of Lean
Lean 1st founded WWII Japan in 1940 (Sakichi Toyoda and chief engineer
Taiichi Ohno)
Toyota Production System (TPS) grounded in the systematic elimination
of what Toyota identified as the eight deadly wastes.
Mass production Lean production
Basis Hennery Ford (standard Motors
company)
Toyota (Varied Motor products)
People-design Narrowly skilled professionals Team of multi-skilled workers at all levels in the
organizations
People -
production
Unskilled or semi-skilled workers Team of multi-skilled workers at all levels in the
organizations
Equipment Experts, single purpose machines Manual and automatized systems which can
produce large volume with large product variety
Production
methods
Makes high volume of
standardized products
Make the product which the customers ordered
Organizational
philosophy
Hierarchical- management take
responsibility
Value streams using appropriate levels of
empowerment- pushing responsibility further
Production Systems Compare

6. Eight Types of Waste identified by
Toyota
. s/
/n
Form Description
1 Overproduction Producing more than it is needed or/and used. (production
ahead of demand)
2 Human
Resources
Not using people mind and getting them involved/Unused
Employee Creativity
3 Transportation Moving tools/materials to the point of use, moving products
that are not actually required to perform the processing
4 Inventory Materials or information, Includes WIP and Finished goods, all
all components, work in process, and finished product not being
being processed
5 Motion/repetitiv
ve
Movement of people (walking, riding) as well as smaller
movements more than required (chain of work should be
culture)= develop responsibility

7. cont’d
 The Lean Enterprise Research Centre (LERC,
2004) at Cardiff Business School highlighted
that for most production operations:
 5% of activities add value;
35% are necessary non-value adding
activities;
60% add no value at all.
The ultimate goal of lean is to avoid the eight
deadly wastes in production process
Hence, lean production is a continuous process

8. Comparisons of traditional and lean organization
(MELTON, 2005)
Concepts Traditional organization Lean organization
Inventory An asset, as defined by
accounting terminology
A waste- ties up a capital & increases
increases processing lead-time
Ideal economic
order quantity
and batch size
Very large- run large batch
sizes to make up for process
downtime
One- continuous efforts are made to
reduce down time to zero
People
utilization
All people must be busy at all
all time
Because work is performed based
directly upon customer demand, people
people might not be busy
Process
utilization
Use high speed processes and
and run them all the time
Processes need to only be designed to
to keep up with demand
Work
scheduling
Build products to forecast Build products to demand
Labor costs Variable fixed
Accounting Traditional (functional)
departments
Cross-functional teams

9. Forces opposing and driving a
change to lean
Being
Lean
Forces Supporting Lean Forces Resisting Lean
• The need to get closer to customers in an
increasingly competitive environment
• The desire to be compliant in an increasingly
regulated environment
The potential benefits:
Financial- decreased operating costs, potential
capital avoidance
Customers- better understanding of their needs
Quality –more robust processes leading to less
error
People- empowered multi skilled teams
Knowledge- increased understanding of the
whole supply chain including the
Natural resistances to change seen as :
• Skepticism/doubt on the validity of the
lean philosophy
• “We have seen this before” assuming “lean”
is another improvement initiative or
“fad/fashion”
• Lack of availability of time – too busy with
the “day job”
• Concerns about time impact of change on
regulatory compliance (SHE, quality, etc.)
Production culture:
• Large campaigns, large batches, minimal
change overs, never stop producing
• Manufacturing drives the supply chain-

10. Principles of Lean
Critical Success Factors in lean thinking are:
 Top Management Support,
 Focus on the Goal,
 Focus on the long Term,
 Involve everyone at all levels of the organization and
 Involve customers and supplies.

11. Benefits of Lean Manufacturing
1. Financial benefits of Lean Manufacturing :
• Reduction of circulating assets (stock and in-process materials):
reduction of capital used, increase in cash-in-hand, improved return on
investment,
• Work on productivity and profitability,
• improving the bottom line by reducing production costs
2. Industrial benefits of Lean Manufacturing :
• Less investment for same level of production
• Increased production at constant investment
• Ecological production, more compact plants
• Improved quality.
3. Commercial benefits of Lean Manufacturing :
• Production in phase with customer demand,
• Reduction of delivery times, and
• Greater customer satisfaction.
Overproduction
Human resources
Transportation
Inventory
Motion/repetitive
Corrections/defects
Over-Processing
Waiting/lead time

12. Ethiopian government has taken initiative in 2010 to
commence the GTP where greater emphasis has been given to
manufacturing sectors which are:
 labour intensive ,
have linkages to the rest of the economy,
use agricultural output as inputs ,
export oriented and substitute import and
contribute to rapid technology transfer. (EEA, 2013).
Since 2000 - 2012/13 the sector is growing at an average
growth rate of 10.6% annually and a less than the industry
average growth rate is recorded in the manufacturing sector,
whereby it grows at an average rate of 8.6% within the
specified period.
Ethiopian Manufacturing Industries
Level

13. Ethiopian ---cont’d
Medium and large scale manufacturing industries
have registered a figure between the above two rates
where its average annual growth rate has been 9.9%
over the same ranges of years
The manufacturing sector contributes only 3.7% at
the end of GTP of 2011/12 and is declined from
6.4% of 2003/04 (Amare et al., 2015)
Average of three years value at constant factor price
for manufacturing value added has been found 8.9
billion birr (before GTP1) and 13.12 billion birr
(after GTP1).
The leading manufacturing sector has been taken by

14. Ethiopia---- Cont’d
Heavy industries such as chemicals and basic
iron and steel are
found to be import intensive
While the light categories and others are domestic
resource intensive ones.
So, in our country’s context, the share of Industrial
sector in general and the manufacturing sector in
particular is not only unsatisfactory but also
declining
The share of the manufacturing sector industries in
GDP has further shrunk as evidenced from the
declined figure of 6.4% in 2003/04 to 3.7%

15. Ethiopia---- Cont’d
Basic iron and steel firm had used to import 93% of
its input requirement before GTP (7%)
It has shown a reduction in its imported resource
proportion over the first three GTP implementation
periods to 91% import proportions (9%)
The government has intentionally devalued the local
currencies from 10.96birr/USD in 2009/10 base
year to 17.34birr/USD in 2012 and further to
20.28birr/USD in 2015 as a discouraging tool to
import.
Manufacturing industry dominated by the food,
beverages, leather, textiles, and apparel industries,

16. Export Values of manufacturing sectors
The money value of export of Food and Beverage rose from
2.77million birr (2010) to 12.52million birr (2012).
The average receipt from Textile has been 0.86 million (before)

17. The industry has improved its export performance
over the periods scoring a larger amount of earnings
earnings in the GTP from 0.20million birr in 2009 to
2009 to 0.96million birr by 2011.
However, it is not an achievement and rather it needs
needs industries collaboration with
institutions/universities to bring radical changes in
leaning manufacturing
But the GTP has not been able to foster and
accelerate structural transformation of the economy
Export ---cont’d

18. Employment
Well matured and efficient manufacturing sector raises
national incomes and creates demand for the traditional
sector products and provides growing employment
opportunities (Martins,2015).
It is at the heart of modernization of the economy.
Regardless of this, being at its immature level in Ethiopia,
total employment in major manufacturing industries grew
still in thousands out of 90 million from 93,500 workers in
2000 to 132,172 in 2008 and 200,014 in 2012.
Annual average employment growth rate of 11.48% during
2008-2012
 So far, Ethiopia has not made significant progress in
pulling labor out of agriculture into more productive and

19. Sectorial Contributions to GDP and GDP Growth
(NBE,2014)

20. Why Postgraduate Training program
development?
To lean manufacturing industries through diffusion of
knowledge
More literate and trainable labor force could make
Ethiopia more attractive to international firms seeking
low-wage countries (Chandra et al. 2013).
To Satisfy High demand of professional training of local
society at proximity
To Upgrade knowledge in line with technological
changes beyond usual training
To introduce way how to innovate products /modify it

21. Why Postgraduate Training program development?
Poor supply of appropriately skilled labor as a major obstacle
to improving the competitiveness of the manufacturing sector
in Ethiopia(World bank, 2012).
The reason, Ethiopian manufacturing sector is still relatively
underdeveloped and not heavily reliant on more technical
production is due to lack of skill.
In the medium term, poor nations need to invest in overall
improvement in education quality, with special focus on
science and technology (Ansu & Tan, 2012).
To increase productivity of firms Ethiopia’s education sector
will need to develop and supply the appropriate managerial,
technical and soft skills within the workforce

22. Why Postgraduate training program … cont’d
To graduate engineers who are equipped with management
knowledge (engineering optimization +MGT skills)
To initiate culture of researches that helps to conduct
investigation of natural resources from renewable energy (Sun+
wind+ underground+ water)and others
To enhance culture that initiate collaborative works
Skills shortages in Ethiopia constitute a key constraint to
growth and improved productivity in the manufacturing
sector(World Bank, 2012)
To develop linkage between:
University- industry (through teachers & learners)
Industry-industry (through learners experience sharing at

23. Conclusion
In general the contribution of lean thinking to
manufacturing starts at institutions and bring changes
to starved professional industries
It is demand of government to transform the economy of
citizen from agricultural lead to industry lead economy.
In order to do this, we should produce lean thinkers
professionals
This program opening is the steeping stone where the
local industrial employees get the chance to upgrade
them selves and bring lean thinking in manufacturing
The integration between industry, university,
university-industry will be strong one demanding the
other.

24. “The world we have created is a
product of our thinking; it cannot
cannot be changed without
changing our thinking”, Lawrence J. Peter
J. Peter
“A bad system will defeat a good
good person every time.” – Deming

25. “If (we) don’t have time to do it right, when
will (we) have time to do it over?”-- J.
Raymond Robertson
“Universities are opportunities not threat for
industries let you utilize them”

26. Collaboration