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Lean management


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Lean management

  1. 1. LEAN MANAGEMENT Maximizing customer value through reduction of work wastes
  2. 2. Issues addressed by lean management Prolonged Cycle Time Costly Organization Rampant Wastage Dissatisfied Customers and Employees Low Productivity
  3. 3. Balanced scorecard Balanced Scorecard Perspectives Financial Customer Business Learning and Growth
  4. 4. Balanced scorecard The Learning and Growth Perspective. • The performance metrics in the balanced scorecard will trigger what aspect needs to be developed more and what aspect needs to be sustained. The Business Perspective. • External partners are able to see the picture out of the box hence; will have a better view. They will be able to decipher the correct and timely focus areas. The Customer Perspective. • Customers must not be studied using a generic approach. Customers must be clustered according to profile. Each profile must indicate the target products and services and how to improve them to satisfy the customers’ needs. The Financial Perspective. • These financial reports will provide ideas to the key decision makers on how financial prioritization must be carried out. Financial reports must also relate efficiency and performance in relation to cost management.
  5. 5. Some alternatives to Lean Management Six Sigma •Six Sigma is based on variation theory. Variation here means difference in the input process and the output of the process. •Six Sigma is the method to get the knowledge of defects in the process to eliminate the problem and hence improve the process as well as the products. •For this it uses principles of business, statistics and engineering. Six Sigma can be applied to various fields like production, sales, marketing and services extra. Scientific Management • Scientific management is also called as Taylorism after its inventors name Frederick Winslow Taylor. •Taylor also talked about reduction of cost price and developed exact procedures after studying individuals on work. •He shifted the focus from labor to managers. He also believed in standardization of one method of production for each job and selection of the labor on basis of abilities required by a particular job.
  6. 6. Some alternatives to Lean Management Fordism •The name comes from its inventor Henry Ford. He believed that methods should be found to reduce the cost price of the product so that it becomes cheaper and easily affordable for the common man. • He introduced concept of mass production and standardization. Standardization of manufacturing process needed less skilled labor with each worker performing the same task every day. He also invented moving assembly lines for this purpose. Theory of constrains •Was introduced by Eliyahu M Goldart. According to him if our business is not doing well than there are some constrains that are stopping our business to grow. •He believed in identifying constrains and then eliminating these constrains. He introduced the concepts of buffers; every system had its own buffer so that when ever system braked these buffers may come in use and the production would continue.
  7. 7. Lean management vs. Alternatives Lean Management is customer-oriented management tool which was first used by Toyota in 1980 and is based on the concept that any resource that does not lead to value addition of product for the end customers than, it is a waste because this value addition is reflection of the products adaptability to changing customer demands. The basic idea is to add more value with less work and less wastage. Now let’s compare the alternatives with Lean Management. All these alternatives are targeting an individual system for example Scientific method targets cost reduction during production process; Theory of constrain focuses on operating systems of the organization; while Six Sigma focuses on quality improvement of products . But Lean Management toolkit focuses on overall process improvement.
  8. 8. Lean management vs. Alternatives All the above alternatives need specialized training while Lean Management can be applied immediately and does not require any specialized training. Alternatives management tool requires well trained managers to implement them, while in Lean Management the work force as a whole is responsible for the improvement.
  9. 9. Seven Mudas Over production: this means producing more than there is demand in the market. This muda either covers or highlights other mudas like inventory. Inventory: long inventories of raw-material, finish goods or work-in progress, is an investment without return and is a liability for the producer. Motion: has to do wear, damage or safety of the products while handling by producer, worker or equipment. Waiting: waiting refers to goods that are not being transported or processed. Over Processing: that means more work being done on a piece than required. Transportation: This refers to danger and loss a company has to suffer because of damage, lost or delay. Transportation is a muda because it means cost without any value addition. Flaws: Any quality issues or flaws can subject the system to rework on whole plans eying the cost minimization. Flaws Motion Over Processing Waiting Transportation Inventory Over Production
  10. 10. Lean Management Principles 1. Add Value 2. Shift Focus 3. Delay Commitments 4. Discourage Departmental Evaluation 5. Adapt to New Change
  11. 11. Success Factors Of Lean Management Goal Involvement Approach Workers Communication Metric System Plan
  12. 12. Companies Implemented Lean Management Toyota Motor Company Lean Management CIGNA Group Bechtel Starwood Hotels Corporation & Resorts Worldwide, Inc.
  13. 13. Considerations Of Lean Management Benefits Limitations Tools
  14. 14. Checklists for Lean Management Waiting •The waiting analysis involves the process of finding out whether the various tasks could be executed as parallel activities, instead of serial activities. It would be obvious that parallel activities reduce waiting and implementation time substantially, compared to serial activities. Transportation •Transportation solves the issue of people moving the products from one operation to the next one by configuring the process to automatically move the products from one stage to another. This reduced the manpower and reduces transportation time. Processing •Processing analysis considers the point whether it is possible to combine multiple tasks into compact units or whether any processes can be totally eliminated. Motion •This factor decides whether the process aids like new equipment, special tools, and fixtures would help in speeding up the processes, thereby reducing the total production time.
  15. 15. Checklists for Lean Management Poor Quality • Poor quality assessment deals with the use of mistake-proofing to reduce errors, defects or reworking or eliminate them completely. Inventory • Inventory estimates are done periodically to keep the inventory at the lowest minimum or to operate without any inventory. Studies reveal that many organizations keep inventories of several items on just-in-case-needed basis and these inventories are rarely used. Overproduction • The analysis of overproduction indicates whether the production is aimed at maintaining certain finish product inventory levels or whether the production is geared to produce only to the extent of order-in-hand. This usually results in considerable savings for the organization.
  16. 16. 5s/6s Checklist Sort. The sorting helps the organization to separate the useful processes, inventories, motions, transports, etc. from the unnecessary. The sorting ensures that only the spares, tools, parts, and instructions absolute necessary for the process in a particular work area remain there, while all other redundant items are removed from the area. Straighten. Straighten is the implementation of the principle that everything has its own place in a work area and everything should remain in its allotted place. This principle could be achieved by creation and display of visual scoreboards, floor paints, Jidoka lights, kanbans, and other methods of visual control. Sweep. Sweep and shine is the program through which the workplace is kept in a spic-and-span shining level through sweeping, scouring, washing, scrubbing, rinsing, and painting.
  17. 17. 5s/6s Checklist Standardize. In standardization phase, routine cleaning of the work area is made as a way of life. Performance of preventive maintenance, with the planning, scheduling, and maintaining controlled by the central maintenance department. At the same time, each work center also undertakes its own routine maintenance as much as possible with select people in the work center trained to do this. Sustain. Sustenance is another routine practice implemented in all lean management 5S/6S work places. All the root causes of wastes and defects are identified on a routine and regular basis for eliminating them or dealing with them through appropriate solutions. It is necessary that the management, supervisors, and ground level employees are fully familiar with the 5S and lean practices and methods. Safety. The organizations that adopt 6S instead of 5S include all safety issues and addressing them in proper fashion as the sixth principle in lean management. The safety practice is a standard and routine work audit that includes the 5S principles along with the areas related to safety and ergonomics.
  18. 18. Other Aspects Related to Lean Management Quality Function Deployment Process Failure Modes and Effects Analysis Fool-Proofing Statistical Process Control Taguchi Shainin Kanban
  19. 19. Quality Function Deployment Design Requirements Critical Parts Characteristics Key Process Production Requirements
  20. 20. Conclusion Lean management is the process through which customer value is maximized by the reduction of wastages in work process. The major techniques adopted in lean management are workplace redesigning, total productive maintenance (TPM), total quality management (TQM), and Just in Time (JIT). When wastes are eliminated, efforts, defects, costs, and time spent in processes are also automatically reduced. This leads to higher revenues, larger customer base, and enhanced employee motivations. The major thrust areas addressed by lean management are low productivity, prolonged cycle time, total organizational expenses, rampant wastages, dissatisfied customers, and disillusioned or alienated employees. When companies implemented lean management, the average gains in productivity were around 25%, wastages were reduced by even 90%, floor space shrunk by 50%, and travel distances inside the organizations were cut down by 75%.