Operations Management-II Dr. S.Venkataramanaiah  Assistant Professor OM & QT Area IIM Indore, Pigdamber, Rau Indore- 453 3...
Lean Manufacturing
Lean  Manufacturing Implementation  Source :  Mr.  D.S. Viswanath, AVTEC Indore
<ul><li>Manufacturing flow </li></ul><ul><li>Product/Quantity assessment </li></ul><ul><li>Process mapping </li></ul><ul><...
<ul><li>Metrics </li></ul><ul><li>On-time delivery </li></ul><ul><li>Process lead time </li></ul><ul><li>Total cost </li><...
Takt time example <ul><li>Month 1   2   3 4   5 </li></ul><ul><li>Demand  200 280 265 215   245  (total =1205) </li></ul><...
  What is Lean Manufacturing ? MORE LESS INVENTORY MORE LESS LEAD TIME MORE LESS SPACE MORE LESS DEFECTS MORE LESS HUMAN E...
  <ul><li>Customer requirement in focus </li></ul><ul><li>Production only on demand (demand pull system) </li></ul><ul><li...
  <ul><li>Lean helps in reducing waste in different areas of business  </li></ul><ul><li>Lean companies have greater flexi...
  Key Themes of the Lean System <ul><li>The Goal is to reduce uncertainty so that people know what to expect. Also quality...
  Lean Production in Factory Management Lean Factory Management Process design Planning & Process Control Techniques Suppo...
  Process Design Product flow Multi-Process/ Multi-Machine Handling Pokayoke - quality at source Value - Added work One - ...
  Key for Continuous Improvement <ul><li>A Constant focus in internal and external customers.  </li></ul><ul><li>Continual...
  CHANGE  FORM  OR  QUALITY WORK MACHINING ASSEMBLY ETC TRANSPORT (MOVEMENT STORAGE) INSPECTION ETC VALUE  ADDED  WORK ONL...
Implementation- An Example
Lean Manufacturing System (LMS) <ul><li>DEMONSTRATOR CELL : </li></ul><ul><li>TYPE 54 OUTPUT SHAFT </li></ul><ul><li>Consi...
1. FACING & CENTERING M/C (NEW) 9. THREAD ROLLING-MTR 15 17. GEAREDMOTOR TABLE 2. STC 25 – II 10. HF1 MILLING M/C 18. AWH ...
Some statistics before Layout update <ul><li>Components (forging) flows in zig-zag manner from machine 1 to machine 23. </...
Problems with existing Layout  <ul><li>Process layout </li></ul><ul><li>More inventory, space, handling </li></ul><ul><li>...
<ul><li>Inventory level is more, problems buried (submerged) & accumulate </li></ul><ul><li>Production flows in spite of p...
More Inventory <ul><li>Only when a batch of components completed at a machine (say M1) and then moved to another machine (...
More Space SPACE FOR MACHINE SPACE FOR STORING INCOMING & OUTGOING COMPONENTS TROLLEY SPACE FOR TROLLEY’S MOVEMENT-WIDER A...
More Defects 1 2 3 4 5 6 7 8 Defect produced  in taper  dia. angle Defect in taper dia. angle affects serration & visibly ...
More Human Effort <ul><li>Machines continuously run effort is more since person is fully utilized. </li></ul><ul><li>Perso...
More Break Downs <ul><li>Machines continuously used and hence  no time for preventive maintenance. </li></ul><ul><li>Machi...
More follow - up <ul><li>Machines positioned far & away. </li></ul><ul><li>Components processed in batches. </li></ul><ul>...
More Cost <ul><li>More inventory. </li></ul><ul><li>More lead time. </li></ul><ul><li>More space. </li></ul><ul><li>More d...
TAKT - Time <ul><li>AVAILABLE TIME </li></ul><ul><li>TAKT TIME = --------------------------------- (PER SHFIT) </li></ul><...
LMS Layout <ul><li>Product – oriented layout </li></ul><ul><li>Components processed through sequential operations – unidir...
<ul><li>1. Facing & centering m/c (new) 13. FN 2 eh milling m/c </li></ul><ul><li>2. STC 25 – ii 14. Induction hardening m...
Less Inventory <ul><li>Dedicated machines – sequential layout – single part flow. </li></ul><ul><li>When one part complete...
<ul><li>Inventory  level is reduced </li></ul><ul><li>Problems become visible </li></ul><ul><li>Problems are solved for pr...
Less lead time <ul><li>Takt time of cell – 7 minutes </li></ul><ul><li>Number of work stations – 23 </li></ul><ul><li>Lead...
Less space <ul><li>Space only for machine </li></ul><ul><li>No space for storing incomming & outgoing components / no trol...
Less defects (components produced – 5/6 ) Hence less (5/6) defects ! Since communication is faster, remedial action is  im...
Less Human effort <ul><li>Machines not continuously run, only required parts produced.  </li></ul><ul><li>Multi-process / ...
Less breakdowns <ul><li>Common factors leading to Machine Breakdown </li></ul><ul><ul><li>Dirty / Rusty Machine </li></ul>...
Less Follow-ups <ul><li>Machines positioned sequentially </li></ul><ul><li>Single part flow - No planning </li></ul><ul><l...
Less Cost <ul><li>Cost  reduced due to </li></ul><ul><li>Less inventory </li></ul><ul><li>Less lead time </li></ul><ul><li...
Conclusions <ul><li>Implementation of Lean requires effort from many areas (Cross functional in nature) </li></ul><ul><li>...
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    1. 1. Operations Management-II Dr. S.Venkataramanaiah Assistant Professor OM & QT Area IIM Indore, Pigdamber, Rau Indore- 453 331 Email : [email_address]
    2. 2. Lean Manufacturing
    3. 3. Lean Manufacturing Implementation Source : Mr. D.S. Viswanath, AVTEC Indore
    4. 4. <ul><li>Manufacturing flow </li></ul><ul><li>Product/Quantity assessment </li></ul><ul><li>Process mapping </li></ul><ul><li>Routing analysis </li></ul><ul><li>Takt time calculation </li></ul><ul><li>Workload balancing </li></ul><ul><li>Kanban sizing </li></ul><ul><li>Cell layout </li></ul><ul><li>Standard work </li></ul><ul><li>One-piece flow </li></ul>Five Primary elements of Lean Manufacturing or TPS <ul><li>Organisation </li></ul><ul><li>Product focused, multi-disciplined team </li></ul><ul><li>Lean manager development </li></ul><ul><li>Labour cross training skill matrix </li></ul><ul><li>Training </li></ul><ul><li>Communication plan </li></ul><ul><li>Roles and Responsibilities </li></ul>
    5. 5. <ul><li>Metrics </li></ul><ul><li>On-time delivery </li></ul><ul><li>Process lead time </li></ul><ul><li>Total cost </li></ul><ul><li>Quality yield </li></ul><ul><li>Inventory turns (flow) </li></ul><ul><li>Space utilisation </li></ul><ul><li>Travel distance </li></ul><ul><li>Productivity </li></ul>Five Primary elements of Lean Manufacturing <ul><li>Logistics </li></ul><ul><li>Forward plan </li></ul><ul><li>Mix-model manufacturing </li></ul><ul><li>Level loading </li></ul><ul><li>Workable work </li></ul><ul><li>Kanban pull signal </li></ul><ul><li>ABC parts handling </li></ul><ul><li>Service cell arrangements </li></ul><ul><li>Customer/supplier alignment </li></ul><ul><li>Operational rules </li></ul><ul><li>Process Control </li></ul><ul><li>TPM </li></ul><ul><li>Poka-yoke (error proofing) </li></ul><ul><li>SMED </li></ul><ul><li>Graphical work instructions </li></ul><ul><li>Visual controls </li></ul><ul><li>Continuous improvement </li></ul><ul><li>Line Stop </li></ul><ul><li>SPC </li></ul><ul><li>5S house keeping </li></ul>
    6. 6. Takt time example <ul><li>Month 1 2 3 4 5 </li></ul><ul><li>Demand 200 280 265 215 245 (total =1205) </li></ul><ul><li>(daily) </li></ul><ul><li>Avg demand = 1205/5= 241 units/month </li></ul><ul><li>Variation coefficient = 0.20 (appr) </li></ul><ul><li>Designed production rate = Avg *(1+ Var coeff) = 241*1.2 = 290 </li></ul><ul><li>Takt time = 7hr *60 min /290 = 1.45 min (is the TT for cell) </li></ul><ul><li>Takt time (German, Rhythm or beat) </li></ul><ul><li>Basis for cell design and represents market consumption rate </li></ul><ul><li>Reflective of customer demand, every thing in cell is based on takt time </li></ul><ul><li>Different from cycle time (CT represents capacity) </li></ul><ul><li>Takt time depends on projected customer demand (not on the capacity) </li></ul><ul><li>TT= Total time available (per day)/ Designed daily production rate </li></ul><ul><li>Ex in an 8 hr shift if 30 min for breaks and 30 min for meetings then time available is 7 hrs </li></ul>
    7. 7.   What is Lean Manufacturing ? MORE LESS INVENTORY MORE LESS LEAD TIME MORE LESS SPACE MORE LESS DEFECTS MORE LESS HUMAN EFFORT MORE LESS BREAK DOWN MORE LESS FOLLOW-UP MORE LESS COST LEAN MEANS LESS LESS = JUST NEEDED
    8. 8.   <ul><li>Customer requirement in focus </li></ul><ul><li>Production only on demand (demand pull system) </li></ul><ul><li>Lowest cost & hence better price </li></ul><ul><li>Average skill in multi process is sufficient </li></ul><ul><li>Least WIP & lowest throughput time </li></ul><ul><li>Better adherence to delivery commitments </li></ul>Lean Manufacturing System
    9. 9.   <ul><li>Lean helps in reducing waste in different areas of business </li></ul><ul><li>Lean companies have greater flexibility in responding to changing customer needs </li></ul><ul><li>They have less expensive cost structure that permits these changes without bankrupting the firm. </li></ul><ul><li>The result : The companies can offer more models, can bring them to market faster, and can refresh or replace them more frequently than traditional or non-lean organisations. </li></ul>Advantages of Lean Manufacturing
    10. 10.   Key Themes of the Lean System <ul><li>The Goal is to reduce uncertainty so that people know what to expect. Also quality and quantity of product should be predictable from one hour to the next. Process stability is a must </li></ul><ul><li>Demands on factory output must be stable </li></ul><ul><li>Every step in the process must add value, not simply be the checking or repairing of previous step </li></ul><ul><li>Continuous important rather than problem identification and “fire fighting” </li></ul><ul><li>Have a mind set that there is always a better way to do everything </li></ul>
    11. 11.   Lean Production in Factory Management Lean Factory Management Process design Planning & Process Control Techniques Support Routines Analytical Tools & techniques Behavioral & Organizational Underpinnings
    12. 12.   Process Design Product flow Multi-Process/ Multi-Machine Handling Pokayoke - quality at source Value - Added work One - Part Processing through sequential Operations Processing Through Sequential Operations work Place / Work Cell Arrangements Quick Set-Ups Miscellaneous Support elements Process Design for Lean Manufacturing
    13. 13.   Key for Continuous Improvement <ul><li>A Constant focus in internal and external customers. </li></ul><ul><li>Continual, uncompromising drive for quality. </li></ul><ul><li>Commitment to continuously improve the process. </li></ul><ul><li>Problem solving searches for root causes. </li></ul><ul><li>Problem resolution flows from orderly and detailed data collection and analysis. </li></ul><ul><li>Use of “ Seven QC Tools ” and P-D-C-A. </li></ul><ul><li>Most important, continuous improvement is possible only through the people and their eager intellectual and emotional involvement in the process that enables the lean system to flourish. </li></ul>
    14. 14.   CHANGE FORM OR QUALITY WORK MACHINING ASSEMBLY ETC TRANSPORT (MOVEMENT STORAGE) INSPECTION ETC VALUE ADDED WORK ONLY ADDS COST WASTE YES NO Value Added Work
    15. 15. Implementation- An Example
    16. 16. Lean Manufacturing System (LMS) <ul><li>DEMONSTRATOR CELL : </li></ul><ul><li>TYPE 54 OUTPUT SHAFT </li></ul><ul><li>Consists of 23 workstations </li></ul><ul><li>Undergoes multi-various processing </li></ul><ul><li>Turning </li></ul><ul><li>Drilling / reaming </li></ul><ul><li>Milling </li></ul><ul><li>Shaping </li></ul><ul><li>Hobbing </li></ul><ul><li>Rolling </li></ul><ul><li>Induction hardening </li></ul><ul><li>Furnace hardening </li></ul><ul><li>Grinding </li></ul><ul><li>Assembly </li></ul><ul><li>Riveting (by heating) </li></ul>
    17. 17. 1. FACING & CENTERING M/C (NEW) 9. THREAD ROLLING-MTR 15 17. GEAREDMOTOR TABLE 2. STC 25 – II 10. HF1 MILLING M/C 18. AWH GRINDER MKL 3. CNC LATHE STC 20 11. FN 2 EH MILLING M/C 19. K 130 P GRINDER 4. AXLE HOLE SPM –TAURUS 12. HF 1 EH MILLING M/C 20. K 30 P GRINDER 5. FN 3 H MILLING M/C 13. FN 2 EH MILLINGM/C 21. FN 2 EH MILLING M/C 6. FELLOWS – RECONDITIONED 14. INDUCTION HARDENING M/C PILLAR 22. SUB ASSEMBLY TABLE 7. HOBBING M/C PSG 15. TEMPERING FURNACE PYROMASTER 23. INDUCTION RIVETTING M/C 8. TEETH CHAMFERING M/C UBIQUE 16. MAGNAFIELD CRACK DETECTER 2 3 18 19 20 1 16 8 7 11 10 17 21 9 4 13 12 5 6 23 22 14 15
    18. 18. Some statistics before Layout update <ul><li>Components (forging) flows in zig-zag manner from machine 1 to machine 23. </li></ul><ul><li>Components processed in batch size of 400 numbers </li></ul><ul><li>2 machines operated by one operator. </li></ul><ul><li>Machines are not dedicated for output shaft alone. </li></ul><ul><li>Mostly process oriented layout. </li></ul>
    19. 19. Problems with existing Layout <ul><li>Process layout </li></ul><ul><li>More inventory, space, handling </li></ul><ul><li>More defects and human effort </li></ul><ul><li>More follow up </li></ul><ul><li>More break downs </li></ul><ul><li>More time and </li></ul><ul><li>More cost </li></ul>
    20. 20. <ul><li>Inventory level is more, problems buried (submerged) & accumulate </li></ul><ul><li>Production flows in spite of problems because of more inventory </li></ul><ul><li>Problems are not visible & hence cannot be solved </li></ul>Process layout - problems
    21. 21. More Inventory <ul><li>Only when a batch of components completed at a machine (say M1) and then moved to another machine (say M2), hence more components are available at various stages of processing. </li></ul><ul><li>At any given time 1000/1200 components are in shop floor as in-process inventory </li></ul><ul><li>HENCE MORE INVENTORY ! </li></ul>
    22. 22. More Space SPACE FOR MACHINE SPACE FOR STORING INCOMING & OUTGOING COMPONENTS TROLLEY SPACE FOR TROLLEY’S MOVEMENT-WIDER AISLES MORE SPACE MACHINE INCOMING TROLLEY OUTGOING TROLLEY MOVEMENT MOVEMENT
    23. 23. More Defects 1 2 3 4 5 6 7 8 Defect produced in taper dia. angle Defect in taper dia. angle affects serration & visibly seen at this stage TIME ELAPSED 950 MINUTES (COMPONENTS PRODUCED – 230) HENCE MORE (230) DEFECTS !
    24. 24. More Human Effort <ul><li>Machines continuously run effort is more since person is fully utilized. </li></ul><ul><li>Person is used in one type of operation and effort is more since work is monotonous. </li></ul><ul><li>Components moved in bulk (batch quantity) in trolleys through long distances back and forth. </li></ul><ul><li>Effort is more in material handling. </li></ul><ul><li>HENCE MORE HUMAN EFFORT </li></ul>
    25. 25. More Break Downs <ul><li>Machines continuously used and hence no time for preventive maintenance. </li></ul><ul><li>Machine cleaning is not done as frequently as required. </li></ul><ul><li>Machine lubrication is not done as scheduled. </li></ul><ul><li>Proper tools not used for machine accessories & tooling . </li></ul><ul><li>HENCE MORE BREAKDOWNS </li></ul>
    26. 26. More follow - up <ul><li>Machines positioned far & away. </li></ul><ul><li>Components processed in batches. </li></ul><ul><li>Inspection done by quality. </li></ul><ul><li>Maintenance done by plant engineering. </li></ul><ul><li>Toolings provided by tool engineering. </li></ul><ul><li>HENCE MORE FOLLOW – UP REQUIRED TO KEEP UP SCHEDULE </li></ul>
    27. 27. More Cost <ul><li>More inventory. </li></ul><ul><li>More lead time. </li></ul><ul><li>More space. </li></ul><ul><li>More defects </li></ul><ul><li>More human effort </li></ul><ul><li>More breakdowns </li></ul><ul><li>More follow – ups </li></ul><ul><li>HENCE MORE COST ! </li></ul>COST INCREASED DUE TO
    28. 28. TAKT - Time <ul><li>AVAILABLE TIME </li></ul><ul><li>TAKT TIME = --------------------------------- (PER SHFIT) </li></ul><ul><li>REQUIRED CAPACITY </li></ul><ul><li>350 MINUTES </li></ul><ul><li>= ------------------------- = 7 MINUTES </li></ul><ul><li>50 NUMBERS </li></ul>
    29. 29. LMS Layout <ul><li>Product – oriented layout </li></ul><ul><li>Components processed through sequential operations – unidirectional flow </li></ul><ul><li>Single part processing – no batch </li></ul><ul><li>Multi – process operation </li></ul><ul><li>Multi – machine operation </li></ul><ul><li>Quality at source – self inspection </li></ul><ul><li>Productive maintenance – self maintenance </li></ul><ul><li>Good house keeping / work place arrangement – 5S principle </li></ul><ul><li>Self analysis & correction - 7 tools of QC </li></ul><ul><li>Continuous improvement – kaizen / SGA </li></ul><ul><li>Least follow - up </li></ul>
    30. 30. <ul><li>1. Facing & centering m/c (new) 13. FN 2 eh milling m/c </li></ul><ul><li>2. STC 25 – ii 14. Induction hardening m/c pillar </li></ul><ul><li>3. CNC lathe STC 20 15. Tempering furnace pyromaster </li></ul><ul><li>4. Axle hole SPM-taurus 16. Magnafield crack detector </li></ul><ul><li>5. FN 3 h milling m/c 17. Geared motor table </li></ul><ul><li>6. Follows – reconditioned 18. AWH grinder mkl </li></ul><ul><li>7. Hobbing M/c PSG 19. K 130 p grinder </li></ul><ul><li>8. Teeth chambering m/c Ubique 20. K 130 p grinder </li></ul><ul><li>9. Thread rolling – mtr 15 21. FN 2 eh milling m/c </li></ul><ul><li>10. HF1 milling m/c 22. Sub assembly table </li></ul><ul><li>11. FN 2 eh milling m/c 23. Induction revitting m/c </li></ul><ul><li>12. HF 1 milling m/c </li></ul>1 2 3 4 5 6 7 8 9 10 11 23 22 21 20 19 18 17 16 15 14 13 12
    31. 31. Less Inventory <ul><li>Dedicated machines – sequential layout – single part flow. </li></ul><ul><li>When one part completed on machine M1, it immediately flows to machine M2 </li></ul><ul><li>At any time only 1 part available at each machine </li></ul><ul><li>At any given time, in total 54 components are in the cell as in-process inventory. </li></ul><ul><li>1:20 reduction in physical in-process inventory </li></ul><ul><li>HENCE LESS INVENTORY ! </li></ul>
    32. 32. <ul><li>Inventory level is reduced </li></ul><ul><li>Problems become visible </li></ul><ul><li>Problems are solved for production to flow smoothly </li></ul>PROBLEMS ARE OPPORTUNITIES LPS Benefits
    33. 33. Less lead time <ul><li>Takt time of cell – 7 minutes </li></ul><ul><li>Number of work stations – 23 </li></ul><ul><li>Lead time – 7 x 23 = 161 minutes </li></ul><ul><li>2 hours 41 minutes (one component after every 7 minutes) </li></ul><ul><li>Earlier 50 pieces produced in 3400 minutes </li></ul><ul><li>Now 50 pieces produced in 504 minutes </li></ul><ul><li>Therefore reduction in through put time is 85% </li></ul><ul><li>HENCE LESS LEAD TIME ! </li></ul>
    34. 34. Less space <ul><li>Space only for machine </li></ul><ul><li>No space for storing incomming & outgoing components / no trolleys. </li></ul><ul><li>No space for trolley movement – narrow aisle for person to walk . </li></ul><ul><li>HENCE LESS SPACE </li></ul>
    35. 35. Less defects (components produced – 5/6 ) Hence less (5/6) defects ! Since communication is faster, remedial action is immediate this will enable ZERO DEFECT 1 2 3 4 5 6 7 8 Defect produced in taper dia. angle Defect in taper dia. angle affects serration & visibly seen at this stage time elapsed 35 minutes
    36. 36. Less Human effort <ul><li>Machines not continuously run, only required parts produced. </li></ul><ul><li>Multi-process / multi - machine operation meaningful & involved work, breaking monotony. </li></ul><ul><li>Components moved singly while cell member moves to operate adjacent machines. </li></ul><ul><li>No bulk material movement through long distances. </li></ul><ul><li>HENCE HUMAN EFFORT IS LESS ! </li></ul>
    37. 37. Less breakdowns <ul><li>Common factors leading to Machine Breakdown </li></ul><ul><ul><li>Dirty / Rusty Machine </li></ul></ul><ul><ul><li>Lack of lubrication of moving parts </li></ul></ul><ul><ul><li>Leaks </li></ul></ul><ul><ul><li>Loose parts </li></ul></ul><ul><ul><li>Neglecting first sign of problem </li></ul></ul><ul><ul><li>(like noise / heat / vibration, etc.) </li></ul></ul><ul><ul><li>Not following correct operating procedures. </li></ul></ul><ul><ul><li>In LPS, Cell members understand </li></ul></ul><ul><ul><li>Cleanliness lubrication, etc. are taken care of by cell member himself. </li></ul></ul><ul><ul><li>HENCE LESS BREAKDOWNS ! </li></ul></ul>
    38. 38. Less Follow-ups <ul><li>Machines positioned sequentially </li></ul><ul><li>Single part flow - No planning </li></ul><ul><li>Self inspection by cell member </li></ul><ul><li>Productive (Self) maintenance by cell member </li></ul><ul><li>HENCE LESS FOLLOW – UPS ! </li></ul>
    39. 39. Less Cost <ul><li>Cost reduced due to </li></ul><ul><li>Less inventory </li></ul><ul><li>Less lead time </li></ul><ul><li>Less space </li></ul><ul><li>Less defects </li></ul><ul><li>Less human effort </li></ul><ul><li>Less break-downs </li></ul><ul><li>Less follow-ups </li></ul><ul><li>HENCE LESS COST ! </li></ul>
    40. 40. Conclusions <ul><li>Implementation of Lean requires effort from many areas (Cross functional in nature) </li></ul><ul><li>Helps in streamlining the process and thereby productivity improvement </li></ul><ul><li>It is continuous process and leads to both tangible and intangible benefits </li></ul>

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