that report are made after full analysis by me .......its my experience in bajaj auto pvt ltd

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ENGINEASSMBLY
APEX GROUP OF INSTITUTION AND TECHNOLOGY
SUMMER INTERNSHIP
(JUNE-JULY 2016)
AN INTERNSHIP PROJECT REPORT BY:
ADITYA SINGH
B.TECH. (MECHANICAL ENGINEERING)
BATCH 2013-2017
INTERNSHIP WITH:
BAJAJ AUTO PRIVATE LIMITED
UNDER THE GUIDANCE OF:
Mis. Yashika Arora
(Seinour engg. Engine Assembly)

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ENGINE ASSEMBLY
HIDDEN LOSSES
SSUUBBMMIITTTTEEDD TTOO:: SSUUBBMMIITTTTEEDD BBYY::
YYAASSHHIIKKAA AARROORRAA AADDIITTYYAA SSIINNGGHH
EENNGGGG.. EENNGGIINNEE AASSSSEEMMBBLLYY BB..TTEECCHH ((MMEE))
BBAAJJAAJJ AAUUTTOO PPVVTT LLTTDD.. AAPPEEXX GGRROOUUPP IINNSSTTIITTUUTTIIOONN
RRAAMMPPUURR ((UU..PP))

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ENGINEASSMBLY
CERTIFICATE
This is to certify that ADITYA SINGH, student of B.Tech (Mechanical
Engineering) has undergone industrial training with this company (Bajaj Auto
Pvt. Ltd.) under my supervision and guidance. During the internship he was
assigned the under mentioned tasks:-
Which he …………… (Pleasewrite few lines on how the studentperformed the
task, his conductand any special contributions)
Date:
Name and Designation:
Signature
Seal/Stamp of the Organization

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Acknowledgement
It is a great pleasure to present this report of summer training in
BAJAJ AUTO PVT LTD in partial fulfillment of B.Tech programme
under APEX GROUP OF INSTITUTION , AKTU. At the outset, I would
like to express my immense gratitude to my training guide, Mr.
Dinkar panday (Engine Assembly Head).
And my heartiest thanks to Mis. Yashika Arora (Seinour Engg.
Engine Assembly) for guiding me right from the inception till the
successful completion of the training. I am falling short of my words
for expressing feelings of gratitude towards him for extending his
valuable guidance about “ENGINE ASSUMBLY” & support for critical
reviews of project & also moral support he had provided me
throughout the training.
Training guide: Trainee:
Miss. Yashika Arora Aditya Singh

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PREFACE
The four year B.Tech Program is a full time technical course which
helps in immense learning of technological aspects, similarly the
project helps us in enhancing our learning by adding more to our
world of knowledge & summer training is the part of B.Tech to
nurture our technical skills.
Bajaj Auto Pvt. Ltd., Pantnagar gave me the chance for exposure to
the industrial practices and techniques. Here I got the practical
knowledge of many theoretical concepts.
I worked under ENGINEERING DEPARTMENT (ENGINE ASSEMBLY)
It was a life time experience for which I thank all the staff members
of Bajaj Auto Pvt. Ltd., Pantnagar.

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ABSTRACT
Industries that utilize the engine assembly line to obtain their
products currently go through great challenges. The first is the need
to assemble a large number of product models and their variants in
their lines, due to the variety required by the market. Another
challenge is the need to maintain an adequate level of manpower
occupation reduced hidden losses and other utilized resources. In
this scenario the activity of reduced hidden losses in operations
appears. In order to increase the efficiency and reduce the operating
costs of the line, and non value added activities among workstations
are performed. They can be done by different methods, such as:
reducing non value added. In engine assembly lines that produce
more than one model, total and individual engine assembly times are
often different among models, so the operation time of each station
varies from model to model. By elimination of non-value added
activities in lines that produce more than one model can be
performed by using the weighted averages of the times of the
different models.

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Another possibility is to use an objective function that considers the
imbalance among the models and try to minimize it. Quality is the
assurance of adherence to the customer specifications and it is a
measure of excellence or a state of being free from defects,
deficiencies and significant variation from standards. Customer
specification of the product can be met by strictly adhering to the
quality control measures in the production process and can be
ensured in a cost effective manner only if the quality of each and
every process in the organization is well defined and ensured
without any lapses. Every activity in the supply chain line to be
critically verified to identify the quality deviations incurring
additional expense or loss to the organization. This is in line with the
continual improvement principle of TQM philosophy. The cost of
quality management system acts as the most significant tool in
measuring, monitoring, controlling and decision making activities in a
firm which aims on business excellence.

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TABLE OF CONTENTS
Certificate
1. Acknowledgement
2. Abstract
3. Table Of Contents
4. Company Profile
a. Bajaj Company Profile
b. Pantnagar Plant
5. Vendor’s List
6. Engine Assembly
7. Introduction of hidden losses
8. Process
9. Type of wastes
1. 0ver-production
2. Waiting time
3. Transportation
4. Motion losses
5. Inventory
6. Over-processing
7. Scraps
10. Characteristics of Hidden losses
11. Tools and Techniques Used in Waste Reduction Efforts
11. Investigation and Prevention of Hidden Losses
12. Conclusions

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COMPANY PROFILE
BAJAJ – Company Profile
History
Bajaj Auto came into existence on November 29, 1945 as M/s
Bachraj Trading Corporation Private Limited. It started off by
selling imported two- and three-wheelers in India. In 1942, his son
Kamalnayan Bajaj took over the charge, he not only consolidated
the group, but also diversified the group into various
manufacturing activities.
The present Chairman of the group, Rahul Bajaj, took charge of the
business in 1965. Under his leadership, the turnover of the Bajaj
Auto the flagship company has gone up from INR.72 million to INR.
120 billion, its product portfolio has expanded and the brand has
found a global market of Bajaj Auto Limited is a major Indian
automobile manufacturer having a turnover of 120 billion rupees.
The Bajaj Group is amongst the top 10 business houses in India. Its
footprint stretches over a wide range of industries, spanning
automobiles (two-wheelers and three-wheelers), home appliances,
lighting, iron and steel, insurance, travel and finance. The group's
flagship company, Bajaj Auto, is ranked as the world's fourth largest
two- and three- wheeler manufacturer and the Bajaj brand is well
known across several countries in Latin America, Africa, Middle East,
South and South East Asia.

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Manufacturing Location
Bajaj Auto’s has in all three plants, two at Waluj and Chakan in
Maharashtra and one plant in Pantnagar in Uttrakhand.
Waluj – Bajaj range of Motorcycles and three-wheelers.
Chakan – Bajaj range of Motorcycles.
Pantnagar – Bajaj range of Motorcycles.
Key Milestone
1945 – Bajaj Auto comes into existence as M/s Bachraj Trading
Corporation Private Limited.
1948 – Sales in India commence by importing two- and three-
wheelers.
1959 – Bajaj Auto obtains license from the Government of India to
manufacture two- and three- wheelers.
1960 – Bajaj Auto becomes a public limited company.
1970 – Bajaj auto rolls out its 100,000th vehicle.
1971 – The three-wheeler goods carrier is introduced.
1972 – The Bajaj Chetak is introduced.
1975 – BAL & Maharashtra Scooters Ltd. Joint venture.
1976 – The Bajaj Super is introduced.
1977 – The rear engine Auto rickshaw is introduced. Bajaj Auto
achieves production and sales of 100,000 vehicles in a single
financial year.
1981 – The Bajaj M-50 is introduced. 1984 – Foundation stone laid
for the new plant at Waluj, Aurangabad.
1985 – Production commences at Waluj, Aurangabad.
1986 – The Bajaj M-80 and the Kawasaki Bajaj KB100 motorcycles
are introduced.
1986 – The Bajaj Sunny is introduced.
1991 – The Kawasaki Bajaj 4S Champion is introduced.
1994 – The Bajaj Classic is introduced.

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1995 – Agreement signed with Kubota of Japan for the
development of diesel engines for three – wheelers and with
Tokyo R&D for ungeared Scooter and moped development.
1997 – The Kawasaki Bajaj Boxer and the RE Diesel Auto rickshaw
is Introduced.
1998 – Production commences at Chakan and India First Four
Stroke scooter rolls out of Akurdi.
1999 – Caliber Motorcycle notches up 100,000 sales in record time
of 12 months.
2000 – Bajaj Saffire is introduced.
2001 – Bajaj Auto Launched its Premium Bike Segment ‘Pulsar’.
2003 – Bajaj Pulsar DTS-I is launched.
2004 – Bajaj Discover DTS-I and New Bajaj Chetak-4 Strike with
wonder Gear Launched.
2005 – Bajaj Avenger DTS-I launched.
2006 – Bajaj Platina launched, Foundation stone laid for the new
plant at Pantnagar, Uttrakhand.
2007 – Bajaj XCD 125 DTS-I, Bajaj Pulsar 220 DTS-Fi, 200 cc Pulsar
DTS-I launched and Production commences at Pantnagar.
2008 – Bajaj Platina 125 DTS-I and Bajaj Discover 135 DTS-I
Upgrade launched.
2009 – Bajaj Pulsar 150 & 180 upgrade launched.
2010 - BAL achieves BS III norms on entire 2-wheeler range.
2011 – Bajaj Pulsar 200 upgrade launched.
2012- Bajaj revised Pulsar 200cc liquid cooled engine.
2013 – Bajaj launched three new models 100T, 100M, and 125T
powered by worlds first 4 value twin spark DTSi engine.
2014 – Bajaj Discover 150F and 150S launched.
2015 – Bajaj Platina 100ES, CT 100 (Reintroduce), Pulsar 200RS
,200AS, and Bajaj Avenger 150 & 220 street.
2016 – Bajaj V15 Launched.

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Pantnagar Plant
HISTORY
Foundation stone- April 2006
Plant Inauguration- 9th April 2007
Commercial Production Start- 9th April 2007
INVESTMENTS
Total investments made into this factory-
Rs.1.73billlion (Rs. 173 Corers).
AREA
BAL-Pantnagar Plant Area-60 acres And 180 acres of the plant area
has been taken up by 16 vendors to set up a dedicated facilities-and
Thus ensure seamless integration with the mother plant.

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DEPARTMENTS
1. Vehicle Assembly
2. Engine Assembly
3. Paint Shop
4. Production, Planning and Control (PPC)
5. Vehicle Dispatch
6. Utility & Services
7. HR & Admin.

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VENDOR’S LIST
S.NO Vendor's Name S.NO Components
1 Varroc 1 Seat
2 R. R. Unit
3 C D I
2 Badve 1 Frame Assembly
2 Silencer
3 Gear Shift Lever
4 Hanger Bracket
5 Engine RH Bracket
6 Engine LH Bracket
3 Pricol 1 Speedometer Assembly
2 Fuel Gauge
4 AEL 1 Front Brake Assembly
2 Rear Brake Assembly

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5 Roop Polymers 1 Battery Arrester or Band
2 RR Cover
6 Minda Corp. Ltd. 1 Lock Set
2 Handle Holder
3 Fuel Cap
7 Advik 1 Fuel Cock
8 Minda Industries 1 Handle Bar
9 Lumax 1 Fairing
2 S.P.M. Flap
10 Endurance 1 Front Fork
11 NAPL 1 Frame Assembly
2 Chain Case & Fuel tank
12 MMT 1 Frame Assembly

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INTRODUCTION
The Hidden Factory is a term that refers to activities in an operation
or standard operating procedure (SOP). A few examples of Hidden
Factories are workarounds, rework, or any of the 7 wastes, which I
will describe below. Most organizations have some form of a Hidden
Factory and being able to “see” these hidden factories in an
organization requires learning to see what waste is and
understanding that waste in Assembly operation — service or a —
can be a substantial drain on the bottom line, top line, on employee
A strong control over the management of utilization of resources of
all categories in a manufacturing process becomes the demand of
the day due to the high competition among the players of the
present market. The resources-man, material, machine and time-to
be utilized in a most cost effective manner to ensure the profitability
of any business and at the same time no compromise in the quality is
permissible. This is the highly competitive globalized market scenario
today. Hence management and financial accounting have an
important role in the measurement and control of the components
of assembly costs. On the other hand quality improvement programs
for attaining continual improvements have become essential to any
business organization to thrive forward profitably with enhancement
in its customer base. The question is how to achieve both these
objective without losing organizational interests. Cost of quality has
evolved as the answer to this question. Cost of quality analysis is
considered as one of the most effective management tool for
gathering and analyzing the expenses in maintaining quality in a
assembly process and also identifies the non-value added expenses.
Quality improvement International Journal of Managing Value and
Supply Chains (IJMVSC) Vol. 6, No. 2, June 2015 14 programs can be

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critically analyzed using quality costing techniques to check the merit
of the program. This helps the management to identify the areas for
improvement in quality as well in reducing wastages and hence
ensure profitability. Morale, shareholders and, most importantly, the
customer. A process is a systematic activity comprising of smaller
activities that culminate in an outcome — service or product. Cycle
time is the total time from the beginning to the end of your process,
as defined by you and your customer. Cycle time includes process
time, during which a unit is acted upon to bring it closer to an
output, and delay time, during which a unit of work is spent waiting
to take the next action. Many models of quality cost analysis have
been evolved since the inception of this concept by the quality guru
Dr. Joseph Juran in 1950. The classical PAF model by Feigenbaum
(1956) which distinguishes quality costs into Prevention-Appraisal-
Failure categories, Process Cost Model by Marsh and Ross (1976)
classifying quality costs into cost of conformance and non-
conformance in the manufacturing processes, Opportunity Cost
Model by Sandoval- Chavez (1998) with the addition of opportunity
losses to the other traditional models and the ABC-COQ integrated
model by Tsai (1998) are the prominent models among them. Many
more dimensions have been added to the quality cost analysis by
researchers like Steve Elridge (2006) who has added knowledge
management concept to quality, Sower etal (2007) who has analyzed
the quality cost as a measure of system maturity with the analysis of
the relationship between quality and quality costs and Ali Uyar
(2008) and Zulnadi yakup (2010) who have analyzed quality cost as
money invested and money lost.

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PROCESS:
A process can take up time, space, and resources. All
processes can be categorized into the following categories: Value-
added, Non-value added but necessary and Non-value added.
There are three type of process…….
1. Value-added
2. Non-value-added
3. Non-value-added but necessary
1.Value-added
This step in the process adds form, function, and
value to the end product and for the customer. An activity is
classified as value added if it is effective. In other words, if the
activity directly contributes to satisfying the customer's expectations,
it is a value added activity. Any activity which improves the
customer's perception of the product or service is a value added
activity. Production type activities are value added activities (e.g.,
taking customer orders, receiving materials, assembling materials).

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2. Non-value added:
This step does not add form, function, or
assist in the finished goods manufacturing of the product. In order to
reduce cost while keeping up with the competition, non-value added
activities might be eliminated, non-value added activities might
be reduced, or simplified by becoming ‘lean‘ (mud). Typical non-
value added activities include reviewing, counting parts, inspecting,
testing / checking, filling information, obtaining multiple approvals,
revising / reworking, reporting. These activities do not help create
conformance to the customer’s specifications; they are something
for which the customer should be unwilling to pay a premium for.
Some activities are essential for the process for traceability and
accountability or are required to meet company or regulatory
policies, such like sign-offs, approvals, etc. Consequently, such
activities do not directly contribute to manufacturer’s profits and are
considered non-value added activities.
3. Non-value added but necessary:
This step does not add
value, but is a necessary step in the final value-added product. Non-
value-adding activities that is necessary under the present operating
system or equipment. They are likely to be difficult to remove in the
short term but may be possible to eliminate in the medium term by
changing equipment or processes. Often use to describe regulatory
compliance activity that adds no direct customer value but is
required to maintain the license to operate.

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Non-value added & Non value added but
necessary Naturally create 7 type of waste
Over-Production
Producing more than is needed, faster than needed or
before needed
Waiting time
Idle time that occur when co-dependent events are not
synchronized
Transportation Movement of materials or people that does not add value
Motion
Unnecessary movement resulting in delays or
inefficiencies
Inventory
Material supply in excess of that required to meet customers’
demands
Over-processing Material supply in excess of that required to meet or processes
Scraps
Product, service or documentation imperfections
nonconformance, or errors
1.Over-Production:
Producing more than is needed, faster than
needed or before needed. Over-production is the worst of the seven
wastes of lean manufacturing overproduction is making products in
too great a quantity or before it is actually needed leading to
excessive inventory. Overproduction is the worst of the seven wastes
as it obscures all of the other problems within your processes.
Making more than is necessary is a very common practice among

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biopharm companies. While it may seem logical to keep the shelves
stocked and customers instantly gratified, there are some serious
risks and costs involved in making more than necessary, such as
product expiration, possible contamination from outside sources,
deteriorating product quality, etc. Some of these outcomes could
have major con-sequences to the patient and possibly the corporate
image. The principles of Lean assembly require you to make what the
customer wants when they want it, pulling only what is ordered
through your work flow. Just in Time manufacturing is possible in any
industry with ingenuity and improving technology. Another cost
associated with Over-production is to do with the storage and
movement of the inventory that you have created, it all requires
space, it needs people and equipment to move it around and it
needs containers for storage. All of this is a cost to you, if you could
eliminate it the savings would be straight back on your bottom line
improving your profit.
Causes of the Waste of Over-production:
We produce
large batches because of long setups on some of our machines, so
we try to maximize our throughput of these machines and use
“economical batch quantities” to dictate how much material is
processed rather than what the customer wants. We also distrust
our supplier’s ability to supply what we need, so we order more than
we need and sooner than we need it to ensure that we have it when
we need it, this additional stress that we place on our suppliers often
causes them to fail becoming a self fulfilling prophecy. We also
distrust the reliability of our own processes and plan to allow for
interruptions in the flow of production, often scheduling a few days
or even weeks between successive operations just in case of issues
or the need to change the production plan. We plan in many of our

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delays and inventory and many ERP and MRP systems add to this
problem. We also work to forecasts; we guess what the customer
will want in the future and invariably make mistakes and thus build
product that is unwanted and don’t build what the customers really
want.
Examples of wastes of Over-production:
 Production of components before the next stage in the process
is ready to receive them
2. Waiting Loss
Idle time that occur when co-dependent events
are not synchronized. Waiting is time wasted waiting to proceed
with value added activities. Delays can result from a number of
factors. Waiting for release of material or unavailability of QA/QC
personnel for verifications/validations and clearances can be a large
contributor to increased waiting. In one recent study (confidential
client) conducted by the authors, it was observed that time spent
waiting for the QA personnel to begin inspection contributed up to
42 percent of the overall cycle time. This waiting time could have
been easily eliminated by proper scheduling of activities to ensure
that the QA person is not required in more than one place at the
same time.
Unavailability of raw materials is another contributor to increased
waiting time. This factor is greatly influenced by demand forecasts,
reordering strategies, variability in the supply chain, environmental
factors, etc. A common strategy is to order surpluses of raw
materials to mitigate the risk of shortages and delays. This increases
raw material inventories that occupy valuable real estate in the

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warehouse. As mentioned earlier, a lean operation will only carry
the inventory necessary to ensure the customer is satisfied and
demand is met.
Improper planning and scheduling also contribute to delays.
Variability in upstream processes will impact processes
downstream. Delays in the upstream process significantly increase
waiting time in the downstream process. Unveil-ability of
equipment (processing or transport) also can add to the waiting
time, e.g., unavailability of clean or sterile equipment, assemblies,
and kits required for processing, etc. increase waiting time.
Equipment idle time adds no value in a lean operation.
Bioprocessing equipment has extremely high capital value. Not
maximizing its utilization can result in higher product COGs.
Whenever an operator or machine is idle, the company is losing
money and other valuable resources. Companies must pay for labor
even if an operator was idle (for reasons beyond his/her control)
during the shift. In these cases, operators can be reassigned to
other tasks. However, if the operators are not trained in these
tasks, such reassignments may not be reasonable and add little
value to the overall operator utilization.

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3. Transportation:
Excessive movement of raw materials,
personnel, or paper-work can be considered NVA activities.
Transportation may seem like an essential activity, but a process
where every unit operation is physically located adjacent to its
upstream and downstream operations does not require
transportation. This is often not achievable in biopharm facilities
where aseptic processing and environmental clean room
classifications may require segregation of unit operations and
therefore transfer stations and transporters. However, much of
the cost associated with transportation and transfer waste can be
attributed to inefficient processes and lack of understanding of
environmental impact on the operation resulting in poor facility
layout design.
Any type of transportation has cost associated with it. Some form
of equipment is required, e.g., forklift, hand truck, etc., and these
need to be purchased. These equipment items have an initial
capital cost, recurring maintenance cost, operator costs, and other
indirect costs, such as insurance, training, depreciation, cost to
install traffic indicators (overhead traffic signals), etc. Automated
Guided Vehicles (AGVs) are viable alternatives to manually
operated equipment, but the cost of purchasing, implementing, and
validating an automated system may be too high for some
companies. For other companies in search of reducing headcount
and overhead while maximizing the productivity of their work
force, automation may be the solution. It should be noted that
employing AGVs or automation is justified when tasks are similar in
nature, repetitive, and have higher frequency.

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Significant transportation waste can be seen if portable equipment
and tanks are repeatedly moved around a facility. When a buffer
hold bag is transported from a solution prep area to a
chromatography suite, the bag holder and operator must pass
through air locks. The operator must adorn additional gowning and
spend time wiping down the bag holder. Then, once the buffer is
consumed, the operator must reverse the process, and spend time
de-gowning.
Layouts should be designed such that sequential process steps are
adjacent to each other; and material and personnel movement is
minimized. Techniques like spaghetti maps or discrete event
simulations can be used to analyze the distance traveled by
operators in varying layout configurations. Such analysis is
especially useful to analyze multi-product facilities or when the
operating philosophies are still being defined.
Considerable waste, in terms of time, money, and resources, also
can be seen in supply chains. If a distribution center is not optimally
located, the overall COGs are higher. Similarly, trucks sent to/from
the warehouse without a full load also contribute to transportation
wastes as the same amount of time and resources are being
consumed regardless of the load.
Example of transportation
 Fasteners transportation to workplace
 Engine transportation from unloading stage

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4.Motionlosses :
Motion itself refers to the amount of
movement an operator performs. Ideally, an operator could stand
still and parts would arrive in order to achieve maximum productivity
- again this is not always feasible. Every second an operator has to
spend gowning, searching for a flex hose, or even sifting through
computer files represents unproductive time and motion that is not
spent adding value to the product. This waste can be combated by
standardizing procedures, ensuring preparedness, efficient layouts,
and organized work spaces, such as those seen when using the 5S5
concept, a Lean housekeeping technique.
Unnecessary motions are those movements of man or machine
which are not as small or as easy to achieve as possible, by this I
mean bending down to retrieve heavy objects at floor level when
they could be fed at waist level to reduce stress and time to retrieve.
Excessive travel between work stations, excessive machine
movements from start point to work start point are all examples of
the waste of Motion.
All of these wasteful motions cost you time (money) and cause stress
on your employees and machines, after all even robots wear out.
Example of motion losses:
 People searching for materials, tools or equipment or fasteners
 Poorly structured or disorganized work spaces and kit bin

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5.Inventory:
Inventory is often described as a necessary evil.
Inventory consists of raw materials in a warehouse or on a shelf and
finished goods. Low inventory (of raw materials) risks starving the
process, while holding too much inventory can increase product lead
times and warehouse space requirements. It may be difficult to strike
the right balance of inventory requirements without advanced data
processing or simulation.
Excessive inventory of product is a result of over-production, another
type of Lean waste. A study conducted by Schonberg showed that
pharmaceutical companies typically carry relatively huge inventories
when compared to those of other industries.4
Many companies use
excess inventory to cover variability in the process or uncertainty in
demand.
In a truly Lean process, there is no built up Work In Process (WIP) or
excess inventory. The process should include one-piece flow of
product from one processing step to the next based entirely on
customer pull. Raw materials arrive from the supplier only when they
are needed. Finished goods are sent directly to the customer once
the process is complete. This is very difficult to achieve in highly
regulated industries such as biopharmaceutical manufacturing.
However, a de-tailed study of material levels and root causes of
variability can help lower excess inventory. Discrete Event Simulation
has often been used to model the resource requirements of a
process or facility in order to quantify optimal inventory levels.
There are numerous costs associated with inventory. Storing raw
materials prior to use requires that you have a warehouse or some
type of storage facility, which includes land and construction costs.

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Furthermore, the materials may require tightly controlled
environmental conditions adding to both the installation and
operating costs. A company also must track every item that is held
in inventory. The material management/tracking systems used for
such purposes can become expensive as a result of increased
complexity and tracking requirements. In addition, operators are
required to receive, inspect, and move materials – another cost
factor. There are several risks and costs associated with holding
excess inventory, such as damage to raw material, due to obsolete
rendering the material unusable, and contamination to name a few.
Example of inventory:
 Excess production of engines
 Stock of engine components in store
6.Over-processing:
Over-processing is the performance of
operations beyond a set (or expected) quality level. If product or
processes not only satisfies, but exceeds Critical-To-Quality (CTQ)
and/or regulatory requirements (i.e., quality higher than a
customer is willing to pay for), it can be described as over-
processing. It also includes continuing to process an incorrect
product. Such instances can occur if appropriate quality checks are
not put in place. Processing or producing at rates exceeding
requirements is also a form of over-processing waste.
Quality control falls under this very broad category. A certain level
of inspection is required to ensure quality and to meet regulatory

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expectations. Over-testing has high costs associated with it. At the
other extreme, under-testing presents significant risk. Guidelines
on minimum sample and quality testing requirements are provided
by the Regulatory Agencies to mitigate risks associated with
inadequate sampling and testing.
Biopharmaceutical companies have always struggled with this
balance. Statistical methods such as Six Sigma and sampling plans
can be used to determine the appropriate level of quality
inspection, sampling, and testing required to comply while
minimizing costs. Formal risk assessments will define the areas of
highest risk, thereby providing manufacturers a roadmap on where
to focus their testing.
Similarly, excessive documentation is another activity that can be
considered over-processing waste. CTQ parameters must be
monitored during batch processing and recorded in batch records.
Today’s technology allows for much of this data logging to be
performed automatically with any real time deviation or OOS event
to be identified immediately, alarming the manufacturer and
preventing subsequent manufacture of OOS product. The traditional
development and maintenance of batch records can be very
inefficient when non-critical information is recorded and further
confirmed by secondary signatures. Time lost by operators,
approvers, and/or managers on NVA activities, such as documenting
unnecessary data or duplicating data, further increases the product
COGs. Increased documentation or human involve-ment also
increases the chance of making an error. Sometimes approvals
cannot be avoided, but the fewer that are required, the lower are
the costs and risks. Electronic Batch Records (EBR) can help
overcome some of the problems associated with manual batch
records. However, EBRs should be designed to capture the key

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artifacts and avoid any unnecessary inputs or information.
Over-processing not only increases the overall cycle time, but also
affects inventory levels. Many times companies over-process as a
precautionary measure. Examples of over-processing include using
intensive CIP, SIP, or cleaning regimen when lower grade
cleaning/rinse may be adequate, repeating test sequences in
commissioning and qualification, performing “pre-validation”
activities that are non value added, processing closed unit operations
in highly classified clean room environments, requiring
protocol/record approval signatures of personnel or departments
that cannot add value or are not Subject Matter Experts (SMEs), etc.
While these activities may be necessary to some extent, they are all
examples of over-processing and result in loss of material,
manpower, or money in one way or another.
7.Scraps:
Scraps are the most common form of waste and can be
identified easily as damaged goods or non-compliant prod-uct. Scrap
can be found anywhere from the manufacturing process to the
analytical lab, and even in the supply chains. In a warehouse,
damaged boxes from careless maneuvering can impact raw materials
or finished goods, which then need to be repaired or discarded. If a
shipping form is not filled out correctly (defect), it can cause delays in
the assembly process, which in turn delays the shipment of finished
goods to the customers. Other documentation errors that can cause
delays in the process or additional corrective action are considered
waste because they do not add any value to the final product.
Low yield is a good indicator of high levels of defects. In an Oral Solid
Dosage (OSD) manufacturing facility, a defect could be a broken
tablet, or a label that does not adhere to the bottle it is attached to.

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Products that do not pass quality inspection are considered
defective. In a cell culture process, non-conforming batches of buffer
or harvest contamination are examples of defects.
Many scraps can be attributed to variability within a process.
According to Dr. Walter Stewart, there are two types of variability:
assignable cause, which represents the randomness of a system
outside the process, and chance cause, which is the variability
inherent in a process.3
Lean techniques are used to eliminate
assignable cause variation and bring the process into a state of
statistical control where it operates within one to three sigma range.
Six Sigma tools and methodologies can then be used to reduce
variability and eliminate the chance cause to bring the process
capability from three to six sigma.
In a tightly controlled Lean process, defective product will be
identified before any further NVA processing can be done on the
non-compliant item. In such a scenario, no extra work is performed
on a batch or drug container that is already OOS and is destined to
be disposed of. This frees up resources downstream to continue
processing “good” product, and eliminates further wasteful
activities. The processing of OOS product is also known as “over-
processing” (described below). However, it is very important to
identify the underlying causes resulting in OOS products. Failure
Mode and Effects Analysis (FMEA) is one of the commonly used
techniques for identifying root causes, analyzing the impact of
failures, and prioritizing the failure modes. Control procedures
should be designed and developed around processes susceptible to
creating OOS products to avoid recurrence of such instances.
The costs associated with defective product or materials are
primarily direct costs due to lost sales. Additionally, there can be
indirect costs associated with defects such as, but not limited to,
disposal costs, contamination of process streams, need for additional

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testing, cleaning, and sanitization. Such costs, especially disposal
costs, can be very high when dealing with active pharmaceutical
ingredients that may need to be stored securely and incinerated.
Although it may be possible to reprocess some products, additional
costs will be incurred. As an example, the refiltering of a buffer
solution, where the post filter integrity test failed, may be allowed,
but the net COGs would need to include the additional components,
utilities, and labor required to reprocess the solution. The system
integrity failure could also require additional future testing and
revalidation of the process, which consume additional resources.
In order to minimize defects and associated costs, the process should
be highly robust and repeatable, such that any OOS product is
identified immediately. Line tours and process observations can
provide good information and insight into the causes leading to
defective products. Statistical techniques like Pareto Analysis can be
used to identify those processes, equipment, or procedures which
cause the highest number of defective (or OOS) products. Data
mining techniques and Analysis of Variation (ANOVA) can be used to
understand relationships between various factors that generate
defects and help to determine the root causes.

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Characteristics of Hidden losses
Though hidden losses differ by products, processes, facilities, etc.,
there are some common traits that are observed:
 Hidden losses irrespective of type, negatively impacts
productivity, flexibility, and profitability.
 Losses will not be always “visible.” Obvious waste is easy to
reduce/eliminate. However, it is the unseen waste that
poses the real threat. This type of waste needs to be
identified and eliminated.
 Losses can be concealed even in the (so-called) value added
activities.
 Losses are not always independent of each other. One type
of losses can lead to another, e.g., overproduction could
increase chances of defects, increase inventory,
transportation, etc.
 Some NVA activities are miscategorized as ENVA activities.
Some are due to legacy practices no longer applicable with
the use of new technologies and better process
understanding. Proper identification of Critical Quality
Attributes will lead to a lean Quality Program based on risk
to patient.

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Tools and Techniques Used in Waste Reduction Efforts
Using the right tools and techniques can help identify, and
subsequently reduce (or eliminate), waste from the process.
Selection of an appropriate tool/technique is dependent on the
problem at hand. Numerous tools and techniques can be employed
for the aforementioned purpose. However, we will restrict the
discussion to some of the popular techniques used for waste
reduction.
A common and most popular lean technique to identify waste is
Value Stream Mapping (VSM). A value stream map is more than a
flow chart. Using unique symbols, it shows both information and
material flow, while capturing VA and NVA activities and their
respective durations. This tool is used not only to depict current
process, but also can be used to create a vision of future state
processes. However, VSM does not capture the impact of variability
on a process. Also, it cannot be used to understand the dynamic
interactions that occur within the process.
Modeling and simulation can be used to address such
shortcomings. Discrete Event Simulations (DES) is very effective in
handling variability and interactions. The ability to model random
(stochastic) events, e.g., equipment failures, unavailability of
resources, unexpected changes in demand, etc., allows DES to
mimic the real world operations. DES is often employed to study
“what-if” scenarios and to optimize a process or facility. Numerous
commercial simulation software is now available, including Flexsim,
Remodel, Arena, etc.
Workplace organization using visual techniques also are
recommended to reduce waste. Markings, colors, and other visual
controls can be used to eliminate excess motion or inventory.

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Techniques such as 5S, visual production control, e.g., Kanban, and
visual information and performance measurement techniques
should be employed. Replacing manual operations with automated
operations, wherever feasible, will reduce the errors caused by
human intervention.
Standardizing equipment, practice, and procedures can significantly
reduce wastes. In many instances, standardization improves overall
flexibility. Statistical and quality techniques, such as Design of
Experiments (DOE), control charts, sampling plans, etc., can be
effectively used to reduce waste in a process and even within
supply chains.

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Investigation and Prevention of Hidden Losses
Issue 1
At head cover sealant application when head cover is fitted in
engine sealant are fall outside the engine and create problems on
other stages also some amount of sealant are waste. Currently 12gm
sealant used.
Solutions: If we reduce pressure from nozzle and also decrease
amount of sealant then these problems can be eliminated.
Issue 2
When engine model are change at RH crank case clamping
one extra manpower required for adjusting the fixture bolt and that
NVA take some extra time and manpower. That activities perform
one full revolution of conveyor belt.
Issue 3
Stock of engine that is an inventory but it’s helpful for
dispatching engine when engine are not assembled by assembly line.
But it’s also a problem as well as covered more area at outside the
assembly shop.

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CONCLUSIONS:
In this study, a comprehensive analysis of all cost
elements which contributes to the quality of products and services in
the supply chain line of a manufacturing firm has been conducted.
Apart from the normal prevention-appraisal-failure mode quality
cost categories, more in depth analysis of all activities in the whole
supply chain is done to track and measure the hidden elements of
quality cost including the opportunity cost elements.
The study is findings points out the fact that the hidden cost of
quality is more than 3 times higher than the direct quality cost
elements in the manufacturing firm and most of these hidden costs
can be reduced or even eliminated by proper tracking and
understanding the root causes.
This study highlights the inadequacy of traditional cost of quality
system in tracking and assessing the overall costs of quality. In order
to assess the overall cost of quality, the hidden costs also has to be
identified, quantified, measured and analyzed. For tracing the hidden
quality costs, it is necessary to move beyond the data produced by
the traditional accounting system. This also gives an insight to the
huge impact of hidden quality costs to the organizational bottom line
and points out the gold mine of improvements. Using this data the
company can formulate survival strategies in the highly intensive
competitive market scenario.
Future studies in this field are recommended with the study of
impacts of hidden elements on overall quality cost and development
of a quality cost expert system with inclusion of hidden and
opportunity cost elements.
As pressure to cut costs continues to grow, companies need to
reflect on their current practices and identify any possible sources of

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waste. Lean and Six Sigma methodologies can be used to help
identify non value adding activities and eliminate the causes of
waste, along with variability in supply, demand, or processing.
Overcoming the initial hurdle of admitting a process is not perfect
can be the hardest part. There is a perceived high cost to re-validate
a process. Many times, the benefits gained from process
improvements can overcome the cost of re-validation within the first
year. The savings can be realized as increased capacity or reduced
inventory in a warehouse. The benefits are not limited to cost
savings, but may include quality improvements and increased
flexibility.

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THANK
YOU