Lean Manufacturing: The most effective way to become a value & wealth creating world-class organization

Transcription

1 Lean Manufacturing: The most effective way to become a value & wealth creating world-class organization Lean Manufacturing - A. N. Singh, Lean Solutions Consultant Lean is the term used to describe the production system developed by the Toyota company in the post World War II years. "Lean" comes from the ability to achieve more with less resource, by the continuous elimination of waste. The concept of Lean is not restricted to manufacturing and applies to the whole enterprise, including the supply chain, the new product development process and the provision of service. In 1990 James Womack, Daniel Jones & Dan Roose wrote a book called "The Machine That Changed The World". This book was a straightforward account of the history of automobile manufacturing combined with a study of Japanese, American, and European automotive assembly plants. "Lean Manufacturing" caught the imagination of manufacturing professionals in many countries. Lean implementations are now commonplace, every progressive company is trying to become lean. The knowledge and experience base is expanding rapidly. The essential elements of Lean are described in "Principles of Lean Manufacturing." They are based on the techniques developed by Ohno, Shingo and the people at Toyota. This article on implementation of Lean provides a "Mental Model" to assist the thinking process and guidance on strategy and planning. There is no cookbook for manufacturing. Each firm has its own unique set of products, processes, people, and history. Toyota is Toyota, your company is your company, and you can't copy Toyota but can definitely learn and apply the essence of proven principles in your own way. Manufacturing methodology is a "science", be unique to every product and organization. Implementation strategy is still, largely, an art. Therefore implementation of Lean Manufacturing is combination of science and art, significantly depends on the characteristics of processes, people and culture of the organization. Benefits of Lean Manufacturing Enhances throughput (speed of cash inflow through sales) Reduces cost by eliminating wasteful use of resources Improves delivery speed by eliminating un-necessary time consuming activities Improves quality by eliminating root-causes of defects Reduces Inventory by balancing the process capacity and linking with customer demand rate (Takt Time) Reduces order to delivery time by eliminating delay causing activities Reduces space requirement by reducing inventory Improves cash balance by reducing cash outflow due to low inventory Enhances production capacity of the plant without any investment Improves effective utilization of resources How Lean brings dramatic improvements? In any activity of a business process, at any moment of time we are doing only two things: Either adding value to product or service through useful activities or Generating waste by doing a non-value adding activity

2 Success of your company and profit margins depend on "how less waste" you are generating in your processes? To improve the performance of your organization, you have to focus on the quantum of waste being generated in your business processes, lesser the better. Waste is defined as any business activity that adds no value bust absorbs resources. All resources have a cost. Any waste is increase in your cost. As per "Toyota Production System" all types of waste can be classified in 8 categories: defects, over production, excess inventory, inappropriate processing, unnecessary motion, transportation and untapped human potential. Lean makes people "Learn to See Waste". Once you can see waste and become aware of it, your "professional conscience" and "creative urge" will inspire you to apply your knowledge and experience to find a practical solution to eliminate waste, which no outsider expert can do. Developing a practical and inexpensive solution for your process is not a problem for you, the only difficulty is in seeing the waste and reaching to the "correct and exact root-cause of problem". Lean knowledge and skill development training will equip you with right kind of tools & techniques to "detect waste" and provide step-by-step guidance to "eliminate waste" through unique "problem solving technique". How to implement Lean? Lean implementation involves deployment of following five Lean Principles in all business processes (manufacturing and non manufacturing). These principles have proven its potential to make Toyota as the topmost company of the world. Every person of the company has to learn and understand Lean Principles for effective deployment in their business process. Every entity of this world is created twice; first in human mind in form of a "thought", second creation is "manifestation of thoughts into physical world". You too can make your company "Lean", if you start thinking in lean way. This article may trigger "Lean Thinking" in you to begin a lean journey of your organization. Principles of Lean (This part of article compiled from the publications of Lean Enterprise Institute USA) 1. Specify value from the standpoint of the end customer by product family. 2. Identify all the steps in the value stream for each product family, eliminating every step and every action and every practice that does not create value. 3. Make the remaining value-creating steps occur in a tight and integrated sequence so the product will flow smoothly toward the customer 4. As flow is introduced, let customers pull value from the next upstream activity. 5. As these steps lead to greater transparency, enabling managers and teams to eliminate further waste, pursue perfection through continuous improvement.

3 As Womack and Jones note in Lean Thinking "The critical starting point for lean thinking is value. The ultimate customer can only define value. And it's only meaningful when expressed in terms of a specific product (a good or a service, and often both at once), which meets the customer's needs at a specific price at a specific time." Above all, lean practitioners must be relentlessly focused on the customer when specifying and creating value. Neither shareholder needs, nor senior management_s financial mind-set, nor political exigencies, nor any other consideration should distract from this critical first step in lean thinking. The value stream is the set of all the specific actions required to bring a specific product through the critical management tasks of any business. There are three kinds of tasks performed in a value stream: - The problem-solving task running from concept through detailed design and engineering to production launch, - The information management task running from order-taking through detailed scheduling to delivery, and - The physical transformation task proceeding from raw materials to a finished product in the hands of the customer. Identifying the entire value stream for each product is the next step in lean thinking, a step, which firms have rarely attempted, but which almost always exposes enormous, indeed staggering, amounts of waste. Only after specifying value and mapping the value stream can lean thinkers implement the third principle of making the remaining, value-creating steps flow. Such a shift often requires a fundamental shift in thinking for everyone involved, as functions and departments that once served as the categories for organizing work must give way to specific products; and a "batch and queue" production mentality must get used to small lots produced in continuous flow. As a result of the first three principles, lean enterprises can now make a revolutionary shift: instead of scheduling production to operate by a sales forecast, they can now simply make what the customer tells them to make. As Womack and Jones state, "You can let the customer pull the product from you as needed rather than pushing products, often unwanted, onto the customer." In other words, no one upstream function or department should produce a good or service until the customer downstream asks for it.

4 After having implemented the prior lean principles, it "dawns on those involved that there is no end to the process of reducing effort, time, space, cost, and mistakes while offering a product which is ever more nearly what the customer actually wants," write Womack and Jones. improvement in every area of business activity. Perfection is the fifth and final principle attained by practicing the first four principles and continuous (Source: Lean Thinking by Womack & Jones) Seven step Implementation plan Lean implementation involves combination of "top-down" and "bottom-up" approaches in a well-planned and systematic manner. Success of lean implementation depends upon the commitment of people. Top management must be truly committed to "make Lean happen" and every person of the organization should be fully involved to learn and implement lean techniques to ensure continuous improvement of process, people and culture of the organization. Based on experiences of implementation of Lean in Indian organizations, following steps are recommended: Commitment Lean Transformation Strategy Lean Leadership training Value Stream Mapping Value Stream Improvement Value Stream Management Lean Enterprise Getting started Lean Gurus; Womack & Jones recommend following five-step plan to start lean journey: Get a change agent: who can make things happen in your company. A person with patience, persuasive skill, highly positive attitude and empowered by CEO. That change agent may be you! Find a Sensei (Coach, Teacher): who has formally learnt, seen and felt Lean in Japan (preferably in Toyota). Having adequate hands-on experience of shop floor and implemented lean (don t try with a consultant who is going to guide you just by reading the book "Toyota Way", he may take you to somewhere else). Lean is more practical and experiential rather than just conceptual. Success of Lean implementation greatly depends upon the knowledge and skills of consultant Seize or create a crisis to draw attention of top management and others. In fact there are many crisis existing in your company. You have to become Columbus to discover one of them. It's not a problem, a golden opportunity to use your wisdom & creativity. Map your Value Stream: select a value stream and map it (after learning)

5 Pickup some thing and get stared: don t wait for grand strategy, just do it. You can learn Lean by doing, don t expect any miracle to happen. Remember that "Lean is not a Quick Fix", but a sound and robust way to create a perfect process. There is no option; your company has to become Lean! In fact there is no option to organizations if they want to survive and grow (however survival is not compulsory). For attaining and retaining global competitiveness, companies have to detect and eliminate waste. How you do it, is your choice; it is immaterial, but it must be done. Either you eliminate waste or get eliminated: choice is yours! White spaces Consulting- facilitates Lean implementation White spaces consulting facilitate Indian organizations for implementation of Lean Manufacturing in effective manner. About the author A. N. Singh; an engineer, author, quality auditor, trainer and Lean management consultant with thirty-seven years of hands-on experience of industrial management, training and consulting in leading public and private sector organizations. Recipient of Japanese Government Scholarship to learn Total Quality Management in Japan. Trained in Lean Manage ment & Value Stream Mapping at Lean Enterprise Academy UK. Undergone training in Toyota Production System at Toyota Motor Corporation Japan (birth place of Lean), Kaizen Institute Japan and Yokohama Kenshu Center Japan. A Six-Sigma Black Belt from American Society for Quality. Conducted more than hundred in-house, public training programs and Lean workshops in various organizations. on behalf of FICCI Quality Forum, UNIDO, American Society for Quality, CHR Global Consulting and Lean Six Sigma Academy. Having seventeen publications to his credit, published in form of eight Books (related to Quality Management, and Steel Technology) and nine Corporate Training CD ROMs (e-books) on topics related to Lean Manufacturing, Lean Service, Lean Six Sigma and TQM. ASQ faculty on Lean Manufacturing & Lean Six Sigma. Worked as UNIDO consultant for implementation of Lean Manufacturing in SME clusters. Active member of ASQ & Lean Global Network. Currently working as Process Excellence Practice Head and Lean Solutions Consultant at White Spaces Consulting. Contact: ansingh11@gmail.com, Phone: