Lean Management Techniques

7th May, 2014

By Sanjay R. Chitale

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In today’s world of ever growing competition, businesses (be they manufacturing or service sector), are finding very difficult to maintain a competitive edge over their competitors. Cost Reduction, Maximising Productivity, Quality Improvement, Efficient Maintenance of machines, Inventory Control, Customer Satisfaction are some of the key measures that organisations undertake to improve one’s business. It has been seen that the biggest problem is sustenance of the methods employed & soon things start going out of order. In short, it is not the concepts that are important but sustenance of concepts is of prime importance for success of any business in the long run.

The approach of Lean management/Kaizen is a very unique one & is a hand –on approach with practical workshops on real problems rather than seminars or board room discussions. It is a low/no cost approach & results achieved are very remarkable. The techniques used are very simple to understand for all levels of employees.

The concept of Lean Management originates from the Toyota Production System developed by Taiichi Ohno & his colleagues in the early post war years. It was a system that challenged traditional mass production. In using this approach, Toyota found that compared to other manufacturers they were able to create a given amount of value with less of everything. That is they were able to add more value to products or services using less & less of available resources.

Key Principles

The focus is creating value added product or service at the end of a process with the aim of reducing or eliminating all the seven wastes that are attached with the process.

Techniques to Reduce Waste

1) Over Production:

Over Production is a fall out of using mass production methods with the view that more production reduces overall cost of production. Instead Cellular Manufacturing & One Piece Flow method of manufacturing ensures no Loss or waste due to defective batches & cost of inventory.

2) Waiting:

When either man, machine or material is kept waiting in any process or Service, it leads to waste of time. Delays in delivery of products or services become evident due to waiting. Value Stream Mapping Process Linking, Std. Operations & Visual Management is used to eliminate waiting in any process.

3) Excess Transport:

When either Man, Machine (Equipment), Material has to move frequently over large distances in any process or service it leads to waste of time. Value Stream mapping Process Linking & Process Layout helps in reducing such time losses.

4) Over Processing:

Over Processing or repeating a process to get the right product leads to stopping of regular production or employs excess manpower which in turn reduces productivity. Std. Operations, Total Productive Maintenance (TPM), Total Quality Management (TQM) ensures products & services to be first time Right.

5) Searching:

During any process or service a lot of time is wasted in searching Material, tools, documents, spare parts, etc. eventually there is reduction in productivity. Efficient Storage, Point of Use Storage, 5 ‘S’ Principles are effective techniques for reducing search time.

6) Defects / Rejects:

Defects & Rejects are direct losses to any organization & only Adds to the cost of production. Total Quality Management (TQM), & Total Productive Maintenance (TPM) ensures Zero Defects thus reducing cost.

7) Unnecessary Motion:

Although looked at as a small matter it contributes in a big way where repetitive work is carried out either in production or service related processes. Standardizing Work Operations & Work methods reduces unnecessary any motion leading to increased productivity.

Benefits:

1) Increased Productivity of 30%

2) Reduction in Space Utilization 25-30%

3) Increase in Manpower Utilization 25-30%

4) Reduction in Inventory 30-40%

5) Reduced Machine Break Downs

6) Reduced Defects & Rejects

CASE STUDIES

1) Autonomous Maintenance on Seydel M/c: This was one of the most critical m/cs for the spinning department in Spin – Knit Textiles Ltd. The machine had been performing very poorly for some time & management had decided to replace the same. This was going to incur a cost of approx. Kenya Shillings 50 million. It was decided to implement Autonomous Maintenance on the M/c & see the results over a 1 year period then decide on the purchase of new m/c. I was part of the team & over a period of one year the following results were achieved.

OEE (Overall Equipment Effectiveness) improved from 60% to 78%

MTTR (Mean Time to Repair) reduced from 5hrs to 20 mins

MTBF (Mean Time before Failure) increased from 1week to 3months

The condition of the machine improved dramatically & the need for new machine was scrapped thus saving the organization millions of shillings.

2) Cellular Manufacturing in Tailoring Department: There were two departments where stitching activities were carried out namely Blankets & Shawls. Both departments had a batch method of working where by first all the Rolls of fabric received from the Weaving Dept. would be stacked, then large batches of blankets & shawls were cut, these were then stitched & later packed. All the various operations were carried out by separate groups of people working in different sections. It was recommended that there was a need to implement cellular manufacturing for these operations & a project was undertaken. The team noted the various cycle times of each operation & established the Take Time for the process. With the help of the consultant cells were created & all the activities were brought within the Cell. No more inventory was being held up in the form of rolls of cut blankets. Each cell was complete on its own right from cutting to packing. Following were the results achieved.

Man Power reduced by 30%

Inventory (WIP) reduced by 80%

Identification of Defects improved as Response time improved thus leading to reduction of defects at weaving 20%

Delivery to Finished Goods Store improved.

Lean Manufacturing in Engineering:

Josts Engineering Ltd. is a 100 year old company in the business of manufacturing electrically operated Material Handling Equipments like Stackers, Forklifts, Towtrucks, Hand Pallets, Rackings, Dock Levellers etc.

1) Stores & Inventory Control:

Recently, while working with M/s Josts Engineering Ltd Thane, the Material Procurement dept was constantly finding that the stock of items on the computer never tallied with the physical stock in the store. This always led to wrong items being procured, thus leading either to excess or shortage of material for production. A project was under taken to improve this situation. The first step was to improve storage in the store. Traditional Racks & Bins were removed & efficient material arrangement system using peg boards made from scrap timber. Shadow markings & Re-Order Levels were clearly marked. Kanban cards were prepared and training to the people on its usage was done.

The results thus achieved were

Stocks on Computer & physical correctness improved to 97% up from 80%

Zero ‘stock out’ for items since last 5 months

Inventory Value in store reduced by 10%

Search time at store improved by 20%

All storage now at eye level & bend free, climb free, Space recovered nearly 50%

2) Improving Delivery of Spare – Parts to Customer:

The income from spare – parts supply to customers contributes substantially to the business of Josts Engineering & is critical in ensuring additional sale of equipments to existing customers. There was a constant complain from Sales & Service personnel that customers were not getting their spare – parts in time. Many customers were forced to seek alternative suppliers & were losing faith in the company’s ability to give proper service to them. This was also affecting sale of new equipment.

Existing delivery time was seen to be averaging at 52 days in the month of July. A project was undertaken to improve the delivery time. An ambitious goal of 7 days was set (i.e. to deliver spare parts within 7 days from the time of Purchase Order). The existing process of Spare Part ordering & its documentation till actual time of delivery was analyzed. Very interesting facts came to light and it was seen that the major time (delay) was due to documents waiting at every table. All the owners to the process were then shown the data & a review process was put in place. At the end of October the average delivery time was seen at 23 days. An improvement of almost 50 % . The sales & service personnel were already receiving good feedback from customers w.r.t. spare part delivery. This project is still going on & further improvements are being implemented to achieve the target set.

3) Improving Productivity by 30% at Indian Pneumatic & Hydraulic.

M/s Indian Pneumatic & Hydraulic were contemplating on buying a New CNC m/c for their drilling section. This was due to a bottle neck in the drilling operations. They were running the drilling section using 4 Radial Drill m/c & were unable to cope up with the demand from assembly section.

On observing the Drilling operations it was observed that each drilling m/c operator was keeping the Drill m/c idle during changeover of job. While the m/c remained idle, the operators were busy either bringing the overhead crane to the m/c or removing the finished job from the m/c. Also when new job was loaded on m/c the operator would do marking of PCD holes for drilling operation.

It was noticed for every drilling operation of 40-60 mins. Approx 15-20 mins were taken up due to change over.

It was decided to keep another bed adjacent to the original bed & while one bed would be doing the drilling operation, the second bed would be kept ready with the new job. Soon the drilling m/cs were no longer waiting & productivity increased by 30%. The assemble section started producing more cylinders per day. Total production went up from 130 cylinders per month to 200-210 cylinders per month.