Lean Production: Concept and a way of thinking

By Pritam: 10 March, 2014,

Definition

Lean production is a sociotechnical production system with a primary objective of eliminating waste by concurrently reducing or minimizing supplier, customer and internal variability. (Verma and Boyer, 2010)

How was it invented?

The two dominant but fundamentally different approaches to production in the 20^thcentury have been the conversion and flow models respectively. (Koskela, 1992)

Mass production systems have been considered to focus primarily on the process of conversion illustrated in the above diagram. The conversion model of production breaks the manufacturing process down to a series of activities, each of which converts an input to an output. This can be seen in the diagram below. This model uses the batch and queue theory. (Womack, 1996)

The theory states that for machines to achieve a high utilization rate they must be run continually. Parts are hence manufactured in large batches at one process within a plant and then queued for the next process. This results in large inventories from high work-in-progress levels (WIP), bottlenecking and other manufacturing problems.

(Diekmann, et.al., 2004)

The above diagram represents a generalized flow model of production. The idea of production as a flow process is central to lean production. The flow process does not view the production stream only as a group of conversions, but as a mixture of value adding and non-value adding activities. (Koskela, 1992)

The above diagram shows how the flow model contributes in improving efficiency of the value adding activities and reducing their cost, but also minimize or eliminate non value adding activities. All elements of the production process are enhanced as a result of waste elimination and improvements in conversion activity. The flow process emphasizes the constant movement of components from one value adding activity to next, eliminating large buffers, also reducing the WIP levels. This is also referred to as single-piece flow (Womack, 1996). A drop in WIP levels leads to reduction in the amount of inventory space required. Capital required to produce and stock extra inventories of partially completed products also drops. Low setup times and WIP levels can help manufacturers to be more responsive to market conditions. The producer as a result, lets the customer or market pull the production.

(Diekmann, et al., 2004)

The concept of lean production has its roots in the assembly line manufacturing methodology developed by Toyota for efficient automobile manufacturing, known as the Toyota Production System (TPS). The idea of producing only required units, at the time needed and in the needed quantities, to eliminate unnecessary and intermediate and finished product inventories is central to the Toyota Production System.

(Verma and Boyer, 2010)

As an aftermath of the Second World War, businesses like the Toyota Motor Company (established in 1937) were facing material shortages coupled with small production volumes. This enforced the need to raise the levels of productivity to those found in large volume production, but with utilizing materials efficiently to produce only the required amount of products.

(Toyota Global, 2014)

The company hence adopted an improvised version of the Ford Production System developed by Henry Ford during the early part of the twentieth century. Some scholars still credit Henry Ford for founding the original principles of lean thinking in doing so. One of Toyota’s lead engineers, Taiichi Ohno had studied the Ford Production System in America. Ohno studied and mastered the system and was tasked with conceptualizing the Ford Production System in a Japanese context. Ohno introduced new, additional principles and approaches to further enhance the effectiveness of the Ford Production System.

(Verma and Boyer, 2010)

The aim of lean production is combining the quality and flexibility offered by craftsmanship with the low cost advantages of mass production. Lean production is regarded as the third step in a historical progression in industry that began with the age of craftsmanship, followed by the methods of mass production to an era that combines the best of both worlds. (The Economist, 2009)

Lean Thinking

Lean production as a concept was originally developed for manufacturing automobiles. The same principles and techniques however, can be applied to companies that operate in other industries. It is argued that lean thinking is more than a set of techniques and approaches but rather a mindset for all employees and managers with waste elimination and variability reduction in all business processes being the main focus.

(Verma and Boyer, 2010, p 449)

Womack, Jones and Roos (1991) describe the five core components of a lean production system as follows:

Lean Principal 1: The value in a lean production system should be defined from the customer’s point of view for each product family.

Lean Principal 2: Each production step should be evaluated in terms of its contribution to value creation. Those actions that do not add value should be eliminated.

Lean Principal 3: the value creating sequence of steps should be organized in a tight and integrated sequence to develop smooth flow toward the customer.

Lean Principal 4: Instead of organizing production to push finished products to the customers, products pulled by the customers should be the driver for planning, organizing, and scheduling upstream production activities.

Lean Principal 5: All members of the organization should pursue perfection through continuous improvement.

(Verma and Boyer, 2010, p 450)

In the above diagram Shah and Ward (2007) state a lean production system to be comprised of three constructs related to customers, suppliers and internal processes. Each individual construct relies on different underlying concepts. A just-in-time inventory management system, customer involvement, different aspects of production processes are some examples of these concepts.

(Verma and Boyer, 2010)

Waste elimination in Lean Production

The idea of value from a customer’s point of view is central to lean thinking. Customers will refuse paying for a product or service that fails to offer value.

In a lean thinking framework, all production activities are carefully evaluated, ensuring that the customer finds the finished product or service valuable. This enforces the need of eliminating or minimizing all non-value added activities. The types of waste in a production system can be broadly categorized as follows:

Muda: A Japanese term for production activities that are wasteful and do not add value to the goods or services.

Mura: Waste associated with the unevenness of the processes.

Muri: Waste resulting from overburden or unreasonableness.

(Verma and Boyer, 2010, p 450)

The three general types of wastes namely muda, mura and muri are found in different forms within manufacturing and service systems. The above diagram provides a breakdown of the different forms of waste in system that contribute in overproduction, loss of time, lengthy production processes, increased waste as a result of large inventories and so on. Reducing the impact of different forms of waste shown above requires careful systems thinking, long-term commitment to continuous improvement and the co-operation of all members of the organization to identify wastes, troubleshoot and formulating approaches that lead to reduce all wastes.

The Toyota Production System

By Pritam: 10 March, 2014

Although lean production has been applied in areas other than manufacturing, the Toyota Production System (TPS) is one of the best examples of advantages offered by adopting this approach.

The above diagram shows how Toyota successfully adopts and implements just-in-time (JIT) inventory management using a kanban system.

Just-in-time: An inventory management system designed to make the “right amount of inventory available at the right time” at all times.

Kanban: Japanese for “card” or “visible record”, referring to the cards used to control the flow of production through a factory.

Each container of raw materials, parts, work-in-progress inventory is attached with a card with respective production or process instructions. When the user empties the container, the card is removed and the container is put on a receiving post. The next batch of parts is produced only when the card on a container signals the user to do so. The cycle begins again when the user receives the container with the card attached. The kanban system used by Toyota is often called the “super market method”, as super markets use product control cards on which product-related information such as product code, product name and storage location is entered.

(Verma and Boyer, 2010)

Producing good and services according to customer expectations is an important characteristic of the Toyota Production System. Toyota practices the philosophy of kaizen to build quality into the production process rather than inspecting finished goods for quality defects. Kaizen is a Japanese term that means “continuous improvement”. Each employee acts as his or her own quality inspector, preventing a defective unit from leaving a work station and moving on to the next process. This practice is also called quality “at the source”.   (Verma and Boyer, 2010)

Another approach used by Toyota to minimize or eliminate quality defects and problems from recurring repetitively is jidoka. Verma and Boyer (2010) define jidoka as an approach for automated quality monitoring of equipment guided by a human touch. As shown in the above diagram, whenever a defective part or equipment malfunction is discovered, the concerned machine stops immediately. Production resumes once the problem is sorted and any improvements are incorporated in the standard workflow. Operators stop work and correct the problem. Hence the definition: “automation with a human touch”.

The philosophy of kaizen, the methods and approaches of jidoka, just-in-time and kanban, are important building blocks in the House of Toyota. More information on these concepts can be found in the following video:

Lean Production System & applying to lean managed hospital

By Gabriel Li Velasco; 24 Feb 2014

Lean production is an approach of management that targets on excluding waste while maintaining the quality of production or services and only focused on essential to the processes, such as quantities, units and time by eliminating unnecessary transition. The original concept of lean were developed by Henry Ford then adopted by Toyota manufacture automobile that would enhance the effectiveness of (FTS) and now known as Toyota Production System (TPS) (Verma and Boyer, 2009, Pp.449-450) the aim of elimination waste of lean and Toyota defined three types of waste know as Muda, Muri and Mura.

Those are the waste that adds no value and can be eliminated such as unnecessary financing cost, storage cost and worthless old items. Muda distinguished seven categories that are frequently wasted

ü  (Unnecessary) Transportation – unnecessary movement of information, products or components and unnecessary transport which detects movements

ü  Inventory – inventories, which are only required or needed therefore controlling inventory can save money and space in terms of over stocks of inventory

ü  (Unnecessary) Motion – moving work space will cost time and effort therefore motion is being poor working standard practices

ü  Waiting time – If manufacturing processes are not being transported or processed therefore production time is wasted and it will increase the cost of production. Waiting can cause by poor machinery or poor production line

ü  Over-processing – those are process which has additional steps than required. This may result on error in rework process, poor process design or bad communication and not checking customer requirements.

ü  Over-production – When producing additional product or component could effect rework rate, inventory, processing and waiting as unnecessary motion and transportation

ü  Defects or rework – those are the product or component that are being damage and has to rework of the product. This cause by bad manufacturing process, human or machine errors as a consequence of time and manufacturing cost.

Sources: (Manufactus, 2014)

Muri (English: Overburden): Eliminating overburden of machinery or people, this means that even identifying waste (Muda) there are still chances that could lead to waste due to overwork load, unless limiting project, work capability and capacity of an organization would help the business effectively in other words, staffs or projects are being pressured in the operation can cause defect on the production and this will eventually go through the processes again and time is wasted creating delays therefore unnecessary stress or difficult operation are likely create waste. Limiting it can help the operation workflow more effectively in order to balance other members or machinery to correct standard work. (The Lean Thinker, 2014)

Mura (English: Unevenness or irregularity): focused on eliminating unevenness or irregularities in the production process in order to avoid fluctuation processes in other words uneven demand occur day to day or month to month therefore the production line would sometimes rush or settle down during the operation moreover sometimes people are encourage poor behavior when staffs are idling or under stressed. For example lets assume in week one the customers demand 1,000 products then 10,000 in week two after that 5,000 on week three, usually customers appear to be unpredictable however it does shows pattern that can correct the average that should be produce therefore the best approach to this issue is to balance in order to smoother the production line and more predictable schedule. (Lean manufacturing tool, 2014)

Applying lean to hospitals

Lean is not a list of tool that applies only to factories but also can be applied through hospital as strategy and day-to-day operating approach. The Avera Mckennan Hospital implemented the lean management in the laboratory by using the lean such as eliminating 1000 square feet of space (motion) as a result of productivity increased more than 10% therefore the hospital continues to apply this method and taught lean management to all staffs and every department. It helps also improved patient discharge process, (Waiting time) allowing next patient to use the room preventing overcrowded patient in the waiting line. (Mura) improving unexpected changes helps employees without pressuring them to work faster or sacrificing the quality thus creating standardize work and schedule for employees. (Muri) Overwork condition are more likely to make mistakes that could harm the patients, stressed were caused by the seven aspect of (Muda) we mentioned above, balancing helps the workload allows productivity and quality upgraded. Avera Mckenan has completed lean projects in many departments such, laboratory and histology, pharmacy, emergency department, operative services, business office and health information management and more. Lean management provides effective method for improving safety, quality and cost while preventing delay and increasing employee satisfaction. (OHSU, 2014)

Brief history of lean management & Toyota production System

By Falaye Leke Jonathan; 24 Feb 2014
   

According to Young (2010, p.30), the term lean management was first used by the authors James Womack and Daniel Jones in their books “the machine that changed the world (1991)” and further defined in their book “lean thinking (2003)”. This concept is essentially nothing more than a renaming of the Japanese production system just-in-time (JIT).

Lean management is a means of waste identification (for example, wasted labour, materials of some resources) or in operations (for instance manufacturing, services and administration) so that it can be removed (that is made lean) for greater efficiency, this is a dynamic process of continual change and is not a standardized one-size-fit-all approach but an adaptive means of efficiency improvement (Schniederjans, Schniederjans and Schniederjans, 2010, p.3).

This is an interesting video that explain lean management in connecting with how it can help organisation to achieve competitive advantage   

Lean manufacturing is concern about the speed of the product; it focuses on improving the quality of the product and the stability of all the processes. Equally, lean concept employs the use of some tools which includes, value stream mapping, cellular manufacturing, total productive maintenance, error proofing, visual control and practical problem solving (Gemba academy, 2011).

A typical example of company known for practising lean management is Toyota. Toyota lean management philosophies includes,

Ø  Just-in-time: system of delivering parts to the assembly line in a continuous flow rather than stockpiling large volumes in the plant.

Ø  Continuous improvement: process of analysis and solving problems on a daily basis.

Ø  Personal responsibility: Each worker on production line is given responsibility for each process he carries out.

Ø  Flexible production: several different models can be produced on the same assembly line.

Ø  Design for manufacture: Making the component a car easy to fit together on assembly.

                                                                                                                      (BBC, 2007)

The major advantage of this process in Toyota is that it allows the organisation to get closer to consumers need. It equally aids faster development of new model because Toyota now develops new model in 18month, compared to the traditional three years (BBC, 2007).

This video explains more about Toyota lean production 

http://www.youtube.com/watch?v=8KJaEOiHxNw

According to Turkyilmaz, et.al (2013), value steaming mapping is a collection of all the procedures that are required to bring products through the main flow starting with raw materials and ending with customers. The main purpose of value stream mapping is to pinpoint the various categories of waste in the value stream and take steps to try to eliminate them.

Visual management or control as a tool of lean manufacturing is simply a visible pattern of control which employs the use of visual perception and suitable colours to guide standardize and organise the production, aiming to ensure safety of production and improve labour productivity (Hao, Wei and Tian, 2014).

In addition, cellular manufacturing is another tool of lean management. This is an innovative manufacturing strategy derived from a group technology concept. It is an approach that can be used to improve both flexibility and efficiency in contemporary competitive manufacturing environment. Cellular manufacturing involves, cell formation, group layout, group scheduling and resource allocation (Kai, et.al, 2012).

Concept of Lean Management

By Rakib Hossain ;23 Feb 2014;

Nowadays, every companies try to use their material at the best possible way they can, along with not to waste too much. Also, they want production efficient, customer satisfaction. Lean production is a supply management approach where using this it is possible to provide customer value and reducing waste.  According to Jacobs and Chase (2011, pp. 454-455), Lean production is the most compelling operations and supply management approach of the last 50 years. It is focus more on eliminating or reducing waste as much as possible. Eliminating process involve, moves that are not required, worthless processing steps, and overwhelm inventory in the supply chain are targets for development during the learning process.  Apart from that, Lean operations produce works on the demand of the customers; it means they will produce the same quantity of product as much as customers want (Heizer and Render, p.654).  

Due to the market competitors, every business wants to cut their waste so that they can lower the price than their competitors and produce better quality product. That’s why business needs a process where they can achieve both, by a manufacturing process or management system.  As lean manufacturing is a production philosophy and widely used methods to eliminate waste and increase profit. It has some certain process to work on.

Firstly, pull is one of the four principals of lean management. It helps business through produce the same level according to the customers’ demands, not to producing as much manufacturer wants. This minimize over production. Therefore, business does not have to stock more inventories, where less capital will require because business has to buy less (fourprincipals, 2012).

Secondly, One piece flow; focus on one single piece that minimize process interruption, lead and waiting time, top of that, it increase quality and flexibility.

Thirdly, Takt; known as the hardest part of lean management because it shows that how fast a manufacturer can produce a product to meet the customers demand. It also focus on, to make balance on the work content and achieve a continue flow, respond flexible to change in the market place.

Lastly, zero defects; as mistakes happen, however, lean company do not pass on defects. Mistakes from previous steps must be fixed before move on to the next steps.

                                          Lean Concept- adapted from : 1000ventures.com

Apply to Jaguar: 

There are many companies who adapt lean management, as their production philosophy. Jaguar is one of them. The way they work, the first step called, the change process; where they the term ‘ tell and do’ which means instruction used to come from the top on the organization hierarchy.  Now Jaguar makes the implementation to forming some small groups and selecting a team leader to get the feedback from the team and work accordingly.

Matching supply and demand (JIT); as we had a discussion above. One of the main concepts of a lean production is producing according to customers demand. Jaguar follows the trends (Times 100, 2014). Taking an example of production time, when they require any production materials they get quick response from the center.

Visible management/factory: to meet the performance requirements this process get involve to everyone. By all means, employees can get the knowledge of how individual parts of the plant perform.  

Ownership of work; in this process jaguar gives individual responsibility for a certain task. Here, employee is responsible for their work. The reason of doing this, because they can get to know what are their responsibilities and can maintain their quality standard.