Lecture 2

Introduction to
Lean
Manufacturing
Copyright 2006 © by Dr. Govind Bharwani, Wright State University
Current Manufacturing Focus
•  Factory organization
•  Equipment acquisition
•  Production goals
•  Production measurements
•  Factory capability

When Manufacturing strategy is aligned

with corporate strategy then the
company realizes Competitive advantage

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

Manufacturing problems due to
processing time variability
1) High inventory
2) Space congestion
3) Long lead time
4) Increased thru-put time
5) High cost and low productivity

The major objective of Lean Manufacturing

concept is to reduce processing time variability.

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 What can affect Thru-put?

1) Equipment reliability
2) Lack of standardized procedures
3) Uncontrolled environmental conditions
4) Long setup operations
5) Large production lots
6) Late deliveries from suppliers
7) Inappropriate management decisions

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

Challenges in today s market
•  Customer demand lower prices
•  Higher level of quality
•  Increased variety & short lead time
•  High production capacity in the
market relative to global demand
•  Global marketplace and competition
•  High speed of innovation
•  Improved communication challenge
•  High degree of automation

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 A different way of thinking
•  Lean production philosophy also known as Lean
Manufacturing .
•  Lean principles are different than mass production
principles.
•  It focuses on increased flexibility and quick
response to the changing customer demand.
•  It can lead to high quality at the lowest cost in the
shortest amount of time.

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 How to run today s factory?

Satisfy the customer demand

while making profit
by modifying factory to be flexible,
efficient & produce perfect quality

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 How does
Lean Manufacturing
meet these objectives?

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 Important definitions
•  Value - A capability provided to a customer at the
right time at an appropriate price, as defined in
each case by the customer. Features of the product
or service, availability, cost and performance are
dimensions of value.

•  Waste - Any activity that consumes resources but

creates no value (waste).

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 What is Lean?
•  Lean production focuses on eliminating waste in
processes (i.e. the waste of work in progress and
finished good inventories)
•  Lean production is not about eliminating people
•  Lean production is about expanding capacity by
reducing costs and shortening cycle times between
order and ship date
•  Lean is about understanding what is important to
the customer

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 Thinking Lean
•  Specify value
–  can only be defined by the ultimate customer
•  Identify the value stream
–  exposes the enormous amounts of waste
•  Create flow
–  reduce batch size and WIP
•  Let the customer pull product through the value stream
–  make only what the customer has ordered
•  Seek perfection
–  continuously improve quality and eliminate waste
From Lean Thinking by Womack and Jones

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 Benefits of lean manufacturing
•  Lean provides tangible benefits
•  Reduces costs not just selling price
–  Reduces delivery time, cycle time, set-up time
–  Eliminates waste
–  Seeks continuous improvement
•  Improves quality
•  Improves customer ratings and perceptions
•  Increases overall customer satisfaction
•  Improves employee involvement, morale, and company
culture
•  Helps transform manufacturers

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

Toyota Production System (TPS)
•  Quality, Cost, Delivery
–  Shorten Production Flow by Eliminating Waste
•  Just In Time
–  The Right Part at the Right Time in the Right Amount
–  Continuous Flow
–  Pull Systems
–  Level Production
•  Built-In Quality
–  Error Proofing – Poka Yoke
–  Visual Controls
•  Operational Stability
–  Standardized Work
–  Robust Products & Processes
–  Total Productive Maintenance
–  Supplier Involvement

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 Types of Waste
•  Overproduction
•  Excess inventory
•  Defects
•  Non-value added processing
•  Waiting
•  Underutilized people
•  Excess motion
•  Transportation

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 Lean vs. Traditional Manufacturing
•  Half the hours of engineering effort
•  Half the product development time
•  Half the investment in machinery, tools and equipment
•  Half the hours of human effort in the factory
•  Half the defects in the finished product
•  Half the factory space for the same output
•  A tenth or less of in-process inventories

Source: The Machine that Changed the World, Womack, Jones, and Roos, 1990.

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

Lean vs. Traditional Manufacturing
•  99.9% Customer Schedule Attainment
•  Defects of 15 PPM or less
•  4-6 Inventory Days of Supply
•  92%+ Operational Availability
•  Leveled, Sequenced Production
•  Order to Customer Use - Hours, not weeks
•  Functioning Supplier Partnership
•  Strong Production Control Function
Examples: Tier 1 Suppliers: Johnson Controls Seating, Litens Automotive
Partnership, Cadimex, Denso Manufacturing, Toyota Motor Corporation.

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 Barriers to Lean
•  Implementing Lean Can Be Difficult Because it is
Counterintuitive from a Traditional Paradigm:
–  Buying multiple small machines rather than one big
machine that offers economies of scale.
–  Shutting down equipment when maximum inventory
levels are reached rather than running flat out.
–  Using standards to continuously improve.
•  There is no step-by-step cook book
–  There are some basic steps but the how-to varies from
organization to organization
–  Requires an assessment of the company in order to map
out the strategy
•  Company culture plays a big part in the how-to
Copyright 2006 © by Dr. Govind Bharwani, Wright State University
 Example of a company growth

Phase 1: Stan and Fran s Machine Shop

Phase 2: S & F Manufacturing Co.
Phase 3: SFM Corporation

Review the following slides and answer

What Changed from Phase 1 to Phase 3?

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 Stan and Fran s Machine shop
•  The shop is small.
•  No space to store material.
•  WIP (work-in process) & FGI
(finished goods inventory) is low.
•  Inventory turns are high.
•  Customers can talk directly to Stan
& Fran for any problems.
•  They can fix the problems quickly.
•  Customers are happy and the sales
increases.
Copyright 2006 © by Dr. Govind Bharwani, Wright State University
S & F Manufacturing Co.
(What changed?)

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 SFM Corporation
(What changed?)

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

Vertically integrated lean layout

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

Lean Manufacturing Techniques chart
(against the goal of perfect 10)

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

Non-lean manufacturing plant

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

Lean manufacturing plant

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

Five primary elements of lean manufacturing
1) Manufacturing flow focuses on physical layout and
design standard as part of the cell
2) Organization focuses on people s roles and functions,
training and communication.
3) Process Control focuses on monitoring, controlling, and
stabilizing ways to improve the process.
4) Metrics focuses on visible, result based performance
measurements with team rewards and recognition
5) Logistics focuses on operating rules and mechanisms to
control the flow of material.
Copyright 2006 © by Dr. Govind Bharwani, Wright State University
 Manufacturing Flow
•  Product quality assessment
•  Process Mapping
•  Routing analysis (process, work, volume)
•  Takt calculation
•  Workload balancing
•  Kanban sizing
•  Cell layout
•  Standard work
•  One-piece flow

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 Organization
•  Product focused multi-disciplined teams
•  Lean Manager development
•  Cross training skill metrics
•  Training on lean awareness
•  Communication plan
•  Roles and responsibilities

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 Process Control
•  Productive maintenance
•  Poka-yoke
•  SMED (Single Minute Exchange of Dies)
•  Graphical work instructions
•  Visual control
•  Kaizen (continuous improvement)
•  Line stop
•  SPC
•  5S housekeeping

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 Metrics
•  On-time delivery
•  Process lead time
•  Total cost
•  Quality yield
•  Inventory turns
•  Space utilization
•  Travel distance
•  Productivity

Copyright 2006 © by Dr. Govind Bharwani, Wright State University

 Logistics
•  Forward plan
•  Mix model manufacturing
•  Level loading
•  Workable work
•  Kanban pull system
•  A,B,C parts handling
•  Service cell agreement
•  Customer/supplier alignment
•  Operational rules

Copyright 2006 © by Dr. Govind Bharwani, Wright State University