Lean production

Lean production

1. Lean Production Chapter No.39 Introduction to Business Studies Bruce R Jewell PRESENTATION BY :- ISRAR K. RAJA Preston University, Islamabad, P akistan

2. Lean Production

3. Lean Production Is an integrated approach to design, technology, components, material and new culture for the firm. Techniques include Just in time, time based management and cell production

4. Lean Seeks to Eliminate Waste

5. Types of Waste Over Production Waiting Time-Lead Time Transportation Process methods Inventory Motion/movement Defective Products

6. Traditional VS Lean Production Traditional Production Lean Production Division of labor Barriers in mobility Just in case-avoid stock out Large batch size Distant relation with partners Large n few deliveries Inspect out defective goods Large n frequent improvement Standardized product Buffer everywhere Downward communication Limited consultation Team production Flexible workforce Just in time Small batch Partnership/collaboration Many/small deliveries Build in quality Continuous improvement Product variety No safety net Multiple communication Extensive consultation

7. Just in Time (JIT) An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs . Just-in-time (JIT) manufacturing is a production model in which items are created to meet demand, not created in surplus or in advance of need. The purpose of JIT production is to avoid the waste associated with overproduction, waiting and excess inventory

8. Requirements For JIT Employees flexibility and commitment Total quality or zero defects Preventive maintenance Cell production Continuous improvement Elimination of bottle necks

9. Just in Time Advantages Disadvantages Right quantity at right time Higher quality Improve customer service Minimal inventory n waste Reduced space requirements Reduced lead time Increase equipment utilization Simplicity More workforce participation Continuous improvement Better problem solving Reduce costs Requires high degree of delegation Requires change in philosophy n culture Advantages of bulk buying lost Vulnerability in breakdown Work only in regular products Requires highly reliable n flexible suppliers Requires a super coordination between workforce and managers

10. Conventional Vs JIT Purchasing Conventional Purchasing JIT Purchasing Large n frequent deliveries Deliveries according to buyer’s date Multiple sourcing Parts inventory maintained Short term purchasing agreements Products with few constraints Minimal exchange of info with partners Prices are established by suppliers Supplier’s location not important Small lot on immediate requirement base. Frequent deliveries Few suppliers Little inventory maintained Long term purchasing agreements Specialized products Extensive exchange of information Collaboration with suppliers Suppliers’ location important

11. Cell working In a manufacturing facility, the machines involved in the production process would be arranged so that the goods being produced move smoothly and seamlessly from one stage to the next. This would only be possible if the machines are grouped in work cells that facilitate the logical progression of the goods being produced, from raw materials at one end to finished product at the other.  Similarly, in the office context, work cells may facilitate better flow of communication and more efficient use of shared resources. 

12. Cell W orking Cell production has the flow production line split into a number of self-contained units. Each team or ‘cell’ is responsible for a significant part of the finished article and, rather than each person only carrying out only one very specific task, team members are skilled at a number of roles, so it provides a means for job rotation. Cell production is a form of team working and helps ensure worker commitment, as each cell is responsible for a complete unit of work, which Herzberg would view as part of  job enrichment.  

13. Cell working Benefits Down Sides Closeness of cell members should improve communication, avoiding confusion arising from misunderstood or non-received messages Workers become multi-skilled and more adaptable to the future needs of a business Greater worker  motivation , arising from variety of work, team working and more responsibility Quality improvements as each cell has ‘ownership’ for quality on its area The company culture has to encourage trust and participation, or workers can feel that they are being constantly pushed for more and more output with no respite The company may have to invest in new materials handling and ordering systems suitable for cell production Cell production may not allow a firm to use its machinery as intensively as in traditional flow production Some small scale production lines may not yield enough savings to make a switch cell production economically worthwhile The allocation of work to cells has to be efficient so that they have enough work, but not so much that they are unable to cope Recruitment and training of staff must support this approach to production

14. Kaizen (Continuous Improvement) Is customer –focused , in it quality begins with customers-as customers view are continually changing and standards rising, so continuous improvement is required. It involves small, gradual but continuous changes. Gains are small in the short run but are substantial over the longer period. Starts with defining area of improvement, is followed by analysis of the causes of problems.

15. 5 M CHECKLIST MANPOWER MACHINERY MATERIALS METHODS MONEY

16. 5 S’s OF KAIZEN Cleanliness Orderliness Tidiness Organization Discipline

17. Kaizen

18. Fishbone Diagrams

19. Fishbone D iagram also called a cause and effect diagram or Ishikawa diagram, is a visualization tool for categorizing the potential causes of a problem in order to identify its root causes . Focus on causes not symptoms Capturing the collective knowledge and experience of a group Providing a picture of why an effect is happening Establishing a basis for further data gathering and action

20. Quality Circles (QC) it is a work group of employees who meet regularly to discuss their quality problems, investigate causes, recommend solutions, and take corrective actions. Generally, QC is a small group of employees belonging to the same similar work area. Typically features include: Voluntary member ship From single department Doing similar work Free to select issues wish to tackle Receive training Short and frequent meetings Facilitator available Solution in term of cost effectiveness Findings to management Implement and monitor solution that have been agreed

21. Requirements of QC Commitment and support of top mgt. Full consultation of staff A participative approach Decision-making delegation Trust and goodwill Effective support structure Trade union/staff support Training programs Continuous monitoring

22. Benefits of QC Increased productivity Increased quality Improve motivation and morale Job enrichment Greater awareness of problems

23. Time-Based C ompetition (TBC) TBC is based on the proposition that the time it takes to get product from conception to the consumer and provide goods and services to market can be the key to competitive advantage; By Preparation Administration Reducing waiting time No unnecessary movement No overproduction No rejects No set up time No process waste No untidiness No bottleneck

24. Benefits of TBC Speeding up new product development, firms can achieve a competitive advantage Speeding up the production process leads to saving in stocks and working capital Firms can behave opportunistically as new product ideas emerge and as new market segments appear It can increase customer satisfaction It leads to greater flexibility