Lecture 8 Lean strategy Lecture 8 Lean strategy Lecture 8 Lean strategy

Lecture 8 Lean strategy Lecture 8 Lean strategy

1. BSc Logistics with Supply Chain Management Strategic Management – BM4SMT Dr Nasir Zubair Faculty of Transport & Logistics

2. Session 8: Lean Strategy

3. Quality philosophies in Auto Assembly Invention of Automobile in (1880’s) The Henry Ford Mass Production System (1920’s) The Toyota Production System (1950’s) JIT (1980’s) Lean (1990’s) Theory of Constraints (1984..) Total Quality Management (1980’s – 2000’s) ISO 9000 series (1987..) Six Sigma (SIX SIGMA™ Motorola 1993) Business Process Reengineering (1990-1995) Lean Six Sigma (2001 …..)

4. Invention of Automobile Carl Benz is generally given credit for developing the world’s first automobile in 1885. Gotlib Daimler is also a contemporary of Carl Benz who simultaneously developed the automobile with him. Other contemporaries are Wilhelm Maybach and Seigfried Marcus known for developing automobiles later during the same period. C a r l B e n ze G o tlib D ai m ler

5. Henry Ford’s Mass Production System In 1910 Henry Ford laid the foundation of the first highly organised assembly line system of automobile manufacturing. He organised all the elements of a manufacturing system - people, machines, tooling, and products - and arranged them in a continuous system called a conveyor system. Ford was so incredibly successful he quickly became one of the world's richest men and put the world on wheels. Mass production Limited Variety Mechanisation Increased pay ($2/day to $5) Workers afford product Workplace sanitation.

6. Henry Ford Introduced Conveyer Belt System in the Automotive Industry

7. Toyoda Family in the Auto Industry The Toyoda family were Japanese industrialists who were observing American industrial strength and wanted to emulate it by investing in automotive the industry. Toyoda Automatic Loom Company, under the encouragement of the Japanese government, founded the Toyota Motor Corporation in 1933 under the direction of the founder's son Kiichiro Toyoda. Kiichiro Toyoda T he fi rs t p r odu ct ion m od e l A A i n 19 3 6

8. Taichii Ohno Toyota Production System (TPS) 1950’s Toyota could not justify the Mass Production of vehicles for a smaller domestic Japanese market and thought Japanese consumers required more customisation . Mass Production needs Mass Consumption. Acknowledged smaller lot sizes meant increased downtime and would require an emphasis to reduce set-ups. Focused on elimination of waste …. ALL waste (MUDA) Scheduled Preventative Maintenance Promoted Respect for people.

9. “Turning Japanese” TPS becomes JIT 1980’s Japan’s excellence in production is now the subject of international study. The metamorphosis is not limited to Toyota, it is in all manufacturing sectors and the phrase on everyone’s lips is Just-in-Time (JIT). Reduce Inventory Eliminate Waste Simplify processes Quality is central Flow Manufacturing Uncover problems Preventative Maintenance Pull Layouts to minimise movement Shigeo Shingo

10. elements of Lean Production System https://totalqualitymanagement.wordpress.com/2008/10/28/lean-production-system/

11. The 5S process

12. 5S: A place for everything and everything in its place… Visual Systems Visual indicators, e.g. shadow boards Visual signals, e.g. stop/go lights Visual control, e.g. parking space lines Devices that guarantee a correct response, e.g. auto cut-off at the petrol station

13. Standard Layout for Work Areas

14. Mura ‘ L a c k o f c o n s i s t e n c y ’ U n e v e n n e ss o r i r re g ul ar i t y i n the production process Muri ' O v e r - b u r d e n ’ U nn e c e ss a r y o r unreasonable r eq ui r e m e n t s p u t o n a p r o c e s s r e s ul t i n p o o r outcomes M u da ‘Waste’ A c t i v i t i e s t h a t d o n o t a d d v a lu e t o t h e o p e ra t i o n o r t h e c u s t o m e r Three types of waste

15. Muri 'Over-burden’

16. MUDA 7 wastes: Some examples in Hospitals 1 Waiting - Patients, t hea t r e, d i agno s t i c r e s u l t s , p r e sc r i p t i ons , and medicines 2 Over-production requesting unnecessary t e s t s from pa t ho l o g y wr i t i ng r epo r t s no - one reads 3 4 Rework due to defects r ead mi s s i o n be c au s e of failed treatment - repeating tests because c o rr ect in f o r ma t i on w as not provided Motion - unnecessary movement looking for paperwork - not having basic equipment in every examination room 5 Processing - duplication of information - asking for patients’ details several times 6 7 Inventory – excess stock in storerooms patients waiting to be discharged waiting lists Transport - staff walking to the other end of a ward to pick up notes - central equipment stores for commonly used items

17. JIT becomes Lean 1990’s Lean is externally focused on the customer Supplies the customer with their exact wants, when the customer wants it, without waste. Continuous improvement Pull Uses JIT to produce perfect parts Reduces space requirements Develops close relationships and educates suppliers Develops the workforce Reduces the number of job classes and makes jobs more challenging.

18. Push planning and control WORK CENTRE Buffer inventory WORK CENTRE Buffer inventory WORK CENTRE DEMAND Operations planning and control system FORECAST Pull planning and control WORK CENTRE WORK CENTRE WORK CENTRE REQUEST DELIVERY REQUEST DELIVERY REQUEST DELIVERY Kanban Kanban DEMAND

19. TPS emphasizes c o n t inuous i m p r o v e m e n t , standard work practices and respect for people 1950s JIT focuses on continuous and forced problem-solving via a focus on throughput and inventory 1980’s Lean production provides customers exactly what they want, when they want it without waste. 1990’s There is overlap, they are not ‘ different ’ as much as ‘ stages ’ in an evolution The Toyota Production System

20. Invention of Automobile in (1880’s) The Henry Ford Mass Production System (1920’s) The Toyota Production System (1950’s) JIT (1980’s) Lean (1990’s)  Theory of Constraints (1984..) Total Quality Management (1980’s – 2000’s) ISO 9000 series (1987..) Six Sigma (SIX SIGMA™ Motorola 1993) Business Process Reengineering (1990-1995) Lean Six Sigma (2001 …..)

21. Invention of Automobile in (1880’s) The Henry Ford Mass Production System (1920’s) The Toyota Production System (1950’s) JIT (1980’s) Lean (1990’s)  Theory of Constraints (1984..) Total Quality Management (1980’s – 2000’s) ISO 9000 series (1987..) Six Sigma (SIX SIGMA™ Motorola 1993) Business Process Reengineering (1990-1995) Lean Six Sigma (2001 …..)

22. Total Quality Management (TQM) A climate in which an organisation continuously improves its ability to deliver high-quality products and services to customers. TQM enjoyed widespread attention during the late 1980’s and early 1990’s. “Is such a thing as TQM or is it merely a potpourri for a diverse set of management initiatives?” ..many companies were paying ‘lip service’ to some elements of TQM ..in particular a declining use of scientific methods .. considered one of the most distinctive features of TQM. Hackman and Wageman (1995)

23. Invention of Automobile in (1880’s) The Henry Ford Mass Production System (1920’s) The Toyota Production System (1950’s) JIT (1980’s) Lean (1990’s)  Theory of Constraints (1984..) Total Quality Management (1980’s – 2000’s) ISO 9000 series (1987..) Six Sigma (SIX SIGMA™ Motorola 1993) Business Process Reengineering (1990-1995) Lean Six Sigma (2001 …..)

24. ISO 9000 (1987, revised 1994, 2000, 2008 & 2015.. ISO 9001 ) Guidelines for designing, manufacturing, selling, and servicing products. Generic characteristics of good management principles can be standardized. Third-party certification bodies. Selecting an ISO-certified supplier provides some assurance that the supplier follows accepted business practices.

25. Quality Management Systems ISO 9000 Guidelines for designing, manufacturing, selling, and servicing products. Selecting an ISO 9000-certified supplier provides some assurance that the supplier follows accepted business practices in areas covered by the standard http://elsmar.com/Forums/showthread.php?t=34235 ISO 14000 Series of standards covering environmental management systems, environmental auditing, evaluation of environmental performance, environmental labelling, and life-cycle assessment. https://www.youtube.com/user/EFQM2010

26. Invention of Automobile in (1880’s) The Henry Ford Mass Production System (1920’s) The Toyota Production System (1950’s) JIT (1980’s) Lean (1990’s)  Theory of Constraints (1984..) Total Quality Management (1980’s – 2000’s) ISO 9000 series (1987..) Six Sigma (SIX SIGMA™ Motorola 1993) Business Process Reengineering (1990-1995) Lean Six Sigma (2001 …..)

27. Dramatic and Fundamentally rethink how we work, in order to dramatically improve customer service & cut costs. Functionally-based processes Fu nc t io n 1 Fu nc t io n 2 Fu nc t io n 3 Fu nc t io n 4 End-to-end process 1 End-to-end process 2 End-to-end process 3 Cu s t o m e r nee ds Customer needs fulfilled Business Process Reengineering.

28. Office supplies operation

29. Suppliers F o r eca s t i ng Marketing Purchasing M ate r i a l s p l ann i ng Pu r c hase o r der processing Goods r e c e i v i ng Stores m anage m ent P i c k and pack D i spat c h Warehouse Sales Customer o r der ent r y A l l o c at i on p r i nt note print F i nan c e Invoicing Customers

30. X F o r eca s t i ng Customer o r der ent r y M ate r i a l s p l ann i ng Pu r c hase o r der processing Goods r e c e i v i ng Pu r c has i ng operations A l l o c at i on p r i nt note print Stores m anage m ent P i c k and pack D i spat c h C u s to m er s e r v i c e operations Customers Invoicing Suppliers

31. Ultimately the downfall of BPR was the way companies chose to restructure the organisation , reduce staff numbers and make short term savings Rather than following universal principles, it was found that consultants tend to tailor their BPR efforts to satisfy unique situational conditions faced by their clients – no two BPR projects followed the same principles! ( Kettinger , et al, 1997). Further, Harkness, et al. (1996) suggest that BPR teams often modified their existing (TQM) methods to accommodate more proactive business process change. BPR was watered down and blended with softer TQM methods incorporating smaller projects, PDCA, and active 'bottom-up' participation (Davenport 1995).

32. Invention of Automobile in (1880’s) The Henry Ford Mass Production System (1920’s) The Toyota Production System (1950’s) JIT (1980’s) Lean (1990’s)  Theory of Constraints (1984..) Total Quality Management (1980’s – 2000’s) ISO 9000 series (1987..) Six Sigma (SIX SIGMA™ Motorola 1993) Business Process Reengineering (1990-1995) Lean Six Sigma (2001 …..)

33. Business process r ee n g i n ee r i n g (B P R ) Six S i g ma T o t al q u a li t y m a n a g e me n t (TQM) E n d- t o- e n d processes Radical / b r e a kth r o u g h i m p r ove me n t Evidence-based decisions S ys t e m s a n d procedures Improvement cycles C u s t o mer centric E m ph a s i s o n education I n c l ud e a l l people Synchronized flow Waste identification Customer r ela t io ns h i p s Process-based analysis Reduce v a r i a t i on Perfection is t he g o al C o n t i nu o u s improvement Emphasis on solutions - what to do Emphasis on me t ho d s - ho w t o do it Lean improvement E m ph a s i s on g r a du a l change E m ph a s i s on r a p i d change The elements of improvement approaches

34. Six Sigma Emphasis on rapid change Lean TQM Emphasis on gradual change Emphasis on solutions - what to do Emphasis on methods - how to do it ISO BPR Notwithstanding some common elements …. approaches differ