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Introduction of Lean Management.


What is Lean?
→ Overview of Lean → Principles of Lean
→Types of Waste →Lean Journey

Overview of Lean
√ Creating more value for customer with fewer resources
√ Philosophy: To provide perfect value to the customer through a perfect value creation process that has zero waste
√ Lean reduces cost, improves quality, and speeds delivery by eliminating non-value-added activity in a process by identifying and eliminating waste
√ Lean is not a tactic or a cost reduction program, but a way of optimizing end to end processes
Principles of Lean


Types of Waste
√ What is waste?
√ Non-value-add activity
√ Some types of waste with examples
•Anything that could have been avoided
•Customer is not willing to pay for it
•Defects/rework
√ The 7 types of waste
√ Muda (Japanese word for waste)
√ Uncommon common sense

Lean Journey
√ Lean journey is on the principle “I will believe it when I see it”
√ Lowering the tide and uncovering more reefs that can sink the boat
√ Three stages of Lean journey
•Lean operations
•Lean enterprise
•Lean network

Root of Lean
Lean at Ford
Toyota Production system
JIT (Just-in-Time)

Lean at Ford
√ Henry Ford (at Highland Park, MI USA) in 1913
√ Car “Model T”
√ Integration of entire production process
√ Flow production
•Interchangeable parts
•Moving conveyance
•Automated assembly line
•Fabrication steps
•Go/No-Go gauge
√ Model T (one color, one specification)
√ Need for variety
Toyota Production System (TPS)
√ Based on Ford’s original thinking
√ Rebuilding Japanese economy after World War II (1930)
√ Kiichiro Toyoda, Taiichi Ohno, and others at Toyota
√ Series of simple innovations to improve process flow and provide variety in product offerings
√ Focus on improving end to end processes rather than optimizing individual machines
√ Result: Low cost, high variety, high quality, and very rapid throughput times to meet customer desires
Just-In-Time (JIT)
√ Introduced by Ford
√ Supply-chain/ production/inventory strategy
√ Demand-pull system
√ Get the right thing at the right time at the right place
√ Relies on signals between processes to keep things moving
√ Requires producers to accurately forecast demand and use integrated production management tools
√ Saves warehouse space, inventory cost and prevents obsolete inventory, resulting in higher ROI

Lean Successes and Benefits
√ “Efficiency” Business Model Fit
√ Cash Flow Improvement
√ Increased Capacity for Revenue

“Efficiency” Business Model Fit
√ Business Model
•Employees
•Customers
•Profits
√ Higher Efficiency
•Do More with less
•“Just Enough” in everything
•No more band aid solutions that become future problems
√ From managing numbers to managing process
Cash Flow Improvement
√ Reduced inventory
√ No waiting
√ Space reduction
√ Cycle time reduction
√ Reduced waste
√ Reduced defect
Increased Capacity for Revenue
√ Attract and retain customer
√ More with less
√ Fewer support calls
√ Lean increases capacity
•Your process can produce more with the same number of people
•Your process can produce the same amount with fewer people

Its Challenges
Process Changes Cause a Rethinking of Process Flow
Disruptions, Downtime, Design Failures
Low volume/High Mix
High Variability—Customization, Demand

Process Changes Cause a Rethinking of Process Flow
√ Process
•Input
•Processing
•Output
√ Process changes
√ Process flow
√ In-process metrics
√ Training
Disruptions, Downtime, Design Failures
√ Process change
√ Disruptions
√ Downtime
√ Design failures
Low Volume/High Mix
√ Toyota production system
√ High volume/low mix manufacturing
√ Low volume/high Mix Needs
√ Example
High Variability – Customization, Demand
√ Customer demands
√ Customization
√ Made-to-order
√ Variability
√ Support and maintenance
Summary
√ Lean overview
√ Types of waste
√ History
√ Successes and challenges

To be Continue

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