Part Time MBA Program Operation & Decision Science - 3rd Year Trimester IX

Lean Manufacturing Session 6 Covered On 06.02.2013

Visual Factory, 3P, Poka Yoke, Automation, Continuous Improvement & Inventory Management for lean

Notes Prepared By Malik M. Samnani C044

Notes Reviewed By

Abhijit J. Udani

C048

Faculty Prof. Shashank Tilak

Part Time MBA Program Operation & Decision Science - 3rd Year Trimester IX
Note: These notes shall be read in conjunction with Slides provided by Prof. Shashank Tilak; hence, in order to avoid repetitiveness, certain points are referred to as Slides numbers. Abstract: In our earlier sessions we have in depth discussions on the macro aspects pertaining to achieving lean, namely; Push/Pull Systems, Layouts, Value Stream, 5S, Workplace Organizations, etc. As the above aspects our clear we move on to some of the micro aspects to achieve lean. These aspects are purely dedicated at operational level. It mainly involves Preparedness, Implementation on day-to-day basis and also the Practices under taken inorder to achieve lean. 1.0 Visual Factory (Slide no. 4 - 7): Visual Factory concepts basically mean making the complete factory visible. Main motive of any business is to make maximum Money. In this competitive world were the selling price is always the constrained, company had to really cut down the cost incurred inorder to maximise the money.

Input
Operations

Output

Delivery

Money
Customer

Visual Factory To understand the pulse of the business to maximise the Profits

Managing the complete show, from scratch, to achieve lean objectives is the key motive of visual factory. The underlying key features of Visual Factory are as under;

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Faculty Prof. Shashank Tilak

Part Time MBA Program Operation & Decision Science - 3rd Year Trimester IX
i. Teamwork: Teamwork is the key parameter in any task/operation. Every individual is assigned a job based on his qualification, experience and capability. Executing the assigned work with responsibility and ownership adds value to the teamwork.

Further the processes involved are very complex, hence the responsible work of individuals along with effective Co-Ordination and Synchronization enhances the teamwork. This reduces Time and Efforts required in executing the complete process as a whole. Teamwork basically deals with people (mindset) and without people (mindset) things are not possible. Hence, an efficient and effective teamwork is the perfect start required in achieving lean. ii. Methods, Systems & Infrastructure Sharing Information: Information sharing is the most important requirement in any organization and workplace. High quality Teamwork backed by spontaneous and accurate information sharing is what the organizations crave for to achieve lean.

Information sharing signals the status of the task/operation and accordingly reflects what needs to be done as per the planning. Non-conformity of the products or certain processes should be shared immediately at all levels inorder to avoid assembling of an undesirable product and repeating the same. Example (covering teamwork & information sharing) Movie Chakde brings out a very classic example of teamwork and information sharing. It clearly shows that how teamwork and sharing of information, in terms of handling the game, have helped the girls to achieve the impossible.

The Visual Factory concept helps in advance know how of the future performance and creates the room for continuous progress. a) Effectiveness ( best utilization of outputs) b) Efficiency ( dependent on optimum usage of inputs)

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Faculty Prof. Shashank Tilak

Part Time MBA Program Operation & Decision Science - 3rd Year Trimester IX

Payment

Coordination

Meeting each demand

Vendor managemen

Effectiveness

Efficiency

Faster and accurate updates

Larger capacity/ Cost Monitoring and Control

Cost Reduction

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Faculty Prof. Shashank Tilak

Part Time MBA Program Operation & Decision Science - 3rd Year Trimester IX
Efficiency is nothing buty optimum use of inputs and services and the companys commitment toward achieving the ultimate goal of Cost reduction. Some o the methods are as follo0ws a) Coordination : b) Vendor management c) Large capacity/ Cost distribution Effectiveness is best deployment of the outputs which are manufactureds on basis of inputs. Some of the methods are as follows a) Payment b) Meeting Each others Demand c) Faster and accurate updates Both of the principles when used in a synchronous manner together along with proper monitoring and control can result in benefits for the company. Manufacturing Planning - Push system emergence APICS definition: Production of items at times (& in Quantities) required by a given scheduled planned in advance In short Manufacturing system in which production is based on a projected production plan and where information flows from management to the market, the same direction in which the materials flow. E.g.: when items are served by the caterer it is typically push. If we notice all that is pushed on to the plate would be get wasted, because the person serving is not aware of the consumers taste and also the consumer doesn't feel guilty of wasting food, because it was forced on to him or her. Though the purpose of push system followed by the caterer is to restrict consumption of high cost item, typically more of such food would get wasted.

Its basis for the same was milestones for plans so that it could be benchmarked for each of the manufacturing / Project works

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Faculty Prof. Shashank Tilak

Part Time MBA Program Operation & Decision Science - 3rd Year Trimester IX
MRP schedules

Job shop/ Project mfg

Customer orders

Mfg orders

Purchase Orders

It basically focused on a) Efficiency b) Utilization c) Productivity E.g.: A factory manufacturing roller bearings and Shafts for reputed company like Hero Honda and so on drives maximum efficiency but continuous production and tremendous pressure on the personnel. But manufacturing happens 17 hours without taking into consideration the material requirement by customer and leading to high inventory at site. A Complex Project like power plant set up for the RRVUNL (Chabra) the vendors list in India is to be followed. The requirement is such that the valves and pumps selected such that the material is always available in the market a. Thats when you that vendor like Audco has placed millions of products worth crores in the market that too at a discounted price. Also pumps manufacturers like KBL have kept a certain model of pumps in market so that the same can be used to dispatch. This is an example of Push type system Characteristics of the Push system is explained in Slide no 6 of 31 Some of the problems associated with there as per shown in the diagram below and also explain in the slides mentioned by the professor (slide 5 of 31)

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Faculty Prof. Shashank Tilak

Part Time MBA Program Operation & Decision Science - 3rd Year Trimester IX

Execution through a Push system: (explanation on slide no 8 of 31) Example As parts in a car are many if manufactured through a push system, on a monthly production of min 20000 vehicles we require the following No of assemblies., No of quality documents , Keeping track of each of the system and its incoming details, which part is assembled on which a car. Which one is faulty, what happens happens if place not in time when it is to be required. Suppose if color change is required. How fast can it change its paint cans and set up time for assembly. What can be done to reduce? The no of the workers that he is to put in to get that plant running through out, where the order is to be provided, which supplier should be answered first and so on. Pull system APICS definition: The production of items only as demanded for use of to replace those taken for use. In simple words: Manufacturing system in which production is based on actual daily demand (sales), and where information flows from market to management in a direction opposite to that in traditional (push) systems. E.g.: The supermarkets typically work on a pull system, because when we pick up soaps or other consumable from the shelf, the gap in the shelf triggers supply of fresh material, which in turn triggers production of the material

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Faculty Prof. Shashank Tilak

Part Time MBA Program Operation & Decision Science - 3rd Year Trimester IX
In factory canteens when we serve rice on a buffet system it is pull, but when items are served by the caterer it is typically push A Complex Project like power plant set up for the NTPC simadhri (reason because close to Sea water erosion) can be taken as an example wherein the material to be used is 18% Nickel in steel or duplex type Stainless steel for valves and Pumps whereas the Pipe to used is Austenitic type SS316and needs a lead time of min 24 weeks with most of the vendors in India and the vendor list is to be followed. The entire operation needs to be taken care such that no delay happens but since the lead time involved is too long, Money rotation and relationship with the vendors needs to be flexible so that supply happens in a staggered and helps recover investment for the company.

Working of Pull system Example for steel Product

Example: A Style Spa Furniture can be considered as a typical example wherein the customer first places the order on which basis the dealer gives him a head time of say 2days. After receiving the order the dealer supplies the same from the warehouse in knocked down condition to the customer and the same is assembled at the customers residence. Bus at warehouse the inventory is less by one item it places order on the factory and the cycle continues, till it reach the start point of the entire process. Diagrammatically it can be shown as above.

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Faculty Prof. Shashank Tilak

Part Time MBA Program Operation & Decision Science - 3rd Year Trimester IX
Characteristics of Pull system is clearly explained in Slide 11 of 31

Execution of pull system is well explained in slides 14 of 31

Differentiation between Push and pull system can be explained as shown below

SMED: Single-Minute Exchange of Die (SMED) is one of the many lean production methods for reducing waste in a manufacturing process. It provides a rapid and efficient way of converting a manufacturing process from running the current product to running the next product. This rapid changeover is key to reducing production lot sizes and thereby improving flow. A single cell and set of tools can therefore produce a variety of products without the time consuming equipment changeover and set-up time associated with large batch-and-queue processes, enabling the organization to quickly respond to changes in customer demand.

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Faculty Prof. Shashank Tilak

Part Time MBA Program Operation & Decision Science - 3rd Year Trimester IX
Earlier while working in roller bearing factory on centreless grinding machine change of grinding wheel ( as grinding stone would differed depending on type of steel used) would take two shifts in total and depending of grinding tool required. By means of planning and carefully timing, improvement in maintenance techniques the company was able to reduce its downtime to 17hrs to approx 5 hours.

Hybrid Push Pull systems

Above shown is diagrammatic representation of the Intel manufacturing chips. A push system makes the production and supply chain demands on basis of forecasting whereas pull supply chain drives the production and distribution by means of customer demand.

Wal-Mart is another example of a company that uses the push vs. pull strategy. A pushpull system in business describes the movement of a product or information between two subjects. On markets the consumers usually pull" the goods or information they demand for their needs, while the offerers or supplierspush" them toward the consumers. In logistic chains or supply chains the stages are operating normally both in push- and pull-manner.[5] Push production is based on forecast demand and pull production is based on actual or consumed demand. The interface between these stages is called the pushpull boundary or decoupling point

Workstations The assigned location where a worker performs the job on a workbench. Already same has been covered in detail in Session4.However we would look into Cellular layout Its nothing more than an assembly of machines that produce the same range of products (industry within industry Page 10 of 13 Faculty Prof. Shashank Tilak

Part Time MBA Program Operation & Decision Science - 3rd Year Trimester IX
E.g.: Coins being produced at Mint Petrol and its variants at a Refinery Marti models of Swift and Dire manufactured on same assembly line.

Diagrammatically a U shaped layout can be shown as follows

Example of it is groups of machines like lined each behind the other for the completion of the job from raw material to finished goods

Operations management: Operations decisions by Dr. Donald J. McCubbrey,

For an intermittent type of Process flow. Reference: The arrangement can be as follows

Example: For example, a health care clinic must cater to the individual needs of every patient who enters the clinic for treatment. One patient may have a broken ankle, while another patient may be a pregnant woman who needs a prenatal care checkup. One patient may be a baby with a fever, while another patient may be getting a prescription medication refilled. The primary organizational goal for a health clinic is effectiveness in treating the individual needs of each patient, and an intermittent process is often the most suitable way to organize labor and equipment to provide customized treatment for each individual patient. X-ray equipment and technicians are organized into an X-ray Department. Other departments are created for Page 11 of 13 Faculty Prof. Shashank Tilak

Part Time MBA Program Operation & Decision Science - 3rd Year Trimester IX
pediatrics, lab, gynecology, pharmacy, physical therapy, and many more. Patients are routed only to the departments that are needed for their particular treatment requirements. This production process is called an intermittent process, because the activity of each department happens intermittently at irregular intervals, depending on the particular needs of different patients (customers) at different points in time.

For repetitive movement

A cellular process arranges dissimilar machines and equipment together in a line that is dedicated to producing a specific family of products that have similar processing requirements. By setting up multiple dedicated cells, the facility can efficiently produce a wide variety of products. Since the products within a family have similar production requirements, equipment setup times, inventories, and lot sizes can be kept to a minimum. The cellular approach allows each product to be sent through the manufacturing process one piece at a time, according to the immediate set of customer orders. It provides workers the flexibility to change a product or customize it in some way in response to specific customer requirements. The cells are usually arranged in a U shape. This enables one worker to view multiple machines simultaneously and puts all machines within easy reaching distance. Cellular processes minimize cycle times and enable the organization to maintain higher levels of product volumes, variety, and customization.
KANBANs

APICs Definition of KANBAN : Method of Just in time Production that uses standard containers of lot sizes with a single card attached to it.

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Faculty Prof. Shashank Tilak

Part Time MBA Program Operation & Decision Science - 3rd Year Trimester IX
Kanban is a Japanese word that means visual card. At Toyota, Kanban is the term used for the visual & physical signaling system that ties together the whole Lean Production system

Types of kanban cards have been already shown in the ppt given by prof Slide 26 to 30

However the benefits of Kanban are as follows.

Kanban works from upstream to downstream in the production process (i.e., starting with the customer order). At each step, only as many parts are withdrawn as the kanban instructs, helping ensure that only what is ordered is made. The necessary parts in a given step always accompanies the kanban to ensure visual control. The upstream processes only produce what has been withdrawn. This includes only producing items in the sequence in which the kanban are received, and only producing the number indicated on the kanban.

Only products that are 100 percent defect-free continue on through the production line. In this way, each step uncovers and then corrects the defects that are found, before any more can be produced. The number of kanban should be decreased over time. Minimizing the total number of kanban is the best way to uncover areas of needed improvement. By constantly reducing the total number of kanban, continuous improvement is facilitated by concurrently reducing the overall level of stock in production.

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Faculty Prof. Shashank Tilak