ASSIGNMENT

STRATEGIC OPERATION MANAGEMENT

Question 1 : MUDA is anything other than the minimum amount of equipment, material,
parts, space and workers time, which are absolutely essential to add value of the
product ..SCHOICHIRO TOYOTA, TOYOTA PRESIDENT.

Based on the above quote,

a) Explain in details what you understand by MUDA
b) Types of MUDA
c) With relevant examples, explain MURI and MURA.

(15 marks)

Introduction
Muda is a Japanese word meaning "futility; uselessness; idleness; superfluity;
waste; wastage; wastefulness", and is a key concept in the Toyota Production
System (TPS) as one of the three types of deviation from optimal allocation of resources
(muda, mura, muri). Waste

reduction is

an

effective

way

to

increase

profitability. Toyota adopted these three words beginning with the prefix mu-, which in
Japan are widely recognized as a reference to a product improvement program or
campaign.
From customer point of view, a value added work is the process adds value by
producing goods or providing a service that a customer is willing to pay for. However,
muda is processes that consumes resources more than needed which causes waste
occurs.
Muda are breakdown into two types namely:

Muda Type - I : The non value added activity for end customer but it is necessary.
Muda Type -II : The non value added activity for end customer which are not necessary.
It is targeted to eliminate this type of wastage.
Type-I are usually hard to eliminate because although it is classified as non - value
added activity but it is not necessary muda. To illustrate, we will take an example of car
manufacturing. The quality inspection process for critical process is needed at car
assembly to ensure the car quality and fulfil safety standards before sending it to the
end user. However, from customer point of view, this actions is deemed unnecessary
and do not attribute to the assembly process which add values or to the car assembly.
Type-II are non value added activity which contributes to waste and incurring hidden
costs. Toyota Production system identifies the wastage occurs and group them into 7
major categories.

MUDA is one what we call the 3Ms . The other two are MURI, overburden, and MURA,
unevenness. Eliminating all three of these will result in efficient, rationalized production.
MUDA : Non-value added or waste
MURI : Overburden
MURA : Unevenness
MURI, or overburden, is at opposite end of the spectrum from MUDA. MURI is pushing a machine
or person beyond natural limits. Overburdening people results in safety and quality problems, and
overburdening machinery is a direct cause of breakdowns and defects.
MURA, the third of the 3Ms, can be viewed as combination of the first two Ms: at times there is
excess capacity and at time overburden. Such unevenness results from an irregular production
schedule or fluctuating production volume.

MUDA, is an automatic result of because unevenness in production levels means that it is always
necessary to have on hand enough equipment, materials and people for highest level productionno
matter what the level may be at any given time.
The first step toward eliminating MUDA is to learn to recognize it; which steps of the production
process are truly necessary, which step add value to the product, and which steps do not?
If you look closely at the process of doing production work, you can see that there are three main
types of activity that are involved.
The first is simply waste or obvious MUDA. This obvious MUDA is any step that is logically
unnecessary to carrying out the job, such things as waiting around, rearranging materials, or handling
parts that are not needed right away. Such activities add no value to the final product, or to the
material that go into it.
Next is the MUDA of incidental operations, work that must be done under present job conditions but
that add no value. Leaving the workspace to get parts or tools, or taking time to unpack parts are
example of identical-operation MUDA.
The last type of activity consists of the truly necessary operations which add to value of the materials.
These are processing operationschanging the shape something, changing its quality or assembling
it. The higher the proportion of value-adding operations in the total work performed, the higher the
level of production efficiency.
In fact, when we inspect actual job-sites we find hat MUDA is extremely prevalent and value-adding
operations are surprisingly small. MUDA is everywhere, and the effort to identify and eliminate it has
led to the classification of MUDA into seven categories:
1. MUDA of Over-production: Producing too much or too soon.
2. MUDA of Waiting: Waiting for parts to arrive or for a machine to finish a cycle, etc.
3. MUDA of Conveyance: Any conveyance is essentially MUDA so should kept to a
minimum.

4. MUDA in Processing: It is simply over-processing.

5. MUDA of Inventory: Any more than the minimum to get the job done.
6. MUDA of Motion: Any motion that does not contribute directly to value added.
7. MUDA of Correction: Any repair is MUDA.
The Toyota Production System attempts to eliminate all forms of MUDA, but pays special attention of
MUDA of over-production.

Examples
The 3 Ms of Lean
When Japanese companies talk about waste they usually talk about the three Ms; Mura,
Muri and Muda. While most people who have had contact with lean manufacturing will
have been made aware of the 7 wastes and Muda they often have not been introduced
to Muri and Mura at all. Yet these wastes are often far more important to tackle than
Muda and often are the underlying causes of the Muda that you observe within your
processes.
While Muda is the non-value adding actions within your processes; Muri is to
overburden or be unreasonable while Mura is unevenness. I will discuss these terms
below.
Muda, The Seven Wastes
Muda is any activity or process that does not add value; a physical waste of your time,
resources and ultimately your money. These wastes were categorized by Taiichi Ohno
within the Toyota production system, they are;

Transport; the movement of product between operations, and locations.

Inventory; the work in progress (WIP) and stocks of finished goods and raw
materials that a company holds.

Motion; the physical movement of a person or machine whilst conducting an

operation.

Waiting; the act of waiting for a machine to finish, for product to arrive, or any
other cause.

Overproduction; Over producing product beyond what the customer has ordered.

Over-processing; conducting operations beyond those that customer requires.

Defects; product rejects and rework within your processes.

MURA AND MURI

Mura the Waste of Unevenness

Hockey Stick Effect

Mura is the waste of unevenness or inconsistency, but what does this mean and how
does it affect us?
Mura creates many of the seven wastes that we observe, Mura drives Muda! By failing
to smooth our demand we put unfair demands on our processes and people and cause
the creation of inventory and other wastes.
One obvious example is production processes where the manager is measured on
monthly output, the department rushes like mad in the final week of the month to meet
targets, using up components and producing parts not actually required. The first week
of the month is then slow due to component shortages and no focus on meeting targets.
This gives us the hockey stick graph of production as we see here on the right, far
better to smooth out production and work at the demand of the customer.

Muri the waste of Overburden

Some causes of Muri

Muri is to cause overburden, by this we mean to give unnecessary stress to our

employees and our processes. This is caused by Mura and a host of other failures in
our system such as lack of training, unclear or no defined ways of working, the wrong
tools, and ill thought out measures of performance.
Again Mura causes Muda, the seven wastes are symptoms of our failure to tackle Mura
and Muri within our processes not the root cause.
Question 2
KAIZEN is a way of life. How KAIZEN can be part of solution for Question 1
Introduction
Continuous improvement is based on a Japanese Concept called Kaizen, is the philosophy of
continually seeking ways to improve operations. It invloves identifying benchmarks of excellent
practices and instilling a sense of employee ownership of the process. The focus can be on:

Reducing the length of time required to process requests for loans in bank

The amount of scrap generated at a milling machine or the number of employee injuries.

Continuous improvement can also focus on problems with customers or suppliers, such as
customers who request frequent changes in shipping quantities and suppliers that to
maintain high quality.

The bases of the continuous improvement philosophy are the beliefs that virtually any aspect of an
operation can be improved and that the people most closely associated with an operation are in the
best position to identify the changes that should be made. Consequently, employee involvement
plays a big role in continuous improvement programs.
Getting Started with Continuous Improvement
Instilling a philosophy of continuous improvement in an organization may be a lengthy process, and
several steps are essential to its eventual success.

1. Train employees in the methods of statistical process control (SPC) and other tools for
improvement quality.
2. Make SPC methods a normal aspect of daily operations.
3. Build work teams and employee involvement.
4. Utilize problem-solving techniques within work teams.
5. Develop a sense of operator ownership of the process.
Here employee involvement is central to the philosophy of continuous improvement. However, the
last two steps are crucial if the philosophy is to be the part of everyday operations.A sense of operator
ownership emerges when employees feel as if they own the processes and methods they use and
take pride in the quality of product or service they produce. It comes from participation on work teams
and in problem-solving activities, which instill in employees a feeling that they have some control over
their workplace
Any activity asking unreasonable stress or effort from personnel, material or equipment.
In short: OVERBURDEN
For people, Muri means: a too heavy mental- or physical burden. For machinery Muri
means: expecting a machine to do more than it is capable of- or has been designed to
do.
Usually the three of them can not be seen separate. When a process is not balanced
(mura), this leads to an overburden on equipment, facilities and people (muri) which will
cause all kinds of non value adding activities (Waiting is also an activity!!) thus leads to
muda.
To eliminate MURA and MURI larger parts of the system need to be looked upon, not
only a process or process step or operation, but at an entire Value Stream. Makigami,
VSM or 'Process Kaizen' eliminates MUDA.

KAIZEN DEFINITIONS IN MANAGEMENT

Kaizen is the practice of continuous improvement. Kaizen was originally introduced to
the West by Masaaki Imai in his book Kaizen: The Key to Japans Competitive Success
in 1986. Today Kaizen is recognized worldwide as an important pillar of an
organizations long-term competitive strategy. Kaizen is continuous improvement that is
based on certain guiding principles:

Good processes bring good results

Go see for yourself to grasp the current situation

Speak with data, manage by facts

Take action to contain and correct root causes of problems

Work as a team

Kaizen is everybodys business

And much more!

One of the most notable features of kaizen is that big results come from many small
changes accumulated over time. However this has been misunderstood to mean that
kaizen equals small changes. In fact, kaizen means everyone involved in making
improvements. While the majority of changes may be small, the greatest impact may be
kaizens that are led by senior management as transformational projects, or by crossfunctional teams as kaizen events.

Suggestion:
Design the system with sufficient capacity to fulfill customer requirements without
overburdening people, equipment, or methods (MURI.)
2. Strive to reduce variation/fluctuation to a bare minimum.(MURA)

3. Then strive to eliminate sources of waste!(MUDA)

BUT REMEMBER: Quality first, then cost first stop shipping scrap.
Mura and Muri are most of the time the root causes of Muda
Muda has also rootcauses itself.
Muri and Mura also.
Muda type II is easy to eliminate and gives quick results.... but for how long?
So:

Take a careful look at your Mura and your Muri as you start to tackle your Muda.

Ask why there should be any more variation in your activities then called for by
customer behavior.

Then ask how the remaining, real variation in customer demand can be
smoothed internally to stabilize your operations.

Finally ask how overburdens on your equipment and people -- from whatever
cause -- can be steadily eliminated.

This will be hard work and will require courage because it will sometimes require you to
re-think longstanding sales, management, and accounting practices that create the
Mura and Muri.
However, if you can eliminate Mura and Muri at the outline to create a stable
environment for your sales, operations, and supply management teams, you will
discover that Muda can be removed much faster.
And once removed it will stay removed.
Muda eliminated only taking in mind MUDA means that the MUDA can come back like a
sniper.

Before improving a system, it is essential to first create stability.

Attaining 'basic stability' in the 4 Ms (men, machines, material, method) is the essential
pre-condition for sustained expulsion of Muda from any gemba!
Without a basic stability, mura will be present due to variance!
This is a reason to implement OEE and even TPM before trying to create flow through
lean initiatives.
Why? Well, how can you create flow (= eliminate muda) when machine performance is
unstable?
Muri experienced by machines, gives rise to Mura in their performance!
So:
TPM is your basic Muda reduction toolbox.
Six Sigma is your Mura (variability) reduction toolbox.

QUESTION 3
a) Explain what you understand about inventory
Inventory Definition
Inventory or stock refers to the goods and materials that a business holds for the
ultimate purpose of resale (or repair).
Inventory management is a science primarily about specifying the shape and
percentage of stocked goods. It is required at different locations within a facility or
within many locations of a supply network to precede the regular and planned
course of production and stock of materials.
The scope of inventory management concerns the fine lines between replenishment
lead time, carrying costs of inventory, asset management, inventory forecasting,
inventory valuation, inventory visibility, future inventory price forecasting, physical

inventory, available physical space for inventory, quality management,

replenishment, returns and defective goods, and demand forecasting. Balancing
these competing requirements leads to optimal inventory levels, which is an ongoing
process as the business needs shift and react to the wider environment.
Inventory management involves a retailer seeking to acquire and maintain a proper
merchandise assortment while ordering, shipping, handling, and related costs are
kept in check. It also involves systems and processes that identify inventory
requirements, set targets, provide replenishment techniques, report actual and
projected inventory status and handle all functions related to the tracking and
management of material. This would include the monitoring of material moved into
and out of stockroom locations and the reconciling of the inventory balances. It also
may include ABC analysis, lot tracking, cycle counting support, etc. Management of
the inventories, with the primary objective of determining/controlling stock levels
within the physical distribution system, functions to balance the need for product
availability against the need for minimizing stock holding and handling costs.

Inventory management
Inventory management is the overseeing and controlling of the ordering, storage and
use of components that a company will use in the production of the items it will sell
as well as the overseeing and controlling of quantities of finished products for sale. A
business's inventory is one of its major assets and represents an investment that is
tied up until the item is sold or used in the production of an item that is sold. It also
costs money to store, track and insure inventory. Inventories that are mismanaged
can create significant financial problems for a business, whether the
mismanagement results in an inventory glut or an inventory shortage.

b) Disadvantage of inventory

Excess inventory exists when a company inaccurately orders inventory and is left with
more than the market demands or market demand dramatically falls after inventory is
ordered. Having excess inventory is generally regarded as bad for business because of
what it means for inventory turnover and the costs associated with managing it.
Space Problems
One problem of having excess inventory is that it takes up floor space and prevents you
from offering newer products that appeal to customers. Turnover-per-foot of shelf space
is a common measurement used by retailers to determine how efficiently they sell
products that are given space on the sales floor. When excess inventory lingers from an
out-of-style or older product, it restricts better product opportunities.
Reduced Profits
Excess inventory naturally leads to reduced profit margins in many instances.
Companies usually wind up putting excess items on clearance to induce buyers to
purchase them at lower costs. Some companies even wind up selling extra inventory at
prices below what they paid for them. This significantly lowers profit margin, which is the
difference between what you pay for products and what you sell them for. Similarly,
selling at lower prices means you are not bringing in as much cash as you would selling
products at regular prices.
Storage Costs
Another major concern of carrying excess inventory is the many costs involved. Many
companies have extra storage space, where excess inventory is held until product on
the floor clears out. More space used for storage means less floor space for selling.
Plus, you have to pay for utilities and other costs related to the storage. Employees who
move inventory in and out of storage and organize it are also paid, which means you
pay labor for the management of excess inventory.
Waste
Related to the costs of inventory management is a worst-case scenario in which you
end up throwing out excess inventory that perishes or expires. If a company carries
fresh produce, for instance, it may have to throw out excess when it goes bad. Products

like medicine, bread and other foods have expiration dates and must be tossed at some
point. Reducing wasted inventory is critical for cost control and profitability.