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Lean Manufacturing FOR Competitive Advantage
Lean Manufacturing FOR Competitive Advantage
Lean Manufacturing FOR Competitive Advantage
FOR
COMPETITIVE
ADVANTAGE
PREPARED BY:
With the opening of world market, the Indian manufacturers can not afford the
luxury of producing products not compatible with that of the foreign products. The
presence of globally competitive firms and the continuous innovations in the market has
given a new impetus to the competition and the quality standards. The Indian
manufacturing industries operating in the states not having good infrastructure, are
suffering on account of high cost of production which is largely attributed to high
inventory level, high cycle time and enormous wastage. It is high time that the
manufacturers should try some innovative and new manufacturing strategies/techniques.
Lean manufacturing can be the answer for those industries, which can make them
competitive by enabling them to cut down the cost of product by reducing the waste as
waste has been the bane of manufacturing sector both inside and between the companies.
Major organizational changes are required for implementing the lean manufacturing. The
effective implementation of lean manufacturing strategy involves the use of Just-In-Time
(JIT) concepts, Supply Chain Management (SCM), Cellular Manufacturing System
(CMS), Six Sigma quality control, Total Productive Maintenance (TPM) and Kaizen
along with some newest techniques such as concurrent engineering and rapid prototyping
etc. This paper presents the ways and means of implementing the lean manufacturing
concept for meeting the customer's fast changing and focused requirements in today's
intensely competitive market.
INTRODUCTION
Since the early 1990s, the process of economic liberalization and globalization has
completely changed the industrial scenario all over the world. The Indian industries
particularly the manufacturing industries are now have to survive the toughest challenge of
the global leaders in this field which includes indomitable Japanese, Americans, Europeans,
and Koreans companies. The Indian manufacturers have greatly suffered on account of high
inventory level, high delivery time and large wastage till the end of the 1990s. The root cause i
of all these problems lies in managing the old batch production system poorly. With the 1
extensive use of fast changing and ever improving technology in market, the manufacturing ,
industries can not afford to enjoy the luxury they have before the pre-liberalization era. The 1
Indian manufacturers now have to learn and master the art of producing high quality 1
products at low cost with short delivery time with the aim of delighting the customers in an
open buyers market. Gone are the days when the satisfaction of the customers happens to be
the sole aim of manufacturing. The flooding of market with high level quality products by
the foreign firms have raised the competition to such a great height where only the
companies with the innovative ideas and high technical and managerial competency will
survive. The majority of Indian manufacturing industries lack the competitive skill required
in this IT (Information Technology) driven market. The reasonable competitive edge can be
gained by following the time tested concepts of Lean Manufacturing. Lean has been the
buzzword of the late 1990s.
Lean manufacturing is the process of analyzing the flow of materials and information
in an environment and continuously improving the process to delight the customer. Lean
manufacturing applies the modern elements and technologies of different areas: Process
Improvement, Operational Improvement, World Class Manufacturing, and Just-In- Time,
Continuous Flow, Concurrent Engineering, Continuous Improvement, Kaizen, and Supply
Chain Integration.
Womack have identified three types of activity in an organization .These are shown in
Table-3:
Further three more types of waste have been added to the seven original wastes. These are
called information waste. These are (i) Planning, (ii) Scheduling, and (iii) Execution waste.
In one of the European study conducted in Germany twenty types of office waste has been
found as shown in Table-4. Lean manufacturing enables to cut waste through proper planning
and efficient work processes by using the conventional industrial engineering techniques.
Table-(4) twenty types of Office Waste
Kaizen
Total Productive Maintenance (TPM)
Seven Quality Control Tools
Business Process Reengineering
Target Costing
Value Analysis
6. Lean Principles
Clearly identify the areas which add and do not add value to the product from the
Customer’s point of view and not from the perspective of individual firms, functions
and departments.
▪Identify all the steps necessary to design, order and produce the product across the
whole value stream to highlight non-value adding waste.
▪Listing of those actions that create value flow without interruption, detours,
backflows waiting or scrap.
▪Strive for perfection by continually removing successive layers of waste, as they are
uncovered.
Understanding the customer--- Meeting the customer's need and reducing the customer's
overall cost of purchasing.
Toyota used JIT successfully by
- Establishing regular delivery deals with each supplier in exchange of continual
Loyalty.
- Reduced inventories drastically by as much as 70%.
- Reduced material handling considerably.
The JIT umbrella contains the other improvement techniques such as
Kanban, TPM, and Standardization of processes.
The word kanban means visual record. The kanban or card as it is generally referred to
be a mechanism by which a workstation signals the need for more parts from the preceding
station. Kanban is a concept based on visual items like tags, cards, banners, and boxes, trays
etc. to ease operations related to production control. Supplies WIP and material handling in
general.
Toyota started using total productive maintenance since 1970s. Total Productive
Maintenance (TPM) is Total, because it is business wide Productive, because it improves
equipment performance and Maintenance, because it provides machine system support. TPM
is the philosophy and practice of preventing the loss of productive time due to: breakdowns,
minor stoppages idling, operating at less than planned for cycle times, changeover/setups,
and unacceptable quality.
7.4 Kaizen
Kaizen means improvement. When applied to the work place Kaizen means
continuing improvement. Kaizen is a system for communicating ideas up and down the
company hierarchy; everyone is encouraged to search and exploit the new opportunities and
institutional barriers to the information flow are dismantled. Kaizen charges management to
prioritize standardize and improve. Standardization and measurement are the keys to kaizen.
Next important task before the management is to ensure the Production of zero defect
products .Mistake proofing (Poka yoke) is the means adopted for this purpose. Though the
Statistical Process Control (SPC) is used to check out the defects whereas the Poka-yoke is
required to correct the defects. The use of six-sigma concepts in some World’s top class
industries has yielded excellent results.
The concept of customer satisfaction is no longer valid; delighting the customer is what
companies are looking for. The need is to strive for the continuous improvement in order to
remain competitive Genba Kanri is one such technique, which ensures better quality, low
cost and fast delivery. The principle in Genba is that management must manage the five' M’s:
manpower, machines, materials, methods, and measurements efficiently.
The barriers in the Indian context of implementing the lean manufacturing are the following:
- Lack of resources.
- Lack of expertise.
- Initial high cost which includes the cost of resources as well as expertise.
10. Conclusion
Despite achieving the remarkable success in Japan over the last three decades, one will
find it hard to comment on the worthiness of lean manufacturing in today's highly
competitive market. It has still left with lot more potential to maintain the necessary
competitive edge. Despite initial hurdles the companies have achieved considerable success
by implementing lean manufacturing. The Indian companies will find it hard to compete with
the rival foreign firms in case if they are averse to implement it and continue to follow the
old concepts based on mass customized production. The need of the modern market i.e. the
development of top quality products at lowest possible cost within the shortest possible time
can be made possible by following the concepts of lean manufacturing.
References:
1. Journal on Lean manufacturing –Mohan sen (August 2002)
2. www.af.ac.uk
3. www.mfgeng.com
4. http://web.mit.edu
5. www.implementation.com