Course Title

Lean and Agile Manufacturing (3+0)

Department of Industrial Engineering & Management

MS., Batch 2021 n 2022

Lecture: 10-12

Lean Management and Implementation

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Lean Strategy

• “Lean strategy” in manufacturing involves a series of activities to

minimize waste and Non value added (NVA) operations from
production, customer relations, product design, supplier networks and
factory management and improve the value added (VA) process.

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Lean Strategy approach

Stage 1: Loss To Safety

Stage 2: Doubt To Reality
Stage 3: Discomfort To Motivation

Stage 4: Discovery To Perspective

Stage 5: Understanding To Awareness

Stage 6: Integration To Flexibility

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Lean Strategy approach in Toyota Production System

Over-production

Wait time

Transportation

Processing

Inventory

Motion

Defects

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Lean Strategy approach in Toyota Production System

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Lean Implementation Issues

• Applying lean strategies incorrectly, increases the inefficiencies of an

organization's resources and reduced employee confidence in lean
strategies. (Marvel and Standridge 2009).

• Therefore, applying the appropriate lean strategy for the specified

industry is of paramount importance.

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Reasons of Failure of Lean Strategy

• Behrouzi and Wong (2011) reported that the principal reasons

behind the failure of the lean practices are:
1. The lack of an effective implementation methodology.
2. Inadequate understanding of lean performance measurements
needed to evaluate the improvement in effectiveness and efficiency .

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Core Principles of Lean Strategy

• The three core principles of lean strategy are identified as:

1. Identification of value
2. Elimination of waste
3. The generation of smooth flow
• (Womack et al., 1990)

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Modified Core Principles of Lean Strategy

1. Identifying customer defined value

2. Optimizing the value stream
3. Converting the value flow smoothly by controlling and
eliminating wastes
4. Activating the demand pull by synchronizing customer demand
and information flow
5. Perfection of all products processes and services
(Womack and Jones, 2003)
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Five Steps of Lean Implementation
1. Define Customer requirement—TAKT TIME (demand/time)

2. Map out the Current process (Value Stream Map) and identify Value-Add vs Non-Value-
Add activity

3. Get the stream to “flow” by Reducing/Eliminating the 7+1 Sins Waste, i.e. material
handling, setup time, downtime, walking

4. Line balance the Cycle Times & implement internal customer “PULL” system,
(continuous flow)

5. Manage the Bottleneck process by implementing Flexible Work Cells with Cross
Functionally trained operators who help do each others job and to keep the “flow going”

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Five Steps of Lean Implementation

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Five Steps of Lean Implementation

• 7+1 wastes
1. Producing Defects (SCRAP)

2. Reworking parts due to process problems

3. OVER-TIME to make up lost time (In-efficiencies)

4. Time Waiting i.e. Set-Up/Change-Over time, delivery of supplier materials

5. Wasting time walking around and looking for tools, material, people,

6. Moving parts from one area to another & staging them into (WIP)

7. Carrying excess Inventories of parts more than needed ($$ tied up)

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Five Steps of Lean Implementation

• The 8th wastes

• The lack of functional training

1. Not utilizing operators to their full potential

2. Over relying on a select few while others are

3. Inadequately trained

4. Operators are unable to rotate and help each other out to balanance the work-
load

5. High overtime increasing pressure and stress

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Productivity
• One of the most important responsibilities of an operations manager is
to achieve productive use of organization’s resources.

• Productivity is an index that measures output (goods and services)

relative to the input (capital, labor, materials, energy, and other
resources) used to produce them.

• It is usually expressed as the ratio of output to input:

𝑜𝑢𝑡𝑝𝑢𝑡
• 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 =
𝑖𝑛𝑝𝑢𝑡

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System concept of Productivity

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Productivity Improvement
• Productivity Improvement (PI) is the result of managing and intervening
in transformation or work processes.

• PI will occur if:

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Application of Productivity Measures
It is down to up approach:

• Individual level

• Group level

• Department level

• Corporate level

• National level

• Global level

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Global-Level Productivity
• Why are global-level productivity measures important?

• How do we compare productivity among nations?

• How can a nation increase productivity in a global economy?

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Importance of Global-Level Productivity Measures
• Measure and compare competitiveness among nations.

• Contribute to the development of a nation’s economic, social, and

political policies.

• Develop global cooperation among nations.

• Help business organizations make investment decisions.

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Factors Affecting Productivity Improvement at Global Level

• Education
• Technology
• Macroeconomic policies
• Social and culture environments
• Foreign aids
• Foreign investments
• Industry policies & competition

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Why is National Productivity Important?

• To compete with international level.

• At the national level, growing productivity
• leads to a higher standard of living
• holds inflation in check
• enhances international competitiveness.

• The annual GDP growth is partially due to

• growth in productivity
• Growth (-) in inflation
• *GDP = Gross domestic product
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Variables Affecting Labor Productivity

• Physical work environment

• Technology, equipment, materials, lighting, layout

• Product quality
• Defects, scrap, rework

• Employee job performance

• Employee ability, motivation

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 Methods Analysis and Improvement
• Specifying the tasks and responsibilities of a job is only the first step in the
job design process.

• The next step is to determine how to perform the tasks, that is, determine
the best work methods.

• Best work methods are:

• the most efficient physical movements of the worker,

• the best sequence in which to perform movements or tasks, and

• the best way to coordinate the workers actions with those of machines and other
workers.
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Methods Analysis and Improvement

• Methods Analysis

• Work Measurement

• Labor Standards

• Time Study

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Determining Labor Standards from Time Studies

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Example: Time Study Approach

• In a time study of a manufacturing operation, the

average time observed to complete a product was 8.6
minutes. The performance rating applied to the
observed worker was 0.95 and the allowance during
an 8-hour shift was 12.5% or 60 minutes.

• Compute the labor standard.

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Example: Time Study Approach
• Observed time = 8.6 minutes

• Performance rating = 0.95

• Allowance fraction = 0.125

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Example: Time Study Approach
• Observed time = 8.6 minutes

• Performance rating = 0.95

• Allowance fraction = 0.125

• Normal time = Observed time x Performance rating

= 8.6 x 0.95

= 8.17 minutes

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Example: Time Study Approach
• Observed time = 8.6 minutes

• Performance rating = 0.95

• Allowance fraction = 0.125

• Normal time = Observed time x Performance rating

= 8.6 x 0.95

= 8.17 minutes

• Standard Time = Normal time / (1 - Allowance)

= 8.17 / (1 - 0.125)

= 8.17 / (0.875)

= 9.337 minutes
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Work Sampling

• Job performed by a single worker in a fixed location

• Job involves repetitive short cycles
• Job expected to be changed periodically as customer
orders change
• Job produces relatively small quantities of output
• Resulting time standard used for accounting cost
standard, pricing analysis, and production planning
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Example: Work Sampling
• A work sampling study was performed on an electronic assembly operation at OK
Instruments. The study covered an 8-hour shift with a single worker. The results of the
study were:

Activity % of Worker’s Time

Assemble Units 80

Allowances 20

• If the worker received a performance rating of 1.20 on the Assemble Units activity and
400 units were assembled during the study, what is the labor standard for this operation?

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Example: Work Sampling

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Example: Work Sampling

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Example: Work Sampling

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Conclusion

• The overall achievement in reducing NVA time , average processing

time and improvement in process efficiency and effectiveness should
found satisfactory for the company.

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References

• Azharul Karim and Kazi Arif-Uz-Zaman, A methodology for

effective implementation of lean strategies and its performance
evaluation in manufacturing organizations, J. Business Process
Management, Vol. 19 No. 1, (2013 ), PP 169-195.

• Manimay Ghosh, Lean manufacturing performance in Indian

manufacturing plants, Journal of Manufacturing Technology
Management, Vol. 24 No. 1, (2013) , PP 113-122.

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cycle change • 7+1 wastes
Stage 1: Loss To Safety 1. Producing Defects (SCRAP)
Stage 2: Doubt To Reality 2. Reworking parts due to process problems
Stage 3: Discomfort To Motivation 3. OVER-TIME to make up lost time (In-efficiencies)
Stage 4: Discovery To Perspective 4. Time Waiting i.e. Set-Up/Change-Over time, delivery of supplier materials
Stage 5:UnderstandingToAwareness Stage 6: Integration To Flexibility 5. Wasting time walking around and looking for tools, material, people,
6. Moving parts from one area to another & staging them into (WIP)
Lean Implementation Issues 7. Carrying excess Inventories of parts more than needed ($$ tied up)
1.Lack of Management Support:2.Resistance to Change: +1. Unused Employee Creativity: Failing to utilize the knowledge, skills, and creativity
3.Insufficient Training: of employees (traning and educate the employee)
4.Inadequate Communication:
5.Unrealistic Expectations:
6.Failure to Measure Progress:
7.Lack of Continuous Improvement:

The three core principles of lean strategy are identified as:

1. Identification of value
2. Elimination of waste
3. The generation of smooth flow

Modified Core Principles of Lean Strategy

1. Identifying customer defined value
2. Optimizing the value stream
3. Converting the value flow smoothly by controlling and eliminating wastes
4. Activating the demand pull by synchronizing customer demand
5. Perfection of all products processes and services

steps of lean
1. Establish a clear understanding of customer value
2. Map the value stream
3. Identify and eliminate waste
4. Create flow
5. Establish pull
6. Pursue perfection
7. Respect people
8. Develop a lean culture
9. Monitor and evaluate

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