Lean Enterprise
System (Based on TPS)
 Around the world the idea of lean enterprise is
progressively more applied to manufacturing, service,
and non-profit organizations. Lean enterprise as of this
date has been extended by combining lean production
idea to Six Sigma.. Although, not all organizations can
apply this concept, but others which have successfully
applied these combined concepts have experienced
noteworthy upgrading in their performance in terms of
operations.
Lean Production
 The lean production idea is to manufacture the kinds
of units considered necessary, at the time considered
necessary and in quantities considered necessary. This
is to get rid of needless intermediate and finished
product inventories. Lean production is beyond
techniques and approaches. It is a mindset both for
employees and managers that centers on riddance of
waste and lessening of variability in all business
sectors.
Lean Thinking
 The original lean thinking was credited to Henry Ford
and his Ford Production System (FPS) in the early 20th
century. In 1937, when Toyota was established, and
engineer named Taiichi Ohno was sent by the company
to be trained in the principle and approach initiated by
FPS. Ohno had extended his knowledge of the FPS by
adding principles and approaches that enhances its
effectiveness and later became Toyota Production
System (TPS). The concept of TPS was applied widely
all over the organization which made Toyota very
successful in markets worldwide.
Five Core Principles of Lean Production
 1. The value in a production system must be described
coming from the viewpoint of the customers for each
product of family.
 2. Every production stage must be assessed using its
contribution to value creation. Non-added value
activities should be removed.
 3. The value-creating series of stages must be
structured in a firm and integrated series to develop a
smooth flow toward the customer.
 4. Instead of organizing production to push finished
goods to customers, products pulled by the customer
must be the motives for planning, organizing, and
scheduling upstream production activities.
 5.All members of the organization must practice
perfection using continuous improvement.
Three Broad Categories on the Types of Waste in a Production
Muda
 This is a Japanese term for non-value added
production activities which could be wasteful. The
context of value came from the perspective of
customers. Customers are not willing to spend their
money for non-value added activity.
Mura
 This type of waste is related to irregularity of the
process. The process of JIT (just-in-time; approach in
TPS) is used to lessen the uncertainty and irregularity
in the production process.
Muri
 This is the waste that comes from overburden and
unreasonableness. Reduction from this waste could be
done through better standardization of the production
process.
Types of Waste
Overproduction
 It is better to manufacture products in smaller number
that are more or less closer to what is demanded by
the market to avoid overproducing.
Setup time
 under the lean production system set up time is lessen.
Setup time makes waste even those necessary like raw
materials and other resources.
Processing time
 Processing time is the time necessary to manufacture a
product. Basically product price is based on its market
value and not on processing time therefore the latter is
considered as waste.
Waiting time
 A longer production lead time results to waste and
contributes to quality problems due to obsolete or
expired raw materials and components.
Transportation
 Facilities like factories, warehouses, and supplier
facilities need to be located near each other to
minimize the waste.
Movement
  Poor layout, work, and process design may result to
unnecessary movement of raw materials and
components. The layout must be designed to diminish
the waste from movement.
Inventory
 It is best to maintain a minimum amount of inventory
for smooth production process. Any extra inventory
adds waste because of extra storage and handling
requirements.
Poor quality
 Any product or component produced not based from
specifications are considered scrapped or wasted.
Components of Lean Production System
1. Pull Production System
 it is a production system that utilizes customer
demand as the prime motive for production planning
to maximize the use of production resources.
 Pull refers to just-in-time production and delivery
process. Once the production flow is in place and there
are no bottlenecks in the process, it is possible to
deliver the products as demanded. With improved
flow, it is possible to give the customer the product
when demanded, at the right time and in the right
quantity. This results in reduction of stock and
inventory costs and adds value to the customers.
2. Push Production System
 The push system centers on maximizing the use of
production capacity and depend on estimated
customer demand.
 A push system, starts production in order to anticipate
future demand that has been estimated according to
historical data. In this supply chain management
system, goods are "pushed" through the supply chain,
with the demand forecast triggering production, and
with finished goods being dispatched to distributors or
retailers that will then market the products and wait
for customers to make the purchase.
3. Small Batch Sizes
 A batch is a quantity of products that are
manufactured together. Under the lean production
system the batch sizes have to be small as possible.
Small batches are advantageous due to reduced
average level of inventory. Small batches allow for
early detection of any quality problems and help attain
a standardized workload on the system. Small batches
could also be moved around more effectively leading
to capacity efficiency.
4. Short Setup Times
 Small lots are advantageous to operations, but to the
disadvantage of increasing set up. A set up is a group
of activities to change or readjust the process between
successive batches of products.
5. Just-in-time Inventory
 It is popularly known as JIT, its objective is to make the
correct amount of inventory accessible at the right
time. In TPS, Kanban is the method of implementing
the JIT. Kanban is the card used to control the flow of
production through a factory.
 JIT has often been expressed as a holistic management
system aimed at reducing waste, maximizing cost
efficiency, and securing a competitive advantage. Thus,
a number of additional conditions are considered
necessary for the successful implementation of JIT.
6. Uniform Production Planning
 In manufacturing operations, the standardization
components across multiple products known as part
commonality or modularity increases repeatability.
Part commonality permits a company to make
immediate change from production of one product to
another production of another product. Therefore, the
modularity lessens lead time and inventory
requirements.
7. Continuous Improvement or Kaizen
 Kaizen refers to continuous improvement. Under the
lean production system it is best to produce goods and
services that will delight customers. Hence, the main
concept is to create quality into the production process
instead of inspect goods for quality defects. In order to
achieve this concept, the practice of quality at the
source is being practiced. Quality at the source means
that every employee should act as his own quality
inspector.
8. Close Supplier Relationships
 Lean system functions with low levels of capacity slack
and inventory, companies must create close
relationship with their suppliers. This relationship will
guarantee uninterrupted supply of raw materials and
components parts. Suppliers must be near to the
production facility to avoid waste in transportation and
to deliver raw materials and components at frequent
intervals.
9. Multifunctional Work Force
 Under the lean production system, workers are trained
to perform several tasks at the same time. This way, a
worker can be flexible that he can be shifted among
 work stations when needed especially when some
employees are on vacation or sick. Training is not only
for flexibility but also for making certain the quality at
workers' own tasks.
10. Five S
 A messy and disorganized workplace produced
inefficient workers. It takes a lot of wasted time
looking for tools and equipment moving around
scattered things. Under the lean production system,
the "Five S" principle is utilized to produce a more
organized workplace. The five S's consists of seiri
(sort), seiton (straighten), seiso (shine), seikitsu
(standardize) and shitsuke (sustain).
The Five S
Sort
 Separate needed from unneeded items and discard
unneeded.
Straighten
 Neatly arrange what is left with the place for
everything and everything in its place. Organize the
workplace so that it is easy to find what is needed.
Shine
 Clean and wash the workplace and make it shine.
Standardize
 Establish schedules and methods for performing the
cleaning and sorting. Formalize the cleanliness and a
state of readiness are maintained
Sustain
 Create discipline to perform the first four practices so
that everyone understand, obeys, and practices the
rules when in the plant. Implement mechanisms to
sustain the gains by involving people and recognizing
them via a performance measurement system.
11. Visual Control
 visual controls or ardon are indicators that are situated
in plain sight of all employees in order to quickly and
easily comprehend the condition and performance of
the work system. Ardon is a Japanese practice of
placing cords that operators can pull to signal
supervisors and other workers that a problem
happened. The purpose for visual controls in lean
management is to focus on the process and make it
easy to compare expected vs. actual performance.
These comparisons highlight when the process is not
performing as expected and where improvement
might be needed.
12. Preventive Maintenance
 Under the lean production system, there is little slack
or buffer inventory between work stations and any
unplanned downtime that could pose destructions. It is
a requirement under the lean system that all
equipment and processes operate unfailingly. Planned
downtime and scheduled maintenance are better than
unplanned downtime. Preventive maintenance can
lessen the occurrences and length of machine
downtime. Maintenance is usually done in a scheduled
time that makes balance the cost of preventive
maintenance and the risks and costs of machine
failure. Another technique is to let workers do the
routine maintenance of their own equipment or
machine and keep them in good conditions to generate
pride in them.
13. Value Stream Mapping
 Under the lean production system value stream
mapping (VSM) is an essential component. It can be
initial point to assist management engineers,
production associates, suppliers and customers alike to
identify waste and their causes. It is used both as a
communication practice and a strategic plan
instrument. In the, value stream mapping the flow of
materials and information are mapped form the time
products come in the back door as raw materials,
throughout all production steps until such time they
are moved off the loading dock as finished goods. The
map reveals both the present condition and guidelines
in arriving at a future desired conditions through
utilizing lean production technique. There are number
of icons used to create a value stream map.