Lean Production

Project Management; Production management

 Lean Production
Lean production is an approach to management that focuses on cutting out
waste, whilst ensuring quality. This approach can be applied to all aspects of a
business – from design, through production to distribution.
Objective
 Lean production aims to cut costs by making the business more efficient and
responsive to market needs.
 This approach sets out to cut out or minimise activities that do not add value to the
production process, such as holding of stock, repairing faulty product and unnecessary
movement of people and product around the business.
 The lean approach to managing operations is really about:
 Doing the simple things well
 Doing things better
 Involving employees in the continuous process of improvement
 …and as a result, avoiding waste
 Lean production originated in the manufacturing plants of Japan, but has now been adopted
well beyond large and sophisticated manufacturing activities.
Safety stock inventory,
 The concept of lean production issometimes
an incredibly powerful
called one for any business that wants to
buffer stock,
become and/or remain competitive. is a term used
byinventory managers
 Less waste therefore means LOWER COSTS, which is anto
essential part of any business being
competitive. describe a level of
extra stock that is maintained
 Over-production: making more than is needed
to mitigate – leads
risk of to excess
stockouts or stocks
(shortfall in raw material or
 Waiting time: equipment and peoplefinished
standing idle due
goods) waiting
to for a production process to be
completed or resources to arrive uncertainties in supply and
 demand.
Transport: moving resources (people, materials) around unnecessarily
 Stocks: often held as an acceptable buffer, but should not be excessive
 Processing: inappropriate processing
 Motion: a worker who appears busy but is not actually adding any value
 Defects: output that does not reach the required quality standard – often a significant cost to
an uncompetitive business
Example: Toyota
 The pioneering work of Toyota (a leader in lean production) identified different kinds
of waste which can be applied to any business operation.
 The key aspects of lean production that you should be aware of are:
 Time based management
 Simultaneous engineering
 Just in time production (JIT)
 Cell production
 Kaizen (Continuous improvement)
 Quality improvement and management
 Time based management
 Time-based management is an aspect of lean production. Time-based
management focuses on reducing the amount of time required to complete a
process. The concept is most commonly employed in the production area,
where time reduction eliminates labor and inventory holding costs, thereby
making a company's products more cost-competitive.
 A business that continually focuses on time-based management should build up
a substantial advantage over its rivals over a period of time. This approach has
the following benefits to an organization
 The potential benefits of time-based management include:
 Quicker response times (reduced lead times) to meet changing market and
customer needs
 Faster product development cycles
 Reduction in waste, therefore greater efficiency
 For a firm to operate time-based management effectively, it
needs to have flexible production facilities that enable it to
make changes easily. For example, it may need to be able to
switch production quickly when a company is not burdened by
restrictive work rules, and where there is a high level of trust
between management and employees regarding ongoing
changes to processes or between different products and to alter
the length of production runs as needed.
 As with other aspects of lean production, time-based
management also calls for flexible, multi-skilled staff, and a
culture of mutual trust between workers and managers.
Simultaneous engineering
 Concurrent engineering (CE) is a work methodology
emphasizing the parallelisation of tasks (i.e.
performing tasks concurrently), which is sometimes
called simultaneous engineering or integrated
product development (IPD) using an integrated
product team approach. It refers to an approach used
in product development in which functions of design
engineering, manufacturing engineering, and other
functions are integrated to reduce the time required
to bring a new product to market
Just in time production (JIT)
 Just-in-time (JIT) manufacturing, also known as just-in-time
production or the Toyota Production System (TPS), is a
methodology aimed primarily at reducing times within
production system as well as response times from suppliers
and to customers.
 Just-in-time' is a management philosophy and not a
technique.
 It originally referred to the production of goods to meet
customer demand exactly, in time, quality and quantity,
whether the `customer' is the final purchaser of the product or
another process further along the production line.
 JIT - Background and History
 JIT is a Japanese management philosophy which has been applied in practice since the early 1970s in
many Japanese manufacturing organisations. It was first developed and perfected within the Toyota
manufacturing plants by Taiichi Ohno as a means of meeting consumer demands with minimum delays .
Taiichi Ohno is frequently referred to as the father of JIT.

 There are other ways JIT and Lean differ. Lean is a complete system that can be used across business
departments including manufacturing, production, marketing, distribution, etc. You can use Lean to create
a JIT process but JIT is the piece of the Lean method that eliminates the waste of excessive inventory.
 JIT and Lean manufacturing have an interesting history based on the auto industry. Before
the JIT concept, manufacturers created their products in surplus and often, well in advance of
need. Henry Ford implemented JIT at a plant in Michigan. Iron ore was delivered on Monday
and was part of a finished car three days later. Ford saw the savings in having just the right
amount of inventory arriving at just the right time.
 Ford’s work influenced Taiichi Ohno, a Toyota executive who studied the manufacturing
process of the Model T. Ohno was also impressed with American supermarkets and how they
stocked inventory. He thought it was much more efficient than the auto industry.
 Taiichi Ohno built on Ford’s idea of keeping only the inventory necessary for production and
developed a comprehensive strategy for reducing waste, adding value, and bolstering profit.
 Upon returning to Japan, Ohno identified the categories of wasteful manufacturing practices
which became to be known as the seven wastes:
 Just In Time production and the identification of the seven wastes, along with other tools and
techniques, became collectively known as the Toyota Production System. The Toyota
Production System was successful and the term “lean production” was later coined by an MIT
research team to describe the “revolutionary production and management system” they
identified at Toyota. Thanks to two automobile icons and their implementation of JIT and
Lean, organizations have two tools to create more efficient and productive processes.
Cell production
 Cell production has the flow production line split into a number of self-contained units.
Each team or ‘cell’ is responsible for a significant part of the finished article and, rather than
each person only carrying out only one very specific task, team members are skilled at a
number of roles, so it provides a means for job rotation.
 Cell production is a form of team working and helps ensure worker commitment, as each
cell is responsible for a complete unit of work, which Herzberg would view as part of job
enrichment.
OR
 Cell production is an important ingredient of lean manufacturing and refers to a
manufacturing system where the workforce is divided into self-contained teams designed
to complete a particular manufacturing process or product. The team is responsible for
quality control and 'sells' the part-finished product to the next cell which is regarded as an
'internal customer'. Each member of the team is multi-skilled, allowing for greater flexibility
in production through job rotation.
 Advantages of cell production:
 stability of the team improves communication between the cell members
 processes, defects, scheduling and maintenance can be managed more efficiently and cost-
effectively
 workers become multi-skilled and are consequently more adaptable and flexible to the
changes in the business
 seeing the product from start to finish may create greater 'pride' and job satisfaction
 staff feel more involved in decision-making and the variety of work and greater responsibility
generally results in better motivation
 quality improves because each cell has 'ownership' over production and cells often aim for 'zero
defects' and the elimination of waste ('Muda')
 low stock requirements and minimal work-in-progress allows for the operation of a just-in-time
(JIT) system
 improved customer response time
Disadvantages of cell production:
 may not allow firms to use their machinery as intensively as in flow production and
output will be lower than mass production as a result
 greater investment is required in new management and control processes, such as
stock ordering
 there may be rivalry between different cells and conflict may arise if one cell is left to
wait for output from another
Kaizen (Continuous improvement)
 Kaizen (Continuous Improvement) is a strategy where employees at all levels of a company
work together proactively to achieve regular, incremental improvements to the
manufacturing process. In a sense, it combines the collective talents within a company to
create a powerful engine for improvement.
 The five foundation elements of Kaizen
 Teamwork.
 Personal discipline.
 Improved morale.
 Quality circles.
 Suggestions for improvement.


 Kaizen as seen by the Japanese (especially Toyota as part of the Toyota Production
System TPS) is a method of involving the workforce to come up with many ideas for
improvement, each employee is expected to come up with (and implement) 3 to 5
improvement ideas each and every month. The power of this method is not in the
individual small improvement but in the combined power of many hundreds of small
improvements moving the business forward constantly.
Lean Demand Pull Logic
 A pull system is a lean manufacturing strategy used to reduce waste in the
production process. In this type of system, components used in the manufacturing
process are only replaced once they have been consumed so companies only make
enough products to meet customer demand.
 Pull-type supply chain management is based on the demand side such as Just-in-Time
(JIT) and CRP (Continuous Replenishment Program) or actual demand assigned to
later processes. Therefore, unlike the Push-type method it is not Make to Stock, which
is based on demand forecast.
 Go to the following link to learn more:
https://www.allaboutlean.com/push-pull/
Thank you