Lean Management and Kanban System

LEAN MANAGEMENT & KANBAN SYSTEM

Semester Project for

Operations Management

Bachelors of Management Studies

Submitted By

Gaurav Singh, Parmeet Singh, Pragya Sarin,

Pratishta Gupta, Sanyam Khetarpal, Satya Mathur

LEAN MANAGEMENT INTRODUCTION

• Lean manufacturing or lean production, often simply "lean", is a systematic method

for the elimination of waste ("Muda") within a manufacturing system.

• Lean also takes into account waste created through overburden ("Muri") and waste

created through unevenness in work loads ("Mura").

• Working from the perspective of the client who consumes a product or service,

"value" is any action or process that a customer would be willing to pay for.

• The purpose of lean is to remove all forms of waste from the value stream.

• Waste includes cycle time, labor, materials, and energy.

• The chief obstacle is the fact that waste often hides in plain sight, or is built into

activities.

LEAN MANAGEMENT ORIGINS

• Henry Ford pioneers Mass Production System

• World War 2 forces need of flexibility, altered existing process of managing operations

• 1972 Oil Crisis put severe pressure on manufacturing systems, customers demanded

higher quality at lower price, more customization, faster delivery

• Over a period of two decades, Japanese manufacturers developed set of tools and

techniques

• Proponents include Toyota and Kawasaki

LEAN MANAGEMENT BENEFITS

• Lean manufacturing delivers an insurmountable competitive

advantage over competitors who don't use it effectively.

• Lower production cost higher profits and wages

• Cost avoidance flows directly to the bottom line.

• Supports ISO 14001 and "green" manufacturing

• Reduction of material waste and associated disposal costs

higher profits

• Shorter cycle times: make-to-order vs. make-to-stock

LEAN MANAGEMENT PHILOSOPHY

• Value Added (VA), Non Value Added (NVA) and Necessary but Non Value

Added (NNVA)

• Waste: Any process or set of activities that does not add value as perceived

by the customer is classified as waste. Consists of both NVA and NNVA

• Value Stream: All activities that need to be performed (VA and NNVA) from

the time the customer order is received to the time the order is fulfilled

• Lean Management: Creating a channel for value stream by eliminating waste

from system

LEAN MANAGEMENT - WASTE

A systematic approach to the identification and elimination all forms of waste from the value

stream is required.

The original seven muda are:• Transport (moving products that are not actually required to perform the processing)

• Inventory (all components, work in process, and finished product not being processed)

• Motion (people or equipment moving or walking more than is required to perform the processing)

• Waiting (waiting for the next production step, interruptions of production during shift change)

• Overproduction (production ahead of demand)

• Over Processing (resulting from poor tool or product design creating activity)

• Defects (the effort involved in inspecting for and fixing defects)

JUST IN TIME (JIT) MANUFACTURING

A philosophy of continuous improvement that puts emphasis on prevention rather than correction, and demands a company wide focus on quality.

• Focus on simplicity of operations

• Continuous improvement

• Flexibility - to adapt to changes in environment

JIT PRINCIPLES

• Eliminate waste

• Remove variability

• Improve throughput

• Quality Management• Production Management• Supplier Management• Inventory Management• Human Resource Management

JIT CONCEPT

CONTINOUS FLOW PRODUCTION

Flow with JIT

Traditional Flow

CustomersSuppliers

CustomersSuppliers

Production Process (stream of water)

Inventory (stagnant ponds)

Material

(water in

stream)

• Communication Techniques• Completion of task-Kanban• Problem- Andon or siren/light

• Stopping the process if something goes wrong

• Preventive Maintenance

COMMUNICATION TECHNIQUES


JIT MANUFACTURING PRINCIPLES

ROLE OF INVENTORY REDUCTION


JIT MANUFACTURING PRINCIPLES

• Self-Inspection of work

• Diversified Employees• Absenteeism• To eliminate boredom in process

• Management Support and Empowerment of workforce

HUMAN RESOURCE MANAGEMENT

PUSH AND PULL SCHEDULING

• In order to minimize wastage

by replacing only what has

been consumed, pull

scheduling or pull demand

logic is used in JIT or Kanban

manufacturing systems.

• Pull scheduling works with the

supermarket logic.

PULL SCHEDULING

• The consumer triggers by his

consumption decision and

purchases, the production in the

pull scheduling system.

• At each stage in the

manufacturing system the shop

pulls a certain quantity of

input material and the

preceding shop responds to it

.

A consumer orders 50 units of an item which is

fulfilled by finished goods in the stores.

This will be followed by an order placed with the final assembly shop to

assemble these 50 units to replenish stocks.

Now the assembly consumes, in this process a certain required number

of sub assemblies.

Hence, now a respective order will be placed with feeder shops to produce

these particular and certain quantity of sub

assemblies.

This sort of drip or pull effect follows all the way to raw material stores.

PUSH SCHEDULING

• In this system forecasts drive the entire system.

• The actual offtake by the customer or the market is not taken into direct consideration

but just factored into the forecast

• Once the plan is finalized it is

released to the production

shops and raw material stores.

• The components in this system

are progressively pushed

towards the final assembly and

eventually finished goods

stores.

DECIDING BETWEEN PUSH & PULL

• Pull-type scheduling cannot

be implemented in all

manufacturing systems.

• It requires that the

manufacturing system have

sufficient flexibility to

respond swiftly to changes.

• Moreover, it implies that the

organization is customer-

focused and has low

demand variations.

DECIDING BETWEEN PUSH & PULL

• On the other hand, if the manufacturing system works with long lead time and a

greater emphasis on utilization-based measures of performance, the push method of

scheduling may be appropriate.

• However, since the actual customer demand is not directly incorporated into the

scheduling exercise, build-up of inventory may take place in a push system

• Moreover, an organization practising push-scheduling tends to be internally focused

RESPONSIBILITIES AND PROBLEMS

Push – Centrally scheduled and

problems are hiddenPull – Responsibility on

operating personnel and a visible urgency is created

in case of shortfall

KANBAN Literally means visual record

KanbanBecause Japanese that’s why!

Kanban

• A supermarket stocks the items needed by its customers when they are needed in the quantity needed, and has all of these items available for sale at any given time.

• By having the next process (the customer) go to the preceding process (the supermarket) to retrieve the necessary parts when they are needed and in the amount needed, it was possible to improve upon the existing inefficient production system.

• No longer were the preceding processes making excess parts and delivering them to the next process.

Inspired by American Supermarkets!

Kanban uses PULL SCHEDULING.Which is better than push scheduling, actually.

DUAL CARD Kanban SYSTEM

• Also known as the Toyota Kanban System

• More useful in large-scale, high variety manufacturing facilities.

• In this system, each part has its own special container designed to hold a precise quantity of that part.

• Two cards are used: production & conveyance Kanban

• Irrespective of the type of Kanban, each of cards have basic information about the

item, its specifications, details about the preceding and succeeding process and the

quantity of items associated with each such Kanban.

• P-Kanban basically serves as the authorization for production of the number of

items indicated in the Kanban. For example, if a P-Kanban has the indicated

quantity to be 40 units, then each such P-Kanban serves as an authorization for the

work centre to manufacture 40 units.

• In a similar fashion, a C-Kanban serves as the authorization to move that many units

from the preceding process to the succeeding process, where it is used for

processing.

DUAL CARD Kanban SYSTEM WORKING

• A more convenient system for manufacturing facilities requiting less variety in their parts

• It’s simply a dual-card kanban system with the absence of the production kanban and designated stock points.

SINGLE CARD Kanban SYSTEM

SOME STRUCTURAL FEATURES OF THE MANUFACTURING SYSTEM:

1

Preceding and Succeeding Processes


2

Inbound buffer


3

outbound buffer

Kanban POST

DUAL CARD Kanban PROCESS

Step 1 The succeeding process begins one cycle of production as soon as P-Kanbans and empty containers are

available.

One P-Kanban is drawn from the Kanban post and an empty container is picked up from the outbound buffer.

Step 2In order to begin production, one full container with an attached C-Kanban is moved from the inbound buffer

area to the processing area.

The C-Kanban is detached from the container and displayed at the Kanban post.

Production of components begins.

Step 3As production is completed, the P-Kanban is attached to the full container of finished item and the container is

moved to the outbound area.

Similarly, the empty container (since all components are used up for manufacturing) is moved back to the

inbound buffer area.

DUAL CARD Kanban PROCESS

Step 4One empty container from the input buffer area of a succeeding process and a C-Kanban from the Kanban

post of the succeeding process will be taken to the outbound buffer area of the preceding process for

replenishment.

Step 5Swapping of Kanban cards between containers takes place at the outbound buffer area of the preceding

process.

What this means is that the P-Kanban attached to the full container will be replaced by C-Kanban.

Step 6As a result of this swapping operation, the full container and C-Kanban will return to the inbound buffer area

of the succeeding process.

Step 7The empty container will be placed in the outbound buffer area of the preceding process.

The P-Kanban will be displayed at the Kanban post of the preceding process.

DUAL CARD Kanban PROCESSStep 4One empty container from the input buffer area of a succeeding process and a C-Kanban from the Kanban

post of the succeeding process will be taken to the outbound buffer area of the preceding process for

replenishment.

Step 5Swapping of Kanban cards between containers takes place at the outbound buffer area of the preceding

process.

What this means is that the P-Kanban attached to the full container will be replaced by C-Kanban.

Step 6As a result of this swapping operation, the full container and C-Kanban will return to the inbound buffer area

of the succeeding process.

Step 7The empty container will be placed in the outbound buffer area of the preceding process.

The P-Kanban will be displayed at the Kanban post of the preceding process.

STANDARD CONTAINERS

Generally container of small quantities are recommended

The thumb rule is to have about 10 percent of daily demand as per the quantity of the container.

NUMBERS OF KANBAN

Demand rate = D

Number of Kanbans = K

Production lead time = P

Conveyance lead time = C

Safety factor = α

Container size = Q

K =D(P+C) (1+ α)/Q

IMPROVEMENT OPTIONS

•Step improvement

•Ramp improvement

•Hybrid improvement

CONTINUOUS IMPROVEMENT

Means a positive change in the working conditions in an operating system leadingto better performance evident from key performance measures on an ongoing basis

Systematic

Optimizes available resources, technology and capacity

Reduces wastage

Operational efficiency

Iterative increments

Business, Manufacturing, Business processes like marketing finance and CRM.

FEATURES

RADICAL IMPROVEMENTAlso known as the step improvement process

There is a sudden and dramatic shift in the performance of the system

happens due to innovations in technology pertaining to the operations and substantialupgradation of the capacity of the existing system

FEATURESQuality

Low production cost

Sporadic but Substantial change

Steel and Petrochemical processes.

Innovation

Economies of Scale

Investments required

High productivity

THE CONTINUOUS IMPROVEMENT PROCESS

Set up a measurement methodology for assessing

the quantum of Improvement

Equip employees

with tools and techniquesCreate

appropriate Organizational

Structure

Monitor improvements

Create a Context for continuous

improvement


• Process mapping

• Non value added analysis

• Business Process Reingineering

• QC tools

• Kaizen

TOOLS

KAIZEN

1. Seiri, or sort

2. Seiton or set in order

3. Seiso or scrub

4. Seiketsu or standardize

5. Shitsuki or sustain


• Task Force

• Quality Circles

• SGIA

• Visual Control Aids

ORGANIZATION

CHALLENGES IN LEAN IMPLEMENTATION

• Supply chain issues

• Employee development

• Cultural and human issues

• Technological challenges

Lean Management and Kanban System

Business

Transcript of Lean Management and Kanban System