ECMM101Lean Production Critique

Introduction

This report will study the revolutionary system of lean manufacturing, it will delve into the main principles and tools implemented in the lean production process. Two systems will be analysed and compared, for this particular study the automotive industry and the construction industry both take on different approaches and highlights the different ways lean manufacturing can be implemented.

Lean production was created and developed by two brilliant minds; Eiji Toyoda and Taiichi Ohno. This young Japanese engineer set out to change the world, in 1950 he travelled to America to study Ford’s Rogue plant in Detroit, at this time Ford were the biggest manufacturers of cars in the world using the mass production system. Upon his return he deduced one thing “Muda” which is Japanese for waste, this is the

foundation at which lean production is built on. (James P. Womack, 1992).

This meant that his lean production philosophy would be centred on making obvious what adds value by reducing everything else. This is highlighted by his findings in America, to start the manufacturing process a sheet was run through an automated “blanking” press to produce a stack of flat blanks slightly larger than the final part they wanted. (James P. Womack, 1992, pg.50-51).

The presses weighed tonnes and were very slow for production hence why Ford had so many, the major problem with this method was they had to be aligned with absolute precision or they would need to be repaired by a specialist. Due to the nature of the manufacturing hundreds or presses were assigned to various parts in order to lower costs. (Rise of Lean Production, 2015)

As Toyota were on a smaller budget, a way in which to mass-produce in a more economical way had to be found, the idea brought forth was the birth of lean production as found today. (James P. Womack, 1992, pg.52-53), describes his idea here “His idea was to develop simple die-change techniques and to change dies frequently—every two or three hours versus two to three months— Because the new technique was easy to master and production workers were idle during changes he decided to let the production perform die changes.”

This is the earliest form of lean production and really highlights Ohno’s thoughts on Muda earlier:

Time to change dies lowered in order to increase productivity and allow for more than part to be manufactured

The removal of specialists within the process and the inclusion of floor workers at all time makes people on the floor always adding value to the process

Making small batches allowed for the huge carrying costs of huge inventories to be omitted

Making only a few parts before assembling them into a car caused stamping mistakes to show up almost instantly

He simply stripped the process down to its bare bones and if a cog in the wheel was idle it would be omitted, this was eventually mastered after more iterations and Toyota blew their competitors out of the water and the rest of the industry were playing catch up all through out the 70’s to 90’s.

Lean Manufacturing Principles and Tools

The best way to understand the lean manufacturing principles is to take them from the father of lean manufacturing; Taiihi Ohno. At Toyota he developed six finely tuned principles, which are the pillars, which support the company to this day. Throughout this section the principles will be explored exactly as they are found at the Toyota plant.

1. Muda, waste control

As explained earlier, the philosophy of the Lean production is the attaining of cost reduction through the elimination of wasteful operations. Ohno divides waste into the following seven categories:

• Overproduction• Transporting• Unnecessary stock on hand• Producing defective goods• Waiting (idle/non-productive time)• Processing itself• Unnecessary motion

The best way to ensure waste removal is to find and then recognise that its waste at all.

2. Just-in-time

The concept of just-in-time (often shortened to JIT) was invented by Kiichiro Toyoda, but it was Ohno who developed it to the full potential we recognise today. JIT is essentially creating the part just as it is needed in the plant as everything moves smoothly and nothing is ever being waited on.

This idea came from his experiences of the supermarket; customers only bought what they needed. This was the birthplace of JIT as when he looked at Toyota the lines producing an item would push their output on to the next stage regardless if it was needed or not. With the JIT implemented the$ workers and their supervisors can see if they’re working too fast or too slow and can take the necessary action to reduce the

waste. Guru: Taiichi Ohno | The Economist. 2015.

3. Ninben no tsuita jidoka - Autonomation, automation with a human touch

Autonomation is another aspect Ohno focused on and results from Sakichi Toyoda's earlier invention of the auto-activated weaving machine. The machine that Sakichi

developed would automatically stop if a problem occurred. This was done to prevent any defective products being pushed further down the line, this procedure was then used in Toyota. The line would stop until the workers could work out what was causing the problem, at first this caused a lot of time spent fixing problems but as time went on the assembly line was never stopped as the workers became efficient in problem solving on the spot.

Ohno created the “5 whys” and this was the tool used to deduce any problem within the factory, this type of system was not adopted at Ford and a huge area of the plant was set away for fixing defects and essentially wasted a lot of time and money, this process adopted by Ohno made the company a lot more efficient and productive.

4. Jidoka, automation becomes the quality principle

Jidoka means building quality into the process itself and is a natural extension of autonomation. In mas production an inspection team was used to keep tabs on quality control. Ohno believed that quality must flow from the production line and not from constant inspection. He changed this process by standardising all work, this meant that every task along the line was the most efficient and safest it could be. This meant every member in the process was always adding value to the system, the standardized work guarantees quality by making it a fundamental part of the manufacturing process.

5. Heijunka, production leveling

Work leveling or load smoothing is the major premise for the elimination of waste.

The volatile nature of demand ultimately creates waste, with manpower it is easy to rearrange the production plan so that a process with less work can help out those with more, this type of solution isn’t viable for the production systems. In the automobile industry the only way to cater for this was to maintain a large inventory of overflow stock, this was seen as a waste by Ohno. Ohno’s solution was to equalise the types and quantities of parts used, this created an even demand for the different types of components within the production line.

6. Kanban

The kanban system came into being around the same time as the just-in-time and ensures that the system runs smoothly. Ohno would put tags or sign boards up to control the transportation of a finished product.

A Kanban is used in conjunction with just-in-time, it helps to manage and ensure the process is working. It is a very direct form of communication, which is located at the point it is needed. Normally a Kanban is a small piece of paper on which the job, which needs to be done, is found, a very simple system but compliments JIT perfectly. (Taiichi Ohno. 2015)

Ohno built the Toyota Kanban system around six rules:

• Do not send defective products to the next process

• Subsequent processes come to withdraw only what is needed• Produce only the exact quantity withdrawn by the subsequent process• Equalise production (load smoothing)• Use Kanban as a means of fine tuning• Stabilise and rationalise the process

Automotive Industry

A manufacturing plant benchmarked within its own organisation, recognised that its quality levels needed to improve in order to both satisfy current business, and to win new internal contracts.

Lean manufacturing and resourcing (LMR) was decided upon due to their success at a sister company, as this side of the company had had a lot of success they were asked to come in to provide assistance. The plant provided a small team tasked with achieving change in a structured and sustainable way, their main objectives are found below. (Automotive Case Study 3. 2015):

Increased production planning Work method design Continuous improvement Implementation of lean principles and tools

The main consideration from LMR was to implement the improved process by building on the existing one rather than create extra, dedicated functions, which would incur more costs and take up more floor space. LMR’s approach was to assess the situation and to propose the adoption of a measured approach, beginning initially with a Standardised Inspection Process (SIP) over a period of only four months the following actions occurred (Automotive Case Study 3, pg. 2-3, 2015):

Onsite workshop for the senior Plant Managers to help establish a high level understanding of the lean techniques that support SIP

Mediated discussions with local Unions, the emphasis tailored to highlight what is important to everyone

A simple overview of the lean manufacturing process delivered to 300+ plant employees, with the focus aimed at the importance of the Standardised Inspection Process

These factors had a significant impact on the type of layout designed. Implementation of SIP tools and techniques within the 17-target manufacturing

Standardised Inspection Process, carefully implemented to capture the quality problems highlighted by customers

Yamazumi techniques for process time balancing, using the bottleneck as a datum

Work Place Organisation and Kambishibai boards, to physically make the work content transparent

Standard Work Confirmation Audits. A means of preventing unnecessary failures of standardised work due to inappropriate actions at the workplace

The project was completed on time, and with effective results. In addition, LMR provided further support with the introduction of Practical Problem Solving techniques within the production environment. (Automotive Case Study 3, pg. 4-5, 2015):

The results of this change in manufacturing quite literally turned the company around; the two main outcomes were that quality returns reduced from 13 a month, to ZERO and the unit cost reduction of 11%. These improvements ensured that the company was winning more contracts and due to their quality being improved exponentially their production became very lean.

Construction Industry

PARC Project (Ballard, Casten et al. 1997) was a refinery expansion costing approximately $2.1billion. In this case study the following lean principles and tools will be examined below:

Increased production planning Work method design Decrease variability-increase reliability Continuous improvement Increased project coordination

In 1994 consultants Mike Casten, Greg Howell and Glenn Ballared conducted a productivity improvement program at the PARC project following an on site analysis. Prior to this program, the project suffered from poor labour productivity. As a result, the current direct labour force of 10,000 had to be increased to 18,000. This increase was out of the question due to a lack of skilled workers in the surrounding area and the inability of the project to accelerate the supply of the work. (Diekmann, Krewedl et al. 2004 pg. 55-57)

Due to these constraints the improvement program had to focus on production planning, their results from the analysis deduced that the current planning methods were insufficient to complete the job. The contract production model had to be changed to a production management model, they settled on three key areas for project improvement:

How well the project is supplying the basic elements of work to the crews. These elements include information, materials, tools, equipment, etc

The method used by the crew to perform the work How well the accomplishment of the work itself meets the needs of the

workers

Once these key areas were explored further it was determined that the planning reliability was important to improve project performance. To improve this a team of consultants introduced subcontractors to the Last Planner System, a system used to improve production planning, this included the following:

Using six-week look-ahead schedules Screening processes for creating for creating workable assignments Sizing assignments to crew capacity Charting and acting on reasons for not doing planned work Using percentage of planned weekly assignments completed (PPC charts)

The results of these changes were improved quality of subcontractor production planning as well as improvements in field operations. The improvement program resulted in substantial increases in productivity as well as a project completed on schedule. (Diekmann, Krewedl et al. 2004 pg. 56)

This is a good example of successful implementation of the lean principles and tools in industry, in particular this focused not on the actual waste of materials but on the waste of labour hours. From this example it is evident to see how diverse the lean principles are and can be applied to any business in order to be more productive.

Differences Used Within Each Industry

Within both industries there are numerous differences, the automotive supplier focused on leaning out their production system in contrast the construction company looked to employ the same principles but to a management process in order to use what they had but in a much more efficient and effective way.

Works Cited

James P. Womack, 1992. Machine That Changed the World. Edition. Simon & Schuster Australia.

PPT – Rise of Lean Production PowerPoint presentation | free to download . 2015. PPT – Rise of Lean Production PowerPoint presentation | free to download . [ONLINE] Available at: http://www.powershow.com/view/3f26d6-ZTlhN/Rise_of_Lean_Production_powerpoint_ppt_presentation. [Accessed 26 January 2015].

Taiichi Ohno. 2015. Taiichi Ohno. [ONLINE] Available at: http://www.mbsportal.bl.uk/taster/subjareas/busmanhist/mgmtthinkers/ohno.aspx. [Accessed 22 January 2015].

Guru: Taiichi Ohno | The Economist. 2015. Guru: Taiichi Ohno | The Economist. [ONLINE] Available at: http://www.economist.com/node/13941150. [Accessed 22 January 2015].

Ballard, G., M. Casten, et al., 1997, “PARC: A Case Study,” Proceedings of the Fourth Annual Conference of the International Group for Lean Construction (IGLC-4), Birmingham, UK.

James E. Diekmann, Mark Krewedl, Joshua Balonick, Travis Stewart, and Spencer Won, 2004. Application Of Lean Manufacturing Principles To Construction

Automotive Case Study 3. 2015. Automotive Case Study 3. [ONLINE] Available at: http://www.goinglean.co.uk/clients-a-sectors/automotive/17-automotive-case-study-3.html. [Accessed 26 January 2015].