Lean Management

Dr. Win Than Dar

Professor
Contents

• What is lean operation?

• Key principles of lean Management

• Lean Management tools and techniques

• Benefits of lean management

• Common challenges in implementing lean management

• Optimal solutions for those challenges

Lean operations

Eliminates waste through continuous improvement and focus

on exactly what the customer wants.
Muda, Mura and Muri
• Muda, mura and muri are Japanese words conveying three causes of waste
• Muda –activities in a process that are wasteful because they do not add
value to the operation or the customer
• Mura – means ‘lack of consistency’ or unevenness that results in periodic
overloading of staff or equipment
• Muri – means absurd or unreasonable. It is based on the idea that
unnecessary or unreasonable requirements put on a process will result in
poor outcomes
• These three causes of waste are related. Inconsistent processes (mura) leads
to overburdening resources (muri) which causes non-value adding activities
(muda)

Slide 4
Seven types of waste
• Over-production

• Waiting Time
• Waste activities consume • Transport
time, resources and/or
space, but do not contribute • Over-processing
to satisfying customer needs
• Inventory

• Motion

• Defective/Inspection
Slide 5
Traditional approach:
Scheduling and movement information from operation’s
planning and control system

Inform- Buffer Inform- Inform- Buffer Inform-

ation inventory ation ation inventory ation Stage C
Stage A Stage B
Deliveries Deliveries Deliveries Deliveries

Lean approach:
Information Information
(orders) (orders)
Stage A Stage B Stage C
Slide 6

Deliveries Deliveries
Lean Focus on producing only
Traditional when needed
approach
approach
Focus on high-
capacity utilization Fewer stoppages
Lower capacity
utilization, but Low inventory so
More stoppages
because of problems problems are
exposed and solved
More production
at each stage High inventory means
less chance of No surplus
problems being production goes
exposed and solved into inventory
Extra production
goes into inventory
because of continuing
stoppages at stages Slide 7
The lean philosophy of operations
Continuous
Eliminate waste Involve everyone
improvement

Lean as a set of techniques for managing

operations Lean as a method of
planning and control
Basic working practices TPM (Total Productive
Manintaince) Pull scheduling
Design for manufacture Set-up reduction
Kanban control
Operations focus Total people involvement
Levelled scheduling
Small, simple machines Visibility
Mixed modelling
Flow layout JIT supply
Synchronization

Slide 8
Key principles of lean Management

• defining value

• mapping the value stream

• creating flow

• using a pull system and

• pursuing perfection
Lean Management tools and techniques
5S’s of Lean Operations
• Sort (Seiri) Eliminate what is not needed and keep what is needed.

• Straighten (Seiton) Position things in such a way that they can be easily reached whenever they are
needed.

• Shine (Seiso) Keep things clean and tidy; no refuse or dirt in the work area.

• Standardize (Seiketsu) Maintain cleanliness and order – perpetual neatness.

• Sustain (Shitsuke) Develop a commitment and pride in keeping to standards.

Two additional Ss
► Safety – built in good practices
► Support/maintenance – reduce variability and unplanned downtime
Slide 11
•
Remove Variability
▶JIT systems require managers to reduce
variability caused by both internal and
external factors
▶Variability is any deviation from the optimum
process
▶Inventory hides variability
▶Less variability results in less waste
Sources of Variability
▶Poor production processes resulting in
improper quantities, late, or non-
conforming units
▶Unknown customer demands
▶Incomplete or inaccurate drawings,
specifications, or bills of material

in v en t o ry
t h J IT a n d ls i n
Bo e c tiv e to o
n a re e ff bi l i ty
red u c t i o o fv a r i a
g c a u s e s
id en t i f y i n
Improve Throughput
▶The rate at which units move through a
production process
▶A pull system increases throughput
▶processes are activated by actual, not forecasted
demand
▶Customer get
 what they want
 when they want
 where they want
Improve Throughput
▶By pulling material in small lots, inventory
cushions are removed, exposing problems and
emphasizing continual improvement
▶Manufacturing cycle time is reduced
Just-In-Time (JIT)
▶Powerful strategy for improving operations
▶Materials arrive where they
are needed when they are
needed
▶Identifying problems and
driving out waste reduces
costs and variability and
improves throughput
▶Requires a meaningful
buyer-supplier relationship
JIT and Competitive
Advantage

Figure 16.1
Reduce Inventory
▶Reducing inventory uncovers the “rocks”
▶Problems are exposed
▶Ultimately there will
be virtually no
inventory and no Inventory
problems
▶Shingo says “Inventory is evil”
JIT Scheduling
▶Schedules must be communicated inside
and outside the organization
▶Level schedules
▶Process frequent small batches
▶Freezing the schedule helps stability
▶Kanban
▶Signals used in a pull system
Level Schedules
▶Process frequent small batches rather than a
few large batches
▶Make and move small lots so the level
schedule is economical
▶Freezing the schedule closest to the due
dates can improve performance
Kanban
• Kanban is the Japanese word for card
• The card is an authorization for the next container of material to be
produced
• A sequence of kanbans
pulls material through
the process
• Many different sorts of
signals are used, but
the system is still called
a kanban
Kanban
 A Kanban system moves parts through production
via a “pull” from a signal: output generated in
response to actual demand

Material/Parts Final Finished Customer

Supplier assembly goods order

Work
cell

Kanban card
Kanban card Kanban card (pull signal)
(pull signal) (pull signal)

Kanban Signals “Pull” Material Through the Production Process

More Kanban
▶Usually each card controls a specific quantity or parts although
multiple card systems may be used if there are several
components or if the lot size is different from the move size
The Number of Kanban Cards
or Containers
▶Need to know the lead time needed to
produce a container of parts
▶Need to know the amount of safety stock
needed

Demand during Safety

Number of kanbans lead time + stock
(containers) =
Size of container
Number of Kanbans Example
Daily demand = 500 cakes
Production lead time = 2 days
(Wait time +
Material handling time +
Processing time)
Safety stock = 1/2 day
Container size = 250 cakes

Demand during lead time = 2 days x 500 cakes = 1,000

Safety stock = ½ x Daily demand = 250
1,000 + 250
Number of kanbans = =5
250
Toyota Production System
▶Continuous improvement
▶Build an organizational culture and value system
that stresses improvement of all processes, kaizen
▶Part of everyone’s job
▶Respect for people
▶People are treated as
knowledge workers
▶Engage mental and
physical capabilities
▶Empower employees
Toyota Production System
▶Standard work practice
▶Work shall be completely specified as to content,
sequence, timing, and outcome
▶Internal and external customer-supplier connection
are direct
▶Product and service flows must be simple and
direct
▶Any improvement must be made in accordance
with the scientific method at the lowest possible
level of the organization
Kaizen (Continuous Improvement)
Benefits of lean management
Common challenges in implementing lean management

• 1. No Support from The Top

• Lack of Training
• Focusing on Tools, not Culture
• Not Keeping Score
• Thinking There is an End
•The five major obstacles to implement lean within small businesses include: 
 Insufficient management time to support lean
 Not understanding the potential benefits of applying lean
 Underestimating employee attitudes/resistance to change
 Insufficient workforce skills to implement lean
 Backsliding to the old inefficient ways of working
Some common challenges companies face when implementing
Lean manufacturing are:
• Lack of support from senior management
• Insufficient staff training, limited workforce, and lack of
appropriate tools
• Failure to monitor progress (Insufficient performance data)
• Implementing several changes at one go
• Difficulty replacing established work practices (cultures)
Optimal solutions for those challenges

• Establish a Robust Implementation Plan

• Focus on a Culture Change at All Levels of the Organization
• Tailor the Lean Manufacturing Program to Address Business-
Critical Problems
• Train Employees and Maintain Constant Communication