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Lean and Quality

The document discusses the need for lean management principles in manufacturing and service organizations. It provides three key reasons for adopting lean management: (1) To improve productivity and reduce costs and response times amid economic slowdowns faced by automakers and aerospace companies, (2) To develop more efficient operational systems that deliver higher quality products and services using fewer resources to remain competitive, and (3) Lean management principles directly address the issues of enhancing efficiency and cutting costs through principles like eliminating waste from processes.

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73 views

Lean and Quality

The document discusses the need for lean management principles in manufacturing and service organizations. It provides three key reasons for adopting lean management: (1) To improve productivity and reduce costs and response times amid economic slowdowns faced by automakers and aerospace companies, (2) To develop more efficient operational systems that deliver higher quality products and services using fewer resources to remain competitive, and (3) Lean management principles directly address the issues of enhancing efficiency and cutting costs through principles like eliminating waste from processes.

Uploaded by

bharat258
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 38

Why Lean Management?

The emerging situation points to one of improving


productivity and response time and cutting costs
The big three automobiles in the US and the global
auto majors are facing severe problems due to
economic slowdown
Due to mounting cost of crude and the competition in
the civilian aerospace market, Boeing and Airbus are
working with a central theme of enhancing efficiency
and cost cutting
In textile sector Indian companies suffer from long lead
time, low productivity and small sized plants compared
to Chinese plants

Lean Management
Manufacturing and service organizations
are required to understand
how to develop better operational systems and
deliver better quality products and services
using fewer resources

To be competitive in the market


organizations need to ensure less is more
productive
Lean Management principles address these
issues directly and efficiently

Lean Management
Relevant terms

Value added (VA): Activities are classified as value added as long as


the customer is willing to pay for that activity
Non-value added (NVA): All those activities for which the customer
may not want to pay are classified as non-value added activities
Necessary but non-value added (NNVA): the set of activities that
are to be eventually eliminated as and when better systems are
developed in an organization
Waste: Any process or a set of activities that do not add value as
perceived by the customer
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 will make up the value stream
Lean Management: Process by which continuous efforts of all
concerned parties enables an organization to create a channel for the
value stream by eliminating waste from the system

Just in Time Philosophy


Salient features

The notion of waste in any operating


system
JIT as a philosophy of elimination of
waste
As a deliberate and a systematic
attempt
On a continuous basis

Common Sources of Waste

Category
Inventory
Related
Waste

Waste Due
to
Processes

Manufacturing Organizations
Accumulating Inventory
Waiting for material to
work on
Stock verification
Counting the number of
parts
Temporary Storage
Parts Shortage
Defects & Rework
Machine Breakdowns
Watching the machine run

Service Organizations
Overflowing In Baskets
Duplication of work
Too much of paper work
Incomplete information leading
to pending decisions

Waste Due
to Planning

Looking for tools


Carrying heavy pieces
Transferring parts over
long distances
Over Production & Double
Handling

Payments not made on time


Wrong service delivery (Service
Failure)
Proposals not completed on
time for the bid
Customer Orders taking too long
to be filled
Complicated office layouts
Poorly planned meetings
Documents handled many times
before a decision is taken
Extra signature needed that
hold up completion
Teams with incomplete or no

Lean Management
Processes & Outcomes
Accrued Benefit

Tools &
Techniques
Used

Basic Enabling
Mechanisms

Basic Premise

Less is more Productive !


Process Mapping, Nonvalue added analysis
Continuous
Improvement
Kaizen, Small Group
Improvement
Benchmarking
Quality Circles

Total Quality
Management (TQM)

Manufacturing
Architectural Changes
Set-up time Reduction
Small Lot size processing
Pull Scheduling
Simplified Operation
Control (Kanban)

Just in Time (JIT)

Elimination of waste & creating a value stream for


products & services

JIT Philosophy
Core Logic

Source: Schonberger, R..J. (1982), Japanese Manufacturing Techniques: Nine hidden lessons in simplicity, Free Press, pp 26.

JIT Philosophy
Overall Impact

JIT Manufacturing
Basic Elements

Manufacturing system should conform to a


flow process
Total Quality Management to be deployed
Kanban based scheduling
Standard Containers
Constantly eliminate waste
Setup time reduction Lot size reduction
Inventory reduction Removing Kanbans
Quality improvement Small group
improvements
Defect free supplies Supplier collaborations

PUSH Scheduling Logic


Forecast

FG & RM
Stock

Planned
Order

RM
Ordering

Order
Creation

Raw
Material

SubAssy.

Stores

Sub- Assy
Inspn.

Yes

OK ?

Product
Assy.

No

RM
Reservations

Product
Inspn.

No

WIP

Order
Release

Available
in
Stock?

No

Packing

OK ?

Yes

Customer Order Receipt

Yes

Ship the order

FG Stores

PUSH Scheduling
Internal
Focus

Long Lead
Times

Utilisation

Push

Quantity
Driven
Measurements

High
Demand
Forecast

High Fixed
Costs

INVENTORIES

Forecast drives production

PULL Scheduling
Profit Based
Measurement
Low
Demand
PULL
Finished Goods
External Focus
Factory

Flexibility

Faster
Response

Customer Order

Customer triggers production

PUSH PULL

Impact on the system

Kanban as Planning Tool


Terminologies

Preceding & Succeeding Processes


In-bound & Outbound Buffers
Design of Kanban System
Types of Kanbans
Production Order Kanban (P-Kanban)
Conveyance Kanban (C-Kanban)

Standard Containers
Number of Kanbans

Kanban Post

Working of Dual Card Kanban


A schematic representation

Outbound buffer

Outbound buffer

7
Kanban
Post
C

7
Preceding
Process

Kanban
Post

1
3
Succeeding
Process

Inbound buffer

Full

Inbound buffer

Empty

Production Planning using Kanban


Actions at a succeeding process

Step 1:One P-Kanban is drawn from the Kanban post and an


empty container is picked up from the outbound buffer
area.
Step 2:In 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 3:As 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

Production Planning using Kanban


Actions at a preceding process

Step 4:One empty container from the input buffer area of


succeeding process and a C-Kanban from the Kanban post of
the succeeding process will be taken to the outbound buffer
area of preceding process for replenishment.
Step 5:Swapping of Kanban cards between the 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 6:As a result of this swapping operation, the full container and
C-Kanban will return to the inbound buffer area of the
succeeding process.
Step 7:The empty container will be placed at the outbound buffer
area of preceding process. The P-Kanban will be displayed at
the Kanban post of the preceding process.

Kanban rules

Implications for PPC

JIT Process
LUCAS TVS

JUST IN TIME
Automation
Jidoka

Step 5

Change
Over

Step 4
Levelling

Quality
Assurance

Step 3
Multi-process
Operations

Flow Manufacturing
Step 2
5S for factory improvement

Source: Lucas TVS, The Joy of


JIT, Business Today, August 18,
2002, pp 102 106.

Step 1
Building awareness among employees

Kanban

Visual Control

Flexible Manpower

Standardised Operations

Maintenance
& Safety

Continuous Improvement
Continuous improvement
Refers to constant and positive change in the working conditions in
an operating system
Leading to better performance evident from key performance
measures

Typical examples of such improvements


Increase in production with no addition of capacity,
Elimination of manpower even when production levels go up
No appreciable increase in cost of production even when the volume
drops
Increase in the velocity of various business processes without any
addition of new capacity or technology
Significant reduction in defects
Rework and inventory investments when the production rates go up
An overall increase in the productivity

Continuous Improvement Process


A framework

Create a context for


continuous
improvement

Closely monitor and


recognise the benefits
accrued from
improvements

Set up a measurement
methodology for assessing
the quantum of
improvement

Continuous
Improvement
Cycle

Create appropriate
organisational structures
for continuous
improvement

Equip the employees


with tools & techniques
for continuous
improvement

Continuous Improvement
Tools & Techniques

Process Mapping
A tool to understand various steps involved in
performing a business process
Non-Value Added (NVA) Analysis
A method by which the relevance of some of the
existing activities are questioned
Business Process Engineering (BPR)
Fundamental rethinking and radical redesign of
processes
Kaizen Initiatives
Setup time reduction through SMED
QC Tools

Quality Management
Changing Perceptions

Yesterday
It is often uneconomical to make
quality improvements since it brings down
productivity, increases cost and investment.
Today
Productivity goes up and cost comes
down as quality goes up. This fact is
Known, but only to a selected few.

Quality Gurus

Willam Edwards Deming


Joseph M Juran
Philip B Crosby
Karou Ishikawa
Shigeo Shingo
Genichi Taguchi

Demings contributions
New perceptions to quality
management
Plan Do Check Act (PDCA) Cycle
14 point agenda for quality
improvement
Considered father of Japanese
Quality Management Systems
Highest Award in Japan named after him

Jurans Quality Trilogy


Quality planning: the process of
preparing to meet quality goals
Quality control: the process of
making quality goals during
operations
Quality improvement: the process
of breaking through to
unprecedented levels of performance

Philip Crosby

Absolutes of Quality

I Absolute: Definition of quality is


conformance to standards
II Absolute: The system of Quality is
prevention
III Absolute: The performance standard
is zero defects
IV Absolute: Measurement of Quality is
the price of non-conformance
V Absolute: There is no such thing as
Quality Problem

Other quality gurus


Karou Ishikawa
Cause & Effect (Fishbone) Diagram
Cause & Effect Diagram with Action Card
(CEDAC)

Shigeo Shingo
Poka Yoke

Genichi Taguchi
Loss function
Design of experiments

Taguchis Loss Function

Customer Tolerance

Loss

Manufacturer Tolerance

Target

Performance Characteristic

Garvins Dimensions of
Quality

Performance: Customer expects a certain level of performance from a


product.
Features: Features provide additional attributes of enhancing the quality.
Reliability: Denotes the expectation that the product performs
satisfactorily for a period of time.
Conformance: Meeting the specifications and standards of design
Durability: How long does the product lasts before it requires a
replacement.
Serviceability: The ease with which the product can be serviced.
Aesthetics: Customers also value the aesthetics of the product.
Safety: Safety aspects denote the assurance to the customer that there
are no hazards in using the product
Other perceptions: Customers may also have a host of subjective
perceptions such as brand name, image, impact of advertising etc. in
his/her assessment of quality.

Source: Garvin, D.A. (1984), What does quality really mean? Sloan Management Review, 26 (1), pp. 25 43

Alternative definitions of
Quality
Qualitative and Intangible attributes of Quality
Customer

Minimize
loss to society
Fitness for
Use
Fulfill
customer needs

Firm

Conformance
to specs

Quantifiable attributes of quality

Total Quality Management


Elements

Role of
Top Management

Quality
System
Employee Involvement
Training & Team Work

Tools & Techniques

Quality Function Deployment (QFD)


The four houses of quality

Links
Links
Links
Links
customer
design
actions to implementneeds to attributes toimplement- ation to
design actions firms ation
process
attributes can take decisions
plans

Quality Costing

Categories of Quality Costs

Quality Costs
Control Costs

Prevention

Appraisal

Failure Costs

Internal

External

The CII-EXIM Business Excellence


Award Model
Enablers (500 Points)
People
100 points
(10%)
Leadership
100 Points
(10%)

Strategy
100 points
(10%)
Partnerships
& Resources
100 points
(10%)

Processes,
Products &
Services
100 Points
(10%)

urce: Adapted from http://www.cii.in/uploads/SMB899.pdf

Results (500 Points)


People
Results
100 points
(10%)
Customer
Results
150 points
(15%)
Society
Results
100 points
(10%)

Key Results
150 Points
(15%)

Certification Programs in Software


Industry
Capability Maturity Model Integration
(CMMI)
People Capability Maturity Model (P-CMM)
Software Acquisition Capability Maturity
Model (SA-CMM)
Capability Maturity Model for Software
(SW-CMM)
Systems Engineering Capability Maturity
Model (SE-CMM)
Integrated Product Development
Capability Maturity Model (IPD-CMM)

Elements of a Quality Assurance


System
Understand customer
needs
Translate them to
meaningful measures
for the operating system

Mechanisms for
identifying quality
problems

Tools & techniques for


the employees
For tracking problems
to their root causes
Identifying corrective
measures

Top Management
Commitment to
Quality

Quality
Assurance
System

Employee involvement
for continuous focus
on quality
improvement

Quality
Certifications &
Benchmarking
exercises

Documentation of all
quality related
initiatives for
continuous learning &
improvement

Methods for
preventing
recurrence of
problems

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