Lean System Thinking

( Overview- Concept, Tools & Techniques)

Focus of Lean System Thinking

Waste Elimination or Reduction

Purpose of Lean System Thinking

Being Competitive,

By meeting External Customer’s requirement

AND

By Improving Internal Organizational Competency

Lean Framework.
STEPS IN IMPLEMENTING LEAN

LEAN SYSTEM
STEP 5
JIDOKA-HUMAN AUTOMATION STANDARDISED OPERATIONS
MAINTENANCE & SAFETY

STEP 4
CHANGEOVER QUALITY ASSURANCE
LEVELLING

STEP 3
MULTI -PROCESS OPERATIONS KANBAN
FLOW MANUFACTURING

STEP 2
5 S / Visual Management

STEP 1
AWARENESS REVOLUTION
Implementation Methodology.
Education
 Mapping Existing state
and Future vision
Gap analysis
Concept.
Tools & Tech.
Audit
Capability Transferring
Applications of
Lean Concepts
techniques.
Application of Lean Tools &
Impact / Result.
Techniques
Lean Assessment model
Creating lean champions
/ KPI progress.

Hand Holding
Guidance.
Case study Example
Online/Offline support.
Lean Principles.
1. Base your 2. Create continuous 3. Use pull system to 4. Level out the work
management decisions flow to bring the avoid over-production load
on long term problems to the surface
philosophy even at the
cost of short term
benefits 6. Standardized work
5. Build a culture of
stopping to fix the are the foundations for 7. Use visual controls
problem to get quality continuous so no problems are
first time right improvement and hidden
employee
empowerment
8. Use only thoroughly
tested and reliable 9. Grow the leaders 10. Respect your
technology that serve who thoroughly extended network of 11. Go and see yourself
your people better understand the work, partners and suppliers, thoroughly to
live the philosophy and challenge them and understand the problem
12. Make decisions teach it to others help them to improve
through consensus,
considering all options 13. Become a learning 14. Develop exceptional
and implement organization through teams and people who
decisions rapidly relentless reflection and follow the company
continuous learning philosophy

PEOPLE RELATED CONTINUOUS IMPROVEMENT RELATED PROCESS & SYSTEM RELATED

Phases of Lean System Thinking.
Lean in Product
Development

Lean in Supply chain Concurrent Engineering

Areas DFMA
Lean in Manufacturing Standardization
Kanban QFD
& Assembly Leveling FMEA
5S Supply chain
Visual Management ‘Q’ Improvements
Flow Improvement Inventory Management
Layout Vendor management
Material Handling Logistics Optimization
Building Quality
Machine Maintenance
Change Over [SMED]
Line Balancing
Lean Key Performance Indicators (KPI’s)
Lean Key Performance Indicators (KPI's)

Category Metrics UOM Target Actual 1st QTR 2nd QTR 3rd QTR

Avg man hrs / Product Hrs /unit          

Productivity
Capacity Utilization %          
% Rejection %          
Quality % of rework %          
Cost of poor quality $ / piece          
Cell output per hour no's          
Delivery Delivery Actualization %          
Lead time Day          
Avg Manufacturing cost % of sales          
Cost Avg Manpower cost % of sales          
Avg Rejection cost % of sales          
5S Score %          
Morale
# of KAIZEN no's          
Lean Tools / Techniques
Tool / Description Purpose
Technique
5S Systematic approach for housekeeping that ensure the To reduce waste on Motions and searches .also to ensure
parts , tools are in right place with right identification safe work environment

Cellular Organizing work group of 3 to 15 people in manufacturing Simple workflow usually results in improvement in quality,
Manufactur family of products from end to end. lead-time and inventory.
ing
Continuous It is a concept of moving a product throughout value Synchronized production .no delay or temporary storage
flow chain at constant rate rather than in batches results in other side effects

Quick Uses work simplification of each setup process and reduce To reduce changeover time and then encourage low batch
Changeove waste and time. Also makes the changeover process as production. Also improves the availability time of
r more predictable equipment or facility

Mistake Uses wide variety of technique to prevent mistake in To avoid rejections or rework and also enhances the
Proofing process availability
TPM Uses predictive and preventive maintenance technique To increase availability , process capability of facility
with problem solving approach
Lean Concepts , Tools and Techniques

To increase

Value added content in Process

However, Lean is not about application of tools

It is about change in thinking leading to cultural change in the

organization
 Why lean initiatives fail?

Lack of CEO and Top Management involvement

Not Educating or creating awareness about Lean and its purpose

Delegation to down without support

Changing priority based on the production volume

Not understanding the Big Picture of organizational problem

Keen on technical knowhow of tools and not on implementation

Why lean initiatives fail?

Lack of people involvement or engagement

No In-depth implementation of tools

Lack of facilitation and patience

Aversion to experimentation and trial

How to overcome obstacles?
10 Commandments for Transformative Results ..
1. Challenge Fixed ideas
2. Think how it can be done rather it won’t
3. Deny status quo
4. Don’t seek perfection
5. Correct Mistakes as soon as they found
6. Innovation does not need money
7. Problems are opportunities
8. Ask WHY
9. Ideas of 10 are better than knowledge of 1
10.Innovations never ends
Transformation happens …

from Thinking on Higher Possibilities

Who is responsible for the transformation ?
What is Lean ?
What is Lean ?

Lean is achieving “More with LESS”.

It means
 achieving more with given resources or
 achieving more with less resources .

Mainly it is elimination or reduction of waste in the

entire value chain .
What is Lean Manufacturing ?
What is Lean Manufacturing ?

Lean
What is Lean Manufacturing ?

Lean manufacturing system can be understood by relating to the human body. If

the person appears “lean”, then general assumption is that he/she is free from
unnecessary FAT in the body, hence free from unnecessary side effects like BP,
Pain in joints, laziness etc. And the person is perceived as healthy, more flexible,
active etc..
The same way ,Lean manufacturing means , manufacturing system is free from
unnecessary fats like high inventory, high rejection, high breakdowns or line
stoppages factors etc which leads to more flexible in delivery, less lead time, first
time right , low cost of manufacturing and free flow of communication etc .
What is Lean System Thinking ?
What is Lean System Thinking ?

Waste
What is Lean System Thinking ?

Similarly, Lean System or Lean Organization means free from

unnecessary waste in the entire value chain starting from extended
supply chain system to customer, even after sales service system .

Lean system Thinking is more than application of Tools and Techniques.

It is a culture of continuous improvement or a way of working or

winning mindset of everyone working for the organization.
Misconception about Lean
Misconception about Lean?
There are some misunderstandings about lean and its application .Some of the misconception
about lean are

•Lean means cost cutting

No. Cost cutting means cutting down the expenses whether it is essentially required or not .Lean is
focusing more on cutting down the waste or unnecessary expenses, which is not adding value to
customer ,in turn to business.
Waste
•Lean is for manpower productivity
Partially true. Lean is focusing on waste elimination or reduction in any form like man, machine,
material, and method. By eliminating or reducing wasteful activities in format, manpower,
material, machine, or process efficiency is improved. Hence, it is not only on manpower
productivity alone. but for all factors of manufacturing.
•Lean is applicable for manufacturing organization only
No. As said, lean is all about waste elimination. As long as activities are there in any organization,
waste will be present .Wherever waste is ther, Lean is applicable. It is not only applicable for
manufacturing.

Not only
•Lean can be implemented only in large organization
No. One of the assumptions is that implementing lean requires investment and only large organization
can afford .Actually, understanding the lean concept, tools, and techniques is easy and does not require
investment. Lean thinking and practices can be implemented in any size of the organization. In fact, Lean
can be easily implementable in small and medium scale organization because of its size and activities
involved.
•Lean is all about 5S and Visual Boards
No. Most of the people think that doing Housekeeping (5S) and putting display boards is lean
manufacturing. Of course fundamental requirement for waste elimination is housekeeping , ie keeping the
workplace in order ,but that alone is not constituting Lean system. Lean is beyond implementing
housekeeping practices. Similarly visual management is one of the elements of lean system in which
display and control boards are part of it. Hence, Lean is beyond 5S and visual boards or even it is beyond
any lean tools and techniques. It is philosophy and way of conducting daily management.

Implementing
•Lean is for during lean seasons
One of the most misconception is that lean implementation is for not peak season as everyone is
busy with activities and lean is for during lean season. Lean is nothing do with the busyness of
people either peak or lean period. Lean is for waste elimination or reduction. In fact,
implementing and practicing lean concepts during peak period may give more savings.

No Lean implementation “ I’m Busy”

Lean period
Lean implementation
•Lean can be useful during recession
Same as above assumption. There is no right time as recession or booming economic
environment. In fact, if Lean is understood well and lean thinking is implemented internally,
external factors will not affect the organization much.
•Lean is only for automobile and ancillary organizations
No. As said, Lean is not specific to any industries. Wherever there are activities involved, Lean
can be implementable. Why it is popular in auto and ancillary industries, because the lean
concept was evolved and tested first in auto industries..

n be
n ca
table
Lea emen
l
imp
•Lean implementation is time bound
No. No organization can claim that they implemented lean system thinking ,because
fundamental of lean is zero waste, zero accident , zero defects and it is impossible to achieve
and thus it calls for continuous improvement or excellence journey .Lean implementation is a
process or journey .. It is not a destination.
Founder
The “founders” of Lean : History of Toyota and their production system TPS

1924 : Sakichi Toyoda developed an automatic loom with quality stop

1933 : Kiichiro Toyoda (son) left the Toyoda Automated Loom

Company and founded the Toyota Motor Corporation
1939: Faced with a small and highly diversified Japaese
automotive market and low capital – especially after the
Second Sakichi Toyoda
1950World
:TaiichiWar
Ohno (Production Manager) developed the “Toyota Production
System”, which main focus is on “Just-in-time,” Jidoka (Intelligent
Automation), and Kaizen (Continuous Improvement)

Taiichi Ohno
Toyota Motor Company achieved efficiency in mass production in an
environment that is highly diversified and marked by low piece numbers. Kiichiro Toyoda
 Transplants
Supplier Development
Foundation Jidoka
of Toyota JIT – TPS as System

1933 World War II 1950 1960 1970 1980 1990 2000


Source : Toyota
Why there is need for Lean in today’s context ?
Why there is need for Lean in today’s context ?
Variants
On time delivery
 No inventory
Speed

Globalization  Towards Zero defect

Competition
Technology
Internal Challenges for organization
Internal Challenges for organization…

Improve
Quality
“Better”

Production Costs

Reduce Reduce
Lead Time Cost
“Faster” “Cheaper”
What is value
In Manufacturing Context ,

Value is defined thru Waste

Definition of Waste
Definition of Waste

 Useless Consumption or Expenditure

 Use of Resources without adequate return

Waste is alternatively termed as NON VALUE ADDED

Customer to Customer
Customer - ask Customer - get
for Product / Lead Time =Money Product / Service
Service

Activities needed for

Activities adding Activities are not
statutory
value from needed and
regulations &
Customer’s view & wasteful. customer
customer not ready
ready to pay not ready to pay
to pay.

Example: Example:
Example:
change shape of business process
storage , moving ,
material , automation, documentation,
inspection,
aesthetic improvement , accounting ,auditing
rectification
protection certification
Goal is maximize VALUE ADDED and eliminate NON VALUE ADDED (WASTE)
activities In Customer to Customer processes
“Value addition” in Shop Floor
Typical Value Chain in Manufacturing setup

Non
Factory Profit MRP
Material Process Quality Factory Logisti
Fixed TAX
cost Cost Cost Fixed cs Cost
cost
Cost
 MRP
Factory Profit
Material Process Factory Quality Logistics
Non Fixed TAX
cost Cost Fixed cost Cost Cost
Cost

Rs 500 Rs 350 Rs 250 Rs 200 Rs 300 Rs 100 Rs 300 Rs 500 Rs 2500

Where do Manufacturing
have control ???
 Where do Manufacturing have control ???
By competition & demand /
supply

Factory
Material Process Factory Quality Logistics
Non Fixed TAX Profit MRP
cost Cost Fixed cost Cost Cost
Cost

By Statutory and Tax

regulations

Always on pressure to meet

Partial Control by Factory Stakeholders Expectation
 Factory
Material Process Factory Quality Logistics
Non Fixed TAX Profit MRP
cost Cost Fixed cost Cost Cost
Cost

Rs 500 Rs 350 Rs 250 Rs 200 Rs 300 Rs 100 Rs 300 Rs 500 Rs 2500

Typically 45-65 % of Value Chain Cost –under manufacturing Control

How we achieve excellence in Manufacturing
How we achieve excellence in Manufacturing .
Key Initiatives :
Lean Manufacturing

TQM
5S TPM

Continuous Improvement (Kaizen)

Six sigma Q
Total Employee Involvement

Leads to VALUE Maximization to Stakeholders

Measure of Excellence
Measure of Excellence -PQCDSM

 High Productivity

 Consistent Quality

 Cost-effective

 On time Delivery

 Safe for people to work

 High People Morale

Typical waste in manufacturing process / setup
Typical Wastes in Manufacturing System
1. Over production
2. Over processing
3. Defective Product / Rejection/ Rework
4. Material and Man Movement
5. Inventory
6. Idle Equipment
7. Delay / Waiting for material / man / decisions
8. Unnecessary motion in workplace operations

Mostly all the wastes are interrelated

Over Production
Type of Description / Examples Causes for Waste
Waste
Over Producing more than demand Long Setups in Equipments ,
Production Producing faster than required speed Unbalanced Processes
Over Processing
Type of Waste Description / Examples Causes for Waste

Process not defined well,

Over Processing more than specification
communication gap ,lack of
Processing or requirement
work standardization
Inventory
Type of Waste Description / Examples Causes for Waste
Unbalanced processes ,Time delay,
Either in WIP or as Unrealistic demand / supply, Quality
Inventory
finished goods issues , Unreliable Equipment,
scheduling
Material or Man Movement
Type of Waste Description / Examples Causes for Waste

Moving the product from one Process layout ;

Movement
location to another. Centralized storage
Motion in workplace
Type of Waste Description / Examples Causes for Waste

Poor Workplace Layout, Non standardized

Unnecessary Operator
Motion work methods, Lack of ergonomic
Motion in workplace
designed workplace
Quality issues

Type of Waste Description / Examples Causes for Waste

Incapable processes /
Defectives / Inspect ,segregate , rework
equipment, Lack of trained
Rework / Rejections and Rejection
people , Poor maintenance
Idle Equipment
Type of Waste Description / Examples Causes for Waste
Over capacity , Poor
Equipment not performing value
Idle Equipment maintenance, scheduling
added process or underutilized
variability, Changeover loss
Delay or waiting
Type of Waste Description / Examples Causes for Waste
People not working or idle due to
Delay or Unbalanced process or
waiting for material / machine /
waiting schedule variability
decision or planning problems
Summary of wastes
Type of Waste Description / Examples Causes for Waste
Over Production Producing More than demand Long Setups in Equipments , Unbalanced
Processes
Producing soon than required speed
Inventory Either in WIP as finished goods Unbalanced processes ,Time delay, Unrealistic
demand / supply, Quality issues , Unreliable
Equipment, scheduling

Transport Moving the product from one location Process layout ;Centralized storage
to another
Motion Unnecessary Operator Motion Poor Workplace Layout, Non standardized work
methods

Quality issue Inspect ,segregate , rework and Incapable processes / equipment, Lack of
Rejection
trained people , Poor maintenance
Idle Equipment Equipment not performing value Over capacity , Poor maintenance, scheduling
added process or underutilized variability

Delay or waiting People not working or idle Unbalanced process or schedule variability
 Typical Lean Tools for
eliminating / Reducing waste in
manufacturing process / Setup
Lean Tools
Tool / Description Purpose
Technique
Systematic approach for housekeeping that ensure the To reduce waste on Motions and searches .also to ensure

5S parts , tools are in right place with right identification safe work environment

Cellular Organizing work group of 3 to 15 people in Simple workflow usually results in improvement in quality,
Manufacturin manufacturing family of products from end to end. lead-time and inventory.
g
Continuous It is a concept of moving a product throughout value Synchronized production .no delay or temporary storage
flow chain at constant rate rather than in batches results in other side effects

Quick Uses work simplification of each setup process and To reduce changeover time and then encourage low batch
Changeover reduce waste and time. Also makes the changeover production. Also improves the availability time of
process as more predictable equipment or facility

Mistake Uses wide variety of technique to prevent mistake in To avoid rejections or rework and also enhances the
Proofing process availability
TPM Uses predictive and preventive maintenance technique To increase availability , process capability of facility
with problem solving approach
1.Reduce ‘‘Change over time’’ from 3.5 hrs to 3 sec in 20 yrs time
2.Reduce ‘Cost of quality’ by 50% in 3 years time.

50%
3 yrs
50%
3.Increase the plant output by 200% in 2 years time by increasing
‘Companywide’ efficiency and Increasing the profitability by 3 times

200%

2 yrs
Industry Engagement Business Challenges / Business Result Delivered Methodology / Tools
Type Struggles Application

Extrusion Productivity Delivery backlog / Manpower productivity by 32 % Line Balancing ,methods

Improvements Low manpower and Plant Capacity Enhancement Improvement
productivity

32%
 Industry Engagement Business Business Result Delivered Methodology / Tools
Type Challenges / Application
Struggles
Al die casting Business Eroding profitability / Capacity enhancement by 22 % ; OEE Improvements,
& machining Transformation Low manpower Setting time reduction from 4.5 Setting time reduction, Low
Productivity hrs to 2 hrs ; Profitability increase cost automation,KPI focus,
by 3 times Maintenance Management,
People Engagement

3 Times 22%
Industry Engagement Business Business Result Delivered Methodology / Tools
Type Challenges / Application
Struggles
Auto vech Business Delivery delay / low Manufacturing lead time reduction OEE improvement in
mfg Transformation capacity utilization by 50 %( 21 days to 10 days) Fabrication and Assembly
lines , People engagement,
Inventory Management
 Industry Engagement Business Challenges / Business Result Delivered Methodology / Tools
Type Struggles Application

Al die casting Business Delivery backlog Sales turnover increased by 45%, Performance management,
& machining Transformation /Losing of Negative EBITDA turned to Industrial Engineering,
customers / Negative breakeven ;Delivery actualization Daily work management
profit improvement from 60 % to > 85%

45% 60% to >85%

 Industry Engagement Business Challenges / Business Result Delivered Methodology / Tools
Type Struggles Application

Forging comp Business Delivery issue / 100 % delivery achieved; Setting time OEE improvement, Setting
mfg Transformation Negative operational reduction from 4.5 hrs to 1 hr; 25% time reduction; Structured
profit manpower productivity improvement; problem solving, KPI focus,
8 % improvement in material yield; daily management
Negative profitability turned positive
by 6 %

25%
Industry Engagement Business Challenges / Business Result Delivered Methodology / Tools
Type Struggles Application

Gear Mfg Business Delivery backlog / low 28 % reduction in mfg cost ; Mfg lead OEE focus, Line balancing,
Transformation productivity / lack of time reduction from 10 days to 4 days Relay out from process to
daily management product, Setting time
reduction, Cycle time
reduction, KPI focus, daily
management

28%
 Industry Engagement Business Business Result Delivered Methodology / Tools
Type Challenges / Application
Struggles
Fabrication / Business Delivery delay / low Manufacturing lead time reduction OEE improvement in
FRP comp Transformation capacity utilization by 50 %( 21 days to 10 days) Fabrication and Assembly
lines , People engagement,
Inventory Management

50%
 Industry Engagement Business Challenges / Business Result Delivered Methodology / Tools
Type Struggles Application

Abrasives / Productivity Operational efficiency 9 % increase in OEE and 8 % OEE, SMED, KPI
Auto comp Improvements low increase in plant capacity ; Setting
mfg time reduction by 35 %

9% 8%
35%
 Industry Engagement Business Business Result Delivered Methodology / Tools
Type Challenges / Application
Struggles
Electrical VSM /Project Plant capacity Roadmap for improving production VSM ,Line balancing
Transformer Management Improvement and from 3 per day to 5 per day
Mfg bottleneck
identification

3
Industry Engagement Business Challenges / Business Result Delivered Methodology / Tools
Type Struggles Application

Auto Business Negative EBITDA;Not Plant OEE improvements from 45 Capacity enhancement;
Precision Transformation meeting delivery to 80 %;Delivery adherence KPI ; Product
comp Mfg commitments. improvement from 70 % to 86 %; rationalization; Marketing
Rejection reduction by 64 realignment; Org structural
%;Negative EBITDA turned change
positive

80% 86%

45% 70%
64%
 Industry Engagement Business Business Result Delivered Methodology / Tools
Type Challenges / Application
Struggles
Cable comp Business Decreasing sales turnover improvement by 30 OEE,KPI, capacity
mfg Transformation profitability and sales %; Lead time reduction from 32 to enhancement, problem
growth stagnant 20 days . Customer's complaint solving methodologies
reduction by 75 %

30% 75%
Industry Engagement Business Business Result Delivered Methodology / Tools
Type Challenges / Application
Struggles
Food Business Decreasing 5 % reduction in mfg cost per Capacity enhancement;KPI
processing Transformation profitability and sales tone; 40 % reduction in ; Product rationalization;
growth stagnant inventory;30 % improvement in Marketing realignment;
tonnage production; 15 % Org structural change.
improvement in sales turnover

40%

5% / tone
30% 15%
Industry Engagement Business Challenges / Business Result Delivered Methodology / Tools
Type Struggles Application

Toys comp Business sales growth Sales turnover increased by 70 % Capacity enhancement;KPI
mfg Transformation stagnant; Decreasing ; Product rationalization;
profitability Marketing realignment;
Org structural change

70%
Lean Concepts , Tools and Techniques

To increase

Value added content in Process

However, Lean is not about application of tools

It is about change in thinking leading to cultural change in the

organization
 Why lean initiatives fail?

Lack of CEO and Top Management involvement

Not Educating or creating awareness about Lean and its purpose

Delegation to down without support

Changing priority based on the production volume

Not understanding the Big Picture of organizational problem

Keen on technical knowhow of tools and not on implementation

Why lean initiatives fail?

Lack of people involvement or engagement

No In-depth implementation of tools

Lack of facilitation and patience

Aversion to experimentation and trial

How to overcome obstacles?
10 Commandments for Transformative Results ..
1. Challenge Fixed ideas
2. Think how it can be done rather it won’t
3. Deny status quo
4. Don’t seek perfection
5. Correct Mistakes as soon as they found
6. Innovation does not need money
7. Problems are opportunities
8. Ask WHY
9. Ideas of 10 are better than knowledge of 1
10.Innovations never ends
Transformation happens …

from Thinking on Higher Possibilities

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www.winningmindssolutions.com

Pl click “ Learning resources”

Thank you