Lean Management and Kanban System
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The document discusses lean management and the Kanban system, which are methods aimed at eliminating waste within manufacturing processes to enhance efficiency and value to the customer. It covers the origins, benefits, principles, and challenges of implementing lean management, including Just-in-Time (JIT) manufacturing and the use of pull versus push scheduling systems. Specifically, it details various Kanban systems and their operational mechanisms, emphasizing continuous improvement and systematic waste reduction in the production process.
Lean Management and Kanban System
- 1. 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
- 2. 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.
- 3. 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
- 4. 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
- 5. 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
- 6. 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)
- 7. 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
- 8. JIT PRINCIPLES • Eliminate waste • Remove variability • Improve throughput • Quality Management • Production Management • Supplier Management • Inventory Management • Human Resource Management JIT CONCEPT
- 9. CONTINOUS FLOW PRODUCTION Flow with JIT Traditional Flow Customers Suppliers Customers Suppliers Production Process (stream of water) Inventory (stagnant ponds) Material (water in stream)
- 10. • Communication Techniques • Completion of task-Kanban • Problem- Andon or siren/light • Stopping the process if something goes wrong • Preventive Maintenance COMMUNICATION TECHNIQUES
- 11. • Quality Management • Production Management • Supplier Management • Inventory Management • Human Resource Management JIT MANUFACTURING PRINCIPLES
- 12. ROLE OF INVENTORY REDUCTION
- 13. • Quality Management • Production Management • Supplier Management • Inventory Management • Human Resource Management JIT MANUFACTURING PRINCIPLES
- 14. • Self-Inspection of work • Diversified Employees • Absenteeism • To eliminate boredom in process • Management Support and Empowerment of workforce HUMAN RESOURCE MANAGEMENT
- 15. 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.
- 16. 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.
- 17. 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.
- 18. 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.
- 19. 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
- 20. RESPONSIBILITIES AND PROBLEMS Push – Centrally scheduled and problems are hidden Pull – Responsibility on operating personnel and a visible urgency is created in case of shortfall
- 21. KANBAN Literally means visual record KanbanBecause Japanese that’s why!
- 22. 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!
- 23. Kanban uses PULL SCHEDULING. Which is better than push scheduling, actually.
- 24. 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
- 25. • 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
- 26. • 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
- 27. SOME STRUCTURAL FEATURES OF THE MANUFACTURING SYSTEM: 1 Preceding and Succeeding Processes
- 28. SOME STRUCTURAL FEATURES OF THE MANUFACTURING SYSTEM: 2 Inbound buffer
- 29. SOME STRUCTURAL FEATURES OF THE MANUFACTURING SYSTEM: 3 outbound buffer
- 30. Kanban POST
- 31. 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 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.
- 32. DUAL CARD Kanban PROCESS Step 4 One 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 5 Swapping 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 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 in the outbound buffer area of the preceding process. The P-Kanban will be displayed at the Kanban post of the preceding process.
- 33. DUAL CARD Kanban PROCESS Step 4 One 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 5 Swapping 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 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 in the outbound buffer area of the preceding process. The P-Kanban will be displayed at the Kanban post of the preceding process.
- 34. 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.
- 35. 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
- 36. IMPROVEMENT OPTIONS •Step improvement •Ramp improvement •Hybrid improvement
- 37. CONTINUOUS IMPROVEMENT Means a positive change in the working conditions in an operating system leading to 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
- 38. RADICAL IMPROVEMENT Also 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 substantial upgradation of the capacity of the existing system FEATURES Quality Low production cost Sporadic but Substantial change Steel and Petrochemical processes. Innovation Economies of Scale Investments required High productivity
- 39. 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
- 40. THE CONTINUOUS IMPROVEMENT PROCESS • Process mapping • Non value added analysis • Business Process Reingineering • QC tools • Kaizen TOOLS
- 41. KAIZEN 1. Seiri, or sort 2. Seiton or set in order 3. Seiso or scrub 4. Seiketsu or standardize 5. Shitsuki or sustain
- 42. THE CONTINUOUS IMPROVEMENT PROCESS • Task Force • Quality Circles • SGIA • Visual Control Aids ORGANIZATION
- 43. CHALLENGES IN LEAN IMPLEMENTATION • Supply chain issues • Employee development • Cultural and human issues • Technological challenges