Lean Manufacturing
Definition
Lean manufacturing or lean production, often simply, "Lean," is a team based continuous improvement process designed for long term maximization of company resources. Lean is an approach to achieving manufacturing excellence based upon the continued elimination of waste. Waste is defined as activities that do not add value to the product.
Working from the perspective of the customer who consumes a product or service, "value" is defined as any action or process that a customer would be willing to pay for. Basically, lean is centered on preserving value with less work. Lean manufacturing is a management philosophy derived mostly from the Toyota Production System (TPS) and identified as "Lean" only in the 1990s. It is renowned for its focus on reduction of the original Toyota seven wastes to improve overall customer value, but there are varying perspectives on how this is best achieved. The steady growth of Toyota, from a small company to the world's largest automaker has focused attention on how it has achieved this.
Types of Waste
While the elimination of waste may seem like a simple and clear subject it is noticeable that waste is often very conservatively identified. This then hugely reduces the potential of such an aim. The elimination of waste is the goal of Lean, and Toyota defined three broad types of waste which are muda, muri and mura.
Muri is all the unreasonable work that management imposes on workers and machines because of poor organization, such as carrying heavy weights, moving things around, dangerous tasks, even working significantly faster than usual. It is pushing a person or a machine beyond its natural limits. This may simply be asking a greater level of performance from a process than it can handle without taking shortcuts and informally modifying decision criteria. Unreasonable work is almost always a cause of multiple variations.
To link these three concepts is simple in TPS and thus Lean. Firstly, muri focuses on the preparation and planning of the process, or what work can be avoided proactively by design. Next, mura then focuses on how the work design is implemented and the elimination of fluctuation at the scheduling or operations level, such as quality and volume. Muda is then discovered after the process is in place and is dealt with reactively. It is seen through variation in output. It is the role of management to examine the muda, in the processes and eliminate the deeper causes by considering the connections to the muri and mura of the system. The muda and mura inconsistencies must be fed back to the muri, or planning, stage for the next project.
A typical example of the interplay of these wastes is the corporate behaviour of "making the numbers" as the end of a reporting period approaches. Demand is raised to 'make plan,' increasing (mura), when the "numbers" are low, which causes production to try to squeeze extra capacity from the process, which causes routines and standards to be modified or stretched. This stretch and improvisation leads to muri-style waste, which leads to downtime, mistakes and back flows, and waiting, thus the muda of waiting, correction and movement.
The original seven muda (waste) are:
1. Transport (moving products that is not actually required to perform the processing)
2. Inventory (all components, work in process and finished product not being processed)
3. Motion (people or equipment moving or walking more than is required to perform the processing)
4. Waiting (waiting for the next production step)
5. Overproduction (production ahead of demand)
6. Over Processing (resulting from poor tool or product design creating activity)
7. Defects (the effort involved in inspecting for and fixing defects)
Lean Goals and Strategy
1. Improve quality: To stay competitive in today’s marketplace, a company must understand its customers' wants and needs and design processes to meet their expectations and requirements.
2. Eliminate waste: Waste is any activity that consumes time, resources, or space but does not add any value to the product or service.
3. Reduce time: Reducing the time it takes to finish an activity from start to finish is one of the most effective ways to eliminate waste and lower costs.
4. Reduce total costs: To minimize cost, a company must produce only to customer demand. Overproduction increases a company’s inventory costs because of storage needs.
Steps to Achieve Lean Systems
The following steps should be implemented to create the ideal lean manufacturing system:
1. Design a simple manufacturing system
A fundamental principle of lean manufacturing is demand-based flow manufacturing. In this type of production setting, inventory is only pulled through each production center when it is needed to meet a customer’s order. The benefits of this goal include:
· decreased cycle time
· less inventory
· increased productivity
· increased capital equipment utilization
2. There is always room for improvement
The core of lean is founded on the concept of continuous product and process improvement and the elimination of non-value added activities. The Value adding activities are simply only those things the customer is willing to pay for, everything else is waste, and should be eliminated, simplified, reduced, or integrated. Improving the flow of material through new ideal system layouts at the customer's required rate would reduce waste in material movement and inventory.
3. Continuously improvement of lean manufacturing system design
A continuous improvement mindset is essential to reach a company's goals. The term "continuous improvement" means incremental improvement of products, processes, or services over time, with the goal of reducing waste to improve workplace functionality, customer service, or product performance.
Agile manufacturing is an approach to manufacturing which is focused on meeting the needs of customers while maintaining high standards of quality and controlling the overall costs involved in the production of a particular product. This approach is geared towards companies working in a highly competitive environment, where small variations in performance and product delivery can make a huge difference in the long term to a company's survival and reputation among consumers.
This concept is closely related to lean manufacturing, in which the goal is to reduce waste as much as possible. Agile manufacturing is seen as the next step after Lean in the evolution of production methodology. In lean manufacturing, the company aims to cut all costs which are not directly related to the production of a product for the consumer. Agile manufacturing can include this concept, but it also adds an additional dimension, the idea that customer demands need to be met rapidly and effectively. In situations where companies integrate both approaches, they are sometimes said to be using “lean and agile manufacturing”. According to Martin Christopher, when companies have to decide what to be, they have to look at the Customer Order Cycle (the time the customers are willing to wait) and the lead-time for getting supplies. If the supplier has a short lead time, lean production is possible. If the COC is short, agile production is beneficial.
Lean and agile principles complement each other, however, the scale at which they are applied are different. Lean principles are best applied at the factory or floor level where efficiency takes precedence of all except safety. On the other hand, agile principles are most suitable at the enterprise level where ability to adjust to changing internal and external factors is off utmost importance. The emphasis in lean is more on the technical and operational issues, while agile addresses the people and organizational issues.
However, where there is a significant difference is how change management is performed under each system. Lean tries to minimize change, whether internal or external in order to minimize waste and increase efficiency. On the other hand, agile embraces change. The idea is to thrive at the ever changing environment and business landscape. In fact, agile manufacturing should be seen as the natural extension and evolution of the lean principles.
Four Principles of Lean Production and Agile Manufacturing
Lean Production | Agile Production |
· Minimize Change | · Enrich the Customer |
· Perfect first-time quality | · Cooperate to enhance competitiveness |
· Flexible production lines | · Organize to master change |
· Continuous improvement | · Leverage the impact of people & information |
Comparison of Lean Production and Agile Manufacturing Attributes
Lean Production | Agile Production |
· Enhancement of Mass Production | · Break with mass production; emphasis on mass customization. |
· Flexible production for product variety | · Greater flexibility for customized products |
· Focus on factory operations | · Scope is enterprise wide |
· Emphasis on supplier management | · Formation Virtual enterprises |
· Emphasis on efficient use of resources | · Emphasis on thriving in environment marked by continuous unpredictable change |
· Relies on smooth production schedule | · Acknowledgement and attempts to be responsive to change. |
Companies which utilize an agile manufacturing approach tend to have very strong networks with suppliers and related companies, along with numerous cooperative teams which work within the company to deliver products effectively. They can retool facilities quickly, negotiate new agreements with suppliers and other partners in response to changing market forces, and take other steps to meet customer demands. This means that the company can increase production on products with a high consumer demand, as well as redesign products to respond to issues which have emerged on the open market.
Figure 2: Lean Vs Agile Manufacturing
Markets can change very quickly, especially in the global economy. A company which cannot adapt quickly to change may find itself left behind, and once a company starts to lose market share, it can fall rapidly. The goal of agile manufacturing is to keep a company ahead of the competition so that consumers think of that company first, which allows it to continue innovating and introducing new products, because it is financially stable and it has a strong customer support base. Using this method Agile offers several significant advantages not only to the team but also to their sponsors:
- Business leaders can see results quickly and exert more control over development costs. Failing projects can be cancelled early, lowering risk and potential waste.
- Changes in priority can be addressed immediately with minimal waste. Change is welcome, not eschewed.
- Collaboration between business leaders and development teams lessens misunderstandings on both sides and builds stronger relationships and overall team spirit.
- Solutions get to market faster and development cycle times are reduced.
References
Expert Opinion by Andy Brown
L. Goldman, R.L. Nagel and K Preiss, Agile Competitors and Virtual Organizations - Strategies for Enriching the Customer, Van Nostrand Reinhold, 1995.
http://customcable.ca/lean-versus-agile-production/
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