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26 views

PGP27-LS-2-Why Lean Differences

Uploaded by

pradumnsanthalia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PGP27

Term V

Lean Systems

Session 2

Dr. G. Anand
Professor
QM & OM Area
IIM Kozhikode
anandg@iimk.ac.in

What is lean? – contd.


• Lean – A way to eliminate waste
and improve efficiency in a
business environment
– Lean focuses on flow, the value
stream and eliminating muda, the
Japanese word for waste

• Traditional definition says that


Lean manufacturing (LM) is the
production of goods using less of
everything compared to
traditional mass production:
– less waste, human effort,
manufacturing space, investment in
tools, inventory, and engineering
time to develop a new product Image obtained from:
http://www.emsstrategies.com/img/tps-house-001.png
What is lean? – contd.
• Prototype of Lean manufacturing
was developed by Toyota Motor
Corporation (TMC) that utilised a
unique production system called
Toyota Production System (TPS),
following the challenge to re-build
the Japanese economy after World
War II.

• This concept was introduced to the


Western world in 1991 by the book
“The Machine That Changed the
World” written by Womack, Jones,
and Roos after a 5 million dollar
research study titled “International
Motor Vehicles Programme (IMVP)
Photos obtained from:
http://fukuoka-now.com/wp-content/uploads/2013/07/toyota-production-of-2011.jpg
http://ebooksmio.com/uploads/posts/2012-03-19/james-p-womack-the-machine-that-changed-the-world_1.jpg

Evolution – contd.
• The concepts of lean
can be applied to both
manufacturing and
services

• Lean thinking is defined


as “A systematic
approach to identifying
and eliminating waste
(non-value-added
activities) through
continuous improvement
by flowing the
product/information at
the pull of the customer
in pursuit of perfection.”
Photos obtained from:
http://media.tumblr.com/9b2e05e445913b56dc29aab91c347f18/tumblr_inline_mgd8jcShDN1qhjhjj.jpg
Why Lean?
• To achieve significant Competitive Advantage

• Winners Don't Do Different Things, They Do


Things Differently

• The difference from the winner and losers is


that winners provide better products and
services in terms of
– Quality: better
– Price: cheaper
– Time: faster

Benefits
• Many research studies have reported that
implementing lean would result in following:
– 90% reduction in lead time (cycle time).
– 50% increase in productivity.
– 80% reduction in work-in-process inventory.
– 80% improvement in quality.
– 75% reduction in space utilization.

• Other benefits (Qualitative or Intangible)


– Increase worker participation in problem solving
– Increase in team working, morale, etc.
– Improvement in communication
– Etc.
•
It CANNOT BE COPIED by Competitors
What is (are) the
difference(s) between
Lean Production/Thinking
and Toyota Production
System?

Winners and Losers – Contd.

• Left hand drive • Right hand drive


• 110V • 220V
• Pounds, Miles • Kilograms, Kilometres

Photos obtained from:


http://thumbs.dreamstime.com/thumblarge_331/1225973029SzqW30.jpg
http://p6ril.files.wordpress.com/2010/04/light_switch.gif
http://farm4.static.flickr.com/3551/3449385501_5dc446ed3d.jpg
What are the difference(s)
between Lean
Production/Thinking and
Mass/Ford Production
System

Comparisons – contd.
• Traditional manufacturing • Lean Systems
systems – In case of EOQ, it is a trade off
between inventory cost and
– Based on the principles of holding cost. In other way, if
scientific management given setup cost is minimized, then
by Taylor, manufacturing why the need of inventory
system was analyzed for – In case of stochastic models,
optimized piece of system data are collected to find optimal
safety stock, because of
• These principles eliminated variation in manufacturing. But
waste and provided better why to have safety stock, if we
wages for workers, higher reduce variability
profits for owners and better – Instead of inventory cost,
quality of life Japanese attacked setup cost
– It also resulted in models like and minimized it
EOQ, SQC, but they are sub – Instead of statistics of defective
parts, they reduced the
optimal and does not view the production of defective items
whole of a system

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