LEAN MANAGEMENT & KANBAN SYSTEM

Submitted By
Gaurav Singh, Parmeet Singh, Pragya Sarin,
Pratishta Gupta, Sanyam Khetarpal, Satya Mathur

Semester Project for

Operations Management
Bachelors of Management Studies

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.

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

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

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

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)

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

JIT CONCEPT

Eliminate waste
Remove variability
Improve throughput

Quality Management
Production Management
Supplier Management
Inventory Management
Human Resource Management

JIT PRINCIPLES

CONTINOUS FLOW PRODUCTION

Traditional Flow

Production Process (stream of

water)

Suppliers

Customers
Inventory (stagnant ponds)

Flow with JIT

Suppliers

Material
(water in
stream)
Customers

COMMUNICATION TECHNIQUES
Communication Techniques
Completion of task-Kanban
Problem- Andon or siren/light
Stopping the process if something goes
wrong
Preventive Maintenance

JIT MANUFACTURING PRINCIPLES

Quality Management
Production Management
Supplier Management
Inventory Management
Human Resource Management

ROLE OF INVENTORY REDUCTION

JIT MANUFACTURING PRINCIPLES

Quality Management
Production Management
Supplier Management
Inventory Management
Human Resource Management

HUMAN RESOURCE MANAGEMENT

Self-Inspection of work
Diversified Employees

Absenteeism
To eliminate boredom in process

Management Support and

Empowerment of workforce

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.

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.

Hence, now a respective

order will be placed with
feeder shops to produce
these particular and
certain quantity of sub
assemblies.

Now the assembly

consumes, in this process a
certain required number
of sub assemblies.

This sort of drip or pull

effect follows all the way
to raw material stores.

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.

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 customerfocused and has low
demand variations.

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

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

Kanban
Because Japanese thats why!

KANBAN

Literally means visual record

Kanban

Inspired by American Supermarkets!

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.

Kanban uses PULL SCHEDULING.

Which is better than push scheduling, actually.

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

DUAL CARD Kanban SYSTEM WORKING

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.

SINGLE CARD Kanban SYSTEM

A more convenient system for manufacturing facilities requiting less

variety in their parts

Its simply a dual-card kanban system with the absence of the

production kanban and designated stock points.

FEATURES OF MANUFACTURING PROCESS

1
Preceding and Succeeding Processes

2
Inbound buffer
3
Outbound buffer

Kanban POST

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.

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.

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.

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.

NUMBERS OF KANBAN
Demand rate = D
Number of Kanbans = K
Production lead time = P

Conveyance lead time = C

Safety factor =
Container size = Q
K =D(P+C) (1+ )/Q

IMPROVEMENT OPTIONS
Step improvement
Ramp improvement
Hybrid improvement

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

FEATURES

Reduces wastage
Operational efficiency
Iterative increments

Business, Manufacturing, Business processes like marketing finance and CRM.

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

THE CONTINUOUS IMPROVEMENT PROCESS

Set up a
measurement
methodology
for assessing
the quantum of
Improvement

Create a
Context for
continuous
improvement

Monitor
improvements
Create
appropriate
Organizational
Structure

Equip
employees
with tools and
techniques

THE CONTINUOUS IMPROVEMENT PROCESS

Process mapping
Non value added analysis
Business Process Reingineering
TQM
QC tools

TOOLS

THE CONTINUOUS IMPROVEMENT PROCESS

Task Force
Quality Circles
SGIA
Visual Control Aids

ORGANIZATION

KAIZEN
1.
2.
3.
4.
5.

Seiri, or sort
Seiton or set in order
Seiso or scrub
Seiketsu or standardize
Shitsuki or sustain

CHALLENGES IN LEAN IMPLEMENTATION

Supply chain issues
Employee development
Cultural and human issues

CHALLENGES IN LEAN IMPLEMENTATION

Technological challenges
JIT implementation issues
Resistance to change