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Lean implementation and its benets to production industry

Bhim Singh
Department of Mechanical Engineering, Galgotias College of Engineering and Technology, Greater Noida, India

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S.K. Garg
Department of Mechanical and Industrial Engineering, Delhi Technological University, Delhi, India

S.K. Sharma
Department of Mechanical Engineering, National Institute of Technology, Kurukshetra, India, and

Chandandeep Grewal
Department of Mechanical and Manufacturing Engineering, Schulich School of Engineering, University of Calgary, Calgary, Canada
Abstract
Purpose The purpose of this paper is to discuss the lean implementation process and its quantied benets for the production industry with the help of value stream mapping (VSM). Both current and future state maps of the organizations shop oor scenarios are discussed using VSM techniques in order to highlight improvement areas and to bridge the gap between the existing state and the proposed state of shop oor of the selected industry. Design/methodology/approach VSM process symbols are used to discuss lean implementation process in the production industry. The existing status of the selected manufacturing industry is prepared with the help of VSM symbols and improvement areas are identied. Some modications in current state map are suggested and with these modications a future state map is prepared. Findings After comparison of the current and future state of shop oor of the selected industry it is found that reduction in lead time was 83.14 percent, reduction in processing time was 12.62 percent, reduction in work-in-process inventory was 89.47 percent, and reduction in manpower requirement was 30 percent. The rise in productivity per operator was 42.86 percent. Research limitations/implications The ndings are limited due to the focused nature of the case study and further cost-benet analysis can be carried out. Practical implications This paper will be very useful for the researchers and practitioners for understanding lean implementations and its derived benets. Originality/value The paper is a real case study showing lean implementation and its benets for the production industry. Keywords Lean production, Production processes Paper type Case study

1. Introduction Value stream mapping (VSM) is an enterprise improvement tool to assist in visualizing the entire production process, representing both material and information ow. The goal is to identify all types of waste in the value stream and to take steps to eliminate them (Rother and Shook, 1999). Taking the value stream viewpoint means working on the big

International Journal of Lean Six Sigma Vol. 1 No. 2, 2010 pp. 157-168 q Emerald Group Publishing Limited 2040-4166 DOI 10.1108/20401461011049520

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picture and not individual processes, and improving the whole ow and not just optimizing the pieces. It creates a common language for production process, thus facilitating more thoughtful decisions to improve the value stream (McDonald et.al., 2002) While researchers and practitioners have developed a number of tools to investigate individual rms and supply chains, most of these tools fall short in linking and visualizing the nature of the material and information ow in an individual company. At the level of the individual rm, many organizations have moved toward becoming lean by adapting different lean tools such as Just in time, set up reduction, 5S, TPM, etc. In many such cases, rms have reported some benets; however, it is apparent that there is a need to understand the entire system in order to gain maximum benets. In this paper, an attempt has been made to discuss lean implementation process using VSM in XYZ production industry. Both current and future state maps of the organizations shop oor scenarios are discussed using VSM techniques. Analysis includes calculation of TAKT time followed by ndings of other gap areas. Gain in production output, reduction of work in process (WIP) and nished goods inventory, reduction in lead time and real value addition time, affecting productivity are also reported. 2. Literature review Lean manufacturing has been the buzzword in the area of manufacturing for past few years. The concept originated in Japan after the Second World War when Japanese realized they could not afford the massive investment required to build facilities similar to those in the USA. The goal of lean manufacturing is to reduce waste in human effort, inventory, time to market and manufacturing space to become highly responsive to customer demand while producing quality products in the most efcient and economical manner. Nicholas (1998) found that waste takes many forms and can be found at any time and in any place. Waste consumes resources but does not add any value to the product. Russell and Taylor (1999) dene waste as anything other than the minimum amount of equipment, effort, materials, parts, space, and time that are essential to add value to the product. Lean manufacturing combines the best features of both mass and craft production: the ability to reduce costs per unit and dramatically improve quality while at the same time providing an ever wider range of products and more challenging work (Womack et al., 1990). Value stream refers to those specics of the rms that add value to the product or service under consideration. It is a far more focused and contingent view of the value adding (VA) process. Lean manufacturing uses tools like one-piece ow, visual control, Kaizen, cellular manufacturing, inventory management, Poka yoke, standardized work, workplace organization, and scrap reduction to reduce manufacturing waste (Russell and Taylor, 1999; Monden, 1993) suggested a new scheme of classifying operations into three generic categories as non-VA, necessary but non-VA and VA. This scheme proved to be more generic and was extended to different areas. Over the years, many lean manufacturing tools to support value stream have been developed and many more are being proposed every day (Womack et al., 1990; Barker, 1994; Cusumano and Nobeoka, 1998; Childerhouse et al., 2000; Taylor and Brunt, 2001). VSM tools were popularized by Rother and Shook (1999). These developments are primarily for two requirements: one to understand the interdependence of one function, department or even whole unit over another, and to capture a holistic view about a situation where the conventional industrial engineering recording tools do not help much. As the complexity of manufacturing and business is growing newer, value stream tools are emerging.

Recently, there exists a plethora of different tools and techniques developed for different purposes and waste reduction or elimination. To understand different value streams and their overlapping nature, several researchers like Forza et al. (1993), Beesley (1994) and Jessop and Jones (1995) have developed individual tools. The classication scheme suggested by Hines and Rich (1997) about seven new mapping tools (namely, process activity mapping, supply-chain response matrix, production variety funnel, quality. Filter mapping, demand amplication mapping, decision point analysis and physical structure mapping) regarding their major application areas is very useful. Another scheme of classication for lean manufacturing tools and allied detailing proposed by Pavnaskar et al. (2003) are also quite exhaustive. Chitturi et al. (2007) explored practical issues in job shop using a standard VSM and also explained how improved VSM can eliminate some limitations of old VSM. Al-Sudairi (2007) built a simulation model to study the impact of certain lean principles for enhancing the ow of construction material and found that lesser the time spend in the value stream, leaner is a process. Lian and Van Landeghem (2007) discussed on the application of VSM-based simulation generator in a manufacturer of poultry and pig-raising equipments for feeding, drinking, feed storage and feed transportation systems. Domingo et al. (2007) identied data with VSM from assembly line of a Spanish Bosch factory and used lean metrics, such as dock-to-dock time and lean rate, milk run to improve materials ow. Gopakumar et al. (2008) used discrete event simulation quantied through a detailed VSM exercise to model the current systems functioning and to identify operational inefciencies in warehouse receiving process at a large food distribution center, which comprises of trucks with goods reaching the destination warehouse, unloading and nally putting away the contents to the specic aisles. Zheng et al. (2008) introduced a new cycle time performance tracking matrix derived from the factory physics queuing model to explore a systematic way to structure the hierarchical cycle time key performance indicators framework and also to dene the right owner to improve those measurements. Further, VSM was used to reduce factory variability. Grewal (2008) used VSM techniques as lean implementation initiatives in small manufacturing rm and claimed 33.18 percent reduction in cycle time, 81.5 percent reduction in changeover time, 81.4 percent reduction in lead time and 1.41 percent reduction in value-added time. Melvin and Baglee (2008) studied how VSM can be applied to the food and drink industry to identify areas of waste and how these can be reduced and/or eliminated from the value stream. Serrano et al. (2008) used multiple case study approach and concluded that VSM can be used as redesign tool for manufacturing apart from enumerating the differences between theoretical concepts proposed by VSM and real world applications. Seth et al. (2008) addressed various wastes in the processing side of the supply chain of the Indian cottonseed oil industry, using VSM and individually attacked all wastes to reduce or eliminate them from the system. Lasa et al. (2008) showed that the VSM is a valuable tool for redesigning the productive systems according to the lean system and found that there are some key points for the establishing teams that have to take into account, as follows: the time and training resources spent, the use of suitable information systems and a suitable management of the application phases. Sahoo et al. (2008) discussed application of VSM in forging industry for identication and elimination of waste and its sources. A noticeable reduction in set up time and WIP inventory level is substantiated. Singh et al. (2009) suggested industries to apply VSM techniques to nd money drain points in their balance sheets and also apply these techniques to cut down operational cost to save business during recessionary times. Singh and Sharma (2009)

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showed that VSM is a versatile tool for lean implementation by a case study of an Indian manufacturing industry and witnessed 92.58 percent, reduction in lead time, 2.17 percent reduction in processing time, 97.1 percent reduction in WIP and 26.08 percent reduction in manpower requirement. Singh et al. (2010a) developed an index for measuring leanness of any manufacturing rm based on the scores awarded by leanness measurement team members. Various types of manufacturing wastes addressed by lean are taken as one parameter for measuring leanness index. Singh et al. (2010b) discussed the scope of lean implementation in Indian industries and identied many lean implementation issues in consultation to Indian managers. They also grouped these issues by using principal component analysis. Hines et al. (1998), Hines (1999), Grewal and Sareen (2006) and Grewal and Singh (2006), used VSM for identication and elimination of muda (waste) in production industry and Brunt (2000) and Abdulmalek and Rajgopal (2007) used VSM for productivity improvement of process industry. McManus and Millard (2002) applied VSM for product development and Emiliani and Stec (2004) for leadership development. In spite of all the benets offered by VSM, many researchers have pointed out the limitations of VSM. Chitturi et al. (2007) explored practical issues like how to calculate TAKT time, where to place supermarket, where can we use continuous ow processing, what process improvements can be done and how to handle different product families while mapping job shop operations using a standard VSM and also explained while drawing a standard VSM in job shop operations, all pertinent informations should be collected from the last to the rst operation in contrast to other production system where all informations are collected from the rst to the last operation, lastly as in job shop operation the future demand is not certain, so the average demand in the previous years should be considered for mapping a particular product family. Braglia et al. (2006) pointed out in his article that VSM is basically a paper-and-pencil-based technique, so, the accuracy level is limited, and the number of versions that can be handled is low; in real situations, many companies are of a high varietylow volume type, this requires many value streams and cannot be addressed by simple VSM. They proposed an alternative and innovative framework for a structured application of VSM to products requiring non-linear value streams, based on the preliminary analysis to identify the longer critical production path using the Temporized Bill of Material. After identication of the critical path, possible improvements were searched and then considered all sharing with secondary paths as further constraints. Finally, when the main value stream got improved, a new path became the critical one. Thus, the analysis proceeded iteratively until the optimum is reached or the WIP level has decreased under the desired level. McDonald et al. (2002) noted that VSM may not serve the purpose, when it is used to map a production line which produces different types of product families that are having different processing times and set up times for each processing step apart from different number of shifts. 3. Present work The present study is carried out in XYZ Ltd production industry located in Patiala, Punjab (India). It deals with manufacturing of components to meet the maintenance need of diesel traction eet, Indian railways. Present study proceeds with the mapping of current state of shop oor of equalizer beam manufacturing line of XYZ Ltd This mapping is done with a pencil and paper using various process symbols of VSM to visualize the ow of material and information as the product takes its way in manufacturing line. Mapping is carried out keeping in view of the lean manufacturing principles as discussed by Rother and Shook

(1999) and Seth and Gupta (2005). These principles are: dene value from your customers perspective; identify the value stream; eliminate the seven deadly wastes; make the work ow; pull the work rather than push it; and pursue to perfection level. The major steps involved in mapping are as follows (Figures 1 and 2): (1) VSM process symbols are used to represent customer, supplier, and production control. (2) All important data related to current state of shop oor of manufacturing such as lead time, process time, change over time and number of shifts are shown by data boxes below the VSM symbols. (3) The monthly/daily requirements of product along with the number of containers and Kanbans required are obtained. (4) Movement of product is indicated with arrows including shipment and receiving data. (5) In between two workstations, WIP is shown with proper inventory icons. (6) Major improvement areas are identied from the current state map. (7) Some modications in current state map are proposed and with the application of lean tools various gap areas are bridged in order to prepare future state map. (8) Future state map is prepared and improvements achieved are highlighted. 4. Current state map VSM is a pencil and paper tool, which is created using a predened set of icons. There are a lot of benets to drawing value stream maps by hand with paper and pencil. With manual mapping, let us see what is actually happening in a shop oor value stream, rather than being restrained to a computer. Also, the process of quickly drawing and redrawing a map acts as a plan-do-check-act cycle that deepens our understanding of the overall ow of value or lack thereof. The rst step in VSM is to choose a product family as the target
Suppliers Annual forecast Monthly schedule Weekly requirement Planning deptt of XYZ Monthly schedule Daily requirement Daily schedule Daily schedule 15-days inventory Finished items Quality No. check up punching Customers

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Flame cutting

Benching manual

Drilling

Profile milling

Hand grinding

46

18 Prod. lead time 22.44 days Processing time 252 min

19 CT = 42 min 2-shifts uptime 100% 0.783 days 42 min

16 CT = 30 min 2-shifts uptime 100% 0.826 days 30 min

28 CT = 34 min 2-shifts uptime 100% 0.696 days 34 min

30 CT = 32 min 2-shifts uptime 100% 1.22 days 32 min CT = 50 min 2-shifts uptime 100% 1.3 days 50 min

32 CT = 36 min 2-shifts uptime 100% 1.39 days 36 min

28 CT = 28 min 2-shifts uptime 100% 1.22 days 28 min

Figure 1. Current state map

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Suppliers Annual forecast Monthly schedule Planning deptt of XYZ Weekly requirement Daily requirement Milk run
W W W W

Customers

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3-days
P

Flame cutting

Benching manual

Drilling

Profile milling

Quality check up

Finished items No 23 punching

18 CT = 36 min 2-shifts uptime 100% 0.783 days 36 min 0 days 30 min CT = 30 min 2-shifts uptime 100% 0 days 34 min CT = 34 min 2-shifts uptime 100% 0 days 32 min CT = 32 min 2-shifts uptime 100% 0 days 36 min CT = 36 min 2-shifts uptime 100% 0 days 36 min CT = 36 min 2-shifts uptime 100% CT = 28 min 2-shifts uptime 100% 0 days 28 min

Production lead time 3.783 days

Figure 2. Future state map

Processing time 196 min

for improvement. Customers care only about their products and not all products so that it is unrealistic to map everything that passes through the shop oor. Drawing all the product ow in one company would be too complex. Identifying a product family can be done either by using the product and process matrix to classify similar process steps for different products or by choosing products that use the highest volume after choosing a product family. The next step is to draw a current state map to take a snapshot of how things are being done now. This is done while walking along the actual pathways from the actual production process. Drawing material ow on the current state map should always start with the process that is most linked to the customers, which in most cases is the shipping department, and then working ones way up to the upstream processes. The material ow is drawn at the lower portion of the map. At each process, all the critical information including lead-time, cycle time, changeover time, inventory levels, etc. are documented. The inventory levels on the map should correspond to levels at the time of the actual mapping and not the average because it is important to use actual gures rather than historical averages provided by the company. The second aspect of the current state map is the information ow that indicates how much each process will be going to add value to nal product. The information ow is drawn on the upper portion of the map. The information ow is drawn from right to left on the map and is connected to the material ow previously drawn. After the completion of the map, a timeline is drawn below the process boxes to indicate the production lead-time, which is the time that a particular product spends on the shop oor from its arrival until its completion. A second time called the value-added time is then added. This time represents the sum of the processing times for each process. Lead time is calculated by the way each component will wait on every machine and then total waiting time over the entire process will make the lead time. Current state map of the present shop is shown in Figure 1.

5. Evaluation of current state map From the evaluation of current state map, a few assumptions are made. It is assumed that maximum demand may reach up to 560 items per month based on the past data of the organization under study. The current state map captures information at a particular instance, which may vary from shift to shift. For the sake of evaluation, the shift and labor-wise variation is not considered. Effective numbers of working days are 24 per month, Number of shifts per day is two and working hours per shift are seven. Available working time per day in minutes 840. TAKT time refers to the rate at which customers are buying products from the production line, i.e. the unit production rate that must be met to match customers requirements. It is calculated as follows: TAKT time Available work time per day minutes Customer demand per day units

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TAKT time comes out to be 36 minutes. Table I represents various details regarding the current state of the shop oor of manufacturing line and data shown in Table I is taken from Figure 1. Existing process requires manpower of ten per day with a production output of 3.6 products per worker. The real VA time for the current process is 252 minutes, whereas production lead-time is 22.44 days. High-WIP inventory of 32 products is observed at station inspection and quality check up and nished goods inventory of 46 products is there due to poor ordering policy and the play-safe tendency of the organization. 6. Proposed changes in existing state of manufacturing Based on the data of current state map and the wastage identied in the analysis, changes were proposed in existing state as shown in Figure 2. The suppliers of the organization were asked to fulll hourly demand instead of daily demand. The fulllment of hourly demand requires high degree of information ow and coordination through the organization and with its suppliers. For this purpose, a Kanban system was introduced between the organization and its suppliers. It was suggested that withdrawal Kanban should ow from planning department to dispatch. Similarly, the production Kanban was suggested owing from dispatch to raw material store, as shown in Figure 2. The Kanban system brought the necessary schedule and delivery discipline. This system also reduced the manpower requirement to track the demand and inventory at the organization and communicating the same at the supplier end. Inventory was also very high at many stations in the current state; presently the organization is holding 15 days of inventory due
Processing time (minutes) 42 30 34 32 50 36 28 252 Production lead time (days) 15.000 0.783 0.826 0.696 1.220 1.300 1.390 1.220 22.440 In-processes inventory (units) 00 18 19 16 28 30 32 28 171

Machine/process Store Flame cutting Benching manual Drilling Prole milling Hand grinding Quality check up No. punching Total

Table I. Current state data

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to poor communication and stock outs. Electronic information, Kanban system and super market help to reduce inventory. These changes reduced inventory levels in raw material store from 22.44 to 3.783 days, as shown in Figure 2, which was quite signicant. This also helped in making whole supply chain lean and exible. To ensure station cycle time lies in the range of TAKT time, i.e. 36 minutes in present case and to reduce manpower requirement from ten to seven per day, the continuous ow of materials and information were maintained across the whole process. To synchronize station cycle time with TAKT time at ame cutting station, oxy acetylene gas cutting should be replaced with plasma gas cutting, it will not only synchronize the station cycle time but also improve the surface nish at the cutting surface of equalizer beam and it will eliminate the requirement of hand grinding operation at latter stage. Comparison of TAKT time with cycle time of current state and future state map is shown in Figure 3. The data from Figure 2 along with benets achieved are given in Tables II and III. These are clear indications that production output per worker has improved to 3.20 from 2.24 products. Production lead-time is reduced drastically from 22.44 to 3.783 days and VA time is also reduced from 4.2 to 3.67 hours. Current demand at the organization is easily achievable with reduction in both WIP and nished goods inventory in the supply chain. All these proposed changes will help the organization to become cost competitive in todays global market, and hence it will also help in freezing overall costs in the supply chain. In the present situation, the supplier will be in a position to deliver at required rate, and high-quality products at lower cost, which was also the requirement of a lean and responsive environment. In this study, the cost of proposed changes is not given but all the changes were suggested after consultation with lean implementation experts and shop oor instructors. Initially, these changes may appear costly and against the lean principles but as per the volume of the production in the given industry, cost will be recovered in very short spell of time and afterwards the industry can enjoy the full benets of lean principles. 7. Conclusions Lean implementation is carried out in a production industry with the help of VSM technique and many benets are reported such as reduction in WIP inventory by 89.47 percent, nished goods inventory by 17.85 percent, product lead time by 83.14 percent, processing time by 12.62 percent, manpower required by 30 percent and output per operator is increased by 42.86 percent. Rother and Shook (1999) rightly argued that whenever there is a product for a customer, there is a value stream. The challenge lies
60 50 Cycle time (min) 42 40 30 20 10 0 0 Flame cutting Benching manual Drilling Profile milling Hand grinding Quality No. check up punching 36 30 30 Current state Future state 50 Talk time = 36 minutes 34 34 32 32 36 36 28 28

Figure 3. Talk time comparison with cycle time of current state and future state map

Machine/process Store Flame cutting Benching manual Drilling Prole milling Hand grinding Quality check up No. punching Total Total relevant units

Processing time (minutes) 0 36 30 34 32 00 36 28 196 3 hours 16 minutes

Production lead time (days) 03.000 0.783 0.000 0.000 0.000 0.000 0.000 0.000 3.783 3.783 days

In-processes inventory (no.) 00 18 0 0 0 00 0 0 18 18 products

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Table II. Future state data

Measure Output per man Total manpower In-process inventory Finished goods inventory Production lead time Processing leads time

Units Products/man Numbers/day Products Products Days Hours

Current state 2.24 10 171 28 22.44 4.2

Future state 3.20 7 18 23 3.783 3.67

Improvement (%) 42.86 30.00 89.47 17.86 83.14 12.62

Table III. Current state versus future state data

in working and implementing it. VSM can be done in the same way for practically any business activity and expanded upstream or downstream. This study provided following lessons for the researchers and practitioners: . VSM is a very powerful tool to identify gap areas and facilitate lean implementation for production industry. . The improvements carried out in this study are signicant enough for the practitioners to further explore lean implementation and take its full benet.
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Further reading Lamming, R., Johnsen, T., Zheng, J. and Harland, C. (2000), An initial classication of supply networks, International Journal of Operations & Production Management, Vol. 20, pp. 675-91. Nicholls, M.G. (1994), Optimizing the operation of an ingot mill in an aluminium smelter, Journal of Operational Research Society, Vol. 45 No. 9, pp. 987-99. Zayko, M., Broughman, D. and Hancock, W. (1997), Lean manufacturing yields world class improvements for small manufacturer, IIE Solutions, Vol. 29 No. 4, pp. 46-64. About the authors Bhim Singh is presently associated with Galgotias College of Engineering and Technology, Greater Noida, UP, India, as an Assistant Professor in Mechanical Engineering Department. He holds BTech degree from REC, Kurukshetra, and MTech degree from GNDEC, Ludhiana. He is presently pursuing PhD from National Institute of Technology (NIT), Kurukshetra, on lean manufacturing. He has more than ten years of teaching experience in Undergraduate and Post Graduate classes. He has published paper in international journals and in several national and international conferences. He has guided many projects to undergraduate students. His area of interest statistical quality control, operations research, supply chain management, value engineering and lean manufacturing. Bhim Singh is the corresponding author and can be contacted at: bhimsingh_ncce@rediffmail.com S.K. Garg did his PhD from Indian Institute of Technology (IIT), Delhi, India. He is presently associated with Mechanical and Industrial Engineering Department of Delhi Technological University, Delhi, as a Professor of Industrial Engineering and Operations Research. He has published more than 50 papers in international journals and conferences. He also authored three books in his area of interest. His area of interest includes lean manufacturing, supply chain management, just-in-time manufacturing, total quality management, operation research. He is also guiding many research scholars for their PhD degree in his eld. S.K. Sharma, eminent scholar and leader in the eld of industrial engineering and entrepreneurship development is currently a Professor in the Department of Mechanical Engineering at NIT, Kurukshetra, Haryana, India. He did extensive research in the eld of industrial engineering and has guided 16 candidates in their dissertation for MTech degree. He is guiding ten students for their PhD degree in the eld of production and industrial engineering. He has published many papers in national and international journals of repute. Chandandeep Grewal is currently doing his PhD at University of Calgary. Before joining PhD, He was a Lecturer in the Department of Mechanical and Production Engineering at Guru Nanak Dev Engineering College, Ludhiana, India. He holds the Master of Technology in Industrial Engineering from the IIT, Delhi. His areas of interest are supply chain management, lean manufacturing, operations research and simulation and modeling. He has number of research papers in international and national journals and conferences.

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