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OPERATION

MANAGEMENT-II
REPORT
Lean Management and
Under the guidance itsArun
of Prof. implementation
Ku. Paul in
Airline Cabin and Automobile Industry-
Illustration of how Toyota overcame its recent
setbacksSubmitted By:
Section E, Group 6

Akansha Singh UM16255


Nachiketa Panda UM16277
Soumyashree Kar UM16300

Table of Contents
OPERATION MANAGEMENT-II REPORT

1. EXECUTIVE SUMMARY...........................................................................2

2. RESEARCH METHODOLOGY....................................................................2

3. FUZZY WAY OF DECISION MAKING IN LEAN MANUFACTURING........................3

4. IMPLEMENTATION OF LEAN MANAGEMENT IN AIRLINE INDUSTRY..................5


4.1 Introduction:................................................................................5
4.2 Tools of Lean:...............................................................................5
4.2.1 Lean tool: 5S..........................................................................5
4.2.2 Lean tool: Gemba...................................................................5
4.2.3 Lean tool: Value stream mapping.......................................6
4.2.4 Lean tool: Kaizen...................................................................6
4.3 Research Method:......................................................................6

5. IMPLEMENTATION OF LEAN MANUFACTURING TECHNIQUE BY TOYOTA...........8

5.1. INTRODUCTION....................................................................................8

5.2. PROBLEMS FACED.................................................................................8

5.3. THEORY OF CONSTRAINTS: BRIEF OVERVIEW..............................................9

5.4. IMPLEMENTATION PLAN.........................................................................9

6. CONCLUSION......................................................................................11

7. REFERENCES......................................................................................12

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1. Executive Summary

Lean management is an approach to running an organization that supports the concept of continuous improvement, a long-
term approach to work that systematically seeks to achieve small, incremental changes in processes in order to improve
efficiency and quality. Similarly, 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 workloads ("Mura"). Selecting virtuous lean manufacturing
tool is an essential requirement in competitive scenario due to vagueness and uncertainty in multi-criteria, multi-factor
decision environment. These can be done through tools value stream mapping, poka-yoke, single minute exchange of die,
kaizen and 5S in specific multi factors leadership & management, financial capabilities, skill and expertise, organizational
culture and manufacturing strategy.

The Toyota case was selected as it will help us understand how TOC problem solving can help solve problems and stem
its root causes. The Article will focus on steps that Toyota, one of automobile giant and an expert in lean operations
recaptured the market lead. The importance of customer trust and employee empowerment will be gauzed in detail.

Similarly, in the other article selected on Airline Industry, the focus will be on of lean management into the cabin
environment of an aircraft. The paper examines how Icelandair uses lean management to reduce waste and increase
benefits of their passengers as well as flight attendants. The paper uses qualitative research with project members and
stakeholders within Icelandair to critically evaluate the nature of project success .

2. Research Methodology

In our article An Integrated Fuzzy-based Multi Criteria Decision Making System to Selection of Lean Tool Performance:
An Indian Automotive Parts Manufacturing Company Case Study, following has been done:
To identify set of criteria and numerous decision makers, each with their own set of viewpoints for set of alternative
lean tools.
To develop position matrices for the finite set of lean tools across the set of criteria.

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To aggregate the membership values using modified pessimistic aggregation.
To identify an optimal lean tool using dominance matrix approach by
introducing tolerance limit and weightages for
each criterion.
Conduct sensitivity analysis

3. Fuzzy Way of Decision making in Lean


Manufacturing

Alternatives represent the different choices of action available with the


decision makers. They are supposed to be screened, prioritized and eventually
ranked. After the initial screening is complete, the decision makers
preference information on the evaluation criteria is defined. This will reflect which criterion is more important to the
decision maker (DM). Relative weights are assigned to each evaluation criterion to describe the DMs preference
information.

The normalized matrix aij is represented above

X = [aij wj]; Where x indicates weighted position matrix, aij indicates normalized matrix, and wj indicates weight
assigned. Thus, the weighted position matrix is

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The Dominance Matrix (DM) is chosen to select the most suitable alternative considering its simplicity. In judging the
finite set of lean manufacturing tools (A1, A2, .........AN) across a set of factors (F1, F2, ...., FM) one can assign a value
for each factors and for each lean manufacturing tool. An inherent property of dominance matrices is that they are
additive. The opinion of the expert can be easily expressed in matrix format. A decision matrix A is an (M N) matrix in
which element aij indicates the performance of alternative Ai when it is evaluated in terms of decision criterion Cj, (for i
=1,2,3, ..., M, and j = 1,2,3, ..., N).

For the purpose of evaluation membership is defined. The membership value of 1.0 is treated as complete satisfaction
of needs associated with a qualitative feature and the membership value of 0.0 as complete dissatisfaction. A lean tool is
said to be superior to a second lean tool if it dominates the second lean tool in more features than the number of features
in which the second dominates the first.
Now Sensitivity analysis was performed on the MCDM method selection algorithm in order to analyze its robustness with
respect to parameter variations, such as the variation of DMs preference information and the input data. Assessment of
dominance is quite sensitive to errors in the data of the position matrix. To avoid such sensitive errors, sensitivity
analysis is carried out, for the effective use and implementation of qualitative factors. For example, if membership value
assigned to one alternative is 0.75 and the membership value of another alternative is 0.77 so, according to dominance
criteria concerned, domination of 0.77 over 0.75 cant be considered because the difference between these two
membership values is 0.02 which is falling under the limit of tolerance 0.03.

The Lean manufacturing is to be ranked based on the qualitative criteria. A questionnaire was prepared to evaluate the
lean manufacturing tools against these alternatives. The questionnaire was circulated to lean manufacturing implementing
industries experts in Maruti Suzuki, HVCC, Sumi-Motherson, Tata Moters & Sundram Fasteners to have their opinions in
terms of membership values and questionnaire. The questionnaire deals with qualitative criteria such as leadership &
management, financial capability, skills and expertise, organisational culture and manufacturing strategies in lean
environment.

A correspondence between the qualitative factors and the available lean tools was made explicit, and a numerical scale
between 0.0 and 1.0 was established. A value of 0.5 indicates a neutral effect while a value of 1.0 is defined as complete
satisfaction. the procedure for obtaining the above value is as follows.

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A41=[a41^1+a41^2+..........................a41^10]/10, A41 = Mean aggregated membership value = 0.53. Similarly aggregated
matrix were formed. After identifying the mean aggregated values, the pessimistic aggregated matrix should be formed to
minimize the risk of taking the values of memberships given by all the experts.
A54 = min. of [ a54^1, a54^2, ....................., a54^10] are the minimum membership values of criteria against alternatives.

Now using this dominance matrix, the best alternative was found out by assigning weights and alos compared with one
without weights. Optimum selection of lean manufacturing tools for automotive industries depends on qualitative factor
decision making criteria and identifies an organized set of factor for the selection of lean manufacturing tool based on
artificial intelligence approach.

4. Implementation of Lean Management in Airline Industry

4.1 Introduction:
Icelandair, the largest airline in Iceland, thought of implementing lean management in 2008. Their pilot project was to
introduce lean management to Icelandair Technical Services (ITS). This division of the airline is responsible for
maintenance and repairing of Icelandairs aircraft fleet. This lean management implementation was a huge success, and
mainly resulted in reducing the time to change an engine in an airplane from twenty hours to merely eight hours.
Eventually, lean management specialist was hired full time within that division to lead more improvements. Based on the
success of lean management implementation, they started to replicate that success by introducing lean management into
other parts of their operation, including the office environment as well as the aircraft cabin, that is the first known lean
management implementation example of its kind.

4.2 Tools of Lean:


4.2.1 Lean tool: 5S
Sort: sort, keep what is needed while losing what is not.
Straighten: everything has got its specific place and is put there after its usage.
Shine: cleanliness, having everything clean can help workers see quality issues sooner.
Standardize: have rules, standards and a system to keep everything sorted, straightened and shined.
Sustain: maintaining the new situation, continuous improvement. (Liker, 2004)

4.2.2 Lean tool: Gemba


One of the core tools of lean management is the genchi gembutsu, i.e. gemba. The main idea of
gemba is for managers to go and see the actual situation for understanding.

The basic purpose of a gemba walk is: To see how the work is done, ask open questions about the work, be open minded,
be
respectful, but at the same time asking them if they already are or could do their jobs in a much simpler way or quicker
with fewer
steps, see and ask how management can support them in that process (Liker, 2004) (Womack & Jones, 2003) (Modig &
hlstrm, 2012).

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4.2.3 Lean tool: Value stream mapping

The main purpose behind the value stream mapping is to see the process as-is, not how it should be. To map out the
current situation, see where and how the process can be improved, Where is the waste e.g. waiting and unnecessary
movements. Then a new value stream mapping is drawn with the wishful situation. Then only improvement opportunities
can be seen and you have a starting point. (Womack & Jones, 2003) (Liker, 2004)
In Toyota activities, connections, and production flows are stiff and scripted, everything is constantly being challenged
and
therefore it constantly gets more advanced in benefit for the company as a whole. Organizations have to be flexible and
adaptable
(Spear & Bowen, 1999)

4.2.4 Lean tool: Kaizen


Kaizen workshops is a remarkable social invention that frees up a cross functional team to make changes in a week that
otherwise could drag on for months. Selecting the right people is important, as is getting the time set aside for those
individuals and giving them a lot of management support. The session should start with a
review of the scope of the process to be improved and a review of the objective with the team. Some trainings are
provided on basic
lean management concept, especially of what is value-added and non-value added. (Liker, 2004).

4.3 Research Method:


A qualitative research study was conducted to approach the research questions. This study was built on many interviews,
a
questionnaire and results from the gemba visits. This approach was chosen because qualitative research is basically based
on interviews that help to reach a deeper understanding of the participants experiences and viewpoints.
The type of interviews that were taken into account in this research can be classified as a general interview guide
approach. This specific approach allows a lot of freedom while providing a certain focus, with the questions already
formed (Turner, 2010). Not all the interviewees got the same questions because they had different insights on the topic.
In addition to these interviews, the research was also based on data from a questionnaire that was conducted by project
managers
for implementation of lean management into the aircraft cabin in December 2014, where cabin crew members were asked
about their view on the lean cabin project. The questionnaire included five questions and one open question for new ideas.

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4.6 Research Results

Easier preparing and deliverance of children's food


Re-evaluated children services
Re-evaluated and standardization of stock in bars
Standardized installation in food carts
Addition of information labels on board
Simplified process around sales computers logout
Simplified wine selection on board
Re-evaluated newspapers on board
Coordinated pickup times between cabin crew and flight deck
Hot water in a thermos flask on carts to be used to make
porridge
AQD reports (reports done by senior cabin crewmember about
each flight.
Other improvements

Based on the results on this implementation of lean management into an airline cabin, we can draw the conclusion
that is has been a great success. In the spirit of lean management, where continuous improvement should always be
the first thing in mind, there are some more improvements that can be done.

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To make this implementation an even greater success story, Icelandair will implement a better way for the cabin crew
members to bring up their suggestions, and even provide with an electronic process where employees could see if their
suggestion has been approved and where in the implementation process it is at each time.

5. Implementation of Lean Manufacturing technique by Toyota

5.1. Introduction
The Japanese carmaker Toyota has long been regarded as the apex of Japanese innovation, manufacturing quality and
industrial strength particularly since it overtook the industry giant General Motors in 2008 to become the worlds
biggest carmaker. The lean manufacturing techniques and culture of continuous improvement followed by this industrial
giant were the envy of the business world.
However, problems with unintended acceleration of its cars which the firm later took seriously resulted in a crisis within
the company. Toyotas problems became bigger on 9 February 2009 when it said it would also recall 440,000 hybrid
vehicles, including the celebrated Prius, to fix a problem with their brakes. The firms reputation for quality, on which the
business was built, as a result, was in tatters. Its market capitalization dropped by an amount roughly equal to the entire
value of Ford. But the greatest damage was due to its misreading and mishandling of the crisis. The interesting question
presented in this article is that why Toyota lost track of its quality control measure in US? Is there any comprehensive
action for Toyota Way to bring the customers trust to force Toyota to the lead? This article applied Theory of
Constraints to address these questions.

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5.2. Problems Faced

Category Problems
5.3. Theor
y of
Product 1. Potential safety & software problems

2. Wrong product design

3. High quantity recalls

4. More complexity of design, production & parts supply

People 5. Hide engineering & quality problems

6. People are reluctant to pass bad news up to chain

Customer relation 7. Customer complaints

8. Neglected costumers voice

Cost 9. Reduce crash testing of new cars in order to cut costs

Governance 10. Poor communication between key stakeholders

11. Conducting corporate governance in western countries with


Japanese style

Business Strategy 12. Lax safety policy

13. Customers perspectives too much localized (Japan) quality


control teams instead of globalized ones

Constraints: Brief Overview

The Theory of Constraints is a problem solving model developed by Eliyahu M. Goldratt. Since the mid-1970s, Goldratt
has used scientific methods to create concepts in management, which have been proven to be of great value to industry.
Goldratt also presented his own expression of the scientific method and the structured TOC thinking processes using
common sense. The problem solving process takes the form of the Theory of Constraints thinking processes and a family
of five Theory of Constraints logic tree diagrams. In essence, the Theory of Constraints is about change and how best to
influence change. The TOC is a set of management principles that helps to identify obstacles to ones goal(s) and
influence the changes essential to eliminate them.

In order to induce effective output from TOC thinking processes, Goldratt used three basic questions namely:
(1) What to change?
(2) What to change to?
(3) How to cause the change?
They are linked with five logic trees.

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5.4. Implementation plan

The solution consists of a 4-step process adapted from a generalized problem solving process:

Problem finding,
Idea finding,
Obstacle finding, and
Solution finding
In this case study, we employ the basic analysis tools of four TOC tree diagrams.

Problem Finding
In order to effectively find the root causes and solutions, the first priority is to correctly identify and clearly define the
confronted problem under Toyota.
The root causes are identified as:
(1) Conducting corporate governance in western countries with Japanese style
(2) Overly rapid expansion without proper check in place
(3) Low cost oriented culture.

Idea Finding
The gap between the objective and the reality is bridged with a series of intermediate tasks which are defined by the TOC
future reality tree (FRT). Basically, the FRT is a logic tree diagram depicting the cause and effect relationship.
After deploying the FRT, it was found out that there were three key ideas of improvement for Toyota Motor to potentially
come back to the global market lead, which are:
Set up the culture of low cost but high quality and meet safety requirements (not only cost reduction),
Has proper check mechanism in place for any overly rapid expansion,
Conducting corporate governance in western countries with western style (Future Model)

Obstacle Finding
The set of solution ideas generated through the FRT is of a preliminary nature. There might be a number of potential
problems hindering its realization. In order to discover the hidden obstacles, the TOC prerequisite tree is exploited to map
out a prerequisite plan for examination. A total of 11 obstacles are identified and shown as hexagons to obstruct the
achievement of each intermediate objective (IO).

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Solution Finding
In order to find the solution, two separate issues need to be dealt with:

I. Develop action plans for achieving intermediate or ideal objectives, and


II. Take necessary actions to remove those obstacles

The solution scheme so developed according to the three key improving ideas to achieve their objectives and considering
the elimination of 11 obstacles proposes the following action plans:

1) Set up a culture of low cost with high quality and fool-proof safety requirements (not just cost reduction, need to go
back to the basics)

Follow up suppliers to work according to Toyota Supplier Quality Assurance Manual.


Reduce parts purchasing cost only under quality assurance.
Make sure the fresh operators follow quality on job training.
Confirm all operators follow assembly SOP every day

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Testing cars & safety parts under varying conditions
Re-visit Toyota Way & back to original basics of Toyota Production System.
2) Has proper check organism in place for any overly rapid expansion

Document assessed impacts & risks to the extent possible (create a risk/impact database)
Set up 5 years of business plan including new people development.
Conduct on job engineering training for all engineers.
Conduct on job supervision training for group leaders & supervisors.
Toyota should rethink its employees performance evaluation to eliminate employees hiding mistakes.
Set up models & functions complexity limitations for production & design.
Establish Organization Strategic Development Centre to prevent impact from any overly rapid expansion

3) Conducting corporate governance in western countries with western style (Future Model )
Communicate customers issues transparently, and deliver solutions that they need.

Need a major breakthrough in public relations: first, to improve dialogue with US safety regulators.
Perform the test-retest after repairs were carried out.
Forming a quality advisory group composed of respected outside experts will prevent Toyota from making a
misguided decision.
Build up local management team including quality & safety divisions.
Set up across departmental communication organism.
Organize cross functional task forces to immediately fix customers complaints.

In summary, there are all together 20 activities highlighted in the Transition Tree for Toyota backs to market lead, but they
may need to be broken down in detail according to the current severe situation of the auto market .

6. Conclusion
It can be concluded that The fuzzy dominance method is considered relevant criteria for fuzzy multiple attribute decision
making along with weights. Thus selection results derived from fuzzy multiple attribute decision making methods are
comparatively more significant than those obtained by other decision making methods. The proposed use of four TOC
trees instead of five TOC logic trees demonstrates that this model is more flexible.

Based on the study done we can understand that Icelandair can implement lean management into an airline cabin, for a
great. In the spirit of lean management, where continuous improvement should always be the first thing in mind, there are
some improvements that can be done. To make this an even greater success story, Icelandair can implement a better way
for the cabin crew to bring up their suggestions, and even provide an electronic process where employees could see if their
suggestion has been approved and where in the implementation process it is at each time.

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Similarly, Toyota can understand and capture how a complex problem beyond production field can be analyzed and dealt
with effectively using theory of constants and Lean Manufacturing. The study also answers, How to transform the low
cost oriented culture under overly rapid expansion with no globalization thinking to bring Toyota back to market lead?

In the end the big question still remains, Can Artificial Intelligence be used in situation of Toyota and Icelandair to solve
the critical managerial decision by providing a robust and instrumental base to make an informed decision.

7. References

Liker, J. K. (2004). The Toyota Way. Madison : McGraw-Hill.


Abdi, F., Shavarini, S. K., & Hoseini, S. M. (2006). Glean Lean: How to use lean approach in service industries?
Journal of Services Research ,
191-206.
Lankinen, P. (12. March 2015). Lean and CSI (Continual Service Improvemen) - Mission Impossible or
Opportunity. Reykjavk, Reykjavk,
Iceland. Stt 23. april 2015 fr https://vimeo.com/124095145
Hamilton, B. (12. march 2015). How to engage the entire workforce. Reykjavik, Iceland. Stt 22. april 2015 fr
http://leanisland.is/wpcontent/
uploads/2014/12/Bruce-GBMP.pdf
Womack, J. P., & Jones, D. T. (2003). Lean Thinking, Banish Waste and Create Wealth in your Corporation. New
York: Free Press.
Modig, N., & hlstrm, P. (2012). This is Lean, resolving the efficiency paradox. Stockholm: Rheologica
publishing.
Spear, S., & Bowen, H. (1999). Decoding the DNA of the Toyota Production System. Harvard Business Review ,
97-106.
Bartholomeuw, D. (17. may 2009). Lean Thinking in Aircraft Repair and Maintenance Takes Wing at FedEx
Express. Stt fr www.lean.org:
http://www.lean.org/common/display/?o=987
Turner, D. W. (2010). Qualitative Interview Design: A Practical Guide for Novice Investigators. The Qualitative
Report 15(3) , 754-760.
Koeningsberg, O., Muller, E., & Vilcassim, N. J. (2004). easyJet Airlines: Small, Lean, and with Prices that
Increase over Time. London: Londin Business School.
Andrew, K. (20. March 2015). RBS lean transformation. Reykjavk, Iceland.
N. Bunkley, Toyota Ahead of G.M. in 2008 Sales (The New York Times, January 21,2009).

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J. Cai and S. Hwang, Generalized and generative thinking in US and Chinese students mathematical problem
solving and problem posing, Journal of Mathematical Behavior 21 (2002) 401421.
J. F. Cox III and M. S. Spencer, The constraints management handbook, APICS Series on Constraints
Management (St. Lucie Press, 1998).
H. W. Dettmer, Goldratts Theory of Constraints: A Systems Approach to Continuous improvement (ASQC
Quality Press Milwaukee, Wisconsin, 1997).
E. M. Goldratt, Theory of Constraints (The North River Press Publishing Corporation,1990).

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