How to Achieve 20 percent Growth within a Year ?
How to Achieve 20 percent Growth ?
Are we aware how much money is company losing due to wasted effort and low productivity of knowledge workers employed in business processes?
How many opportunities are lost?
How many customers are irritated?
Are we running a production line without knowing each day what to make and in what quantities.
The lack of that critical information guarantees uneven production, overburdened workers, and waste ñ a disaster
We have to hence understand the degree of change necessary to be a truly Lean organisation or culture or doing Kaizen regularly in the workplace
(a) Value: The First Lean Principle with value only being defined by the end customer.
Aim is to continuously improve product development, order-taking and production activities. These factors produce steady results along the value path to perfection.
It is only meaningful when expressed in terms of a specific product which meets the customer’s needs at a specific price at a specific time. We must “talk” to their customers and together, must find new ways to define value along the value stream. Furthermore, the ability to find more customers and to acquire additional sales rapidly is critical to the success of Lean Thinking
This value is created by the manufacturer or the organization. is a manufacturing lifestyle dedicated to the elimination of waste. In theory, manufacturers should not produce more than the customer’s need, since inventory is a form of waste.
The most important task in specifying value, once the product is defined, is to determine a target cost based on the amount of resources and effort required to make a product of given specification and capabilities if all the currently visible waste, or muda, is removed from the manufacturing process. Performing this activity is the key to driving out the waste. /
The organization can look at the current bundles of pricing and features being offered to the customers by conventional firms and then ask how much cost they can absorb or take out by the full application of Lean. Lean organizations set targets below the costs borne by competition and as a result, the organization has choices;
Reduce prices (another way to increase sales volume and utilise freed-up resources.
Add features or capabilities to the product (which should also increase sales).
Add services to the physical product to create additional value (and jobs).
Expand the distribution and service network (increasing sales, although with a time lag).
Take profits to underwrite new products (which will increase sales in the longer term).
The target price becomes the lens for examining every step in the value stream for product development through to production. Constant evaluation of the value stream becomes the key to meeting and challenging the cost target of
the value defined product.
(b) The Value Stream: The Second Lean Principle
(i) The value stream is the set of all the specific actions required to produce a specific product (whether a good, a service, or, increasingly, a combination of the two) through the three critical management tasks of any organization –
The problem-solving task running from concept through to detailed design and engineering to product launch,
The information management task running from order-taking through detailed scheduled delivery
The physical transformation task proceeding from raw materials to a finished product in the hands of the customer.
(ii) The value stream analysis will almost always show that there are three types of actions occurring along the value
stream; look at the whole – the entire set of activities along entailed in creating and producing a specific product, from concept through to detailed design to actual availability.
Many steps will be found to unambiguously create value
Many other steps will be found to create no value but to be unavoidable with current technologies and production assets.
Many additional steps will be found to create no value and to be immediately avoidable.
(iii) The objective in creating a value stream map is to define exactly every step in the manufacturing process
required to design, order, and make a specific product. This action can be divided into three important steps;
The process or steps that actually create value as perceived by the customer.
The steps that add no value, however, they are required in the process of manufacture and cannot be eliminated in the process immediately.
The steps that do not create value as perceived by the customer and can be eliminated immediately.
(iv) Once these steps are defined and the third step is removed, the path is clear to focus on the remaining non-value-creating steps through the use of flow, pull and perfecting the techniques as prescribed by lean principles
1. Material procurement
2. Inspection and issue procedures
3. Production planning and control system
4. Quality control methods
5. Process of design & evaluation
6. Management information system
7. Labor relations & compensation system
8. Culture of productivity & quality
( c) Flow: The Third Lean Principle
When the value is accurately defined by the organization, the value stream mapped for the particular product family and all the wasteful steps are eliminated, however, the remaining value-creating steps must be made to flow.
The Lean alternative is to redefine the work of functions, departments and organisations so that they can make a positive contribution to value creation and to speak to the real needs of the employees at every point along the value stream so that it is actually in their interest to make value flow. This approach not only requires the creation of a lean enterprise for each product but also the rethinking of conventional organizations, function, careers and the development
of a lean strategy for the organization.
One of the key approaches to reducing waste is contained in the application of just-in-time (JIT) production. JIT dramatically reduces batch size, which results in proportional reductions in both inventory and cycle time. A second key element of JIT in the creation of flow. Flow occurs, when the value is being added continuously – work products never sit idle and motionless. This flow is based on control systems based on “pull” rather than “push”
Lean enables small lot sizes by reducing set-up time. Small lot sizes directly shorten cycle times, which in turn improve efficiency, and provide the rapid feedback that improves quality. Higher quality leads to further reductions in lot size because it reduces variability and queuing behaviour
(d) Pull: The Fourth Lean Principle
The first visible effects of converting from departments and batches to product teams and flow is that the time required to go from concept to launch, sale to delivery and raw materials to the customer falls dramatically. When flow is introduced, products requiring a significant time to produce are completed within shorter periods.
(e) Perfection: The Fifth Lean Principle
As organizations begin to accurately specify value, identify the entire value chain [stream], make the value-creating steps for specific products flow continuously and let customers pull value from the organization, something very odd begins to happen – it dawns on those involved that there is no end to the initial improvement
Transparency, the fact that everyone in a Lean system can see everything making it easier to discover better ways at doing the daily things in order to create value for the customer.
The areas will be work processes, scheduling, inventory, equipment, lay out, material handling, employees, quality, product design, supplier, tools and techniques, customer ergonomics, safety , management and culture
Employees who are motivated and empowered are essential since people are the key element in lean manufacturing.
Unexpected machine downtime would result in line stoppage and decrease productivity. Equipment is a vital area where preventive maintenance and reduction of setup time play an important role to ensure the success of lean manufacturing.
Appropriate scheduling methods such as pull system could reduce inventories and avoid overproduction.
Quality is critical in lean manufacturing because poor quality management would result in many wastes such as scraps and rejects
Suppliers encourage developing capabilities of JIT production as well as JIT delivery in order to enhance long term competitiveness
Material handling is identified as important in lean manufacturing because material movement and waiting time are wastes that need to be minimized
Layout determines the travelling distance and processing sequence. An inappropriate layout would result in unnecessary transport or conveyance which is a major waste.
It is also crucial to standardize work processes and eliminates non-value added activities in order to achieve lean
There is a need to maintain the inventory at the minimum level because excess inventory would require more valuable space and result in higher carrying cost
Product design is also important as the choices of product structures and materials would affect the production methods and cost.
Setting up good relationships with customers would enable an organisation to meet customers’ needs and predict their demands accurately.
Safety is the foundation of all activities. Ergonomics is also important as it helps humans to improve productivity, reduce injuries and fatigues. By using ergonomic features, unnecessary motions (one of the major wastes) are reduced. This helps to reduce mistakes caused by human errors thus enhancing the quality of products
(f) Education and Training
The most important element in any organizational transformation initiative is that of education and training,These are especially critical in transitioning an organization from a mass-production paradigm to a Lean-production paradigm.A lean transformation is not complete until it reaches beyond the immediate company to include customers and suppliers in the overall Lean system design.Only in this way can the complete value stream be structured and optimized in accordance with Lean principles and practices
Conclusion There is only one effective organizational structure for anyone else seeking to become Lean and that is one built around Value Streams. The value stream is the core structure of a Lean Organization.The objective is for organization is to become world class, create a seamless process of taking a product concept to customer deliver. Remove waste that occurs in all functional interfaces of the organization. Identify the set of tasks to be optimized and synchronized. Performance metrics are only useful at the value stream level. Lean Organizational Structure is the only structure that can bring all of the best thinking and best efforts in the organization to bear on sustainable, bottom line improvements
