Lean Management
Lean management gives importance to both effectiveness and efficiency.
Lean Managers simultaneously take care of customer satisfaction and productivity/ cost reduction responsibilities.
Hence lean management leads to more productivity in the organization.
It is appropriate that NPC came out with the theme “Lean Management for Productivity Enhancement”
Management
Management is achieving objectives prescribed by owners/superiors, set by the manager himself and set in collaboration with the team members, together with the team with the resources provided to the team or acquired by the manager/team.
Soldier and Commander
Commander is a manager.
He may be a very good soldier himself.
Management is a lot more than being an expert doer.
But managers require the technical skills of a function they are managing.
Management Process
Planning
Organizing
Resourcing (Acquiring various resources including human resources known as staffing)
Directing
Controlling
Effectiveness and Efficiency
Managers have to be effective and efficient.
Effectiveness is achievement of objectives.
Efficiency is effectiveness combined with minimum consumption of resources.
No effectiveness - no efficiency.
Effectiveness first, efficiency next.
Scientific Management
F.W. Taylor advocated scientific management that highlighted the importance of efficiency in production shops.
Development of science of using machines and men in productive work is the theme of his management thought – scientific management
Taylor was responsible for development of industrial engineering discipline.
Principles of Management – Fayol
Management as a subject to be taught was advocated by Henri Fayol.
He gave 14 principles of management and explained management process.
He appreciated Taylor’s thought and advocated its wide adoption.
Principles of Management – Koontz
Koontz extended the 14 principles of management to around 30 and embedded them in the five functions.
He stressed importance of effectiveness and efficiency in his first chapter. Also included some principles of efficiency in his list.
Koontz – Definition of Management
Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.
Koontz on Productivity
In a real sense, this book (Management) is about the improvement of productivity.
But still, efficiency got neglected on a holistic basis in his book.
Industrial engineering is not mentioned in the book
Effectiveness and Efficiency as opposing ideas – An Error in Management Thought
Certain management authors positioned effectiveness and efficiency as opposing concepts.
They created tables showing differences between them.
Managers became isolated from the efficiency dimension.
Lean Management
Lean management philosophy brings efficiency back into the management discipline as a major component.
Managers must also have efficiency/productivity improvement skills
The Toyota Motors’ managers are to be given credit for this development.
Developments in Japan
Japanese executives captured the spirit of scientific management and industrial engineering almost from its birth in USA.
Industrial engineering was given a Buddhist religious dimension in the slogan-
Eliminate muda, mura, muri
Kiichiro Toyoda – Toyota Motors Founder
Kiichiro Toyoda was sure of the quality of his car.
But he was worried about its price.
He said unless its cost was reduced and price was reduced Toyota motors will not survive.
Effectiveness is there but Efficiency is the need.
So according to Kiichiro Toyoda, effectiveness was there.
Japanese customer is happy with the car.
But efficiency is not there.
Cost of production is high and hence price is high.
Manager’s Focus on Productivity/Efficiency
Therefore Kiichiro Toyoda’s focus shifted to productivity.
More and more managers were asked to focus on productivity.
Productivity in other words is cost reduction
Taichi Ohno
Taichi Ohno is a production manager.
Started concentrating on cost reduction.
Used Industrial Engineering.
Toyota Style Industrial Engineering.
Industrial Engineering
Industrial engineering is reducing cost of a product and increasing profit by increasing sales due to low prices.
Industrial engineering is profit making engineering (Ohno).
The other engineering is market-establishing and fulfilling engineering.
Industrial Engineering – Definition or Explanation by Narayana Rao K.V.S.S.
Industrial Engineering is Human Effort Engineering and System Efficiency Engineering.
JIT Systems - Lean Management
Kiichiro Toyoda looked around his production-distribution system for eliminating muda (excess resources).
Inventory seemed to him an excess resource.
He told his managers, that they have to think of JIT systems or low inventory systems.
Thus Kiichiro Toyoda is the man who first advocated JIT.
Taichi Ohno – JIT, IE and Productivity Activities
Reduce inventory – Create flow production.
Increase worker productivity
Use more automatic machines
Make a worker attend more machines.
Make machines intelligent. No defective unit production
Kaizen
The change must be good.
The change must be profitable.
Do proper economic analysis.
Importance of Engineering Economic Analysis.
Low “lot size” inventory requires lower setup times.
Reduce setup times.
SMED
Shigeo Shingo, now a famous industrial engineer, helped Ohno.
Setup times for big presses were reduced to 3 minutes from earlier 2 to 4 or even 8 hours.
Low Safety Stocks
Systems have to be reliable and production should not result in defective parts.
Involve people in process quality improvement - TQM
Machines should not breakdown.
Improve maintenance and involve production workers also in machine upkeep
OEE
Emphasize on high availability of machines for production.
Do preventive and planned maintenance.
Condition monitoring employed for planned maintenance.
Maintenance for high available production time.
Total productive maintenance.
Low Inventory
Only a day’s inventory as buffer
Between components and assembly section only a days maximum consumption of each item is kept (as an illustration).
Components are made in small batches as per the use on that day.
Communication by Kanban.
Low inventory systems are lean systems
What is a lean system?
A system that satisfies customer requirements with a very low level of inventory.
It is a system that uses less resources than mass production systems based on traditional inventory principles.
Hence lean systems produce products at lower costs vs. high inventory systems.
Lean Manager
Lean managers use all management principles and techniques along with all the industrial engineering tools and also tools specially developed in Toyota Production System and its further development as Lean Enterprise System (Womack and Jones, The Machine that changed the World)
Is Lean Applicable to Steel Plants?
Yes.
Tata Steel is itself following some lean practices.
Its managers are talking of lean at least since 2001. May be lean movement started some time before.
Recent Publications
2003 Phd thesis on application of lean in a steel plant.
Lean supply chain practices in steel plants
Value stream mapping and reduction of production lead time in steel plants.
Optimizing inplant supply chain(PPC) using Lean.
Traditional Industrial Engineering Tools Applied in Lean Systems
Value engineering
Process and Operation Analysis (Method Study )
Standardization of Processes and Working Conditions
Motion Study and Principles of Motion Economy (5S)
Standardization of the Process
Time Study and Time Standards
Optimization and Operations Research
Statistical Methods to Control Variation
Engineering Economics
Ergonomics
Simulation
A Different IE Tool Classification
Product Design Efficiency Engineering
Production Process Eff. Engg.
Human Effort Eff. Engg.
Efficiency Engg. Of Various Resources
Process Efficiency Engineering
Technical Processes
Business Processes
Managerial Processes
New Ideas and Tools in Lean Systems
Just in Time Production - Change in Inventory Control Practices
Just in Time Supply
Kanban Communication System - Change in Production Planning and Control Procedure
Special Focus on Seven Wastes
Zero Defect Movement
Total Quality Control (Inspection by production persons only - no additional inspector) Total Productive Maintenance (Involving production operators significantly in preventive maintenance) Aggressive Kaizen (Team leaders responsible for monthly improvement in processes)
Visual Communication (Standard Work Sheets, Daily Targets and Production, and Problems)
Value Stream Mapping to identify and remove obstructions to flow
SMED (Application of methods study to setup time reduction)
U-shape layouts
Poka Yoke
Leveled production or production smoothing
Mixed model assembly or flexible production facilities
Supplier process improvement
Supply chain cost reduction led by Assembler.
Seven Waste Model – Waste and Elimination Principle or Technique
Waste of overproduction - One cannot produce without a production Kanban
Waste of time on hand (waiting) - Multiple machines to an operator, all producing as per tact time.
Waste in transportation - Machines in line or flow placed close together
Waste of processing itself - Standardized Methods
Waste of stock on hand - JIT system
Waste of movement (of workers) - Machine layout changes
Waste of making defective products - Problem solving approach to produce zero defects. 5 Why’s?-Poka Yoke
Full Book "The Guide to Lean Enablers for Managing Engineering Programs"
http://dspace.mit.edu/bitstream/handle/1721.1/70495/Oehmen%20et%20al%202012%20-%20The%20Guide%20to%20Lean%20Enablers%20for%20Managing%20Engineering%20Programs.pdf
