Productivity enhancement using lean

Advanced Studies in
Operations Management
Productivity Enhancement
By: Sherin Haroun El Rashied

Index
01
02
03
04
What is Productivity?
Productivity Importance and
Misconceptions
Introduction to Lean
Case Study: Jaguar Lean Production

Means doing something better today than yesterday.
Means continuous improvement.
Describes various measures of the efficiency of production.
Is an attitude of mind.
Productivity
Productivity

The wealthy nations they are the productive nations”
“Productivity makes you wealthy, it allows you to support high wages, it allows you to support high returns on capital”
Michael Porter
•Output ÷ (single input)
Partial Productivity measure
•Output ÷ (multiple inputs)
Multi-factor Productivity measure
•Output ÷ (total inputs)
Total Productivity measure
Productivitymeasured

Types & Importance
of Productivity
Individual Productivity
Branch Productivity
Divisional Productivity
Company Productivity
Industry Productivity
National Productivity
2
1
4
5
6
3
Types of Productivity
Higher
Productivity
Higher
Productivity
Higher GDP
per capita
Higher
standard of
living
Importance of Productivity

Productivity Improvement
Develop productivity measures
Determine critical (bottleneck) operations
Develop methods for productivity
improvements (Use IT)
Establish reasonable goals
Get management support
Measure and publicize improvements
1
2
5
6
7
3
4

Micro-Level
Productivity Indicators
The productivity increase is due to :
Ratios, which measure:
• Competitiveness
• Labor productivity
• Capital productivity
• Business Returns & profitability
• Process Efficiency

Misconceptions about
Productivity
Misconceptions about
Productivity
Productivity is only for
commercial enterprises
and not for the public
sector
Productivity
=
Production
Productivity means
only Labor Productivity
Productivity can be
increased by getting people
to work harder(working
more intelligently not
harder
Productivity is relevant
only in manufacturing
Productivity and
Quality are tradeoffs.
People fear, hate, feel let
down, and complain about
productivity, very often
because they have
misunderstood it.

using LEAN
• To survive in the market, the goal is to produce goods at the least time possible and at the lowest cost.
• Thus Lean implementation is the best decision for productivity improvement.

A new management style, known as lean operations management,
is focusing on greater efficiency in all aspects of an organization.
This style helps create growth among organizations that are willing
to simplify production and service in whatever ways possible in
order to get rid of waste.
What is LEAN?
The core idea is to maximize customer value while minimizing
waste. Simply, lean means creating more value for customers with
fewer resources.
The word transformation or lean transformation is often used to
characterize a company moving from an old way of thinking to
lean thinking. It requires a complete transformation on how a
company conducts business.
 Lean means manufacturing without
waste
 Lean makes use of many tools &
techniques
 Continuous improvement in every
stage of product by utilizing minimum
time & cost
using LEAN

Lean History
The
history of
Lean
Manufactu
ring goes
back to at
least 1850
when Eli
Whitney
perfected
the
concept of
interchang
eable
parts.

Lean
Objectives & Principles
Objectives
of Lean
Principles
of Lean
• Lean manufacturing focuses on reduction of all kind of waste to make
continuous flow of the work.
• Continuous improvement in every stage of product by utilizing minimum
time & cost.
• Specify value from the standpoint of consumer.
• Identify the value stream through the steps required.
• Make the value creation flow in accordance with the consumer pull.
• Peruse perfection by seeking continuous improvement in all aspects.
• Encourage employee participation to gain their energy into lasting improvement.

Misconceptions about Lean
Lean
manufacturing
1
Lean startup
3
Lean
construction
4
Lean laboratory
5
Lean software
development
7
Lean
integration
8
Lean higher
education
9
Lean Six Sigma
10
Lean accounting
11
Lean product
development
2
Lean services
6
Lean Government
12
A popular misconception is that lean is suited only for manufacturing. Not true. Lean applies
in every business and every process. It is not a tactic or a cost reduction program, but a way
of thinking and acting for an entire organization.

Lean manufacturing
The 7 kinds of deadly waste
Lean manufacturing is a methodology
that focuses on minimizing waste
within manufacturing systems while
simultaneously maximizing
productivity. Also known as lean
production, or just lean, the
integrated sociotechnical approach is
based on the Toyota Production
System.
Lean manufacturing was introduced
to the Western world via the 1990
publication of The Machine That
Changed the World, which was based
on a five-year, $5 million MIT study of
the future of the automobile that
detailed Toyota's lean production
system. .

Steps to achieve
Lean system
• Design a simple manufacturing system
• Recognize there is always a room for improvement
• Continuously improve the lean manufacturing system design
Lean Process
Map the
process
Step
1
Determine
capacity
&
customer
demand
Step
2
Identify
waste
Step
3
Work to
demand
Eliminate
disruptions
&
abnormali
ties
Step
4
Improve
flow,
shorten
lead time
Step
5
Eliminate
remaining
waste
aggressively
Step
6

Pros and cons
of using Lean
BenefitsBarriers
1.Utilization of space
2. Inventory reduction
3. Waste reduction
4. On time delivery
5. Quality products
6. Customer satisfaction
7. Productivity improvement
1. Lack of awareness
 No regular and proper training
offered
 Wrong concept about lean
among employees
2. Shortage of basic infrastructure
 Wasteful movement due to
large distance between
supporting departments
 Time wasting during drifting
tools from one place to another
3. More work in progress waiting
for availability of next facility to
carry out next operation

Lean
management & techniques
Lean management
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.
Lean techniques
The lean techniques is a way to think about
the startup process that emphasizes the
business model over the business plan, and
encourages a process of customer discovery
and development, and iteration to achieve
the right product/market fit.

Some Essential LEAN Techniques
Just In Time Technique
• A production strategy that strives
to improve a business (ROI) by
reducing in-process inventory and
associated carrying costs.
• JIT is “Producing the necessary
units, in the necessary quantities
at the necessary time with the
required quality”.
• To meet JIT objectives, the process
relies on signals or KANBAN
between different points in the
process, which tell production
when to make the next part.
• It is the frequency at which a
product/service must be
completed in order to meet
customer needs.
• The purpose is to prevent
inventory buildups and
shortages.
• Takt-time is one of the Lean
techniques in the Lean
Toolbox.
• TAKT Time = Available Time /
Required Output
Lean Techniques Takt-time

Case Study: A Jaguar Lean production

Introduction
• Jaguar is part of the Ford Group.
• Ford has for a number of years been improving its production methods, particularly by introducing manufacturing
methods developed in Japanese industry.
This includes lean manufacturing (a system pioneered at the Castle Bromwich factory).
• Ford workers there will be developing a Jaguar motorcar, therefore the skills developed at Castle Bromwich need to
be successful at Halewood.
• This case study focuses on the way in which Jaguar has employed lean manufacturing processes. This underpins
the success of the new Jaguar S-Type production line at its Castle Bromwich factory in Birmingham.

The Change Process
1. Transform patterns of working relationships.
2. Matching supply to demand “Just in time”
3. Visible management/visual factory
4. Ownership of work (Teamwork)

• Workers operate in small teams with a group leader
An approach known as cellular working
• The teams (cells) were introduced to a series of new tools
Designed to enable them to work more effectively.
• Teams were trained in their work areas rather than classrooms
so they could see how to apply the new tools in a work based
context, and feel comfortable and involved
Transform patterns
of working relationships

Previous Structure
• Factory had been organized using a
hierarchical approach with one
supervisor and one group leader taking
responsibility for up to 30 production
line workers.
• The old approach was characterized by a
‘tell and do’ approach with instructions
being fed downwards in order to exercise
control from above.
Todays Structure
• Team leader works with a small group of
seven team members.
• Group members are expected to take
responsibility for their own work and to use
team leaders for support (i.e. in a helping
role).
• Jaguar workers have enthusiastically adopted
the new approach as it allows for greater
involvement and responsibility for improving
their work patterns.
Transform patterns
of working relationships
Increased productivity and quality is clearly visible as a consequence of the new structure.

Matching supply to demand
“Just in time”
This cuts out waste in a number of ways, for example:
less floor space is required
cells are able to work in an uncluttered work area
walking (physically moving about between operations) is minimized
fewer components are damaged from standing around in batches on the
workspace floor.
The solution is to run the production line at the speed necessary
to match demand patterns while retaining quality.

Matching supply to demand
“Just in time”
Traditional way
Groups of employees
had focused on set
processes in the
production of Jaguar
cars using batches of
components.
Cramped working environment
and
less floor space.
New way
Cut down stocks of
components in the
workspace to the
numbers required to
keep production
flowing smoothly
Teams press a signal
button to call for
fresh stocks when
they are required.
A quick response from a
central store enables new
parts to arrive at work
stations ‘just-in-time’ for
them to be used

Visible management/visual factory
A system of ‘visible management’ enable everyone involved in the
process to understand how individual parts of the plant are
performing so they can contribute to meeting performance
requirements.
• The Control Board
• Open Information Centers
Jaguar has adopted a Japanese word ‘gemba’ — a new approach to
production management and supervision, means to go see, develop,
understand, grasp, and solve problems when they occur rather than
sit in remote offices.
This makes it possible for production managers and supervisors to
identify problems more easily.

The Control Board is a quick and visual tool for monitoring
where problems occur on the production line. On the Jaguar
production line, cars flow along a line with teams processing
the work on the car in an ordered sequence.
It is essential that each line worker completes their specialist tasks to
the highest quality before the car moves to the next position on the
line. If a worker is having a problem they pull a cord which alerts their
team leader who will provide assistance. If the team leader, who is
more knowledgeable and multi-skilled than other production line
workers, is able to quickly solve the problem he pulls the cord a second
time and the line continues to flow forward.
However, if the problem cannot be immediately solved the whole line
will halt and then wait while the problem is solved. It is estimated that
typically there will be 130 - 150 pulls of the cord per shift. The running
total is recorded on Control boards indicating the performance of each
line. This makes it possible for production managers and supervisors to
identify problems more easily.

Open Information Centers
• Placed in the work areas of the factory.
• These Information Centers are based on a ‘three minute
management approach’. (to understand work related visions
and goals, issues and problems affecting particular sections of
the work area.)
• using clear and graphic charts to highlight issues, events and
progress.

Ownership of work
• Work must be standardized
• Everyone knows what they are accountable for and they can
ensure quality standards.
• Within each cell, team members will be responsible for
writing their own work element sheets.
Purpose of work teams:
• team takes ownership for the processes and the amount of
time involved in carrying out work.”
• discuss their work in order to identify ways of reducing the
time spent on non-value added related activities, i.e. to cut
out waste - the purpose of lean production.

Ownership of work
Another idea from Japan - the ‘Yamazumi Board’ –
• The responsibility of each worker is outlined in a series
of work elements.
• These work elements are shown in a vertical column
on a Yamazumi board which is a flat white screen.
• The value added activities of each employee are shown
in green and non-value added activities in red.
• The height of each vertical element represents the
amount of time needed to carry out the element e.g.
nine seconds.
By examining the Yamazumi board it is possible to
reallocate some work elements from some production
workers to others in order to create greater fairness of
work distribution.
Yamazumi Board’

Conclusion
• Lean production involves the standardization of work processes to cut out waste.
The standard is the best identified method of operation at a particular moment in time and one that
will be continuously monitored and improved by the individual operator.
• The teamwork approach is a recognition that the best way to achieve this is for all members of the
workforce to be involved to achieve a quick response, It has enabled jaguar to effectively develop cars
with less resources, time and wastes.
• The key to lean production is to identify which processes in the organization of production add value to
the production process.
Processes which do not, can be reduced or eliminated so that labor & machinery can focus on added
value activities.
This does not mean that production line workers and machinery have to work harder - rather
they need to be able to work ‘smarter’.

Results
Jaguar S-type
Lean production has enabled Jaguar to cut out waste in the production of the Jaguar S-type at
Castle Bromwich. Ford is now seeking to spread the message about lean production by
incorporating a total of 400 of its Halewood employees into working at Castle Bromwich. The
successful implementation of lean production at Jaguar will form the benchmark for the systems
introduction at Halewood.
Lean manufacturing requires ‘thinking’ at all levels within the organization.

Productivity enhancement using lean

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