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MODULE-4

Strategic issues:
- Actions
- Issues
- Focus
- Leadership
- Management of teams
– Training.
Focused factory concept
Availability,
Variability,
Lean implementation strategies,
Causes for failures,
Sustaining lean,
Constraint management
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Actions
• While every individual or company embarking
on a lean journey will have different
challenges based on their particular set of
circumstances, there are several crucial steps
that can help reduce resistance, spread the
right learning, and engender the type of
commitment necessary for lean enterprise

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• Find a change agent, a leader who will take
personal responsibility for the lean
transformation.
• Get the lean knowledge, via a sensei or
consultant, who can teach lean techniques and
how to implement them as part of a system, not
as isolated programs.
• Find a lever by seizing a crisis or by creating one
to begin the transformation. If your company
currently isn’t in crisis, focus attention on a lean
competitor or find a lean customer or supplier
who will make demands for dramatically better
performance.

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• Forget grand strategy for the moment.
• Map the value streams, beginning with the
current state of how material and information
flow now, then drawing a leaner future state
of how they should flow and creating an
implementation plan.
• Begin as soon as possible with an important
and visible activity.
• Demand immediate results.
• As soon as you’ve got momentum, expand
your scope to link improvements in the value
streams.

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ISSUES
• Lean manufacturing centres around
minimizing waste and reducing costs through
automation and continuous improvements in
operational efficiency.
• Lean manufacturing relies on integrated
technological systems, smaller workforces of
highly trained employees and a radical shift in
company culture.

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• Each of these elements can present distinct
challenges that must be overcome to achieve
a truly efficient lean manufacturing system.
• Understanding these key issues is a vital
building block for developing your own lean
implementation plan
Strategic Operational
Issues Tactical Issues Issues

Operation MRP
Capacity
Strategy

Process Location JIT


Analysis
Inventory TOC
Manufactur
ing Design Aggregate 7
& Selection Planning
• 1. Supply Chain Issues : Lean manufacturing
includes the minimization or near elimination
of storage time for incoming materials and
outgoing products. Implementing a just-in-
time ordering system is necessary to ensure
that raw materials are constantly coming in at
the perfect rate to meet operational demand.
• This requires close coordination with
suppliers, which can introduce a host of
issues, since project managers in both
companies must coordinate with each other
while managing their own side of the
implementation project.
• The same can be true on the outgoing end, as
well. Serving business customers with just-in-
time ordering systems can require your
business to act as a just-in-time supplier, filling
orders frequently and automatically

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2. Employee Development
• Implementing lean manufacturing methodologies
in an existing business creates a talent gap that
must be crossed.
• The technological infrastructure required to
manage supply-chain issues while maintaining
automated production and quality-control
systems requires more-educated and -trained
employees than traditional assembly line setups.
Lean manufacturers require highly skilled and
educated employees to inspect, repair and design
the layout of automated production technology
regularly.

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• Technical employees will likely require safety
certifications and special licenses to operate
and maintain such systems, and they demand
much higher compensation than general-
labour employees.
• 3. Cultural Issues
• Going lean introduces a revolutionary shift in
the way work is done in a manufacturing
organization. Implementing lean
manufacturing requires a smaller number of
employees to take on a wider range of
responsibilities.

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• It involves a strict and meaningful
commitment to waste reduction, which can
mean changing employees' familiar work
processes.
• It should involve reworking incentives and
bonus structures to reward behaviour and
ideas that reduce costs, production time and
waste.
• This requires true buy-in at all levels of a
company, from senior managers to front-line
machine operators. Successfully developing
lean manufacturing processes requires true
commitment from everyone involved.
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4. Technological Challenges
• Lean manufacturing can require a significant
upfront investment in technology.
• Choosing the right systems is crucial for
success as a lean manufacturer, since you will
be relying on your systems for the continued
efficient operation of your business.
• One of the tenets of lean business practices is
to automate as much as possible, making you
more reliant on technology than you may have
been in the past.
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Focus
The 4 Main Focus Points of Lean Mfg.: While every
company embarking on a lean journey will have
unique challenges to face, concentrating on the
following crucial areas will help to reduce resistance
to change, simplify learning and training, and
promote commitment to the effort:

1)Effective leadership, (2)Team Work Environment, (3)


Communication channels and (4) Continuous
Improvement of Company Processes

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Effective Leadership.
• The first focus point is providing effective
leadership that will set the standards for the
program and the organization.
• Solid leadership can precisely communicate
the vision of the lean manufacturing program,
build trust, and inspire and coach employees
when it comes to making process changes,
reviewing findings, and making important
improvements to the process.

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Team Work Environment.
• Team work environments help to foster better
employee/management relationships where
employees can contribute to the overall success
of the organization.
• Team work environments value diversity, utilize
the knowledge of highly skilled workers by
promoting accountability and responsibility for
work, and support the continuous development
of the workforce

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Communication Channels.
• Communication channels essential for the
transfer of knowledge between management,
shop workers, and office staff.
• From project implementation to project
completion, communication is important in
identifying critical issues, developing new
processes, and executing new programs and/or
changes.
• Open communication helps to make the decision-
making process simple and keeps employees
better informed.

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Continuous Improvement of Company
Processes.
• In order for lean manufacturing to be successful,
products must be designed and built right the
first time with all unnecessary steps and waste
removed from the process.
• Lean manufacturing is a commitment to the
elimination of waste and problems, improvement
throughout supply chain, control of JIT delivery of
materials, training and development of workers,
and learning from suppliers and customers alike.

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LEADERSHIP
• Seven Essential Qualities of a Lean Leader

P • PERSPECTIVE

R • RESPONSIBILITY

O • OPENNESS

F • FLEXIBILITY

I • INERTIA

T • TEAMWORK
S • SELF KNOWLEDGE
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• Perspective: The lean leader should hold a
long-term perspective and guide their
organization to make decisions that are in
their best interests over the long haul.
• Responsibility: Lean leaders need the quality
of strong responsibility for social
responsibility, in order to earning lasting
results and respect
• Openness: Leaders must be open to change.
Trading on the market called change never
closes so the leaders need to always be
prepared to do business there
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• Flexibility: A lean leader must be a skilled two-way
communicator, able to quickly adjust to differences
in styles.
• Flexibility for a lean leader is the ability to
accommodate differences in style, communication,
and circumstance without reverting to type and
defining the problem as it fits their favoured personal
solution.
• Inertia: The essential quality of a lean leader is
steadiness, confidence, persistence, constancy of
purpose, sticking to the principles and process,
unless a sufficient external learning influences them
to change their ways. Inertia is widely
misunderstood. Leaders should have more of it.
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• Teamwork: An effective lean leader must be
willing to identify, influence and be influenced
by the needs to of their team. A lean leader
effectively links one's own goals with the goals
of the group, removes barriers to enable
teamwork, and identifies strongly with the
team but does not crowd it.
• Self knowledge: Before a leader can take
control of the organization and effectively lead
the team, she needs to get control of herself.
True self-knowledge should lead to humility.
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MANAGEMENT OF TEAMS
• The team in an organization is like the family in a
society. It is the fundamental building block of trust
and competence.
• The team is the heart of the social system both at the
front line level and at all levels of management.
• Three characteristics a group are required to be
considered a real team, and to maximize its
potential:
• A meaningful and common purpose
• Adaptable skills
• Mutual accountability

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• The most effective organizations are all built on the
foundation of effective teams.

• The majority of companies implementing lean organization


are not achieving the results they could achieve because they
are primarily focused on the technical things which form only
half the organization.

• The other half is the human side, the culture of the


organization. This is the hard part because it is about you –
how you think, feel and behave.

• It is about the relationships between team members,


between different functions and levels in the organization. It
is about trust. This is the hard part.
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• Lean Team Management for most companies is a
change in culture.
• It is a culture of responsibility for performance at
every level of the organization.
• It is a culture that is very focused on data, the facts
of performance.
• It requires everyone to know and serve their
customers, internally and externally
• Lean is not a set of problem-solving techniques.
• Lean is a culture that is practiced top-to-bottom, left-
to-right, in the organization.

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• Effective team management helps not only how to
establish a productive environment and exploit
group dynamics, but also provides practical
techniques for you to try in different settings

Benefits:
• Team management helps to remove bottle necks.
• Results in better work with innovative ideas.
• It reduces time wastage and increases production.
• Employee job satisfaction gets boosted.

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The Team Leader

• A team leader is someone who is wholly accountable


for their team’s performance.

• They participating fully in the hiring and firing


process and they have a high level of involvement in
the planning processes that affect their team.

• This role has a far greater emphasis on leading


people than on developing the incumbent’s technical
capabilities.

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Typical Team Leader Tasks
• Preparing for and the Facilitation of meetings
• Building effective teams
• Developing and coaching team members
• Managing
– One on ones
– Fire side chat
– Performance feedback
– Performance Appraisal
– Managing poor performance
– Managing undesirable behavior
– Managing unplanned absence

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• Managing budgets or costs
• Planning work
• Planning Resources
• Driving for results
• Making decisions
• Analysis and problem solving
• Managing change
• Managing quality
• Managing safety
• Personal development

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TRAINING
• Training is done by managers and team leaders
– Experienced Group Leaders, Team Leaders, senior
executives, managers, engineers and specialists become
mentors and trainers.
– Training on many occasions is conducted one-on-one
– This training process is very similar to a trade
Apprenticeship program, where an experienced
Craftsman takes a student “under his wing” and teaches
him knowledge and skills required to perform a job.

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• Training is on the job

– OJT consists not only of training on how to


perform you specific job, but also on the proper
use of tools, equipment, observation of safety
rules, quality procedures, HR policies, preventive
maintenance, ordering materials and reporting
problems.
– The training is done by observing, trying out and
practicing different work elements of a job, using
Standardized Work sheet as a guideline.

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• Understanding principles of TPS
– Each new employee is assigned a trainer who is
responsible not only for teaching the job elements
and job content, but also explain how to perform
the job in accordance to TPS rules and policies.
– The role of the Trainer is to explain to the Trainee
why certain work elements of a job need to be
done in a certain way.
– At the end of the initial OJT employees are
expected to have fundamental knowledge of basic
principles of TPS and Toyota’s philosophies ,
namely

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• Teambuilding
• Concept of a single piece flow
• What is continuous flow processing
• How does the Pull system work - including
Kanban
• What is Takt time
• How to achieve the highest quality of the
product
• What drives the costs
• How to identify, report and solve problems
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• What are the seven types of Waste
• What is Kaizen
• Three rules of Just-in-Time
– Produce only what the Customer needs
– In the right quantity
– At the right time

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Necessary skills of a trainer
• Toyota requires five basic levels of knowledge and
skills from a trainer.
1. Understanding and Knowledge of Role and
Responsibilities
2. Understanding and Knowledge of Job Elements
3. Training Skills
4. Leadership Skills
5. Skills in Kaizen

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Focused Factory concept
• The conventional factory attempts to do too
many conflicting production tasks within one
inconsistent set of manufacturing policies.
• The chief result is that the plant is likely to be
noncompetitive because its policies are not
focused on the one key manufacturing task
essential to successfully competing in its
industry.

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Focused factory
• Production facility organized around a specific,
narrowly-limited set of resources, to provide a
narrow range of services or operations
in manufacture of a few products at low-cost and
high-throughput

• A Focused Factory strives for a narrow range of


products, customers and processes. The result is a
factory that is smaller, simpler and totally focused on
one or two Key Manufacturing Tasks

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• Professor Skinner summarizes it best:
• "A factory that focuses on a narrow product
mix for a particular market niche will
outperform the conventional plant, which
attempts a broader mission.
• The reason behind this is
– its equipment, supporting systems and procedures
can concentrate on a limited task for one set of
customers,
– its costs and especially its overhead are likely to
be lower than those of the conventional plant.

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– But, more important, such a plant can become
a competitive weapon because its entire
apparatus is focused to accomplish the
particular manufacturing task demanded by
the company's overall strategy and marketing
objective.“
– The focused factory will out-produce, undersell, and
quickly gain competitive edge over the complex
factory
– The focused factory does a better job because
repetition and concentration in one area allows its
work force and managers to become effective and
experienced in the task required for success.
– The focused factory is manageable and controllable.
Prof Skimmer-HBR 39
Several forces and factors diffuse the
original focus
• Inconsistent Policies
• Professional Isolation
• Gradual Mission Change
• Failure To Design The Task
• Unrecognized Inconsistencies
• Product Proliferation
• Market Proliferation

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The Focused Factory rests on three underlying concepts:
• There are many ways to compete besides low cost.
• A factory cannot perform well on every measure.
• Simplicity & repetition bring competence

Benefits
• Customer satisfaction
• Lower investment required
• Less frustration.
• A focused manufacturing facility is smaller and simple

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• Avoids conflicting job duties and inconsistent
policies
• The factory is designed to do a better job at lower
cost
DISADVANTAGES
• Focused manufacturing also is less capable of
creating customized products for high-end
customers
• Focused manufacturing includes all steps of
product fabrication, which can lead to
bottlenecks at slower parts of the process.
• Diversification is not possible

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Characteristics of The Focused Factory

• A Focused Factory strives for a narrower range


of products, customers or processes.

• The result is a factory that is smaller, and has


fewer Key Manufacturing Tasks.

• It optimizes performance on a few dimensions


while sub-optimizing on others.
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Aircraft design offers an analogy.
• Aerospace engineers can design an aircraft that
flies at Mach 3.0.
• They can design an aircraft that carries 350
people.
• They can design an aircraft that circles the globe
on a few hundred gallons of fuel.
• They can design an aircraft that lands on a 500
foot runway.
• BUT…They cannot design an aircraft that does all
of the above because the available technology
has limits.

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AVAILABILITY
In its simplest form, availability measures the
uptime of a machine or process against the
planned production time. As one of the
factors of Overall Equipment Efficiency (OEE),
Availability is expressed as a percentage. The
uptime is calculated by taking the difference
between the planned production time and
total duration of the downtime events that
occurred during the planned production period.

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Availability
• Availability when a system is functioning as it is
required to, then the system is said to be available
and when system has breakdown or is in repair then
it means that the system is not available.

• Types of Availability:
– Inherent
– Achieved
– Operational
• Inherent :Probability that system shall be
available for operation without any preventive
maintenance at any given time.
• Ai = MTBF/(MTBF+MTTR)

• Achieved Availability: Probability that system


works under a said condition in a given time.
• Aa= MTBM/(MTBM+M)
• Operational availability: The probability that a system
will operate satisfactorily under the said condition at
any given time.
• Ao= MTBM/(MTBM+MDT)
• Where MTBF = Mean time between failures
• MTTR=Mean time to repair
• MTBM=Mean time between maintenance
• M= Mean maintenance down time
• MDT=Mean down time
VARIABILITY
• Variability is the consistency of each step to ensure
that each cycle of the process is identical

Strategies for Variability:

• Manufacturers can either


1) reduce variability or 2) cope with it.
• Almost every element of Lean Manufacturing aims
at reduction, coping or both.
• Most variability is unnecessary, unproductive and
indicative of an underlying problem.
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• For these reasons, variability reduction is the first
line of defense. TQM/Six Sigma is an example of
variability reduction.

• Occasionally, variability is irreducible for technical


reasons or desirable for marketing reasons.
• In these cases, systems can be designed to cope with
it. CNC processing equipment is an example of
coping with variability. However, coping with
variability (as opposed to reducing it) is often
expensive and may produce undesirable
consequences.

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• Almost every aspect of Lean Manufacturing involves
variability. Some elements of Lean reduce variability
while others attempt to cope with irreducible
variability.

• Variability is the reason that inventory rapidly rises


with increasing utilization. The amount of
variability shapes the curve that defines this
relationship.

• The amount of variability also limits capacity. With


high variability, a factory or production line "chokes
up" well below theoretical capacity.

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CAUSES FOR FAILURES
Did you know that lean has a 96% failure rate?
• About 96% of lean initiatives fail or quit within 18
months

• Top 10 Reasons Why LEAN implementation fails:


1. Lack of top management support
2. Lack of communication
3. Lack of middle management/supervisor buy-in
4. Not understanding that this is about your people

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5. Lack of customer focus
6. Lack of improvement measures
7. Lack of LEAN leadership
8. People measures not aligned with LEAN goals
9. Using Kaizen events as the sole improvement
mechanism
10.Bonus pay systems where the only measure
is company profitability