The
lean approach
Two
decades ago when the concept of Toyota Production System (TPS) was fresh
in India and there was a lot of speculation about how inventories can
be reduced, many wondered regarding its relevance to Indian manufacturing
sector. As a concept, it had tremendous appeal for those working in
a batch-manufacturing environment. They could see benefits of TPS in
terms of reducing lead time, increasing productivity, improving quality
and successfully implementing it in the form of U Cells. However, with
experience of having worked in a machine tool company, one is always
skeptical about cost and inventory reduction due to TPS. The need for
reduction in work-in-process as well as finished goods inventory is
understandable but does it not mean shifting inventories to raw material
or with vendors?
Where
& How?
If
we take castings from the vendor as and when we need, how does he do
small batch production in his foundry? Usually he simply pours a batch
and loads his inventory holding cost on his prices. Even though it may
seem that he is not holding raw material inventory, someone pays for
it. If a blowhole comes in the casting and an additional casting is
obtained from the foundry, chances are more likely that blowholes will
appear in them as well, because they were produced as a batch earlier.
Thus, even though it seems that with low inventories money can be saved,
actually it may not be so. And more often than not, deliveries may get
delayed too.
It
will soon become apparent that unless a collaborative approach is adopted
with vendors and make them lean, one cannot get the best results of
Lean Manufacturing. The success in implementing TPS in the machine tool
company is therefore very limited. Over the years, it is experienced
that TPS assumes that one’s business processes, upstream and downstream,
are streamlined and predictable. Since in those early days enough attention
was not paid to this aspect of implementation, one paid the price. In
retrospect it should be done differently. But where and how does a
company, which wants to implement TPS or more correctly the Lean Approach
start?
Case
study in implementation
In
1992, an oil seal manufacturing facility had a functional layout with
a group of presses, trimming machines together, and so on. This is Phase
I (Fig 1), which was current reality and Kaizen activities were started
in the company. The focus on productivity improvement through Kaizen
resulted in a cellular layout, Phase II. The immediate benefits realised
were dramatic reduction in work-in-process inventory, sharp reduction
in lead time and increase in productivity. The characteristics of the
cellular layout included one-piece flow, small, dedicated and inexpensive
machines laid out in order of process and one operator handling several
machines. The other features noticed were easy transfer by moving or
standing, pull production paced to takt time resulting in short lead
times and high ratio of value added time as compared to non-value added
time.
Further
improvements continued. These included implementing 5-S, visual controls,
integration of online measurement systems, preventive maintenance system
being implemented and a set-up change time below 10 minutes. This transferred
the U Cell into a Best Practice Cell. Once these improvements were in
place and maintained, indirect support functions such as materials management,
quality and technology were integrated into the Cell transforming it
into a Model Manufacturing Cell, Phase III.
Kaizens
were performed everyday and this became a way of life. The team consisted
of both direct and indirect functions and worked as a profit centre.
This led to dramatic financial impact. The crashing of lead times, drastic
reduction in work-in-process and dramatic increase in productivity and
quality improvement had quantifiable financial impact. ..(contd.)
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