LEAN MANAGEMENT THROUGH INNOVATION

MADE BY:Samriddh Tyagi (E-38 )

Ashil John Panicker ( D- 37 )Abhishek ( D- 27)

Souvik Mukherjee ( D - 29 )Binay Kumar ( E - 51 )

Bandana Chadha (Faculty)

LEAN MANAGEMENT

INNOVATION

EXAMPLES

Aim of this presentation

LEAN MANAGEMENT INNOVATION

Lean Management in HR Perspective

What is Profit ?

PROFIT is not a single concept but comes with many important implications:

• P- Process excellence• R- Resources Management• O- Oriented to a Goal• F- Financially Strong• I- Innovative – to stay ahead of competition• T- Timely deployment of strategies

Where does lean thinking start in an Organization?

• Recruitment and training Companies have come up with online recruitment strategies to reduce

cost incurred by the company and there by the final product cost can also

be minimized. Net Cost incurred by an organization earlier has reduced drastically by

atleast 30% due to Online recruiters. Out Sourcing of Training activities (both Hard and Soft Skill) to private

agencies has ensure cost reduction by another 60% and hence final product from the organization is of a lesser cost.

Other benefits due to online recruiters are: Better Talent Search is possible, Less time Consuming, Better reach to people

Real Life Case Analysis• ACIS Recruits Employees for RRD, Technopark• Every Lower Management, Middle Management recruited by ACIS. • Employees on contract basis for 6 months to test the effectiveness of

recruitment before making them a Stable RRD employee. • End Result: Revenue @ RRD increased by 40% during 2010-11• Attrition Rate declined by 12%• Employee Turn Over increased by 8%• Skilled Employees much better than earlier rate.• Better Process and Tools knowledge imparted to employees in a short

span of time and with lesser cost

Source: Venu Rajagopal, Site Head, RRD Technopark.

Lean Manufacturing in ford

Ford Accounts Payable Process*

PO = Receiving Doc. = Invoice

Accounts Payable

Accounts Payable

VendorVendor

GoodsReceivingReceiving

Payment

Invoice

Receiving document

PurchasingPurchasingPurchase order

Copy ofpurchase order

*Source: Adapted from Hammer and Champy, 1993

? ?

Trigger for Ford’s leaning AP

• Mazda only uses 1/5 personnel to do the same AP. (Ford: 500; Mazda: 100)

• When goods arrive at the loading dock at Mazda: – Use bar-code reader is used to read delivery data.– Inventory data are updated.– Production schedules may be rescheduled if

necessary.– Send electronic payment to the supplier.

Ford Procurement Process

AccountsPayable

AccountsPayable

VendorVendor

GoodsReceivingReceiving

Payment

Goods received

PurchasingPurchasing Purchase order

Purchase order

Data base

Ford Accounts Payable

• More than 500 accounts payable clerks matched purchase order, receiving documents, and invoices and then issued payment.(Muda)

• It was slow and cumbersome. (Muri)• Mismatches were common. (Mura)

BeforeBefore

AfterAfter

• Modified “procurement” instead of AP process.• The new process cuts head count in AP by 75%.• Invoices are eliminated. • Matching is computerized. • Accuracy is improved.

• saving in term of monetary value : average income of personnel in U.K : 3000 pound saving of 400 workforce =1,200,000 pound

General Motor’s Lean Manufacturing Initiative

Background• In 1994, GM and Toyota formed a joint venture called the

New United Motor Manufacturing Inc. (NUMMI) to

pioneer implementation of lean methods at an

automotive manufacturing plant in the U.S.

• NUMMI was able to cut assembly hours per car from 31 to

19 and assembly defects per 100 cars from 135 to 45.

• Provided better productivity, product quality, and

profitability advantages over traditional mass production,

batch-and-queue systems.

LEAN applied at various assembly unitsSaturn Kanban Implementation

• Signals for when more parts are needed in a particular

process area.

• This "KANBAN"-type system eliminates tons of packaging

wastes each year and reduces the space, cost, and energy

needs of managing such wastes.

Fairfax Assembly Paint Booth Cleaning

• The reduction in cleaning frequency facilitates improvements

in the process "up-time" and flow.

Application of Lean Methods to Administrative Processing in the Purchasing Group

• GM incurred high costs to purchase a great deal of paper

and used raw materials associated with printing and

packaging

• cost and energy required to deliver each package to each

potential supplier.

• RFQ process was converted into an electronic-based

system

• Fast and accurate flow of information through the supply

chain

The various techniques used --• KAIZEN technique was followed

• Reduced the amount of scrap and rework. (reduction of

up to 7 tones was noticed.)

• All hazardous wastes associated with the painting

process step (including clean-up rags, overspray sludge,

off-spec and expired paints) was reduced and

• Recyclable containers were brought to use bringing

about total cost reductions of $3,000 to $4,000 per

week

Implementation of lean manufacturing

in Boeing

Introduction

• Role: Narrow-body jet airliner

• National origin :United States

• Manufacturer: Boeing Commercial Airplanes

• Built 7,283 as of August 2012 

• Boeing is the largest global aircraft

manufacturer by revenue, orders and

deliveries, and the

Manufacturing plant

• largest manufacturing plant.

• 23,000 employees on site making products.

• Factory is over 98 acres under one roof.

• Just image 911 basketball courts! The ceiling stands

9 stories tall.

• In 1998, Boeing Co. needed 71 days

to assemble its behemoth 777. Now

it only needs 37.

• Boeing 737, final assembly going

from 20 days to 11.

How Boeing did that

• Now watch the film clip and identify as

many examples of lean/JIT thinking as

you can.

• Assembling a is a complex job. Factory

employees must take 367,000 parts, an

equal number of bolts, rivets, 36 miles

(58 kilometres) of electrical wire and then

put them all together to form an airplane.

video

Problem : Seat Installation

• The lifting of the plane's heavy seats up to its doorway and

inside for installation. Once the seats came to the plant, they

were fitted with wheels, lifted by an overhead crane to the

airplane doorway, unloaded, rolled into the cabin, divested of

their wheels and finally installed.

• One member mentioned the hay loaders he often saw on farms

near his home.

• Every one laughed until they saw the efficiency of the new

loader.

• Modified hay loader used cutting a full 10 hours off seat

installation.

Change over time reduction

• Staging of tool and parts kits, equipment near

point of use .

• Bringing tools and parts to workers in "kits.

• Different tools are packed with color coding.

Parts come in grey blue ,green boxes,

hazardous materials come in green boxes.

• The result is the workers no longer spend

much of their time looking for tools and parts;

they just put things together.

Visual Control Systems

Andon, a light above a workstation that

indicates its state, whether working,

waiting for work, broken down, etc

Work balancing across two shifts(MURI)

Passport Seva Project (PSP) A citizen-centric e-Governance initiative launched in

Public-Private-Partnership (PPP) mode with M/s Tata Consultancy Services as Service Provider.

PSP delivers passport services to citizens in a : Timely Transparent More accessible Reliable Comfortable environment with streamlined processes and committed, trained & motivated workforce

Old Passport System MUDA (Wasteful practices & process methods)DOT WIMP• Defects • Overproduction • Transportation• Waiting (queue time)• Inspection • Motion • Process

MURA (irregularities, fluctuation, variation) Poor Process flow/Equipment usage/Information flow, Overburden of

manual processing/excess cycle-time & Delayed deliveries.MURI (overburden) Citizen & Employee frustration Why Change?Improve Quality/Control Cost/Ensure on-time Delivery

TCS-Passport Seva Project

TCS-Passport Seva Project

Time Saving p.a.

80 lac passport services provided in 20111. Waiting Time – Saving of 2 hrs per transaction.

Hours = 1.6 crore hrs (80 lacsX2 hrs)

Man Days = 6.7 Lac days (1.6 crore/24 hrs) Man Years = 1,836 yrs (6.7 lacs/365 days)

Assuming Rs 100 per man hour Rupees Saved p.a. = Rs 160 crores (1.6 croreXRs 100)

Paper Saving p.a.2. Paper (A4 ; 75 gsm)– 10 pages per transaction

Saving p.a.: Pages = 8 crore (10 pages X 8 lacs)

Rims = 1.6 lac (8 crore/500 pgs per rim) Kgs = 3.68 lac (1.6 lac rims X 2.3 Kg per rim) Tons = 368 (3.68 lac kg/1000 kg per ton) 1 ton of office paper uses 24 trees *

Trees Saved = 8,832 (368 tons X 24 trees per ton)Rupees Saved = Rs 3.2 crores (1.6 lac rims @ Rs 200 per rim)

Also, - Reduction in Defects/back-log Significant improvement in productivity, quality & on-time

delivery.* Source – Conservatree ; http://conservatree.org/learn/EnviroIssues/TreeStats.shtml

Isolating one process Rethinking every & deciding its fate business process.-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cost cutting across Judicious investing. the board------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Starving Building muscle, trimming fat. ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

People not thinking & Tapping collective just transacting intelligence. --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Reducing manpower Reducing overhead. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Standardizing every part Getting smarter about what of a process. you do.

LEAN MGT. It’s not about It’s about------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------