Application of Lean Production Case Study from Garment Sector of Pakistan

28 March, 2011

Presenters:Mr. Haider Sagheer

Mr. Qasar Wasique AhmedDr. Nabeel Amin

`

SMEDA-Industry Support Program

Background of the Project

Labor intensive Huge variety of products with small quantity orders Inefficient production systems High need of flexibility Large employment Opportunities and increased share in export

market

Evaluation Phase

1. House Keeping

2. Factory Current Efficiency Level

3. Factory Current Defect Rate

4. Material Handling

5. Space Utilization

6. Style Change Over Analysis

1- House Keeping-before

House Keeping-before

House Keeping-before

2. Factory Efficiency

Following were the major steps taken for calculating factory current efficiency level:

1. SAM Calculation of major products

2. Calculation of Over time

3. Data Collection from Bundle induction to sewing lines

4. Data Collection of finished Bundles

5. Idle Time Calculations

2. Factory Efficiency

22%

3. Defect Rate

Data collection by introducing appropriate format's. Data collection at end line and finishing stage. Appointed end line checkers.

After collection of data for one month an average of 35-40% defect rate was observed.

Inspection Sheet Finishing

4. Material Flow Analysis

840 Ft

Target Setting Phase

Following Key Performance Indicators were defined as project target metrics:

1. Efficiency

2. Defect Rate

3. Material Handling

4. Space Utilization

5. Throughput Time

6. Cost/Pc

Implementation Phase

Implementing 5S/Visual Control Systems across the Factory Implementation of IE functions Conducting Style Change Over Analysis by SMED (Reducing

throughput time) Running of Sewing Line at target efficiency level Implementing Hourly Based Quality Monitoring System Implementing SQC techniques Introducing Incentive System for Quality Control

5S

Before After

5S in Store

Before After

Savings of 135,000 PKR by sale of obsolete machinery

Assignment Sheet

Standard Allowed Minutes (SAM)- Gundo CT Short

Pkt bag OL

Frnt rise OL, Back yokes OL

Frnt rise att, Back Yoke Att

Pkt bag att, Pkt TS

Back Rise OL

Frnt rise TS, Back yokes TS

Back rise att, Piping making

Back rise TS, Piping att to bk yokes, Back yokes att to back bodyBk yoke edge

OLSide seam att & lbl attSide seam OL

Button hole

Bartack 4 pts

W.B TS

In seam OL

Inseam att

Bottom hem

W.B elastic mkg, Side label att, Elastic att at W.B, Main label att

Store Room

Critical path Analysis- Gundo CT Short

CP Time = 9.63, SM = 1.31

O/L time = 1.31

Style Change Analysis (Model Line)

Bundle Size: 15, Style: ShortDate:13/5/10, Time: 10:30

Activities to introduce Flexible Production Line

Reduction of Bundle Size Hourly Basis Monitoring System Advance Cutting in Shelves Implementation of Checklist for Accessories Layout – Shifting of Special Machines Selection Criteria of Operators, Payments, Disciplinary Issues,

Improved Material flow

328 Ft

Before After (Model hall)

Items Description Items Description

Overhead Cost per Month for 170 machines

1,000,000 Overhead Cost per Month 1,000,000

Overhead Cost per Month for 17 machines

100,000Overhead Cost per Month for 17

machines100,000

No. of pcs/day produced @22% 225 No. of pcs/day produced @32% 325

No. of Pcs per mth @22% 5625 No. of Pcs per mth @32% 8125

overhead Cost/pc per mth @22%

18 overhead Cost/pc per mth @32% 12.31

OH cost Difference per piece = 18-12.31 = 5.47

OH Cost Savings = 5.47*8125 = Rs. 44, 443

Overhead cost Comparison (for 17 no of machines for one month)

Quality Control System

Introduced Hourly Basis ReportsEnd LineFinishing

Check Sheets – Major Defects

ISSUES: Reports could not be properly filled due to large buddle size Operators were not submitting small bundles on time

Low DHU is Key Factor for running model line, therefore immediate action must be taken to properly fill the Q.C Reports

Introducing Incentive System

Defect Rate

Monthly Defect Rate

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

May,2010 June,2010 July,2010 August,2010 September,2010 October,2010 November,2010 December,2010

Month

De

fec

t R

ate

%

DR %

Trgt DR%

Before

Before

After

After

DR reduces Upto 5%

Cost Savings Through Defect Rate Reduction

Avg. Production per Month = 60, 000 Pcs DR Before =30%, Rework in Nos = 18000 pcs DR After = 5%, Rework in Nos = 3000 pcs Rework Difference = 18000 – 3000 = 15000 pcs Avg. Operation Time =0.5 min Total time = 15000*0.5=7500 min Total time consumed in RW is 7* times of the operation 1st time performed. Total time saved= 7500 * 7 = 52500 min Avg. SAM per pc = 12 min

*According to KSA study this factor ranges from 7 to 14 times of the operation 1 st time performed.

Cost Savings Through Defect Rate Reduction

No. of pcs that can be produced = 52500/12*32 = 1400pcs

Avg. Profit per pc @15% (FOB=Rs.425) = Rs. 64

Cost saving in RW/mth@15% per Mth = 1400 * 64

= Rs. 89,600

Projected saving by sustaining the RW @5%over one year = 89,600*12

= Rs. 10,75,200

Cost Savings Through Defect Rate Reduction (Inspection Cost)

Salary per month(25 working days) = Rs. 7000 Per day income (salary)=7000/25 = Rs. 280 Avg. pcs inspected per day per Inspector=250 No of days needed by one inspector=15000/250=60 days Savings/Month By Reducing Inspection = 60*280

= Rs. 16800 Projected Saving over one year through Inspection

= 16800*12 = 201,600

Total Savings Per Month

Cost Savings by

Reducing DR/month + Cost Savings By Reducing Inspection

= Rs. 89600 + Rs. 16800

= Rs. 106400

Results

Sr.No

KPI Before After Percentage improvement

1 Efficiency 22% 32% 45%

2 Defect Rate 35% 5% 85 %

3 Material Handling 840 ft 328 ft 61%

4 Space Utilization 0 sq ft 1254 sq ft 100%

5 Through Put Time 3 days 1 day 66%

6 Cost per piece 18 Rs 12.31 Rs 31%