Lean implementation and itsbenefits to production industry

Bhim SinghDepartment of Mechanical Engineering,

Galgotia’s College of Engineering and Technology, Greater Noida, India

S.K. GargDepartment of Mechanical and Industrial Engineering,

Delhi Technological University, Delhi, India

S.K. SharmaDepartment of Mechanical Engineering, National Institute of Technology,

Kurukshetra, India, and

Chandandeep GrewalDepartment of Mechanical and Manufacturing Engineering,

Schulich School of Engineering, University of Calgary, Calgary, Canada

AbstractPurpose – The purpose of this paper is to discuss the lean implementation process and its quantifiedbenefits for the production industry with the help of value stream mapping (VSM). Both current andfuture statemaps of the organization’s shopfloor scenarios are discussed usingVSM techniques in orderto highlight improvement areas and to bridge the gap between the existing state and the proposed stateof shop floor of the selected industry.

Design/methodology/approach – VSM process symbols are used to discuss lean implementationprocess in the production industry. The existing status of the selected manufacturing industry isprepared with the help of VSM symbols and improvement areas are identified. Some modifications incurrent state map are suggested and with these modifications a future state map is prepared.

Findings – After comparison of the current and future state of shop floor of the selected industry it isfound that reduction in lead time was 83.14 percent, reduction in processing time was 12.62 percent,reduction in work-in-process inventory was 89.47 percent, and reduction in manpower requirement was30 percent. The rise in productivity per operator was 42.86 percent.

Research limitations/implications – The findings are limited due to the focused nature of thecase study and further cost-benefit analysis can be carried out.

Practical implications – This paper will be very useful for the researchers and practitioners forunderstanding lean implementations and its derived benefits.

Originality/value – The paper is a real case study showing lean implementation and its benefits forthe production industry.

Keywords Lean production, Production processes

Paper type Case study

1. IntroductionValue streammapping (VSM) is an enterprise improvement tool to assist in visualizing theentire production process, representing both material and information flow. The goal isto identify all types of waste in the value stream and to take steps to eliminate them(Rother and Shook, 1999). Taking the value stream viewpoint means working on the big

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International Journal of Lean SixSigma

Vol. 1 No. 2, 2010pp. 157-168

q Emerald Group Publishing Limited2040-4166

DOI 10.1108/20401461011049520

picture and not individual processes, and improving the whole flow and not justoptimizing the pieces. It creates a common language for production process, thusfacilitatingmore thoughtful decisions to improve the value stream (McDonald et.al., 2002)While researchers and practitioners have developed a number of tools to investigateindividual firms and supply chains,most of these tools fall short in linking and visualizingthe nature of the material and information flow in an individual company. At the levelof the individual firm,manyorganizationshavemoved towardbecoming leanbyadaptingdifferent lean tools such as Just in time, set up reduction, 5S, TPM, etc. Inmany such cases,firms have reported some benefits; however, it is apparent that there is a need tounderstand the entire system in order to gainmaximumbenefits. In this paper, an attempthas been made to discuss lean implementation process using VSM in XYZ productionindustry. Both current and future state maps of the organization’s shop floor scenariosare discussed using VSM techniques. Analysis includes calculation of TAKT timefollowed by findings of other gap areas. Gain in production output, reduction of workin process (WIP) and finished goods inventory, reduction in lead time and real valueaddition time, affecting productivity are also reported.

2. Literature reviewLean manufacturing has been the buzzword in the area of manufacturing for past fewyears. The concept originated in Japan after the Second World War when Japaneserealized they could not afford the massive investment required to build facilities similarto those in the USA. The goal of lean manufacturing is to reduce waste in human effort,inventory, time to market and manufacturing space to become highly responsive tocustomer demand while producing quality products in the most efficient and economicalmanner. Nicholas (1998) found that waste takesmany forms and can be found at any timeand in any place. Waste consumes resources but does not add any value to the product.Russell and Taylor (1999) define waste as anything other than the minimum amountof equipment, effort, materials, parts, space, and time that are essential to add value to theproduct. Lean manufacturing combines the best features of both mass and craftproduction: the ability to reduce costs per unit and dramatically improve quality while atthe same time providing an ever wider range of products and more challenging work(Womack et al., 1990). Value stream refers to those specifics of the firms that add valueto the product or service under consideration. It is a far more focused and contingent viewof thevalue adding (VA)process. Leanmanufacturinguses tools like one-pieceflow, visualcontrol, Kaizen, cellular manufacturing, inventorymanagement, Poka yoke, standardizedwork, workplace organization, and scrap reduction to reduce manufacturing waste(Russell and Taylor, 1999; Monden, 1993) suggested a new scheme of classifyingoperations into three generic categories as non-VA, necessary but non-VA and VA. Thisscheme proved to be more generic and was extended to different areas. Over the years,many lean manufacturing tools to support value stream have been developed and manymore are being proposed every day (Womack et al., 1990; Barker, 1994; Cusumano andNobeoka, 1998; Childerhouse et al., 2000; Taylor and Brunt, 2001). VSM tools werepopularized by Rother and Shook (1999). These developments are primarily for tworequirements: one to understand the interdependence of one function, department or evenwhole unit over another, and to capture a holistic view about a situation where theconventional industrial engineering recording tools do not help much. As the complexityof manufacturing and business is growing newer, value stream tools are emerging.

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Recently, there exists a plethora of different tools and techniques developed for differentpurposes and waste reduction or elimination. To understand different value streams andtheir overlapping nature, several researchers like Forza et al. (1993), Beesley (1994)and Jessop and Jones (1995) have developed individual tools. The classification schemesuggested by Hines and Rich (1997) about seven new mapping tools (namely, processactivity mapping, supply-chain response matrix, production variety funnel, quality.Filter mapping, demand amplification mapping, decision point analysis and physicalstructure mapping) regarding their major application areas is very useful. Anotherscheme of classification for lean manufacturing tools and allied detailing proposed byPavnaskar et al. (2003) are also quite exhaustive. Chitturi et al. (2007) explored practicalissues in job shop using a standard VSM and also explained how improved VSM caneliminate some limitations of old VSM.Al-Sudairi (2007) built a simulationmodel to studythe impact of certain lean principles for enhancing the flow of construction material andfound that lesser the time spend in the value stream, leaner is a process. Lian andVan Landeghem (2007) discussed on the application of VSM-based simulation generatorin a manufacturer of poultry and pig-raising equipments for feeding, drinking, feedstorage and feed transportation systems. Domingo et al. (2007) identified data with VSMfromassembly line of a SpanishBosch factory andused leanmetrics, such as dock-to-docktime and lean rate, milk run to improve materials flow. Gopakumar et al. (2008) useddiscrete event simulation quantified through a detailedVSM exercise tomodel the currentsystem’s functioning and to identify operational inefficiencies in warehouse receivingprocess at a large food distribution center, which comprises of truckswith goods reachingthe destinationwarehouse, unloading and finally putting away the contents to the specificaisles. Zheng et al. (2008) introducedanewcycle timeperformance trackingmatrix derivedfrom the factory physics queuing model to explore a systematic way to structure thehierarchical cycle time key performance indicators framework and also to define the rightowner to improve those measurements. Further, VSM was used to reduce factoryvariability. Grewal (2008) used VSM techniques as lean implementation initiatives insmall manufacturing firm and claimed 33.18 percent reduction in cycle time, 81.5 percentreduction in changeover time, 81.4 percent reduction in lead time and 1.41 percentreduction in value-added time. Melvin and Baglee (2008) studied howVSM can be appliedto the food and drink industry to identify areas of waste and how these can be reducedand/or eliminated from the value stream. Serrano et al. (2008) used multiple case studyapproach and concluded that VSM can be used as redesign tool for manufacturing apartfrom enumerating the differences between theoretical concepts proposed byVSMand realworld applications. Seth et al. (2008) addressed variouswastes in the processing side of thesupply chain of the Indian cottonseed oil industry, using VSM and individually attackedall wastes to reduce or eliminate them from the system. Lasa et al. (2008) showed that theVSM is a valuable tool for redesigning the productive systems according to the leansystem and found that there are some key points for the establishing teams that have totake into account, as follows: the time and training resources spent, the use of suitableinformation systems and a suitable management of the application phases. Sahoo et al.(2008) discussed application of VSM in forging industry for identification and eliminationof waste and its sources. A noticeable reduction in set up time andWIP inventory level issubstantiated. Singh et al. (2009) suggested industries to apply VSM techniques to findmoney drain points in their balance sheets and also apply these techniques to cut downoperational cost to save business during recessionary times. Singh and Sharma (2009)

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showed that VSM is a versatile tool for lean implementation by a case study of an Indianmanufacturing industry and witnessed 92.58 percent, reduction in lead time, 2.17 percentreduction in processing time, 97.1 percent reduction inWIP and 26.08 percent reduction inmanpower requirement. Singh et al. (2010a) developed an index for measuring leannessof any manufacturing firm based on the scores awarded by leanness measurement teammembers. Various types of manufacturing wastes addressed by lean are taken as oneparameter for measuring leanness index. Singh et al. (2010b) discussed the scope of leanimplementation in Indian industries and identified many lean implementation issues inconsultation to Indian managers. They also grouped these issues by using principalcomponent analysis.Hines et al. (1998), Hines (1999), Grewal andSareen (2006) andGrewaland Singh (2006), used VSM for identification and elimination of muda (waste) inproduction industry and Brunt (2000) andAbdulmalek and Rajgopal (2007) used VSM forproductivity improvement of process industry.McManus andMillard (2002) appliedVSMfor product development and Emiliani and Stec (2004) for leadership development.

In spite of all the benefits offered by VSM, many researchers have pointed out thelimitations of VSM. Chitturi et al. (2007) explored practical issues like how to calculateTAKT time, where to place supermarket, where can we use continuous flow processing,what process improvements can be done and how to handle different product familieswhile mapping job shop operations using a standard VSM and also explained whiledrawing a standard VSM in job shop operations, all pertinent informations should becollected from the last to the first operation in contrast to other production system whereall informations are collected from the first to the last operation, lastly as in job shopoperation the future demand is not certain, so the average demand in the previous yearsshould be considered formapping a particular product family. Braglia et al. (2006) pointedout in his article that VSM is basically a paper-and-pencil-based technique, so, theaccuracy level is limited, and the number of versions that can be handled is low; in realsituations, many companies are of a “high variety–low volume type”, this requires manyvalue streams and cannot be addressed by simpleVSM.They proposed an alternative andinnovative framework for a structured application of VSM to products requiringnon-linear value streams, based on the preliminary analysis to identify the longer criticalproduction path using the Temporized Bill of Material. After identification of the criticalpath, possible improvements were searched and then considered all sharing withsecondarypaths as further constraints. Finally,when themainvalue streamgot improved,a new path became the critical one. Thus, the analysis proceeded iteratively until theoptimum is reached or theWIP level has decreased under the desired level.McDonald et al.(2002) noted that VSMmay not serve the purpose, when it is used tomap a production linewhich produces different types of product families that are having different processingtimes and set up times for each processing step apart from different number of shifts.

3. Present workThe present study is carried out inXYZLtd production industry located inPatiala, Punjab(India). It deals withmanufacturing of components tomeet themaintenance need of dieseltraction fleet, Indian railways. Present study proceedswith themapping of current state ofshop floor of equalizer beammanufacturing line of XYZ Ltd This mapping is done with apencil and paper using various process symbols of VSM to visualize the flow of materialand informationas the product takes itsway inmanufacturing line.Mapping is carried outkeeping in view of the lean manufacturing principles as discussed by Rother and Shook

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(1999) and Seth and Gupta (2005). These principles are: define value from your customer’sperspective; identify the value stream; eliminate the seven deadly wastes; make the workflow; pull the work rather than push it; and pursue to perfection level. The major stepsinvolved in mapping are as follows (Figures 1 and 2):

(1) VSM process symbols are used to represent customer, supplier, and productioncontrol.

(2) All important data related to current state of shop floor of manufacturing such aslead time, process time, change over time and number of shifts are shown by databoxes below the VSM symbols.

(3) The monthly/daily requirements of product along with the number of containersand Kanbans required are obtained.

(4) Movement of product is indicated with arrows including shipment and receivingdata.

(5) In between two workstations, WIP is shown with proper inventory icons.

(6) Major improvement areas are identified from the current state map.

(7) Some modifications in current state map are proposed and with the applicationof lean tools various gap areas are bridged in order to prepare future state map.

(8) Future state map is prepared and improvements achieved are highlighted.

4. Current state mapVSM is a pencil andpaper tool, which is created using a predefined set of icons. There are alot of benefits to drawing value streammaps by handwith paper and pencil.Withmanualmapping, let us see what is actually happening in a shop floor value stream, rather thanbeing restrained to a computer.Also, the process of quickly drawing and redrawing amapacts as a plan-do-check-act cycle that deepens our understanding of the overall flowof value or lack thereof. The first step in VSM is to choose a product family as the target

Figure 1.Current state map

Monthly schedule

Monthly schedule

Daily schedule

Daily schedule

Daily requirement

Weekly requirement

Planning depttof XYZ

Annual forecast

BenchingmanualFlame cutting Drilling Profile

millingHand

grindingQuality

check upNo.

punching 46

Finisheditems

323028161918 28

Prod. leadtime 22.44

days

Processingtime 252

min

CT = 42 min2-shiftsuptime100%

CT = 30 min2-shiftsuptime100%

CT = 34 min2-shiftsuptime100%

CT = 32 min2-shiftsuptime100%

CT = 50 min2-shiftsuptime100%

CT = 36 min2-shiftsuptime100%

CT = 28 min2-shiftsuptime100%

1.22 days1.39 days1.3 days1.22 days0.696 days0.826 days0.783 days

42 min 30 min 34 min 32 min 50 min 36 min 28 min

Customers

15-daysinventory

Suppliers

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for improvement. Customers care only about their products and not all products so that itis unrealistic to map everything that passes through the shop floor. Drawing all theproduct flow in one company would be too complex. Identifying a product family can bedone either by using the product and process matrix to classify similar process steps fordifferent products or by choosing products that use the highest volume after choosing aproduct family. The next step is to draw a current state map to take a snapshot of howthings are being donenow.This is donewhilewalking along the actual pathways from theactual production process. Drawingmaterial flow on the current state map should alwaysstart with the process that is most linked to the customers, which in most cases is theshipping department, and then working ones way up to the upstream processes. Thematerial flow is drawn at the lower portion of the map. At each process, all the criticalinformation including lead-time, cycle time, changeover time, inventory levels, etc. aredocumented.The inventory levels on themap should correspond to levels at the time of theactual mapping and not the average because it is important to use actual figures ratherthan historical averages provided by the company. The second aspect of the current statemap is the information flow that indicates how much each process will be going to addvalue to final product. The information flow is drawn on the upper portion of themap.Theinformation flow is drawn from right to left on the map and is connected to the materialflow previously drawn. After the completion of the map, a timeline is drawn below theprocess boxes to indicate the production lead-time, which is the time that a particularproduct spends on the shop floor from its arrival until its completion. A second time calledthe value-added time is then added. This time represents the sum of the processing timesfor each process. Lead time is calculated by the way each component will wait on everymachine and then total waiting time over the entire process will make the lead time.Current state map of the present shop is shown in Figure 1.

Figure 2.Future state map

Monthly schedule

Monthly schedule

Daily requirement

Weekly requirement

Planning depttof XYZ

Annual forecast

BenchingmanualFlame cutting Drilling

Profilemilling

Qualitycheck up

Nopunching

23

Finisheditems

18

Production lead time3.783 days

Processingtime 196

min

CT = 36 min2-shiftsuptime100%

CT = 30 min2-shiftsuptime100%

CT = 34 min2-shiftsuptime100%

CT = 32 min2-shiftsuptime100%

CT = 36 min2-shiftsuptime100%

CT = 36 min2-shiftsuptime100%

CT = 28 min2-shiftsuptime100%

0 days0 days0 days0 days0 days0 days0.783 days

36 min 30 min 34 min 32 min 36 min 36 min 28 min

CustomersSuppliers

Milk run

3-days

W

WW

W

PP

P

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5. Evaluation of current state mapFrom the evaluation of current state map, a few assumptions are made. It is assumed thatmaximum demand may reach up to 560 items per month based on the past data of theorganization under study. The current state map captures information at a particularinstance, which may vary from shift to shift. For the sake of evaluation, the shiftand labor-wise variation is not considered. Effective numbers of working days are24 per month, Number of shifts per day is two and working hours per shift are seven.Available working time per day in minutes – 840. TAKT time refers to the rate at whichcustomers are buying products from the production line, i.e. the unit production rate thatmust be met to match customers’ requirements. It is calculated as follows:

TAKT time ! Available work time per day "minutes#Customer demand per day "units#

TAKT time comes out to be 36 minutes. Table I represents various details regarding thecurrent state of the shopfloor ofmanufacturing line and data shown inTable I is taken fromFigure 1. Existing process requires manpower of ten per day with a production output of3.6 products per worker. The real VA time for the current process is 252 minutes, whereasproduction lead-time is 22.44 days.High-WIP inventory of 32 products is observed at station“inspectionandquality checkup” andfinishedgoods inventoryof 46products is theredue topoor ordering policy and the play-safe tendency of the organization.

6. Proposed changes in existing state of manufacturingBased on the data of current statemap and the wastage identified in the analysis, changeswere proposed in existing state as shown in Figure 2. The suppliers of the organizationwere asked to fulfill hourly demand instead of daily demand. The fulfillment of hourlydemand requires high degree of information flow and coordination through theorganization and with its suppliers. For this purpose, a Kanban system was introducedbetween the organization and its suppliers. It was suggested that withdrawal Kanbanshould flow fromplanning department to dispatch. Similarly, the productionKanbanwassuggested flowing from dispatch to rawmaterial store, as shown in Figure 2. TheKanbansystem brought the necessary schedule and delivery discipline. This system also reducedthe manpower requirement to track the demand and inventory at the organization andcommunicating the same at the supplier end. Inventory was also very high at manystations in the current state; presently the organization is holding 15 days of inventory due

Machine/processProcessing time(minutes)

Production lead time(days)

In-processes inventory(units)

Store 15.000 00Flame cutting 42 0.783 18Benching manual 30 0.826 19Drilling 34 0.696 16Profile milling 32 1.220 28Hand grinding 50 1.300 30Quality check up 36 1.390 32No. punching 28 1.220 28Total 252 22.440 171

Table I.Current state data

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to poor communication and stock outs. Electronic information, Kanban system and supermarket help to reduce inventory. These changes reduced inventory levels in rawmaterialstore from22.44 to 3.783 days, as shown inFigure 2,whichwas quite significant. This alsohelped inmakingwhole supply chain lean and flexible. To ensure station cycle time lies inthe range of TAKT time, i.e. 36 minutes in present case and to reduce manpowerrequirement from ten to seven per day, the continuous flow of materials and informationwere maintained across the whole process. To synchronize station cycle timewith TAKTtime at flame cutting station, oxy acetylene gas cutting should be replaced with plasmagas cutting, it will not only synchronize the station cycle time but also improve the surfacefinish at the cutting surface of equalizer beamand itwill eliminate the requirement of handgrinding operation at latter stage. Comparison of TAKT time with cycle time of currentstate and future state map is shown in Figure 3.

The data from Figure 2 along with benefits achieved are given in Tables II and III.These are clear indications that production output per worker has improved to 3.20 from2.24products. Production lead-time is reduceddrastically from22.44 to 3.783 days andVAtime is also reduced from 4.2 to 3.67 hours. Current demand at the organization is easilyachievable with reduction in bothWIP and finished goods inventory in the supply chain.All these proposed changes will help the organization to become cost competitive intoday’s global market, and hence it will also help in freezing overall costs in the supplychain. In the present situation, the supplier will be in a position to deliver at required rate,and high-quality products at lower cost, which was also the requirement of a lean andresponsive environment. In this study, the cost of proposed changes is not given but all thechanges were suggested after consultation with lean implementation experts and shopfloor instructors. Initially, these changesmay appear costly and against the leanprinciplesbut as per the volume of the production in the given industry, costwill be recovered inveryshort spell of time andafterwards the industry can enjoy the full benefits of lean principles.

7. ConclusionsLean implementation is carried out in a production industry with the help of VSMtechnique and many benefits are reported such as reduction in WIP inventory by89.47 percent, finished goods inventory by 17.85 percent, product lead time by83.14 percent, processing time by 12.62 percent, manpower required by 30 percent andoutput per operator is increased by 42.86 percent. Rother and Shook (1999) rightly arguedthat whenever there is a product for a customer, there is a value stream. The challenge lies

Figure 3.Talk time comparisonwith cycle time of currentstate and future state map

60

50

40

30

20

10

0Flamecutting

Benchingmanual

Drilling Profilemilling

Handgrinding

Qualitycheck up

No.punching

4236

30 3034 34 32 32

50

0

36 36

28 28

Talk time = 36 minutes

Current state Future state

Cyc

le ti

me

(min

)

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in working and implementing it. VSM can be done in the same way for practically anybusiness activity and expanded upstream or downstream. This study provided followinglessons for the researchers and practitioners:

. VSM is a very powerful tool to identify gap areas and facilitate leanimplementation for production industry.

. The improvements carried out in this study are significant enough for thepractitioners to further explore lean implementation and take its full benefit.

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Zheng, L., Xiao, J., Hou, F., Feng, W. and Li, N. (2008), “Cycle time reduction in assembly and testmanufacturing factories: a KPI driven methodology”, IEEE International Conference onIndustrial Engineering and Engineering Management, Singapore, pp. 1234-8.

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Further reading

Lamming, R., Johnsen, T., Zheng, J. and Harland, C. (2000), “An initial classification of supplynetworks”, International Journal of Operations & Production Management, Vol. 20,pp. 675-91.

Nicholls, M.G. (1994), “Optimizing the operation of an ingot mill in an aluminium smelter”,Journal of Operational Research Society, Vol. 45 No. 9, pp. 987-99.

Zayko, M., Broughman, D. and Hancock, W. (1997), “Lean manufacturing yields world classimprovements for small manufacturer”, IIE Solutions, Vol. 29 No. 4, pp. 46-64.

About the authorsBhim Singh is presently associated with Galgotia’s College of Engineering and Technology,Greater Noida, UP, India, as an Assistant Professor in Mechanical Engineering Department.He holds BTech degree fromREC, Kurukshetra, andMTech degree fromGNDEC, Ludhiana. He ispresently pursuing PhD from National Institute of Technology (NIT), Kurukshetra, on leanmanufacturing. He has more than ten years of teaching experience in Undergraduate andPostGraduate classes. He has published paper in international journals and in several national andinternational conferences. He has guided many projects to undergraduate students. His area ofinterest – statistical quality control, operations research, supply chain management, valueengineering and lean manufacturing. Bhim Singh is the corresponding author and can becontacted at: bhimsingh_ncce@rediffmail.com

S.K. Garg did his PhD from Indian Institute of Technology (IIT), Delhi, India. He is presentlyassociated with Mechanical and Industrial Engineering Department of Delhi TechnologicalUniversity, Delhi, as a Professor of Industrial Engineering and Operations Research. He haspublished more than 50 papers in international journals and conferences. He also authored threebooks in his area of interest. His area of interest includes lean manufacturing, supply chainmanagement, just-in-time manufacturing, total quality management, operation research. He isalso guiding many research scholars for their PhD degree in his field.

S.K. Sharma, eminent scholar and leader in the field of industrial engineering andentrepreneurship development is currently a Professor in the Department of MechanicalEngineering at NIT, Kurukshetra, Haryana, India. He did extensive research in the field ofindustrial engineering and has guided 16 candidates in their dissertation for MTech degree. He isguiding ten students for their PhD degree in the field of production and industrial engineering. Hehas published many papers in national and international journals of repute.

ChandandeepGrewal is currently doinghis PhDatUniversity of Calgary. Before joiningPhD,Hewas a Lecturer in the Department of Mechanical and Production Engineering at Guru Nanak DevEngineering College, Ludhiana, India. He holds theMaster of Technology in Industrial Engineeringfrom the IIT, Delhi. His areas of interest are supply chain management, lean manufacturing,operations research and simulation andmodeling. He has number of researchpapers in internationaland national journals and conferences.

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