The Fundamental

The Endless Journey of Continuous Improvement

RICHARD TIAM
 The Fundamental of
LEAN MANUFACTURING
"The Endless Journey of Continuous Improvement"

Richard bin Tiam @ Aloysius

M.E (Manufacturing System)
B.E (Mechanical)
Department of Mechanical Engineering
Politeknik Kota Kinabalu

 Publication

Published by:

POLITEKNIK KOTA KINABALU

No.4, Jalan Politeknik, KKIP Barat
Kota Kinabalu Industrial Park
88460 Kota Kinabalu, Sabah

Phone : 088-401800
Fax : 088-499960
Website : https://polikk.mypolycc.edu.my

Copyright © Politeknik Kota Kinabalu

First Edition, 2022

All rights are reserved. Without the written consent of

Politeknik Kota Kinabalu, it is forbidden to reproduce any
portion of the article, illustration, or content of this e-book
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e ISBN 978-967-2301-58-5
 Preface
The purpose of this lean manufacturing ebook is to
provide a simple guide to help students understand the
fundamentals of the lean system. This ebook focuses on
lean applications in the manufacturing sector and serves as
a supplement to topic five for the course DJF41052
Manufacturing System, Politeknik Malaysia.
It reviewed Toyota Motor Corporation's history as a
system pioneer, as well as the origins of the lean principles.
It discusses the various types of waste generated in the
manufacturing industry and how the lean philosophy
addresses them. This ebook attempts to describe the
characteristics of the lean system in a simple but clear
manner. It also covers the lean system methodologies,
tools, and approaches of Just in Time, Value Stream
Mapping, Kanban, and Kaizen. Finally, the fundamentals of
supply chain and logistics management are covered.
I would like to thank all of my friends and colleagues who
contributed directly or indirectly to the creation of this
ebook. This ebook is dedicated to my family. Nathan,
Nathalie, and Noah, as well as Helena, my wife. Continuous
progress, like life, is a journey. Although there is no such
thing as a perfect existence, there is always room for
improvement. I adore each of you.

Richard Tiam

Kota Kinabalu, Sabah

November 2022
 Table of Contents

01 The Origin of Lean

02 Waste in Manufacturing

03 Lean Characteristics

04 Lean Tools & Approaches

05 Supply Chain Management

 Introduction to Lean
Today, the term lean is widely used in many industries around
the world. Lean services, lean healthcare, lean logistics, lean
construction, lean IT, lean higher education, lean government,
and many more have emerged in addition to the original version
of lean production or manufacturing.
The general consensus is that
they should use the term lean to
describe their organization because
they believe they have
implemented a good management
or lean system. However, many
people are unsure of the exact
definition or true description of the
term lean. Furthermore, it should
come as no surprise that many
people are unaware of the origins
of this term. The most popular
written interpretations of lean are
as follows.

"Lean is the systematic approach

to identifying and eliminating
waste through continuous
improvement by flowing the "Lean is doing more output with
product at the pull of the less input. Use the least amount
customer in pursuit of of effort, energy, equipment,
perfection" time, facility, space, materials,
and capital while giving the
customer exactly what they
"Lean is a comprehensive set of want"
techniques that when combined
allow reduction and elimination
of waste, thus will make the
company leaner, more flexible,
and more responsive by reducing
waste”

01
 The History of Lean
The term lean production was first coined by John Krafcik in
his 1988 book Triumph of the Lean Production System. The
Machine That Changed the World, written by Daniel T. Jones,
Daniel Ross, and James P. Womack, was published in 1990,
contributed to its increased popularity. The book examines the
production strategy of the highly efficient Japanese automaker,
Toyota Motor Corporation (TMC). Lean production is the term
used to describe the management system developed and
adopted by Toyota Motor.
In other words, lean production refers to Toyota Production
System (TPS), a world class manufacturing management
system. TPS is now regarded as the most efficient
manufacturing organization in the world. In some publications,
the terms lean production and TPS were used interchangeably.
Many industries attempt to implement their own form of lean
production using the TPS as a standard, but many of them fail.
Failure was primarily due to a lack of grasp of the lean principle,
particularly its humanistic aspects. Even Toyota itself admitted
to having difficulties at the beginning with implementing its TPS
outside Japan. In order to properly understand lean production,
one may need to first review the background of its founder,
Toyota Motor Corporation.

" In an effort to replicate Toyota's success, many

organizations rushed to implement various concepts
without fully grasping the CULTURE and managerial
support necessary to sustain such tools "
Fujio Cho - Toyota President

02
 Toyota Motor History

Kiichiro Toyoda
Sakiichi Toyoda Father of JIT
Toyota Motor Founder

When it was first established, Toyota Motor Corporation

(TMC) did not produce cars. The Toyoda Spinning and Weaving
Company founded by Sakiichi Toyoda, first produced fabric.
Later in 1937, the founder's son Kiichiro Toyoda established an
automotive division.
The automobile division was still in its infancy at the time,
and it could not afford to invest money on unnecessary
equipment and supplies. During his visit to Ford Motor, Kiichiro
Toyoda was inspired by the supermarket system in the United
States and introduced the Just-in-Time (JIT) management
principle. JIT refers to the concept of producing exactly what
the customer has ordered, on time and in the correct quantity.
Toyota only produces and delivers cars in response to
requests from customers. Toyota does not follow the strategy
adopted by Ford Motor, mass production, which is to produce
as many as feasible. The JIT philosophy was the foundation of
the Toyota Production System (TPS). Production of more
products than customers need is one of the many wastes,
according to TPS. The core idea behind TPS is total waste
elimination, which will be covered later in this ebook.

03
 TPS, however, took years of constant development across
the entire organization to be successful. Over time, the
foundation of the JIT concept was built through the
introduction and adoption of numerous continuous
improvement techniques, such as Kanban, Jidoka,
Standardized Work, Takt Time, 5S, SMED, Visual Control,
Error-proofing, and many others.
Although a lot of people mistakenly believe that lean is a
Japanese approach, the majority of its tools actually have
American roots. The Americans were the forerunners of ideas
like the assembly line, training within the industry,
comprehensive quality management, six sigma, time study,
and motion study. Notable American businessmen, scientists,
and researchers include Fredrick Taylor, Lilian Gilbreth, Henry
Ford, Abraham Maslow, Alfred Sloan, Edwards Deming, and a
host of others.

Henry Ford Taichi Ohno

Father of Mass Production Father of TPS

But, it was Toyota, under the leadership of Sakichi Toyoda,

Kiichiro Toyoda, Taiichi Ohno, Shigeo Shingo, Fujio Cho, and
Yasuhiro Monden, that seriously applied those scientific
studies into production and successfully merged the
humanistic and logical components of lean systems through
years of continuous improvement. As a result, General
Motors, a US corporation, was surpassed by Toyota Motor as
the world's leading automaker in 2007.

04
 History of Production
Henry Ford invented and implemented the mass production
system in the automotive industry in 1908, long before the lean
concept became popular. Earlier, the only way to produce
goods was through handiwork or craft production.
The table below compares the characteristics of each type of
production system.

Comparison between Craft, Mass & Lean Production

05
 Waste in
Manufacturing
Waste is any activity for which the customer will not be
willing to pay, the opposite of value. Production activity can be
divided into three categories; value-added or actual work,
necessary non-value added or supporting work, and non-value
added or waste. According to lean concept, the non-value-
added activities must be eliminated, supporting works should
be minimized and the actual work is improvised.
The 8 types of waste in manufacturing include defect,
overproduction, waiting, non-utilized skill, transportation,
inventory, movement, and extra processing. DOWNTIME is an
acronym for these wastes. In the manufacturing industry,
downtime refers to the time lost while production is forced to
halt due to equipment failures or other factors.

The 8 types of waste

06
 Defect
Defect products are unwanted outputs from the
manufacturing process. Unwanted outputs can be categorized
into defective and scrap. An output that does not meet specific
quality standards but can still be repaired is referred to as a
defective item. However, further procedures to fix the
damaged item cost the company more money for extra
manpower, material, facilities & material handling.
These additional costs have a direct impact on the
organization in the form of reduced capacity, increased
scheduling effort, increased inspection, and decreased client
confidence. Undetected problems that are shipped to
customers will result in warranty claims, in addition to
negatively affecting the company's reputation and brand.
The other defect, scraps refer to the manufacturing process
output that does not meet the predetermined product qualities.
Defects of this nature cannot be fixed and are placed directly in
the scrap bin. Scraps directly increase the cost of the operation
as the below;
Producing defective parts wastes resources including
labor, machinery, and materials.
Waste from handling, moving, and throwing away the
scrap item.
Waste from keeping the scrap items in stock.

“Stop
repairing
defects that
should
never have
occurred”

07
 Overproduction
“ Producing more or sooner than the
customer requires - make to stock ”

There are two types of overproduction which are producing

too much and producing too early. Overproduction or producing
items to stock is the worst waste of all because it invites other
waste. It is the root cause of excess inventory, transportation,
motion, waiting, and defects. These wastes will require;
Building and maintenance of the warehouse.
Additional personnel and equipment.
Additional components and materials.
Extra electricity and energy.
Additional material handling system.
Additional loan interest charges.

08
 Waiting
Time is priceless. Waiting for others, materials or equipment is
a waste of time as work cannot be done until they arrive.
Waiting may be due to the following;

Breakdowns because of equipment problems.

Long changeover time.
Delays because of processes not smoothly linking to
one another.
Poor material flow because of high work-in-process.
Poor process layout.
Poor work sequence.

"Waiting for supplies, tools,

plans, or other people to finish
their work ”

09
 Non-utilized skills

“ Workers are not

completely engaged,
underutilizing human
ability, knowledge,
and skills to maximize
value generation ”

Employees are the most valuable resource for an

organization. Failure of the employer to capitalize on its
employees’ knowledge and creativity prevents the long-term
effort to eliminate waste. Non-utilized skills and talent lead to
job dissatisfaction, lower motivation, and boredom among
employees. These job problems are associated with lower
productivity, higher absenteeism, and turnover.
An organization's management must make every effort to
utilize employees' knowledge, experience, and creativity. This
demonstrates respect for people, a culture emphasized by the
Toyota Production System. Creating a mutually respectful,
trusting, and cooperative environment between employer and
staff is critical for making progress and encouraging
engagement.

10
 Transportation

Even though transportation does not add value to the

product, it is vital because it supports the production process. In
manufacturing, transportation is needed to move raw materials
to the production line, from one workstation to another, and to
transport finished goods to warehouses or distributors. Forklifts,
cranes, conveyors, and other material handling equipment could
be used as a method of transportation.
Transportation activities can be reduced with careful planning
and process improvement. Transportation time, for example,
can be reduced by efficient layout and facility design, such as
the following;
Bringing processes closer together.
Utilizing a better technique for material management.
Shipping areas should be close to the end of the
process.
Work teams and support units should be located close
together.

“ Moving material, information around stages in

the production process ”

11
 Inventory

“ Keeping more materials on hand than needed

for the present stage of the procedure ”

The four types of inventory for a manufacturer to manage

with are the raw materials, work-in-process, finished goods
and maintenance/repair/operating (MRO).

Types of Inventory

Inventory increased the cost to the company of providing

resources such extra people, equipment, and storage space for
safekeeping. A minimum inventory level would be achieved by
the efficient, continuous flow of work through each
manufacturing process.

12
 Motion
Time and energy are wasted by employees or machines
performing unnecessary motion or movement to complete
tasks. Poor workplace design is usually the main cause of this
situation. To perform their tasks, employees are frequently
required to move excessively, which can be hazardous to their
health and safety. Examples of these movements include
bending, twisting, stretching, reaching, and lifting.
The most frequent safety and
health hazard reportedly caused by
excessive movement at work is
fatigue. Worker fatigue decreases
productivity and raises the risk of
accidents.
The lean culture that values
respect for people, makes safety a
top priority. The employer is
responsible for providing employees
with the safest working environment
and the convenient method to do the
jobs.
To reduce worker movement, the
workstation may need to be
redesigned, as well as the operating
method. However, the new design
and method must not compromise the
final output quality. Workstation
design must consider human factors
or ergonomics for safety, comfort,
and productivity.

13 06
 Extra-processing
performs more work than is
required on a task or project.
Extra-processing waste occurs whenever an employee

Producing more than the client needs is a waste of time and

resources. For example, using expensive high-precision
machines that process materials when simple equipment can
accomplish the work. The excessive usage of expensive capital
assets results in expenses for the company.

" Doing more work

on products than
customer willing to
pay for ”
Employees must be encouraged to
learn how to identify extra
processing waste, and perform the
standard work processing on parts
and not spend more effort than
required. Examples of extra
processing waste are below.

A product is highly polished

using labor and machinery
when it is not a product
functionality requirement.

Working outside the scope of a

project.

14 14
 Characteristics of
Lean
The following characteristics are present in an organization
that has incorporated the lean principle into its production
system.

Pull Method
Quality at the Source
Uniform Load
Small Lot Size
Standardized Method
Close Supplier
Flexible Work Force
Line Flow
Automation
5S
Total Productive Maintenance

15
 Pull Method
“ Make only what the customer has
ordered "
Companies that use lean operations employ the pull method,
in which product manufacturing is based on customer demand.
Pull systems will prevent many different types of waste
connected with the overproduction of goods by producing only
what customers require. The advantages of using the pull style
of manufacturing are accuracy in production, actual
consumption, small batches, low inventory, less waste, and
better communications.

On the other hand, the push method is frequently employed

in traditional systems that do not place an emphasis on lean
systems. Demand projections are made, and the product is
produced before the customer places their order. The push
method's drawbacks include approximate output, projected
demand, huge lots, high inventory, higher waste, and
inadequate communication.

16
 Quality at the Source
" The workers, not inspectors, should responsible
for product quality "

" Don't accept or pass a defect "

One of the key characteristics of lean systems is their
consistent ability to satisfy customer expectations. Adhering to
the "quality at the source" principle is one technique to
accomplish this goal. It is a philosophy in which errors are
discovered and fixed at the source. Working as their own
quality inspectors, employees should never move defective
products on to the next step in the process.

“Always do
it right the
first time! ”

Jidoka, Poka-Yoke, and Andon are concepts that the Toyota

Production System uses to stop any defects from entering the
production process and, more crucially, from reaching the
customers. In chapter 4, these tools will be discussed in greater
detail.

17
 Uniform Load
The daily workload at each workstation must be fairly
uniform for a lean system to function effectively. An efficient
and steady production line is ensured by the uniform load.
Before a pull system can be used, a robust production process
must first be established.
Uneven loads at workstations
result in a substantial quantity of
waste (muda) due to the
Uneven Load
unevenness (mura) of the
production line and the overburden
(muri) on some workers. To obtain
uniform loads at each workstation,
production load levelling (heijunka)
or line balancing might be used. Two
approaches to load balancing are
based on product volume and
product mix.
Uniform Load

" The rate of

production
determined by the
rate of sales "
Takt is a German word that means tempo or beat. Takt time
can be defined as the rate at which customers require items,
and it varies over time. It is used to compare the rate of
production to the rate of sales. According to lean principles, the
production time or tempo of a product should be determined by
customer demand.

Takt Time = Available work time ÷ Customer order quantity

per shift per shift

18
 Small Lot Size
" Small lot moves more quickly and smoothly "
A lot is the number of items that are processed together.
Smaller lot sizes are used in lean manufacturing processes. The
amount of work-in-process inventory is reduced since small lots
move through the system more quickly and smoothly.

Additionally, checking fewer goods in small amounts meant

that any defect could be addressed faster. Small lots also assist
in preventing overproduction and achieving a uniform load on
the system. Other benefits of small lots are;
The process can physically be
moved closer together.
Transportation between stations
can be simplified.
Workers show less tendency to
let poor quality pass.
Make processes more dependent
on each other.

Large lots, on the other hand, use

up a lot of workstation manufacturing
capacity and make scheduling
complicated. Small lots give
scheduling options for utilizing the
production capacity in an effective
and efficient manner.

However, small lots do have the disadvantage of increased

setup frequency. It requires setup, commonly called
changeover, to make the necessary adjustments to the
equipment between upcoming lots of goods. Quick die
changeover approach helps eliminate setup-related time delays.

19
Standardized Components
& Work Methods
Standardized work procedures outline the easiest, safest,
and most efficient method to complete the task based on
available technology. Additionally, standardized parts will need
the same manufacturing procedure and working approach,
which will speed up the changeover. Standardizing components
and work methods increase job repetition with lower setup time
will support the process stability for the following advantages.

Higher productivity.
Consistent quality.
Lower cost.
Increase safety.
Enable future
improvement.

Standardized work procedures

include:
Work content
Work sequence
Takt time
Expected result
Embedded tests that
indicate OK/Not OK

" The most convenient, safest, and efficient

method of completing the task based on
available technology "

20
 Close Supplier
The core philosophy of the lean system is to continuously
seek new ways to increase productivity and decrease inventory
levels. Having a good relationship with their suppliers is vital for
lean systems that function with little raw material inventory. It
requires supplies to be delivered frequently, has a shorter lead
time, and arrives on schedule with high quality.

" Delivered
frequently, on
schedule & high
quality "
Therefore, in order to promote
solid partnerships, suppliers
perform best when they are
situated near together
geographically. When customers
and their suppliers, however,
cannot be found close to one
another, a buffer or safety stock
is required because of the
distance.
To achieve a win-win situation, close supplier relationships
should be formed and maintained. Later chapter will include a
detailed discussion of the supply chain strategy.

21
 Flexible Workforce
The worker's role is elevated in lean systems. Workers in the
flexible workforce concept can be trained to handle a wide
range of tasks. By moving workers across workstations,
bottlenecks can be relieved without the need for inventory
buffers. Employees can also fill in for absent or ill coworkers.

" Multi-skilled workers

to perform variety of
tasks "

While giving employees new,

unfamiliar tasks to complete
temporarily reduces their productivity,
job rotation generally refreshes
employees and relieves boredom.
Some companies that have adopted
lean production allow cross-trained
personnel to switch jobs every two
hours. With the increasing demand for
product customization, the company
needs a team with a wider range of
skills.

22
 Line Flow
Work moves through a production system according to flow.
A continuous or line-flowing process is ideal for a production
system. Manufacturing processes must run continuously to
ensure that work goes smoothly and reliably. Continuous
production flow without bottlenecks, pauses, diversions,
backflows, or waiting is a characteristic of lean systems.

“ Make things one at a

time and move them
quickly through the
system ”

The goal of lean manufacturing is

to achieve a continuous production
flow, which results in more
consistent delivery and added value
for customers, and stakeholders. If
the flow is not continuous or is
interrupted, the possibility of waste
accumulation increases.

One method to smoothen the

production flow is to introduce an
inventory buffer system along the
process stream. While the cause of
the interruption in the prior process
is fixed, this buffering mechanism
makes sure the subsequent process
continues to run smoothly.

23
 Automation
Automation is the use of technology and innovation to
manufacture and deliver a product with little or no human
involvement. Automation is critical to lean systems and reduces
operating costs. The overall manufacturing costs are reduced as
a result of shorter lead times and lower inventory.

" Use industrial

robotics and
technology for speedy
manufacturing &
consistent quality "

However, before making a decision,

automation should be thoroughly
considered. Automation is frequently
thought to be beneficial to industries,
but this is not always the case. Humans
occasionally perform certain tasks more
effectively than robots and automatic
assembly lines.

24
 “ There is a place for everything,
5S everything is in place ”
Five S (5S) is a methodology for
organizing, cleaning,
developing, and sustaining a productive work environment. It
represents five related terms, each beginning with an S, that
describe workplace practices conducive to visual controls and
lean production.

The 5S initiative involves more than

merely cleaning the workstation. It
produces a visually appealing
environment that supports uniform
work and encourages employee
discipline. Its goal is to design a
workspace that makes it as easy as
feasible for someone to perform their
duties. The system that a person is
working inside largely determines how
well they function individually.
It is widely acknowledged that the
5S methodology serves as a crucial
cornerstone for reducing waste and
eliminate unnecessary jobs, activities,
and materials. By using 5S techniques,
employees can priorities their duties,
gain a better sense of focus, and
visually perceive everything
differently. The advantages of using
5S techniques are;

lower costs.
improve on-time delivery.
Improve productivity.
higher product quality.
better use of floor space.
safer working environment. “ 5S - making
builds the discipline needed to the invisible,
make the lean systems effective.
visible ”
25

 Total Productive
Maintenance (TPM)
“ The performance standard is zero breakdowns - total
involvement, preventive & predictive ”
Lean systems place a strong emphasis on a continuous
production flow, which depends on reliable machinery and
equipment. Hence, a comprehensive and effective maintenance
program is needed. Implementing Total Productive
Maintenance (TPM) in a lean system involves performing
maintenance tasks in accordance with a systematically
scheduled preventative program. Planned maintenance will
ensure that there is minimal or no downtime during production.

" Conventional culture - I operate, you fix "

" Lean culture - We are all responsible for our

equipment "
For long-term predictive maintenance, TPM gathers data in
order to study patterns in machine failure behaviour. This data
is then examined to develop better guidelines and procedures
for preventative maintenance. History of failures and
maintenance costs are also included in the data.
Total employee involvement is the basis of the TPM
approach. It aims to maximize the effectiveness of the facility,
its resources, and its operations by involving all staff members,
including the machine operators. Employee pride will rise as a
result of the lean culture, which encourages employees to
routinely maintain their own equipment. The maintenance tasks,
however, are usually limited to light cleaning, lubricating, and
adjusting. Yet, trained personnel are still needed for advanced
machine maintenance. Nevertheless, carrying out even basic
maintenance procedures greatly enhances the efficiency of
machinery.

26
 Lean Tools &
Approaches

The House of Lean

The Toyota Production System (TPS) is the culmination of
years of continuous process improvement efforts through
problem-solving and trial and error. To achieve the best
possible problem solution, numerous lean tools and approaches
were developed based on scientific research and
methodologies. It is important to note, however, that TPS is not
focused on tools, but rather on fostering a lean culture
throughout the organization.
The lean house demonstrates the lean system concept
perfectly. One of the pillars is JIT, the other is Jidoka and in
between is the philosophy of respect for people. Stability and
standardization are the foundations of the lean system, which
are reinforced by various lean tools such as Kaizen, Value
Stream Mapping, Kanban, and so on.
27
 Kaizen
“ Japanese word for change (kai) for the better (zen) that
means continuous process improvement”
Kaizen is a Japanese term that means constant process
improvement to eliminate waste. Continuous improvement,
requires a relentless effort encompassing people, equipment,
suppliers, materials, and procedures. The philosophy is based
on the idea that every aspect of an organization can be
improved. The ultimate goal is perfection, which can never be
reached but is always sought after.
Opportunities for continuous improvement in manufacturing
are frequently visible. These include waste that is obvious
(muda), such as persistent defects, equipment failures, or an
excess of inventories. Unevenness (mura) and overburden
(muri) are two other obvious areas for improvement. The
following elements may, but are not limited to, be included in
the prospect for improvement.
" Perfection will
Productivity
Quality never be achieved,
Cost but there is always
Delivery time room for
Safety and environment
Morale and motivation improvement "
Toyota's lean culture incorporates the kaizen practice that
values participative management. Toyota believes that
employees are the experts for their respective field. Employees
are thus encouraged to take part in the ongoing improvement
process. Any proposals for improvement (gemba newawashi),
no matter how small, are welcome. Any proposal, nevertheless,
will be carefully evaluated and tested before being
implemented. Toyota established a reward system for
employees who successfully implemented kaizen ideas.

28
 Kaizen Tools
In lean manufacturing, any improvement activities are
impractical unless production system elements such as
manpower, machines, materials, and methods are first
stabilized. Without the stability of these elements, the lean
characteristic of the pull system is not possible. Many
continuous improvement tools, approaches, and methods were
used and adopted in order to achieve production system
stability.
Kaizen models and concepts have been developed over the
years to aid in improvement. Well-known concepts are such as
PDCA, DMAIC, and Total Quality Management (TQM).

PDCA Cycle

The PDCA (Plan, Do, Check, Act) model was

developed by Edward Deming, an American
academician and consultant who introduced the
concept to Japan after WWII.

29
 DMAIC
DMAIC is a Six Sigma model for continuous improvement and
problem solving approach popularized by Motorola, Honeywell,
and General Electric. DMAIC is the acronym for the five steps of
the process improvement model, which are Define, Measure,
Analyze, Improve, and Control. It is a program designed to
reduce defects in order to reduce costs, save time, and improve
customer satisfaction.

Defines the project's purpose, scope &

outputs.

Measures the process and collect data.

Analyze the data, ensure repeatability &

reproducibility.

Improves by modifying or redesigning

existing processes and procedures.

Controls the new process to make sure

performance levels are maintained.

DMAIC Process

30
 Value Stream Mapping
A lean technique called value stream mapping (VSM) uses
graphics to show how information and materials move through
a production process. It provides a clear visual representation
of how a process works with precise time for each step-by-step
activity. Value stream mapping's goal is to identify between
activities that contribute value and those that do not so that
prospects for improvement can be explored.
VSM is a crucial qualitative lean tool for “ A diagnostic
waste reduction initiatives. It makes a TOOLS used to
visual map of the supply chain that covers assist in
the arrival of raw materials to the shipment identifying &
of finished goods to the customer, making eliminating
it very useful. It presents and provides a lot
waste ”
more data than a standard process map.

An illustration of a value stream mapping for a company's

present status may be seen in the picture above. It is significant
to notice that the value-added (VA) activity took only 16 minutes,
compared to the non-value-added (NVA) activity which is 4 days.

31
 VSM Process Steps
The steps in the process of value
stream mapping are as shown. The
initial stage is to concentrate on one
product family that can be mapped.
The production situation's current
state map is then drawn after that.
In order to create a map and
record actual process timings, the
analysis begins at the customer's end
and moves upstream. This allows for
first-hand observation. The shop
floor can provide data for drawing
the material and information flows, The steps in the process
such as information on each process' of value stream mapping
cycle time, setup or changeover time, are as shown. The initial
availability, production batch sizes, stage is to concentrate on
personnel requirements, number of one product family that can
product variations, pack size, be mapped. The production
working time, and scrap rate. situation's current state
map is then drawn after
that.

32
 Just-in-Time (JIT)
“ A management APPROACH in
production - producing and delivering
item as customers need it ”

Toyota Motor Corporation invented and popularized the

Just-in-Time (JIT) management philosophy. The terms JIT,
Toyota Production System (TPS), and lean system are
sometimes used interchangeably in literature. In other words,
JIT is a lean system. Kiichiro Toyoda introduced the JIT concept
into production in 1937. The objective is to produce only the
precise amounts that customers request while using the
minimum resources possible in terms of facilities, machinery,
supplies, and labor. JIT simply means;

producing that quantity of units that are

needed, no more, and no less.
producing them at the date and time required,
not before, and not after.
a supplier delivers the exact quantity
demanded, at the scheduled time and date.
Materials are only delivered when they are needed using
the JIT approach. When a delivery is late or incomplete, a
problem is immediately identified and resolved. JIT simply
means being efficient, organized, precise, adaptable, on time,
and of the highest quality at the lowest possible cost. The
ultimate goal is customer satisfaction. The JIT approach lowers
expenses related to excess inventory, minimize variability, and
expedites production time.

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 JIT Characteristics Element
As previously stated, the terms JIT and lean system are frequently used
interchangeably in the literature. As a result, the JIT characteristics mirror
those of the lean system, as discussed in topic 3. These characteristics
are as follows:

JIT Elements

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 JIT Tools - Kanban

“A TOOLS to facilitate better communication

that enable the pull system ”

Kanban: 3 bin system

The Japanese word kanban means card or visible record. It is
a lean tool that supports the pull production approach and
maintains work discipline by functioning as a visual information
system. The kanban is the signals to transport and produce
goods at the right time, quantity, and location. The signal is a
directive that announces that a withdrawal has been made,
prompting production to replenish the items that were pulled
out.
As long as they work and improve communication, these
signals can take many different shapes. Containers, carts,
baskets, and tote pans are examples of common kanban. In
conclusion, kanban works as a strategy for lean improvement to
establish an efficient communication system that;
Facilitate smooth production flow.
Establish a pull system.
Control inventory level.

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 Withdrawal & Production
Kanban
The two forms of kanban used in manufacturing are
withdrawal and production kanban. At the user's location, the
withdrawal card's container is emptied. The item and quantity
the user of the item shall withdraw from the container are
specified on the withdrawal card. The producer should be
notified when a container is empty so that another item may be
supplied. The work order is the production kanban. The work
order specifies the amount, material, and delivery location for
the item that has to be manufactured. The general rules of using
kanban are as follow;
The 6 Rules of Kanban

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 JIT Tools - Jidoka
“ Autonomation or Smart Automation -
Stop production, so that production
never has to stop ”
The Japanese name for something that automatically stops a
procedure when something goes wrong is jidoka aka
autonomation. Jidoka gives employees the authority to stop
production so that problems can be discovered and corrected.
The founder of Toyota, Sakichi Toyoda, invented a loom that
automatically stopped when a thread broke in 1926. This is the
first time the Jidoka concept has been used.
Jidoka is a visual management system that helps employees
check the quality of their work at each station. This technique
also frees up employees from constantly attending machines,
enabling them to carry out other tasks.

JIT Tools - Poka - Yoke

“ mistake proofing methods aimed at designing a
fail-safe system that minimizes human errors ”

Using Poka-Yoke, or mistake-proofing techniques, to create

a fail-safe system that works to prevent and reduces human
errors, is one effective strategy for implementing quality at the
source. Poka-yoke systems perform excellently in actual
situations.
For example, every vehicle manufactured at the Toyota plant
comes with an RFID (Radio Frequency Identification Device)
chip that records how many nuts and bolts need to be tightened
for a particular operation at the assigned workstation. When the
required quantity of nuts have been tightened, the green light
turns on.
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 JIT Tools - Andon
“ to signal any abnormal condition for immediate
necessary action ”
Andon is the Japanese word for signboard. It gives the
machines and operators the ability to signal the occurrence of
any abnormal condition during production such as a shortage
of parts, products made outside of specifications, and tool
malfunction. Andon can take the form of audio alarms, blinking
lights, LCD (Liquid Crystal Display) text displays, or chords
that can be pulled by workers to ask for help or stop the
production line if needed.
The examples are andon board and light. For andon light,
green indicates normal condition, yellow to signal a call for
help and red light informs that the production line is stopping.

At Toyota, workers are authorized

to shut down the production line if a
defect is found. This practice helps
to ensure accountability by
upstream workers to do their job
properly by not passing defectives
downstream.

Andon board

When a defect is detected, the

production line is stopped until the
root cause of the defect is
identified and solved. This
promotes a culture of zero
tolerance for defects in an
organization.
Andon light

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 Supply Chain
The phrase supply chain refers to a series of operations that
begin with the procurement of raw materials for production,
continue into product manufacturing and distribution, and end
with customer satisfaction. Suppliers, manufacturers,
distributors, wholesalers, and retailers who provide products to
final consumers are members of a supply chain network.

Supply Chain
There are upstream and downstream activities in the supply
chain. The process of providing the resources required for
production is referred to as upstream activity. On the other
hand, downstream operations refer to the procedure of
distributing the finished product to the end customers.
Thus, supply chain management is the coordination of
linkages between upstream and downstream operations with
the aim of efficiently matching supply and demand.

Logistics Management
Logistic is a component of the larger supply chain. Logistics
management is the planning, execution, and control of the
effective flow and storage of raw materials, goods, services,
and information to meet customers' demands. Logistics
management systems cover transportation, warehousing and
inventory management.
The goal of logistic management is to achieve effective
operations through the coordination of activities associated
with material procurement, distribution, and storage. Logistics
management that is efficient and effective offers manufacturers
a competitive edge by lowering costs and enhancing customer
service.
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 The Elements of
Supply Chain Management
(SCM)
The four supply chain elements that work together to create
an economical and competitive business strategy are
purchasing, operations, distribution, and integration.

Purchasing
Purchasing is the process of acquiring goods or services
that are required for production. Purchasing activities should be
carefully planned in order to supply the best resources possible
for manufacturing processes. The procurement of resources
such as materials, tools, and equipment is a component of the
inventory management system.

Make-or -by
The manufacturing company's make-or-buy decision refers
to deciding whether to manufacture a part, or service in-house
or outsource it to an external supplier. Regardless of the option,
the supply chain's performance should be evaluated constantly.
Supplier performance, cost variation, production capacities, and
other related costs should be reviewed on a regular basis. The
figure on the next page, shows some factors to consider when
deciding whether to make an item in-house or outsource it.

Sourcing Strategies
The organization must decide its supply chain strategy
before sourcing goods and services from outside suppliers.
There are 5 strategies that a company can take into
consideration shown in the next figure.

40
Make-or-buy Decision

5 Sourcing Strategies

41
 Sourcing Strategy - Supplier Assessment
Making decision on a supplier is challenging because each
has unique strengths and weaknesses. A company's
procurement policy may facilitate the selection and
management of suppliers. Nevertheless, the following are some
factors to consider when assessing the suppliers.

Technical Ability
Have the production capacity & flexible to technological
changes.

Production Capability
Able to produce in accordance to quantity & quality.

Reliability
Proven track record, stable and financially solid.

After Sales Support

Must offer excellent after sales services.

Supplier Location
Prefer a close location for lower delivery time & cost.

Price
Reasonable price that match the product quality.

Purchasing Terms
Credit terms and conditions.

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 Operation
Operation refers to the production process that converts
inputs into outputs in accordance to customer expectations. To
remain competitive, manufacturing organizations must
implement the lean production approach or JIT principle.

Inventory Management Strategy

An effective and efficient inventory management system is a
critical component of production. To meet customer demands,
inventories must be kept at an optimal level. Product quality,
process, product engineering, production planning, customer
responsiveness, and overall profitability are all influenced by
inventory levels. Nonetheless, excess inventories are costly to
the company, according to the lean principle. The four functions
of inventory are as follows.

as a buffer to protect the company from material supply

fluctuations.
as a buffer to protect the company from fluctuations in
demand.
to benefit from volume discounts.
to protect against inflation.

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 The ideal inventory management system balances supply,
inventory, and customer demand. Such a system is determined
by the ability to classify inventory items and keep accurate
inventory records. The 4 inventory management strategies that
an operations manager can employ are as follows:

Inventory Management Strategy

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 Distribution
Companies are aware that transporting goods to and from
facilities can account for up to a quarter of the total cost of
production. Because of the high cost of distribution, businesses
must constantly evaluate their options. Trucking, railroads,
airfreight, waterways, and pipelines are the five main modes of
transportation.

Mode of Transportation

45
 Warehousing
A warehouse is another important element of the distribution
management. The primary function of a warehouse is to hold
products until they are ready to be delivered to customers.
Operating a warehouse is frequently very expensive, and poor
management of the warehouse operations will even drive up
costs. The purpose of a warehouse is listed in the table below.

Warehouse Function

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 Integration
The integration of the supply chain from suppliers to
production, warehousing, distribution, and end to the customer
is wide-ranging. Inefficiencies, also known as waste in the lean
principle, could occur anywhere. This is due to the fact that
each member of the supply chain operates as a separate and
often very independent organization.

Integrated Supply Chain

The first step toward effective supply chain management is
mutual agreement on goals, which is followed by mutual trust
and, finally, compatible organizational cultures.

Effective Supply Chain Management

47
 Integrated Supply Chain - Issues

Integrated Supply Chain - Opportunities

Accurate market requirements are generated by
sharing;
Point of sale data to enable efficient
Accurate Pull scheduling among chain members.
Data Computer-assisted ordering (CAO) collect
sales data to do the adjustment with market
factors, inventory, and outstanding order to
produce accurate net order.

Single Control Distributor to manage inventory for particular

Replenishment area.

Vendor- Use a local supplier (distributor) to maintain for

Managed
the manufacturer and retailer.
Inventory
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 Lot sizes reduction through active management.
Establishing cost-effective transportation than
the truckload lots.
Lot Size Offer discounts based on total annual volume
Reduction
rather than size of individual shipments.
Lowering ordering costs by electronic
purchasing & standing orders.

A long term purchase agreement to a supplier

Blanket Orders for items, to be delivered over period of time,
to take advantage of fixed price.

To increase the level of standardization as a

strategy for cost reduction.
Standardization Standardization of labeling, coloring,
packaging or engineering specifications.

Delaying any changes or customization to a

Postponement product as long as possible in the production
process.

Drop Shipping Shipping directly from the supplier to the end

& Special
Package user saves time and money on reshipping.

Pass-through Expedites delivery by keeping goods in storage

Facility and sending them from shipping hubs.

Channel A product's final assembly can be delegated to

Assembly the distributor. Distributor as partner.

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 The Benefits of Effective
Supply Chain Management
The supply chain receives a
great deal of attention because
it is an essential component of company strategy and the most
expensive activity in most businesses. The goal of effective
supply chain management is to create a network of suppliers
who are focused on providing the most value to the end user.

“ Competition is no longer
between enterprises, it is
the supply chains ”
Competition now exists between supply chains, which are
frequently global. Thus, creative planning and thorough
research are necessary for a successful strategic plan for
supply chain management. Effective supply chain management
has the following benefits;

Enhance customer service.

Lower operating costs.
Higher sales volume.
Increased efficiency.
Higher productivity.
More flexible.
More responsive.

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 References

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