The overall objective of lean manufacturing is to reduce the lead time and cost of the product. In saturated markets, like textiles, the issue of lead-time is of great importance. It is one of the main driving factors for business profitability but businesses still seem to be not fully aware of the benefits of lean manufacturing and its implementation can bring potential to bring significant improvements in textile industry of Pakistan.
1.1 Overview
Pakistan's textile industry has undergone massive change. Balancing, Modernization and Rehabilitation (BMR) programs have upgraded the textile mills. New investment in textile projects has introduced modern technology but despite having latest computerized manufacturing machines in Pakistan, the efficiency of operation leaves a lot to be desired. There is no production and inventory planning systems, less emphasis is given to supply chain management issues on practical grounds. Lean manufacturing is one of these ignored factors of supply chain management (SCM) in Pakistan's textile industry, although it can resolve most of the current issues of lead time & cost problems.
In supply chain management, Lean manufacturing needs to be the key focus to enhance competitiveness of our textile industry. It can help us enter the arena of high value textile markets.
1.2 Problem Statement
Pakistan textiles are losing share competitiveness in the international market due to cost competition & delivery time problems. Buyers get a low quality service which reduces their confidence to do business with Pakistan. Furthermore, Pakistani industry can neither meet the lead time demand of highly profitable textile nor the low price expectation of their international buyers until and unless an initiative to resolve the cost and delivery issues is not undertaken. The lean manufacturing application could resolve these issues, but it requires the awareness and knowledge of the application of its concepts. This thesis proposes to focus on the barriers to implementation of lean manufacturing in the textile industry of Pakistan.
1.3 Hypothesis
H1
Waste management has significant impact in implementing Lean Manufacturing in Textile Industry
H2
Training has significant impact in implementing Lean Manufacturing in Textile Industry
H3
ERP has significant impact in implementation of Lean Manufacturing
1.4 Outline of the study
The main purpose of the thesis is to determine the awareness & barriers to adoption of lean manufacturing in textile industry of Pakistan. The findings can hopefully be applied to the whole textile sector of Pakistan to make it more competitive.
1.5 Definitions
The terminology and definitions specific to this project are summarized in Appendix
CHAPTER 2:
LITERATURE REVIEW
Lean is a dynamic process of change driven by a systematic set of principles and best practices aimed at continuous improvement by eliminating waste. And it requires rooting out everything that is non-value-added [Womack et al, 1990].
History of Lean Manufacturing
Ford and his right-hand-man, Charles E. Sorensen, fashioned the first comprehensive manufacturing strategy [Robert Chalice, 2007]. They took all the elements of a manufacturing system; people, machines, tooling, and products, and arranged them in a continuous system for manufacturing the Model T automobile. Ford was so incredibly successful he quickly became one of the world's richest men and put the world on wheels.
Many of the concepts in Lean Manufacturing originate from the Toyota Production System (TPS) and have been implemented gradually throughout Toyota's operations beginning in the 1950's. It is a popular fact that JIT system started in the initial years after the World War II in Japan for the Toyota automobile system. Toyoda family in Japan decided to change their automatic loom manufacturing business to the automobile business. Toyota was recognized as one of the most efficient manufacturing companies in the world and had become the benchmark for Lean Manufacturing [Womack and Roos,1992]. Lean Manufacturing has increasingly been applied by leading manufacturing companies throughout the world, led by the major automobile manufactures and their equipment suppliers. By the 1980's Toyota had increasingly become known for the effectiveness with which it had implemented Just-In-Time (JIT) manufacturing systems. Lean Manufacturing is becoming an increasingly important topic for manufacturing companies in developed countries as they try to find ways to compete more effectively against competition.
Definition of lean manufacturing
Lean manufacturing is the systematic elimination of waste from all aspects of an organization's operations, where waste is viewed as any use or loss of resources that does not lead directly to creating the product or service a customer wants when they want it. In many industrial processes, such non-value added activity can comprise more than 90 percent of a factory's total activity [Caulkin,2002].
Manufacturing Waste
The concept of waste includes anything or activity that does not add value in the end product. Every organization wastes a significant proportion of its resources. Therefore it is important to have a closer look at these wastes. In general, the waste can be classified into the following categories.
Over production
Waiting
Work In Progress (WIP)
Transportation
Inappropriate processing
Excess motion or ergonomic problems
Defected products
Underutilization of employees
2.3.1 Over-production - Over-production is unnecessarily producing more than demanded or producing it too early before it is needed. This increases the risk of obsolescence, increases the risk of producing the wrong thing and increases the possibility of having to sell those items at a discount or discard them as scrap. However, there are some cases when an extra supply of semi-finished or finished products is intentionally maintained, even by lean manufacturers.
2.3.2 Defects - In addition to physical defects which directly add to the costs of goods sold, this may include errors in paperwork, provision of incorrect information about the product, late delivery, production to incorrect specifications, use of too much raw materials or generation of unnecessary scrap.
2.3.3 Inventory - Inventory waste means having unnecessarily high levels of raw materials, works-in-progress and finished products. Extra inventory leads to higher inventory financing costs, higher storage costs and higher defect rates. For more on this, please see section 2.5 below.
2.3.4 Transportation - Transportation includes any movement of materials that does not add any value to the product, such as moving materials between workstations. The idea is that transportation of materials between production-stages should aim for the ideal that the output of one process is immediately used as the input for the next process. Transportation between processing stages results in prolonging production cycle times, the inefficient use of labor and space and can also be a source of minor production stoppages.
2.3.5 Waiting - Waiting is idle time for workers or machines due to bottlenecks or inefficient production flow on the factory floor. Waiting also includes small delays between processing of units. Waiting results in a significant cost insofar as it increases labor costs and depreciation costs per unit of output.
2.3.6 Motion - Motion includes any unnecessary physical motions or walking by workers which diverts them from actual processing work. For example, this might include walking around the factory floor to look for a tool, or even unnecessary or difficult physical movements, due to poorly designed ergonomics, which slow down the workers.
2.3.7 Correction - Correction, or reprocessing, is when something has to be re-done because it wasn't done correctly the first time. This not only results in inefficient use of labor and equipment but the act of re-processing often causes disruptions to the smooth flow of production and therefore generates bottlenecks and stoppages. Also, issues associated with reworking typically consume a significant amount of management time and therefore add to factory overhead costs.
2.3.8 Over-processing - Over-processing is unintentionally doing more processing work than the customer requires in terms of product quality or features - such as polishing or applying finishing on some areas of a product that won't be seen by the customer.
2.3.9 Knowledge Disconnection - This is when information or knowledge isn't available where or when it is needed. This might include information on correct procedures, specifications, ways to solve problems, etc. Lack of correct information often leads to defects and bottlenecks. For example, unavailability of a mixing formula may potentially suspend the entire process or create defective items due to time-consuming trial-and-error tests.
Objectives of Lean Manufacturing
Lean Manufacturing, also called Lean Production, is a set of tools and methodologies that aims for the continuous elimination of all waste in the production process. The main benefits of this are lower production costs; increased output and shorter production lead times. More specifically, some of the goals include:
2.4.1 Defects and wastage - Reduce defects and unnecessary physical wastage, including excess use of raw material inputs, preventable defects, costs associated with reprocessing defective items, and unnecessary product characteristics which are not required by customers;
2.4.2 Cycle Times - Reduce manufacturing lead times and production cycle times by reducing waiting times between processing stages, as well as process preparation times and product/model conversion times.
2.4.3 Inventory levels - Minimize inventory levels at all stages of production, particularly works-in progress between production stages. Lower inventories also mean lower working capital requirements.
2.4.4 Labor productivity - Improve labor productivity, both by reducing the idle time of workers and ensuring that when workers are working, they are using their effort as productively as possible (including not doing unnecessary tasks or unnecessary motions);
2.4.5 Utilization of equipment and space - Use equipment and manufacturing space more efficiently by eliminating bottlenecks and maximizing the rate of production though existing equipment, while minimizing machine downtime;
2.4.6 Flexibility - Have the ability to produce a more flexible range of products with minimum changeover costs and changeover time.
2.4.7 Output - Insofar as reduced cycle times, increased labor productivity and elimination of bottlenecks and machine downtime can be achieved, companies can generally significantly increased output from their existing facilities.
Basic Principles of Lean
Add Nothing But Value (Eliminate Waste)
The first step in lean thinking is to understand what value is and what activities and resources are absolutely necessary to create that value. Once this is understood, everything else is waste. Since no one wants to consider what they do as waste, the job of determining what value is and what adds value is something that needs to be done at a fairly high level. Let's say you are developing order tracking software. It seems like it would be very important for a customer to know the status of their order, so this would certainly add customer value. But actually, if the order is in house for less than 24 hours, the only order status that is necessary is to inform the customer that the order was received, and then that it has been shipped, and let them know the shipping tracking number. Better yet, if the order can be fulfilled by downloading it on the Web, there really isn't any order status necessary at all. To develop breakthroughs with lean thinking, the first step is learning to see waste. If something does not directly add value, it is waste. If there is a way to do without it, it is waste. Taiichi Ohno, the mastermind of the Toyota Production System, identified seven types of manufacturing waste, [Poppendieck.LLC, 2002]
CHAPTER 3:
RESEARCH METHODS
3.1 Method of Data Collection
This section describes how the researcher gathered the relevant data for this study. Although known to the population, the researcher relied on the human resources manager to obtain access to the sample. The top management has direct contact with the population and therefore had more influence in terms of creating a sense of urgency to complete the questionnaires.
3.2 Sampling Technique
The purpose of data collection was to obtain information on application of lean manufacturing practices and senior management's perspective on the subject. A questionnaire was developed to obtain the required data through interviews. Convenience sampling was employed for the purpose.
3.3 Sample size
Due to the limited time, only it was decided to limit the survey to the major textile exporters of Karachi, which nevertheless are a good indicator of national textile export industry. The selected sample accounts for more than 30% of the textile exports. The candidate companies are:
Gul Ahmed Textile Mills Limited.
Younus Textile Mills Limited.
Al Abid textile mills Limited.
Lucky Textile Mills Limited.
Al-Karam Textile Mills Limited.
Orient Textile Mills Limited.
The total number of Respondents was 50 managers from above companies. Further the work doesn't include interviews with supplier & customers which would have been difficult and time consuming. The data collection was therefore limited to the organization internal boundaries only. The significance of the candidate companies can be recognized by the fact that the selected textile companies account for more than 30% of the total textile export and is therefore an excellent indicator of overall textile exporting industries.
3.4 Instrument of Data Collection
The questionnaire used for data collection is presented in Appendix A-2. It consists of three distinct sections to allow investigation of the lean manufacturing activities.
3.5 Statistical tool used
In this research Descriptive (Frequency Distribution) and Inferential statistics (One Sample T-Test) was used to find out that whether lean manufacturing is used in the Textile Industry or not. One sample t-tests is used to determine the mean of a sample is different from a particular value.
CHAPTER 4:
RESULTS
4.1 Findings and Interpretation of results
The results of one sample T-Testis are shown in Tables 1 and 2.
Table 1.One-Sample Statistics
N
Mean
Std. Deviation
Std. Error Mean
Waste
50
3.2067
.25298
.03578
Training
50
3.4850
.50104
.07086
ERP
50
4.0343
.37136
.05252
The Table 1, labeled One-Sample Statistics, gives descriptive statistics for the variables waste, training and ERP respectively.
Table 2. One-Sample Test
Test Value = 4
95% Confidence Interval of the Difference
t
df
Sig. (2-tailed)
Mean Difference
Lower
Upper
Waste
-22.174
49
.000
-.79333
-.8652
-.7214
Training
-7.268
49
.000
-.51500
-.6574
-.3726
ERP
.653
49
.517
.03429
-.0713
.1398
Table 2 labeled One-Sample Test gives the result of t-test analysis. The first entry is the value of the t-statistics, next is the degree of freedom (df), followed by the corresponding p value for 2-tailed test given as Sig. (2-tailed).
The test result for Waste variable gives the t-statistic -22.174 with 49 degrees of freedom. The corresponding 2-tailed p value for waste is 0.00 which is less than 0.05. This means that the sample mean is significantly different from the test value of 4 which rejects H1.
The test result for Training gives the t-statistic -7.268 with 49 degrees of freedom. The corresponding 2-tailed p value for Training is also 0.00 which is less than 0.05. This means the sample mean is significantly different from the test value of 4 which rejects H2 also.
The test result for ERP gives the t-statistic 0.653 with 49 degrees of freedom. The corresponding 2-tailed p value for waste is 0.517 which is greater than 0.05. This means the sample mean is same as the test value of 4 which supports H3.
4.2 Hypothesis Assessment Summary
S.no.
Hypotheses
t
Sig.
Result
H1
Waste management has significant impact in implementing Lean Manufacturing in Textile Industry
-22.174
0.000
Rejected
H2
Training has significant impact in implementing Lean Manufacturing in Textile Industry
-7.268
0.000
Rejected
H3
ERP has significant impact in implementing Lean
Manufacturing in Textile Industry
0.653
0.517
Accepted
CHAPTER 5:
DISCUSSION, IMPLICATIONS, FUTURE RESEARCH AND CONCLUSION,
5.1 Discussions
This thesis indicates that sample population is not aware of the lean manufacturing tools & benefits that's why it has not yet been implemented in the textile industry of Pakistan.
Furthermore the research also indicates that the knowledge & the traditional culture is the main barrier in the implementation of lean manufacturing. Realization of lean manufacturing can only be done when the management is aware of the possible benefits of this philosophy.
5.2 Implications and Recommendation
It is recommended that training and education in lean manufacturing concept be undertaken as a top priority. This training needs to begin at senior management level to provide the commitment necessary for implementing lean manufacturing.
Production staff and management need to develop trained eyes to identify non-value adding activities (wastes) to even attempt to remove these wastes. Lack of information technology also hides many wastes that could become self evident if information technology resources were available and kept updated.
The benefits of lean manufacturing could only be availed with top-level commitment to the implementation of lean. Awareness, education, and application of ERP would be critical to the successful implementation of lean manufacturing concepts and success of the textile industry
5.3 Future Research
This research has clearly indicated that awareness to the concepts of lean manufacturing and wider application of ERP are major obstacles to improved efficiency of the sector. A more comprehensive study through textile research institutions is justified which could also be used for assistance in implementing lean manufacturing in the textile sector.
Similar research needs to be conducted in other industrial sectors to determine the effort required to improve the efficiency of the overall industrial sector.
5.4 Conclusion
It is evident from the interviews and the survey that lean manufacturing concepts are either not understood even at senior levels. The concept of what constitutes 'waste' is one such concept. Many professionals do not recognize the concept of waste (Muda) and this prevents not only identification of waste; non value adding activities and operations, but also rejection of waste as a barrier to lean manufacturing.
Training of staff into the identification of non-value adding activities and operation will provide a major impetus to implementation of lean manufacturing. Both awareness and identification of waste are interdependent and the industries need to focus on both of these areas to improve implementation of lean manufacturing.
