Manufacturing industries are based on the ability of a company to create a valuable product at a low cost (with little waste) and sell it to the customer at a competitive, profitable price. Various methods exist for achieving both of these requirements. In order to minimize costs, manufacturers can use cheaper products or employ fewer workers. Prices can be set accordingly to achieve maximum profits. These are not the only ways to enhance the manufacturing operation, however. Additional methods entail making the process smarter or more efficient, rather than changing the material inputs. Manufacturers can become more efficient by creating more products in less time and creating less waste during similar processes. As a whole, these processes are known as lean manufacturing.
The core concept of lean manufacturing is based on two main components: adding value and eliminating waste. An excellent definition of value, taken from the Toyota Corporation, is 'an item or feature for which a customer is willing to pay' (TOYOTA). By using this definition, value becomes less abstract and more material. If a customer is willing to pay for something, it is valuable. If the customer is not willing to pay for it, the item or feature does not have value to the manufacturer. The second component of lean manufacturing is the elimination of waste. Waste can be defined in numerous ways:
* Overproduction ' producing more than, faster than or sooner than is required
* Waiting ' idle time that could be used productively
* Transporting ' unnecessary transport of parts or materials
* Inappropriate processing ' operations that add no value from the customer's perspective
* Unnecessary inventory ' exceeding one-piece flow
* Unnecessary/excess motion ' any movement by people or equipment that does not add value
* Defects ' rework, repair or waste in its simplest form
-Vorne
Manufacturers improve the production of a product in material terms by reducing overhead costs and disposing of unnecessary functions thus increasing economic returns on the product.
History
The processes of lean manufacturing are valuable tools when taken individually, helping to promote the effective production and efficient control of waste throughout the manufacturing process for corporations attempting to streamline production processes. Companies who are able to introduce multiple systems of lean manufacturing find even greater success in improving their current system. The best method for incorporating these processes would thus be to include all of the individual processes in a system, in order to gain an advantage over competitors and dominate the market share.
The most notable corporation, in terms of lean manufacturing, to accomplish this feat is the Japanese car company Toyota, which has presented itself over the years as a leader in the ways of lean manufacturing. Toyota developed a system of making their manufacturing process better by introducing new ideas throughout the process- on the manufacturing floor, in the shipping realm, and in methods of interpreting consumer demands. This is done using tactics that have been created and compiled to create the concept called the Toyota Production System (TPS). In all the Toyota Production System took years to fully develop, but it now has made Toyota one of the leading car manufacturers in the world.
Fig. 1 - An overview of the Toyota Production System (TPS)
As the forefather of lean manufacturing, the ideas of TPS have been added to and expanded upon by other companies to try to create a more effective manufacturing process. New ideas and strategies are continually being added, but the core ideas that encompass TPS remain. The foundations of the methods that make up the Toyota Production System can be traced to that of a few men to be noted in particular.
The first of these was a man named Sakichi Toyoda. This man was the inventor of the automatic loom and founder of the Toyota Group. In 1902, Sakichi Toyoda invented a loom that would automatically stop if a string was broken. With this, one could oversee multiple looms that would work at the same time. Doing so allowed for a smaller number of workers to preside over a greater number of processes. This lowers the labor cost, which in turn helps to lower the price of the final product. Also since the loom would stop when a string broke, the loom would not continue to create a defective product. This helped to enhance the productivity and efficiency of assembly-line processes. Additionally, it aided greatly in the elimination of waste in the form of both time and material used. By immediately stopping, the problem could be identified quickly and a solution implemented in much less time than if the machine were to continue to run. Also, it helped to reduce material waste by eliminating the continuous production of defective products. Both of these processes helped to ensure the addition of quality to every product. This concept, introduced and developed by Sakichi, is one that the Toyota Corporation adopted as a part of the TPS. 'The principle of designing equipment to stop automatically and call attention to problems immediately is crucial to the Toyota Production System. It is evident on every production line at Toyota and at other companies that use the system' (TMMK). It is apparent that this idea has become a crucial part of TPS. (TMMK)
Fig. 2 ' Toyoda's Automatic Loom
The second man to heavily influence the Toyota Production System was Sakichi Toyoda's son Kiichiro Toyoda. When the Toyota Group began manufacturing cars in the 30's, Kiichiro headed the project. He first studied Henry Ford's assembly line. After gathering a firm understanding of the assembly line, Kiichiro decided to form Toyota's manufacturing process after that of Ford. Kiichiro, however, added his own ideas to the process and adapted it to fit the needs of the Toyota company and related market. Toyota would go on to manufacture only what customers ordered and only when they ordered it. Each part of the manufacturing process would only manufacture what items were needed to complete the order, and this would only be done when these items were needed for the next part of the process. There would never be extra parts created since this would be a waste of resources. This concept was called 'just-in-time' manufacturing. (TMMK)
Another one of the most influential men in the creation of the TPS was a production engineer for Toyota named Taiichi Ohno. In the mid 50's, Ohno visited the United States and was intrigued by the American supermarket. Stores would provide an array of merchandise to the costumer. The costumer would choose and buy what they wanted, and the store would provide more of the items that were sold to meet the demands of consumers. This seemed to be quite an efficient way of doing business. Ohno had the idea to mimic this in the way that Toyota produced cars. The result was that a production line would create an array of parts for the next production line to choose from. When the second line made its choice, the first line creates more of that part to equal the demands of the next production line in the process. In this way each process would meet the demands of the following process. Ohno went on to create methods of communication between processes. One of these was the popular Kanban system, which is discussed later in this paper. (TMMK)
Toyota's application of the Kanban system is particularly exceptional for a few reasons. First, Toyota produces automobiles- thousands of them- which are constructed of thousands of parts each. This magnitude of production requires a finely tuned supply and production process in order to maintain high-volume output. The Kanban scheduling system helps to alleviate this problem by informing the manufacturers of 'what, when, and how much' they need to produce. This is especially useful when dealing with processes of different magnitudes (such as the small process of constructing a steering wheel vs. the much larger process of attaching the body of the automobile to the chassis) because it helps to keep the production on-time and on track.
When items are produced only to meet the demands of the following process, a problem is created. Different parts are made to meet different demands at different points in time. The problem with this is that the production line must allow time for changeover to provide for manufacturing of the next part. To prepare to create the next part, a production line must do things like change the tools and switch to different molds. While time is spent for changeover, no parts can be made. This accounts for lost money.
A man named Shigeo Shingo worked to fix this problem and reduce changeover time. He created a system called the Single Minute Exchange of Dies (SMED) system. This is a system that shortens the process of changeover. With SMED the changeover process is planned so that the changeover is mostly finished while production is still occurring prior to changeover. This requires preparation and careful planning. 'SMED improves setup process and provide a setup time reduction up to 90% with moderate investments' (Cakmakci, Mehmet, and Mahmut Karasu, 334). This is one of the many components of the Toyota Production System. All parts of the system add to lower production costs and better quality parts.
The implementation of the processes detailed previously has not only helped to make the Toyota Production System one of the most efficient manufacturing processes to date; but, in turn, it has helped to make the Toyota Corporation one of the most competitive players in the automobile industry. By specializing the ways in which value is added and waste is eliminated, Toyota has developed an economic model that is outproducing and outgaining its competitors. The advantage gained on the manufacturing floor translates directly to market advantages, where Toyota continues to increase market shares as other companies see their market shares decrease.
Fig. 3 ' Market Share and Sales
Fig. 4 - Toyota Market Share, 2009-2010
Application of Lean Manufacturing: Engineers
There are many ways to implement lean manufacturing from a technician's stand point. As the onsite engineer or supervisor, a technician is instrumental in making the manufacturing process run smoothly and efficiently. Also, the technician is important when the manufacturing process is being modified or changed. This is a frequent occurrence for lean manufacturing because the process is being constantly improved and refined.
Kaizen
This continuous improvement, called kaizen, is a fundamental aspect of lean manufacturing. The principle of kaizen is that the manufacturing process can always be improved and that anyone involved in the operation can have valuable input to improve the system. (Vorne) While the workers operating the manufacturing machinery may have knowledge from lots of hands-on experience, an onsite engineer has more theoretical knowledge to add to this experience. For example, an equipment operator may find a quicker way to switch tools from a lathe to save time but an engineer could improve the machine further by optimizing the tool shape, tool material and cutting speed. Both improvements are valuable in saving time and money for the company.
Fig. 5 ' The Kaizen Cycle
Another part of kaizen is improving employee morale and involvement in the improvement process. This is very important because the workers must be enthusiastic about their work and the company if they are going to take an active role in improving it. Therefore, it is critical for the onsite supervisor to encourage the employees to stay engaged with their work.
Kaizen is a continuous process where improvements are tried on a small scale, refined and then implemented on a larger scale. Once this is realized, the process starts over again as new improvements are presented. (Vorne) The onsite engineer is necessary in every stage of the cycle. The engineer must oversee the small scale test in one production plant and then monitor and document the results to determine where changes are necessary. It is then the job of the onsite engineer to assist with the large scale application of the improvement across the entire company. So in addition to proposing new ideas for improvements, an onsite engineer is responsible for putting these ideas into action effectively.
Overall Equipment Effectiveness (OEE)
Another tool used in lean manufacturing is called Overall Equipment Effectiveness or OEE. This measures the percentage of time that a machine is actually doing productive and profitable work. (Vorne) A machine wastes time during setup, tool replacing, tool changing and maintenance. By quantifying the amount of time used for production and comparing it with the wasted downtime, a machine's efficiency can be calculated. This value is viewed as the machine's efficiency, because any time spent in production is profitable and any time not spent in production costs the company money.
Fig. 6 ' OEE measurements.
Certainly a machine cannot operate without downtime; however, an engineer can take many steps to minimize the amount of downtime while maximizing the amount of time in production. When organizing the manufacturing process, an engineer can coordinate stoppage times. Therefore, when one machine is required to stop for maintenance or retooling, other machines can have maintenance done too instead of waiting for production to resume. Another way to reduce down time is to have the parts for maintenance and tools for retooling nearby, so the procedures can be completed as quickly as possible.
An additional aspect to OEE analysis is the time spent on producing a product of inferior quality that will have to be scrapped. Time spent remachining a part with defects is a waste of time and subsequently a waste of money. An engineer must find ways to reduce the number of defects in order to run a lean manufacturing operation. These defects could come directly from the machine in question or from somewhere earlier in the manufacturing line. Either way, the production of defects is a wasteful practice and should be eliminated wherever possible to ensure the leanest manufacturing process. (Vorne)
Total Productive Maintenance (TPM)
A concept that couples with Overall Equipment Effectiveness is called Total Productive Maintenance or TPM. This is a concept which emphasizes preventive and predictive maintenance instead of reactive maintenance. The traditional way of thinking about maintenance was to separate it from the manufacturing process and instead just use maintenance to react to a piece of equipment breaking. The biggest problem with this school of thought is that when a machine breaks down it is wasting time and money. TPM is a practice where maintenance is done throughout the manufacturing process by the machine operators. (Vorne) This is similar in concept to dressing a grinding wheel. During operation, a grinding wheel is dressed frequently to remove the buildup of material and dull pieces. This is a small example of TPM because the grinding wheel is maintained frequently during use instead of being used until it fails and needs to be replaced. While most of the work in TPM falls on the machine operator, the engineer must work to develop the regimen on maintenance and work to optimize the amount of time spent on maintenance and the amount of time spent on production. An advantage to this system is that there can be scheduled stops for preventative maintenance. These scheduled stops would be used to replace parts that will soon fail. This is safer than running a part until it fails and gives time for all of the machines to be maintained. This means that all of the machines would be maintained at the same time instead of having to stop multiple times to wait for a machine to be repaired from a failure. This is advantageous because while maintenance is a necessary occurrence, stopping to wait for another machine can be avoided. This highlights another key principal of lean manufacturing: Just-in-Time Production.
Just-In-Time Production (JIT)
Just-In-Time Production or JIT. JIT refers to the arrival of raw materials to the manufacturing center and to the arrival of each part at the next station in the manufacturing line. The first part of JIT is important in keeping the storage costs for raw materials down. Instead of paying for huge warehouses to store raw materials, the materials arrive jut in time to be used by the manufacturing center - hence the name Just-In-Time. This must be carefully organized and coordinated by the onsite supervisor so the system runs smoothly. Any delay in the arrival of supplies means a delay in production. This constant need for supplies is the major drawback to Just-In-Time Production. Ideally the supplies arrive just when they are needed and production operates smoothly and efficiently. Issues occur when the system operates less than ideally. The flow of supplies can be interrupted for some reason out of the manufacturing company's control. This would bring production grinding to a halt. A company with raw materials stored up could continue for a time until the supply resumes. The price of the supplies can change drastically which could offset the cost of stocking up is the materials were bought at low prices. These are the risks involved with Just-In-Time Production. (Vorne)
The second part to Just-In-Time Production is the same concept but applied inside the factory. Each station in the manufacturing process must wait for the materials to arrive from a previous step. (Vorne) The engineer must orchestrate the stations so there is very little time spent waiting on the previous station to deliver its materials for the next step. Once again this is because any time spent waiting means money is being wasted. The minimization of downtime is critical to running a lean manufacturing process.
Takt Time
On the other end of the manufacturing process is the finished product. The finished product is the focus of the lean manufacturing strategy Takt Time. The goal of Takt Time is to match the customer's demands without exceeding or falling short of them by too much. (Vorne) Exceeding the customer's demands results in overproduction which reduces the value of the product and results in wasted products which go unsold. Underproduction is not desirable either. Falling short of the customer's needs results in a shortage of the product. Both situations are not ideal for a lean manufacturing process. The best scenario is to produce enough of the product to meet the customer's needs and not exceed them. Some of this task falls to the manufacturing engineer or plant manager who must regulate how quickly the plant works to meet the customer's needs without exceeding them. A simple version of this concept is to calculate how frequently a product must be completed to reach a certain amount within a certain time frame. (Vorne)
Once this is defined the industrial engineer must find ways to tailor the manufacturing process to produce the correct amount of product in the given time frame. It is the duty of the industrial engineer to apply these concepts in an effective manner so that the manufacturing process is as efficient and as cost effective as possible. This then contributes to the overall goal of lean manufacturing: producing a product of the same quality with as little waste as possible.
Application of Lean Manufacturing: Machinists
The machinist is the backbone of manufacturing. The machinist is responsible for the production of the parts, meaning manufacturing starts with him. The faster he can make the parts, the faster the product can be made, and the faster a company can adapt to changing demand and technology. The more efficiently a machinist can make a part, the less waste he creates and the more income a company can keep for itself. In other words, machinists who follow lean manufacturing strategies can be the difference between a 5% loss and a 50% growth.
Andon
Andon is a visual display that shows the status of the various production lines on the factory floor. The signs began and sometimes still are simple street-light style signs, with green for good, yellow for assistance and red for a stopped line. Andons are sometimes backed by audio cues, emphasizing a shift from good to bad, bad to worse, or worse to resolved. The main function of these signs is to notify workers of the status of the various production lines on the floor. (Vorne) This allows the machinists on the floor to adapt by shutting down other lines or starting up others in order to avoid large stockpiles of extra parts, leading to additional costs for storage and transportation of those extra parts.
The less-obvious, secondary effect is floor machinist empowerment. Before, it was the inspectors and management who blew the whistle on a faulty line, when the line did not suffer some failure first. The men on the floor are the first ones who can tell when something is not quite right, or even about to fail. It makes perfect sense that they should be the first line of defense against line failure. Using an Andon system, the workers on the floor can call for help or put the entire line on alert should they sense a problem or should a failure occur. (Vorne)
Fig. 7 ' An Andon sign in action.
Visual Factory
Another machinist-centered strategy is Visual Factory. Visual Factory refers to the various visual methods through which information is conveyed in a manufacturing environment. This information can be anything from attendance rates to efficiency reports to work schedules. The information may be shown on the factory floor to instruct a machinist how to perform a process or to what specifications a part must be made. (Vorne) The easier information is to read and interpret the faster and more efficiently it can be read. The greater the speed of interpretation and the more organized the workers are, the faster the work can get done and the more efficient the floor is. Efficiency is the key to lean manufacturing.
Fig. 8 ' An example of Visual Factory. Work Assignments and Schedule.
Visual Factory adds another element to the floor as well: energy. Visual Factory is not just for work schedules and assignments. Attendance rates, production records and other competitive-type statistics can be posted as well. Friendly competition is introduced onto the work floor through these kinds of postings. Competition and awards are great ways to increase production on the factory floor, since employees will always work harder, faster and with more enthusiasm when rewards and bragging rights are at stake.
Single Minute Exchange of Dies (SMED)
Normally when a line has reached production demand for a specific part, the line is shut down and cleaned, tools, temperature settings and programming are changed and then new part production begins. This changeover from one part to another can be very time-consuming, resulting in waste and time lost. Whenever time is lost, profit is as well. SMED is all about reducing the time necessary to change a line from one part to another, saving the company time and money. (Vorne)
The idea of SMED is to make the production line as close to 'one size fits all' as possible. The more universal parts and settings are, the less must be changed when preparing for a new part. SMED can be separated into three efficiencies: process efficiency, internal efficiency and external efficiency.
Process efficiency is all about getting rid of wasteful practices during changeover. One of the biggest inefficiencies would of course be doing something twice when it is only necessary to do it once, i.e. adjusting both sides of guard rails instead of just one side, or replacing tools from the prior process with other tools which aren't necessary to the new process. Internal efficiency is getting rid of the cumbersome parts that make changeover a burden. Nuts and bolts must be taken out and retightened for every changeover. These can be replaced with hand-tightening wheels or knobs or levers, which a) decrease tightening and loosening time and b) reduce small tool (wrenches, etc) needs on the factory floor. (Vorne)
External efficiency takes place outside the physical changeover and covers the background necessities of the new product line. External efficiency is the most preparation-oriented of the three. The most important aspect of external efficiency: the presence of the new material. There must always be a double-check to make sure the new material or parts to be machined are present before the changeover starts. If there is a delay on the delivery of parts and there is therefore nothing to machine on the newly-changed line, the line must either stay dormant for a period or change to another process. This is a major waste of time, and time is money. Other pivotal aspects of external efficiency include preheating dies and gathering tools. Heating a die to the proper temperature takes time, and if the heating can be accomplished before the changeover the die can be used immediately after the changeover, preventing further delay. Gathering tools is just as important, considering that without the proper tools, machining can't occur; at least, not with good quality. (Vorne)
Fig 9 ' Time usage for changeover and output periods.
SMED also provides a second line of defense against failure-related delays. Should a different manufacturing line on the floor break down, a machinist can switch more quickly from the part he is currently making to either the part usually produced on the downed line, or he could make a different part entirely, in order to avoid large stockpiles of a specific part that must be stored and transported. In this way he can save the company money twice over: by picking up production of the necessary part when it normally could not be produced and by helping the company to avoid storage costs.
Overall Equipment Effectiveness (OEE)
While SMED deals with the efficiency of the changeover process, the Overall Equipment Effectiveness rating deals with the efficiency of machining processes in use by the workers on the floor. The OEE controls how well and how quickly a machinist can produce a part, making this arguably the most important aspect of lean manufacturing for any machinist. Machinists are the people working with the various tools and processes day in and day out, making them the most experienced with each machine and process. The machinists get a front-row view of performing the process and can see any inherent inefficiencies or vulnerabilities in the system, making them invaluable for the improvement of the OEE.
Total Productive Maintenance (TPM)
It is this same train of thought that leads to the lean manufacturing strategy of Total Productive Maintenance. Machinists on the floor are the people that most interact with the tools on the floor. They are the people who know what is wearing and by how much. By including them in the maintenance process, problems can be found earlier and the machinists can be taught how and when to replace specific, quick-wearing parts. With preventative, user-driven maintenance, there is less need for specialized, long-term maintenance, meaning there is more time to produce and less money lost in upkeep.
When all these strategies are utilized together, the machinist is put into an environment of minimal waste and optimum speed, allowing him to produce more at a faster pace. All of these strategies make the machinist a stronger production force and much more adaptable. Since machining is the backbone of manufacturing, the stronger and more adaptable the machinist, the stronger and more adaptable the company.
Application of Lean Manufacturing: Front Office
Decisions from the front office are those that set workplace policy and have a large amount of influence in the efficiency and effectiveness of a company's ability to manufacture a product and make a profit. The front office decisions are those that are made by upper management. Some examples of front office decisions are the process by which parts are manufactured, dictation of the procedure for tool changes, frequency of cleaning or dressing, plans of action in case of tool failure or breakage, procedure for storing products, quantities that parts will be produced in, and how to integrate new machines, technologies, or ideas into the company's current manufacturing process. The influence of a front office decision is huge simply because it is one that sets the guidelines for how to react to a certain situation. Because of the importance and influence of a front office decision, it is imperative that the front office and management have the ability to be flexible, make adaptive decisions, and consider new ideas while implementing those that benefit the productivity and profit of the company. Unorganized efforts for improvement made by groups of employees or certain divisions will be unable to improve the whole process to its fullest potential. The increase in productivity of one group will often be negated by waiting for another group or process that hasn't improved, wasting the new found productivity of the group. It is for this reason that the management must be the group to take initiative and implement the principles of lean manufacturing as a company-wide ideology. By ensuring that every member is consciously thinking and improving the system, improvements are not lost while waiting for other groups. In addition a common cause unites the workforce, which encourages working together and increased productivity.
Kaizen
Kaizen is an aspect of lean manufacturing that is also known as 'continuous improvement'. Kaizen is less of a technique, and more of a mindset that all management personnel should follow. Kaizen represents the thinking that the current process is inherently flawed, and that improvement is always possible and should be actively pursued and implemented. The place where kaizen is most important is with the decisions of the front office.
Practicing continuous improvement is something that determines whether any company will fail or succeed in today's demanding market. Those that cannot adapt and adopt more time and financially efficient processes will not survive. The technique of kaizen is to attempt continuous improvement of the product or process, even when the current method is both profitable and customers are satisfied. While the old mantra 'if it ain't broke, don't fix it' seems to be wise advice, it is the opposite direction of thinking from kaizen and will not allow a company to maximize profits and exceed customer expectations through constant improvement and drive for self-improvement.
Upper management and those in the front office must be conscious of the principle that room for improvement always exists. They should be open to the ideas of other people involved with the process, such as the engineers or the machinists. Management should encourage anyone in the company with an idea to come forward or suggest it in some way. Encouraging everyone to actively think of ways to improve the process and offering incentives for successful new techniques is a way to inspire employees to be more thoughtful, engaged, passionate, productive, and efficient. All members of the company are important - as opposed to just upper management - because those people are the ones who are specialized in what task they perform every day. They will be more knowledgeable than a person who is removed from the process. The ideas generated should be met with positive feedback, so as to not discourage further creativity and other ideas in the future.
When a new idea is presented and reviewed, management should attempt to implement the idea on a small scale and evaluate the results. Should favorable results such as improved production time, reduction of waste, reduced machine downtime, or workflow optimization occur, management should take steps to move the entire production process to incorporate this new idea. It is the continuous quest for improvement and active pursuit of a better process which allows a company to succeed, make larger profits with less waste, and lower downtimes for machines.
Key Performance Indicators (KPI)
Key Performance Indicators are measurements and metrics that support and facilitate achieving critical goals of the organization (Vorne). Key performance indicators are chosen to easily display the efficiency or output of a process. Often the KPI is chosen so as to quantify the amount of waste produced. Anything that is produced by the process that does not add value for the customer is considered waste. Effective KPI's can help identify any abnormalities that begin to occur in a process, which can indicate a problem with a machine or a raw material. Early identification of problems can help to save valuable time and resources when the proper KPI's expose the problem early. The KPI presents a benchmark for performance of the manufacturing process. Any changes made to a process will have an effect on the KPI and these changes can be compared to determine if the change is favorable and should be implemented on a wide scale.
Fig. 10 ' An example of one company's KPIs.
The front office is responsible for picking the KPI. It is extremely important that the management pick the correct KPI. Picking irrelevant or incorrect KPI's will negate all of the benefits listed above and could even cause a company to become unaware of the effects of changes in the manufacturing process. Monitoring and displaying the KPI's are common practices that the front office should participate in. The monitoring and publication of the KPI's help all employees to know how they are working as a whole and encourage workers to try to reduce accidents and downtimes in order to compete for the best KPI. Changing KPI with the work shift will allow the front office to identify problems within the workforce and optimize for best overall performance.
While the KPI's are not physical processes that change the way the product is made to cut losses and increase profits, they are incredibly effective at cutting losses and increasing productivity and profits by setting standards and baselines which can be compared to current performance at any time. Any time the possibility for decreased losses and higher profits arise, the front office should pursue and implement it. The careful choosing of KPI's is something that must be done in order to receive the many benefits that can be obtained by performance monitoring.
Takt Time
Takt Time is a very important aspect of lean manufacturing. Takt Time is important for maximizing productivity and reducing waste at the same time. Takt Time is the pace of production (e.g. manufacturing one piece every 34 seconds) that aligns production with customer demand (Vorne). In other words, Takt Time tells the floor just how many parts must be produced within a certain unit of time in order to meet customer demand. If production rate exceeds the Takt Time, waste is generated in the form of extra products that must be transported and stored. However, if production rate falls below then customer demand will not be met.
It is important for the management to calculate the Takt Tim, and to observe production in order to ensure that the rate of production does not deviate far from the ideal time. In this way waste and product buildup can be avoided while filling customer demand. Management can use the correlation between the current production rate and the Takt Time as an appropriate KPI in order to get a valuable measure of current efficiency of the floor. Management must calculate an accepted range of values for the instantaneous production rate that is considered acceptable. This should be done with the knowledge that random events and machine failure can result in unexpected slowdowns. For this reason the production rate should be higher than the Takt Time, but the exact amount higher should be carefully calculated by studies of past downtimes and averages of past performances. This way a rate can be determined that will not generate too much waste, while still meeting the customer's demand.
Lean Manufacturing
Lean manufacturing as a whole is the quest to eliminate waste and to maximize profit. The pursuit of lean manufacturing requires employing the techniques and concepts previously described in order to accomplish production goals. Front office decisions to employ those techniques and utilize the new thought process will determine the company's progress toward the final goal of lean manufacturing.
In the past a company has increased or maintained profits by increasing the sale price of the product to compensate for higher production cost. The lean manufacturing approach is different. Lean manufacturing focuses on the reduction of production cost in order to increase profits without changing the sale price to the customer. Keeping prices lower for the customer is very beneficial because it will encourage customer loyalty while also increasing sale volume. As sale volume increases with a decrease in production cost - associated with more efficient processes that produce less waste - a large increase in profit will be observed. But it is up to the front office to implement the techniques of lean manufacturing into the manufacturing process. It is not everything to simply implement the techniques however; the management must encourage active participation by all people involved with the process at all times. A policy which is not understood or in good favor with the employees will not be successful due to decreased participation. A company that lacks the ability to adapt and employ the techniques of lean manufacturing will quickly lose market to others that can, as those companies continue to adapt and improve, lowering costs and improving customer satisfaction. It is the responsibility of the front office or management to see that these techniques are employed across the entire work force. Efforts by just a few unorganized employees will not result in the gains that an organized effort would bring to increase the efficiency and minimize the losses due to waste.
Conclusion
Lean manufacturing is now the driving force in the global market today. It has been a game-changer for how companies large and small think about manufacturing as a whole. The buzz words of manufacturing and the market are no longer, 'supply' and 'demand,' but rather 'waste' and 'value.' Toyota, the leader in lean manufacturing strategies has quickly grown to become a world leader in innovation, efficiency and profit. They have grown as a result of the application of lean manufacturing strategies both on the factory floor and in the front office.
With the advanced and ever-changing technology of today, the companies that will survive are not the companies that can provide the newest technology (all the products of the same price range will have about the same technology anyway). No, the key to a company's survival is who can apply and build upon the lean manufacturing strategies the most in order to make their processes the most efficient, to earn the most profit, and to provide the best quality product possible.
