5th International & 26th All India Manufacturing Technology, Design and Research Conference (AIMTDR 2014) December 12th–14th, 2014, IIT Guwahati, Assam, India

Status of implementation of Lean manufacturing principles in the context of Indian industry: A Literature Review A. P. Chaple1*, B. E. Narkhede2, M. M. Akarte3 1*

2

Research Scholar, VJTI, Mumbai, 400019, [email protected] Head, Production Engineering, VJTI, Mumbai, 400019, [email protected] 3 AssociateProfessor, NITIE, Mumbai, 400087, [email protected]

Abstract Today, principles and practices of Lean manufacturing are widely used by industries to eliminate waste and make the process more efficient. Lean has been recognized as one of the key approaches in enhancing the productivity and hence the competitiveness of an organization. This paper presents a review of lean principles and practices in the Indian manufacturing industries. The paper contributes by identifying enablers & barriers in implementing the lean principles and practices, methodologies used in leanness measurement of an organization in the Indian manufacturing industry. Finally, the diffusion of lean in the Indian manufacturing industries has been given. Keywords: Lean manufacturing, leanness, lean barriers, lean practices.

1. Lean Manufacturing: Introduction The Toyota Production System (TPS) was developed in Japan by Ohno and Shingo in 1940s and forms the basis of lean manufacturing (Herron et al., 2008). The mass production system existed in USA could not affordable by Toyota so they focused on minimizing waste in all aspects of its operation by using many techniques and tools including Kaizen, cellular manufacturing, poka-yoke, etc. (Herron et al., 2008). Toyota was able to make better quality cars with fewer defects resulting in higher customer satisfaction. The Toyota Production System (TPS) has been perceived to be a major rationale for Japan’s competitive success and this system became synonymous with the ideal model of manufacturing for Japanese manufacturers and later to all companies throughout the world (Yadav et al., 2010). The past decades has witnessed the decline of mass manufacturing system which was adopted by many industries from Ford and the Lean manufacturing concept is viewed as a counter-intuitive alternative to traditional and mass manufacturing models (Lewis, 2000). Lean manufacturing was accepted as a new paradigm that eliminates waste in any form, anywhere and at any time, relentlessly strives to maintain harmony in the flow of materials and information, and continually attempts to attain perfection (Yadav et al., 2010). Lean production is broadly classified under the umbrella of process improvement programs, which also include other approaches such as business process re-engineering,

theory of constraints and total productive maintenance (Shah et al., 2008). In order to provide an introduction to the concept of the lean manufacturing, some definitions quoted in literature will be given here. The term “lean” was introduced by Krafcik to refer to a manufacturing approach that (Papadopouloe et al., 2005): …compared to mass production it uses less of everything-half the human effort in the factory, half the manufacturing space, half the investment in tools, half the engineering hours to develop a new product in half the time. Also it requires keeping far less than half the needed inventory on site, results in many fewer defects, and produces a greater and ever growing variety of products. Shah et al. (2007) proposed the following definition to capture the many facets of lean production: Lean production is an integrated socio-technical system whose main objective is to eliminate waste by concurrently reducing or minimizing supplier, customer, and internal variability. Lean production gained the huge popularity after the publication of the book The Machine That Changed The World in 1990. Lean manufacturing attracting more Researchers from all over the World, figure 1 shows the continuous increasing trend of published research papers (source of published work: peer reviewed journal papers from various sites www.search.proquest.com, www. search.ebscohost.com, www. scholar.google.co.in) The paper is organized in the way, first introduction of lean manufacturing; discussion on literature

567-1

Status of implementation of Lean manufacturing principles in the context of Indian industry: A Literature Review

review on the lean practices, lean principles and lean implementation, application of lean, then leanness is elucidated. Finally the barriers to implement lean followed lean manufacturing in India are discussed.

2. Principles and Practices of Lean Manufacturing Lean production is a multi-dimensional approach that encompasses a wide variety of management practices, including just-in-time, quality systems, work teams, cellular manufacturing, supplier management, etc. in an integrated system (Shah et al., 2003).Yadav et al. (2010) identified ten fundamental lean principles (Table 1) on the basis of exhaustive literature review and authors’ industrial experience, which further used for investigation of lean implementation.

Figure 1 Papers published on Lean Manufacturing Lean manufacturing principles 1. Standardization

2. Simple and specified pathways 3. Teaching and learning 4. Socialization

5. Continuous improvement 6. Supplier-customer relationship

7. Coordination through rich communication 8. Functional expertise and stability 9. Pursuit for perfection / striving for ideal goal

10. Cultivating organizational knowledge

What it means?

Table 1Lean manufacturing principles Enablers

Standardized work procedure to do routine and repetitive tasks to improve efficiency and quality. Flow of work to the right machine or person in the right form at the right time at the lowest cost with the highest quality possible which reduces production lead time. Through continuous effort of managers and supervisors acting as enablers or mentor in solving problems. An atmosphere of trust, respect and common purpose in which work is performed to improve efficiency and productivity. Experimentation by the people at every level toward improving their own work systems. Supplier-customer relationship specifies the form and quantity of the goods and services to be provided, the way requests are made by each customer, and the expected time in which the request will be met. Coordination through rich communication is required to develop the idea into an innovation. Every company depends on highly skilled engineers, designers, and technicians to bring a product to the market; it is about developing standard set of skills. It is a common sense of what the ideal system would be, and that shared goal motivation to make improvements beyond what would be necessary merely to meet the current needs of their customers. It shows the faith of organization that the skills and knowledge generated will pay off later.

Recently the thorough research emphasizes a broad set of practices which frequently included under the lean production (Shah et al., 2008), shown in Table 2. The key aspect of lean implementation is the marriage between lean practices and principles with the strong commitment in pursuit of perfection through perpetual learning (Yadav et al., 2010).

Standard work procedures, Design blue prints Kanban system, JIT

Scientific methods of problem solving Consistency, consensus and communication Kaizen, TQM, Six Sigma, JIT etc. Long term cooperative relationship

go-see, involvement of suppliers early during PD Job rotation policy

Sharing a common goal

knowledge sharing practices

There is not a fixed standard recipe for lean implementations; however Hines (2004) given the Womack and Jones’s framework for the lean leap (Table 3); defines a “one best way” which, containing a good deal of sensible advise.

567-2

5th International & 26th All India Manufacturing Technology, Design and Research Conference (AIMTDR 2014) December 12th–14th, 2014, IIT Guwahati, Assam, India

Table 2Lean manufacturing practices Lean Practices Bottleneck removal (production smoothing) Cellular manufacturing Competitive benchmarking Continuous improvement programs Cross-functional work force Cycle time reductions Focused factory production JIT/continuous flow production Lot size reductions Maintenance optimization New process equipment/technologies Planning and scheduling strategies Preventive maintenance / TPM Process capability measurements Pull system/kanban Quality management programs Quick changeover techniques / SMED Reengineered production process Safety improvement programs Self-directed work teams Total quality management

Sources (1) * * * * * * * * * * * * * * * * * * * * *

(2)

(3) * *

* *

*

*

(4)

(5) *

* *

*

*

* *

(6) * * * *

(7) *

*

*

* *

*

*

*

*

*

*

* * * *

* * * *

*

* * * *

*

(1) Shah et al. (2003); (2) Bhasin (2006), (3) Bonavia et al. (2006), (4) Kollberg et al. (2007), (5) Upadhye et al. (2010), (6) Duque et al. (2007) and (7) Shah et al. (2007)

Recently the thorough research emphasizes a broad set of practices which frequently included under the lean production (Shah et al., 2008), shown in Table 2. The key aspect of lean implementation is the marriage between lean practices and principles with the strong commitment in pursuit of perfection through perpetual learning (Yadav et al., 2010).

There is not a fixed standard recipe for lean implementations; however Hines (2004) given the Womack and Jones’s framework for the lean leap (Table 3); defines a “one best way” which, containing a good deal of sensible advise.

Table 3Time frame for the lean leap Phase Get started

Specific steps 1. Find a change agent, 2. Get lean knowledge, 3. Find a lever, 4. Map value streams, 5. Begin kaikaku, 6. Expand your scope Create a new 1. Reorganize by product family, 2. Create a lean function, 3. Devise a organization policy for excess people, 4. Devise a growth strategy, 5. Remove anchordraggers, 6. Unstill a "perfection" mind-set Install business 1. Introduce lean accounting, 2. Relate pay to firm performance, 3. systems Implement transparency, 4. Initiate policy deployment, 5. Introduce lean learning, 6. Find right-sized tools Complete the 1. Apply these steps to your suppliers/customers, 2. Develop global transformation strategy, 3. Transition from top-down to bottom-up improvement (Source: Hines, 2004)

Time frame First six months Six months through year two Years three and four By the end of year five

567-3

Status of implementation of Lean manufacturing principles in the context of Indian industry: A Literature Review

Lean manufacturing is not new in Automobile industry where actually it born. After sudden success of Toyota in 1980’s over the big three (Ford, General Motors and Chrysler) and other Automobile industries, the other industries started implementation to reap the benefits seen in Toyota. Piercy and Rich (2009) discussed the evidences of successful lean implementation in service environment; in call service centre to achieve reducing costs and improving quality. Meier and Forrester (2002) found that lean production practices can be successfully applied to tableware sector characterized by craft manufacturing. Abdulmalek and Rajgopal (2007) argue the frequent application of lean approach to discrete manufacturing than in the continuous/process sector. Lean manufacturing has been applied within the process industries, most notably chemicals and pharmaceuticals sectors, to great effect (Melton, 2005). Sullivan et al. (2002) discussed an equipment replacement decision problem within the context of lean manufacturing for inventory saving, floor space reduction, and high quality.

Wan and Chen (2008) developed a leanness measure evolved from the concept of data envelopment analysis (DEA) that indicates how lean the system is and how much waste exists. Singh et al. (2010) developed a leanness index by introducing fuzzy logic set theory to the measurement method based on the judgment and evaluation given by leanness measurement team (LMT) on various leanness parameters such as supplier’s issues, investment priorities, lean practices, and various waste addressed by lean and customers’ issues. Vimal and Vinodh (2012) attempted fuzzy logic-based inference method and developed a conceptual model consisting of three levels namely enabler, criterion, and attributes to compute leanness level using IF-THEN rules. Gurumurthy et al. (2009) applied the benchmarking (BM) tool for assessing the lean manufacturing; BM utilizes a systematic process for improving the performance of product/service, process or an organization as a whole by continuously identifying, understanding, and adapting best practices that are found either inside or outside the organization. Doolen et al. (2005) developed a lean assessment tool to assess both the number and the level of implementation of a broad range of lean practices in an organization.

4.

5.

3.

Application of Lean Approach

Leanness

The term leanness is interpreted diversely in literature. Leanness is the measure of lean manufacturing practices (Vimal and Vinodh, 2012). Leanness refers to measure its degree of commitment to lean production (Meier and Forrester, 2002). Singh et al. (2010) define leanness in context to assessing lean status of any manufacturing firm.According to Papadopoulou et al. (2005) and Singh et al. (2010) leanness should not be viewed in the narrow sense of a set of tools, techniques and practices, but rather as a holistic approach that transcends the boundaries of the shop-floor thus affecting apart from the production itself almost all the operational aspects, e.g. design, development, quality, maintenance, etc. as well as the entire organization and management of the company. Wan and Chen (2008) refers leanness level to the performance level of a value stream compared with perfection which shows ‘how lean’ the system is. Production is lean if it is accomplished with minimal waste due to unneeded operations, inefficient operations, or excessive buffering in operations (Hallgren et al. 2009). Meier and Forrester (2002) identified nine variables of leanness, namely: the elimination of wastes, continuous improvement, zero defects, JIT deliveries, pull of materials, multifunctional teams, decentralization, integration of functions and vertical information systems. Meier and Forrester (2002) then concluded thatlean production has been applied successfully to craft production.

Barriers of Lean Manufacturing

Though lean is accepted by many companies for sustainable growth by learning the Toyota growth story, literature indicates that very less rate of successful lean implementation among the organizations. Bhasin (2012) found out from the literature that less than 10 per cent of UK organizations have accomplished a successful lean implementation. Though principles, practices and tools of lean are backbone of lean manufacturing system but there are other barriers too. Mere implementation of tools, without having established an integrative system that acts as precursor to lean implementation, is not sufficient and it does not help transformation into learning organization (Yadav et al., 2010). Yadav et al. (2010) discovered in their study that many automotive companies attempted to implement few lean principles independently and been very successful in implementing techniques like JIT, Kanban, Production leveling, team building, quality circle, and other but it did not bring them kind of success these companies was expecting through lean implementation. Sim and Rogers (2009) attempted to find out the cultural issues as a barrier to implement continuous improvement strategies and problem of resistance to change. Sim and Rogers (2009) carried out a survey on a Fortune 500 manufacturing plants located in the Eastern USA; while thoroughly committed to theconcept of continuous improvement, plants hasachieved only partial success due to the persistence of legacy attitudes on the part of unionized andhigh seniority employees.

567-4

5th International & 26th All India Manufacturing Technology, Design and Research Conference (AIMTDR 2014) December 12th–14th, 2014, IIT Guwahati, Assam, India

Bhasin (2012) identified the prominent barriers in relation to the organizations size by analyzing total 68 UK manufacturing organizations operating lean which

explains the factors contributing to the low numbers of successful lean conversions. The prominent barriers identified by Bhasin (2012) are presented in the Table 4.

Table 4 Barriers to implement lean Barriers to Implement Lean Cost of the investment Insufficient internal funding Insufficient supervisory skills to implement lean Insufficient management time Employee attitudes/resistance to change Insufficient external funding Insufficient senior management skills to implement lean Insufficient workforce skills to implement lean Cultural issues Insufficient understanding of the potential benefits

Small Organizations √ √ √ √ √ √ √ √

Medium sized Organizations

Large sized Organizations √

Sources

√ √ √ √

√ √ √

√

√

(1) (1) (1) (1), (2) (1),(2),(3) (1) (1)

√ √ √

√ √ √

(1) (1),(4),(5) (1),(6)

(Adopted from Bhasin (2012)) Sources: (1) Bhasin (2012), (2) Panizzolo (2013), (3) Pingyu (2010), (4) Emiliani (1998), (5) Hunter (2004), (6) Shah et al. (2007).

6.

Lean Manufacturing in India

India is emerging as a new manufacturing destination and many industries are seeking ways to excel their manufacturing capabilities by elimination of wasteful activities from their systems. Lean is one of the approach the Indian industries are looking to become more competitive in local as well as global market. Yadav et al. (2010) indicated in their study a keen interest on the part of Indian manufacturing companies to adopt or learn new approaches and techniques in order to improve their performance; but it was only the beginning of a long journey for them. In recent study, Panizzolo et al. (2012) investigated the adoption of lean production in India (Table 5). The Indian Automotive sector has the very high level of lean implementation followed by Electronics / IT / Engineering sector. Other sectors are seen on medium to low level.

Table 5Diffusion of lean in India Industry sector in India Level of diffusion Automotive Very high Machine tool Medium to low Electronics/ IT High /engineering FMCG Medium to low Process industries Medium to low Aerospace Medium to low (Source: Panizzolo et al. (2010))

7.

Conclusion

This paper presents the review of lean thinking and its concept through definitions from literature. The main focus of lean manufacturing is to eliminate waste, doing things better in half of the resources as mass production requires, providing higher quality with lesser cost. More and more facets of lean manufacturing will come forth as researchers are keenly bringing through continual research. The good understanding of lean principles and practices is required for successful implementation of lean as lean practices without knowing lean principles can give short term success but may fail as long term strategy. The paper tried to present best way for lean implementation available in literature along with discussion that lean is applied successfully in different sectors than automobile sector such as service sector, discrete manufacturing, etc. The recent literature shows that the trend in lean manufacturing for research now is focused on lean assessment. Leanness attracts focus to answer specific questions of managers responsible for lean implementation to assess the lean implementation level and to justify spending over lean implementation. In this paper, presents the review of barriers of lean implementation from literature review. Understanding the barriers is important for managers to avoid failures and to sustain lean leap. The future research may be to identify such barriers through extensive literature review and interviews of working professionals as very little work happened on this subject. The way forward for research in this area may be multiple criteria

567-5

Status of implementation of Lean manufacturing principles in the context of Indian industry: A Literature Review

decision-making (MCDM) for lean assessment to assess lean performance holistically.The literature pointed toward popularity of lean in India; but when it comes to success, its only start of journey. Other than automobile and electronics industry, others are having medium to low diffusion of lean in India.

The paper contributes by identifying enablers & barriers in implementing the lean principles and practices, methodologies used in leanness measurement of an organization in the Indian manufacturing industry.

References 1) Abdulmalek, F. A. and Fajgopal, J. (2007), Analyzing the benefits of lean manufacturing and value stream mapping via simulation: A process sector case study, Int. J. Production Economics, Vol. 107, pp. 223-236. 2) Bhasin, S. (2012), Performance of Lean in large organisations, Journal of Manufacturing Systems, Vol. 31, 349-357. 3) Doolen, T. L. and Hacker, M. E. (2005), A Review of Lean Assessment in Organizations: An Exploratory Study of Lean Practices by Electronics Manufacturers, Journal of Manufacturing Systems, 24, 1, pp. 55-67. 4) Gurumurthy, A. and Kodali, R. (2009), Application of benchmarking for assessing the lean manufacturing implementation, Benchmarking: An International Journal, Vol. 16, No. 2, pp. 274-308. 5) Hallgren, M. and Olhager, J. (2009), Lean and agile manufacturing: external and internal drivers and performance outcomes, International Journal of Operations & Production Management, Vol. 29 No. 10, pp. 976-999. 6) Herron, C. and Christian, H. (2008), The transfer of selected lean manufacturing techniques from Japanese automotive manufacturing into general manufacturing (UK) through change agents, Robotics and Computer-Integrated Manufacturing, 24, pp. 524-531. 7) Hines, P., Holwe, M. and Rich, N. (2004), Learning to evolve: A review of contemporary lean thinking, International Journal of Operations & Production Management, Vol. 24, No. 10, pp. 9941011. 8) Lewis, M. A. (2000), Lean production and sustainable competitive advantage, International Journal of Operations & Production Management, Vol. 20 No. 8, pp. 959-978. 9) Meier, H. S. and Forrester, P. L. (2002), A model for evaluating the degree of leanness of manufacturing firms, Integrated Manufacturing Systems, 13, 2, pp. 104-109. 10) Melton, T. (2005), THE BENEFITS OF LEAN MANUFACTURINGWhat Lean Thinking has to Offer the Process Industries, Chemical Engineering Research and Design, 83(A6), pp. 662–673. 11) Panizzolo, R., Garengo, P., Sharma, M. K. and Gore, A. (2012), Lean manufacturing in developing countries: evidence from Indian SMEs, Production

Planning & Control, Vol. 23, No. 10-11, pp. 769– 788. 12) Papadopoulou, T. C.and Ozbayrak, M. (2005), Leanness: experiences from the journey to date, Journal of Manufacturing Technology Management, Vol. 16 No. 7, pp. 784-807. 13) Piercy, N. and Rich, N. (2009), Lean transformation in the pure service environment: the case of the call service centre, International Journal of Operations & Production Management, Vol. 29, No. 1, pp. 54-75. 14) Shah, R. and Ward, P. T. (2003), Lean manufacturing: context, practice bundles, and performance, Journal of Operations Management, 21, pp. 129–149. 15) Shah, R. and Ward, P. T. (2007), Defining and developing measures of lean production, Journal of Operations Management, 25, pp. 785-805. 16) Shah, R., Chandrasekaran, A. and Linderman, K. (2008), In pursuit of implementation patterns: the context of Lean and Six Sigma, International Journal of Production Research, Vol. 46, No. 23, pp. 66796699. 17) Singh, B., Garg, S. K. and Sharma, S. K. (2010), Development of index for measuring leanness: study of an Indian auto component industry, Measuring Business Excellence, Vol. 14, No. 2, pp. 46-53. 18) Sullivan, W. G., McDonald, T. N. and Van Aken, E. M. (2002), Equipment replacement decisions and lean manufacturing, Robotics and Computer Integrated Manufacturing, Vol. 18, pp. 255-265. 19) Vimal, K. E. K. and Vinodh, S. (2012), Leanness evaluation using IF–THEN rules, International Journal of Advanced Manufacturing Technology, Vol. 63, Iss. 1-4, pp. 407-413. 20) Wan, H. and Chen, F. F. (2008), A leanness measure of manufacturing systems for quantifying impacts of lean initiatives, International Journal of Production Research, Vol. 46, No. 23, pp. 6567– 6584. 21) Yadav, O. P., Nepal, B., Goel, P. S., Jain, R. and Mohanty, R. P. (2010), Insights and learnings from lean manufacturing implementation practices, Int. J. Services and Operations Management, Vol. 6, pp. 398-422.

567-6