Lean Implementation Using VSM and Simulation - Assignment Example

CASE STUDY ON LEAN IMPLEMENTATION USING VSM & SIMULATION Mass production has been one of the key factors for the success of thedeveloped nations of today's world. The concept of mass production has led us to such a state that the industry has forgotten to lay emphasis on cutting down on the 'wastes' that have been plaguing the industry and instead, managers have been focusing more on the concept of supply chain management. The present report is an attempt towards outlining this aspect and aims to bring forth these 'wastes' of the manufacturing industry to light. This will be done by way of a case study on a prominent company called ACW, wherein ACW's supply chain and internal workflow will be analyzed in order to minimize the wastes and thereby improve the efficiency and productivity of the manufacturing process. Thus, this report will be an attempt towards depicting the use of the Lean manufacturing technique for optimizing the supply chain of ACW. INTRODUCTION Technology drives industry. This is true for industrial sectors especially those belonging to the developed economies of the world. Until the last decade, industries in the United States and Europe (which were some of the most heavily industrialized countries of the world) were so heavily dependent on technological Research & development so much so that a major chunk of companies' budget used to be allocated exclusively for R&D purposes. But, the most glaring phenomenon was that there were no research initiatives in the direction of management let alone waste management. Here waste must not be confused with physical waste, as the following sections will go on to depict. It was not until two decades ago that manufacturing industries realized their folly. They had learnt an important lesson from their fellow counterparts in Japan who had successfully implemented & popularized the use of "Just in Time" policies. The "Just in Time" policy was a conglomeration or in other words, a fusion of the concepts of mass production and scientific management methodologies. These concepts were soon familiar all around the world and were now known as "Lean Manufacturing Techniques" and the goods that were manufactured under this set up were known to have been produced under "Lean Production". With the passage of time, the concept of lean manufacturing has gained immense popularity with its varied application in fields ranging from mass production to the services industry. Thus, lean methodologies have been successfully implemented in many disciplines. If one were to look down at history towards various sectors of the industry, it can be understood as to how lean principle have come into being. The roots of lean come from the word-CUTTHROAT COMPETITION. Since the 1970s, regardless of the nature or the services provided by the industry, the emphasis is laid more on how fast can the final product be delivered with optimum quality. If one were to look at Dell's strategy, it would be imperative that dell manufactures custom desktops in less than a week so as to remain a step ahead of its competitors. FedEx has been known to deliver packages within a day and this is the reason for the company's huge customer base and its dominance in the courier industry. Thus, their main strategy is to think on the basis of adding value to the supply chain, which in managerial jargon, would be known as Lean thinking. Under the lean strategy, the industry strives to identify critical elements connected to the industry that add value to the product along with minimizing the production time. The same is the case with the company that is under focus as far as this report is concerned. The company here is called ACW that is based in Tonypandy. The main objective of this report would be to analyze the current state of workflow using some popular methods under the lean manufacturing techniques and thereupon propose further strategies and changes in order to optimize the work processes further. But before that, a major part of this dissertation will mainly focus on discussing about the origins of lean manufacturing and its specifics and theories. HOW DID LEAN COME INTO BEING Lean got its name from the 1990s book titled "The machine that changed the world-The Story of Lean Production I". The story depicted in this book describes the transformation of the production approaches in the automobile industry from custom manufacturing to assembly line based mass production to lean manufacturing in the modern era. It picturizes the manner in which Sir Henry Ford popularized the idea of mass production through the use of standard assembly lines and mass-produces spare parts. This enhanced the employment opportunities regardless of the skill of the worker and brought about a revolution into the automobile industry in the form of mechanized production that resulted in the production of cars that everyone could afford. It also describes the rise of new avenues as far as jobs were concerned in the sectors of planning, development & management. It was during the early 1940s that the lean concept started to evolve in the Japanese automobile industry. During that period, car production in the US & Europe put together exceeded the Japanese output volumes by nearly 10%. It was in this context that Toyoda Kiichiro; the then president of the Toyota motor company began to make improvements within the work flow of manufacturing process in order to offer healthy competition to his western counterparts, which ultimately led to the birth of the popular concept of the "Toyota Production System". It is this system that has been adopted into the manufacturing processes of all major companies around the world in due course of time that has led to the standardization of the Toyota concept by the incorporation of many additional features. This system is today known as the "Lean Manufacturing principle." It must be understood that Toyoda perfected the Toyota manufacturing concept by referring to the "assembly line" scheme of automobile manufacture that was initially proposed by "Henry Ford" that is the backbone of today's industries. The main emphasis of the Toyota concept has been to reduce the dependence on the resources that fail to add value to the final product or the end working system. The use of lean has seen a rapid rise in the US in particular especially since the last decade, with major industry players having understood the features and capabilities of this concept. The belief of the Japanese industry in the Toyota manufacturing concepts has been acknowledged by the ability of the Japanese to provide the same products that were manufactured in the US or Europe at nearly half the prices and at the same quality. This has been possible because lean manufacturing has helped the Japanese to analyze, identify & rectify glaring defects in the amount of human effort, the manufacturing processes, storage, handling & usage of the equipment & raw materials, management, and distribution of the goods. LITERATURE REVIEW The previous section has described about the birth of the Lean manufacturing concept in the Japanese automobile industry, at Toyota in particular. The present section will provide the reader an insight into the theoretical aspects of the Lean Manufacturing concept. All along, this section will discuss various concepts ranging from Kaizen & Kanban to Value Stream Maps (VSMs). Lean in general The so-called industry majors have been found to waste nearly 70-90% of their available resources, which is huge in terms of the amount of capital that goes into procuring and managing these resources. Therefore, managers in companies resort to lean manufacturing, which happens to belong to management science that is used to concentrate efforts over minimizing the seven major attributes that the manufacturing categorizes as wastes. These 7 wastes are: Over production. Waiting Time. Inventory. Scrap. Transport. Motion. Over processing. The industry emphasizes that the application of the concepts of lean manufacturing enables them to cut down on these wastes, thereby helping towards standardizing and maximizing the quality of the goods produced in spite of a reduction in the human effort or time required for manufacturing the products. From the above listing, it can be seen that these 7 wastes are not wastes that can be visible as such (they are not physical wastes in totality). By categorizing the above phenomenon as wastes the industry wishes to lay emphasize on the fact that any procedure or a product can be termed as waste if it has been produced as a result of wasteful, ill-planned, improperly managed and unmonitored processes. Therefore, all such types of processes have been termed as wastes. Lean manufacturing provides managers and planners with a set of tools that includes names such as Kaizen, Kanban & Poka Yoke. The roots of lean in the Japanese industry are evident from this terminology. An example of the advantages of Lean manufacturing can be ascertained from the following justification. In any manufacturing scenario, an engineer would recommend materials & processes that he/she is familiar. In most cases, the engineer would not have conducted a market survey and would have relied upon his previous experience. Such an approach would ensure that the project is completed well within schedule, but this would be less beneficial to the interests of the company. Firstly, this increases the incidence & chances of financial risks as more efficient & optimal solutions may be available in the market, but the engineer or manager may have been unaware of them (as most rely on their experience and choice). Such an approach would ultimately lead to a decline in the company's profits (in the long run). This is the fundamental approach of lean manufacturing where strong emphasis is laid on constant product & process review. There are many underlying principles within the vast concept of lean methodologies & thinking. They are elucidated below: Perfect first-time quality: constant upgradation & reviewal for nullifying defects, and ensuring that all shortcomings are searched, detected & eliminated at the site of production itself. Waste minimization: analyzing the various processes within the manufacturing activity and ensuring that all activities are studied with precision thereby eliminating all those activities that do not contribute towards the improvement of the value of the activity. In addition, there is an extended emphasis on the optimal utilization of precious and hard-to-find resources such as funds, site & manpower. Continuous improvement: working towards cutting down on costs along with striving continuously towards upgrading the quality of the product. Ensuring theat there is a clear flow of information between the various manufacturing stages and increasing efforts towards maximizing productivity. Pull processing: products must be pulled from the custumer end instead of being pushed from the production side. Flexibility: makinfg efforts towards bringing in more variety into the products produced bytrying out all possible permutations & combinations in the design process. To take adequate care that the efficiency or pace of production is not stopped at any stage of the production due to these improvement initiatives. Thus, in other words, production and research & development must progress parallely. Understanding the significance of the efficiency of the supply chain and working towards establishing & achieving this efficiency by forging long standing relationships with the suppliers through various initiatives such as risk reduction & cost minimization and establishment of effective communication mediums. Thus, it can be seen that lean manufacturing is all about making the correct decisions & analysis, in order to create a framework for the timely use of resources for achieving the desired objectives that have been listed above. The next part of the literaturre review will concentrate on the elaboration of some of the core principles of lean manufacturing.that comprises the concept of Value Stream maps & other critical theories. Kaizen Just in Time Six Sigma/Total Qualioty Management. Cellular management. Irt must be understood that the concept of Value Stream Maps is a tool tha is used to study the existing processes and implement these core strategies in all possible ways to as to cut down on the wastes and improve the quality of the product & eliminate all wastes. VALUE STREAM MAPS Value Stream maps are essentially confined to paper & pencil and they are useful for depicting the flow of products and the procedure & state of communication between the various work processes within the manufacturing system of the organization that help in the analysis of these processes for the purpose of optimizing them. It is a tool that is mostly used under the Lean manufacturing concept, but has been under use of late under other domains as well. The concept of Value stream maps can also be used to study the various aspects of the managerial and administrative set up of an organization as well. Under the Value Stream maps, the flow of material and the products that are modified and enhanced at each stage of the manufacturing process are mapped and studied to identify inherent errors in the manufacturing system. The Valus stream map alloes one to create a pictorial representation of the state of the product from the start to the finish from which the relevancy of the name is clearly understood. Under this approach, one starts by chalking out the current strea map that depicts the current state of the various stages in the manufacturing process. Thus, the present state Valus Stream Map as it is called, gives the managers an insight into the present state of affairs with respect to the production. The Present State map is then used as a reference to produce the Future state VSM that will enable the managers to implement their objecives by identifying the pitfallls that have been existing in the manufacturing system and nullifying them. Thereupon, the fytyre state VSM is drawn that shows the production process with the proposed changes that will enable the administration to calculate the efficiency of the resources and the quality of the product at every stage of the work flow thereby, providing error-detection and correction at every stage. Thus, Value Stream Maps enable companies to streamline their processes that will reduce the production time, minimize costs, improve the quality & reduce or nullify wastes. Some of the benefits of Value Stream maps are discussed below: Value Stream Maps enable one to have a graphical look at the flow of the production thereby providing the capability to identify the inherent wastes. VSM provides the unique feature of perceiving the products along a complete and wholesome perspective. VSM enables one to modal the flow of materials and the information as well. It enables managers of an orgnization to reshuffle the existing activities according to their assigned priorities for the purpose of devising the Future State Maps. An example of the Value Stream Map is shown below in a series of steps. The figure's components will be explained one by one. Therefore, this will be a step-by-step procedure to draw a Value Stream Map. Initially, we draw the symbols for the customer, supplier & the production control. Thereupon, the customer's requirements are registered in detail on per month & per day basis along with the requisite calculations on the daily production & requirements. We then draw the direction of flow of goods using the outbound shipping icon & the truck icon is attached along with the delivery frequency that provides details about the number of pieces or containers transported per month & per day. This is done for the flow of material from the company under focus to the customer. A similar procedure is adopted for detailing the transportation of the material from the supplier to the company. Then the various processes or stages that occur along the manufacturing line are identified and the processes are drawn sequentially from left to right as a set of process boxes. Then for each individual process box, a set of data boxes is added that describe the details of every process. In order to explain the VSM, some anchor notes and communication arrows are added to and the frequencies are added to each note to depict the timing of occurrence of these activities or processes. For every process, the specific details of activities that are known as process attributes are calculated and put into the data boxes. In addition, operator symbols are added at the appropriate places as shown. Then the inventories are depicted at the appropriate places and other icons such as FIFO are added. The meaning and significance of each icon that are used in VSM are explained in the appendix. In addition, working hours, cycle & lead times and their totals are calculated and tabulated in the VSM map. COMPUTER SIMULATION The proposed research is aimed at developing the work flow within the manufacturing process of ACW, and proposes to implement lean techniques for doing so as has been already mentioned. But in order to do this, one must first reaffirm that the proposed initiatives will bring the desired changes and will work their way towards achieving the desirted objectives. It is in this regard that the simulation of thew work flow becomes a critical determinant for the successful estimation of any proposed changes & measures. With the availability of the all-powerful personal computer at our disposal, it becomes mush more easier to simulate the work flow and the proposed changes using an appropriate software. Therefore, the current section will aim at discussing the general theories of Computer simulation and the subsequent section in the iterature review will work towards elaborating on the requisite software that has been chosen for conducting the proposed research. Generally speaking, the process of simulation is aimed at visually implementing a proposed scenario in a virtual world that will enable one to assess the scenario for the desired objectives and will enable them to unearth & rectify all potential errors. Simulation acts as a virtual & an interactive teaching medium that may eliminate the traditional requirement of a tutor for delivering the content of any subject or craft. Thus, when the simulation is performed with the help of a computer system, then such an instance is termed as Computer simulation. That simulation is the abstract visualization of any desired system. Today, computer simulation is so deep rooted within the industry and the universities so much so that a major chunk of all Research & development activity is done through computer simulation. Computer simulation provides for the analysis of absolutely anything under the sun without actually having to experience working with the same system in reality. The concept of Computer simulation can be traced back to the development of the atomic bomb during the second world war when it was first used during the world-famous manhattan project. During that time, the primary intention for depending on computers was to estimate and prepare models that could be used to simulate and study the intricacies of nuclear detonation and explosions. There was of course, very widepread outrage against its use with the eminent physict Richard Feynman having once described as a disease. But with the passage of time and with the inreasing use of computers and computer based simulation in almost all disciplines, it has become imperative to understand the significance of the use of computer simulation in our lives today. In the present modern world, our fighter pilots are taught the tricks of flying aircraft on state of the art simulation cockpits that run on high-end simulation software. Most of the movies that we see today are tried and tested in simulation environments. Scientists irrespective of whether thy belong to biology or mathematics depend heavily on computer simulators for performing some billions of calculations per second that enables them to solve some of the most complex problems of science & technology. Thus, from the above lines, the significance of computer simulation can be easily sensed. There are many classifications to computer simulation: a) The first one uses the stochastic approach. Here, stochastic means that an entity is measurable. Under the stochastic type simulaton, special algorithms are used that are used to generate random numbers so as to coordinate between the various chains of events that are common under simulation programs. b) The second approach is known as the DE approach where 'DE' stands for discrete events. Uder this approch, the simulation engine maintains a prioritized list of events in the form of a queue that can be used to identify events and trigger the responses in the requisite formats. c) A thir type of simulation releis heavily on the use of differential equations for performing complex calculations. Generally, this is used in the case of airplane simulation wherein, a trigger event by the pilot causes the simulator to apply the equations to calculate the next set of signals and instructions to implement. Thus, this can also be used to simulate electronic circuitry and computer architecture also. d) Under agent based simulation, the simulation is used to just view the components of a system and there is minimal computational work that is done. An exam0le is the visualization & construction of molecules. e) Distributed simulation, as the name impleies, is so huge in terms of its size and its requirement for additional resources that each individual component of the system is stored on different and neighbouring systems and are accessed by any system as and when required. A typical example in this regard is the ALSP (Aggregate level simulation protocol) & the DIS (Distributed interactive simulation). SOFTWARE PROMODEL Promodel is a useful and yet an easy to use graphical user interface oriented software that is used to simulate and optimize any manufacturing process. The advantage with using promodel lies in the fact that it does not make any distinction between the size of a process, the amount of capital, time & labour involved in it and nor does it consider any geographical locaion of the place of production. Thus, in simple, words, the software promodel is a GUI (graphical user interface) suite that is capable of modeling all kinds of production processes & supply chains. It is built on the modern and robust concept of Object oriented programming (OOP). Promodel has a data-driven simulation engine that also comes with an additional feature of proding futuristic & deterministic analysis with the help of a utility called 'SimRunner'. It allows for rule based decision logic that provides the additional capability of being easy to learn, use and adapt. The use of ProModel has been so widespread since its release simply because it has succeeded in modeling & solving the most complex of situations in the manufacturing processes and supply chains without any distinction between the two. There has been an extensive use of the simulation software in colleges and universities given the fact that ther is no need for any programming and is easy for professors to teach concepts and easy for students to learn & implement. Thus, there is no requirement for any one to have prior programming knowledge in order to be able to use the software in an effective manner. the promodel's distinctive features lie in the drag & drop nature of the vrious building blocks provided with it. In addition, these elemnents can be supplied with requisite attributes with the click of a mouse, which makes it very easy to use. In spite of these easy-to-use features, the software's internal architecture is veryu robust through the provision and use of control structures such as looing conditions and decision trees and there are several additional features for accessing spreadsheets too for the purpose of problem-solving under promodel. The developed of promodel have consodered the requirements of computer programmers as well, who are well-versed with programming under environments such as C/C++, java etc. For catering to the needs of these set of customers, there are many external extensions & subroutineds that provide the capability to attach the cod that is custom written to the software. There is also an additional feature for using any extra tools along with promodel through the combination of the proposed tools with promodel using special plug-ins. The system architecture has in-built featureds for generating random numbers, whose purpose of generation has been explained in the previous section.Promodel allows the user to analuze the outcomes of changes made to a working process in the form of appropriate graphs as well. All the input is to be entered at graphically requiring minimum understanding & effort and this is the inherent beauty of promodel unlike the conventional approache of drawing on paper. The output is displayed in easy and clear to understand formats that is quite similar to sopreadsheets in excel. Promodel is in understanding with the industry standards for software use & design and this enables users of other windows based application to easily migrate to the software and begin using it. All graphical user interface features such as pop-ups, file transfers, file storage & retrieval and extensions are available with the software. It is possible for any layman to get to know about using the system by simply referring to the online tutorials & documantation, that contain detailed and scenario-based detailed explanations on how one should proceed with using the software in an effective manner. in case the user does not have access to the world wide web, there is also the feature osf a help context menu that provides requisite material to the user for the twin purposes of learing & troubleshooting. Lastly, promodel also a provides the feature of modularity by allowing a complex situation or a problem to be broken up into simpleer chunks or blocks to be solved by different teams or individuals wherein, te solution developed by each entity for the sub-problem may be linked together to provide the solution to the overall problem in totality. Thus, it can be seen that promodel is the ideal software for analyzing the work processes of ACW as far as the proposed research is concerned. Read More