Expert Answer:Critical Thinking

Answer & Explanation:Logistics Management ASSIGNMENT -3 Place of Submission: Students Grade Centre Weight: 05 Marks Learning Outcome: 1. Analyze and identify challenges and issues pertaining to logistical processes. 2. Apply essential elements of core logistic and supply chain management principles. 3. The capacity to write coherent project about actual logistic case studies. Assignment Workload: This assignment is an individual assignment. Critical Thinking The purpose of this assignment is to identify and apply Logistics and Supply Chain Management concepts/tools to suggest logistics performance priorities. Use Saudi digital Library (SDL) search engine. Search Title: THE BENEFITS OF LEAN MANUFACTURING what lean thinking offers the process Industries Authors Name: Melton,T Source: In 7th World Congress of Chemical Engineering, Chemical Engineering Research and Design June 2005 83(6):662-673 Read out the research paper carefully and based on your understanding you should answer the following questions. Questions: Why Manufacturing Companies focuses on Lean Thinking? What is meant by the term overproduction? Why do you think this has been described as the biggest waste of all? Assess the reasons for using lean thinking. What are the benefits from Suppliers to end users? The Answer should be within 2- 3 pages in length including the cover and appendices.
the_benefits_of_lean_manufacturing_what_lean_thinking_offers_the_process_industries.pdf

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0263–8762/05/$30.00+0.00
# 2005 Institution of Chemical Engineers
Trans IChemE, Part A, June 2005
Chemical Engineering Research and Design, 83(A6): 662–673
www.icheme.org/journals
doi: 10.1205/cherd.04351
THE BENEFITS OF LEAN MANUFACTURING
What Lean Thinking has to Offer the Process Industries
T. MELTON
MIME Solutions Ltd, Chester, UK
H
ow many people in the manufacturing industry can truly say that they have not heard
of LEAN? Not many. Yet how many of these believe in lean, have implemented
lean, are the passionate change agents who have convinced senior stakeholders
than lean is the way forward for their company? Less. Much Less. Lean is a revolution—it
isn’t just about using tools, or changing a few steps in our manufacturing processes—it’s
about the complete change of our businesses—how the supply chain operates, how the directors direct, how the managers manage, how employees—people—go about their daily work.
Everything. So what is this revolution, and how is it impacting the process industries? The
background of lean thinking is based in the history of Japanese manufacturing techniques
which have now been applied world-wide within many types of industry.
Keywords: lean manufacturing; waste; value; flow; value stream; bottleneck.
A BRIEF HISTORY OF ‘LEAN’
Taiichi Ohno had started work on the Toyota Production
system in the 1940s and continued it’s development into the
late 1980s unhindered by the advancements in computers
which had allowed mass production to be further
‘enhanced’ by MRP Systems. By the 1970s Toyota’s own
supply base was ‘lean’; by the 1980s their distribution
base was also ‘lean’.
Key tools and techniques within the ‘lean’ system,
included:
Mention ‘lean’ and most ‘lean thinkers’ will know that this
is a reference to the lean production approach pioneered by
Toyota but also the subject of The Machine that Changed
the World (Womack et al., 1990); a book which first highlighted Japanese production methods as compared to traditional Western mass production systems; it also
highlighted the superior performance of the former. The
follow-on book, Lean Thinking: Banish Waste and Create
Wealth in your Organisation (Womack and Jones, 1996),
is equally a key step in the history of lean as it summarizes
the lean principles which ‘guide action’. It also coined the
phrase ‘Lean Production’.
But let’s go back to the beginning—the birth of lean was
in Japan within Toyota in the 1940s: The Toyota Production System was based around the desire to produce
in a continuous flow which did not rely on long production
runs to be efficient; it was based around the recognition that
only a small fraction of the total time and effort to process a
product added value to the end customer. This was clearly
the opposite of what the Western world was doing—here
mass production based around materials resource planning
(MRP) and complex computerized systems was developing
alongside the mass production philosophies originally
developed by Henry Ford, i.e., large high volume production of standardized products with minimal product
changeovers.
. Kanban—a visual signal to support flow by ‘pulling’ product through the manufacturing process as required by
the customer.
. 5 S’s—a visual housekeeping technique which devolved
control to the shopfloor.
. Visual control—a method of measuring performance at
the ‘shop floor’ which was visual and owned by the operator team.
. Poke yoke—an ‘error-proofing’ technique.
. SMED (single minute exchange of dies)—a changeover
reduction technique.
However let us return to the 1990s and the two landmark
works discussed at the start of this section.
The Machine that Changed the World (Womack et al.,
1990) compared and contrasted the Mass Production
System seen in the US and Europe, with the Lean Production
System, seen in Japan, within the automotive industry.
Table 1 is a summary of some of the comparisons highlighted by Womack et al. (1990).
. The mass producers were able to maintain long production runs using standard designs which ensured that
the customer got a lower cost; they also got less variety

Correspondence to: Dr T. Melton, MIME Solutions Ltd, Gable Cottage,
Childwall Farm, Kelsall Road, Kelsall, Chester, CH3 8NR, UK.
E-mail: trish.melton@mimesolutions.com
662
THE BENEFITS OF LEAN MANUFACTURING
663
Table 1. Production Systems Compared.
Mass production
Lean production
Basis
† Henry Ford
† Toyota
People–design
† Narrowly skilled professionals
† Teams of multi-skilled workers at all levels in the organization
People–production
† Unskilled or semi-skilled workers
† Teams of multi-skilled workers at all levels in the organization
Equipment
† Expensive, single-purpose machines
† Manual and automated systems which can produce large
volumes with large product variety
Production methods
† Make high volumes of standardized products
† Make products which the customer has ordered
Organizational philosophy
† Hierarchical—management take responsibility
† Value streams using appropriate levels of empowerment—
pushing responsibility further down the organization
Philosophy
† Aim for ‘good enough’
† Aim for perfection
as did the workforce who found this mode of operation
tedious.
. In comparison, the term ‘lean’ comes from the ‘upside’
of the production method which requires ‘half the
human effort, half the manufacturing space, half the
investment and half the engineering hours to develop
a new product in half the time’.
However, it is not difficult to see that the world of car-parts
and conveyor belt production lines did not immediately
grab the interest and excitement of the process industries.
Apart from the packaging lines the analogies seemed hard
to find.
However, Lean Thinking (Womack and Jones, 1996)
helped us to understand the principles of lean:
. The identification of value.
. The elimination of waste.
. The generation of flow (of value to the customer).
It clearly demonstrated that this was not a philosophy or
technique which was only applicable to the automotive
industry.
THE BENEFITS OF BEING ‘LEAN’
The benefits seen within non-process industries (see
Figure 1), such as the automotive industry, are well
documented:
. decreased lead times for customers;
. reduced inventories for manufacturers;
. improved knowledge management;
. more robust processes (as measured by less errors and
therefore less rework).
This makes lean a very real and physical concept—
especially for manufacturing.
Lean production has now expanded and lean thinking has
been applied to all aspects of the supply chain. There are
many well documented examples of the application of
‘lean thinking’ to business processes such as project management (Melton, 2003); construction, design, and so on.
Lean can be applied to all aspects of the supply chain and
should be if the maximum benefits within the organization
are to be sustainably realized. The two biggest problems
with the application of lean to business processes are the
perceived lack of tangible benefits and the view that
many business processes are already efficient. Both
assumptions can be challenged (Melton, 2004):
. There are many tangible benefits associated with lean
business processes. A lean business process will be
faster, e.g. the speed of response to a request for the
business process will be faster, and as most business processes are linked to organizational supply chains, then
this can deliver significant financial benefits to a
company.
. The perception that a business process is already efficient
is all too often an illusion. Functionally, many business
processes may appear very efficient, however the application of Lean Thinking forces us to review the whole
supply chain in which the business process sits, and
this frequently reveals bottlenecks and pockets of
inefficiency.
But for now let us return to the world of manufacturing
within the process industries.
WHAT’S STOPPING US?
Figure 1. The benefits of ‘lean’.
With the benefits so apparently obvious the question has
to be—what’s stopping us?
For some in the process industries the answer is simple—
nothing! There are good examples of the implementation of
lean philosophies across the process industries. For
example, PICME (Process Industries Centre for Manufacturing Excellence), an organization part funded by the
DTI to specifically help manufacturing in the process
industries to become more efficient and more competitive,
quote estimated projected savings of over £75 million
over their first 5 years of operation (PICME, 2004).
Trans IChemE, Part A, Chemical Engineering Research and Design, 2005, 83(A6): 662–673
664
MELTON
Figure 2. The forces opposing and driving a change to ‘lean’.
But for some the ‘case for change’ cannot be as compelling as it would appear to be. Figure 2 is a force field diagram which shows some of the drivers and resistors within
the manufacturing sector of the process industries; it is only
when the specific driving forces for an organization are
greater than the opposing forces that the change will
occur. The ultimate sustainability then requires additional
supporting forces to further reduce and eliminate
opposition.
Within the process industries specific sectors have been
under increasing pressure:
. Chemical Industry—the continuing pressure on the cost
base.
. Pharmaceutical manufacturing—the pressure on the
supply chain has increased as there are more external
competitive pressures for manufacturers to deliver new,
safe efficacious drugs quicker than ever before.
But—lean manufacturing has now been applied within the
pharmaceutical sector both within primary and secondary
operations and the use within the wider process industries is increasingly likely as the breadth of benefits are
demonstrated and the driving forces for change increase.
Lean thinkers would probably want an additional driving
force for change: lean is easy to implement! But although
the principles and tools associated with lean thinking
may appear at face value an easy concept to use within
an apparently willing industry they present huge ‘change’
challenges to any business truly wishing to become lean.
Perhaps the biggest resisting force for the process industries
will be the huge inertia that must be overcome: the resistance to change.
Lean thinking involves a serious challenge to the status
quo and for many this level of challenge to the ‘way we
do things round here’ is a sufficient deterrent to application—particularly after the surge of business changes
implemented following initiatives seemingly aiming for a
similar goal—greater business effectiveness and therefore
profit! However it can be demonstrated that the forces
supporting the application of lean are greater than those
resisting it.
WHAT IS LEAN THINKING?
Lean Thinking starts with the customer and the definition
of value. Therefore, as a manufacturing process is a vehicle
to deliver value (a product) to a customer, the principles of
lean thinking should be applicable to the Process Industries
and the specific manufacturing processes within that
industry.
We can remove waste from many steps of our manufacturing processes, from how we develop the initial product
and process design, how we assure compliance, to how
we design to operate a completed facility. However, to be
truly lean we have to link all these elements within a
robust supply chain—we need to ensure the flow of value.
This leads to what many are calling a ‘lean enterprise’
(LERC, 2004).
Trans IChemE, Part A, Chemical Engineering Research and Design, 2005, 83(A6): 662–673
THE BENEFITS OF LEAN MANUFACTURING
665
The Lean Enterprise Research Centre (LERC, 2004) at
Cardiff Business School highlighted that for most production operations:
. 5% of activities add value;
. 35% are necessary non-value activities;
. 60% add no value at all.
Therefore, there is no doubt that the elimination of waste
represents a huge potential in terms of manufacturing
improvements—the key is to:
. identify both waste and value;
. develop our knowledge management base;
. realize that sustainable improvement requires the buy
in of the people operating the processes and managing
the business, and therefore a culture of continuous
improvement.
Value
The identification of value and the definition of value
propositions for specific customers is the starting point.
Without a robust understanding of what the customer
values you cannot move forwards (see Table 2). Outside
of the process industries there are many examples of
what we mean by a ‘value proposition’—as a consumer
buying a washing machine what we value may be the ability to wash our clothes at home; for others the value may be
related to cost or specific design features or even the colour.
The challenge for the manufacturer is to develop a product
portfolio based on these value propositions.
Table 2 gives some examples of value propositions
which manufacturers in the process industries have
developed as related to their specific customer group,
their product portfolio and their potential capabilities.
For customer A, development of the process they handover to the toll manufacturer is a value added activity;
for customer B this would be considered waste.
Table 2. Examples of value propositions within the process industries.
Customer type
A. Major
pharmaceutical
manufacturer of
drug products
B. Other
manufacturer in
a low cost base
industry
C. The patient (via
the companies
who distribute
the drugs)
Value proposition
Manufacturer type
† Robust process and
product development
at fast track speed
ensuring regulatory
compliance
† Correct specification,
low cost and
delivered on time
in the volumes
specified
† High quality, safe
drugs that ‘work’ at
an appropriate price
† Toll
manufacturer of
pharmaceutical
intermediates
† Bulk chemicals
manufacturer
† Major
pharmaceutical
manufacturer of
drug products
Waste
Any activity in a process which does not add value to the
customer is called ‘waste’. Sometimes the waste is a
necessary part of the process and adds value to the company and this cannot be eliminated, e.g., financial controls.
Figure 3. The seven types of waste.
Otherwise all ‘Muda’, as the Japanese call waste, should be
eliminated.
There are seven main types of waste as outlined in
Figure 3 and further detailed in Table 3.
Initially, waste can be easily identified in all processes
and early changes can reap huge savings. As the processes
continually improve, the waste reduction will be more
incremental as the company strives to achieve a wastefree process. Continuous improvement is at the core of
lean thinking.
The data in Table 3 is only the tip of the iceberg in terms
of the amount and types of waste which will be within our
manufacturing processes and overall supply chains. The
key is to identify it, i.e., to ensure that the root cause—
the real waste—is eliminated, not just the symptom.
Flow
Flow is probably the hardest lean concept to understand.
It is the concept which most obviously contradicts with
mass production systems; the comparison of one piece
flow versus batch and queue processes.
It is a lack of flow in our manufacturing processes which
accounts for the huge warehouses which house the mass of
inventory which consumes the working capital of the
business.
To understand flow you need to understand the concept
of the value stream—that linkage of events or activities
which ultimately delivers value to a customer. A value
stream crosses functional and, usually, organizational
boundaries.
Figure 4 shows a simple value stream which would
be typical for a toll manufacturer. The value stream does
not show all the supporting activities, only the main
value adding stages and the key multi-functional teams
involved.
Flow is concerned with processes, people and culture and
it is appropriate at this stage to mention the work of
Goldratt and Cox (1993) who’s book The Goal introduced
Trans IChemE, Part A, Chemical Engineering Research and Design, 2005, 83(A6): 662–673
666
MELTON
Table 3. The seven types of waste.
Type of waste
Description
Within the process industry
Example symptom
1. Over
production
† Product made for no specific
customer
† Development of a product, a
process or a manufacturing
facility for no additional
value
† Large campaign—large batch and
continuous large-scale manufacturing
processes
† Development of alternative process routes
which are not used or the development of
processes which do not support the
bottleneck
† Redesign of parts of the manufacturing
facility which are ‘standard’, e.g., reactors
† The extent of warehouse space needed
and used
† Development and production
organization imbalance
† An ever changing process (tweaked)
† Large engineering costs/time
associated with facility modifications
2. Waiting
† As people, equipment or
product waits to be
processed it is not adding
any value to the customer
† Storage tanks acting as product buffers in
the manufacturing process—waiting to be
processed by the next step
† Intermediate product which cannot leave
site until lab tests and paperwork are
complete
† The large amount of ‘work in
progress’ held up in the
manufacturing process—often seen on
the balance sheet and as ‘piles of
inventory’ around the site
3. Transport
† Moving the product to
several locations
† Whilst the product is in
motion it is not being
processed and therefore not
adding value to the customer
† Raw materials are made in several
locations and transported to one site
where a bulk intermediate is made. This is
then transported to another site for final
product processing
† Packaging for customer use may be at a
separate site
† Movement of pallets of intermediate
product around a site or between sites
† Large warehousing and continual
movement of intermediate material on
and off site rather than final product
4. Inventory
† Storage of products,
intermediates, raw materials,
and so on, all costs money
† Economically large batches of raw
material are purchased for large
campaigns and sit in the warehouse for
extended periods
† Queued batches of intermediate material
may require specific warehousing or
segregation especially if the lab analysis
is yet to be completed or confirmed
† Large buffer stocks within a
manufacturing facility and also large
warehousing on the site; financially
seen as a huge use of working capital
5. Over
processing
† When a particular process
step does not add value to
the product
† A cautious approach to the design of unit
operations can extend processing times
and can include steps, such as hold or
testing, which add no value
† The duplication of any steps related to the
supply chain process, e.g., sampling,
checking
† The reaction stage is typically
complete within minutes yet we
continue to process for hours or days
† We have in process controls which
never show a failure
† The delay of documents to
accompany finished product
6. Motion
† The excessive movement of
the people who operate the
manufacturing facility is
wasteful. Whilst they are in
motion they cannot support
the processing of the product
† Excessive movement of
data, decisions and
information
† People transporting samples or
documentation
† People required to move work in progress
to and from the warehouse
† People required to meet with other people
to confirm key decisions in the supply
chain process
† People entering key data into MRP
systems
† Large teams of operators moving to
and from the manufacturing unit but
less activity actually within the unit
† Data entry being seen as a problem
within MRP systems
7. Defects
† Errors during the process—
either requiring re-work or
additional work
† Material …
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