Choosing Lean Manufacturing Presented to you by : Vrunda Consultancy Service, Ahmedabad

Purpose  Convince the executive team of the imperative need to embrace Lean Manufacturing as the Business Methodology of choice  Outline Lean implementation steps, challenges, cost and time.

Agenda  The Present Current Market Conditions The Profit Equation and Consequences  Lean Manufacturing Overview The Basics of Lean Manufacturing Expected Lean Benefits  The Path What makes a company Great Lean Implementation Methodology, steps, Costs and Timeline Obstacles to Implementing Lean and Overcoming them

The Present Current Market ConditionsConsequencesThe Profit Equation

Current Market Conditions Drastic Increase in Globalization Consumers have more choices The Market forces a “Price cap” Drastic increase in Competition

Profit Equation  Before Price = Cost + Profit  Now Profit = Price - Cost  Profit Equation

Consequences We must :Find a way to keep our costs downBe more productive

Lean Manufacturing Overview The Basics of Lean Manufacturing Expected Lean Benefits

Order Processing, Transport, Storage, Waiting, Rework, Machine Setup, Inspection, Machine Breakdowns, etc... The Basics of Lean Manufacturing It means : - Eliminating work processes that add no value to the product - Simplify those processes that do RUN TIME Total Lead Time Typically >95% of Total Lead Time is Non-Value Added!!

The Basics of Lean Manufacturing It results in the : - Highest quality part - Lowest total cost - Shortest Lead Time

11 / 45 ValueWaste Initial Process Total Lead Time Opportunity for improvement by reducing waste and creating additional value Opportunity for improvement by reducing waste and creating additional value ValueWaste General Process Reduction Reduce all processes by 25% Waste and Value Both Decrease Waste Only Reduction ValueWaste Target & Reduce Waste Maintain Value Value Maintained Resources Decrease Value Creation ValueWaste Apply Resources to Create More Value Value Increased Resources Focused Typically, > 95% of the total Lead Time is Non Value Added Typically, > 95% of the total Lead Time is Non Value Added Total Lead Time OrderCash

The Basics of Lean Manufacturing Observations Problem Solving Lean Tools Team Culture Involvement of all Employees It targets the sources of wastes

13 / 45 Lead Time Reduction Productivity Increase WIP Reduction Quality Improvement Space Utilization Percentage of Benefits Achieved FlexibilitySkill EnhancementVisual Mgmnt From “AMERICA’S BEST - INDUSTRYWEEK’S Guide to World-Class Manufacturing Plants” Expected Lean Benefits

Strong Competitive Advantage Increased Productivity ( 10% - 50%) Improved quality Shorter time to market Improved on-time delivery Reduced space requirements, shorter travel distances Improved workflow, reduced order processing errors Better customer service through streamlining

Expected Lean Benefits Significant cost savings that last Reduced inventory cost ( 30% - 80%) Less damages due to handling Reduced Setup time (30% to 90%) Team working culture Delegation of accountability Better use of resources - plant, skilled labor, utilities Reduced manpower turnover, Less attrition costs

The Path Lean implementation steps, timeline VCS Advantage Obstacles to Implementing LeanCost of implementing LeanWhat makes a Company Great

What is our strategy How are we going to achieve it? What is your vision for your company?

18 / (#) Specify Value Map Value Stream Recognize and eliminate waste Create Flow & Pull Perfection Clarify Specific Needs Top management Commitment Choose Lean Specialist Proper Planning Pick up a Lean Project Well Defined Matrics Form & Train Teams Plan for Reward & Recognition Implement Learning Continuous Monitoring Lean Implementation Steps  Process  Steps  Requirement

Lean Implementation Timelines Allow months to implement lean manufacturing practice Allow months to see results: Cost savings, Productivity improvement, Increased margins

Obstacles to Implementing Lean Obstacles Implement Support o Temporary losses on the profit-and-loss statement. o Obsolete inventory become more visible. o Natural resistance to change o Traditional Cost accounting o Fear of losing the command and Commit to Lean Create bold vision Communicate Focus on core business Reward the performers Measure progress

VCS Advantage Our consultants are recognized for their unique experiences and continuing development of lean concepts with an enterprise perspective. We have significant experience in manufacturing industries. We are interested in making you both competitive and self sufficient as soon as possible.

Cost of implementing Lean Varies from company to company Expect to hire a lean specialist Subsequent lean initiatives are sponsored by previous savings Minor capital purchases Undertaking lean manufacturing to increase productivity Outsource activities that are not related to core business Customize product mix Costs involved Working Smart