OPERATIONS MANAGEMENT

WITH TQM

LEAN
OPERATING
SYSTEMS
WIDELFREDO T. DIAZ
INSTRUCTOR
LEARNING EXPLAIN THE FOUR PRINCIPLES OF
LEAN OPERATING SYSTEMS

OBJECTIVES DESCRIBE THE BASIC LEAN TOOLS

AND APPROACHES

EXPLAIN THE CONCEPT OF LEAN

AFTER STUDYING THIS LESSON SIX SIGMA NAD HOW IT IS APPLIED
YOU SHOULD BE ABLE TO: TO IMPROVING OPERATIONS
PERFORMANCE.

EXPLAIN HOW LEAN PRINCIPLES

ARE USED IN MANUFACTURING
AND SERVICE ORGANIZATIONS.

DESCRIBE THE CONCEPTS AND

PHILOSOPHY OF JUST-IN-TIME
OPERATING SYSTEMS
Lean Thinking
• refers to the approaches that focus on the
elimination of waste in all forms, and the
smooth, efficient flow of materials and
information throughout the value chain to
obtain faster customer response, higher
quality and lower costs.

Manufacturing and service operations that apply the

principles of lean enterprise are often called LEAN
OPERATING SYSTEMS.
Any activity, material, or operation
that does not add value in an
organization is considered WASTE
Principles of
LEAN OPERATING SYSTEMS HAVE
FOUR BASIC PRINCIPLES

Lean Operating
Systems • ELIMINATION OF WASTE
• INCREASE SPEED AND
RESPONSE
• IMPROVED QUALITY
• REDUCED COST
As simple as these may seem, organizations
require disciplined thinking and application
of good operations management tools and
approaches to achieve them
ELIMINATE
WASTE LEAN
By the very nature of the term, implies doing only what
is necessary to get the job done.

• Any activity, material, or operation that does not add value to an organization is considered waste.
• The goal is zero waste in all value-creation and support processes in the entire value chain
Any activity, material, or operation
that does not add value in an
organization is considered WASTE
Lean concepts were initially developed and implemented
by the TOYOTA MOTOR CORPORATION, and lean
operating systems are often benchmarked with the Toyota
Production Systems (TPS)

The TOYOTA Motor

Company categories:
classified waste into seven major
Overproduction:
for example: making a batch of 100 when there are orders
for only 50 in order to avoid an expensive setup, or making
a batch of 52 instead of 50 in case there are rejects.

Overproduction ties up production facilities, and resulting

excess inventory simply sits idle.
Waiting time:
for instance, allowing queues to build up between
operations, resulting in longer lead times and more work-in-
progress.
Transportation:
the time and effort spent in moving products around the
factory as result of poor layout
Processing:
the traditional notion of waste, as exemplified by scrap that
often results from poor product or process designs.
Inventory:
waste associated with the expense of idle stock and extra
storage and handling requirements needed to maintain it.
Motion:
as a result of inefficient workplace design and location of
tools and materials
Production Defects:
the result of not performing work correctly the first time.
INCREASE SPEED
AND RESPONSE
Lean operating systems focus on quick efficient responses in
• designing and getting goods and services to market,
• producing to customer demand and delivery requirements,
• responding to competitors’ actions
• collecting payments
• addressing customer inquiries or problems

Perhaps the most effective way to increase speed and response is to synchronize
the value chain.
IMPROVE
QUALITY
Lean operating systems cannot function if

• raw materials are bad;

• processing operations are not consistent;
• materials and tools are not located in the correct place
• or machines breakdown.
Poor quality disrupts work schedules and reduces
yields, requiring extra inventory, processing
time, and space for scrap and parts waiting for
rework.

All these are forms of waste and increase costs

to the customer. Improve
Quality
Reduce Cost
Certainly, reducing cost is an important objective of lean enterprise. Anything that is
done to reduce waste and improve quality often reduces cost at the same time.

• More efficient equipment

• better preventive maintenance
• and smaller inventories

reduce costs in manufacturing firms.

LEAN TOOLS AND
APPROACHES
Meeting the objectives of a lean enterprise requires disciplined approaches to designing
and improving processes.

Organization use several tools and approaches to create a lean organization.

The 5Ss
Workers cannot be efficient if their workplaces are messy and disorganizedRfficient
manufacturing plants are clean and well organized.

Firms use the 5S principles to create this work environment.

5S derived from Japanese terms: seiri (sort), seiton (set in order), seiso (shine), seiketsu (
standardize) and shitsuke (sustain)
.
SEIRI (SORT)

This step involves going through all items in the workspace and sorting them into
necessary and unnecessary categories. Unnecessary items should be removed from the
workspace. The goal is to reduce clutter and make it easier to find and access the
essential items.
Seiton (Set in order)

In this step, you organize the necessary items in a systematic way. Everything has a
designated place, and there's a logical order for items. This helps improve workflow and
makes it easier to locate tools and materials when needed.
Seiso (Shine)

Also known as "sweep" or "clean," this step emphasizes the importance of cleanliness in
the workplace. Regular cleaning and maintenance help identify and address potential
issues early, maintain a safe and pleasant environment, and prevent equipment and tools
from deteriorating.
Seiton (Set in order)

In this step, you organize the necessary items in a systematic way. Everything has a
designated place, and there's a logical order for items. This helps improve workflow and
makes it easier to locate tools and materials when needed.
Seiketsu (Standardize)

Standardization involves creating and implementing standardized procedures and

practices for maintaining the first three S's (Sort, Set in order, and Shine). Standardized
procedures ensure consistency and make it easier for everyone to follow the 5S
principles.
Shitsuke (Sustain):

Sustaining the 5S methodology is the final step. This involves maintaining the
improvements made in the first four steps and continually improving the workplace.
Regular audits and employee training help ensure that the 5S principles become a part of
the organization's culture and are sustained over the long term.
VISUAL CONTROL
Visual controls are indicators for operating activities that are placed in plain sight of all
employees so that everyone can quickly and easily understand the status and
performance of the work system.
VISUAL CONTROL
VISUAL SIGNALING SYSTEM is known as “ANDON”, drawing from the Japanese
term from which the concept first originated.

for example: if a machine fails or a part is defective or manufactured incorrectly, a light

might turn on or a buzzer might sound, indicating that immediate action should be taken.
Single Minute Exchange of
Dies (SMED)
Single Minute Exchange of Dies (SMED) is a lean manufacturing technique aimed at reducing the time it takes to
change over or exchange dies, tools, or equipment in a production process from one product to another.

The goal of SMED is to minimize setup time so that it can be accomplished in a "single minute" or, more broadly, in
a very short time frame. While the term "single minute" is idealistic and not always achievable, the focus is on
achieving significant time reductions and improving overall production efficiency.
Single Minute Exchange of
Dies (SMED)
SMED was developed by Shigeo Shingo, a Japanese industrial engineer who made significant contributions to the
Toyota Production System (TPS) and lean manufacturing. SMED is a crucial element of TPS and lean manufacturing
principles. The reduction of setup time offers several benefits, including:

• Increased Productivity: Shorter setup times mean that machines can be back in production faster, reducing
downtime and increasing overall productivity.
• Reduced Inventory: With quicker changeovers, there is less need for large buffer stocks to compensate for long
setup times. This leads to lower inventory costs.
• Improved Flexibility: Faster changeovers allow for more frequent product changeovers, making it easier to
respond to customer demands for a variety of products in smaller batches.
• Quality Improvement: Frequent changeovers can help identify and address quality issues more quickly, reducing
the potential for defects in large batches.
SMALL BATCH &
SINGLE-PIECE FLOW
Small batch production and single-piece flow are two manufacturing strategies that
focus on the efficient and flexible production of goods, particularly in industries where
customization and quick response to customer demands are essential. These approaches
are often associated with lean manufacturing and are used to reduce waste, improve
quality, and increase operational efficiency.
Small Batch Production:
Small batch production involves the manufacture of goods in relatively small quantities, typically smaller
than traditional large-scale production runs. This approach is often used in industries where product
variety, customization, and quick changeovers are crucial. Some key characteristics of small batch
production include:

• Flexibility: Small batch production allows manufacturers to respond quickly to changing customer
demands and market trends. It's well-suited for products with frequent design changes or high
variability.
• Reduced Inventory: Smaller production batches help minimize inventory levels, reducing storage
costs and the risk of overproduction.
• Faster Setup and Changeovers: To be effective, small batch production relies on efficient changeover
processes, such as SMED (Single Minute Exchange of Dies), to minimize downtime between
different product runs.
• Quality Control: Smaller batches can lead to better quality control as defects can be identified and
corrected more easily. This can result in higher-quality products.
Single-Piece Flow:
Single-piece flow, often referred to as one-piece flow, is a lean manufacturing concept that emphasizes
producing one product at a time, or as close to a one-piece flow as possible, throughout the production
process. The main principles of single-piece flow include:

• Reducing Waste: Single-piece flow minimizes various forms of waste, such as overproduction, excess
inventory, and waiting time, leading to leaner and more efficient processes.
• Improved Quality: By focusing on one product at a time, defects and issues can be identified and
addressed immediately, resulting in higher product quality.
• Flexibility: Single-piece flow allows for quick product changeovers and adjustments, enabling
manufacturers to respond rapidly to changing customer requirements.
• Better Resource Utilization: Resources like machines, labor, and materials are used more efficiently
as they are matched to the pace of production.
QUALITY AND CONTINUOUS
IMPROVEMENT

Quality and continuous improvement are two interconnected concepts that play a vital role in
achieving excellence in products, services, and processes within an organization. These principles are
often central to quality management and are used to enhance customer satisfaction, reduce waste, and
increase overall efficiency

Back to Agenda
QUALITY AND CONTINUOUS
IMPROVEMENT

Quality, in a general sense, refers to the degree of excellence or superiority of a product, service, or process. It encompasses
several dimensions, including:
• Fitness for Purpose: A product or service should meet the specific requirements and expectations of its intended use or
purpose.
• Conformance to Standards: Quality often involves adherence to industry or regulatory standards and specifications.
• Customer Satisfaction: Ultimately, quality is about satisfying the needs and expectations of customers. Meeting or
exceeding these expectations is a fundamental aspect of quality.
• Absence of Defects: Quality also implies the absence of defects, errors, or problems in a product or service.
• Reliability and Consistency: Quality products and services should be reliable and consistent in performance.

Back to Agenda
QUALITY AND CONTINUOUS
IMPROVEMENT

Quality management principles, such as those outlined in ISO 9001, provide a

structured approach for organizations to maintain and improve quality. These
principles include customer focus, leadership, engagement of people, process
approach, and continuous improvement.

Back to Agenda
QUALITY AND CONTINUOUS
IMPROVEMENT

Continuous improvement, often referred to as "Kaizen" in the context of Japanese management philosophies, is the ongoing effort to enhance
products, services, or processes incrementally over time. Key elements of continuous improvement include:
• Identifying Areas for Improvement: Organizations continuously assess their operations to identify areas where improvements are possible. This
involves collecting data, analyzing performance, and soliciting feedback.
• Setting Objectives: Clear objectives and goals are established to guide the improvement efforts. These objectives should be specific, measurable,
achievable, relevant, and time-bound (SMART).
• Implementing Changes: Improvement initiatives involve making changes to existing processes, systems, or practices. These changes can range
from minor adjustments to significant transformations.
• Monitoring Progress: Progress is monitored and measured against the established objectives. Data and feedback are used to assess the impact of
changes.
• Feedback and Learning: Continuous improvement incorporates a feedback loop to learn from experiences and outcomes. Lessons learned are
applied to future improvement efforts.
• Involving Employees: Successful continuous improvement efforts engage employees at all levels of the organization, as they often have valuable
insights and ideas for improvement. Back to Agenda
QUALITY AND CONTINUOUS
IMPROVEMENT

Quality and Continuous Improvement go hand in hand. Quality management emphasizes

the importance of delivering high-quality products and services, while continuous
improvement ensures that organizations are consistently striving to enhance their
operations and meet or exceed customer expectations. These principles are integral to
achieving competitiveness and long-term success in today's business environment.

Back to Agenda
TOTAL PRODUCTIVE
MAINTENANCE

Total Productive Maintenance (TPM) is a comprehensive maintenance philosophy and

methodology that aims to maximize the overall effectiveness of equipment and machinery in a
manufacturing or production environment. TPM focuses on reducing equipment downtime,
improving equipment reliability, and enhancing product quality through a combination of proactive
maintenance, employee involvement, and continuous improvement. The concept of TPM was
developed in Japan and is often associated with the Toyota Production System and lean
manufacturing principles.
Key principles and components of
TPM

• Preventive Maintenance: TPM emphasizes preventive maintenance, which includes regular inspections, cleaning,
lubrication, and minor repairs to ensure that equipment is in optimal working condition. By proactively addressing
issues, the likelihood of breakdowns and unplanned downtime is reduced.
• Autonomous Maintenance: In TPM, operators are actively involved in equipment maintenance. They are trained to
perform routine maintenance tasks, such as cleaning, inspection, and minor repairs. This helps create a sense of
ownership and responsibility among operators for the machines they work with.
• Planned Maintenance: Planned maintenance involves scheduling maintenance activities at regular intervals to
address wear and tear, replace worn components, and keep equipment in peak condition. This can reduce the need
for unplanned downtime and emergency repairs.
• Focused Improvement: TPM encourages the formation of small cross-functional teams to identify and address
chronic equipment-related issues. These teams work to continuously improve equipment performance and
reliability.
Key principles and components of
TPM

• Quality Maintenance: TPM recognizes the close connection between equipment performance and product quality.
By maintaining equipment in top condition, it helps ensure consistent and high-quality production.
• Training and Education: Employees are provided with the necessary training and knowledge to perform
maintenance tasks effectively and safely. This includes training in equipment operation, maintenance procedures,
and problem-solving techniques.
• Early Equipment Management (EEM): TPM also involves considering maintenance and reliability factors during
the design and purchase of new equipment. EEM aims to ensure that new equipment is easy to maintain and will
perform reliably.
• Overall Equipment Effectiveness (OEE): TPM uses the OEE metric to measure equipment performance, taking
into account factors like availability, performance rate, and quality. This metric helps organizations monitor and
improve equipment efficiency.
• TPM Pillars: Some variations of TPM may include specific pillars or components, such as administrative TPM
(focusing on office processes) and safety TPM (emphasizing safety practices in the workplace).
TO BE CONTINUED. . .