Article | January 31, 2022
Every industrial facility generates waste in some form or another. However, not all waste has to be physical; some can appear within the processes that occur throughout the manufacturing cycle. It is critical that you adopt strategies that enable you to generate less waste.
“Lean is a way of thinking, not a list of things to do.”
– Shigeo Shingo, a Japanese Industrial Engineer
Lean manufacturing is a method for optimizing and simplifying the way a company operates and interacts with its surroundings on a strategic level. Additionally, it is an efficient method of decreasing and managing existing waste within an organization.In this article, we'll look at the eight types of waste in lean manufacturing and the lean tools that may help reduce them and improve the precision and customer focus of your business operations.
How to Eliminate the 8 Types of Waste in Lean Manufacturing
Transport is a prominent example of lean manufacturing waste. It may be from machining to welding, or from a factory in China to an assembly line in America. This transportation adds no value to the product, does not alter it, and does not satisfy the customer. Transport waste may cause your firm to lose money rapidly; you must spend on material handling equipment, employees, training, safety precautions, additional space for material transportation, etc. Transportation requires strategic planning and logistical assistance to be lean and optimum. Transportation performance should be monitored routinely using analytical measures and KPIs.
For example, Toyota's Toyota Production System (TPS) has developed the tools and practices of Lean Manufacturing, and many of its suppliers are located near to their factories, which helps them reduce the transportation waste of their business. To start applying lean thinking to transportation management, you must first understand transportation expenses, which are divided into unit and productivity costs. Focus on long-term solutions that reduce overall mileage, trailer use, waiting times, and adherence to routing guides. Value stream mapping can help locate transportation waste. With value stream mapping, processes are documented and evaluated in terms of customer value. Any transportation that cannot be connected to value is reduced or eliminated.
One of the main benefits of current Point of Sales (POS) and production technologies is that companies may produce things only when there is demand. Inventory waste is no longer an unavoidable issue. When this type of lean manufacturing waste occurs, it is usually the result of excessive production or a process breakdown. Order management and inventory monitoring solutions assist in decreasing inventory waste. Creating real-time inventory visibility and accuracy requires the use of a computer-based system, such as ERP software.
Additionally, it has been demonstrated that scanning barcodes significantly reduces errors associated with manual procedures. This type of solution offers a far more detailed and fast inventory tracking strategy. Moreover, an active cycle counting program is critical for a manufacturing company's inventory management to improve.
Movement/motion waste is the unnecessary transport of objects. Motion waste, on the other hand, also refers to unnecessary human actions or movements. Motion waste is commonly caused by unoccupied or untidy workspaces. To address motion waste, lean practitioners invented the 5S method. It decreases workplace inefficiency and motion waste. Each of the five steps in the 5S technique begins with the letter S, which are:
Sort: Removing unnecessary material from each work area.
Set in Order: Set the goal of creating efficient work areas for each individual.
Shine: Maintaining a clean work area after each shift helps in identifying and resolving minor concerns.
Standardize: Documenting changes to make applications in other work areas more accessible.
Sustain: Repeat each stage for continuous improvement.
Waiting time occurs when two interrelated processes are out of sync. This may include waiting for parts, instructions, labor, or repairs. Total Productive Maintenance (TPM) is a comprehensive approach that helps to eliminate waiting by reducing equipment downtime. It emphasizes empowering operators by assisting them in maintaining their own equipment. This method promotes shared accountability and increases the involvement of frontline workers.
Overproduction happens when there is a surplus of goods produced. Overproduction is a major source of waste in the 8 wastes examples of lean. It is costly, reduces quality, and generates other wastes such as inventory and transportation. Kanban is another lean manufacturing approach designed to decrease overproduction waste. Kanban is a Japanese word that means “visual board”. As the name suggests, this approach initiates action based on visual clues. It is a "pull" method that addresses demand rather than anticipating it. Additional inventory is generated only when existing inventory is "pulled" from stock.
When simple processes are replaced by complex ones, this is known as over-processing. Excessive processing might entail the addition of features to products that buyers do not require. The employment of expensive equipment that isn't strictly necessary is another example of excessive processing. Value stream mapping may be quite beneficial for locating instances of excessive processing. It assists manufacturers in developing a sound action plan to leverage their available resources while also ensuring that materials and time are spent efficiently.
Defects in manufactured products are expensive to repair since the damaged product must be scrapped or re-made, interrupting the manufacturing process. Lean manufacturing approaches strive for a zero-defect output by recording problems, determining their causes, and adopting corrective action. There are several strategies for identifying and eliminating defect wastes; nevertheless, lean manufacturing seeks to prevent them from developing in the first place. This defect prevention is accomplished through a variety of techniques ranging from automation / Jidoka (machines with "human" intelligence that can detect when a non-standard event has occurred) to Pokayoke devices that detect if a product is defective, either preventing the process from running or highlighting the defect for action.
Implementing standard operating procedures (SOP) and training to guarantee that the proper processes are used and standards are fulfilled is, once again, the greatest solution for overcoming defective waste. Defects are an obvious waste. The cost of materials and labor utilized to create a product gets wasted. The waste from faulty products is aggravated by returns, lost goodwill, and wasted customer support activities.
Employees are the most significant resource in any organization. The lean waste of untapped talent is just what it sounds like: not leveraging your precious resource, your personnel, effectively or at all. This produces waste by leaving value on the table that your workers may provide through unrecognized abilities or talents. Recognizing and utilizing your team's abilities, expertise, and talents is critical to business success. Employees are your most precious resources, and not fully using them wastes time and money. Inappropriate task assignments are one typical source of talent waste.
Additionally, unnecessary administrative chores, poor communication, ineffective leadership or teamwork, and inadequate training are further untapped talent lean wastes examples. The greatest method to reduce talent waste is to empower employees rather than micromanage them. Many unseen abilities and talents emerge when employees feel empowered, making it simpler to identify and develop accessible talent. Following are a few ideas that can be adapted to any workplace:
Refine training programs.
Set up process management checklists that allow for flexibility.
Create remote monitoring systems to reduce micromanagement.
Hold frequent team meetings so they may express their views and ask questions.
How Did Nike Benefit from Lean Manufacturing?
According to the company's FY10/11 Sustainable Business Performance Summary, the supply chain has run more effectively after adopting a lean strategy. They termed it "better manufacturing" as it eliminated wasted resources and time. As part of its sustainability mission, the study noted, the corporation attempted to remove waste, wasted time, and materials from its processes.
According to the survey,
Failure rates were 50% lower in contracted factories that used the lean strategy than in companies that did not.
It was shown that lead times for deliveries from lean manufacturing were on average 40% shorter.
Lean factories have also claimed gains in productivity of 10% to 20% and a 30% decrease in the time required for launching a new model.
We've discussed the lean strategies to deal with the eight forms of waste in manufacturing. Identifying the lean manufacturing types of waste is critical for evaluating business loopholes and overcoming impediments to company growth.
Despite the industry’s transition journey from 1.0 to 4.0, many manufacturing professionals agree that lean manufacturing is still applicable today for running a business with the least amount of resources necessary to thrive. It is ideal for businesses looking to stay ahead of emerging industry trends, such as new technology and associated workforce shifts. By using Lean concepts, technologies, and digital operations, businesses may increase their agility and customer focus.
How is lean different from Six Sigma?
Lean aims to reduce waste, speed up operations, and improve flow. Six Sigma lowers variation and lean decreases waste. Six Sigma targets 3.4 defects per million opportunities, whereas lean emphasizes speed.
What are the five principles of lean manufacturing?
According to Womack and Jones, there are five key lean principles: value, value stream, flow, pull, and perfection.
What is the objective of lean manufacturing?
Companies looking for ways to enhance efficiency and reduce waste should adopt lean thinking. The ultimate objective of lean manufacturing is to manufacture excellent goods that satisfy customers while using minimal resources.
Article | December 21, 2021
When it comes to developing a budget for the following financial year of your manufacturing business, many operations managers start with direct labor and material expenditures. But, what about manufacturing overhead costs?
Manufacturing overhead is any expense not directly tied to a factory's production. Therefore, the indirect costs in manufacturing overhead can also be called factory overhead or production overhead.
Outsourcing and globalization of manufacturing allows companies to reduce costs, benefits consumers with lower-cost goods and services, and causes economic expansion that reduces unemployment and increases productivity and job creation.
– Larry Elder
So, this article focuses on some highly effective overhead cost reduction methods that would help you build a healthy budget for the following year.
Manufacturing Overhead Costs: What Is Included?
Everything or everyone within the factory that isn't actively producing items should be considered overhead.
The following are some of the variables that are considered overhead costs:
Depreciation of equipment and productionfacilities
Taxes, insurance, and utilities
Supervisors, maintenance, quality control, and other on-site personnel who aren't producing signs
Indirect supply from light bulbs to toilet paper is also included in the overhead cost.
Manufacturing Overhead Costs: What Is Excluded?
Everything or everyone within or outside the factory that is actively producing items should be excluded from the overhead costs.
Factory overhead does not include the following:
Employee costs for those making the goods daily
External administrative overhead, such as a satellite office or human resources
Costs associated with C-suite employees
Expenses associated with sales and marketing - include pay, travel, and advertising
How to Calculate Overhead Costs in Manufacturing
To know the manufacturing overhead requires calculating the manufacturing overhead rate. The formula to calculate the manufacturing overhead rate i.e. MOR is basic yet vital.
To begin, determine your overall manufacturing overhead expenses. Then, add up all the monthly indirect expenditures that keep manufacturing running smoothly.
Then you can calculate the Manufacturing Overhead Rate (MOR). This statistic shows you your monthly overhead costs as a percentage.
To find this value, divide Total Manufacturing Overhead Cost (TMOC) by Total Monthly Sales (TMS) and multiply it by 100. The final formula will be:
Assume your manufacturing overhead expensesare $50,000 and your monthly sales are $300,000. You get.167 when you divide $50,000 by $300,000. Then increase that by 100 to get your monthly overhead rate of 16.7%.
This means your monthly overhead expenditures will be 16.7% of your monthly income. Being able to forecast and develop better solutions to decrease production overhead.
Five Ways to Reduce Manufacturing Overhead Costs
A variety of strategies may be used by manufacturing organizations to reduce their overhead costs. Here is a summary of some of the most important methods for reducing your manufacturing overhead costs.
Value Stream Mapping – A Production Plant Process Layout
A value stream map depicts the entire manufacturing process of your plant. Everything from raw material purchase through client delivery is detailed here. The value stream map provides you with a complete picture of the profit-making process. This overhead cost-cuttingmethod is listed first for a reason because every effort to reduce manufacturing overhead costsstarts with a value stream map.
Lean manufacturingis also one of the techniques of eliminating unnecessary time, staff, and work that is not necessary for profit and has gained undue favor in the manufacturing process. You must first create a value stream map of the whole manufacturing process for this technique to work. Once the lean manufacturing precept is established, the following strategies for decreasingmanufacturing overhead expenses can be examined.
Do Not Forget Your Back Office Management
Before focusing on factory floor cost reduction techniques, remember that your back offices, where payment processing and customer contacts occur, may also be simplified and increase profitability. Fortunately, automation can achieve this profitability at a cheap cost.
Manufacturers increasingly use robotic process automation (RPA) to sell directly to customers rather than rely on complex supply networks. This automation eliminates costly human mistakes in data input and payment processing by automatically filling forms with consumer data. Moreover, the time saved from manual data input (and rectifying inevitable human errors) equates to decreased labor expenses and downtime.
Automating Your Manufacturing Plant
For a long time, manufacturers saw factory automation as a game-changer. As a result, several plant owners make radical changes in their operations using cutting-edge technologydespite knowing it realistically. Over-investing in technologies unfamiliar to present industrial personnel might be deemed a technology blunder. Investing in new technology that doesn't generate value or is too hard for current staff to use might be a mistake.
It's usually best to start small when implementing newtechnology in manufacturing. Using collaborative robots in production is one way to get started with automation. They are inexpensive, need little software and hardware, and may help employees with mundane, repeated chores that gobble up bandwidth. It is a low-cost entry point into automation that saves labor expenses and opens the door for further automation investments when opportunities are available.
Reuse Other Factory Equipment and Supplies
Check with other factories to see if they have any unused equipment or supplies that may be "redeployed" to your manufacturing plant. Redeployment would save you time and money by eliminating the need to look for and install new equipment while lowering your overhead costs.
Outsourcing a fully equipped factory, equipment, or even staff can also assist in lowering overhead costssince you will only pay for what you utilize. As such, it is a viable method to incorporate into your production process.
Employ an In-house Maintenance Expert
An in-house repair technician can service your equipment for routine inspections, preventive maintenance, and minor repairs. This hiring decision might save money on unforeseen repair expenses or work fees for an outside repair provider. Having someone on-site who can do emergency repairs may save you money if your equipment breaks after business hours.
Manufacturing overhead costis an essential aspect of every manufacturing company's budget to consider. Smart manufacturingis intended to be productive, efficient, and cost-effective while effectively managing production expenditures. Calculating the manufacturing overheadcan provide you with a better understanding of your company's costs and how to minimize them. Depending on the conditions or geographical needs, each manufacturing plant's overhead expensesmay vary. As a result, identify your production overhead costsand concentrate on reducing and improving them.
What are manufacturing overheads?
Manufacturing overhead cost is a sum of all indirect expenses incurred during production. Manufacturing overhead expenses usually include depreciation of equipment, employee salaries, and power utilized to run the equipment.
What is a decent overhead percentage?
When a business is functioning successfully, an overhead ratio of less than 35 % is considered favorable.
How can I calculate the cost of manufacturing per unit?
The overall manufacturing cost per unit is determined by dividing the total production expenses by the total number of units produced for a particular time.
Article | March 29, 2022
The lean manufacturing process is the most time-tested, dependable, and proven method of manufacturing. It has helped numerous notable firms worldwide to reduce production waste and optimize their overall manufacturing operations. Many lean tools, such as 5S lean manufacturing, JIT, and Kanban, have helped manufacturers be more productive and efficient than ever before.
“Lean is a way of thinking, not a list of things to do.”
– Shigeo Shingo, a Japanese Industrial Engineer
In 2014, 29% of manufacturers had implemented lean manufacturing or intended to do so. (Source: MAXIML)
This article highlights lean manufacturing principles and the most commonly used lean tools. We will also look into the three lean manufacturing examples that will help us understand how lean manufacturing techniques may help manufacturing organizations become more successful.
Lean Manufacturing Principles
Value is always determined in terms of the customer's requirements for a particular product. For instance, what is the manufacturing and delivery schedule? What is the cost? What more critical requirements or expectations must be met? This information is vital when it comes to defining value.
The next step after value is to map the "value stream," or all the steps and processes involved in creating a given product, from raw materials to delivery to the client. Value-stream mapping outlines all the steps that move a product or service through a process. Processes might be in design or customer service. The objective is to "map" the movement of material or product through the process on one sheet. The purpose is to identify and eliminate unwanted steps. Some call it process re-engineering. This practice also helps to understand the entire business function.
After removing waste from the value stream, the next step is to ensure there are no interruptions, delays, or bottlenecks. "Sequence the value-creating steps closely so the product or service flows smoothly toward the customer," LEI suggests. This may require breaking down silo thinking and becoming cross-functional across all departments, which can be difficult for lean projects to accomplish. However, studies indicate that this can significantly improve efficiency and productivity, often by up to 50%.
With better flow, the time it takes to get a product to market (or to the customer) can be greatly reduced. As a result, "just in time" manufacturing or delivery becomes simpler. This means that the consumer has the ability to "pull" the product from you at any time (often in weeks instead of months). As a result, the manufacturer or provider and the client save money by not having to build things or store resources in advance.
Developing lean thinking and process optimization part of your organizational culture is the most crucial step. Remember that lean is not a static system that takes continual effort and care to perfect. Lean should be implemented by all employees. Experts claim a process is not fully lean until it has been value-stream mapped a dozen times.
The Most Used Lean Manufacturing Tools
Lean manufacturing employs a variety of lean tools to optimize output and efficiency by making the most use of available resources. Lean manufacturing seeks to improve processes by demanding less work, time, and resources. Specific lean tools may be more suited to one type of business than another. On the other hand, 5S lean manufacturing, Kaizen, Kanban, Value Stream Mapping, and Focus PDCA are among the most useful lean tools.
Three Examples of Lean Manufacturing
Toyota was the first big company to adopt the lean manufacturing process. They have mastered lean manufacturing techniques to minimize defective products that do not meet client expectations. Toyota achieves this goal through two key methods. The first is Jidoka, which means "mechanization with human assistance." While some portions of the operation are automated, humans regularly examine the product's quality. There are extra programs in the system that can shut down the machines if there is a problem.
The second method is called the JIT model. Individual cars can be made as per order using JIT inside the Toyota Production System, but each component must fit precisely the first time due to a lack of alternatives. Therefore, pre-existing production issues cannot be overlooked and resolved quickly.
Computer chip maker Intel implemented lean manufacturing techniques to produce better products with zero defects. This approach has helped to minimize the manufacturing time from three months to ten days. Intel eventually learned that manufacturing low-quality things would not enhance earnings or customer satisfaction. Instead, both parties gain from quality control and waste reduction methods. This is especially true in the electronics business, where products are constantly updated.
John Deere has implemented a lean manufacturing process. Many of their quality control techniques are completely automated, allowing for faster inspection of more parts. This means more products flow out of the door each day, and the consumer gets a better deal. These controls also monitor how each part of their products is made, so they don't overproduce and waste valuable resources.
Being successful with lean manufacturing techniques is a notable achievement for any organization because it involves eliminating redundant efforts, finances, and processes that have hindered your business's growth for an extended period. Recognize your business requirements and select the appropriate lean tool. Ultimately, lean is not just a method; it is an attitude that every manufacturing organization must adopt.
What is the objective of lean manufacturing?
Lean manufacturing aims to improve product quality, cut down on waste, speed up production, and save money.
What are the drawbacks to lean production?
Using lean techniques reduces the error margin. Late supply deliveries can lead to shortages of raw materials and delayed deliveries. This flaw can damage client relationships, drive customers to competitors, and cost you money.
Is lean still applicable today?
Lean manufacturing is relevant now and will be for years to come. So, this might be an exciting opportunity for lean manufacturing to evolve in a new space with new resources.
Article | December 8, 2021
The manufacturing production schedule is a critical aspect that enables the manufacturing business to complete each production activity precisely and on time. Allocating different raw materials, resources, or processes to distinct project phases is called a production schedule. Its goal is to make your manufacturing process as efficient and cost-effective as possible in terms of resources and labor — all while delivering products on schedule.
As technology takes over and enhances many of the processes we used to handle with manual labor, we are freed up to use our minds creatively, which leads to bigger and better leaps in innovation and productivity."
– Matt Mong, VP Market Innovation and Project Business Evangelist at Adeaca
So, how is the overall production schedule managed?
According to businesswire, the global APS (Advanced Production Planning and Scheduling) software market was valued at $1,491.22 million in 2020 and is anticipated to raise $2,941.27 million by 2028 expanding at an 8.86 percent CAGR from 2020 to 2028.
Some software and tools are available to assist manufacturing organizations in properly scheduling production planning, including MaxScheduler, TACTIC, MRPeasy, and Gantt charts. Though there are numerous software programs available on the market for production scheduling, the most crucial aspect is determining which elements to consider when planning production.
This blog will look at the five most important factors to consider while planning the production schedule.
Five Elements to Consider When Scheduling Production
As we saw in the introduction, production scheduling is used in the manufacturing process to assign plant and machinery resources, schedule human resources, plan production processes, and purchase materials.
So, what are the primary components or stages of this production scheduling process? Let's take a quick look at each of them.
Planning to Make the Best Use of the Company's Resources
The role of planning in production scheduling is to use the company's resources to maintain a regular production flow. As a result, downtime is decreased, and bottlenecks are minimized, allowing production to be optimized. For production scheduling, two forms of planning can be used:
Dynamic Planning: Dynamic planning is carried out under the idea that process stages will alter. So, materials must be ready, but production cannot begin until demand is decided.
Static Planning: Static planning is done keeping in mind that all process steps will be completed on schedule and without adjustments.
Routing to Determine the Order of Actions
A “bill of materials” is used in discrete manufacturing to specify what things are needed and in what quantities.
Routing determines the path and sequence of required phases of the process. It may involve in-house operations, but it may also comprise sub-contracted components that must be returned to the production flow for final assembly.
Scheduling to Make Use of Predetermined Planning Levels
To manufacture products from components or raw materials, scheduling makes use of the previously set planning level. As a result, it is time-dependent and must meet the demand outlined at the planning level.
Each department, product, and procedure can have their own unique set of timetables. Sub-schedules for sub-assemblies or mixes and blends may be defined by department-specific master production schedules, utilized at the highest level to define product timeframes.
Dispatching to Decide on Immediate Actions
Dispatching assigns the following jobs to be done from a subset of the production queue. Dispatching is utilized to make quick decisions. This is in contrast to planning, which involves the planning of future actions. Dispatching is utilized in both pull and push production systems.
Execution to Ensure that all Processes are Carried out Correctly
Production scheduling must rely on proper execution to ensure that all processes are completed appropriately and in the sequence planned.
It requires everyone to know what they are expected to do and when they are expected to do it. Execution requires knowledgeable management decisions, well-trained employees, correct data in the manufacturing plan and schedule, and consistent sales statistics and forecast numbers. All must be present for the organization to carry out its production plan and fulfill orders.
How MRPeasy – A Production Scheduling Software Assist Manufacturing Companies in Scheduling Their Production?
MRPeasy is a cloud-based material requirements planning (MRP) application explicitly designed for small manufacturing units. Its primary functions are purchase order management, forecasting, and inventory management.
This software simplifies the process of scheduling production. It enables you to evaluate all of your anticipated manufacturing orders (MO). The bill of materials (BOM), purchasing, and stocking are all maintained in one location, allowing you to quickly book inventory and increase purchase orders (PO) for acquired parts.
MRPeasy enables you to:
Obtain all of the detailed information on all of your MOs
Consider MOs as a single block or as distinct operations.
Drag-and-drop operations and operations to reschedule
Calendar or Gantt chart views are available for monitoring scheduled orders.
Additionally, you can manage MOs smoothly. With the production planning component, you may create, amend, and update MOs. This app compiles an exhaustive list of all your MOs. You can track their progress based on the status of an order or a part's availability. Additionally, you can search for, filter, and export your MOs.
How to schedule production for your organization requires extensive research, planning, and analysis of overall product demand as well as a grasp of the time required to meet the demand. Production scheduling techniques such as job-based planning, batch method, flow method, and others help develop a productive manufacturing production schedule. Include the elements mentioned above in your manufacturing scheduling to get the best possible benefits, such as better production efficiency, lower production costs, and on-time product delivery for your manufacturing in 2022.
How production planning differ from production scheduler?
Production planning and scheduling are often mixed. But there is a difference. Planning decides what and how much work must be done, whereas scheduling specifies who and when the work will be done.
What is real-time manufacturing scheduling?
Real-Time Scheduling is a production planning, scheduling, and tracking tool that enables manufacturing organizations to improve customer satisfaction and achieve optimal operational performance cost-effectively.
How can scheduling be improved?
Communication with staff is a great way to improve scheduling. This is true for all businesses, software or otherwise. However, management should not burden employees with ambiguous or unclear communication, and vice versa.
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