Addis Ababa University

School of Graduate studies

ASPECTS OF

LEAN AND AGILE MANUFACTURING

SYSTEMS
AND THEIR

APPROPRIATNESS

IN ETHIOPIA

A Thesis Submitted to the School of Graduate Studies of Addis Ababa University in

partial fulfillment of the Degree of Masters of Science in Mechanical Engineering
(INDUSTRIAL ENGINEERING STREAM)

By: Idris Zehrudin

Advisor: Dr. R. N. Roy

Addis Ababa
October 2004.
 Dedicated To My Son

To Fa’iz Idris whose sincere love and affection was a means of relief to the stresses

imposed by depressing learning atmosphere in AAU.

i
 Acknowledgments

Many individuals and industries deserve my acknowledgments and appreciation for the

contribution they have made in the realization of this thesis. The thesis advisor, Dr. R.N

Roy has guided me in shaping the overall approach of the research; and Dr. Ing. Daniel

Kitaw gave his valuable suggestion of improvement in the content and refinement of the

script.x

Many thanks go to the personnel at various levels in Akaki Spare Parts and Hand Tools

Share Company (ASPSC) for their unlimited reception, provision of relevant information

and data pertinent to the case studies. The Marketing and Sales department, DPPC, MWS

and FWS are worth mentioning.

I appreciate other surveyed industries too, for their time, ideas, efforts and information.

,GULV=HKUXGLQ

October 2004

i
 Abstracts

The thesis deals with the principles of Lean and Agile Manufacturing Systems and their

appropriateness in Ethiopian context. Inflexible mass-production methods that produce

voluminous of standardized products were inadequate for demands of increased variety. In

pursuit of greater flexibility and elimination of manufacturing wastes, Lean Production

System has been developed. More recently, demand for further responsiveness to the ever-

changing customer demand and turbulent business environment, led to a formulation of

Agile Manufacturing concept with the intention of greater adaptability. Thus, it is

necessary to study their vital principles and adopt the appropriate system to improve the

competitive capability of industries.

Using available literatures, Internet, industry survey and analyzing the gathered pertinent

information, the thesis reviewed the main principles of lean production system. Taking

authentic pilot cases, enhanced value stream map is generated and lean Manufacturing

Cell for cutlery production is designed. The fundamental principles of agile manufacturing

system and then, the comparison of the two systems are also discussed. Finally the

suitability of these systems in Ethiopia context is analyzed.

It is found that Lean Manufacturing is a collection of technical and operational systems

focused on productivity improvements with limited resources (44). LPS focuses on

minimizing manufacturing wastes, continuously improving methods, utilizing flexible

production system to produce variety of defect-free goods. Agile manufacturing (AM), on

ii
the other hand, is a comprehensive manufacturing system focused on thriving in

unpredictable business environment. AM focuses on enriching customers, reorganizing

production system for greater flexibility, cooperation to enhance market responsiveness

and increased use of Information technology.

The comparison between these systems shows a difference in viewpoint and perhaps

strategy with regard to change, but not in method or approach. Cases on the implementation

of Lean techniques indicate that industries can enhance competitiveness by adapting Lean.

The survey revealed that Industries are experiencing forces that lead to more

responsiveness. More over, it is found that most industries believe that the Lean Production

is more appealing in current Ethiopian Industries Situation.

iii
 Table of Contents
Acknowledgments ............................................................................................................ i
Abstracts .......................................................................................................................... ii
Table of Contents ........................................................................................................... iv
List of Tables ................................................................................................................. vii
List of Figures ............................................................................................................... viii
Acronyms ....................................................................................................................... ix

Chapter 1: INTRODUCTION ..................................................................1

1.1. Problem Formulation ................................................................................................1

1.2. Analysis of Problem...................................................................................................1
1.3. Objectives of the Study..............................................................................................3
1.4. Research Methodology .............................................................................................3
1.5. Scope and limitation of the study ..............................................................................4
1.6. Relevance of the study...............................................................................................4
1.7. Back Ground to Manufacturing Systems ..................................................................4

Chapter 2 : LEAN PRODUCTION SYSTEM .........................................9

2.1. Lean Production Overview ........................................................................................9

2.2. Lean production system Principle............................................................................14
2.3. Waste Minimization ................................................................................................14
2.4. First-Time-Quality ..................................................................................................19
2.5. Flexible Production Line .........................................................................................22
2.6. Continuous Improvement ........................................................................................31
2.7. Lean Production Success Stories ............................................................................41

iv
Chapter 3: AGILE MANUFACTURING SYSTEM.............................44
3.1. Agile Manufacturing Overview ...............................................................................44
3.2. Agile Manufacturing System principles .................................................................47
3.2.1. Reorganizing the Production System for Agility..........................................49
3.2.2. Enriching the Customer ................................................................................60
3.2.3. Leveraging the Impact of People and Information ..................................... 62
3.2.4. Cooperation to Enhance Competitiveness ................................................... 65
3.2.5. Agile Success Story .................................................................................... 72

Chapter 4 : COMPARISON OF LEAN AND AGILE SYSTEMS ......74

4.1. Comparison of Lean and Agile System ................................................................. 74
4.1.1. Enhancement of Mass Production Vs Mass Customization ....................... 76
4.1.2. Lean Flexibility Vs Agile Flexibility .......................................................... 78
4.1.3. Factory Operation Vs Enterprise Wide Scope ............................................. 81
4.1.4. Supplier Management Vs Virtual Enterprise .............................................. 83
4.1.5. Efficient Use of Resources Vs Emphasis on Continuous Change ............... 85
4.1.6. Smooth Production Vs Responsiveness to Change ..................................... 86

Chapter 5: Case Studies: APPLICATION OF LEAN

MANUFACTURING SYSTEMS IN ETHIOPIAN INDUSTRY.........88

5.1. The company’s Background ................................................................................... 88

5.1.1. Problem Identification ................................................................................. 91
5.1.2. Choice of Pilot Areas .................................................................................. 92
5.2. Case -1 Value Stream Mapping (VSM).................................................................. 93
5.3. Case -2 Cell Formation ........................................................................................ 103
5.3.1. Identifying Part Families ........................................................................... 105
5.3.2. Analysis of processes ................................................................................ 107
5.3.3. Design of Cell ........................................................................................... 108
5.4. Improvements Sought ........................................................................................... 116
5.5. The Advantages of the Proposed Cellular System................................................ 118

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Chapter 6: APPROPRIATENESS OF LEAN AND AGILE
MANUFACTURING SYSTEMS IN ETHIOPIA................................120
6.1. Industries Survey ..................................................................................................120
6.1.1. Types of industries covered .......................................................................120
6.1.2. Results of the Survey ..................................................................................122
6.2. The Appropriate Manufacturing System to Ethiopia ............................................130
6.2.1. Appropriateness Factors..............................................................................132
6.2.2. Consistency to the manufacturing system definition ..................................133
6.2.3. Past experience of the system .....................................................................134
6.2.4. Feasibility of the System ............................................................................135
6.2.5. Attitude of Industries to The production systems ......................................136

Chapter 7 CONCLUSIONS AND RECOMMENDATIONS .............138

7.1. Conclusions ...........................................................................................................138

7.2. Recommendations..................................................................................................140

Appendix A: Applications of Agile Design Principles to Production Systems...........141

Appendix B Delayed Works in 1994 and 1995 ............................................................142
Appendix C: Part Names and models of Cutlery items ................................................143
Appendix D: Flowchart of Job Ordering Sequence ......................................................144
Appendix: E List of Industries Surveyed......................................................................145
Appendix F: Questionnaires to assess the challenges of industries in the current
business environment .................................................................................................. 146

References .................................................................................................................148

vi
 List of Tables

Table 1 Characteristics of various manufacturing system types .....................................8

Table 2 Applications of the Seven SPC Tools in Quality Improvement Projects .........33
Table 3 Enabling Technologies and Management Practices for AM ...........................52
Table 4 The Four Principles of Lean and Agile Production ..........................................74
Table 5 Attributes of Lean and Agile Manufacturing Systems ....................................76
Table 6 Parts and present Families of Cutlery ............................................................106
Table 7 Operations, cycle time and corresponding machines (spoons and forks) ......107
Table 8 Operations, cycle time and corresponding machines (Knives)..................... 108
Table 9 Cutlery Products Category and Annual Quantity ..........................................110
Table 10 Types of manufacturing industries surveyed ................................................121
Table 11 Challenges of Companies in existing business environment........................123
Table 12 Main problems faced by industries ..............................................................125
Table 13 Changes of customer behavior in recent years ..............................................126
Table 14 Level of Responsiveness to Competitive Factors ........................................129
Table 15 Responses to the Appropriateness of lean and Agile systems .....................137

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 List of Figures

Figure 1 View of a manufacturing system with its input/output condition ......................6

Figure 2 Layout and Time-bar Diagram of U-shaped Cells ..........................................26
Figure 3 Robotic Cells Connected by Computer Network .............................................31
Figure 4 Improvement Process for Setup Time Reduction.............................................38
Figure 5 Agile System Design Principles .....................................................................53
Figure 6 Semiconductor Wafer –processing Cluster Machine .......................................55
Figure 7 Scalable Machine Clusters................................................................................56
Figure 8 Agile Machines in a Reconfigurable Plant Framework....................................57
Figure 9 Agile Machining Cells ....................................................................................58
Figure 10 Agile Machining Cells in a Reconfigurable Framework ...............................59
Figure 11 Enterprise Job Shop........................................................................................70
Figure 12 Loosely Coupling the Enterprises .................................................................71
Figure 13 Ten Steps to Lean Production or how to Design Linked-cells manufacturing
Systems ......................................................................................................................... 79
Figure 14 Organizational Structure of ASPSC ..............................................................89
Figure 15 Current State Value Stream Map ...................................................................95
Figure 16 Future State Value Stream Map .....................................................................98
Figure 17 Effect of Product Quantity, Variety on the Forms of cells ..........................104
Figure 18 Existing Block layout and product route for cutlery ...................................106
Figure 19 Operations Process chart for Knives, Forks and Spoons............................ 109
Figure 20 Cell Layout for Spoons & Forks .................................................................112
Figure 21 Cell Layout for Knives ................................................................................112

viii
 Acronyms

AGV: Automated Guided Vehicles

AMEF: Agile Manufacturing Enterprise Forum
AMS: Agile Manufacturing system
ASPSC: Akaki Spare parts Share Company
BPR: Business Process Reengineering
CAD/CAM: Computer-Aided Design / Computer-Aided Manufacturing
CE: Concurrent Engineering
CIM: Computer Integrated Manufacturing
CM: Cellular Manufacturing
CM: Cellular Manufacturing
CNC: Computer Numerical Control
CT: Cycle Time
D&M: Design and Method
FMS: Flexible Manufacturing System
FWS: Foundry Workshop
HCF: Hand Tools and Cutlery
IQC: Integrated Quality Control
IT: Information Technology
JIT: Just-in-Time
LPS: Lean production system
MT: Machining Time
MWS: Mechanical Workshop
OT: Operation Time
POK: Production Order Kanban
PPC: Production planning and Control
RRS: Reconfigurable, reusable, Scalable
SMED: Single Minute Exchange of Die
SQC: Statistical quality Control

ix
TPS: Toyota Production system
TQM: Total Quality Management
VA/VE: Value Analysis /Engineering
VMS: Value Stream Mapping
WIP: Work-in-Process
WLK: Withdrawal Kanban

x
 Chapter 1: INTRODUCTION

1.1. Problem Formulation

ƒ Many manufacturing industries are increasingly requiring much greater flexibilities

and timelines, due to market instability,

ƒ Worldwide (global) competition among manufacturers has increased significantly

that tend to force weak firms out of business,

ƒ Need for better and promising production system approach became mandatory for the

survival of industries in the ever-changing business environment.

ƒ Ethiopian manufacturing industries are facing structural problems that hinder their

competency.

1.2. Analysis of Problem

Major changes in the world of manufacturing have taken place. These are global

competition, quick exchange of advanced technology, and development new manufacturing

system structures, strategies, and management.

Worldwide (global) competition is now a fact of manufacturing life and this trend will

continue in the future. Goods bought today may have been made any where in the world.

The advanced manufacturing technology is usually referred to new processes. This new

technology is often can be purchased from the companies who developed the machinery.

1
This approach is important but may not provide unique competitive advantage in that

competitors who have the capital could buy it. (15)

The business of manufacturing is no longer a ‘process only’ activity. Traditional

manufacturing process had a limited perspective of dealing with transformation of material.

Manufacturers now proclaim that the process is no more or no less important than the

system. For manufacturing to excel, it must include dramatic improvement in systems. (43)

Perhaps, the real key to success in manufacturing is to build a manufacturing system that

can deliver on time to the customer superior-quality goods at the lowest possible costs in a

flexible way. This reflects an effort to improve markedly the methodology by which goods

are produced rather than simply upgrading the process technology. (15)

Even though the free market economy policy of Ethiopia ascertains the base for the growth

of manufacturing and the implementation is going smooth, the manufacturing sector is still

at its infant stage. Most of the industries are suffering from problem of structure, lack of

focus on manufacturing wastes and product quality; low level of technological supply, and

weak cooperation.

Most of the local industries have been established on the objective of import substitution.

But, now a day, there is no such internally oriented market. Since the world is getting

much closer and linked with business, focusing only on domestic markets is not viable. The

market is open for neighbor countries, as well as for emerging continental and global trade.

Manufacturers, regardless of their industries or the condition of their business, are forced to

make major reductions in manufacturing costs using every conceivable means.

2
 1.3. Objectives of the Study

The general objectives are:

o To discuss the main principles of lean and agile manufacturing systems

o To analyze the conceptual differences and appropriateness of the two systems.

The specific objectives of the thesis are:

1. To give better view of Lean and Agile Manufacturing Systems principles, which are

the competitive approaches of global production industries,

2. To clarify differences and similarities between Lean and Agile system approaches,

3. To show methods of improving the manufacturing performance,

4. To demonstrate the application of Lean using real manufacturing cases,

5. To assess current challenges of manufacturing industries in Ethiopia,

6. To examine the appropriateness of LPS and AMS in Ethiopian Context,

7. To recommend adaptation of the better system in Ethiopian context.

1.4. Research Methodology

The methods of study used throughout this thesis comprise:

1. Literature survey and internet surf

2. Data and information gathering

3. Industry survey and questionnaire

4. Analysis and synthesis

5. Peer discussion, interview and personal observation

3
 1.5. Scope and Limitation of the Study

It is clear that such a huge research topic demands long period of time to comprehend every

detail of the subject matter. More over, the availability of material resources on the topic is

scarce. As a result, the study is restricted to the main issues of the two production system

based on the existing internet and library materials, and survey of limited nearby industries.

1.6. Relevance of the Study

Manufacturing is a transformation of inputs to usable outputs there by adding value to the

input. It is the basis for the measure of prosperity of developed nations. In this context the

reason for developing countries to be far behind industrialized nations can be partly

attributed to lack of following appropriate manufacturing approaches. It is relevant then, to

deal with the temporary production systems approaches to strengthen the manufacturing

competency.

1.7. Back Ground to Manufacturing Systems

Manufacturing is the economic term for making goods and services to satisfy human wants.

The manufacturing processes are collected together to form a manufacturing system (MS).

The word system is used to define a relatively complex assembly (or arrangement) of

physical elements characterized by measurable parameters that defines the boundary /

constraint of the system and predict its behavior in response to excitation / disturbances.

4
 The inputs to the manufacturing system include materials, information, and energy. The

system is a complex set of elements that include machines, people, material handling

equipment, and tooling. The materials are processed within the system and gain value. The

manufacturing system outputs may be consumer goods or inputs to some other processes.

Fig 1 gives a general definition for any manufacturing system. It can be observed that many

of the inputs can’t be fully controlled, and the effect of the disturbance must be

counteracted by manipulating the controllable inputs or the system it self. Controlling

material availability or predicting demand fluctuations may be difficult. The business

environment can cause change in any of these inputs. (15)

Since the mid-1970 the variety of manufacturing system types has grown considerably.

Since that time, Flexible Manufacturing Systems, Agile Production Systems, and Lean

Cellular Systems, have become accepted types of manufacturing systems. Prior to that, the

main types of systems were limited to Job Shops, Disconnected Flow Lines, and Transfer

Lines.

It is necessary to understand each type of manufacturing system and the advantages and

disadvantages of each. Five production system types are briefed below. In reality, the line

between the types is often hard to distinguish.

i. Automated Transfer Lines – are Manufacturing systems that use dedicated automated

machines that are specially designed with a particular model of product in mind. These

systems tend to be expensive due to the engineering and custom development required.

They generally support very few products or models. Due to the relative high cost to

5
 retool, they are used for products with long life cycles. Therefore, these systems are most

profitable only at the production level for which they were designed.

Inputs Disturbanc Outputs

Materials
Good products,
Energy Manufacturing system: goods, parts, etc
Demand
Complex arrangement of Information
Social physical elements*, External
characterized by measurable Service to user customer
Political parameters Defect or scrap
Information

Measurable Parameters of the system: * Physical elements:

• Throughput time • Machines
• Production rate • tooling,
• % defectives • material handling equipment,
• % on time delivery • people
• Daily/Weekly/ Monthly production Volume
• Total cost

Figure 1 View of a manufacturing system with its Input/output Condition

ii. Job Shop – A Job Shop style manufacturing system uses standard flexible machines,

which are not oriented or configured for any particular product. Instead, products flow

from machine to machine in whichever order is necessary. Parts are not automatically

transferred from one machine to another. Job Shops generally produce in batches. For

instance, a batch of 100 parts of a particular type is processed at one machine, and then

the batch is transported to the next machine. The machines in Job Shops generally have

long changeover times, are labor intensive, and require complex scheduling. However,

the Job Shop is the most flexible system type in terms of product variety for low volume

products.

6
iii. Flexible Manufacturing System – A Flexible Manufacturing System (FMS) is

essentially an automated Job Shop. The machines are organized in a similar way and

support a wide variety of products. Generally, material transport between machines is

automated with robots or Automated Guided Vehicles (AGVs). Machine changeovers

may be automated. An FMS requires less direct labor, but more investment than a Job

Shop. As in Job Shops, machines are generally operated in parallel and are not designed

or specified based on Takt time. This type of operation can increase system-wide

changeover times and cause problems in the identification of quality problems.

iv. Agile Cells – Agile Cells consist of clusters of modular machines which function in a

similar manner to an FMS. Agile cells conform to the RRS Design Principles: Reusable,

Reconfigurable, and Scalable. The modular machines are built around a common

architecture. This facilitates quick exchanges of modules when one fails or a new product

must be produced. This also supports capacity increases and decreases by adding or

removing modules. To date, Agile Cells have been utilized primarily in electronics

fabrication where high equipment cost, short product life cycles, and delicate part

handling are necessary.

v. Lean Manufacturing Cells – Cells tend to be flexible both in terms of volume and

product mix. Cells give workers more control over the manufacturing system. The

inherent flexibility of the worker is harnessed to build various products or models with

zero changeover time. Workers also enable volume flexibility. If demand for a particular

product family increases, more workers are assigned to the cell responsible for that

product family. When demand decreases, workers are removed from the cell.

7
Attributes of the product that may dictate the type of system required include: the volume

demanded, the certainty of that volume forecast, the mix of products to be produced, the

expected product life, and physical attributes of the products. Some products have other

requirements that limit the choices of a manufacturing system. Human hands cannot handle

electronic devices; hence they must be manufactured in a system with automated material

handling. Table 1 shows the characteristics of various manufacturing system types. (40)

Table 1 Characteristics of various manufacturing system types

Volume Certainty Product Mix Product Life

Automated Transfer Line High Low Long

Job Shop Low High Short

FMS Medium High Short

Agile Cell Medium Medium Medium

Lean Cell Low Medium Medium

8
Chapter 2 : LEAN PRODUCTION SYSTEM

2.1. Lean Production Overview

What is lean production? Perhaps to describe this innovative production system is to

contrast it with craft production and mass production, the two other methods humans have

devised to make things.

The Craft producer uses highly skilled workers and simple, but flexible tools to make

exactly what the consumer asks for, one item at a time. Custom furniture, works of

decorative art, and a few exotic sports cars provide current day examples. All love the idea

of craft production, but goods produced by the craft method cost too much for most to

afford.

The mass producer uses narrowly skilled professionals to design products made by

unskilled or semiskilled workers tending expensive, single-purpose machines. These churn

out standardized products in very high volume. Because the machinery costs so much and

is so intolerant of disruption, the mass-producer adds many buffers - extra supplies, extra

workers, and extra space – to assume smooth production. Because changing over to a new

product costs even more, the mass producer keeps standard design in production for as long

as possible. The result: the consumer gets lower costs but at the expense of variety and, by

means of work methods that most employees find boring and dispiriting.

9
The lean producer, by contrast, combines the advantage of craft and mass production,

while avoiding the high cost of the former and rigidity of the latter. Towards this end, lean

producers employ teams of multi-skilled workers at all levels of the organization and use

highly flexible, increasingly automated machine to produce volumes of products in

enormous variety.

Lean production, a term coined by International Motor Vehicle Program (IMVP) is ‘lean’

because it uses less of every thing compared with mass production - half the human effort

in the factory, half the manufacturing space, half the investment in tools, half the

engineering hours to develop a new product. Also, it requires keeping far less than half the

needed inventory.

Perhaps the most striking differences between mass-production and lean production lie in

their ultimate objectives. Mass producers set a ‘good enough’ goal, which translates into an

acceptable number of defects, a maximum acceptable level of inventories, a narrow range

of standardized products. Lean producers, on the other hand, set their sights explicitly on

perfection: continually declining costs, zero inventories, and endless product variety.

The Rise of Lean Production: In 1950 a Japanese engineer Eiji Toyoda set out a three-

month pilgrimage to Ford’s Rouge plant. After carefully studying every inch of the vast

Rouge, the then largest and most efficient manufacturing facility, he thought on the

possibilities of improvement in the production system. Back at home, Eiji Toyoda and his

production genius, Taiichi Ohno, concluded that mass production could never work in

Japan. From this tentative beginning were born the ‘Toyota Production System’ and

ultimately, Lean Production.

10
In 1937, Toyota entered the motor vehicle industry from textile by the urge of the
government, specializing in trucks for military. It had barely gone beyond building few
prototype cars. After the War Toyota was determined to go into full-scale car, but faced
with a host of problems:

o The domestic market was tiny demanding wide range of vehicle,

o The native Japanese workforce was no longer willing to be treated as variable cost

or as interchangeable parts.

o The economy was starved for capital to purchase massive production technology.

o The world was full of huge motor vehicle producers who were anxious to establish

operations in Japan.

Quick die change: Bodies of vehicles are stamped from sheet steels in two ways: craft

producers cut sheets, beat blanks by hand on a die to their final shape; mass producers use

automated precision ‘blanking’ press. These efficient and expensive dies were not

economical for Toyota. To overcome these problems, Ohno experimented the techniques of

quick-change on used presses, which resulted in three minutes die-change. Since the new

techniques were easy to master, the die change task was left for the production workers.

Toyota Company as Community: The employees in Toyota received a guarantee of

lifetime employment. In return, they are expected to remain in the company for their

working lives, to be flexible in work assignments, and be active in promoting the interests

of the company by initiating improvements. The wok force was a short-term and long-term

fixed cost. To get the best out of the human resources over their working times, Toyota

determined to continuously enhance the workers’ skills and gain the benefit of their

knowledge and experiences.

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Final Assembly Plant: Ohno’s rethinking of final assembly shows just how this new

approach to human resources paid enormous dividends. Assembly line workers in Ford

would perform one or two simple tasks repetitively. There are different specialists with

different tasks.

Ohno thought this whole system was rifle full of Muda. He reasoned that none of the

specialists beyond the assembly worker was actually adding any value. What is more, the

assembly workers could probably do most of the functions of the specialists and do them

much better because of their direct acquaintance with conditions on the line.

At first step, teams were formed with a Team Leader instead of Forman, and given a set of

assembly steps. Next the team was given job of housekeeping, minor repair, and quality

checking. After the teams were running smoothly, time was set aside to suggest way of

improving the process – ‘quality circles’ or Kaizen in Japan – incremental improvement

process.

With respect to rework, workers were instructed to stop the line if a problem is emerged

that they couldn’t fix. Further more, system of problem solving called ‘five whys’ was

instituted to trace errors back to their ultimate causes so that the problem would never occur

again.

The Supply Chain: Final assembling the major components into a complete vehicle

accounts for only 15% of the total manufacturing process. The bulk of the process involves

engineering and fabricating more than 10,000 discrete parts and assembling these into

perhaps 100 major components. Coordinating the process, so that every thing comes

12
together, at the right time with high quality and low cost has been a continuing challenge to

assembler firms. Ohno and others at Toyota began to consider this issue. The real question

was how the assemblers and suppliers could work smoothly together to reduce costs and

improve quality. In mass-production, the approach was either to integrate the entire

production system into one huge, bureaucratic command structure, or varying degree

formal integration.

Toyota began to establish lean production approach to components supply. Suppliers were

organized into functional tiers with different responsibilities assigned to firms in each tier.

First-tier suppliers were responsible for working as an integral part of product-

development team in developing a new product that would work in harmony with the other

systems of given performance specification.

Then, each firs-tier supplier formed a second-tier of suppliers under it self. Companies in

the second-tier were assigned the job of fabricating individual parts. These were

manufacturing specialists with less expertise in product engineering but with strong

background in process engineering and plant operations.

Toyota shared personnel with its supplier firms in two ways: lending personnel to deal with

workload surges, and transferring managers to senior positions in supplier firms. Finally, a

way of coordinating the flow of parts with in the supply system is developed on a day-to-

day basis – just-in-time system. The idea was to convert a vast group of suppliers into one

large ‘machine’ by dictating that parts would only be produced to supply the immediate

demand. (30)

13
 2.2. Lean production system Principles

Lean production is an adaptation of mass productions in which workers and work cells are

made more flexible and efficient by adopting methods that reduce waste in all forms.

According to Roos, D, the co-author of the book, ‘The Machine that Changed the World’,

Lean Production is based on four principles:

1. Waste Minimization

2. Perfect First-time Quality

3. Flexible Production Lines

4. Continuous Improvement

2.2.1. Waste Minimization

All the four principles of lean production are derived from the first principle - Waste

Minimization. The various procedures used in lean production are developed to minimize

manufacturing wastes. Waste elimination or minimization, there by increasing percentage

of time devoted to value adding activities, is one of the most effective ways to increase

profitability and competitiveness. As Toyota and other world-class organizations have

come to realize, customers will pay for value added work, but never for waste. While

products significantly differ between factories, the typical wastes found in manufacturing

environments are quite similar. (44)

14
The Seven Manufacturing Wastes: “The seven wastes” is a tool to categorize wastes.

To eliminate waste, it is important to understand exactly what waste is and where it exists.

For each waste, there is a strategy to reduce or eliminate its effect on a company, thereby

improving overall performance and quality. The seven manufacturing wastes identified by

Taichi Ohno are:

1. Overproduction; is to manufacture an item before it is actually required.

Overproduction is highly costly because it prohibits the smooth flow of materials and

actually degrades quality and productivity. The Toyota Production System is also referred

to as “Just in Time” (JIT) because every item is made just as it is needed. Overproduction

manufacturing is referred to as “Just in Case.” This creates excessive lead times, results in

high storage costs, and makes it difficult to detect defects. The simple solution to

overproduction is turning off the tap. The concept is to schedule and produce only what can

be immediately sold / shipped and improve machine changeover / set-up capability.

2. Waiting; Whenever goods are not moving or being processed, the waste of waiting

occurs. Typically more than 99% of a product's life in traditional batch-and-queue

manufacture is spent waiting to be processed. Much of a product’s lead time is tied up in

waiting for the next operation; this is usually because material flow is poor, production runs

are too long, and distances between work centers are too great. One hour lost in a

bottleneck process is one hour lost to the entire factory’s output, which can never be

recovered. Linking processes together, so that one feeds directly into the next can

dramatically reduce waiting.

15
3. Transporting; Transporting products between processes is a cost incursion which

adds no value to the product. Excessive movement and handling cause damage and are an

opportunity for quality to deteriorate. Material handlers must be used to transport the

materials, resulting in another organizational cost. Transportation can be difficult to reduce

due to the perceived costs of moving equipment and processes closer together.

Furthermore, it is often hard to determine which processes should be next to each other.

Mapping product flows can make this easier to visualize.

4. Inappropriate Processing; Often termed as “using a sledgehammer to crack a nut,”

many organizations use expensive high precision equipment where simpler tools would be

sufficient. This often results in poor plant layout because preceding or subsequent

operations are located far apart. In addition they encourage high asset utilization (over-

production with minimal changeovers) in order to recover the high cost of this equipment.

Toyota is famous for their use of low-cost automation, combined with immaculately

(flawlessly) maintained, often older machines. Investing in smaller, more flexible

equipment where possible; creating manufacturing cells; and combining steps will greatly

reduce the waste of inappropriate processing.

5. Unnecessary Inventory; Work in Progress (WIP) is a direct result of overproduction

and waiting. Excess inventory tends to hide problems on the plant floor. Excess inventory

increases lead times, consumes productive floor space, delays the identification of

problems, and inhibits communication. By achieving a seamless flow between work

centers, many manufacturers have been able to improve customer service and slash

inventories and their associated costs.

16
6. Unnecessary / Excess Motion; This waste is related to ergonomics and is seen in

all instances of bending, stretching, walking, lifting, and reaching. These are also health and

safety issues. Jobs with excessive motion should be analyzed and redesigned for

improvement with the involvement of plant personnel.

7. Defects; Having a direct impact to the bottom line, quality defects resulting in rework

or scrap are a tremendous cost to organizations. In many organizations the total cost of

defects is often a significant percentage of total manufacturing cost. Through employee

involvement and Continuous Process Improvement (CPI), there is a huge opportunity to

reduce defects at many facilities.

Lately, Underutilization of Employees has been added as an eighth waste.

Organizations employ their staff for their nimble fingers and strong muscles but forget they

come to work everyday with a free brain. It is only by capitalizing on employees’ creativity

that organizations can eliminate the other seven wastes and continuously improve their

performance. (11)

Value Stream and Value Stream Mapping

Identifying the entire value stream for each product or product family in a Manufacturing is

the first step toward eliminating waste. There are three things the manager will need to be

understood before identifying value stream; value, value stream and their significance.

VALUE: Value is defined by the customer and is only meaningful when expressed in terms

of a specific product, which meets the customers’ needs at a specific price and at a specific

time. Defining value internally is an error; instead rethinking value should be seen from the

perspective of the customer.

17
VALUE STREAM: The value stream is all the steps and processes required to bring a

specific product from raw materials to finished product in the hands of the customer.

Analyzing the entire flow of a product will almost always reveal enormous amounts of

waste and non value-added sequences.

Value stream analysis shows three types of actions: steps that create value; steps that create

no value but are unavoidable due to current technologies or production methods or assets;

and steps which create no value and are avoidable.

To begin a Lean journey, Value Stream Mapping (VSM) is a critical initial step in lean

conversions. VSM is a method of visually mapping the flow of materials and information

from the time products come in as raw material, through all manufacturing process steps,

and off the loading dock as finished products. Mapping out the activities in the production

process with cycle times, down times, in-process inventory, material moves, information

flow paths, will help visualize the current state of the process activities and guide towards

the future desired state. The process includes physically mapping the "current state" while

also focusing on where to be next, or "future state" map, which can serve as the foundation

for other Lean improvement purposes.

VSM can serve as a starting point to help management, engineers, production associates,

schedulers, suppliers, and customers recognize waste and identify its causes. The goal is to

identify and eliminate any activity that does not add value to the final product. VSM can be

a communication tool, a business-planning tool, and a process change management tool.

18
Once a value stream map have been generated, problem areas stand out very clearly:

inventory building up areas, long setup times, unplanned downtime, unbalanced labor or

machine time, delays, how the rate of customer demand equates to rate of production and

so on. In short, place(s) for starting waste elimination efforts, in the value stream, will

easily be identified. It is possible to visualize how things could operate. This vision will be

the basis of future value stream map, which is the true purpose of value stream mapping.

There will be a chance to eliminate processes that add no value and combine or streamline

those that do add value. Areas where suppliers can provide better services will be

highlighted, redundant and unnecessary information flows will be eliminated. All of these

changes will support an organization’s goal of providing the highest level of service to

customers. (10)

2.2.2. First-Time Quality

When management and production workers trust each other, it is possible to implement an

integrated quality control. Japan was started on the road to superior quality, when they

readily accepted the statistical quality (SQC) techniques in the late 1940s and early 1950s.

They taught the techniques and concepts to everyone, including top management and

production workers. At Toyota, under the leadership of Ohno, quite different from the

Known inspection philosophy, a new idea took hold. Inspect to prevent the defect from

occurring rather than to find the defect after it has occurred. Ultimately the concept of

autonomation evolved.

19
Autonomation means the autonomous control of quality and quantity: stop every thing

immediately when some thing goes wrong; control the quality at the source instead of using

inspectors to find the problem that some else may have created.

This is to make every worker an inspector and to give each person only one part to work on

at a time, so that under no circumstance can a worker buries problems by working on

alternative parts. Cells produce parts one at a time, just like assembly lines. In a nutshell,

the idea is to ‘make one, check one, and move one’. Pull cords are installed on the assembly

lines to stop the lines if any thing goes wrong. If workers find defective parts, if they can’t

keep up with production, if production is going too fast according to the quantity required

for the day or if a safety hazard is found, they are obligated to stop the lines. Then, problem

is fixed immediately.

Mean while the other workers maintain their equipment, change tools, sweep the floor, or

practice setups; but the line does not move until the problem is solved. Quite often,

inspection devices are placed in the machines (inspection at the source) or in devices

(called decouplers) between the machines, so the inspection is performed automatically.

Inspection by a machine instead of a person is faster, easier, and more repeatable.

Inspection becomes part of the production process and does not involve a separate location

or person to perform it. Parts are 100% inspected by devices which either stops the process

if a defect is detected or correct the process before the defect can occur. The machine shuts

off automatically when a problem arises. This prevents mass production of defective parts.

The machine also may shut off automatically when the necessary parts have been made.

20
For manual work, another system for preventing defective work is called Andon, which is

light board hanged high so that every one can see it. When a worker on a line needs help,

he can turn on a yellow light. Nearby (multifunctional) workers who have finished their

jobs with in the allotted times - with in the cycle time - move to assist workers having

problems. If the problem can’t be solved with in the cycle time, a red light comes on and

the line stops automatically until the problem is solved. In most cases the red light goes-off

within 10 seconds and the next cycle begins, a green light comes on with all processes

beginning together. Such systems are built on teamwork and a cooperative spirit among the

workers, fostered by a management philosophy based on harmony and trust.

Another interesting technique is quality circles. The Japanese call them Small Group

Improvement Activities (SGIA) and they are a key part of company wide quality control

efforts (TQM). A quality circle is a group of employees who meet on a scheduled basis

(daily, weekly) to discuss production and quality problems, to try to device a solution to the

problems, and propose the solutions to their management. A foreman or a production

worker may lead the group. It usually includes people from a given discipline or a given

production area. Quality circles should be a natural entity within the manufacturing system

and not artificially created. They are basically a technique to identify causes of problems

and to generate ideas and suggestions to solve problems on the local level. (15, 44)

21
 2.2.3. Flexible Production Lines

Customers demand variety and customization as well as specific quantities delivered at

specific times; a lean producer must remain flexible enough to serve its customers’ needs.

Cellular manufacturing allows companies to provide their customers with the right product

at the right time. It does this by grouping similar products into families that can be

processed on the same equipment in the same sequence. To successfully maintain "one-

piece-flow" in the manufacturing cells, quick changeover techniques are employed.

A cell is a group of workstations, machines or equipment arranged such that a product can

be processed progressively from one workstation to another without having to wait for a

batch to be completed and without additional handling between operations. Cells may be

dedicated to a process, a sub-component, or an entire product. An ideal cell manufactures a

narrow range of highly similar products. Such an ideal cell is self-contained with all

necessary equipment and resources. The result is very fast throughput. Communication is

easy since every operator is close to the others. This improves quality and coordination.

Proximity and a common mission enhance teamwork.

Cellular manufacturing can help make companies more competitive by cutting out costly

transport and delay, shortening the production lead time, saving factory space that can be

used for other value-adding purposes, and promoting continuous improvement by forcing

the company to address problems that block just-in-time (JIT) production. (10)

Cells have many features that make them unique and different from other manufacturing

systems. Parts move from machine to machine one at a time within the cell. For material

22
processing, the machines are typically A (2)1 or higher; capable of completing a machining

cycle initiated by a worker. The U-shape puts the start and finish points of the cell next to

each other. Every time the operator completes a walking trip around a cell, a part is

completed. This time defines the cycle time (CT). The machining time (MT) for each

machine needs only to be less than the time it takes for the operator to complete the

walking trip around the cell. As shown in Fig 2a machining processes are overlapping and

need not be equal (balanced) as long as no MT is greater than the CT. The cycle time is

150 seconds but the total machine time was 60+ 80+100+40+ 20 = 300 seconds.

A numerical controlled (CN) machining center capable of performing the five operations

could easily replace the cell. However, the cycle time for a part could jump from 150

seconds to over 300 seconds because combining the processes into one machine prevents

over lapping of the machine times. More over, adding a portion of additional workers to the

cell can readily alter the CT for the cell.

Manufacturing cell makes parts one at a time in a flexible design. Cell capacity (the cycle

time) can be altered quickly to respond to changes in customer demand. The CT does not

depend on the machining time.

1
Level of Automation
Level Loading Machine Machining Unloading Transferring Part
1 Manual Manual Manual Manual
2 Manual Automated Manual Manual
3 Manual Automated Automated Manual
4 Automated Automated Automated Manual
5 Automated Automated Automated Automated

23
 M3 Poka-Yoke
Mill

3
Decoupler

2
A(2) level
machine tool
M4
/C M2 Manned Drill
Mill Manufacturing
Cell

1 4

Operator Grind
M1 M5

Turn

5
Cart X Final
2 Parts Left Innspection

Cart Y
Part (a) half Full
Operation bieng done

Keys Unload Machine, Put Part in Decoupler

Load Machine 10 sec
Mach. No Machining time

M1 20 sec

M2 40 sec

60 sec Etc.
M3

M4 90 sec run

100 sec run

M5 To

Cycle time 150 sec (b)

Start Cycle Start Cycle

Figure 2 Layout and Time-bar Diagram of Five Machine U-shaped Cells

24
Fig 2b is a simple standard operations routine sheet, used to plan the manufacture of one of

the parts in the family within the cell. The plan shows the relationship between the manual

operation performed by the worker, the machining operations performed by the machine,

and the time spent by the worker walking from machine to machine. The manual operations

include loading and unloading the machine, checking quality, deburring, and taking chips

out of fixtures.

The machining speeds and feeds can be relaxed to extend the life of the cutting tools and

reduce the wear on the machines as long as the (MT) for a particular machine does not

exceed (CT) for the cell. This increases the reliability of the process, by reducing the

probability of breakdown. There is no mystery as to which process within the cell is the

bottleneck - the machine with longest machine time. Every one in the manufacturing

system can see and understand how the cell functions and, therefore, which process is the

most likely to delay the cell’s cycle time.

The cycle time is determined from the demand rate for the parts according to the following

calculations:

Monthly demand ( forcast plus customer orders )

Daily demand for parts =
Number of days in month

1 daily demand ( parts )

CT = Where Production Rate ( PR) =
PR hours in day (hr )

Workers in the cells are multifunctional; each worker can operate more than one kind of

process (multiple versions of the same process) and also performs inspection and machine

maintenance duties. Cells eliminate the job shop concept of one person / one machine and

thereby greatly increase worker productivity and utilization. The restriction of the cell to a

25
parts family makes reduction of setup in the cell possible. This is often called flexible

fixturing.

In some cells, Decouplers are placed between the processes, operations, or machines to

provide flexibility, part transportation, and inspection for defect prevention (Pokeyoka) and

quality control, and process delay for manufacturing cell. In Fig 2, the decoupler inspects

part critical dimension and feeds back adjustments to the machine to prevent producing

oversize parts as the cutter wears. A process delay decoupler will allow the part to cool

down, heat up, cure, or whatever is necessary for a period of time greater than the cycle

time for the cell. Decouplers and flexible fixtures are vital parts of unmanned cell.

Families of parts with similar designs, flexible work holding devices, and tool changers in

programmable machines allow rapid changeover from one component to another. Rapid

change over means, that quick one-touch setup is employed, often like flipping a light

switch. A significant inventory reduction between the cells is possible, and the inventory

level can be directly controlled. Quality is controlled with the cell and the equipment with

in the cell is maintained routinely by the workers.

The product designer can easily see how parts are made in the cell, cell’s process

capability, since all processes are together and quality control techniques are integrated in

the cell. The designer can easily configure the future designs to be made in the cell. This is

truly Design for Manufacturing (DFM). (15)

26
Designing Manufacturing Cells

Conversion of functional system into a flexible, linked-cell system is a design task. There

are different methods by which manufacturing cells can be formed. Most companies

‘design’ their first cell by one of the trial–and– error technique for expediency in gaining

experience in cells. Digital simulation is gaining wider usage in designing and analyzing

manufacturing systems with the advent of newer, more versatile languages.

Another technique being researched extensively is called Physical Simulation. This

approach uses small robots and scaled-down versions of machine tools (mini-machines) to

emulate real world systems. The small machine employs essentially the same mini-

computers and software as full-scale systems. Unmanned cells and FMSs can be simulated

in the laboratory at quite reasonable cost. Generally speaking, the industrial robots and full-

size machines are expensive.

Group Technology offers a systems solution to the reorganization of the functional system,

restructuring the job shop into manufacturing cells. The conversion presents system-level

changes, which will create the potential for tremendous savings. But because of the

magnitude of the changes, careful planning and full cooperation from everyone involved

are absolutely required. The application of this concept to a manufacturing facility results

in the grouping of units or components in to families wherein the components have similar

design or manufacturing sequences. Machines are then collected into groups or machine

cells to process the family. By grouping similar components into families of parts, a group

or set of processes can be collected together. This is a cell where order of machines in the

cell defines the manufacturing sequence.

27
Production Flow Analysis (PFA) uses the information available on the route sheets and

groups them by a matrix analysis, using product-routing information. This method is more

analytical than tacit judgment but not as comprehensive as coding / classification. PFA is a

valuable tool in the systems reorganization problem. For example, it can be used as an up-

front analysis, a sort of ‘before the fact’ analysis that will yield some cost/benefit

information. Design makers will have some information on what the company could expect

in terms of the percentage of their product that could be made by cellular methods, what

would a good ‘first cell’ to under take, what coding/classification system would work best

for them, how much money they might have to invest in new equipment and so on.

Many companies converting to cellular system have used a coding or classification

method. There are design codes, manufacturing codes, and codes that cover both design

and manufacture. Classification sorts items into classes or families based on their

similarities. It uses a code to accomplish this goal. Coding is the assignment of symbols

(letters numbers, or both) to specific component elements based on differences in shape,

function, material, size, processes, and so on.

A cellular manufacturing system composed of linked-cells is the newest manufacturing

system. In cells, processes are grouped according to the sequence and operations needed to

make a product. The linked-cell factory is composed of cells to fabricate components,

subassembly lines, and final assembly lines. The cells are ‘linked’ by Kanban (or linked

directly) to another nearby cell; the subassembly line is directly linked to a ‘point of use’ in

the final assembly line. In the linked-cell system, the work-in-process inventory is between

the cells and is controlled by Kanban.

28
To form a linked-cell manufacturing system, the first step is to restructure portions of the

job shop, converting it in stages into manned cells. At the same time, the flow shop parts

are reconfigured into U-shaped cells as well. To do this the long setup time of flow lines

must be vigorously attacked and reduced so that the flow lines can be changed quickly from

making one product to making another.

The formation of families of parts leads to the design of cells, but cell design is by no

means automatic. It is the critical step in the reorganization and must be carefully planned.

It can be begun with pilot cell so that every one can see how cells function. It will require

time and effort to train the operators and they will need time to adjust to standing and

walking. Nevertheless, the company should proceed with developing manned cells, not

waiting until all parts have been coded. Only in this way will every one learn how cells

operate and how to reduce setup time on each machine.

Machines will not be utilized 100%. Machine utilization rate usually improves but may not

be what it was in the functional system. The objective in manned cellular manufacturing

is to utilize the people fully, enlarging and enriching their jobs by allowing them to become

multifunctional. That is, the operators learn to operate many machines and / or perform

tasks that include quality control, machine maintenance, and setup reduction. In unmanned

cell systems, the utilization of equipment is more important because the most flexible

element in the cell, the worker, has been removed and ‘replaced’ by a robot. (15)

29
Automating the Cell

The need for automation is simply reflects the gradual transition of the factory from manual

to automated functions. Some people think this as CIM. Others recognize that people are

the most important (and flexible) asset in the company and see the computer as just another

tool that is used in the process, but is not the heart of the system. These companies are

moving towards Human Integrated Manufacturing (HIM), where a creative, motivated

workforce is seen as the key to lean production. Even though cells are typically manned,

unmanned cells are beginning to merge with a robot replacing the worker. For the cell to

operate autonomously, it must have adaptive control capability, that is A(5) level of

automation.

For robotic (unmanned cells), the robot usually loads and unloads parts for one to five

machine tools, (15) but this number can be increased if the robot can become mobile. A

machining center can do the same sequence of steps but is not as flexible as a cell

composed of multiple simple machines. Cellular layouts facilitate the integration of critical

production functions while maintaining flexibility in producing superior quality products.

In robotic cells, the microcomputers of the CNC machine tools and a robot are networked

together with a cell host computer. It is difficult, if not possible; to conceive of this kind of

arrangement without restoring to some method that collects the work in to compatible

families. All the machines in the cells are programmable, and therefore this kind of

automation is very flexible. See Fig 3 for robotic cells. (15)

30
 Figure 3 Robotic Cells Connected by Computer Network

2.2.4. Continuous Improvement

Lean production supports the policy of continuous improvement. Called Kaizen by the

Japanese, continuous improvement means constantly searching for and implementing ways

to reduce cost, improve quality, and increase productivity. The scope of continuous

improvement goes beyond factory operations and involves design improvements as well.

Continuous improvement is carried out one project at a time. The projects may be

concerned on the areas of the Quality improvement, Set up time reduction, Cost reduction,

Work-in-process inventory reduction and others. (44)

31
 2.2.4.1. Quality Improvement

Quality problems are usually attacked on a project-by-project basis using teams. Team

approach is one of the basic elements in quality improvement. This is because the issue

usually requires the attention and expertise of more than one person to solve. It is difficult

for one individual, acting alone, to make the necessary changes to solve a quality problem.

Teams, whose members contribute a broad pool of knowledge and expertise in the problem

area, are most effective.

The steps in each project will vary depending on the type of quality problem being

addressed. The following logical sequence of steps is recommended approaches:

1. Selecting the project

2. Observing the process

3. Analyzing the process and conducting experiment if appropriate

4. Formulating corrective actions, and

5. Implementing the corrective action.

These steps and where each of the seven SPC tools might be utilized in quality

improvement projects are discussed in Table-2. (44)

32
 Table 1 Applications of the Seven SPC Tools in Quality Improvement Projects
Steps Quality Improvement Project steps SPC Tools
1 • Control charts
Select the Project
• Pareto charts
2 Observe the Process • Check sheet
3 • Histogram
• Pareto chart
Analyze the Process • Defect concentration diagram
• Scatter diagram
• Cause and effect diagram
4 • Scatter diagram
Formulate Corrective action
• Cause and effect diagram
5 Implement the Corrective Action

2.2.4.2. Setup Time Reduction

Lean Production approach to manufacturing demands that small lots be run. This is

impossible to do, if machine setups take hours. The setup operation is to change the

manufacturing condition from those for producing a certain product to those for producing

a different product, including stopping the present job and preparing for the start of the

next job. Except for making one specific product in a dedicated line, it is periodically

necessary to change the product produced on the line from a product to another. In this

context, single setup means that it has been reduced to a single-digit number of minutes –

less than 10 minutes. However, it means only the time when equipment is stopped for setup

(so-called internal setup time) and does not include the times for incidental operations

related to setup (external setup) that occur before and after equipment stoppage. (4, 15)

33
Shingo’s Single Minute Exchange of Dies (SMED) Rules

Large reduction in setup time can be achieved by applying Shingo’s SMED rules for rapid

exchange of dies. According to this rule, setup time reduction occurs in four stages:

The Initial Stage is to determine what currently is being done in the setup operation. The

operation is usually video taped, then every one concerned gets together and reviews the

tape to determine the elemental steps in the setup. In this stage, two issues are documented

concurrently: a walking diagram illustrates the movement of a person being viewed in the

layout – and analysis chart for detailed methodology of the workstation. The chronological

time stamp from the video is used to determine the elemental time of each step.

The Second Stage is to separate all setup activities into two categories, internal and

external. Internal setup can be done only when the machine is not running. These are:

o Installation and removal of cutting and similar tools,

o Centering and setting of dimensions and other parameters,

o Trial run and adjustments.

External elements can be done while the machining is running. This activity includes:

o Bringing in and positioning of new parts in the appropriate location,

o Getting any tools, parts, and dies ready in accessible position,

o Getting needed tools from the tool room and having them ready to install.

34
Without this distinction, all setup tasks may be treated like internal setup tasks and

equipment may be stopped much longer than is necessary. Thus, simply by differentiating

between internal and external setup, setup time requiring equipment stoppage can be

reduced by 30% to 50%. (4)

The Third Stage focuses on converting internal setup to external setups. For example, a

tool-centering operation had been done with the equipment stopped, but is found that

presetting could be done. Likewise, procedures require the equipment to be stopped after

setup until the quality of newly produced products could be verified. However, by

increasing the reproducibility of manufacturing conditions for non-defective products, it is

possible to restart the equipment immediately (without trial run).

The Fourth Stage of SMED concentrates on streamlining all aspects of the setup

operation. It may be necessary to invest capital to drive the setup times below ten minutes.

Automatic positioning of dies, bolster plates on rollers, intermediate jigs, and duplicate

work holders represent the typical kinds of hardware needed. The basics for this stage

include organizing activities before the setup, reducing the elements of the setup, and

eliminating the adjustments after setup.

Organizing before the setup includes addressing all of the work that could be

accomplished prior to setting the equipment down. Those internal tasks are scrutinized and

each work evaluated as to when it had to be performed. Tools and fixtures are color coded

for easy identification and control and kept on a tool cart to have them readily available

when setup process began. The tools and dies are standardized so that they could run more

than one type of job.

35
Reducing the elements of the setup include reducing the time it take to perform the duties

during the setup and eliminating activity during this process. By using simultaneous

activities, two members work together to avoid having some one walk from one side of the

machine to the other.

Improved clamping methods addresses the issue that fasteners slowdown the whole

process. Replacement and installation include reviewing the fastening technique. The

function of the bolt was to fasten or position things. Some fastening functions are

accomplished through levers or pneumatic hold-downs instead of bolts. Using a one-turn

fastening includes use of U-shaped washers, split threads, and clamps. There are also one-

motion methods that include cam clamps, spring stops, and vacuum suctions.

Eliminate the adjustments after setup includes finding methods and techniques to

accomplish setting machinery correctly the first time. The objective is to set the machinery

correctly and eradicate the need to adjust the equipment in latter steps. It is found that most

adjustments were eliminated by calibrating the equipment on a scheduled basis and by

being more accurate in setting tooling into the machinery.

Considering the result of setup improvement phases and activities, simply reducing setup

time for one piece of equipment will not have that large an impact, because only labor-

hours needed have been reduced. Besides, if setup time operation tasks have merely been

changed to external tasks, the total labor-hour will not have been reduced at all. Therefore

when a single setup have been successfully achieved, it is essential to think in terms of side

ways expansion, so that single setups can be achieved throughout the entire line producing

the product, and other lines as well.

36
If the process described previously is viewed as progression of setup time reduction, it

appears as in Fig 4, next page. This can be easily understood as a process of gradually

‘digging deeper’ through use of idea steps, while repeating the practical steps. (4, 5)

2.2.4.3. Cost Reduction

The lean techniques and procedures are all tailored on effective utilization of resources that

would result in minimizing manufacturing costs. So, the improvements in cost reduction

can be obtained on cell formation, setup reduction, quality control and other methods.

Another important cost minimization method is accomplished jointly with suppliers. At the

heart of lean supply lies a different system of establishing prices and jointly analyzing

costs. First, the lean assembler establishes a target price of a product and then, with the

suppliers, works backwards, figuring how the part can be made for this price while

allowing a reasonable profit for both assembler and suppliers. In other words, it is a ‘market

price minus’ system rather than ‘supplier cost plus’ system.

To achieve this target cost, both suppliers and assembler use Value Engineering techniques

to breakdown costs of each stage of production, identifying the factors that would lower the

cost of each part.

37
 Steps to Reduce Setup Time • Preparing operating
conditions in advance
• Function Standardization
• Using checklist • Using intermediary jigs

Waste
• Performing function checks

time
• Work in parallel
(All internal Setup times)
• Improving die transportation
Changeover time

Improving storage and

External Setup
transportation of blades,
dies, jigs, gages, etc

External Setup
• Implementing parallel operations
• Using of one-touch clamps
• Eliminating adjustments
• Least common multiple system
• mechanization

Internal External
Setup
Internal Setup

Internal Setup External Setup

Setup
Internal Setup
With in 10 min

Before First step Second step Third step Fourth step

Improvement Separating internal Converting internal Improving internal Stream lining all aspects
and external steps to external steps setup of setup operations

Figure 4 Improvement Process for Setup Time Reduction

38
Once the part is in production, a technique called Value Analysis is sued to achieve further

cost reduction. Value Analysis, which continues with the entire time the part is being

produced, is, again, a technique for analyzing the costs of each production step in detail, so

that cost-critical steps can be identified and targeted for further work to reduce costs still

further. These savings can be achieved by incremental improvements, or Kaizen, or the

introduction of new tooling, or redesign of the part.

Obviously, for the lean approach to work, the supplier must share information about costs

and production techniques. Both go over every detail of the production process looking for

ways to cut costs. Agreements made on sharing profits gives suppliers’ the incentive to

improve processes, because it guarantees that the supplier keeps all the profit derived from

cost-saving innovations and Kaizen activities. (30)

2.2.4.4. Work-in-Process Inventory Reduction

The inventory held in the system is called the work-in-process (WIP). It has been

analogized to the water in the river – high river level is equivalent to high level of

inventory. The high river level covers the rocks in the riverbed that is equivalent to

problems. Lowering the level (inventory) exposes the rocks (problems), and the problems

receive immediate attention when exposed. When all the rocks are removed, the river can

run very smoothly with very little water. While zero defects is a proper objective, zero

inventories is misleading. The idea is to minimize the necessary WIP between cells. (With

in the cell, parts are handled one at a time). The level of WIP between the stand-alone

process, cells, subassembly, and assembly is controlled by the foremen. The control is

integrated and performed at the point of use.

39
If there are 10 carts with 20 parts holding capacity in the link, the maximum inventory

becomes 200 parts. Going to the stock area the Forman picks up the kabana cards (one

WLK, one POK), which puts a full cart out of commission. Now there are 9 x 20 or 180

parts. When any problem appears the Kanban is immediately restored, which restores the

inventory in its previous level. The condition is relaxed until a solution for identified

problem is enacted. Once the problem is solved, the procedure repeats. If no other problem

occurs, the inventory is made to drop to 8 x 20 = 160 parts. This procedure is repeated daily

all over the plant. After a few months, the Forman may make down to 5 carts of 20 parts.

Over the weekend the system will be restored to 10 carts, but this time with each cart

holding only 10 parts. If every thing works smoothly, with reduced WIP lot size, the

Forman will then remove a cart to see what happens. More likely, setup time will need to

be reduced. In this way the inventory in the linked-cell system is continually reduced,

exposing problems. The problems are solved one by one working teams.

The minimum level of inventory that can be achieved is a function of, quality level,

probability of machine breakdown, length of set-ups, variability in manual operations,

number of workers in the cell, parts shortages, transportation distance, and so on. The

significant point here is that inventory becomes a controllable independent variable rather

than an uncontrollable variable dependent on cravings of users of the manufacturing system

for more inventories. (15)

40
 2.3. Lean Production Success Stories

a) A Smarter Way to Make Smart Bombs

Boeing’s new missile-making line showcases; Commitment to Lean Manufacturing

For its older missiles, like the Harpoons, SLAMs and CALCMs, the missile assembly lines

were look much like traditional batch and queue operations that depend on a trained

workforce using manual assembly techniques. And there’s a lot to assemble. These missiles

consist of about 98 percent outsourced parts, and two percent Boeing-made parts.

Seated on stools, workers pick small parts from bins, then stretch and stick their hands

inside tight compartments to assemble the missile’s inner brains. Ticketed work-in-progress

is visible in various stages of assembly; there is little automation, and the workers work in

cells and mostly in isolation from one another.

When walking inside Boeing’s new production facility for JDAM (Joint Direct Attack

Munitions) line of missiles, a whole different world -- lean manufacturing is seen.

Starting from scratch, a group of lean manufacturing devotees within Boeing’s missile

division knew they had an opportunity to create the ideal lean assembly plant. They

benchmarked with dozens of other facilities, studied best practices, conducted internal

performance audits, attended lean manufacturing conferences, and did their homework. The

result is a simple looking, but highly-efficient production line that can produce top quality

missiles at a low cost - about US$20,000 per missile. The line now makes about 1,000

missiles a year, but the system could crank out as many as 20,000.

41
On the assembly line, each munitions mechanic follows clearly outlined standardized work

procedures, and spends the same time - 17 minutes - during each stage of the assembly

process. There is no rework on the line, and parts are stored adjacent to where they are

assembled. Each mechanic does every other job, from unloading raw goods from trucks, to

assembly, to packing up the finished product in collapsible and reusable bar-coded

containers with no packaging waste for shipping.

b) North American Application lean production System

Some of the approaches of lean are difficult to implement in North American. Life time

employment, companies unions and subcontractor networks are not prevalent in US and

Canada. Also, US and Canada companies traditionally use a top-down planning and

management structure, which is counter to bottom- round management. In addition US and

Canada companies are vulnerable to labor strikes. What have been adopted in the US and

Canada is the Japans general philosophy and approach to lean

It is discovered that while it may take time to implement, reducing set up times, eliminating

inventory, identifying problems, utilizing the expertise of workers are important, practical

guidelines for all organizations. In deed, a survey on implementation of 1,035 US

manufactures, 86.4% of respondents agreed that lean provided an over all net benefit for

their organization less than 5% reported no overall benefit from their Implementation.

Through put time decreased an average of 59.4%. The study found that organizations with

500 or more employees typically implement JIT practices more often. It was also practiced

for a longer period of time for larger organizations. Regardless of size or type of process

employed, lean manufacturing was beneficial for US manufacturers.

42
In Europe as well, many organizations have seen the benefits. In a study of 80 European

plants, improvements included a 50% average reduction in inventory, a 50-70% reduction

in through put time, a reduction in set up time by as much as 50% (with out major plant and

equipment investments), 20-50% productivity increases, and pay back for the investment in

less than nine months. (8, 20)

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Chapter 3 : AGILE MANUFACTURING SYSTEMS

3.1. Agile Manufacturing Overview

In 1991 a four-month long collaborative workshop was accomplished at Lehih University

that gave birth to the concept of the Agile Manufacturing Enterprise. The intention was to

identify the competitive focus that could be successor to lean.

It was intended to develop a manufacturing competitiveness revitalization strategy to

counteract competitive decline of American manufacturers. Decline occurred as large and

unresponsive American mass-producers experienced market share erosion to foreign-based

“lean” manufacturers. These smaller, more flexible and more responsive manufacturers

took decisive control of global markets largely due to their ability to overcome

inefficiencies associated with inflexible American-style mass-production. Lean

manufacturers facilitated the shift in market dominance by systematically reevaluating and

redefining the importance of all inputs to manufacturing processes. (2, 24, 26)

American response to the global market share erosion was unsuccessful exploitation of

flexible but stand-alone technologies such as Computer-Numeric-Control machine tools,

robotics, flexible manufacturing systems, computer-aided-design/drafting, and computer-

integrated manufacturing, (2).

44
During the workshop discussion, the participants converged on the fact that most of the

organization was feeling increasingly whipsawed by more frequent change in the business

environments. The evidence was apparent that the pace of change was accelerating- and

already outpacing the abilities of many established organizations.

To overcome reliance on stand-alone technologies and promote modular product designs,

which evolve with the needs of consumers, the industry-led Agile Manufacturing Enterprise

Forum (AMEF) took charge of the plan development. The purpose of the forum was to

develop a methodology for creating Reprogrammable, Reconfigurable, and continuously

changeable production systems.

Being agile means being a master of change, and allows one to seize opportunity as well as

initiate innovations. How agile a company or any of its constituent elements is a function of

both opportunity management and innovation management – one brings robust viability and

the other brings is preemptive leadership. Having one without the other is insufficient in

these times of quickening unpredictable change.

• Viability: seeks and responds to the voice of the customer, Says yes to opportunity, is

reactive and resilient, has staying power and robustness.

• Leadership: introduces new approaches, makes existing approaches obsolete, changes

the rules, Promotes out-of-box thinking, disrupt the market.

Manufacturing Agility is the ability to respond to, and create new windows of

opportunities in a turbulent market environment driven by individualizing customer

requirements cost effectively, rapidly and continuously. Essentially the customer, and more

importantly the product requirements that they represent, are central to manufacturing

45
profitability. These requirements must be met at the right price, to the right quality, and at

the right time. Nevertheless, these requirements are not static, and the customer’s needs are

in a state of permanent flux, which has an inevitable impact on a company, and requires

greater flexibility of that company (4, 18). Moreover, the ability to fulfill these

requirements is under permanent pressure from environmental turbulence. AM is, therefore,

the enabling technologies that permit the drive towards manufacturing agility.

Tendencies in the Direction of Agile Manufacturing

The basis for formulating the concept of Agile Manufacturing is an analysis of the

development that is taking place in the management of companies. A number of market

forces can be identified that drive the evolution of agility and agile manufacturing system in

business. These trends include:

1) Market fragmentation

2) Production to Order in Arbitrary Run Lengths

3) Information Technology, which makes it Possible to Service a Large Group of

Customers Individually

4) Shorter Product Lifetimes

5) Global Production - Production Takes Place in Networks Covering the Globe

6) Companies Collaborate and Compete at the Same Time

7) Infra-structure for Marketing and Distribution of Mass Produced, Customer Specific

Products

8) Companies Reorganise themselves at Shorter Intervals

9) Increasing Need to Build up a Special Company Culture with Well-defined Norms

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 10) Converge of Physical Products and Services: The most important consequences of this

development are:

1. Instead of a once-off sale of physical products, it is possible to adapt or upgrade

products to build up a longer lasting relationship with customers.

2. Information has, as time goes by, become a product in itself.

3. The decisive competitive factor is changing from being incorporated in products,

technology and processes, into being associated with the individual employee’s

knowledge, creativity and initiative.

3.2. Agile Manufacturing System PRINCIPLES

The mass production system is undergoing major change. Companies today are able to

cultivate ever more fragmented markets, to deliver customer specific products in arbitrary

run sizes, to develop product families and rapidly change model, to make mass produced

products customer specific and to market information. This development means that

companies of today are moving away from the classical mass production to AM concept.

Agile Manufacturing sets out to identify and apply practical tools, methodologies, and

best practices that enable companies to achieve manufacturing agility within a turbulent

business environment. (16, 26)

When the term agile is used in connection with the management of companies, it refers to

the company’s ability to perform in an ever more dynamic world in which markets,

products, technologies that is rapidly changing. To be agile is not just a question of either

47
using the right technology, or of having the right organisational structure or of having

employees with the right qualifications. There are many examples of companies who have

worked with one or more of these elements. In general terms, the concept of Agile

Manufacturing gives a new framework for how one can run a company in an open dynamic

world.

Agile Manufacturing embodies an aggressive, growth-oriented company that is willing to

change. It makes considerable demands on the individual employee’s creativity and ability

to change over to new tasks at work. Thus a movement in the direction of Agile

Manufacturing puts big demands on how the individual employees are trained and on their

access to relevant knowledge and information.

To get somewhat closer to the definition of Agile Manufacturing, researchers at Agility

Forum have formulated four fundamental principles, which describe the agile company.

These Principles are:

1. Reorganization the production system for Agility,,

2. Enriching customers with total solution products

3. Leveraging people and information or Knowledge-driven enterprise.

4. Co-operating to enhance competitiveness (2, 26, 44)

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 3.2.1. Reorganizing Production System for Agility

Companies seeking to be agile must organize their production operations differently than

the traditional organization. The changes required in this respect can be in two basic areas:

Product design and production operations:

a) Product Design: Companies need to design or develop products that are focused

specifically on an individual customer’s requirement. Product design, in most cases,

will need to be closely integrated with the production process. The need for fast and

effective design means that the traditional approach of having all new products routed

through a design area must be eliminated. The design process must be integrated with

the manufacturing process. The manufacturing people on the production cell can be

trained to do the majority of the design functions. Modularizing allows configuration of

products rather than the separate design of each product; thus, simplifying the design

process. Here, there is customer specific products or alternatively offer a wide spectrum

of product variants which give the customer the possibility of assembling an

individualised product.

The products may be designed to not only meet current needs but to be reconfigurable

to meet the customers' future needs. Attention is paid to configurability, modularity, and

design for the longer term satisfaction of customer requirements. Where the product

contains software, it can be built to accept software updates over time. Where the

product is mechanical, it can be designed for easy reconfiguration and upgrades as

technologies change, as new features are added, and as the customers needs change

over time.

49
 It is noted that decision made in product design determine approximately 70% of the

manufacturing cost of a product (44). For a company to be more agile, the design-

engineering department must develop products that can be characterized as follows:

• Customizable: for individual niche markets and in some cases, for individual

customers.

• Upgradeable: a product with base-model which fit subsequent additional options.

• Reconfigurable: Through modest changes in design, the product is provided with

unique features. A new model can be developed from the previous model without

drastic and time-consuming design effort.

• Design Modularity: The product design that consist several modules (i.e. subassembly).

If a module needs redesign, the entire product dose not require redesign.

• Frequent Model Changes: introducing new versions of the product every time.

• Plat-forms for Information Technology

b) Production Operations: Agile production operations thrive under conditions that drive

others out of business. When forecasts prove too optimistic, or markets run down, they

throttle back on production rate with no effect on product margins. If product lifetime

ends prematurely, they are quickly reconfigured and retooled for new or different

products. Instead of loosing market opportunity, when product demand soars beyond

capacity they expand to meet the market. Rather than postpone or shutdown

periodically for major process changes, they evolve incrementally with continuous

incorporation of new process technologies. In support of new product programs, they

simply take prototypes in the workflow. For niche markets and special orders, they

50
 accommodate small runs at large run margins. Irrespective of these changes, they

maintain superior quality and a steady, loyal work force.

A substantial impact on the agility can be achieved by reorganizing operations,

procedures, and systems that support them. Objectives in production operations and

procedures are:

• Cost-effectiveness and Low-volume production

• Producing to Customer Orders

• Mass Customization

• Reconfiguring and Reusing Processes and Resources; this include CNC

machine tools, parametric part programming, robots, programmable logic

controllers, mixed model production lines, and modular fixtures

• Involving Customers Closer in Production Process

• Integrating Business and Production Procedures The production system

should include business functions in a computer integrated production planning

and control system, based on manufacturing resource planning (MRP II).

• Extended Production System from Suppliers through Customers; the

companies’ own factory is a component in a larger production system.

Some of the important enabling technologies and management practices to reorganize the

production function for agile manufacturing are listed in Table 3. (44)

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 Table 2 Enabling Technologies and Management Practices for AM.
Enabling Technologies Enabling Management Practices
• Computer numerical control • Concurrent Engineering
• Direct numerical control • Manufacturing Resource Planning
• Robotics • JIT production system
• Program Logic Controllers • Reduced Set up and Change over time
• Group Technology Cellular Manufacturing • Shorter product development times to
• Flexible Manufacturing System increase responsiveness and flexibility
• CAD/CAM and CIM • Pull production system
• Rapid Prototyping • Lean Production
• Computer Aided Process Planning CAPP

3.2.1.1. Design Principles for Agile Production System

Designing agile systems, whether they be entire enterprises or any of their critical elements

like business practices, operating procedures, supply-chain strategies, and production

processes, means designing a sustainable proficiency at change into the very nature of the

system. A business engineer is interested in both the static (the fundamental system

architecture) and the dynamics (the day-to-day reengineering that reconfigures as needed).

Sustaining a desired opportunistic/innovative profile is dependant upon the agility of these

systems, which in turn is impeded or enabled by their underlying architectures:

Reusable/Reconfigurable/Scalable (RRS) system. Fig 5 provides a set of design principles

These principles have emerged from observations of both natural and man-made systems

that exhibit RRS characteristics.

The design of manufacturing enterprise systems, from production process to business

procedure, can result in a more or less adaptable system to the extent that certain design

principles are employed. The expression of RRS design principles explored in the three

production systems is assembled in Appendix A, showing various applications.

52
 Any organization of interacting units is a ‘system’: an enterprise of business resources, a team of people, a cell
of workstations, a contract of clauses, or a network of suppliers.

Self-Contained Units Distributed Control and Information

System composed of distinct, separable, self-sufficient Units respond to objectives, decisions made at point
units not intimately integrated. of knowledge; data retained locally but accessible
globally.
Plug Compatibility
System units share common interaction and interface Self-Organizing Relationships
standards, and are easily inserted or removed. Dynamic unit alliances and scheduling; open binding;
and other self-adapting behaviors.
Facilitated Re-Use
Unit inventory management, Modification tools, and Flexible Capacity
designated maintenance responsibilities. Unrestricted unit populations that permit large
increases and decreases in total unit population.
Nonhierarchical Interaction
Nonhierarchical direct negotiation, communication, Unit Redundancy
and interaction among system units. Duplicate unit types or capabilities to provide
capacity fluctuation options and fault tolerance.
Deferred Commitment
Relationships are transient when possible; fixed Evolving Standards
binding is postponed until immediately necessary. Evolving open system framework capable of
accommodating legacy, common, or completely new
units.

Figure 5 Agile System Design Principles

3.2.1.2. Agile Machines

Agile Machines Accommodate workflows of intermixed custom-configured products. US loss

for semiconductor market in 1970s was due to noncompetitive process equipment- machine

tools for semiconductor fabrication. In semiconductor, a high paced industry, production

industries advance significantly every three years or so. With each new generation of

equipment, semiconductor manufacturers build a completely new plant, investing a great deal

of money, in equipment and twice that for environmentally conditioning the building. The

machines are developed to deposit thinner layers of atoms, etch narrower channels, imprint

denser patterns, test higher complexities, and sculpt materials with new accuracy and precision.

Generally, each machine performs its work in a reaction vacuum chamber and sports a sizable

supporting cast of controls, valves, pipes, plumping, material handling, and so fourth.

53
Because the technology in each generation is unique, market success with one generation of

equipment has little to do with the next or the previous generation. The industry’s history is

littered with small vendors that brought a single product–generation to market: single-

purpose, short lived, complex machines: long equipment development cycles; repeatability

and reliability problems – all targeted for high volume, highly competitive production

environment serving impatient, unforgiving markets.

In 1987 new machine architecture is brought to market – architecture based on Reusable,

Reconfigurable, and Scaleable concepts for semiconductors, Fig 6. The machines

decoupled the plumbing and utility infrastructure from the vacuum chamber, and

introduced a multi-chamber architectural concept. Instead of one dedicated processing

chamber, these machines contained up to four independent processing modules serviced by

a shared programmed robotic arm. Attached like outboard motors, process modules are

mixed and matched for custom configured process requirements. A centralized chamber

under partial vacuum houses a robotic arm for moving work-in-process wafers among the

various workstations. The arm also services the transfer of wafer cassette in and out of the

machine’s external material interface.

54
 Reconfigurable Material Transfer Module
Scalable-system Material Interface Module

Reusable, Reconfigurable
Production Process Modules

User Reconfigurable Control Module

Reusable Plumbing and Utility

Figure 6 Semiconductor Wafer –processing Cluster Machine

Architecture: Reusable, Reconfigurable, Scalable

A single machine can integrate four sequential steps in semiconductor fabrication that

decrease scrap caused by contamination during inter-machine material transfer. The

equipment development time and cost is significantly shortened by separating the utility

platform from the processing technology. Development resources are focused now on

process technology and reusing a common utility base across technology generations,

which accounts for 60% of the machine. More important, perhaps, is increased reliability

that the customer’s enjoy with a mature and stable machine foundation. A malfunction in a

process module is isolated to that module alone. It can be taken off-line and repaired while

the remaining modules stay in service.

55
Semiconductor Manufacturing is barraged with prototype run requests from product

engineering. New product typically requires new process setups and often requires new

process capability. When needed redundant process modules can be dedicated to

prototyping for the period of test-analyze-adjust interactions required for process

parameters to be understood. And if a new capability is required, a single new ‘outboard

motor’ is delivered quicker. Cluster architecture also brings a very major savings in both

time and cost for creating new fabrication facilities, as shown in Fig 7; these machines can

be directly interconnected to increase the scale of integration.

Controllled Enviroment Inter-Cluster Transport Bay

Cassete Module
Process Module
Docking Module

Transfer Module

Figure 7 Scalable Machine Clusters

Extending these concepts and combining them with a strategy for reconfigurable facilities

might push the utility services bellow the floor and the clean transport above the machines.

Though this ultimate configuration shown in Fig 8 does not yet exist in a production

environment, the possibilities are obvious.

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 Observed RRS
Clean Vacuum Overhead Transport Principles
Full Utility Underfloor Infrastructure
Reusable
• Self-Contained
• Plug Compatibility
• Facilitated Re-Use
Reconfigurable
• Self Organizing
• Non-Hierarchical
• Deferred Commitment
• Distributed Control
Scalable
• Flexible Capacity
• Redundancy
• Evolving Standards

Figure 8 Agile Machines in a Reconfigurable Plant Framework.

3.2.1.3. Agile Cells

Manufacturing cells in general and flexible machining cells in particular, are not especially

new concepts. Machining centers are expensive and building of cells from these multiple

machines is still too costly for many manufacturers. It is typical to expect benefits from

these flexible machining cells in production operations on high part variety and low volume

runs. When justification and benefit values are based on flexible configuration and

objective this is understandable.

Flexible machining cells have been implemented in many places, but the agile

configuration here brings additional values, Fig 9 and Fig 10. The configuration and the

specific modules were chosen to increase the responsiveness to identified types of change.

The horizontal machining centers do not require pits or special foundations, so they are

57
(relatively speaking) easy to move. A cell can increase or decrease its machining capacity

in the space of a day and never miss a lick in the process. This is facilitated by a plant

infrastructure of common utility, coolant, mechanical, and human interfaces that provide a

frame work for reconfiguring modules easily.

A1 A3 A5 A7
WSS

WSS
A2 A4 A6 A8

Figure 9 Agile Machining Cells

Replacement or massive retooling of a rigid production module is more expensive than

transformation of a flexible production module. Agile system configuration can further

change the economics to overcome an initial investment that has been higher. The price per

performance ratio of the modular production units are, becoming better as cells increase

their production quantities.

Agile production requires neither agile nor flexible machines—for agility is a function of

how the modules of production are permitted to interact. An agile system must be readily

reconfigurable, and may gain this characteristic by simply having a large variety of

compatible but inconsistently or infrequently utilized production units. (4, 16, 17)

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Observed RRS Design Principles
Reusable
ƒ Self Contained – Machines, work setting stations, pallet changers, fixtures.
ƒ Plug Compatibility – Common human, mechanical, electrical, and coolant frame work.
ƒ Facilitated Re-Use – Machines do not require pits or special foundations, and are relatively light and easy
to move.

Reconfigurable
ƒ Self Organizing – Cell control software dynamically changes work routing to accommodate module
status changes and new or removed modules on the fly.
ƒ Non-Hierarchical – Complete autonomous part machining, non-sequential.
ƒ Deferred Commitment – Machines and material transfers are scheduled by cell control software in real
time according to current cell status, part programs downloaded to accommodate individual work
requirements when needed.
ƒ Distributed Control – Part programs downloaded to machines, machine life history kept in machine
controller, machines ask for appropriate work when ready.

Scalable
ƒ Flexible Capacity – cell can accommodate any number of machines and up to four work setting stations.
ƒ Redundancy – All modules are standard and interchangeable with like modules, cells have multiple
instances of each module in operation, machines capable of duplicate work functionality.
ƒ Evolving Standards – utility services and vehicle tracks can be extended without restrictions imposed by
the cell or its module.

Cell 1 Cell 2 Cell 3

Machine
Work Setup
Stations

AGV

Cell 4 Cell 5 Cell 6

Figure 10 Agile Machining Cells in a Reconfigurable Framework

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 3.2.2.Enriching the Customer

Enriching the Customer or Providing Solution to the customer refers to the company’s

ability to deliver customer-adapted products, including the ability to incorporate future

services into a given product. An important aspect here is, the establishment of a "lifelong"

connection to the customer, i.e. one must be able to continue to service the customer long

after the product has been delivered.

The customary view of products is changed from solely focusing on a physical product to

include information and services in relation to the product. In traditional mass production,

the customer buys a product and uses it until it is worn out or out of date, after which a new

standard product is bought from a supplier selected more or less at random. The agile

company offers a complete solution to the customer, including both physical products and

services.

An example is companies which deal in photo-copiers, from whom one can purchase a

complete service. The photo-copier company guarantees to make facilities available, so that

one as a customer will be able to produce a given quantity and quantity of photocopies. The

suppliers, then autonomously look after all services and maintenances, delivers paper and

toner, and replaces the copying machine when necessary and so on. Instead of buying a

copying machine, the customer pays a monthly sum, which corresponds, to the current level

of use of photocopying facilities.

Selling solutions to the customer means, amongst other things, is to support part of those

processes, which are related to maintenance, use, and disposal of the product. For example,

one might offer automatic upgrades of products, or perform all service and maintenance of

60
the product throughout its lifetime, or automatically replace the product, or arrange for

disposal of the product when it has to be replaced etc. The key to customer prosperity is to

look at the products and services in terms of how much value they add to the customers.

World class manufacturers have placed great emphasis on being close to the customer;

customer prosperity goes much further and examines how much value is put on the

company’s products and services.

To intimately recognize the customer's needs it requires understanding customer’s use of

the products more thoroughly than they know themselves. This requires a short, medium,

and long term view. To address the customers' real needs one must sell solutions and not

products. Providing solutions, in turn requires a detailed and thorough understanding of the

customers needs there by pass together a package of products and services to fulfill those

needs. Since products alone many not be enough, one may need to add extra services or

technical support or special terms. Adding complementary products supplied by other

companies - perhaps by competitors - to truly satisfy the customers’ needs.

Automated design systems such as CAD (computer aided design) some times with

Computer Aided Manufacturing (CAM) systems can remove much of the detailed skills

from the design process so that the designs can be automatically fed into the computer

controlled production machines. When more complex products are being sold, the customer

is involved in the design, by directly taking part in the company's product development

team, or by the customer being given access to facilities for specifying an individual

product by design software. The design process can be significantly enhanced by having the

customers fully participate. The two companies - customer and producer - work together

cooperatively for mutual benefit. The customers bring their design skills to bear of the

61
project and manufacturer adds its production skills into the equation. In some cases the

suppliers and outside process vendors can also be integrated into the design process so that

the product is designed to meet the customers needs very effectively. This close

cooperation allows for the development of service-rich products that can evolve over time,

as the customer and the company work closely together, that may lead to the development

of long term relationships. (26, 44)

3.2.3.Leveraging the Impact of People and Information

Leveraging the impact of people and information refers to the company’s ability to exploit

and disseminate knowledge, both internally within the organisation and externally. An

important aspect is the possibilities offered by information technology for modelling

knowledge and information. Through the building up of such models, knowledge is made

explicit and can thus be shared between different actors, - both internally within the

organisation and externally, in a more operational manner.

The new information technology leads to a paradigm shift for the way in which engineers

work. Instead of primarily working operationally on work-out specifications, related to

concrete products and customer orders, engineers must in the future be able to build up a

degree of preparation in the form of the intelligent IT systems. These systems can then

support the task of working-out specifications in connection with concrete development

projects, enquiries or orders from customers.

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Increasingly, it becomes the company’s information and the skill of the people that becomes

a premium. The company ceases to sell products, as such. Rather sells its ability to fulfill

the customers’ needs. This knowledge and skill needs to be valued, protected, and shared.

New information systems technology has made it possible for the company's personnel to

be directly in contact with each other wherever they are in the world. This makes

information, skills, and knowledge accessible to the people who are the primary providers

of customer service. This can be a powerful tool linking people, customers, and other third

parties closely together.

The skills and knowledge of the people within the company become a paramount

consideration as a company develops solution-based selling. This knowledge includes

product knowledge and experience, but it also includes a rich depth of knowledge of the

customers’ needs, anxieties, and service requirements. The relationships that develop

between the customers and company's people when the company sells solutions instead of

products become very much a part of the product itself. The customers need to be treated as

individuals, with individual needs, and a history of experience with the company. This level

of customer enrichment can only be achieved through the use of knowledge-based systems.

Increasingly, the best way to create close customer awareness is to provide the people

within the company, and the customers themselves, a great deal of information. This may

be product information, company information, education and training in the use of the

companies’ products, analysis and data, product upgrades, manuals, drawings, instructions,

and specifications. These days, all this information can reside within the computer systems

and be readily available to all authorized users including customers, suppliers, and other

third party partners. This way, the sales representatives can be highly knowledgeable about

63
the customers’ requirements, ordering pattern, payment history, use of the technical support

or customer service facilities, and so forth. Available, complete, pertinent, and easy-to-

access information is fast becoming a key competitive weapon that enables all customer

contacts to be thorough and satisfactory.

Leading from this, of course, is the ability to closely link the customers’ information

systems into the producer’s systems. Orders can be placed automatically from the customer

and scheduled within the plant, yielding the customer accurate delivery promises. The

design requirements can be automatically picked up in the customers’ information systems

without drawings or specification being printed and passed. This enables the company to

address customer needs with great agility. Design, delivery information, history, accounts

receivable, customer service contact can all be integrated and made available.

Some of the technologies required to achieve this level of information sharing and

availability have only become accessible recently. The wide access to the Internet and the

World Wide Web opens up a standard and direct method of access information and

providing the customers with a standard link into a companies system. For the customers to

be linked into a company's information systems in the past, direct link was required

(usually through dialing). The Internet and other networks allow the customer to have a

simple and standard link to place orders, make inquiries, send message, and specify their

needs.

Another important aspect is that the individual employees are required to have the

necessary abilities, at the same time they should show flexibility in performing changing

64
tasks. This last requirement, in particular makes it necessary to build up a culture in which

the individual employee is constantly being trained to be able to deal with more tasks.

The individual employees’ knowledge and ability, together with their ability to absorb new

knowledge and to deal with more and more new tasks, are the crucial requirements if an

organisation wants to be able to exploit the possibilities which are present on the ever more

dynamic markets. It is also necessary for the employees to be innovative and able to take

new initiatives. In this context it is essential that employees who, for example, participate in

collaborative projects with external partners are empowered to make the necessary

decisions on their own, and that they receive the necessary support for doing so. (26, 55)

3.2.4. Cooperation to Enhance Competitiveness

The rapid change in technology and other skills added to the customers requiring highly

specific, customized products has lead to the need for far greater cooperation within and

between firms. No company can have all the required skills and knowledge. It is just not

possible for one firm to have everything, to fully meet a customers needs. There may be

additional services, information, or logistics required to meet the need. To achieve these

diverse and ever changing needs requires great cooperation. In the context of Agility, There

are two types of relations - internal and external relationships.

Internal Relationships: are those that exist with in the firm between workers and between

supervisors and subordinates. Often traditional companies have very little flexibility and

cooperation between departments. The various departments or areas must work together

for the enrichment of the customers, irrespective of the department’s short term benefit.

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Relationships in side the firm must be managed to promote agility. Some of the important

objectives include:

• Make the work organization adaptive

• Provide cross-functional training

• Encourage rapid partnership formation ,and

• Provide effective electronic communication capability

External Relationships: are those that exist between the company and external suppliers,

customers, and partners. The customers, suppliers, and other third parties can be brought

into the cooperation to design a product or develop a value-added service. In some cases the

company will need to seek out specific partners with special skills or attributes and create a

virtual corporation from several parties to focus on meeting the needs of a customer. These

virtual corporations are opportunistic alliances of core competencies across several firms to

provide focused services and products to meet the customers’ highly focused needs.

It is desirable to form and cultivate the external relationships for the following reasons:

1. to establish interactive, proactive relationships with customers;

2. to provide rapid identification and certification of suppliers;

3. to install effective electronic communication and commerce capability;

4. To encourage rapid partnership formation for mutual commercial advantage.

The fourth reason raises the issue of the virtual enterprise.

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Virtual Enterprise (VE) refers to the company’s ability to collaborate in a manner

involving several internal functions, and its ability to collaborate with external partners.

This is analogous with the concept of Concurrent Engineering. Where Concurrent

Engineering describes concurrency in connection with product development, and

Collaborative Operations refers to concurrency in connection with all the company’s

business processes.

Virtual enterprise (also ‘virtual organization’ and ‘virtual corporation’ are used) is defined

as a temporary partnership (may be with competing firms) of independent resources

(personnel, assets, and other resources) intended to exploit a temporary market opportunity.

In such a partnership, resources and also benefits are shared among partners.

These cooperative partnerships are not the traditional joint ventures or mergers. They are

informally created by companies dedicated to cooperation. Usually there is no complex

legal structure. The cooperative arrangements are quickly made, written down so everyone

understands their role and expectations, and then put into practice. Virtual Corporation

require considerable trust, respect, and openness.

The formation of Virtual Enterprise has potential advantages:

1) It may provide access to resources and technologies not available in-house;

2) It may provide access to new markets and distribution channel;

3) It may reduce product development time, and;

4) It accelerates technology transfer.

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The agile enterprise is adaptable enough to transform itself proficiency into whatever

current trends require. At least, the corporate management understands that business is not

just about making money; it is also about staying in business. Making money was all it took

to stay in business, but now one can make money right up to the day he become irrelevant –

then he is probably the last to know while he is ignored to death.

A corporation stays alive because the customers continue to pay more for goods than the

‘real’ cost of production. This excess payment is required to cover the cost of production

inefficiencies (nothing is perfect) and the cost of preparing for new goods to replace ones

that (eventually) lose favor. With increased competition, it is getting harder to fund these

production inefficiencies; some one is always finding a better way to produce the same

thing. With faster technological obsolescence, it is getting harder to fund the preparation for

new goods; reduced life generates both less investment cash and a high risk of investing in

the wrong thing.

Downsizing was the strategy to seek leaner operating modes, while outsourcing for

increasing responsiveness. When business picks up or new products enjoy high demand,

thus downsized corporation are not upsizing. Contract Manufacturing is providing new

options for fluctuating production capacity, and outsourcing in general is broadening the

capabilities and capacities available to a company on a quick notice.

Gaining new productive capacity and capability through outsourcing has several potential

advantages: short-term requirement are not burdened with long-term costs, capital

investment and its associated risk are both eliminated, the learning curve to develop new

production competency is eliminated, and unit costs may well be lower. Contract

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manufacturers and outsourcing firms are thriving by focusing on areas where they have a

high degree of competency.

With the advent of the information revolution, companies can readily communicate and

cooperate across long distances and provide products and services that are widely scattered

geographically and politically. Information technologies, which allow groups of people to

work together effectively even if they are geographically separated, are tools that enable

these kinds of informal, cooperative endeavors to flourish.

A notable example of this kind of cooperation is the link that has been forged between

IBM, Motorola, and Apple Corporation to develop the new PowerPC chip to compete with

the Intel Pentium. The companies, in some aspects competitors with each other, have

created a team to design, develop, and manufacture the PowerPC chip. None of them could

have done this alone.

An Australian company that was experiencing high costs and problems with the

replenishment of materials from their principle suppliers entered a cooperative relationship

with a transportation company. The truck drivers were given keys to the company’s

production plants and trained to identify component parts that were in short supply or had

kabana requirements. The driver enters a requirement message in the computer system and

drives to the supplier for replenishment of the item. These transactions occur continuously

throughout a 24 hour period, even when the plants are closed and empty. This significantly

reduced costs, eliminated the purchasing/order entry role within the customer and the

supplier, and solved many of the part shortages problems. Cooperation of this kind requires

trust, training, and an openness to try unorthodox approaches. The difficult aspect of this

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change was not the organization of the approach; it was the acceptance by company

managers that this would even work.

From the enterprise point of view, agile production is achieved when the makeup and

relationships of the enterprise’s production resources are easily adapted to the precise needs

of the moment, and a fleeting moment it is. The internal strategy breaks the company into

independent functional resource units that look like one big job shop, Fig 11, when they bid

on work, based on their performance capabilities. Good performance is rewarded with lots

of jobs, bad performance is starved up to death, and the system is self-organizing. Some

learn and improve; others get traded out, shutdown, simply ignored to death, Subsidies

replaced with local profit responsibility and investment authority.

Figure 11 Enterprise Job Shop

The external strategy recognizes that resources do not necessarily have to be owned and

captive; they only have to perform effectively when needed. Outsourcing and contract

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manufacturing enters the corporate mix of possibilities here see Fig 12. When a good

system is setup, these outside alternatives are not used as threats to distort internal costing,

but rather as self-organizing influence that brings best-in-class to the table. The

management values the retention of captive resources. It builds a system that levels that real

difference over a reasonable time. Invariably, this leads back to responsibility and local

authority. Internal units that must compete with best-in-class external alternatives are

allowed to compete on an even basis. And by the same token, they are able to find other

customers that will help maintain a balanced production rate, justify new capability

investment, and inspire innovative leadership. (4, 26)

Figure 12 Loosely Coupling the Enterprises

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 3.3. Agile Success Stories

a) Motorola pagers: To Each his own

In the early 1980s, the electronic pager industry in America was stormed by Japanese

competitors selling high quality pagers for $100, half the price charged by the half-dozen

American manufacturers. By 1985, most domestic producers were out of the business.

Motorola realized that, even if it streamlined its traditional production system, it could not

hope for more than a 20 percent increase in productivity. A drastic transformation of the

production process was necessary, but it had to be done quickly. Motorola therefore,

decided to develop a fully automated production process using the best off-the-shelf

technology in the world. The idea was not only to reduce production costs drastically and

achieve very high quality but also to gain the flexibility to make different pager models

faster than its competitors.

Motorola used many concepts and technologies, discussed here to achieve its ambitious

goal of mass customization. It developed a completely automated, computer-integrated

manufacturing processes and assembly line to produce its Brava line of pagers. The pager

was designed to have only 134 parts assembled robotically. The electronic devices in the

pager provided the customization necessary to allow 29 million possible variations.

The goal was not to transform just the manufacturing line, but rather to transform the entire

order-to-delivery process. Instead of taking a month or so to process orders, Motorola

transmits orders for customized pagers by computer to its plant at Boynton Beach, Florida,

where pagers can be manufactured, tested, and ready for delivery in less than two hours. A

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sales person obtains pager specifications from the customer and transmits them to the plant.

Computers in the plant use the order information to determine the exact production

schedule, plus the machines and robots that will produce the pager. The plant is a show case

facility with automated, minimal set up time and flexible build-to-order manufacturing

operations. The technology is so flexible that Motorola has been abele to dismantle and use

some of the equipment in other pager lines. This is an example of a firm that has used

technology with ingenuity to dramatically improve all Hour Strategic Dimensions; Cost,

Quality, Speed of Delivery, and Flexibility. (8)

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Chapter 4 : COMPARISON OF LEAN AND AGILE SYSTEMS

4.1. Comparison of Lean and Agile Systems

In the literature review section, the thesis has thoroughly discussed with the two trendy

World-Class manufacturing systems, lean and agile. As both patterns of the systems

coexist, there may be a tendency to view the latest system as a successor to the latter. There

was a special focus and necessity to catch-up the lean manufacturing paradigm by several

firms in the world; and nowadays manufacturers may possibly tend to become agile. This

section compares the two systems by referring to their main attributes.

Agile and lean production systems use different statements to describe their core principles

that probably emphasize the difference. In Table 4 the four principles of lean production

with equal number of agile principles, are indicated. (44)

Table 4 the Four Principles of Lean and Agile Production

Lean Production Agile Manufacturing
• Waste minimization • Enriching the customer
• Perfect First-time quality • Co-operating to enhance competitiveness
• Flexible production lines • Organize to master change
• Continuous improvement • Leverage the impact of people and information.

It is important to point out that agile production system is newer than its co-existing lean

system. Though these four main principles with other attributes are mentioned and became

a topic of discussion in a number of newer research articles, forums and a few books, the

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idea of agility and its implementation remains on development stage. So agile

manufacturing system principles and concepts are open for incorporating other matter as

researcher and practitioners exploit the topic. More over, Agile System takes many of the

developed management, and production approaches.

On the other hand, lean manufacturing is a relatively older system, sustained taking various

names by different attracted researchers, authors and industries. Other names given to lean

system are depicted below. Its birth goes back more than a half century in the vicinity of

Toyota Company, Japan, where Taiichi Ohno and his colleagues begun to seek a better

method of production that rescue the factory from the dominance of giant Western

companies. Starting from 70s, the system has been given due attention by researchers,

authors, consultants and practitioners. Hence, its management philosophy, application

method, merits and demerits are explored and explained by many Western Authors and

industry cases.

Other Names that some times replace for Lean Manufacturing System

Just-in-Time / Total Quality Control, name coined by Dick Schonberg

ZIPS (Zero Inventory Production system), Omak Industries
World-class manufacturing, also by Dick Schonberg
MAN (Material as Needed), Harley Davidson
MIPS (Minimum Inventory Production System), Westing House
Ohno System, Many companies in Japan
Toyota Production System, the model in Reality
Stockless production, Hewlett Packard
Kanban, many companies in US and Japan
Modular Manufacturing; apparel industries. (15)

To compare the similarities and differences of lean and agile systems identifying the

distinguishing attributes of each is necessary. The main features of the two systems are

listed in Table-5 (44). Taking every attributes from lean and corresponding features of agile

is more convenient.

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 Table 5 Attributes of Lean and Agile Manufacturing Systems
Lean Production Agile Manufacturing
• Enhancement of mass production • Break with mass production; emphasis on
mass customization
• Flexible production system for product variety • Greater flexibility for customized products
• Focus on factory operations • Scope is enterprise wide
• Emphasis on supplier management • Formation of virtual enterprises
• Emphasis on efficient use of resources • Emphasis on thriving in environment marked
by continuous unpredictable change
• Relies on smooth production schedule • Acknowledges and attempts to be responsive
for change.

4.1.1. Enhancement of Mass Production Vs Mass Customization

Lean is emerged during the 1940s, when mass production significantly dominated the

world market by its highly standardized goods produced in automated factories that permit

utilization of low labor skill and some experts. This efficient system of Fordism managed in

a Taylorism fashion had been founded with firm base of experience, development and was

enhanced for more than three decades. It was also built on lofty financial capacity that

strengthens its capability to extend through North America and Europe.

Observing this seemingly untouchable deep rooted system, firms with limited capacity and

small market segment, studied the system for prolonged time. This enthusiastic study

revealed some promising opportunities for improvement. Some of potential points for

improvement were:

• Time consuming setup for model change that hinder the flexibility,

• Quality problems resulted in high rework and defect sacrificed to smoothen the

automated line, and

• Poor resource management. (30)

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These rooms for improvement motivated the investigators to look at the enhancement of

mass production by minimizing the manufacturing wastes. Consequently, the lean

production system is born with focus on flexibility, waste elimination, quality enhancement

and continuous improvement.

Agile manufacturing concept, on the other hand, was initiated during 1990s. The fierce

global competition of the contemporary market, unpredictable change of business

environment and customer demand for high diversity of goods worried industry analysts

and researchers. These concerned bodies arranged a conference to investigate exiting

challenges of the enterprises and develop a framework to face the challenge. After a

thorough discussion, they come up with a set of principles for agility.

One of the important features of agility is to break with mass production and embrace the

newly developed business philosophy ‘mass customization’. Mass Customization

emphasizes on providing customers with high variety of quality goods that are produced

and delivered in time. In order to satisfy with this demand companies need to be responsive

in design to the extent that each customer could be supplied the particular model he / she

intends to purchase. Modularity of products, where by diversified models can be integrated

to build up the final products as per the customer order, have of paramount importance. To

realize this objective the system relies on recent advanced technologies such as FMS,

information technology and loosely coupled enterprises.

In conclusion, these two features – enhancement of mass production and mass

customization seems to focus on the same issue, but in different terminologies. At the heart

of lean in attempting to enhance mass production; there is flexibility improvement in

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production systems that are a prerequisite for responding individualized customer needs.

What mass customization emphasizes is that the existing model variation by a firm is not

sufficient and it should be further widen. Then, the enhancement of mass production by

lean is a basement for mass customization.

4.1.2. Lean Flexibility Vs Agile Flexibility

From flexibility perspective lean production thrives to enhance flexibility to alleviate

limited resource constraints and competition. This was observed when experimenting on

quick-change–over methods on used presses, to bring setup time from several days to few

minutes. The traditional economic lot size practice to justify set up costs was broken

through by the Shigeo Shingo (another accredited person for Lean system) when he

introduced SDEM.

Lean production is not limited on reducing setup times, to flexibility. More importantly, it

focuses on workforce flexibility, effective team work supported by cellular manufacturing

system. Lean employees are trained to become flexible in handling multiple tasks, such as

operation, maintenance, housekeeping and quality control.

Lean system follows methodical steps to build up from simple flexibility to more complex

flexibility. The system starts from reconfiguration of simple manned machine cells, (A2),

then gradually evolve to a highly autonomous system (unmanned cells), (A5). The steps to

become lean are depicted in Fig 13, (15). From the steps, it can be observed that lean

recognizes the importance of high tech tools to increase flexibility. This is currently

implemented by lean practitioners that robotized cells become common, where economic

justification and system requirements are apparent. Lean production is then open to

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accommodate simple machines at A(2) level as well as the peak soft tools A (5), that recent

and future technology edge brought about.

10 Restructure the rest of the company

Autonomation = Automate + Robotize +

9 Computerize

Integrate Vendors = Making them JIT folks. Do

8 step 1-7

Integrate Inventory Control – Reduce WIP in

7 the links

Integrate Production Control – Pull material to final assembly.

6 Integrate Kanban pull. Minimize information

Level and Balance the Manufacturing system –

5 smoothing material flow.

Integrate Preventive Maintenance – Make Machines

4 and people reliable and dependable

Integrate Quality Control in to the System – Inspect to prevent defects.

3 Pokeyoka. Empower the internal customers. Every worker is an inspector.

Setup Reduction – Changing methods and changing designs of

2 tooling and dies to reduce setup time. Do SMED every where.

Design or Reconfigure the Manufacturing System – Design cells and

1 manufacturing system with internal and external customers in mind

Figure 13 Ten Steps to Lean Production or to Integrated Manufacturing Production

Systems

Agile flexibility enquires for greater adaptability on production systems that enable

manufacturers respond proficiently for changes. The flexibility of agile system is supposed

to be robust to withstand the wave of the market.

Such adaptability requires not only machine cell flexibility but also business practice

flexibility. The agile machines, cells, and enterprises are characterized by

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Reconfigurability, Reusability and Scalability. All should thrive to benefit or safely survive

under either condition, responding reactively and proactively. Consequently, regardless of

their cost, in Agile system, Flexible Machining Centers are justified to rapidly answer the

multifaceted product demand. It advocates also on use of movable machines that facilitate

reconfiguring the layout for mixed production requirements. In addition agile production

strengthens flexibility by forming the loose coupling with enterprises.

Immense research is on progress to enhance existing soft automated machines to cop up

with the vision of agility. Experiments on agile cells become a research concern. For

example, Causey G. C. in ‘Elements of Agility in Manufacturing’ thoroughly discussed and

analyzed Flexible part feeders, Modularity of work cells, Gripper design and other

elements. As indicated in the literature part, the agile system enabling technologies are

highly advanced, that is why it is called “Soft Manufacturing”. Robot, CIM, PLC, and

others are part of the requirements of the system. More over, the workforce should be

knowledgeable that will react proficiently and initiate innovation.

In conclusion agile manufacturing means that production process must be capable to

respond quickly to market change. There fore, the ability to rapidly reconfigure the

production processes and systems is essential. In lean manufacturing, ability to reduce

changeover time is a key, since long changeover time is a manufacturing waste. However,

smooth production schedule may not justify change-over repeatedly. Thus, while it is

highly desirable, and to be considered gradually (continuous improvement) to have rapid

drastic reconfiguration it is not as essential as with agile manufacturing. (29)

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 4.1.3. Factory Operation Vs Enterprise Wide Scope

The emphasis in lean seems to be more on technical and operational issues. Lean focus

concentrates right down to the shop floor where much of the manufacturing potential

opportunities and value adding tasks exist. This strategy is derived from the fact that lean,

at the top of its priority, put emphasis on removing the manufacturing wastes, which are

more or less located at operational and technical activities. The other principles - say

flexible production lines, first-time-quality, and continuous improvement, are all directly or

indirectly aligned to factory operations. The seven manufacturing wastes; over production,

excess motion, unnecessary processing steps, transportation, inventory, waiting and

production of defected parts are all issues of the factory.

Perfect first-time-quality is directed at elimination of defects, the Just-in-time philosophy is

intended to produce no more than the minimum number of parts needed at the next work

station – to reduce unnecessary inventories. Flexible production lines are again aimed at

minimizing transportation, excess motion and waiting time synchronized with Kanban

signal system. The continuous improvement approach seeks to pin point areas of

improvement on company wide activities. All of these principles and other supportive

techniques are core and periphery activities of the factory. Even the external suppliers of

the lean factory are linked to the main factory and committed to deliver required amount of

components and subassemblies just-in time. Hence, they are remote cells for the host

factory. The demand in lean production is derived by market and the factory responds to

satisfy the amount required with high level of agility at the right time.

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Agility gives emphasizes more on organization and people issues. It’s rather broader in

scope, applicable to the enterprise level and even beyond, to the formation of virtual

enterprises. Agility argues that existing circumstances of industries are difficult to tackle

only with factory floor operations and traditional business procedures. In order to meet this

uncontrollable challenge proficiently, companies focus should be on coordinating their

respective available resource.

To react proactively, agile enterprises leverage knowledgeable workforce that is

entrepreneurial in sprit and learner from the facts. Open communication, training and

information technology enable the workforce, and the participative customer as well to a

successful cooperation. Agile system acknowledges that individual firms of the current time

may lack capability to meet agility objectives; unless they formed virtual enterprises that

alleviate the limitation of single integrated organizations or small companies. Enterprises,

regardless of their geographical location, are desired to be integrated loosely on mutually

beneficial manufacturing tasks.

These two attributes of lean and agile - factory operation focus and enterprise wide scope -

resembles in a different perspective. Focus of lean, though the factory considers all

production functions, is at the factory level using predefined methods and techniques,

supported by continuous improvement approach, while agile system focuses on the firm’s

boundary. The interest of agile on organizational and people issue tends to give less

emphasis on factory floor procedural actions. Lean focuses on enhancement of physical

tasks that are probably controllable, then solve existing immediate problems and react on

realistic foundation. On the contrary, agility gives much attention to initiate change actions

that are not in control, anticipating circumstances of disruption. The enabler of agile system

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to apply knowledge management is to develop knowledge base system or intelligent

manufacturing system. So, in these principles, lean and agile can be analogous to

manufacturing resource planning and material requirements planning, that one

complements the other in a better way.

4.1.4. Supplier Management Vs Virtual Enterprise

Lean manufacturing system supply management requires their component and sub-

assembled components suppliers to develop lean mentality and practice. The main plant

provides managerial and technical support to make them lean, and suppliers on their hand,

contracted to supply quality products whenever the main plant just request. The contract is

on relatively long-term basis that compensates the small batch production.

Suppliers of lean companies are not limited just on delivering required amount of parts.

They play a role in product development activities and process improvement in

collaboration with the assembly plant. This practice provides effective utilization of

professional excellences in design and process from those tiers that are at real exposure to

practical manufacturing situations. This approach cut down the life cycle of new product

development. The suppliers of raw parts and receivers are tied closely with similar

production philosophy mutual benefits and commitment. The suppliers are virtually remote

linked-cells that tap parts as needed.

Outsourcing and contract manufacturing are, given much attention, in agile production

system. The companies are not intimately united with each other in technical cooperation.

They are partners or value exchanging groups just look for a benefit that an opportunity

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brings. This can involve forming of partnership with competitive firms. Enhancing

cooperation for competitiveness is the motto of agility. This objective helps bring required

products to market as rapidly as possible by using independent resources. The partnership,

may dissociate after the market opportunity is passed over.

While firms that practice lean focus on close tie of supply chain for timely delivery of raw

parts, agile systems attempt this in a different way – it is a temporary partnership that may

or may not be lasted for subsequent market opportunity. Agile system has doubt in the

success of using limited number of suppliers that are seemingly permanent. This kind of

supply chain as in a lean is fragile because problems encountered in one spot of the chain

will disrupt the entire line.

On the other hand, Lean supply chain mutual cooperation creates an atmosphere of solving

and handling problems together quickly. Furthermore, the lean supply system enjoys

receiving of quality goods from trust-worthy sources participated in the product design. But

agile supply system of virtuosity requires open communication, which provide new

windows for markets and distribution channels, technology that are transfer and access to

resources and technologies not available in-house. The same is also true in lean production,

where main plant coordinates supplier of different tier to exchange information about

manufacturing processes, and improve the weak one and enhance or replace inefficient

production equipment.

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 4.1.5. Efficient Use of Resources Vs Emphasis on Continuous
Change

Agile system is derived from ever changing business environments. Thus, the core principle

is to thrive in the unpredictable market. All the strategies of agile concentrate on change

proficiency. The feature of enterprises or part of it, are characterized by change attributes;

reconfigurable, scalable and reusable design Principles. The mass customizations and

valuing knowledge have also conceived an ultimate goal of being change agent.

Lean stresses on effective proficient use of existing resources to realize waste minimization

objective. Human resources, (often cross-trained), carries out multiple tasks such as

machine operation, quality inspection, maintenance and so on. Production systems

organized in a cellular fashion assist the utilization of lean workforces, machines, and

materials, in efficient way.

Machines need to be busy all the time the factory enjoys soaring demand. Breakdown and

malfunction are taken care of, by operators, preventive maintenance crews. Material is

pulled from the source as needed and flow one-piece-at a time to prevent accumulation of

WIP inventory that hide problems. The whole steps are streamlined to minimize

unnecessary transports; excess motions and waiting times there by optimize utilizing of

equipment and other assets.

The stress of agile is on thriving in environment marked by continuous unpredictable

change. According to Agile system, the resources of a particular firm may not be capable

enough to respond effectively. The requirement is much more than utilization existing

resources efficiently. Unlike lean, that uses resources up to last capability, agile system may

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justify making inefficient resources obsolete and make contract with more efficient

outsiders. Lean is known for its utilization of simple automation with cross-trained workers

to produce low cost goods. But in agility cost it self is, some times, a relative matter, it

pursues that speed to market and being change agent be introducing new models to market

has a prime importance. This is why the agile system relies on highly advanced flexible

manufacturing system, like flexible automation, robotics and computerization. Lean

objective towards changing market is dependent flexible production system, continuous

improvement and short product development time.

4.1.6. Smooth Production Vs Responsiveness to Change

If there is much difference between the two production paradigms, it is the area of change

and change management. Lean tries to minimize change. It attempts to smooth or level out

the ups and downs in production schedule in order to reduce the changeover on factory

operations so that smaller batch sizes and lower inventories are feasible. Flexible

productions that lean employs minimize disruptions caused by design changes. Production

must flow as smoothly as possible which means reducing change from the fixed schedule.

According to lean, changes that happen in downstream operations tend to be magnified by

half in up stream operations due to extended working time, unplanned setups and procedure

variation. Therefore, by maintaining constant schedule over a time, smooth workflow is

achieved, and disruption in production fluctuation is minimized.

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By contrast, the philosophy of agility is to embrace change in every aspect. The emphasis is

on thriving in an environment marked by continuous and unpredictable change. It attempts

to be responsive to change, even to be a change agent if that leads to competitive

advantage. An agile company tries even to disturb a stable market opportunity if it

perceives a window of better benefit in changing the ongoing business practice.

Groover M. 2000 argues that although there may be a difference in viewpoint and perhaps

strategy with regard to change, there is no difference in method or approach. The capacity

of an agile company to adopt to change or to be change agent depends on its ability to have

a flexible production system, to minimize the time and cost of change over, to reduce on

hand inventories of finished products, and to avoid other forms of waste. These capabilities

belong to a lean production system. For a company to be agile, it must also be lean.

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 Chapter 5: Case Studies
APPLICATION OF LEAN MANUFACTURING SYSTEMS IN
ETHIOPIAN INDUSTRY

5.1. The company’s Background

Akaki Spare Parts and Hand Tools Share Company (ASPSC) is probably the biggest job-

order manufacturing company in Ethiopia. It is located at the periphery of the capital Addis

Ababa (Akaki) adjacent to asphalt and railroad from the port. It is established in 1989, with

main objectives of:

• Supplying local factories with spare parts,

• Saving foreign exchange and minimizing order lead-time,

• Enhancing the development of metal sector in the country.

The company has fixed capital of $83,381,000, and about 600 workers, 300 employees less

than its full capacity. Its electric power requirement is about 12MVA. The firm is

established on a total area of 155,000m2 of which 30,500m2 in use. ASPSC produces

various types of products. Its main manufacturing processes consist of: casting, forging,

material removal, Sheet metal fabrication, repairing and surface treatment, assembling, and

others. As the organizational structure depicted in Fig 14 shows, the direct production areas

of the company are divided in to four main divisions. They are:

1. Foundry Workshop (FWS)

2. Mechanical Workshop (MWS)

3. Hand Tools, Cutlery and Forging (HCF)

4. Heat and Surface Treatment (HST)

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All the four production divisions are supported by Design, Production Planning and Control

and Maintenance section.

Board of
Directors

General
Manager
Internal Auditing
Legal Service
Service

Planning and Information Quality Assurance

technology Service
Service

Manufacturing
Marketing and Administration
Department Finance
supplies and Human
PPC Resources Department
department Development
DPPC
D&M
Market Research
Personnel General
and Product account
Foundry Methods Sec Development s
Pattern shop Labor Cost and
Sales Relations Budget
Molding Unit

FWS Ferrous Melting Unit

Purchasing General
Non-Ferrous Shop Service

Finishing Shop
Materials
MWS Store
Units I, II, III, IV and V

Hand Tools

HCF
Cutlery

Heat Treatment Forging

HST
Surface Treatment
Mechanical Maintenance

Maintenance
Electrical Maintenance

Figure 14 Organizational Structure of ASPSC (Mezgeu Aweke 2004)

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1. Foundry workshop (FWS): - In this workshop finished or semi finished metal parts

produced by casting. The workshop has four units:

i. Foundry design and Methods section - prepares pattern and mold design for the

part design. The pattern design is converted into required pattern sets in pattern

making shop, and the mould design is sent either to mechanized or manual molding

area where by mold cavity is constructed.

ii. The molding unit consists of two sub-units: mechanized molding area makes light

molds automatically, while the manual molding area is dedicated for heavy molds

mostly by human effort.

iii. Ferrous metal melting unit consists of three induction furnaces for melting ferrous

metals and three resistance furnaces for non-ferrous alloys.

iv. Finishing shop comprises areas for separating molds from castings and then

cleaning automatically or manually.

2. Mechanical Workshop (MWS): - in this workshop parts are machined using Variety

of Heavy and Light Machine tools arranged in Job shop layout fashion. Sheet metal

products are also fabricated using different Sheet metal machines, welding operation

and others.

3. Hand Tools, Cutlery and Forging (HCF): there are three units under HCF:

i. Hand Tools Manufacturing unit: manufactures industrial hand tools.

ii. Cutlery Manufacturing unit: manufactures household and restaurant items.

iii. Forging unit: performs forging operations to give initial shapes to parts.

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4. Heat and Surface Treatment Shop: consists of two units: Heat treatment unit that

performs hardening, tempering and carborizing operations; and Surface treatment unit

that performs Chrome, Nickel, Phosphate plating and Galvanizing.

5. Design, Planning and Control (DPPC) division consists of two sections: Design and

Method (D&M) and Production Planning and Control (PPC) sections. The D&M

section is responsible for preparing specifications, and manufacturing methods. The

PPC mainly smooth out the progress of the production processes, by Planning, and

controlling the progress of production activities.

6. Maintenance section: - this section is responsible to solve mechanical and electrical

failures that occur during production operations, and to carry out scheduled preventive

maintenances.

5.1.1. Problem Identification

ASPSC is an ideal job shop production system with all characteristics of flexibility and

inefficiency in utilizing machines and lack of meeting exact delivery date. It is a complex

and highly integrated factory comprising wide manufacturing processes. The company’s

problems among others are:

1. About 60% of orders are delayed from the promised delivery date; (Appendix B)

2. The company’s resources are underutilization while customers remain unsatisfied;

3. Manufacturing wastes that arise from waiting, inventory, unnecessary motion and

others are hindering the overall performance of the plant.

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Small to medium lots based on customer order and company’s initiated commercial items

are produced with the help of general purpose production equipment ranging from A0 up to

A4 automation level mostly grouped in a functional layout fashion. In such shops parts

spend much of the time waiting, or being transported and spend only few time on machines

being positioned, loaded, measured or left idle, involving much less time for actual value

adding tasks. High handling and transportation costs arise due to frequent movement of

parts between departments and diversified flow of works complicate the planning and

control tasks.

To over come such and other limitation of the factory considering various alternative

solutions that may alleviate the problem becomes a mandatory.

5.1.2. Choice of Pilot Areas

To insight the application of lean production system, two pilot areas are selected:

1. The FWS, MWS and Order Processing Functions. In these areas it is intended to

identify non-value adding activities, (manufacturing wastes) by mapping the existing

value stream and then, proposing alternative Future Value Stream to indicate potential

improvement areas.

2. Cutlery Manufacturing Unit. In the cutlery unit, the objective is to redesign

(reconfigure) the existing functional layout into lean cellular manufacturing layout,

thereby enhance the performance of the shop.

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The data collection on the manufacturing process flow, order and information flow, product

characteristics are obtained from different sources that include: manufacturing process

sheet and flow chart, interview, personal observation, existing shop layout, documents and

operation manuals.

5.2. Case -1 Value Stream Mapping (VSM)

Value is determined by the customer and his desire to pay. Value added functions such as

manufacturing processes; design, marketing, and service contribute to the performance that

the customer desires. Some functions of the production system such as transport, storage,

setup, planning, accounting and quality assurance, are among non-value adding functions

but an obligatory. (12)

Minimizing actions that create no value has dramatic effect on end result. Value

identification then mapping is an appropriate place to start the lean journey and understand

the sources of waste in a factory’s operation. There are many lean techniques that assist

minimize waste. But to apply the tools, identifying existing value stream by walking-

through all process steps is necessary.

Value stream mapping help visualize the flow of materials and information from the time

products come in as raw material through all manufacturing process steps, and off the

loading dock as finished products. This guides towards the future desired state, facilitate

analysis and evaluation of the states, documentation of improvement areas, and assessment

of the impact of proposed improvements. (3, 10)

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ASPSC manufactures products such as Trash plates, Sugar Mill Rollers, Gears, Scrapper

plates, Sprockets, Rollers, Draw bars. Some of the products are spare parts of machineries

that belong to selected customers. Among these spare parts ‘Trash Plate’, which exists in

four different models is selected. The product is chosen for analysis because:

• It is produced repeatedly every year,

• The production cost is high averaging Birr 9,800.00/unit,

• The product is spare part of Sugar Factories machinery, the preferred customers of

the company, and

• The part passes through many operations that allow assessing various

manufacturing processes in different workshops.

To manufacture one part of ‘Trash Plate’ a number of orders processing and manufacturing

operations are carried out. Along the longest route, the part requires more than 30 order

processing steps including revisions, and more than 25 main production operations that

actually add value to the finished part.

Analyzing the critical processes leads to map the value stream. For convenience,

complicated processes are simplified and grouped. Hence, the material and information

flows in the factory for this representative family of product, is mapped as shown in Fig 15.

Whenever information is obtained, preparation and operation time are included in the

process box, Appendix D.

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Job order is received from external customer through fax, via general manager office, letter

through archive, sketch or purchase request or sample part directly to the sales Engineer.

The order takes considerable time in between the divisions. That will definitely delay the

response and delivery date.

Figure 15 CURRENT STATE VALUE STREAM MAP

Supplier Purchasing PPC Customer

Sales

Shipping
Marketing & supply
PT =
I OT =

FWS D&M MWS

Pattern m.
PT = 60min
I
OT=4200min FD&M
Inspection
Inspection PT = 0
OT = 30
PT = 0
OT =30
Machining
PT = 150
Mold make OT =1800
PT = 30
OT =270
Melt. pour Solidify Finishing Inspection

PT =120 PT = 0 PT = 10 PT = 0
OT =930 OT =7200 D=180 OT =630 OT =20 D=180
PT = 15
D=1440-2880 OP =10

The sales Engineer reviews the order and changes it to a preliminary design for cost

estimation purpose. The estimation is made after checking the availability of raw material

and other inputs on stock.

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Manufacturing cost estimation sheet made by sales is transferred to production planning

and control (PPC) section for further revision. The PPC evaluates the cost against the

material, labor and other overhead requirements. Then approves the cost or sent it back to

the Sales Engineer requesting amendments. After the approval, the order tracks back to

sales so that price is quoted that will be approved by Marketing and Supplies head.

After all these processes, which take from 3 days (minimum order processing time with

latest proposal) up to 20 days, the customer is notified about the price and often uncertain

delivery date. If there is agreement on the proposed price, the client will put a purchase

order after which the order is dispatched to PPC.

PPC sends the design order to D&M Section. The designers analyze the part requirement

and prepare a specification, bill of raw material, operation method; and submit the detail to

the PPC. However, the operation method or route sheet does not follow standard form of

process sequences nor give detailed, accurate setup and machining time. It only indicates

machine categories and production units. The trust is simply on the operator that is assumed

knowledgeable enough on the route and machine selection. There is no value engineering

or value analysis practice to reduce manufacturing cost or improve the existing

manufacturing practices.

In case of problems of manufacturability and cost estimation, D&M Section, in its part,

sends the order to PPC for further evaluation. Orders that pass the design stage are

dispatched to the workshops. The sample product, ‘Trash plate’ order is dispatched to FWS

and order waiting notice is sent to the subsequent MWS.

96
The main problems that can be visualized from the process flow, current state value

stream map include:

1. Long order Processing time with many reversible actions;

2. Too long pattern making time (12 days);

3. Inflexible large capacity furnaces (minimum 3500 KG charge capacity);

4. Absence of scheduling operation that can be processed simultaneously;

5. Waiting time between operations;

6. Long setup time on machine tools and lack of parallel process.

As the current VSM, Fig 15, clearly shows, there are many manufacturing wastes and

problems that can be avoided. Hence, analyzing the existing practices, and thinking the

minimization of these wastes leads to the future value stream. The future value stream map

developed in Fig 16, shows the possible methods and practices that enhance the overall

performance of the factory and locate areas of further investigation. The future VSM

indicates the situations in which the over all value stream should be. Based on the

proposed VSM, the following activates are needed.

Strong Concurrent Engineering (CE) team is established from sales, marketing,

accounting, PPC, design and workshops that perform all order processes in a time

concurrently. CE refers to an approach in which the functions from all divisions and units

are integrated to reduce the elapsed time required to bring new product from concept

through production to market. (44)

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 Figure 16 FUTURE STATE VALUE STREAM MAP
Have selected suppliers Customer
Manufacturing Team
Practices:
Supplier Purchasing • Get Customer Order
• Analyze Requirement
• Check feasibility • Establish CE Team
• Estimate cost • Eliminate Review
• Get Customer Approval • Have updated data every time
PPC • Provide program • Ensure Employee Satisfaction
• Scheduling • Apply Simultaneous Eng’g
• Planning Shipping
• Controlling
Practices:
FD&M • Notify Customer
I D&M • Process Payment
Mold Making
• Schedule Transport
PT = 30
MWS • Get Cust. conformance
OT = 270 Introduce VE / VA

Pattern making
Integrate Insp. I
PT = 10
Machining
OT = ? Finishing
Casting Solidification Integrate insp.
Integrate insp. PT = 0
Melting PT = 10 PT = 0 PT = 0 OT = 1800
Reduce LT OT = 20 OT = 7200 OT = 630
Improve Proc. PT = 0 Dmin = 0
OT = 375
• Get compatible furnace • Reduce Set Up
• Synch mold, cast & charge prep Dmin = 0 • Make Virtual Cell

98
The team analyzes the order requirements, and Estimate production cost immediately after

receiving the order. Then, price quotation is approved by customer. In doing this, the

customer shouldn’t wait for long period of time. Depending on the order complexity, the

customer is informed about the price within hour(s). After the approval, order is dispatched

to different divisions. To be ready for any unpredictable customer order, updated

information on material and shop floor status, and other information should be in the hands

of the team every time.

This narrows the gap these functional divisions and sections; and give opportunities for

manufacturing supervisors to offer advice on how the design might be more

manufacturable. The involvement will also motivate and enhance sense of responsibility

that will definitely result a remarkable effect in the operational effectiveness. Besides, CE

shortens the overall product development process; because steps along the way are handled

in parallel instead of sequentially.

In the current practice, the stock level is reported on a monthly basis, while many orders are

entertained during a month period. The forces the sales engineer to check material

availability every time the new order is initiated. It is more convenient to report the material

and shop floor status on a daily basis.

Suppliers Relationship Improvement: Most of the approaches of lean production are

straight forward and others are not easy to adapt, due to different classic business practices

in different societies. The same thing holds true in Ethiopia. Lifetime time employment

and Lean supply chain are not prevalent in ASPSC, perhaps a major barrier to achieve lean

99
significant benefit in terms of continuous improvement, reduced lead time, and inventory

reduction.

Among the main problems of the company as well as others in the country is access of raw

materials within short period of time. Most of the inputs of metal industries are ordered

from abroad spending from weeks to months time. The job shop company such as ASPSC,

which receives orders randomly, faces uncertainty of demand quantity, and variety to get

ready by increasing the stock level on hand. Even if the demand is predictable, purchasing

of inputs from foreign market either necessitates an “economic order quantity” (EOQ) or

incurs high price.

In ASPSC, the raw material is purchased based on bid announcement and ‘Proforma’

collection from local and international suppliers. The bid takes up to three months while the

local purchasing (proforma) take 3-15 days.

If due consideration is given to the supplier selection and relation, significant lead time can

be reduced by local suppliers. There may be suppliers (importers) who have link with

multinational reliable companies. Selecting some of these importers and negotiating as to

the schedule requirements, may provide better opportunity to access inputs ‘Just-in-time’.

Pattern Making: In the production of the trash plate, pattern making processes take more

than 50% of the manufacturing time, which account for about 12 days. Though the process

is complex, the production time it takes is very high. This time may be reduced to some

extent, if many operators are involved cooperatively on a particular pattern element. So,

decomposing the pattern into manageable set of items there by distributing and then

assembling to the final pattern set may reduce the lead time. It is necessary to improve this

100
preliminary foundry operation phase by applying every conceivable means. Subcontracting

the pattern making or portion of it, to external shops help the company concentrates its

efforts on core competitive operations – the actual Casting Process. Moe over, the

inspection processes need to be integrated to production process and responsibility is given

to pattern makers to eliminate waiting for inspector. The pattern making is a preceding

process for molding and mould assembly operation. However, the melting process can be

accomplished paralllelly if proper schedule is given as to the finishing time of the given

pattern.

The melting process is perhaps the most rigid operation and source of delay in the FWS.

The existing functional furnaces are designed for high volume production while the firm

mainly operates on order-based that mostly come randomly in low quantity.

The existing furnaces are operational for melt charge of 3300KG, below which ignition of

the furnace is impossible. If received order(s) is/are below the minimum capacity of the

furnace, waiting for new orders with compatible product mix is a must. This situation

results in an idle time of days or weeks. On the other hand, orders may come as low as

40KG charge, with particular material composition.

In addition, the melting time is a function of charge volume; requiring 0.35min/KG and

0.75min/KG on big and small furnaces respectively. For the ‘trash plate’ of 500KG, the

exiting furnace requires an order of seven pieces, which may not be the quantity needed by

the customer. And this amount of charge will take 0.35min/KG x 3300 KG = 1155min or

19.25 hrs, which is approximately equivalent to three working days. In contrast, on a

compatible small furnace that may handle the exact customer orders, a single piece order

101
can be manufactured with zero waiting, and less melting time. For example, a single piece

of the part needs; 0.75 min/KG x 500KG = 375min or 6.25hours which is about 33 % of

the time needed on the big furnace. Hence, the current melting furnace is the bottleneck

point for all ferrous metal foundry processes.

To achieve greater flexibility, and then satisfy customers with reduced delivery time, the

company needs to introduce a compatible and robust furnace, for order volume variation.

Repairing the available gas furnace will help a lot, but will not solve the whole problem,

since this furnace has a capacity of 250KG leaving orders in the range of 250-3300KG

charge unresolved. Thus, it is strongly recommended either to introduce new furnaces or

modify the existing one for volume flexibility.

Waiting line occurs in front of shot-blast or cleaning, before grinding, and before transfer to

the MWS. Proper scheduling of machines and workers, developing a culture of time

consciousness may minimize these manufacturing wastes.

In the MWS, the trash plate passes through machining processes of milling, grooving,

drilling and manual threading after which the part is transferred to finished goods store. In

this MWS two important improvement areas can be visualized. The first is reducing setup

time the can be achieved by having the necessary tools, material handling and work holding

devices ready before hand. The single minute exchange die method (SMED) discussed in

the literature survey, is a useful approach in this regard. Machining more than one surface

at a time using appropriate tools and operating more than one machine by an operator in a

virtual cell fashion will significantly reduce operation time.

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 5.3. Case -2 Cell Formation

The purpose of this second case study is to demonstrate how reconfiguring process layout

to lean cellular layout improves performance of cutlery production in the company. The

conversion to a lean cellular manufacturing (CM) system could help improve quality,

minimize waste, and reduce total production costs.

Cutlery is a commercial product of the company to be sold both in both local and foreign

markets. On domestic market level, it is mainly supplied to the Ethiopian Air Lines on

demand and marketed through the Piazza Shop and factory gate distribution channels to

various hotels, restaurants and households.

Cellular manufacturing is applicable in a wide variety of manufacturing situations. Survey

conducted on industries show that manufacturing industries such as machining, machine

tools, agricultural and construction equipment, medical equipment, weapons systems, diesel

engines, and piece parts, has implemented CM. Hundreds of companies including such

giants as Toyota and Dell Computer as well as small manufacturing entities have

successfully implemented this technique and have realized dramatic improvements. In a

study, published by the National Association of Manufactures, 1042 American Factories

were surveyed and 56% of them were in the process of adopting a Cellular Manufacturing

Approach.

CM is appropriately applied under the following circumstances:

o The plant currently uses traditional batch production and a process type layout.

o The parts produced can be grouped into part families.

103
Cells take different forms based on the product characteristics of parts (P) and quantities

(Q) produced and the nature of the process sequence or routing (R) employed, see Fig 17.

Very high quantities lend themselves to dedicated mass production technique such as high-

speed automation or transfer machines. At the other extreme very low quantities and

intermittent production are best produced in a general-purpose job shop. In between these

quantities are the many items, parts, or products that may be grouped or combined in some

way to justify the formation of manufacturing cells. Within the middle range, a production

line cell may be dedicated to one or few high volume items. This type of cell will have

many of the attributes of a traditional transfer line.

Mass Production
Very high ’Q’

Production Line Cell

High ’Q’ for one item,
part, or product
Group Technology Cell
Quantity

Medium to low ’Q’ without

specialized processes (R) Functional Cell
Medium to low ’Q’ with
specialized processes (R)

Job Shop
Very low ’Q’
Products (Materials, Items, Varieties)

Figure 17 Effect of Q, P and R on manufacturing cells

Medium and lower production quantities are typically manufactured in group technology

cells. These are the most common types of cells. They exhibit progressive flow, but the

variety of parts and the associated variety routings work differently.

104
If operations are specialized in some way, requiring special machinery and utilities or

special enclosures of some kind, then a functional cell may be appropriate. Functional cells

are often used for painting, plating, heat-treating, specialized cleaning, and similar batch or

environmentally sensitive operation. (4, 44)

5.3.1. Identifying Part Families

Part family is a collection of parts that are similar either because of geometric shape, size or

because of similar processing steps in their production or both. The similarities must be

close enough to merit their inclusion as members of the part families.

There are three ways of grouping similar parts: (1) Design attributes which are concerned

with part characteristic such as geometry, size, and material; (2) Manufacturing attributes,

which considers the Production flow or the sequences of processing steps required to make

a part; and (3) the combination of the two.

Production flow Analysis (PFA) is a method for identifying part families and associated

machine groupings using on production route sheets rather than part drawings. Work parts

with identical or similar routing are classified into families, and used to form logical

machine cells in a layout.

In this case study, PFA method is selected. Since PFA uses manufacturing data instead of

design data, it can over come two possible anomalies. First, parts whose basic geometries

are quite different may nevertheless require similar or even identical process routings.

Second, parts whose geometries are quite similar may nevertheless require process routings

that are quite different. (44)

105
Product information: The existing cutlery products range up to 25 line items and many

other order-based items. The part families and varieties are presented in Table 6. Total

production volume is estimated approximately 600,000 pieces annually. The batch size

ranges from 5,000 to 10,000 units. Detailed parts name is included in the Appendix C. (9)

Table 6 Parts and present families

No Parts No, of models Remark
1 Knives 8 Many others models can be added
2 Spoons 10 There exit other order-based items
3 Forks 7 There exit other order-based items

In the current system machines are grouped together by operation - process layout rather

than by product flow as shown in Fig 18. Parts, during production, flow from section to

another for subsequent processes.

Coining Station Profile Polishing Station Buffing Station

Hardening Station
Cup/Prong Rol. Blanking Station
To Store
Washing St.
Making Station
Final Polishing Station
Injec.Molding Milling
Station Station
Mini Store

Shearing
Station

Spoons and Forks Route

Knives Route

Figure 18 Existing block lay out and product route for cutlery

106
 5.3.2. Analysis of processes

The part names and operation sequence are obtained from the manufacturing sheet of the

factory. Each operation is associated with particular machine, estimated preparation (setup)

and operation time. With reference to the operation sheet, the routine and cycle times

(converted to seconds), with respective machines are sorted and presented in Table 7 for

Forks & Spoons and Table 8 for Knives.

Table 7 Operations, Cycle time and Corresponding Machines (Spoons and Forks)
No Description of Machines Cycle time Setup time
operation (sec) (sec)
1 Shearing Shearing Machine 4.26 -
2 Blanking Mechanical Press 12 2700
3 Cup / prong rolling Cup rolling Machine 15 -
4 Cup / prong blanking Mechanical Press 12 3600
5 Marking Mechanical Press 8 600
6 Complete coining Hydr. Coining Press 11 3600
7 Profile polishing Polishing Machine 90 -
8 Buffing Buffer 24 2700
9 Washing Manual 11
10 Packaging Manual 30

To visualize the routings of the family analysis of processes is done, and presented in

operation process chart, see Fig 19.

107
 Table 8 Operations, Cycle time and Corresponding Machines (Knives)
No Description of operation Machine Cycle time Setup time
(sec) (sec)
1 Shearing Shearing Machine 3-8
2 Blanking Mechanical Press 12-18 3000
3 Marking Mechanical Press 10-15 600
4 Hardening and tempering Harding furnace 8-18 3600
5 Sharpening Sharpening Machine 28-35 -
6 Profile polishing Polishing Machine 33-52 -
7 Injection Molding Injection Molding Machine 13-56 3600
8 Buffing Buffer 24-43 -
9 Washing Manual 10-30 -
10 Packaging Manual 11

5.3.3. Design of Cell

Calculating Takt time: Takt time (Takt meaning rhythm or beat) is the fastest cycle time

that a cell, as unit of capacity is able to achieve. In a balanced cellular system, the demand

of customer sets the pace of the cell. The Takt time is calculated by inverse of the

forecasted demand over the available time for production.

Available time
TaktTime =
Average Demand

However, the planned capacity of the system also has to meet customer demand while over

coming inevitable variations with in the system such as machine down time. Therefore

extra capacity that uplift the minimum Takt time is considered. In this cell system Overall

Equipment Efficiency factor (OEE) of 85% is considered for both planned and unplanned

down times. To give enough capacity, the peak demand is taken.

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Hence,

AvailableWorking Time / shift

TaktTime = * OEE
CustomerDemand / shift

Seq. No. Operation Parts

Knives Forks Spoons
1 Shearing
1 1
2 Blanking
2 2
3 Cup / prong rolling
3 3
4 Cup/prong blanking
4
4
5 Marking 3
5 5
6 Coining
6 6
7 Hardening and Tempering
4
8 Sharpening

9 Profile polishing
6 8 1

10 Injection molding
7 8 1

11 Buffing
8 1

12 Washing
9 1 1

13 Packng 1 1 2

Figure 19 Operations Process chart for Knives, Forks and Spoons

The annual demand for cutlery is about 600,000 pieces. Working hours per day is 8 hrs

with 30 min break time. When the annual demand is distributed over the year working days

it gives the daily demand. According to the information obtained from marketing

department 360,000pcs are for domestic sale and the rest 240,000pcs for foreign markets.

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Categorizing of products under consideration in to Table, Desert, Coffee/Tea, and Kitchen

Cutlery, give reveal the following demand quantity for each category, (9).

Table 9 Cutlery Products Category and Annual Quantity

S.N Cutlery Categories Annual Quantity (Pcs)
1. Table Cutlery 360,000
2. Dessert Cutlery 90,000
3. Coffee/Tea Cutlery 90,000
4. Kitchen Cutlery 60,000
Total 600,000

Further, regrouping of these products in to their families indicate that, they lie in to three

families namely Spoons, Forks and Knives with annual demand of 200,000 units each.

Thus, the market requires 200,000 units during 250 working days a year and manufacturing

is planned to run on 8- hr shift.

Therefore the daily demand is:

200,0000Units
Demand / shift ForEach Family = = 800Units / day
250day

Effective work hours per day (W) may vary from factory to factory due to differing policies

for shift length, lunches, breaks, and other allowances that take away from available

working hours. The scenario for ASPSC is an 8-hour shift with two 15-minute breaks

W = 8 * 60 min − 2 (15 min break ) ⇒ W = 480 min − 30 min

W = 450 min (7.5 EffectiveWwork hours per day )

The resulting Takt time would be:

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 Available WorkingTime / shift
Takt Time = * OEE
CustomerDemand / shift

450 min
Takt Time = *OEE
200,000

TaktTime = 33.75 * 85% sec onds

Takt Time = 29 sec onds

This would mean that to satisfy the demand, a completed product would need to come off

the end of the production line every 29 seconds in for one shift.

If the system is to operate at Takt time, the work content at each station should be in such a

way that designed operation time is less than takt time, (11, 12). The total processing time

of each station including loading and unloading parts and walking should be less than 29

seconds.

MCTi ”77min Where MCTi= cycle time of the machine i

TTmin = Takt time

Since the products are small discrete items, manual loading and unloading, with carts for

material handling is chosen. Besides, workers can operate more than one station with a little

wasted motion possible.

Considering all these points leads to a cell layout design for the spoons, forks and knives as

presented in Fig 20 and Fig 21. AU-shape configuration is selected to accommodate

operator work loops. Grouping of operations resulted in 10 stations for Spoons & Forks,

and Knives each.

111
 Station 4 Legend
Station 3 W= Worker
Station 2
Station 1 n = Worker code
Station 5
(n) = time/piece (sec)
Station 6 W5(8) Arrow = Worker Movment
W4(12) W4(15) W3 (12) W12 (5)
Raw material enters the cell

W678(90) W9 (24) W3 (11) W12 (30)

W5(10) Finished part leaves the cell

Station 7 Station 8 Station 9

Station 10

Figure 20 Cell Layouts for Spoons & Forks

Station 1
Station 3
Station 4 Station 2

Raw material enters the cell

Station 5 W4(15) W4(13) W3 (15) W12(8)
W5(28)

W67(43) W78(35)W910(43) Finished part leaves the cell

W3(11)
W12
Station 6 (30)
Station 8 Station 9
Station 7 Station 10

Figure 21 Cell Layouts for Knives

112
Description of the Stations

Station #1 consists of sheet metal shearing machine for preparing strips of required width

from standard stainless steel sheet. Since the machine is bulky, the operation requires two

workers. The second station, station 2 uses mechanical presses, to give the initial shape of

the item (blanking) and prepare for the next operation. Station 3 is dedicated for rolling the

cup/prong portion of spoons and forks respectively, by forcing blanked part to pass between

the rollers. The rolled portion then is trimmed in station 4 (cup / prong blanking).

Station 5 marks patterns, letters, brands and or other special features on shanks of spoons,

forks, and blades of knives using predefined dies. This gives a customized feature to order-

based items, and attractive patterns and information for commercial parts. Coining (station

6) is an operation of making detailed designs and geometries (contour) on surface of the

part using hydraulic coining presses, with die attachment.

Station 7, a polishing machine is the most laborious and time consuming bottleneck area.

The operation is to give a clean and free surface from rusts and burrs. The polishing

operation is carried out manually, by holding the part against the rotating abrasive belt.

Considerable amount of time that account for nearly 50% of the total cycle time is needed.

To level the production at the required takt time, two machines and three workers (W678)

are assigned.

Station 8 is a polishing process that results in a shiny surface area by rubbing the part

against a rotating fiber. Washing is carried out before packing so that the cutlery products

get clean from any dirt, dust and hand prints. Station 9 cleans and wipes the part and then

passes the part to Packing Station 10. The packing wraps in a plastic film and packs the

utensil in a cartoon case, which carries information about the product.

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Many of the machines for Knives are similar to the spoons and forks, with the exception of

routing and some other stations. Stations that are special for Knives include: plastic

molding machine, sharpening machine, hardening and tempering furnace.

The hardening and tempering furnace station 4 is dedicated for enhancement of mechanical

properties of the knives, especially to give hardness. The knife sharpening machine Station

5 performs grinding operation on cutting edge of the knives to give a beveled sharp edge.

Station 7 moulds a plastic handle to knives. The operation consists of plasticizing raw

material PVC, melting the material and then injecting it to the mold where handles of the

cutlery is placed.

The operations and machines for forks and Spoons are similar, except for die change. If

change over time is significantly reduced, one cell can handle both families, provided that

additional shift is needed. Or else duplicating the cell allows meeting the demand.

Configuration of Operator Work Loops for Takt Time

The workforce is used most effectively if the operators are able to run more than one

stations at the same time. This separation of operators from machines is possible because

workers operate multiple machines. Parallel or U-shaped configuration with minimized

machine width, helps to reduce the operator walk time. Cellular productions are generally

operated on the following schemes:

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 • One-person scheme – assigning one cell to one person,

• Rotation scheme – one cell is shared by several operators who move from station

to station at approximately the same pace;

• Allocation scheme – the various process steps within the cell are divided up and

work is accomplished through synchronized efforts. (4)

Accordingly Allocation Scheme is selected for these particular cells.

The ideal number of workers in a cell is given by the following equation, (33):

n
OCT
NOR = ∑
i =1 TT

Where NOR is the number of operators in a cell; OCT is the operator cycle time, (station cycle

time plus walking time to the next station); TT is the cell takt time.

10
OCT
NOR = ∑
i =1 TT

For the fork and spoon,

10
5 * 2 + 12 + 15 + 12 + 8 + 11 + 90 + 24 + 10 + 30 * 2 252
NOR = ∑ = = 8.69 = 9 wor ker s
i =1 29 29

And for the Knife station,

10
8 * 2 + 15 + 13 + 13 + 28 + 43 + 35 + 43 + 11 + 30 * 2 277
NOR = ∑ = = 9.55 = 10 wor ker s
i =1 29 29

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At minimum takt time 9 operators are needed in the cell for spoon, fork each; and 10 operators

for knife. In a station requiring a cycle time of nearly equal to takt time, one operator is

assigned. If the cycle time of the station is greater than takt time more than one worker are

allocated. If the cycle time is far less than takt time, two close stations are handled by one

operator. The number of operators is not a fixed value, as the takt time varies with customer

demand, it changes as well. For example, for the demand case that requires more than 30

seconds of takt time, less number of operators is necessary to operate the cell.

In the layout, Fig 20 and 21, the workers are allocated on a one-piece-at-a time scheme. In

dead, the result matches the theoretical concept of ‘make-one-pass-one’. However, in these

particular cases, the cycle time of most stations is so small that require repeated human touch.

Thus, it is more convenient to produce the items in small batches, so that workers operate a

particular station for the required batch and alternate to the other station to produce similar

batch. This will result in a leveled production and allow the worker to be more efficient.

Kanban Control system can readily be introduced.

5.4. Improvements Sought

One of the important principles of lean manufacturing approach is its focus on continuous

improvement. There is no limit for improvement, it should be thought every time endlessly.

In this regard, the potential opportunities of ASPSC for incremental improvement exist in

the skilled and well acquainted workers of the factory.

Technological improvement and innovation may demand expert and capital investment.

These kinds of expertise and investment, though it is important, may be difficult to obtain.

Moreover, technological innovations are replaced quickly, tending to make the today’s

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technology obsolete tomorrow. Thus, it is imperative to look for improvement on process

innovation.

Lean cellular production system opens the door for process improvements, both before and

after implementing the cell. At this stage, improvements can be considered on: Product

development and Die design.

Product development: ASPSC has the technological capacity that makes it competitive.

This is especially true with regard to the Hand tools and cutlery production. It is the only

company that manufacture order-based and company’s initiated commercial items in the

country.

This competitive advantage of ASPSC should be given due consideration so that it cop up

with domestic and foreign market requirement. The D & M section is expected to enhance

the product development by cooperating with marketing and sales division.

This task requires collecting the brands that emanate from different parts of the world and

learn about the product’s quality feature, material, process and aesthetic appearance, there

by develop market oriented attractive items. The selection of raw material design also

matters the final part quality, manufacturability and cost. The Thickness of raw sheet

shouldn’t be more than the functional requirement of the part.

Die Design: Perhaps one prerequisite for the flexibility of the cell to process products is die

design and changeover time reduction. The products require with special upper and lower

dies attached to mechanical and hydraulic presses for every style. The changeover process

in ASPSC takes from 10 min-to 60 min on some machine. While the changeover process is

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an important task, the time is non-adding that should be minimized. Beside, it hinders the

frequent changeovers among product variety, which leads to the rigidity of the system.

Hence the change over time should vigorously be attacked by using Shigeo Shingo’s setup

time reduction rules discussed in chapter-2.

The physical die design also plays a great role in reducing process steps. In some cases, a

die design can incorporate two or more process steps, like shearing and blanking at a time.

If this approach works by some modification on the blanking machine so that it

accommodates a standard sheet metal width, the shearing machine can be eliminated from

the system. Or else, the imported raw material can be bought in the required width.

Moreover, accurate die sets that produce more than one piece at a time would double, or

triple the production rate. This will also help reduce scrap rate; because the allowance left

for one piece operation and two or more piece operation simultaneously, significantly differ

in material utilization.

5.5. The Advantages of the Proposed Cellular System

1) Process Improvement: One of the advantage of moving machines into cells and flow

lines is that it opens the door to process improvement. A team, or perhaps an operator,

can run more than processes and take ownership of a product. In the proposed cell

system, several methods can be deployed to ensure predictable quality of output. First,

inspection can be made after a station performing critical operations. This helps reduce the

time it takes to find the source and correct problems that eventually contribute to better

quality. Operators who move work in a cell are in an ideal position to see where simple

improvements can be made. With operators generating ideas, factory engineers might

equip conventional machines with automatic load and unload or with switches.

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2) Space Saving: The proposed cell requires narrower aisles than the existing one. As the

area is dedicated only for worker and small carts for WIP movement, the need for fork

lift passage, large work transfer from station to station through these cells is avoided.

More over, the gap between subsequent machines can be made closer as much as the

technical and operational activities are not hindered.

3) Reduced Motion in Distance Movement: Instead of moving from one functional

station to another, crossing long distant and encircling ways for subsequent processes,

the movement of the operator and work in process is restricted in the cell’s defined path

way. Backtrack is completely eliminated. In deed, the distance moved in these cells is

approximately 12.5% of the existing workshop.

4) Time Reliability: Predictable time output is a basic requirement for a Just-In-Time

production and distribution. Time output is affected by all relevant processes involved in

the production of a part. In a lean manufacturing system, all relevant processes are

designed to meet takt time and operate in a periodic way. This periodicity gives room

to absorb the variation of each cycle time. In other words, as long as machine

operations are done within takt time, reliable time output is achieved. In addition, all

operations have standardized steps to follow, so that reliable time outputs from workers

are ensured. (33)

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Chapter 6 : APPROPRIATENESS OF LEAN AND AGILE
MANUFACTURING SYSTEMS IN ETHIOPIAN

6.1. Industries Survey

In order to argue on the appropriateness of the lean and agile manufacturing system in

Ethiopia, it is imperative to assess the industries situation and drive conclusions on the

market forces that increasingly challenge the manufacturing sector. This assessment is done

through structured questionnaire systematic interview, and discussion with companies’

representatives. Whenever possible, tour to production areas has been done to observe, the

physical states of manufacturing systems.

6.1.1. Types of Industries Covered

The kinds of industries taken in to consideration operate in various types of manufacturing

sectors. Among these industries the governmental industries account for about 64 % while

the private ones complement 36 %. From each category, some representative industries are

taken randomly, that are located in Addis Ababa and the surrounding. A total of 25 sample

industries are surveyed that may symbolize other industries in the country. The types of

manufacturing industries surveyed are shown in Table 10.

The questionnaire is organized in such a way that companies’ managers or their delegate

may respond to the feedback form. In the questionnaire, lean and agile production systems

were introduced with brief notes and further explanation was made as the need arises, see

Appendix F.

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The points emphasized in the questionnaire are intended to assess the attitudes of

manufacturing industries towards the appropriateness of lean and Agile manufacturing

systems to the Ethiopian industries and to check whether the existing market forces, drive

companies towards more responsiveness. Towards this end, respondents reflected their

attitude as to the appropriateness of the two systems (Lean & Agile) and the prevailing

images of their respective companies.

From 25 questionnaires distributed 22 are returned that account for 88% of the total. See

Appendix E for list of industries surveyed.

Table 10 Types of Manufacturing Industries Surveyed

NO Types of Manufacturing industries Governmental Private Total
1 Metal industries 7 2 9
2 Plastic industries and Glass 2 2 4
3 Food and Beverage industries 1 1 2
4 Shoe factories 1 1 2
5 Paper and printing industries 1 1 2
6 Textile and Garment industries 3 3
7 Electronics Assembly plant 1 1
8 Chemical industries 1 1 2
Total 16 9 25

The reasons for the in proportionate of governmental and private industries stems from two

reasons:

i) The private industries, even though increasing in number tends to be reserved for

visitors. Besides, the private industries are mostly on small enterprise level that may

narrow the scope of the survey,

121
ii) The abundant features of industries can be seen predominantly in the governmental

companies. They are probably the best source for the purpose of the investigation

this is because the government owned companies, have more capacity and long term

experience compared to private companies. They are also with a host of problems.

6.1.2. Results of the Survey

The significance of this analysis is to communicate the findings to concerned parties,

readers, contribute to the topic and make the research more result will be reliable. This

manifests that what ever said in this thesis can be supported using structured empirical data

from local sources and its interpretation.

The method of analysis of the data is simple statistical percentiles and distribution. For easy

visualization of results graphical representation of the data is given. The interpretation and

lastly conclusion is made about the findings.

The core points of the questionnaire are:

1. Awareness to Lean and Agile Production Systems

2. Challenges of companies in existing business environment

3. Main problems of companies

4. Changes in customer behavior

5. Competitive strength of companies

6. Level of companies with regard to responsiveness

7. Appropriateness of Lean and Agile in Ethiopian context

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 1) Awareness to Lean and Agile Production System

As to the awareness of the respondents to Lean and Agile systems, around 90% of the

respondents were new for the term lean and agile production System. During the

discussion, it is found that some of respondents think that they are aware of the lean

production principles. But the awareness is in its narrow sense, for example, the

manufacturing wastes, were understood purely as rejects and improper utilization of raw

materials. Even recycling of defective parts is taken as normal practice.

2) Challenges of Companies in existing business environment

For the question raised to mark the challenges of industries in the current business

environment, they sight different challenges to their respective companies. The response is

summarized in Table 11.

Table 11 Challenges of Companies in Existing Business Environment

Challenges Ranks
1st 2nd 3rd 4th 5th
Product Variety 4 4 4 8
Organizational Capacity 3 6 5 5 3
Local and Global Competition 8 7 3 3 1
Lack Production System Flexibility 3 4 6 4 2
Market Fluctuation 4 2 5 6 3

When industries are requested to rank the challenges that the company faces in the current

business environment 8 respondents that account 36.36%, put global and local competition

as a first challenge; 18.18% of them ranked the demand of market for increased product

variety and unpredictable market fluctuation each on the first challenge; 13.64% refer to

limited organizational capacity and lack of flexibility as the first challenge.

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The challenge that is ranked second by 31.82% of respondents correspond to local or global

competition; and lack of organizational capacity match to 27.27% of respondents. Lack of

production system flexibility and increased demand for product variety accounted for 18.18

% each.

Challenges of Companies in Existing Business Enviroment

100%
90%
Stacked Value of Challenges

80% Market Fluctuation

70% Lack Production

System Flexibility
60% Local or Global
Competition
50% Limited Organizational
Capacity
40% Product Variety

30%
20%
10%
0%

1 2 3 4 5
Ranks of Challenges

The third challenge is lack of production system flexibility which is reported by 27.27 % of

companies; and 22.27% of them face market fluctuation and limited organizational capacity

each; and only 13.64% for local or global competition.

On the fourth and fifth challenge, 36.36% and 22.27 % of companies reported increased

demand for product variety and limited organizational capacity respectively.

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It can be concluded from these findings that competition from local and global firms

become the leading challenge for Ethiopian industries. The demand for product variety is

also another challenge that industries are experiencing. This reflects that the drive for better

and responsive production system exists.

3) Main Problems Faced by the Companies

The industries were requested to mark main problems they face for selected issues and any

other matter that may be considered as main problems. The report is summarized below.

Table 12 Main problems faced by industries

Problems Number of reports Percentage
Rigidity of production System 7 31.81
Worker Inflexibility 3 13.63
Employee morale and culture 8 36.36
Inefficient use of Resources 9 40.90
Unpredictable Demand 12 54.54

It is reported that many of the companies, 54.54%, faces problems of unpredictability in

demand, where as the inefficient use of resources has been indicated by 40.09% of the

companies. The employee morale and culture and rigidity of production system are pointed

out as company’s main problem by 36.36% and 31.82% of manufacturing industries

respectively. Among the problems, which are indicated by the 13.63% of the industries is

worker flexibility.

The other problem mentioned by the companies are, insufficient capital (two respondents),

worker turnover (one respondent), old machinery and failure (three respondents), and

foreign suppliers by one respondent.

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 Main Problems of Companies
14

12

10

0
Rigidity of production Worker Inflexibility Employee morale and Inefficient use of Unpredictable Demand
System culture Resources

Problems

The analysis about the main problems of companies is proven to be unpredictability of

demand. This result is in line with the current research findings on the topic. Moreover, the

second problem, in efficient utilization of existing resources dictates for embracing lean

principles. The reason for the problem of employee morale and culture arises from poor

practice, inconvenient work environment, or low wage.

4) Changes in Customer Behavior

To assess the changing behavior of customers in recent years and its urge to the company’s

responsiveness, four behaviors that may possibly be reflected on industries are given. The

responses on these points and the corresponding behaviors are presented here under.

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 Table 13 Changes of Customer Behavior in Recent Years
Changes observed No, of respondents Percentage
Quality Consciousness 17 77.27
Need for Reduced Price 15 68.18
Request for Shorter Delivery time 13 59.09
Need for Product Variety 12 54.55

Observed Customer Behaviour changes

Need for Product Variety

Request for Shorter Delivery

time

Need for Reduced Price

Quality Consciausness

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00
Percentage

From the information, it is found that most of the companies observed a change in customer

behavior in recent years. Among these changes in behaviors, quality consciousness is

reported by 77.27% of companies; need for reduced price due to the choices that the current

market affords, was reported by 68.18%; and request for shorter delivery time is also

experienced by 59.09 % of organizations surveyed. Customers need for variety and

customized product is indicated by 54.55.09%;

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Becoming more conscious about product quality, request for shorter delivery time, and

reduced price, that is observed on customer, can be attributed to the on time availability of

various products / services, which develop confidence to the customer on choosing

whatever quality, style, he/she intends to buy on reasonable price. The implication reflects

the global competitors’ hand on the local industries.

5) Strength of Companies in Competitiveness

For the open question asked about the main strength of companies with respect to

competitiveness, 8 companies are found that their competitive strength is workers; 8 are

consider their product quality as strength, organizational capacity and responsiveness is

indicated by 4 factories.

The responsiveness of the companies to selected competitive factors is depicted here. From

the graph, the level of responsiveness with respect to the factors given, the companies rate

good level for 38.96%, Satisfactory for 33.77%; Very Good for 12.99%; Fair for 11.04%;

and only 2.6% of the companies rated for poor.

6) Level of responsiveness of companies to selected competitive factors

The raw data and the average of the responses to the level of competitive factors is given in

Table 14

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 Table 14 Level of Responsiveness to Competitive Factors

Competitive Factors
Inventory Utilization
Delivery Reductio Flexibility of Productivit Minimizi
Score Rates Quality Time n / Agility Resources y ng Waste Average %age
1 Poor 0 0 2 0 0 0 2 0.57 2.60
2 Fair 1 2 3 3 3 2 3 2.43 11.04
Satisfactor
3 y 6 9 9 7 7 6 8 7.43 33.77
4 Good 12 8 7 9 10 5 9 8.57 38.96
5 Very Good 3 3 1 3 2 8 0 2.86 12.99

Level of Responsivness to Competitvne Factors

Very Good, 12.99% Poor, 2.60% Fair, 11.04%

Satisfactory , 33.77%
Good, 38.96%

The average result of this analysis for the level of responsiveness to selected competitive

factors is on good level. This result may be a misleading. The bias here arises from

benchmarking local industries, which are weak in structure and competitive attributes. In

some industries boost for some given factors is observed, by claiming that they are unique

in the country. But this will not be the true competitive strength as much as global firms are

at every door step.

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Conclusions
From the industry survey it can be concluded that local industries are facing the global

competition. This challenge and other findings on main problems of the companies,

changing in customer behavior are evident that the drive for agility or more responsiveness

is observed. This implies that it becomes necessary to observe and adopt appropriate

production methodology.

6.2. The Appropriate Manufacturing System to Ethiopia

The overall situation of Ethiopian Industries as well as many other developing countries is

far behind, when compared with other many nations. In fact, one of the main problems the

country faces, of low living standard and proper utilization of artificial and natural

resources emanate from lack of imitating and adopting the appropriate technology and

method of production from the experience of successful nations.

Even though the free market economy policy of Ethiopia ascertains the base for the growth

of manufacturing and the implementation is going smooth, the sector is still at its infant

stage. Most of these industries are suffering from proper production system to response to

market needs, low level of technological supply, Lack of focus on product quality, cost

accounting, weak cooperation between firms and inefficiency to actively participate in

export market. (54)

Most of the local industries have been established on the objective of import substitution.

On the other hand, there is no such internally oriented market. Since the world is getting

much closer and linked with business, focusing only on domestic markets is not viable. The

130
market is open for neighbor countries, as well as for emerging continental and global trade.

Firms that do not earn profit will be forced to leave the way, (57). Manufacturers,

regardless of their industries or the condition of their business, are forced to make major

reductions in manufacturing costs using every conceivable means. The influence of

globalization and the increased speed of technology development has become a challenge

to industries. Competition among manufacturers has increased significantly and comes

from all areas - industrialized and newly industrialized world.

Activities for Ethiopian industrial development should begin from local and global market

perspectives in quality, price and on time delivery. Today, if products are not competitive

in the global market, they will be out of business in the local market. To be competitive, the

manufacturing strategy should be founded on aggressive propensity. The competition is

with giant external companies that possess highly advanced technology, capital and

management capability with strong market network, well-developed infrastructure, skilled

professional workers, and effective governmental services.

When it is mentioned that the development strategy for Ethiopia is agricultural, it is not

meant that industry remains as it is. It doesn’t mean also that it grows slowly. When

industries remain stagnant or the progress is below the need, the agriculture it self will be

affected. The agricultural strategy does mean that, parallel to agricultural development,

manufacturing industries should develop rapidly as much as circumstances permitted. (28)

In deed, many nations of developing world that currently established international

competency pass through systematic transfer of technology and developing efficient

manufacturing strategy parallel to the effort given to agricultural. Since the mid-1970 the

variety of manufacturing system types has grown considerably. Since that time, Flexible

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Manufacturing Systems, Agile Production Systems, and Lean Cellular Systems, have

become accepted types of manufacturing systems.

6.2.1. Appropriateness Factors

To see whether a particular production system is relevant and worth adapting, it is

important first to set criteria that takes the current situation into account and perceive where

to go next. The objective is to examine the adaptation of appropriate manufacturing system

for Ethiopia.

To be appropriate:

• A system should be consistent with general Definition of the manufacturing system.

The system should optimize the measurable parameters of quality, timeliness, quantity

and total cost.

• The system should have a proven past experience and promising future.

• Preferably it is required to be implemented with less capital - the Feasibility

• More importantly, the system needs to be positively welcome by local industries -

Attitude of Industries.

Manufacturing is the economic term for making goods and services to satisfy human wants.

The manufacturing processes are collected together to form a manufacturing system (MS).

The word system is used to define a relatively complex assembly (or arrangement) of

physical elements characterized by measurable parameters that defines the boundary /

constraint of the system and predict its behavior in response to excitation / disturbances.

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The lean and agile manufacturing systems attracted the attention of many industries and

researchers. Some of the reasons for this attention is the systems incorporate most of the

contemporary production approaches. The prevailing slogans of today’s manufacturing

industries like TQM, JIT, FMS, BPR, Supply chain, and many others are intimately

integrated into these systems. Hence, these the two systems are selected for alternative

solutions. Manufacturing Systems in general, and Agile Production System and Lean

Cellular System in particular, have become accepted types of manufacturing systems.

6.2.2. Consistency to the Manufacturing System Definition

As indicated in Fig 1 the view of manufacturing system includes inputs to be fed into the

system so that the system transforms it, in some way, to out put with increased value. The

systems measurable parameters define the constraints of the system and predict its behavior

to disturbances.

The parameters are in the shade of lean manufacturing system. Lean tools and techniques

such as TQ, SMED, VSM, Flexible Production Lines, Continuous Improvement and others,

are directly targeted on the enhancement of the parameters. So, it can be concluded that

lean is appropriate enough to be adopted and implemented by industries who aim to

optimize the throughput time, production rate and flexibility, percent defectives, percent on

time delivery, periodical production volume and total cost.

Lean manufacturing approach can build sustained competitive advantage by starting with

market requirements and focusing on a consistent doable set of manufacturing tasks. It is

manufacturing ‘without waste’ that may be in any form, material, time, idle equipment,

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inventory. The focus is not on a department, area or processes, but the optimization of the

entire value stream - the series of processes between receipt of customer order and delivery

of finished products.

Agile system, on the other hand, tends to concentrate on solving boundary problems that

arise from the disturbances more sufficiently and robustly. The consistency of agile system

to the definition of manufacturing system is reflected on their comprehensive frameworks

which cover all business functions and the demand for increased use of information

technology at every level of the enterprise.

6.2.3. Past experience of the two system

Is the adaptation of these two systems proven to be useful? Perhaps essential criteria to

ague on the systems suitability are to assess nations who tried to implement. Lean

production system is probably the famous approach for its successes. Starting from its

originators, Japanese, and adaptors from developed and less developed nations have gained

the benefits of the implementation. A number of researchers, consultants and industrial

practitioners in the world today are advocating for embracing lean.

Japan competed in mature technologies which is easier to acquire than newer industries.

The industry competes with process technologies, such as Kanban, SMED, and SQC. Once

these processes were reliable and flexible, Japan began to introduce innovation into the

products. (32)

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From the success stories on industries surveyed, it is evident that most of the industries that

implemented lean production fully or partially have found the system helpful, regardless of

type, size and location of the companies.

The agile system is emerged during the 90s as counteract for lean competitive strength. It

has shown a splendid benefit and competitive guide lines for companies who possess the

advanced technology. Using agile system, many western industries are working to

overcome the competitive edges gained by the Eastern hemisphere. Thus, it seems less

suitable to adapt agile system during this time. When advanced manufacturing and

information technology becomes abundant, the system will be at the interest of industries.

6.2.4. Feasibility of the Systems

Womak etal (1990) pointed out that, currently or in immediate future, Lean production

systems should form a promising strategy for developing countries that are characterized by

poor performance in utilizing opportunities in a fiercely global market. Lean manufacturing

represents a major breakthrough in production handling through a more efficient utilization

of available resources. The focus on process improvements can incrementally added to the

system.

The case studies that are carried out in realistic industrial scene on application of lean

cellular system and identification of wastes, using value stream mapping have verified the

feasibility and easiness of the system. It is clear that the proposed alternative improvements

on ASPSC can be realized with little investment.

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More over, it is the experience of the writer during the industry survey, that a huge amount

of manufacturing wastes can be eliminated and significant performance improvement can

be achieved by developing just a lean thinking mentality.

Agile seems to be more interesting for adaptation in developed nations. Some of the

approaches of agile system are innovation and technology oriented, which is scarce for

developing countries. Then, it can be said that agile principles can be philosophically good,

as a business guide and strategy in today’s system as well as for manufacturing perspective

in future.

6.2.5. Attitude of Industries to the Production Systems

The attitude of industries towards Lean and Agile production System principles is assessed

using questionnaire. The findings from the survey dictate that most industries show interest

in lean production principles.

The data analysis for this criterion is discussed as follows:

For the question raised to select the appropriate production system with respect to current

Ethiopian context, the respondents gave their response as follows:

Table 15 Responses to the Appropriateness of Lean and Agile Systems in Ethiopian

Production systems No, of respondents Percentage
Lean 15 68.18
Agile 3 13.64
Both 4 18.18

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 Appropriatness of lean and Agile Manufacturing System
80

70
No, of respondents
Percentage
60

50

40

30

20

10

0
Lean Production
AgileSystems Both

From the analysis of the data, it is evident that majority of the respondents, 68.18 %,

indicated that Lean production approach is more appropriate in the current Ethiopian

context. Some, among respondents who are interested in Lean, also pointed out that there

are a lot of works to be done using Lean before going to Agile production system. They

consider lean production system as a foundation for Agile. 18.18 % of the respondent

chosen both Lean and Agile systems equally. The rest 13.64% of respondents show interest

on Agile production systems in the country. Totally , 86.36% of respondents are attracted

more towards lean production system approaches.

The attitudes of the industries personnel weighed more towards lean production

approaches. All most all industries confirmed that Lean production system is more

appropriate method of manufacturing. So, Lean is selected as promising and appropriate

production system in Ethiopia. Thus, let’s get lean.

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Chapter 7 : Conclusion and Recommendations

7.1. Conclusions

Inflexible mass-production methods that produce bulk of standardized products were

inadequate for current demands of increased variety. In pursuit of greater flexibility to the

production systems under resource constraints, and minimization of the manufacturing

wastes, Lean Production System has come into play. More recently, demand for increased

responsiveness to the ever-changing customer demand and fierce global competition has

led to formulation of Agile Manufacturing framework with the intention of greater

adaptability of production systems to satisfy the customers and reduce the delivery time.

The over all content of the literature survey, the case study and the industry survey have

led to the following conclusions:

1. It is found that Lean Manufacturing is a response to competitive pressures with

limited resources. It is a collection of technical and operational systems focused on

productivity in relatively stable demand environment.

2. LPS focuses on minimizing manufacturing wastes, continuously improving

methods, utilizing flexible production system and equipment organized to produce

wide variety of defect-free goods.

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3. Agile manufacturing, on the other hand, can be seen as a response to the challenge

of constant change. It is an overall system focused on thriving in unpredictable

business environment to overcome the global competition.

4. AM focuses on providing solutions to customers, reorganizing production system

for greater flexibility with the emphasis on Reconfigurable, Reusable, and Scalable

systems, and forming virtual enterprises to alleviate inadequacy of single firms.

The agile system relies on increased use of Information Technology (IT) in

production area and business functions.

5. The comparison between these systems shows that although there may be a

difference in viewpoint and perhaps strategy with regard to change, there is no

difference in method or approach. The capacity of one system depends on its ability

to possess characteristics of the other.

6. Cases on the implementation of Lean techniques indicate that industries can

enhance competitiveness by adapting Lean. The survey revealed that Industries are

experiencing forces that lead to more responsiveness. More over, it is found most

industries believe that the Lean Production is more appealing in current Ethiopian

Industries Situation.

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7.2. Recommendations

o The Lean production system and its principle should be observed whenever

performance improvement is intended.

o Industrial associations, managers and investment promotion bodies, need to focus

on the implementation of lean, and give due attention to the fundamental

approaches of Agile System.

o It is recommended that ASPSC pay due attention to the Value Stream developed,

designed cells and take action to gain the benefits from lean system. Moreover,

ASPSC need to further study other divisions and units using Lean thinking.

o The Ethiopian industries as a whole should be aware of such promising and

competitive production systems to catch-up the world-class manufacturing

practices.

o The established and newly establishing small and large manufacturing industries

should concentrate on making their operation in line to the accepted competitive

attributes that are Quality, Cost, and On-time Delivery.

o The industrial Engineers and other related professionals need to support industries

by providing consultancy services as to the efficient method of production systems

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 Appendix A: Applications of Agile Design Principles to Production System
Design Principles) Production equipment Production Process Production Enterprise
RRS

(Cluster machines) (Agile machining cell) (Enterprise job shop

Self-Contained Units Wafer-transfer module, various Machine, work-setting Design, engineering,
System composed of distinct, process module, docking stations, pallet changers, fabrication, subassembly,
separable, self-sufficient units not module, cassette module, and fixtures, rail guided vehicles and distribution resource
intimately integrated. utility base module. modules.

Plug Compatibility Common human, mechanical, Common human, Common information

Reusable

System units share common electrical, vacuum, and control mechanical, electrical, and procedure among captured
interaction and interface system interface coolant system interfaces. corporate resources,
standards, and are easily inserted Common inter-module common interface in
or removed. mechanical interfaces. outsourcing contracts.
Facilitated Re-Use Machine manufacturer extends Machines do not require Corporate outsourcing
Unit inventory management, / replicates module family for pits, or special foundations, department maintains pre-
Modification tools, and designated new capabilities. Fast module- and are relatively light and qualified pool of potential out
maintenance responsibilities swap maintenance is easy to move. sources.
facilitated.
Nonhierarchical Interaction Processing modules decide Complete autonomous part Business unit resources free
Nonhierarchical direct negotiation, how to meet part production machining, direct machine- to bid on internal jobs and
communication, and interaction objectives with closed loop repository down load external jobs.
among system units. controls. negotiation.
Deferred Commitment Machines custom-configured Machines and materials Individual business unit
Relationships are transient when with processing modules at scheduled n real time, assigned to opportunity
possible; fixed binding is customer installation time. down load part programs fulfillment at last possible
postponed until immediately serve individual work moment.
Reconfigurable

necessary. requirements.
Distributed Control and Intelligent process modules part programs down loaded Enterprise integration
Information keep personal usage histories to machines, machine information system queries
Units respond to objectives, and evolving process history kept in machine databases local to the
decisions made at point of characterization curves. controller, machines ask for business unit.
knowledge; data retained locally work when ready
but accessible globally.
Self-Organizing Relationships Real-time controls system Cell-control software Bid-based production-flow
Dynamic unit alliances and makes use of processing units dynamically changes work alliances.
scheduling; open binding; and available at any given time. routing for status changes
other self-adapting behaviors. Scheduling and rerouting as and new or removed
needed. machines on the fly.
Flexible Capacity Machines can be Cell can accommodate any Outsourced resources can
Unrestricted unit populations that interconnected into larger number of machines and be easily added or deleted to
permit large increases and constant-vacuum macro up to four work-setting increase the population of
decreases in total unit population. clusters. stations. production modules with no
size restrictions.
Unit Redundancy Machine utility bases are all Cells have multiples of Multiple duplicate production
Scalable

Duplicate unit types or capabilities identical; duplicate processing each module; all cells made resources and second
to provide capacity fluctuation chambers can be mounted on from same types of outsources.
options and fault tolerance. same base or different bases. modules, machines have
full work functionality.
Evolving Standards Base framework becoming Utility services and vehicle Enterprise integration
Evolving open system framework standard across vendors, and tracks can be extended information system is open
capable of accommodating legacy, has accommodated without restriction imposed architecture, client/server
common, or completely new units processing technology across by a cell or its modules. based.
generations.

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 Appendix B: Delayed Works in 1994 and 1995
No. of orders delayed (%)
Month 1994 1995
July 57.94 60.48
August 58.80 28.74
September 52.40 74.31
October 71.96 47.40
November 81.28 72.09
December 68.12 68.57
January 49.42 63.48
February 67.57 75.66
March 69.68 63.81
April 58.61 64.92
May 62.81 65.78
June 51.35 45.79
Average 62.26 58.56

Source: Mezgebu Aweke, 2004

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 Appendix C: Part Names and models of Cutlery
No. Model Description
1 100 Table Fork (W/o Flower)
2 100/L Table Fork (Luxury)
3 100/N Table Fork (Normal)
4 110 Desert Fork (W/o Flower)
5 110/L Desert Fork (Luxury)
6 110/N Desert Fork (Normal)
7 110/E Fork 1st Class
8 200/L Table Spoon (Luxury)
9 Desert Spoon 1st Class
10 210/L Desert Spoon (W/o Flower)
11 210/N Desert Spoon (Normal)
12 Tea Spoon 1st Class
13 220 Tea Spoon
14 220/N Tea Spoon
15 220/L Tea Spoon (Luxury)
16 230/L Big Spoon (Luxury)
17 230/N Big Spoon (Normal)
18 300 Table Knife (W/o Flower)
19 300/L Table Knife (Luxury)
20 300/N Table Knife (Normal)
21 310 Plastic Handle Knife
22 320/4 Cooking Knife
23 320/6 Cooking Knife
24 330 Meat Knife
25 340 Sledge Knife
26 Eth. Air Line Fork 1st Class
27 Eth. Air Line Dessert Spoon
28 Eth. Air Line Tea Spoon 1st Class
29 Eth. Air Line Table Knife 1st Class

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 Appendix D: Flowchart of Job Ordering Sequence

Start

Purchase Purchase Order

Requisition (Customer)
(Customer)

Order Dispatching
to PPC
Manufacturing Cost (Sales)
Estimation
(Sales)
Order Receiving
(PPC)

Problem?
Yes
New
No Order? Yes
Cost Sheet
Evaluation No Design work
(PPC) ( D&M )

Problem?
Yes
Problem?
No Yes
Delivery Date & Validity Date No
Setting
(PPC) Route Sheet Preparation,
Raw Material Issuance &
Dispatching to Shops
Price Quotation ( PPC )
( Sales )

Manufacturing
Price Approval (Workshops)
( Marketing & Supplies )

Problem
Yes ?

No
Is Customer Stop
Satisfied? Send To Store
No (Workshops)

Yes Deliver to Customer

(Finished Goods Store)

Stop

Source: Mezgebu Aweke, 2004

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Appendix E: List of Industries Surveyed
1. ADDIS ABABA BOTTLE AND GLASS S. Co.
2. ADDIS ABABA FOAM AND PLASTIC FACTORY
3. AKAKI GARMENT FACTORY
4. AKAKI SPARE PARTS AND HAND TOOLS S. Co.
5. AKAKI TEXTILE FACTORY S. Co.
6. ANBASSA SHOE FACTORY
7. AUTOMOTIVE MANUFACTURING COMPANY OF ETHIOPIA (AMCE)
8. BASIC METALS AND ENGINEERING INDUSTRIES AGENCY
9. BIRHANENNA SELAM PRINTING PRESS
10. EAST AFRICA BOTTELING S. Co.
11. EDGET YARN AND THREAD FACTORY
12. ETHIOPIAN CROWN CORK AND CAN MANUFACTURING INDUSTRIES S. Co.
13. ETHIOPIAN IRON AND STEEL FACTORY
14. ETHIOPIAN MANUFACTURING ASSOCIATIONS
15. FAFA FOOD S. Co.
16. IACONA ENGINEERING PLC
17. KADISCO CHEMICAL INDUSTRY PLC
18. KALITI METAL PRODUCTS FACTORY
19. KANGAROO SHOE FACTORY
20. KOLFE HOUSE HOLD UTENCILS
21. KOTEBE METAL TOOLS FACTORY
22. MA THERMO PLASTIC INDUSTRY PLC
23. MAMCO Pvt. Ltd. Co. PAPER PRODUCTS FACTORY
24. REPI SOAP FACTORY
25. ROTO PLC
26. UNITED NATION INDUSTRIAL DEVELOPMENT ORGANIZATION (UNIDO)
27. UNITTED TEBAREK AND FAMILY (VESTEL TV Assembly plant)

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Appendix F: Questionnaires to assess the challenges of industries in the current business
environment

Addis Ababa University

School of Graduate

This questionnaire is prepared to assess the market forces that require companies to be
more responsive to changing business environment. Your honest response is valuable to
draw valid conclusion.

1. After reading the following brief notes on LEAN and AGILE PRODUCTIONS, comment on
the appropriateness of the two production approaches in Ethiopian context.

LEAN PRODUCTION
Lean production is an adaptation of mass productions in which workers and work cells are made
more flexible and efficient by adopting methods that reduce production wastes in all forms. It
combines the advantage of craft and mass production, while avoiding the high cost of the former
and rigidity of the latter.
Unlike a limited goal for an acceptable number of defects, high level of inventories, and
narrow range of standardized products, lean aims on perfection: continually declining costs, zero
inventories, and endless product variety. Lean Production is based on four principles:

i. Waste Minimization – avoiding the %age of non-value adding activities.

ii. Perfect First-time Quality – preventing defects at the source.
iii. Flexible Production Lines – using cellular work stations and multi-skilled workers.
iv. Continuous Improvement – ever-searching for performance enhancement.

AGILE MANUFACTURING
In recent decades, ever-more open markets, quick transport and use of Information Technology (IT)
led to a number of changes and trends such as: partnership formation, use of IT, short Product
lifetimes, fragmented market and markets arise and disappear faster.
In connection to these progresses, ‘Agile Manufacturing’ (AM) is emerged.
Manufacturing Agility is the ability to respond to, and create new windows of opportunities
rapidly and continuously in unstable market environment. It is a framework for how one can run a
company in an open dynamic world in which markets, technologies and economic factors are
constantly changing. Agile manufacturing is based on four principles:
5. Reorganizing the production system for agility – greater flexibility and responsiveness.
6. Enriching customers with total solution products – life long connection with customer.
7. Leveraging people and information – increased utilization of IT and knowledge worker.
8. Co-operating to enhance competitiveness – collaboration between firms to gain opportunities.

A. Have you ever heard of the two new production systems?

Yes _____ No._______
B. Which production system is more appropriate in the current Ethiopian context?

146
2. Give additional relevant comments on these systems (if any).

3. Rank the challenges that the company faces in the current market.

Increased demand for product/service Lack of production system flexibility

variety
Market fluctuation
Limited organizational capacity

Global or local competition or both

4. Mark changes that the company has experienced in the last 10-20 years.

Introducing new product / service Closing / opening / merging departments

Using IT at office or production floor Delegation of responsibility to lower

organizational ladder
Dropping previous products / services

Reducing production volume

5. What are the main problems of the company with regard to market responsiveness?

Rigidity of production /service Inefficient use of resources

system
Unpredictable demand
Inflexibility of workers
Others (if any)
Employee morale and culture

6. Which change in customer behavior did the company experience in recent years?

Product/ service quality consciousness

Need for reduced price

Need for more products/ services variety

Request for shorter delivery time

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7. Does the company subcontract or outsource a demand to other companies in order to gain
temporary market opportunity?
Yes _____ No._______
8. Is the exiting organizational structure effective enough to meet today’s organization
requirements?
Yes _____ No.______
9. What is/are the main strength of the company with respect to competitiveness?

10. For the following questionnaire, rate the factors according to the scores given.
Scores 1 2 3 4 5
Ratings Poor Fair Satisfactory Good Very good

Factors Scores
A How responsive is the exiting production system of the company with
regard to:
ƒ Better quality 1 2 3 4 5
ƒ Delivery time 1 2 3 4 5
ƒ Inventory reduction 1 2 3 4 5
ƒ Flexibility / Agility 1 2 3 4 5
ƒ Space and equipment utilization 1 2 3 4 5
ƒ Productivity 1 2 3 4 5
B To what extent IT (such as computers, networks and internet) favorably 1 2 3 4 5
affects the organizational performance?
C To what level the company minimizes non-value adding activities? 1 2 3 4 5
D To what level suppliers and customers are involved in relevant activities of 1 2 3 4 5
the company?

148
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