Key Principles of Lean

Lean manufacturing systems are set up on the following basic principles.

• Defining Customer Value: Lean starts with understanding what customers truly value. Critically evaluate every process step to check their contribution to delivering this value.
• Value Stream Mapping: By analysing both material and information flows, companies can pinpoint contribution of each step to the value creation process.
• Continuous Flow: This in turn helps companies identify and eliminate waste across the entire value chain. This is done by improving processes to eliminate waste which happen due to interruptions, bottlenecks, or delays.
• Pull Production: Lean manufacturing aligns production closely with real customer demand to avoid overproduction and eliminate excess inventory from the system and ensures seamless operations without bottlenecks.
• Continuous Improvement: Lean manufacturing builds a culture of ongoing optimization which in turn empowers teams to regularly refine processes, boosts productivity and product quality.

Benefits of Lean Manufacturing to the MSME sector

Implementing Lean manufacturing systems carry a number of benefits to the MSME sector such as

• Increased Efficiency and Profitability: Streamlined processes help reduce costs and improve lead times. This in turn drive revenue growth by making companies more responsive to market changes.
• Improved Product Quality: Since continuous improvement is built into the system, enhanced feedback loops and improved process controls result in better product quality, meeting customer and regulatory expectations.
• Environmental Sustainability: Lean manufacturing emphasizes reduced waste, optimizes energy use, and improves emissions, helping companies meet stringent regulatory and environmental standards.
• Employee Engagement: Lean systems empower workers to stop production lines and immediately work to identify and solve problems on the spot, thereby creating a more engaged and proactive workforce.

Implementation Challenges

However, implementation also carry a number of challenges and pitfalls for the manufacturer such as

• Upfront Costs: Transitioning to Lean manufacturing often requires investment in process redesign, equipment, and upfront training costs. In addition, these initiatives take some time to fully entrench themselves and accrue benefits.
• Resistance to Change: Employees and entrenched stakeholders are always hesitant to adopt new methods, especially in established operations. Intense training and a few internal champions are required for these systems to take hold.
• Complexity: Manufacturing in intricate processes can make Lean system implementation challenging, requiring careful planning and coordination.

Tools to implement Lean systems

• Cellular Manufacturing & Right-Sized Equipment: Historically batch manufacturing has trended towards large batch sizes and doing large operations in a single stage. The thought process has been to spread fixed costs over larger volumes thereby reducing per unit costs. However, this has a significant impact on other costs such as waiting times, inventory levels through the systems, higher wastages etc which have significant impact on total costs but never figure in cost calculations. Moving from large batch production to smaller, flexible cells reduces waste and improves flow. This is done by sometimes splitting operations into smaller discrete steps but moving them through the production pipeline at a much faster rate.
• Just-in-Time Delivery & Point-of-Use Storage: This in turn allows a downstream stage to pull material as required from a previous step. Materials in turn stored at the point of use and are delivered as needed, minimizing inventory and handling risks. If this is done all the way from the point of sales to the raw materials received by the plant, you achieve true JIT.
• Kaizen and 5S: Problems encountered at any point in the pipeline are remedied immediately by the entire workplace team thereby fostering a culture of Continuous improvement thereby boosting productivity, safety and efficiency.

Conclusion

Lean systems offer MSME manufacturers a path to lower costs, greater efficiency, superior quality, and long term sustainability. While implementation can be challenging, the long-term gains in competitiveness and resilience make lean a compelling strategy for any company’s future

Case study in Chemical Coatings

• Chemical Coating company with annual revenue of more than ₹300 Crs. Looking to level up revenue to ₹1000 Crs.
• Wanted to achieve this higher revenue while reducing their system inventory from 90 days to 45 days, thereby reducing capital blocked up in inventory by ₹100 Crs. This was to be achieved by improving service levels from 13 days to 7.
• This was achieved by implementing lean strategies such as right-sized equipment, improved flow rate of production, right time delivery, and point-of-use storage.
• In addition, we achieved annual savings of about ₹50 Lakhs, reduced effluent generation, and diverted nearly 20 tons of plastic scrap annually.