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Quality Council of India Salient Features of New Scheme of Lean Manufacturing for MSME Quality Council of India Relevance of Lean in MSME sector About QCI - Quality Council of India • Cabinet decision to establish Quality Council of India, in 1996 • formed in January 1997. • Non-profit autonomous society • Joint initiative of the Government of India, and the Indian Industry, namely ASSOCHAM, CII and FICCI. • PPP – 50% seed money by Govt; 50% by the industry bodies • Purpose: To establish & operate national accreditation structure and to promote Quality through nation wide quality campaign • Mission – Quality for the National Well Being Governance Council – 38 members Governing Body – 11 members out of the council Chairman - appointed by the Prime Minister on recommendation of the Government and Industry. Past Chairmen: Mr. Ratan N. Tata (1997-99) Mr. Venu Srinivasan (1999-01) Dr. R. A. Mashelkar (2001-07) Mr. Ajay Shankar (2007-10)s Mr. Arun Maira (2010 -13) Mr. Saurabh Chandra ( 2014) Current Chairman Mr. Amitabh Kant Secretary, DIPP, Ministry of Commerce and Industry * Currently an independent autonomous organization under 5 Department of Science & Technology Working With MSME Training of ITI Teachers – 1800 Teachers trained on QMS/ QT Tools Awareness Programs on QMS/ QT Tools -198 programs, 7000 individuals trained on QMS/ QT tools Cluster project : Implementation of QMS/ QT Tools in 10 identified clusters Training of Polytechnic Teachers on QMS/ QT tools Evaluation Study report on Lean Manufacturing Competitiveness National Workshop on Enabling MSME to be Competitive through Quality Tools ROLE of MSME Worldwide, micro, small and medium enterprises (MSMEs) have been accepted as the engine of economic growth and for promoting equitable development. MSMEs constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports. In India too, the MSMEs play a pivotal role in the overall industrial economy of the country. MSMEs in India account for more than 80% of the total number of industrial enterprises and produce over 8000 value-added products. It is estimated that in terms of value, the sector accounts for 45% of the manufacturing output and 40% of the total export of the country and employs over 6 crore people. Further, in recent years the MSME sector has consistently registered higher growth rate compared to the overall industrial sector. The major advantage of the sector is its employment potential at low capital cost (skill development). Status of MSME’s The Micro, Small and Medium Enterprises (MSMEs) are a vital part of the Indian economy contributing to over 45% of industrial production and around 40% of the total exports. There are more than 13 million MSMEs in India employing about 31 million people, easily the single largest contributor in terms employment generation in the manufacturing sector Manufacturing Sector has been recognized as the main The National Manufacturing Policy of Government of engine for growth of the India envisages share of manufacturing to reach target of economy 25% of the National GDP by 2022 The share of the manufacturing To achieve a sustained rate of growth, the sector in Indian National GDP manufacturing sector needs to build and maintain over the years has stagnated to competitiveness needed to face the challenges posed 14-15% only by globalization Under the LM Scheme, MSMEs will be assisted in reducing their manufacturing costs, through proper personnel management, better space utilization, scientific inventory management, improved process flows, reduced engineering time and so on with application of LM techniques Problems being faced by MSME Despite constituting more than 80 % of the total number of industrial enterprises and supporting industrial development, many MSMEs in India have problems such as •sub-optimal scale of operation •technological obsolescence •supply chain inefficiencies •increasing domestic and global competition •fund shortage •change in manufacturing strategies • turbulent and uncertain market scenario. Lean Manufacturing Lean manufacturing is aimed at The goal of Lean Manufacturing is to incorporate the elimination of waste in - less human effort, every area of production - less inventory, including - less time to develop products, and - customer relations, - less space - product design, - supplier networks and to become highly responsive to customer demand, while at the same time producing top - factory management quality products in the most efficient and economical manner. Lean Manufacturing goals 4 Goals of Lean •In order to stay competitive in today’s marketplace, a company must understand its customers' wants and needs and design processes to meet their expectations Improve Quality and requirements. • Waste is any activity that consumes time, resources, or space but does not add any value to the product Eliminate Waste or service. • Reducing the time it takes to finish an activity from start to finish is one of the most effective ways to Reduce Time eliminate waste and lower costs.. • To minimize cost, a company must produce only to customer demand. Overproduction increases a Reduce Total Cost company’s inventory costs due to storage needs. Lean The term “lean” is used because lean manufacturing uses “less”… • Labor in factory 1 • Manufacturing space 2 • Capital Investment 3 •Material 4 • Time between the customer order and the product 5 shipment Definition of Lean A systematic approach to identifying and eliminating waste (non-value-added activities)throughcontinuous improvement by flowing the product at the pull of the customer in pursuit of perfection.” Non-value added is an Value-added is an activity that activity that takes time, transforms or shapes raw resources or space, but does not add to the value material or information to meet of the product or service customer requirements. itself. Waste: Anything that adds Cost to the product without adding Value The Basics of Lean Manufacturing - Eliminating work processes that add no value to the product It means : - Simplify those processes that add value Typically >95% of Total Lead Time is Non-Value Added!! OrderProcessing, Transport, Storage, Waiting, RUN Rework, Machine Setup, Inspection, Machine TIME Breakdowns, etc... Total Lead Time 5 Principles of Lean Define Value from the • Specify value from the standpoint of the end customer by product Customer Perspective family. Identify the value • Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create stream value. Make the process • Make the value-creating steps occur in tight sequence so the flow product will flow smoothly toward the customer Pull from the • Make only what the customer has ordered customer • As value is specified, value streams are identified, wasted steps Head toward are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in Perfection which perfect value is created with no waste. 8 Wastes of Lean “OMIT What U DO” • Overproduction • Waiting O What • Motion M • Underutilized U People • Inventory I • Defects • Transportation Do • Over-processing T Lean Vs Traditional Lean . Simple and visual Traditional signals . Complex . Demand driven . Forecast driven . Inventory as needed . Excessive inventory . Reduce non-value . Speed up value-added added work . Small lot size . Batch production . Minimal lead time . Long lead time . Quality built . Inspected-in . Value stream . Functional departments managers Benefits of Lean Manufacturing Helps in – Real Results Cost reduction 0 50 100 Cycle time reduction Lead Time Reduction “Waste” minimization Productivity Increase Elimination of non- WIP value-added activities Reduction Quality Resulting in a more Improvement “lean,” competitive, Space Utilization agile, and market- responsive company 5S TPM ( Total Productive Maintenance) Lean Just in Time Tools (JIT) Kanban System Poka Yoke or Cellular Mistake Proofing Layout Value Stream Mapping The 5 S systemsisaworkplaceorganization which helps in getting the "junk" out of the work area and set of procedures to keep it that way. 5S stands for Sort, Set in order, Shine, Standardize & Sustain. Visual controls such as cartoons, charts, light signals, Lane marking on floor, Safety instructions, Warning signs, Poka-Yoke instructions etc. can be displayed all over the work place. All verbal instructions should be converted to SOPs to remove dependency on skilled personnel in achieving required product quality level, consistency, effectiveness and efficiency. JIT is a Japanese manufacturing philosophy to make the right product in right quantity at the right time. This almost results in zero inventory and shortest possible cycle time. In Kanban System, components are pulled by assembly or subsequent work centers and the containers are replenished with the right quantities by the previous work center, which reduces the inventory of unwanted components. Cellular Layout is improved manufacturing system, family wise component completion is aimed at within the smaller self contained cell, which is a part of a big factory, as compared to operation wise completion in traditional functional layout Value Stream Mapping covers all activities, both value added and non-value added, and helps in arriving at best layout of all resources required for making the product. Poka Yoke is again a Japanese technique used
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