Assessment of Implementation of Lean Manufacturing Practices in Indian

Plywood Industries – A Case Study

Kaushik Shrivastava1

Anupam Bose2

Sanjib Biswas3

Abstract

Over last two decades, organizations are facing stiff competitions at global marketplace to set

appropriate order winning outputs in terms of lead time, cost and customer delight. As a result of

that, organizations have no choice other than putting significant efforts to improve their

operational efficiencies. Philosophy of lean management enables the organizations to eliminate

wastes and consolidate their operations for reduction in cost, to provide innovative and quality

products for meeting ever changing customer expectations within an affordable lead time. The

purpose of this research is to primarily assess the status of implementation of Lean

Manufacturing (LM) practices and secondarily, to examine the processes being carried out in a

ply wood setting from the perspective of Lean Manufacturing concepts. Value Stream Mapping

(VSM) is applied to identify the wastes incurred by the system and thereby to formulate suitable

strategies to eliminate the wastes for improving operational efficiencies.

Keywords: Lean, Assessment of Leanness, Plywood Manufacturing, Value Stream Mapping

(VSM), Waste Elimination.

1. Introduction:

After Second World War, the entire world, specifically Japan witnessed an absolute crisis of

resources in terms of raw materials, funds and human skills. Any kind of wastage of resources

was considered as a loss to the economy of the country. This scarcity essentially initiated the

concept of waste reduction for the survival of the nation. This need later on gave birth to a new

dimension of competitiveness for manufacturing organizations which was formalized by Toyota

1 PGDM Student, 2nd year, Calcutta Business School. Email: kaushik.shrivastava123@gmail.com

2 PGDM Student, 2nd year, Calcutta Business School. Email: anupambose00@gmail.com

3 Assistant Professor, Calcutta Business School. Email: sanjibbiswas.edu@gmail.com

(Toyota Production System or TPS). TPS mainly focused on standardization of work, balanced

work flow, supplier development, customer involvement and continuous improvement (Ohno,

1988, Spear and Brown, 1999). Over a passage of time, one new concept was evolved from TPS,

known as Lean Manufacturing (LM). The central theme of this concept was to understand

customers’ needs and provide them value within a shortest possible lead time while avoiding any

kind of wastage of resources using waste elimination tools and techniques.

The concept of LM was first explained by Womack et al. (1990) in their masterpiece “The

Machine That Changed the World”, although; it was defined by Krafcik (1988). Conceptually,

LM enables the organizations to deliver a product in half the time with many fewer defects,

employing half the human effort and engineering hours, consuming half the manufacturing space

and half the fund required. In fact, it is an integrated principle driven, tool based system that

produces goods and services with least buffering cost (Hopp and Spearman, 2004). But in order

to reap the benefits out of LM concepts and practices as Toyota did, it has to be embedded in the

organizational culture wherein all employees are committed to continuously look for ways to

improve processes across the entire value chain (Garnett et al., 1998). LM is more than a

methodology rather it is a philosophy that always have a wider perspective (Bhasin and Burcher,

2006). The study of Russell and Taylor (1999) revealed that, the main purposes of using LM are

to increase productivity and product quality within an improved cycle time while reducing lead

time and eliminating wastes from all aspects of an organization’s operations to respond and

fulfill customers’ needs. Thus, crux of LM is to identify and eliminate all wastes classically in

terms of seven categories like Transportation, Inventory, Motion, Waiting, Over-production,

Over-processing, Defects.

In this study, the authors have tried to measure the leanness of a plywood processing unit and

figure out the wastes using one of the principal methods of LM known as Value Stream Mapping

(VSM). Further, an attempt has been made to indicate possible reasons of waste generation and

strategies to improve the leanness of the organization. In section 2, frameworks for measuring

leanness are discussed. Section 3 focuses on the objectives of the study while in section 4, case

study based research methodology using VSM is elaborated. Key findings and recommended

strategies are discussed in section 5 and 6 respectively. Finally, a conclusion and future scope of

this research is mentioned in section 7. This study may be useful to understand the applicability

of LM concepts and practices in processing industry in the sense to measure leanness and

identify wastes in the system and thereby to decide upon suitable strategies to make the system

lean for improving operational efficiency and competitiveness.

2. Leanness of an organization

Essentially, leanness of an organization is the extent to which the organization adopts and

implements LM concepts and practices in true sense. In fact, being lean means staying

competitive by identifying and eliminating wastes (Comm et al., 2000). Many researchers and

industry practitioners have tried to identify the parameters to measure leanness of an

organization. Shah and Ward (2003) made an attempt to develop the measure of leanness in

terms of four bundles related to total quality management, total productive maintenance and

human resource management. Li et al. (2005) focused on set up time, smaller lot size and pull

production as the indicators of leanness of an organization. In essence, leanness demands

integration of all activities pertaining to the system which include distinctive dimensions like

supplier development, customer involvement (Shah and ward, 2007). Researchers like

Sakakibara et al. (1993), Flynn et al. (1995), Sakakibara et al. (1997), Koufteros et al. (1998),

Koufteros and Vonderembse (1998), Dow et al. (1999), McKone and Weiss (1999), Cua et al.

(2001), Ahmad et al. (2003) have worked on different aspects of LM to identify the dimensions

to measure the leanness of an organizations. The dimensions include, just in time (JIT)

principles, total quality management (TQM), set-up time reduction, smaller lot size, pull

system/kanban, continuous flow, workforce management, supplier relationship, customer focus,

product design, preventive maintenance, statistical process control, employee involvement,

continuous improvement, cellular manufacturing, training and cross functional teams. In this

study, based on the secondary works and opinions of industry experts, the authors have applied

their own perceptions to build a framework to measure the leanness of the organization under

study which is mentioned and analyzed in sections 4 and 5 respectively.

3. Objective (s) of the study

The main objectives of this study are:

i. To study the processes being carried out in a plywood setting.

ii. To measure the leanness of the organization under study.

iii. To identify the wastes being incurred by the processes using VSM approach.

iv. To recommend strategies to eliminate the wastes by analyzing the value stream map.

4. Research Methodology:

In the present study, the authors have adopted a case study approach, wherein they focused on

assessing leanness of a plywood processing organization and suggested suitable measures to

implement LM concepts and practices for eliminating wastes. For measuring leanness, the

authors have established a framework, whereas, for identifying and analyzing wastes being

incurred by the system, VSM methodology has been applied.

4.1. Organization and process background

The organization selected under study is a leading wood-panel company of India. It operates

mainly in two segments: plywood and laminates. Plywood brings in ~76% of its revenues,

laminates about 18%. Container Freight Stations (CFS) account for the remaining. The company

has six plywood manufacturing plants spread across the length and breadth of India and one in

abroad. Over the last 30 years the company has emerged as a dominant player in the decorative

plywood industry with more than 25% share of the organized market worth 4,500 crores. The

plant is presently being operated by around 300 employees directly involved in plywood

processing. In this study, the authors mainly focused on plywood manufacturing process which

essentially consists of four broad steps before finished good is made. The steps are: Green End

Processing, Veneer Dryer operations, Lay-up and Pressing, Finishing end processing.

4.2. Leanness measurement framework

Based on the secondary research frameworks and opinions of industry experts in the related

field, authors have put up a framework for measuring leanness of the organization under study.

The framework (as proposed by the authors) mainly considered the dimensions like leadership,

communication, customer involvement, JIT, supplier involvement, pull, flow, process, TPM, set-

up and employee involvement. In order to measure the leanness, each of these dimensions was

assigned several parameters. The authors then interviewed the people who are involved in

decision making, leading and executing LM activities in the plywood processing. Total no of

respondents was 40. The analysis is given in section 5.

4.3. Value Stream Mapping

In essence, LM philosophy is guided by five fundamental principles, such as,

i. Specify the value from the perspective of ultimate customers.

ii. Identification of the Value Stream which is a set of all the actions required to perform to

bring a product to the customers

iii. Flow of value through the value stream

iv. Pull

v. Perfection

Thus, the central theme of LM is to ensure the flow of value across the value stream to the

customers where the customers are pulling the product from the value stream. Therefore, in order

to ensure the flow and elimination of waste, it is very important to identify and analyse the value

stream applying VSM. VSM is one of the LM methodology used to define and analyse the value

stream of a product or product family focusing on reduction of wastes, improvement of lead time

and first pass yield. It is essentially a one page picture of the entire process capturing the

information on cycle time, uptime or utilization of resources, set-up time, inventory, manpower

requirement and the information flow from raw materials to finished goods (Murugananthan et

al. 2014). In fact, “taking a value stream perspective means working on the big picture, not just

individual processes; and improving the whole, not just optimizing the parts” (Rother and.

Shook, 1999, p.9). VSM methodology consists of five basic steps

i. Select a product family

ii. Draw the Current State Map

iii. Design the Future State

iv. Create implementation plan

v. Implement

In this study, the authors have worked on plywood manufacturing process whose current state

value stream map (CVSM) and subsequent analysis are given in section 5.

To create a CVSM, the team members walked through and observed the processes being carried

out in the shop floor, interviewed concerned operators and supervisors who are responsible for

the individual tasks. Broadly following data was collected regarding the process parameters like

Process time, first pass yield, wait time along with Information and physical flows.

Authors intended to understand the nature of flow, find idle time, percent utilization w.r.t. the

cycle time, identify the bottlenecks and constraints, possible improvements to ensure balanced

flow and utilization.

5. Findings and Analysis

Findings are given in terms of level of LM implementation which is reflected in the

measurement of leanness (section 5.1) and CVSM (section 5.2).

5.1. Leanness

Table 1. Measurement of Leanness based on the framework established by the authors

Item No.

Label Parameters Yes No

1 Led_1 Top management is committed in implementing changes for improvement

26 14

2 Comm_1 Communication flow is consistent and transparent 18 22

3 Custinv_1 Voice of customers is taken care of in designing the product and target setting

15 25

4 Custinv_2 Customers are allowed to give feedback on product performance and delivery

14 26

5 Custinv_3 Customers are allowed to visit the factory 20 20

6 Custinv_4 Regular customer satisfaction survey is carried out 17 23

7 Custinv_5 Production schedule is made as per customer requirement 18 22

8 Suppinv_1 Suppliers are involved in product designing and performance improvement

12 28

9 Suppinv_2 Supplier evaluation is done on the basis of total cost 19 21

10 Suppinv_3 Regular vendor development program is carried out 16 24

11 JIT_1 Supply is made on JIT basis 17 23

12 JIT_2 Inventory is kept as per customer order 18 22

13 JIT_3 Buffer stock is maintained 36 4

14 PULL_1 Production is done based on the shipment of finished goods

17 23

15 PULL_2 Production is made on smaller batches 16 24

Item No.

Label Parameters Yes No

16 PULL_3 Every station is allowed to pull from the previous station 12 28

17 PULL_4 Kanban system is in place 7 33

18 PULL_5 Cycle time is determined by the customer demand 13 27

19 Flow_1 Products are classified based on processing requirement 31 9

20 Flow_2 Company layout and workstation design is as per the process

15 25

21 Flow_3 Scientific load balancing are carried out 25 15

22 Flow_4 Process is automated for movement 6 34

23 Flow_5 Material storage area is nearby to the shop floor 7 33

24 Processs_1 Standard operating procedures are in place and adhered to 34 6

25 Processs_2 Line balancing efficiency is measured 15 25

26 Processs_3 Critical to Process (CTP) & Critical to Quality (CTQ) measurement are followed

8 32

27 Processs_4 Cost of non- quality is measured 11 29

28 Processs_5 There is a separate rejection zone 22 18

29 Processs_6 Process studies are carried out before launching new product

21 19

30 Processs_7 Process capability analysis is carried out 14 26

31 Processs_8 Work place management is an integrated activity 14 26

32 Processs_9 Visual control is in place 13 27

33 Setup_1 Setup analysis is carried out 10 30

34 Setup_2 Emphasis is given on reducing setup time 16 24

35 TPM_1 Failure mode effect analysis is carried out 18 22

36 TPM_2 Overall equipment effectiveness is measured and recorded 22 18

37 TPM_3 Regular preventive maintenance activities are carried out 24 16

38 Empinv_1 Employees are involved in problem solving quality/small group activities

19 21

39 Empinv_2 Suggestion schemes are in place 18 22

40 Empinv_3 Continuous improvement programs like Kaizen are followed

13 27

41 Empinv_4 Benchmark/sharing of best practices 17 23

42 Empinv_5 Trainings are given on multi-skill technology 8 32

43 Empinv_6 Employee satisfaction survey is done 11 29

Mean 16.813 23.186

p-value of t-Test* 0.001

Clearly, it is evident from the above analysis that, majority of the respondents expressed their

opinions against the standard practices being followed in a lean organization (approx. 42%

respondents felt that, LM practices are being followed, whereas, 58% did not agree) which is

* at 95% significance

level

validated by the t-Test result. Thus, it can be inferred that, the organization under study is at an

early stage of adopting LM practices.

5.2. Current Value Stream Map

Fig 1. Current State Value Stream Map (based on the observations and analysis by the authors)

Process information:

Each of the fundamental stages consists of some elementary stages. Subsequent data collected on

process metrics for each of those stages are given below.

Stage: Green End

Flow of activities is given below:

A B C D E F G

(A - Log cut of saw, B - log cut into blocks by cut of saw, C- Log waits for debarking, D- Log

debarked, E - Block peeling, F - Veneer clipping, G - Veneer scanned and stacked into loads)

Table2. Process metrics of green end

Parameters/Stages A B C D E F G

Processing Time (PT) in mins/unit 10 15 5 5 8 7.5 1.15

Capacity = 1/PT (units/min) 1/10 1/15 1/5 1/5 1/8 1/7.5 1.15

Cycle time (CT) in mins/unit 15 15 15 15 15 15 15

Flow rate( units/ Min) 1/15 1/15 1/15 1/15 1/15 1/15 1/15

Idle Time (CT-PT) in mins/unit 5 0 10 10 7 7.5 13.85

% Utilization (Flow rate / Capacity) 66 100 33 33 53 50 76

Stage: Drying End

Flow of activities:

Table3. Process metrics of drying end

Parameters/Stages H I J

Processing Time (PT) in mins/unit 25 100 60.48

Capacity = 1/PT (units/min) 1/25 1/100 1/60.48

Cycle time = (C.T) mins/unit 100 100 100

Flow rate( units/ Min) 1/100 1/100 1/100

Idle Time (CT-PT) mins/unit 75 0 39.52

%Utilization = Flow rate / Capacity 25 100 60.48

H I J

(H - Loads of veneer fed into dryer, I- Load veneer dried, J - Veneers scanned and stacked into new load)

Stage: Lay-Up and Press

Flow of activities:

Table 4. Process metrics of Layup and press

Parameters/Stages K L M N O P

Processing Time (PT) in mins/unit 10 12 8 10 20 14

Capacity = 1/PT (units/min) 1/10 1/12 1/8 1/10 1/20 1/14

Cycle time (C.T) in mins/unit 20 20 20 20 20 20

Flow rate ( units/ Min) 1/20 1/20 1/20 1/20 1/20 1/20

Idle Time (CT-PT) in mins/unit 10 8 12 10 0 6

% Utilization = Flow rate / Capacity 50 40 60 50 100 70

Stage: Finishing End

Flow of activities:

Q R S T U V W X Y Z

K L M N O P

(K - Load of veneer moved by forklift to layup line, L - Sheets of veneer joined

and made into panel, M -Sheets of veneer covered with glue and laid up into

panel, N -Load of laid up panels wait for pre-press, O - Load in pre-press, P -

Load pressed in hot press)

(Q - Pressed panel cut into size sanding and dipping, R - Panels stacked into new load, S - Waiting

for patching, T - time for patching, U - Waiting for glue spread checking, V - Glue spread checking,

W - Waiting for sanding and grading, X - Sanding and grading, Y - Wait for stamping, Z –

Stamping and stacking)

Table 5- Process matrix of finishing end

Parameters/Stages Q R S T U V W X Y Z

Processing Time (PT) in mins/unit 20 20 8 12 15 10 15 12 15 14

Capacity = 1/PT (units/min) 1/20 1/20 1/8 1/12 1/15 1/10 1/15 1/12 1/15 1/14

Cycle time = (C.T) mins/min 20 20 20 20 20 20 20 20 20 20

Flow rate ( units/ Min) 1/20 1/20 1/20 1/20 1/20 1/20 1/20 1/20 1/20 1/20

Idle Time = (CT-PT) 0 0 12 8 5 10 5 8 5 6

%Utilization = Flow rate / Capacity 100 100 40 60 75 50 75 60 75 70

Clearly it is evident from the above analysis is that, compared to process time, idle time is very

high, percentage utilization is low and irregular, flow is imbalanced. Further, it was noticed that,

no first pass yield calculation is carried out at every step and it is only done at the finishing end

and accounts for around 80%.

6. Recommendation

From the result of leanness measurement survey it is seen that, the organization is at a very

nascent stage of implementation of LM concepts and practices. There is a strong need of having

regular interaction amongst the employees and managers. Cross functional team approach,

sharing of best practices and benchmarking are required to be conducted on a regular basis. In

order to survive in this era of extreme volatility in market and stiff competition, it is essential to

have close relationship with the customers. Thus, regular exchange of ideas between the

organization and the customers are required. To achieve sustainable business results and to gain

competitive advantage, supplier partnership is an important aspect. Regular interaction with

suppliers, supplier education programs must be conducted. It is further noticed that, in the

organization flow is disrupted, irregular which is also reflected in CVSM. Inventory management

system needs to be well designed and flow must be regular to ensure the possibility of having JIT

system to an extent it is possible. For that, regular brainstorming, group activities, process studies

and kaizen, quality circle activities must be conducted. In fact, small group activities not only

play a vital role in ensuring continuous improvement, but also they educate and involve the

employees, foster team work, create the ability of decision making, empowerment and thus,

promote a vibrating organizational culture conducive for LM implementation. Interventions like

Glass Wall Management and Mini-Company Technique can be practiced in order to improve

work culture, foster synergy amongst employees, improve communication and sharing of

knowledge.

The CVSM highlights many opportunities for improvement. For reducing waiting time, process

restructuring and redistribution are required. For example, in order to reduce waiting time at

green end operation, automation of de-barking and clipping can be done. For dryer end, using

suitable temperature control mechanism, no. of veneers processed under the dryer can be

increased which in-turn reduce the idle time for next step. It was noticed that, finishing end

operations are mostly manual in nature which can be made automated for improving the

efficiency. Production planning may be done on daily basis if possible or on three days basis

based on the batch size requirement of a particular type of product. Further, raw material and

shipment planning can be made on monthly basis to maintain parity. To control the movement of

materials, possible layout restructuring can be further explored. Process capability measures

should be done at individual stages and CTP, CTQ should be identified in order to enhance first

pass yield. Continuous improvement programs like Kaizen, Quality Circle should be encouraged

and trainings should be imparted to improve the efficiency of operations.

7. Conclusion

In this study, authors have tried to establish a framework to measure leanness of a processing

unit and used VSM to portray present state of operations to figure out the wastes being incurred

by the system. It is evident that, considerable amount of waste is in the system which lowers the

efficiency, reduce uptime and utilization. Further, analysis revealed that, leanness is very low in

the organization under study. LM has been increasingly applied by leading organizations across

the world. But, needless to say, it is a philosophy which entails cultural shift. Thus, it can be

applied to all the sectors. This study is essentially confined to a plywood processing unit.

However, further study can be made on the organizations belonging to similar sectors to

understand the nature of LM practices and adoption of LM philosophy. This research can further

be explored in any other processing industry.

Acknowledgement

The authors are grateful to all the respondents, members of the organization under study for their

valuable time and support in conducting this study. We are also thankful to all researchers,

industry practitioners and mentors whose insights have guided us in carrying out this research.

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