logistic

  

Learning Outcome: 

1. Demonstrate a deep understanding of the logistic function concepts and theories as well as supply chain management strategies. (Lo.1.1)

2. Demonstrate the ability to understand complex issues pertaining to supply chain integration and strategic supply chain partnership (Lo 1.2).

3. Apply essential elements of core logistic and supply chain management principles. (Lo 2.1)

Critical Thinking

The purpose of this assignment is to identify and apply Logistics and Supply Chain Management concepts/tools to suggest logistics performance priorities. 

Use the Saudi digital Library (SDL) search engine. 

Search Title: THE BENEFITS OF LEAN MANUFACTURING what lean thinking offers the process Industries

Authors Name: Melton,T

Source: In 7th World Congress of Chemical Engineering, Chemical Engineering Research and Design June 2005 83(6):662-673

Read out the research paper carefully and based on your understanding you should answer the following questions. 

Questions:

1. Why do Manufacturing Companies focus on Lean Thinking? (500 words)- (5Marks)

2. What is meant by the term overproduction? Why do you think this has been described as the biggest waste of all? (500 words)- (5Marks)

3. Assess the reasons for using lean thinking. What are the benefits of using lean thinking from Suppliers to end users? (500 words) -(5Marks)

· Reference should be included.

THE BENEFITS OF LEAN MANUFACTURING
What Lean Thinking has to Offer the Process Industries

T. MELTON�

MIME Solutions Ltd, Chester, UK

H
ow many people in the manufacturing industry can truly say that they have not heard
of LEAN? Not many. Yet how many of these believe in lean, have implemented
lean, are the passionate change agents who have convinced senior stakeholders

than lean is the way forward for their company? Less. Much Less. Lean is a revolution—it
isn’t just about using tools, or changing a few steps in our manufacturing processes—it’s
about the complete change of our businesses—how the supply chain operates, how the direc-
tors direct, how the managers manage, how employees—people—go about their daily work.
Everything. So what is this revolution, and how is it impacting the process industries? The
background of lean thinking is based in the history of Japanese manufacturing techniques
which have now been applied world-wide within many types of industry.

Keywords: lean manufacturing; waste; value; flow; value stream; bottleneck.

A BRIEF HISTORY OF ‘LEAN’

Mention ‘lean’ and most ‘lean thinkers’ will know that this
is a reference to the lean production approach pioneered by
Toyota but also the subject of The Machine that Changed
the World (Womack et al., 1990); a book which first high-
lighted Japanese production methods as compared to tra-
ditional Western mass production systems; it also
highlighted the superior performance of the former. The
follow-on book, Lean Thinking: Banish Waste and Create
Wealth in your Organisation (Womack and Jones, 1996),
is equally a key step in the history of lean as it summarizes
the lean principles which ‘guide action’. It also coined the
phrase ‘Lean Production’.

But let’s go back to the beginning—the birth of lean was
in Japan within Toyota in the 1940s: The Toyota Pro-
duction System was based around the desire to produce
in a continuous flow which did not rely on long production
runs to be efficient; it was based around the recognition that
only a small fraction of the total time and effort to process a
product added value to the end customer. This was clearly
the opposite of what the Western world was doing—here
mass production based around materials resource planning
(MRP) and complex computerized systems was developing
alongside the mass production philosophies originally
developed by Henry Ford, i.e., large high volume pro-
duction of standardized products with minimal product
changeovers.

Taiichi Ohno had started work on the Toyota Production
system in the 1940s and continued it’s development into the
late 1980s unhindered by the advancements in computers
which had allowed mass production to be further
‘enhanced’ by MRP Systems. By the 1970s Toyota’s own
supply base was ‘lean’; by the 1980s their distribution
base was also ‘lean’.

Key tools and techniques within the ‘lean’ system,
included:

. Kanban—a visual signal to support flow by ‘pulling’ pro-
duct through the manufacturing process as required by
the customer.

. 5 S’s—a visual housekeeping technique which devolved
control to the shopfloor.

. Visual control—a method of measuring performance at
the ‘shop floor’ which was visual and owned by the oper-
ator team.

. Poke yoke—an ‘error-proofing’ technique.

. SMED (single minute exchange of dies)—a changeover
reduction technique.

However let us return to the 1990s and the two landmark
works discussed at the start of this section.

The Machine that Changed the World (Womack et al.,
1990) compared and contrasted the Mass Production
System seen in the US and Europe, with the Lean Production
System, seen in Japan, within the automotive industry.

Table 1 is a summary of some of the comparisons high-
lighted by Womack et al. (1990).

. The mass producers were able to maintain long pro-
duction runs using standard designs which ensured that
the customer got a lower cost; they also got less variety

�Correspondence to: Dr T. Melton, MIME Solutions Ltd, Gable Cottage,
Childwall Farm, Kelsall Road, Kelsall, Chester, CH3 8NR, UK.
E-mail: trish.melton@mimesolutions.com

662

0263–8762/05/$30.00+0.00
# 2005 Institution of Chemical Engineers

www.icheme.org/journals Trans IChemE, Part A, June 2005
doi: 10.1205/cherd.04351 Chemical Engineering Research and Design, 83(A6): 662–673

as did the workforce who found this mode of operation
tedious.

. In comparison, the term ‘lean’ comes from the ‘upside’
of the production method which requires ‘half the
human effort, half the manufacturing space, half the
investment and half the engineering hours to develop
a new product in half the time’.

However, it is not difficult to see that the world of car-parts
and conveyor belt production lines did not immediately
grab the interest and excitement of the process industries.
Apart from the packaging lines the analogies seemed hard
to find.

However, Lean Thinking (Womack and Jones, 1996)
helped us to understand the principles of lean:

. The identification of value.

. The elimination of waste.

. The generation of flow (of value to the customer).

It clearly demonstrated that this was not a philosophy or
technique which was only applicable to the automotive
industry.

THE BENEFITS OF BEING ‘LEAN’

The benefits seen within non-process industries (see
Figure 1), such as the automotive industry, are well
documented:

. decreased lead times for customers;

. reduced inventories for manufacturers;

. improved knowledge management;

. more robust processes (as measured by less errors and
therefore less rework).

This makes lean a very real and physical concept—
especially for manufacturing.

Lean production has now expanded and lean thinking has
been applied to all aspects of the supply chain. There are
many well documented examples of the application of
‘lean thinking’ to business processes such as project man-
agement (Melton, 2003); construction, design, and so on.

Lean can be applied to all aspects of the supply chain and
should be if the maximum benefits within the organization
are to be sustainably realized. The two biggest problems
with the application of lean to business processes are the
perceived lack of tangible benefits and the view that
many business processes are already efficient. Both
assumptions can be challenged (Melton, 2004):

. There are many tangible benefits associated with lean
business processes. A lean business process will be
faster, e.g. the speed of response to a request for the
business process will be faster, and as most business pro-
cesses are linked to organizational supply chains, then
this can deliver significant financial benefits to a
company.

. The perception that a business process is already efficient
is all too often an illusion. Functionally, many business
processes may appear very efficient, however the appli-
cation of Lean Thinking forces us to review the whole
supply chain in which the business process sits, and
this frequently reveals bottlenecks and pockets of
inefficiency.

But for now let us return to the world of manufacturing
within the process industries.

WHAT’S STOPPING US?

With the benefits so apparently obvious the question has
to be—what’s stopping us?

For some in the process industries the answer is simple—
nothing! There are good examples of the implementation of
lean philosophies across the process industries. For
example, PICME (Process Industries Centre for Manufac-
turing Excellence), an organization part funded by the
DTI to specifically help manufacturing in the process
industries to become more efficient and more competitive,
quote estimated projected savings of over £75 million
over their first 5 years of operation (PICME, 2004).

Table 1. Production Systems Compared.

Mass production Lean production

Basis † Henry Ford † Toyota

People–design † Narrowly skilled professionals † Teams of multi-skilled workers at all levels in the organization

People–production † Unskilled or semi-skilled workers † Teams of multi-skilled workers at all levels in the organization

Equipment † Expensive, single-purpose machines † Manual and automated systems which can produce large
volumes with large product variety

Production methods † Make high volumes of standardized products † Make products which the customer has ordered

Organizational philosophy † Hierarchical—management take responsibility † Value streams using appropriate levels of empowerment—
pushing responsibility further down the organization

Philosophy † Aim for ‘good enough’ † Aim for perfection

Figure 1. The benefits of ‘lean’.

Trans IChemE, Part A, Chemical Engineering Research and Design, 2005, 83(A6): 662–673

THE BENEFITS OF LEAN MANUFACTURING 663

But for some the ‘case for change’ cannot be as compel-
ling as it would appear to be. Figure 2 is a force field dia-
gram which shows some of the drivers and resistors within
the manufacturing sector of the process industries; it is only
when the specific driving forces for an organization are
greater than the opposing forces that the change will
occur. The ultimate sustainability then requires additional
supporting forces to further reduce and eliminate
opposition.

Within the process industries specific sectors have been
under increasing pressure:

. Chemical Industry—the continuing pressure on the cost
base.

. Pharmaceutical manufacturing—the pressure on the
supply chain has increased as there are more external
competitive pressures for manufacturers to deliver new,
safe efficacious drugs quicker than ever before.

But—lean manufacturing has now been applied within the
pharmaceutical sector both within primary and secondary
operations and the use within the wider process indus-
tries is increasingly likely as the breadth of benefits are
demonstrated and the driving forces for change increase.

Lean thinkers would probably want an additional driving
force for change: lean is easy to implement! But although
the principles and tools associated with lean thinking
may appear at face value an easy concept to use within
an apparently willing industry they present huge ‘change’
challenges to any business truly wishing to become lean.

Perhaps the biggest resisting force for the process industries
will be the huge inertia that must be overcome: the resist-
ance to change.

Lean thinking involves a serious challenge to the status
quo and for many this level of challenge to the ‘way we
do things round here’ is a sufficient deterrent to appli-
cation—particularly after the surge of business changes
implemented following initiatives seemingly aiming for a
similar goal—greater business effectiveness and therefore
profit! However it can be demonstrated that the forces
supporting the application of lean are greater than those
resisting it.

WHAT IS LEAN THINKING?

Lean Thinking starts with the customer and the definition
of value. Therefore, as a manufacturing process is a vehicle
to deliver value (a product) to a customer, the principles of
lean thinking should be applicable to the Process Industries
and the specific manufacturing processes within that
industry.

We can remove waste from many steps of our manufac-
turing processes, from how we develop the initial product
and process design, how we assure compliance, to how
we design to operate a completed facility. However, to be
truly lean we have to link all these elements within a
robust supply chain—we need to ensure the flow of value.
This leads to what many are calling a ‘lean enterprise’
(LERC, 2004).

Figure 2. The forces opposing and driving a change to ‘lean’.

Trans IChemE, Part A, Chemical Engineering Research and Design, 2005, 83(A6): 662–673

664 MELTON

The Lean Enterprise Research Centre (LERC, 2004) at
Cardiff Business School highlighted that for most pro-
duction operations:

. 5% of activities add value;

. 35% are necessary non-value activities;

. 60% add no value at all.

Therefore, there is no doubt that the elimination of waste
represents a huge potential in terms of manufacturing
improvements—the key is to:

. identify both waste and value;

. develop our knowledge management base;

. realize that sustainable improvement requires the buy
in of the people operating the processes and managing
the business, and therefore a culture of continuous
improvement.

Value

The identification of value and the definition of value
propositions for specific customers is the starting point.
Without a robust understanding of what the customer
values you cannot move forwards (see Table 2). Outside
of the process industries there are many examples of
what we mean by a ‘value proposition’—as a consumer
buying a washing machine what we value may be the abil-
ity to wash our clothes at home; for others the value may be
related to cost or specific design features or even the colour.
The challenge for the manufacturer is to develop a product
portfolio based on these value propositions.

Table 2 gives some examples of value propositions
which manufacturers in the process industries have
developed as related to their specific customer group,
their product portfolio and their potential capabilities.

For customer A, development of the process they hand-
over to the toll manufacturer is a value added activity;
for customer B this would be considered waste.

Waste

Any activity in a process which does not add value to the
customer is called ‘waste’. Sometimes the waste is a
necessary part of the process and adds value to the com-
pany and this cannot be eliminated, e.g., financial controls.

Otherwise all ‘Muda’, as the Japanese call waste, should be
eliminated.

There are seven main types of waste as outlined in
Figure 3 and further detailed in Table 3.

Initially, waste can be easily identified in all processes
and early changes can reap huge savings. As the processes
continually improve, the waste reduction will be more
incremental as the company strives to achieve a waste-
free process. Continuous improvement is at the core of
lean thinking.

The data in Table 3 is only the tip of the iceberg in terms
of the amount and types of waste which will be within our
manufacturing processes and overall supply chains. The
key is to identify it, i.e., to ensure that the root cause—
the real waste—is eliminated, not just the symptom.

Flow

Flow is probably the hardest lean concept to understand.
It is the concept which most obviously contradicts with
mass production systems; the comparison of one piece
flow versus batch and queue processes.

It is a lack of flow in our manufacturing processes which
accounts for the huge warehouses which house the mass of
inventory which consumes the working capital of the
business.

To understand flow you need to understand the concept
of the value stream—that linkage of events or activities
which ultimately delivers value to a customer. A value
stream crosses functional and, usually, organizational
boundaries.

Figure 4 shows a simple value stream which would
be typical for a toll manufacturer. The value stream does
not show all the supporting activities, only the main
value adding stages and the key multi-functional teams
involved.

Flow is concerned with processes, people and culture and
it is appropriate at this stage to mention the work of
Goldratt and Cox (1993) who’s book The Goal introduced

Figure 3. The seven types of waste.

Table 2. Examples of value propositions within the process industries.

Customer type Value proposition Manufacturer type

A. Major
pharmaceutical
manufacturer of
drug products

† Robust process and
product development
at fast track speed
ensuring regulatory
compliance

† Toll
manufacturer of
pharmaceutical
intermediates

B. Other
manufacturer in
a low cost base
industry

† Correct specification,
low cost and
delivered on time
in the volumes
specified

† Bulk chemicals
manufacturer

C. The patient (via
the companies
who distribute
the drugs)

† High quality, safe
drugs that ‘work’ at
an appropriate price

† Major
pharmaceutical
manufacturer of
drug products

Trans IChemE, Part A, Chemical Engineering Research and Design, 2005, 83(A6): 662–673

THE BENEFITS OF LEAN MANUFACTURING 665

the Theory of Constraints. This theory aligns with lean
thinking in the way it considers an organization as a
system consisting of resources which are connected by pro-
cesses which ultimately make product which can be sold.

It effectively talks about a value stream and the main
causes for the lack of flow—constraints in the system.

Godratt and Cox (1993) introduced some development of
operational rules to guide how a production plant should be
operated based on three measurements:

. Throughput: the rate at which the system generates
money through sales (use sales not production—if you
produce something, but do not sell it, it is not through-
put)—this links into the lean philosophy of producing
product when the customer ‘pulls’ for it.

. Inventory: all the money that the system has invested in
purchasing things which it intends to sell.

. Operational expense: all the money the system spends in
order to turn inventory into throughput.

They then define the goal of that production operation as
increasing throughput while simultaneously reducing both
inventory and operating expense and that any plant
improvement must be challenged against this, i.e.,

. as a result of this improvement will we:
— Sell any more products? (Did Throughput go up?)
— Reduce the amount of raw materials or overtime?

(Did Operating Expense go down?)
— Reduce the plant Inventory?

Table 3. The seven types of waste.

Type of waste Description Within the process industry Example symptom

1. Over
production

† Product made for no specific
customer

† Development of a product, a
process or a manufacturing
facility for no additional
value

† Large campaign—large batch and
continuous large-scale manufacturing
processes

† Development of alternative process routes
which are not used or the development of
processes which do not support the
bottleneck

† Redesign of parts of the manufacturing
facility which are ‘standard’, e.g., reactors

† The extent of warehouse space needed
and used

† Development and production
organization imbalance

† An ever changing process (tweaked)
† Large engineering costs/time

associated with facility modifications

2. Waiting † As people, equipment or
product waits to be
processed it is not adding
any value to the customer

† Storage tanks acting as product buffers in
the manufacturing process—waiting to be
processed by the next step

† Intermediate product which cannot leave
site until lab tests and paperwork are
complete

† The large amount of ‘work in
progress’ held up in the
manufacturing process—often seen on
the balance sheet and as ‘piles of
inventory’ around the site

3. Transport † Moving the product to
several locations

† Whilst the product is in
motion it is not being
processed and therefore not
adding value to the customer

† Raw materials are made in several
locations and transported to one site
where a bulk intermediate is made. This is
then transported to another site for final
product processing

† Packaging for customer use may be at a
separate site

† Movement of pallets of intermediate
product around a site or between sites

† Large warehousing and continual
movement of intermediate material on
and off site rather than final product

4. Inventory † Storage of products,
intermediates, raw materials,
and so on, all costs money

† Economically large batches of raw
material are purchased for large
campaigns and sit in the warehouse for
extended periods

† Queued batches of intermediate material
may require specific warehousing or
segregation especially if the lab analysis
is yet to be completed or confirmed

† Large buffer stocks within a
manufacturing facility and also large
warehousing on the site; financially
seen as a huge use of working capital

5. Over
processing

† When a particular process
step does not add value to
the product

† A cautious approach to the design of unit
operations can extend processing times
and can include steps, such as hold or
testing, which add no value

† The duplication of any steps related to the
supply chain process, e.g., sampling,
checking

† The reaction stage is typically
complete within minutes yet we
continue to process for hours or days

† We have in process controls which
never show a failure

† The delay of documents to
accompany finished product

6. Motion † The excessive movement of
the people who operate the
manufacturing facility is
wasteful. Whilst they are in
motion they cannot support
the processing of the product

† Excessive movement of
data, decisions and
information

† People transporting samples or
documentation

† People required to move work in progress
to and from the warehouse

† People required to meet with other people
to confirm key decisions in the supply
chain process

† People entering key data into MRP
systems

† Large teams of operators moving to
and from the manufacturing unit but
less activity actually within the unit

† Data entry being seen as a problem
within MRP systems

7. Defects † Errors during the process—
either requiring re-work or
additional work

† Material out of specification; batch
documentation incomplete

† Data and data entry errors
† General miscommunication

† Missed or late orders
† Excessive overtime
† Increased operating costs

Trans IChemE, Part A, Chemical Engineering Research and Design, 2005, 83(A6): 662–673

666 MELTON

The final concept they introduce is that of the
bottleneck—that step in a process which determines
the throughput of the whole process. This also aligns with
lean ‘pull’ production which tells production that it’s OK
to stop production! (if there is no customer ‘pull’).

Within the process industries we do strive for pro-
duction efficiencies, however, ‘a value stream perspective
means working on the big picture, not just individual
processes, and improving the whole, not just optimising
the parts’ (Rother and Shook, 1999). In other words
we need to improve the efficiency and effectiveness of
the whole supply chain not just improve one part of
it and we need to operate the supply chain not the pro-
duction unit.

Figure 5 summarizes the above discussion on flow by
demonstrating how a part of a supply chain could operate

if ‘pulled’ rather than ‘pushed’. In a ‘push’ system pro-
duction works as much as it can to fill a warehouse; In a
‘pull’ system production works only when it needs to at
the pull of customer orders.

Figure 5 demonstrates that the process (the grey boxes)
only operates when an appropriate ‘signal’ is seen:

. The packaging operation only operates when it is packa-
ging for a customer order (it’s ‘signal to pack’). It takes
product from a final product silo (kanban).

. When the level in the silo falls past the red line this is a
signal for the final product manufacture to commence.
Once the silo is at the green level this is a signal for
the manufacture to stop. This operation takes its material
from the raw materials kanban and the intermediate
kanban.

Figure 4. A simple value stream.

Figure 5. ‘Pull’ production example—using kanbans.

Trans IChemE, Part A, Chemical Engineering Research and Design, 2005, 83(A6): 662–673

THE BENEFITS OF LEAN MANUFACTURING 667

. Both of these are storage areas. Specific kegs are placed
on a coloured floor. When enough kegs have been used
so that the red area of the floor can be seen—this is a
signal for the preceding operation to commence, i.e.,
intermediate manufacture or purchasing of raw materials.

The sizing of the kanbans and their operation to ensure
FIFO (first in-first out) has to be thought through but this
can be an effective method of:

. Implementing a ‘pull’ production system.

. Reducing lead-time to the customer.

. Reducing inventory at all stages in a process.

Knowledge Management

The knowledge we have in our systems and more impor-
tantly, our people, is fundamental to the implementation
of lean.

The success of lean in some manufacturing organizations
has been in part due to the reorganization of the teams at
both operational and management level.

Example changes are:

. reorganization of all resources around value streams;

. multi-skilled or cross-functional teams with more
responsibility for the day to day operation of a manufac-
turing unit.

Additionally, formally capturing knowledge of processes is
necessary especially within a work environment where cor-
porate knowledge is no longer defined by the large numbers
of employees who have worked there all their lives. Some

companies have used some form of IT solution to capture
knowledge formally; for others a process of knowledge
sharing spreads the knowledge wider than previously. A
well-managed knowledge base is critical to the sustainabil-
ity of change.

Continuous Improvement

Lean thinkers are aiming for ‘perfection’ and in doing so
the improvement cycle is never ending. For many in the
process industries this culture change is the hardest
change of all.

However, for assured sustainability the organizations
who are truly lean will invest the time and effort to support
a change in culture—the way we do things around here.
The case study attempts to highlight some of the ways in
which culture can be impacted.

HOW TO START ‘LEAN THINKING’

A data-rational, structured approach is needed if the key
principles of value, waste and flow are to be rigorously
applied along the supply chain.

The process of ‘how to lean’ (Figure 6) can be summar-
ized as:

. Document current process performance—how do we do
it now.

. Define value and then eliminate waste.

. Identify undesirable effects and determine their root
cause in order to find the real problem.

Figure 6. How to ‘lean’.

Trans IChemE, Part A, Chemical Engineering Research and Design, 2005, 83(A6): 662–673

668 MELTON

. Solve the problem and re-design the process.

. Test and demonstrate that value is now flowing to the
customer of that process.

There are many tools and techniques to support each step
in the above process—they support implementation of the
principles.

Table 4 shows a sample of the tools a ‘lean thinker’
would have in their toolkit. What surprises many skeptics
is that the lean principles can be put into action using
tools which are very familiar to those who have been
involved in performance improvements.

What is different is the fact that they are used to
ensure that:

. manufacturing processes deliver value to their
customers;

. all activities which do not add value—waste—are elimi-
nated or reduced;

. the manufacturing processes flow within a robust and
‘lean’ supply chain.

PRESENTING THE EVIDENCE: A CASE STUDY

The following case study is taken from a real situation—
it aims to demonstrate the benefits from lean manufacturing
and also lean supply chains—two facets of lean thinking
which are revolutionising the parts of process industries
in which they have been implemented.

Making a Value Stream: The Design and
Implementation of Lean

The following is a case study example taken from the
process industries. It shows how the three principles of
lean supported by the enabling principles, can deliver step
change business benefits and ongoing incremental benefits.

A multi-product manufacturing process was taking 10
weeks from the introduction of raw materials to the com-
pletion of final product processing. The customers gener-
ally expected a lead-time of 6 weeks from order
placement to receipt of the goods.

Table 4. A sample ‘lean’ toolkit.

Tool Description Typical Use

Force field
diagramming

† A tool which allows analysis of the forces
supporting or resisting a particular change

† When looking at a potential design
† When looking at the implementation planning for a change

following design

IPO diagramming † A basic flowchart tool mapping inputs, processes
and outputs. Based on the required outputs, the
appropriate process can be defined and the
required inputs specified

† To design a team session at any stage of the implementation of
lean, e.g., data collection day, kaizen day (implement a
change in one day), implementation planning

Process flow mapping † A map showing each process step in the value
stream

† A data collection activity

† Also used to analyze the VA (value-add) and NVA (non value-

add) steps and as a tool

for redesign

Time-value mapping † A map of the time taken for each process step in
the value stream

† A data collection activity
† Also used to analyze the VA and NVA steps and as a tool

for redesign

Spaghetti
diagramming

† A map of the physical path taken by a product as
it passes down the value stream

† A data collection activity

Five whys † Taiichi Ohno (Womack et al., 1990) had a
practice of asking why five times whenever a
problem was found. In this way the root cause
was solved rather than the symptom.

† As a part of the data analysis so that the root cause problem
can be solved in the design phase

Five S’s † Five activities used to create a workplace suited
for visual control and lean practices:

† Seiri—separate required from unnecessary tools
and remove the latter

† Seiton—arrange tools for ease of use
† Seiso—clean-up
† Seiketsu—do the above regularly—maintain the

system you’ve set up
† Shitsuke—get into the habit of following the first

four S’s

† Can be used at the start of a lean induction to break down
barriers and get a team to own their workspace

† Often used during Kaizens as workplace layout and tidiness is
often an issue which causes waste (unable to find the right
equipment, use what’s there, lose key paperwork, and so on)

Risk assessment † A structured assessment of what could stop the
achievement of specific objectives and how this
can be mitigated

† Assessment of a design prior to implementation as a final
challenge of the design

† Assessment of the issues post-implementation—looking
specifically at what would stop the sustainability of
the change

Kaizen † An improvement activity to create more value
and remove waste. Commonly called a
breakthrough kaizen

† Kaizen workshops are a common method to kick-off the
start of a large step change within an area or value stream

† Kaizens would actually start with data collection and continue
to do some data analysis, design and even implementation

Kanban † Japanese for ‘signboard’. This is a ‘visual’ shop
floor pull system which means that each
supplying work centre does not make anything
until the next work centre requests supply

† This is a design solution to materials flow problems within a
process (examples within both manufacturing and lab
situations have been seen)

Trans IChemE, Part A, Chemical Engineering Research and Design, 2005, 83(A6): 662–673

THE BENEFITS OF LEAN MANUFACTURING 669

As the Manufacturing Time . Customer Lead-Time all
production was scheduled according to a sales forecast.

Sales forecasts within this particular organization, as
with many others, were unreliable and the Production Man-
ager had to build up significant stock of finished product to
ensure that all eventual orders could be met.

The Site Director was faced with a set of key perform-
ance indicators (KPI) which showed a trend for late or
incorrect customer orders, decreasing product quality,
increasing manufacturing time and another request for an
additional warehouse for all materials associated with the
manufacturing process as well as finished product.
Additionally, a new KPI was emerging: the amount of pro-
duct which became unsaleable due to shelf life issues—
indicating both a problem with the length of time product
was being stored in warehouses and the process by which
product was chosen for customer orders.

Initially a Kaizen was used to pull together a cross-section
of all the operational teams that were involved in the manu-
facturing unit: Operators, Lab Analysts, Warehouse Staff,
Customer Service Staff, Schedulers, MRP Data Handlers,
Technical Support Scientists, and so on.

The aim of the Kaizen was twofold:

. to collect and analyse data to identify the REAL problem
and design some solutions;

. to start to break down functional barriers and general
skepticism about lean thinking.

The data collection and data analysis phases yielded
some key problems:

. Process mapping—the total number of steps both within
and outside of the manufacturing process was 34;

approximately 60% of these involved either travel or
waiting, i.e., pure waste (see Figure 7).
— The process mapping was reviewed via closer obser-

vation after the kaizen and a number of variations
came to light as well as a realisation that the discrete
number of steps was nearly double!

— Typical variations were seen when urgent orders
were expedited through the system and the teams
worked closer together to naturally eliminate steps
which didn’t help get the product to the customer

. Spaghetti mapping—demonstrated the extent to which
the product, its associated batch documentation, the
operators, the samples and the support staff had to
travel—it was miles!

. Time-value mapping—of the 10 weeks to produce a typi-
cal product from raw materials only 25% was value
adding (Figure 8).
— The data collected during process mapping was con-

verted into a time-value map (Figure 8). This type of
analysis denotes value added activities as green and
waste as red, i.e., the initial days are shown as wait-
ing for the schedule.

— The Blend sample test (1 day) also has a 50% waste
content as only 50% of the tests done on the sample
ever fail.

— The space between each activity is the waiting time.
— This gives an excellent visual representation of the

overall process—if all the red and ‘white space’ is
removed then the process could theoretically be
reduced from 10 weeks to 1 week!

. Undesirable effects analysis—the supply chain was
managed via functional silos with little or no contact
between them; the support functions did not behave as
though they were actually producing a product for a

Figure 7. Process mapping—before.

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670 MELTON

customer—just a lab analysis or a signed batch record;
the financial systems pushed all parts of the supply
chain to large supply purchases in order to reap supplier
discounts

. Root cause analysis—the symptoms revealed by the data
analysis were root caused with a major issue being the
lack of flow in the process and another being the func-
tional behaviour of the various parts of the supply
chain. The real problems were identified as:
— Lack of flow and functional behaviour—lack of

connectivity of the supply chain; each step was oper-
ated as a distinct entity; functional teams were
praised for functional efficiency even when customer
orders were not being filled.

— Lack of flow—the system was literally too full. The
warehouse was full of work in progress; the lab was
overflowing with samples; the production area con-
tained kegs of raw materials and intermediates
waiting to be processed.

— Functional behaviour—no one person in the supply
chain was accountable for the delivery of customer
orders apart from the site director who had no
direct influence on this. Functional effort was see-
mingly better whilst overall cycletime got worse.

As a result of the Kaizen event a number of quick
changes were able to take place:

. Communication—the Kaizen team could see that it made
no sense NOT to communicate with each other more
often—formal agreements were made (and subsequently
kept!):
— Production operators were going to speak to the

warehouse each morning to check on key materials.
— Lab analysts were going to speak to the production

area each day to check on the volume of samples
likely that day.

. Production and lab stoppages—both the production area
and the lab had a culture of ‘team breaks’ which effec-
tively stopped value adding activities and reduced the
capacity of the plant; i.e., parts of the supply chain
were identified as the bottleneck (lab) or a near-
bottleneck (packaging)
— The lab agreed to stagger break times for analysts so

that the processing of samples could continue with-
out stoppage.

— The production areas agreed to review the system of
breaks and to ensure that ‘cover’ was provided to the
near bottleneck process during break periods (this
area was highly automated and did not have a
large team even through it was one of the most unre-
liable areas in the supply chain from an equipment
perspective).

The design phase for the main change project took some
time as it extended to all parts of the supply chain:

. Value streams were formed—these were dedicated to a
family of products with similar manufacturing processes
and with similar customer requirements.
— This impacted the manufacturing, laboratory and

warehouse layout.
— It changes the whole organization of resources

associated with the product.
. Kanbans were introduced—these were only at key stages

in the overall process but they visually signaled when
production was required—no signal ¼ no production.
— Laboratory—analysts worked in cells dedicated to

the value stream and within the lab a kanban
system was set up to ensure that all materials were
available for the anticipated volume of samples.
The system was very visual.

— Manufacturing area—earlier stages in the manufac-
turing process were signaled to commence if they

Figure 8. Time-value mapping—before. . .

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THE BENEFITS OF LEAN MANUFACTURING 671

received a visual signal from the kanban (a storage
based visual system as per Figure 5); this was
important as they had a capacity far greater than
the packaging step.

. Visual factory was introduced—this ensured that value
stream KPIs were aligned along the value stream and
were available either in the production area, the lab or
the warehouse.
— As soon as you entered each area it was clear how

the area was performing; how many samples were
being processed in the lab; what level of order fulfill-
ment to target lead-time had been achieved in the
warehouse; the throughput of the value chain.

— Functional measures were no longer used.

Overall the benefits for the organization can be measured
in ‘hard’ terms:

. Approximately 50% reduction in overall supply chain
cycle time (see Figure 9).

. Approximately 25% increase in customer order accuracy
(delivery and quality).

. Approximately 30% reduction in inventory (including
safety stock kept due to the inherent inaccuracy in
sales forecasts).

There are also softer benefits and these should not be
forgotten:

. Breakdown of in-company functional barriers.

. Joint development of value stream KPIs with all func-
tions buy-in.

Changing the Manufacturing Culture:
Sustaining Lean

Following the completion of the change project it was
critical that key sustainability measures were tracked:

. Were the new processes being followed?

. Was the layout being kept as per the design?

. Was the visual performance board being used?

A process of ‘hot tagging’ was used within the value stream
to consolidate the culture. This process involved all the team
members highlighting when a part of the value stream was
not in alignment, e.g., kanbans being overfilled; sloppy
housekeeping not in line with the 5 S’s (see Table 4).

LOOKING AHEAD: APPLICATION WITHIN THE
PROCESS INDUSTRIES

Clearly lean manufacturing has, and could be further,
applied within the process industries. The tools and tech-
niques described in previous sections can and have been
used within chemicals and pharmaceuticals manufacturing
in the UK.

For some parts of the process industries the revolution
has yet to begin—for others it is a case of expanding lean
thinking into all parts of the supply chain.

. To start the implementation of lean thinking:
— start on a manufacturing process;
— build a small cross-functional team;
— ensure senior management demonstrate their

support;
— ensure that all change is based on a structured data

rational process;
— communicate success effectively.

. To develop lean thinking further within your
organization:
— communicate the sustainable successes from the

implementation within manufacturing;
— review the value chain for a specific customer or set

of customers;
— review the business processes as well as the physical

processes and apply the same structured data rational
process, based on using cross-functional teams
empowered to implement change;

— keep looking for waste, keep checking up on the
value you deliver to customers, keep controlling
the flow—make it a part of your business culture.

CONCLUSIONS

It is clear that the climate for change within the process
industries over the last couple of years has been an ‘open
door’ to lean thinkers. We are seeing, and hearing of, more
and more examples of how manufacturing processes within
the chemicals and pharmaceuticals industries are being
improved through the use of relatively simple techniques.

It is obvious what ‘lean’ has to offer the process
industries:

. Performance improvements across the whole supply
chain supporting increased business performance.

Ultimately ‘lean’ will enable UK based manufacturing
operations to compete more globally—but only if the
time, expertise and senior management backing is
available.

Implementing lean is a revolution but one that the pro-
cess industries should be welcoming with open arms. The
leaders of this revolution will have to continue to show
by example the financial, cultural and organizational
benefits of starting down a route of REAL continuous
improvement—this is not an initiative, not a fad, it’s a phil-
osophy which has the potential to transform your business.
The data can speak for itself:

. Release of working capital.

. Increased supply chain speed.

. Reduced manufacturing costs.Figure 9. Cycle time reduction results.

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672 MELTON

Lean manufacturing has been applied within the process
industries, most notably chemicals and pharmaceuticals
sectors, to great effect. The wider use is increasingly
likely, but more than that it is required!

Lean thinking is applicable to all business processes
within the process industries. The challenge, if we decide
we want to be lean, is whether we know enough about
our ways of working, what customers of the business pro-
cesses truly value, and how our businesses operate and
need to operate.

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Melton, P.M., 2004, To lean or not to lean? (that is the question), The
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PICME, 2004, Process Industries Centre for Manufacturing Industries,
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Rother, M. and Shook, J., 1999, Learning to See: Value Stream Mapping
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This paper was presented at the 7th World Congress of Chemical
Engineering held in Glasgow, UK, 10–14 July 2005. The manuscript
was received 15 December 2004 and accepted for publication 21 March
2005.

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THE BENEFITS OF LEAN MANUFACTURING 673