Page 54 - 04. Subyek Engineering Materials - Manufacturing, Engineering and Technology SI 6th Edition - Serope Kalpakjian, Stephen Schmid (2009)

General Introduction

l.9 Lean Production and Agile Manufacturing

Lean production is a methodology that involves a thorough assessment of each
activity of a company, with the basic purpose of minimizing waste at all levels and
calling for the elimination of unnecessary operations that do not provide any added
value to the product being made. This approach, also called lean manufacturing,
identifies all of a manufacturer’s activities from the viewpoint of the customer and
optimizes the processes used in order to maximize added value. Lean production fo-
cuses on (a) the efficiency and effectiveness of each and every manufacturing opera-
tion, (b) the efficiency of the machinery and equipment used, and (c) the activities of
the personnel involved in each operation. This methodology also includes a compre-
hensive analysis of the costs incurred in each activity and those for productive and
for nonproductive labor.
The lean production strategy requires a fundamental change in corporate cul-
ture, as well as an understanding of the importance of cooperation and teamwork
among the company’s workforce and management. Lean production does not neces-
sarily require cutting back on a company’s physical or human resources; rather, it aims
at continually improving efficiency and profitability by removing all waste in the com-
pany’s operations and dealing with any problems as soon as they arise.

Agile Manufacturing. The principle behind agile manufacturing is ensuring agility-
and hence flexibility-in the manufacturing enterprise, so that it can respond rapid-
ly and effectively to changes in product demand and the needs of the customer.
Flexibility can be achieved through people, equipment, computer hardware and
software, and advanced communications systems. As an example of this approach,
it has been predicted that the automotive industry could configure and build a car in
three days and that, eventually, the traditional assembly line will be replaced by a
system in which a nearly custom made car will be produced by combining several in-
dividual modules.
The methodologies of both lean and agile production require that a manufacturer
benchmark its operations. Benchmarking involves assessing the competitive position
of other manufacturers with respect to one’s own position (including product quality,
production time, and manufacturing cost) and setting realistic goals for the future.
Benchmarking thus becomes a reference point from which various measurements can
be made and to which they can be compared.

l.l0 Manufacturing Costs and Global Competition

Always critically important, the economics of manufacturing has become even more
so with (a) ever-increasing global competition and (b) the demand for high-quality
products, generally referred to as world-class manufacturing, at low prices.
Typically, the manufacturing cost of a product represents about 40% of its selling
price, which often is the overriding consideration in a product’s marketability and
general customer satisfaction. An approximate, but typical, breakdown of costs in
modern manufacturing is given in Table 1.6. The percentages indicated can, however,
vary significantly depending on product type.
The total cost of manufacturing a product generally consists of the following
components:
I. Materials. Raw-material costs depend on the material itself, as well as on supply
and demand. Low cost may not be the deciding factor if the cost of processing a