ECONOMIC JUSTIFICATION FOR IMPLEMENTATION OF 5S IN MSMES: A CASE STUDY ON M/S. UNNATHI TECHNOLOGIES PVT LTD

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1 International Journal of Mechanical Engineering and Technology (IJMET) Volume 8, Issue 5, May 2017, pp , Article ID: IJMET_08_05_033 Available online at aeme.com/ijmet/issues.asp?jtype=ijmet&vtyp pe=8&itype=5 ISSN Print: and ISSN Online: IAEME Publication Scopus Indexed ECONOMIC JUSTIFICATION FOR IMPLEMENTATION OF 5S IN MSMES: A CASE STUDY ON M/S. UNNATHI CNC TECHNOLOGIES PVT LTD Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep, CH Udaya Bhaskar Mechanical Engineering, KL University, Greenfields, AP, India. P. Ratna Prasad Associate Professor, Department of Mechanical Engineering, KL University, AP, India. ABSTRACT 5s and Kaizen might be familiar for MNCs but MSMEs are new for this scenario. Economic justification is very important for implementation of any process let alone lean manufacturing. This project discusses the economic justification of an MSME i.e. M/s. Unnathi CNC Technologies pvt.ltd. considering the data gathered over 4 months to get a justification on economic prospect. Keywords: Kaizen, 5S, MSME, Economic justification, Lean Manufacturing. Cite this Article: Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep, CH Udaya Bhaskar Economic Justification for Implementation of 5s in MSMES: A Case Study on M/S. Unnathi CNC Technologies Pvt.Ltd.. International Journal of Mechanical Engineering and Technology, 8(5), 2017, pp IType=5 1. INTRODUCTION 1.1. Organisation Overview UNNATHI CNC Technologies Pvt. Ltd. are pioneers in manufacturing of precision machined parts and assemblies for Engineering, Aerospace, Auto, Agricultural and Machine Tool Industries. They are capable of machining a wide variety of materials such as and including Carbon alloy, Stainless Steel, Copper, Aluminum, Brass, etc. From the small beginnings in 2007 with 1 CNC Turning Centre, They have grown to a 10 CNC Turning Centres and 4 CNC Milling Centres in a span of 2 Years. Company was established in 2007 as a Partnership organization with 5 partners to provide mechanical components. In the year 2008 this was converted into a Private Limited Company with 4 Directors on Board. Company is situated in Peenya Industrial Area, which is the largest industrial estate in South East Asia editor@iaeme.com

2 Economic Justification for Implementation of 5s in MSMES: A Case Study on M/S. Unnathi CNC Technologies Pvt.Ltd. Unnathi CNC Technologies is an ISO certified company that follows certain procedures for machining of components and managing the organization in general. Unnathi is not a certified designing company, it machines the components based on customer specification Organization structure Figure 1 Organization structure 1.3. Factory Layout For every industry it's important to be familiar with the layout. This helps a lot to identify the places and to mark the places where 1S is necessary. This layout is a process layout with a mixed inspection strategy editor@iaeme.com

3 Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep, CH Udaya Bhaskar 2. LITERATURE REVIEW Figure 2 Factory layout Seiri (Sorting):It is the first S of the 5S philosophy which puts emphasis on removal or elimination of unnecessary items from the workplace. A workplace survey is conducted and unnecessary items are tagged with red colour and are eliminated from thatt particular place. It is easier if we mark the place with red on the layout for reference. Seiton (Set in order): It is the second S of the 5S philosophy whichh says about having certain things in certain places or creating a position for everything and everything should be in its position. It focuses on efficient storage and partition of things i.e. tools, instruments etc. Activities include storing similar items mutually, labeling items, Painting floors, use of racks or shelves for tools etc. Seiso (Shine): The third S focuses on the cleaning. Daily hygienee is must to have a better work area. More calm and safe workplace is ensured in third S. The third S should be a habit. People/workers should do it spontaneously. Department wise responsibilities should be given to the workers. Some standards have to be established and followed to ensure workers do the cleaning effectively. Seiketsu (standardize): The high standard of workplace in an organization can be ensured by standardization. Good work standards have to be maintained. Fast food chains are the best examples of it. To develop the standards, employees play a great role in it. Best work editor@iaeme.com

4 Economic Justification for Implementation of 5s in MSMES: A Case Study on M/S. Unnathi CNC Technologies Pvt.Ltd. practices are carried out and various ways are find out to ensure that everybody carry out their individual activity in their workplace. Shitsuke (Sustain): This S is considered to be the most challenging to implement among the rest. Many firms do the 5S activities for months. But it becomes very difficult to sustain the activities performed for a longer period of time. Standards have to be maintained year after year in an effective way. Counseling of the employees should be done more often. Proper regulation should be maintained. Also there should be award and reward system to encourage the employees. It can be a monetary gain or formal awarding of a certificate. 3. METHODOLOGY 3.1. SERIR Figure 3 5S 1. Tool room has been identified as the prime location where SERIR is needed. 2. The unnecessary materials are removed and 4m 2 free space has been created after removal. 3. A lack of proper tool keeper setup has been identified and provided with a worktable, chair and folders to maintain tool logs manually. Figure 4 Tool room Before (left) and After(Right) editor@iaeme.com

(right) Figure 6 Taping table before (right) and taping table

Identified and labeled switchboards with colored labels for

Separated tapes and nuts and placed them near the taping table.

5 Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep, CH Udaya Bhaskar Figure 5 Tool room before (left) and after (right) Figure 6 Taping table before (right) and taping table after (left) 3.2. SEITON (Set in order): 1. Identified and labeled switchboards with colored labels for effective and quick usage. 2. Separated tapes and nuts and placed them near the taping table. 3. Provided a stacked tray for storing drill bits in tool room editor@iaeme.com

6 Economic Justification for Implementation of 5s in MSMES: A Case Study on M/S. Unnathi CNC Technologies Pvt.Ltd. Figure 7 Unsorted Taps And Nuts (Left) and Sorted Taps and nuts (Right) Figure 8 Tool sleeves (left) and Re-arranged tool sleeves(right) editor@iaeme.com

Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep, CH Udaya

3. SEISO (Shine): The third S of 5S focuses on cleanliness and safety

Tangled and lose wires are tied together with straps. 2.

Daily 3S time of 15 minutes is allotted from 10:00 AM to 10:15 AM for

7 Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep, CH Udaya Bhaskar Figure 9 Color coded switchboards for quick identification 3.3. SEISO (Shine): The third S of 5S focuses on cleanliness and safety conditions of workplace. 1. Tangled and lose wires are tied together with straps. 2. Lose wires of any equipment are covered in bellows pipes. 3. Daily 3S time of 15 minutes is allotted from 10:00 AM to 10:15 AM for operators to clean and re-arrange their machine premises. Figure 10 Lose wires (left) and tied wires (right) editor@iaeme.com

Economic Justification for Implementation of 5s in MSMES: A Case Study on M/S.

SEIKETSU (Standardize): Figure 11 Exposed wires (Left) and Protected wires (Right) 1.

Employees are asked to follow a set of rules and are monitored by department heads.

To avoid absentiesm and lateness, Employee lateness list with daily updates is placed on notiece board.

8 Economic Justification for Implementation of 5s in MSMES: A Case Study on M/S. Unnathi CNC Technologies Pvt.Ltd SEIKETSU (Standardize): Figure 11 Exposed wires (Left) and Protected wires (Right) 1. Different motivational and knowledgeable wall boards are placed at strategic points in the plant. 2. Employees are asked to follow a set of rules and are monitored by department heads. Figure 12 Wall boards with knowledgeable information in Kannada and English 3.5. SHITSUKE (Sustain) 1. To avoid absentiesm and lateness, Employee lateness list with daily updates is placed on notiece board. 2. To encourage the employees, incentives are provided for good attendance. 3. Employees are taken to training workshops on 5S under the supervison of PES University Banglore editor@iaeme.com

Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep, CH Udaya Bhaskar

1. SEIRI Location: Tool room Figure 14 Two day workshop on 5S at PES University.

9 Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep, CH Udaya Bhaskar Figure 13 Notice board with employee lateness list and many more. 4. BUDGET CALCULATIONS 4.1 Budget for implementing 5s SEIRI Location: Tool room Figure 14 Two day workshop on 5S at PES University. Table 1 Cost to implement Seiri S.No Items purchased Cost(INR) 1 Work Table Rs.3,299/- 2 Chair Rs.2,650/- 3 Folders Rs.320/- Total Cost Rs.6269/ editor@iaeme.com

10 Economic Justification for Implementation of 5s in MSMES: A Case Study on M/S. Unnathi CNC Technologies Pvt.Ltd SEITON Location: Shop floor and Design Room Table 02 Cost to implement Seiton S.No Items purchased Cost(INR) 1 Labels Rs.60/- 2 Extra Trays Rs.1600/- Total SEISO Location: Shop floor and Inspection Room Rs.1660/- Table 3 Cost to implement Seiso SEIKETSU Location: Notice Board area. S.No Items Purchased Cost(INR) 1 Cable Binder Rs.180/- 2 Cable protection hose pipe Rs.120/- 3 Wall mount frames about Kaizen Rs.1800/- Total Cost Table 4 Cost to implement Seiketsu Rs.2100/- S.No Items Purchased Cost(INR) 1 Ribbons Rs.10/- 2 2 day Workshop for 50 Employees Rs.1,20,000/- 3 Paper Rs.100/- Total Rs / SHITSUKE Table 5 Cost to implement Shitsuke S.No Item Cost(INR) 1 Consultancy Fees for 3 years Rs.3,00,000/ editor@iaeme.com

11 Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep, CH Udaya Bhaskar Total Budget Table 6 Total cost to implement 5S. S.No Category Cost(INR) 1 SEIRI* Rs.6269/- 2 SEITON* Rs.1660/- 3 SEISO* Rs.2100/- 4 SEIKETSU Rs /- 5 SHITSUKE* Rs /- 6 Miscellaneous Rs.4260/- Total Rs / Savings after implementing 5s: Space savings: The space saved from removing used grinding wheels and paint cans from tool room and removing cardboard boxes from shop floor is given in table. Table 7 Space savings after implementing 5S S.No Location Area(m 2 ) 1 Tool room 4 2 Shop Floor 13 Maintenance cost savings: The monthly maintenance and breakdown maintenance cost are considered which could have been prevented with proper daily maintenance checks Before 5S Table 8 Maintenance cost, before implementing 5S. S.No Month Spares cost Down time cost Total cost 1 May Rs Rs Rs June Rs Rs Rs Total Rs Rs Rs Average per month Rs Rs Rs editor@iaeme.com

12 Economic Justification for Implementation of 5s in MSMES: A Case Study on M/S. Unnathi CNC Technologies Pvt.Ltd. After started implementing 5S: Table 9 Maintenance cost, after started implementing 5S. S.No Month Spares cost Down time cost Total cost 1 July Rs Rs Rs August Rs Rs.7750 Rs September Rs Rs Rs October - Rs Rs Total Rs Rs Rs Average per month Rs Rs Rs Savings in Maintenance cost: Table 10 Savings in maintenance costs due to 5S. S.No Type of cost Before 5S After starting 5S Savings % reduction in cost Annual Savings 1 Spares Cost Rs Rs Rs Rs /- 2 Down time cost Rs Rs Rs Rs /- Total Maintenance cost Rs Rs Rs Rs /- Setup time savings: Table 11 Average setup time savings, after implementing 5s. S.No Type Avg Setting time Before 5S (mins) Avg setting time After starting 5S (mins) Time difference (Mins) %Savings 1 Turning Milling Cost saved from setting time: S.No Type Table 12 Cost saved in setting time, after implementing 5S. Machine hour rate (Rs/hr) Time saved (mins) Cost saved per setupnumber of setups (INR) per annum Cost savings per annum 1 Turning Rs / (Projected) Rs.6,38,010/- 2 Milling Rs / (Projected) Rs.5,84,932/ editor@iaeme.com

13 Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep, CH Udaya Bhaskar Total projected savings per annum: Table 13 Projected annual savings due to implementation of 5s. S.No Category Projected savings per annum 1 Maintenance Rs.8,67,918/- 2 Setting time Rs.12,22,942/- Total Savings per annum Rs.20,90,860/- 5. CONCLUSION After implementing 5s for a period of 4 months, The OEE of the company has risen by 7% and there is a projected annual savings of INR 20.9 lakhs. For an investment of 4.3 lakhs which might last for a maximum of 3 years, the organization has reaped full rewards for the investment in the form of projected savings. The above mentioned savings are quantifiable or measurable whilst there are many more factors like employee improvement in terms of knowledge and skill etc. which have also increased significantly which indeed will do the organization a lot of good. Investment Vs Savings per annum Cost in Lakhs INR Investment in Lakhs INR Savings in Lakhs INR 0 Total Investment Category Total Savings per annum Figure 15 Cost Vs Savings in INR. 6. FUTURE SCOPE The basic philosophy of lean manufacturing is 'continuous improvement'. The organization can eventually implement all the lean manufacturing principles and improve the Overall Equipment Effiency(OEE) further more to become a world class organization. It will take significant amount of effort whilst maintaining current standards seeking further improvement but the efforts will pay off in the future editor@iaeme.com

14 Economic Justification for Implementation of 5s in MSMES: A Case Study on M/S. Unnathi CNC Technologies Pvt.Ltd. REFERENCES [1] Chapman, C. (2005) Clean house with lean 5S, Quality Progress, Vol. 38, No. 6, pp [2] Mihail Aurel Titu; Constantin Oprean and Daniel Grecu; Applying the Kaizen Method and the 5S Technique in the Activity of Post-Sale Services in the Knowledge-Based Organization; ISSN , IMECS 2010, March 17-19, 2010, Hong-kong. [3] Records of Lean Manufacturing Consultancy, PES University. [4] M. Karthick, M. Sundarraj and T. Raja, Design and Control of ATC or Shorter Time Interval in CNC Machines. International Journal of Mechanical Engineering and Technology, 8(3), 2017, pp [5] Ajay Kumar, Simranjeet Singh, Sahil Barry, Shivam Bhardwaj, Er. Ajay Sharma and Er.Harpreet Singh. Parameter Optimization in Vertical Machining Center CNC for EN45 (Steel Alloy) Using Response Surface Methodology. International Journal of Mechanical Engineering and Technology, 7(2), 2016, pp [6] Mufaddal A. Saifee and Dr. Usha S. Mehta. Design and Implementation of FPGA Based G Code Compatible CNC Lathe Controller. International Journal of Electronics and Communication Engineering & Technology, 7 (1), 2016, pp [7] Ajay Kumar, Simranjeet Singh, Sahil Barry, Shivam Bhardwaj, Er. Ajay Sharma and Er. Harpreet Singh. Parameter Optimization In Vertical Machining Center CNC For En45 (Steel Alloy) Using Response Surface Methodology. International Journal of Mechanical Engineering and Technology, 7(2), 2016, pp [8] Shaman Gupta; Sanjiv Kumar Jain; The 5S and kaizen concept for overall improvement of the organisation: a case study; Int. J. Lean Enterprise Research, Vol. 1, No. 1, editor@iaeme.com

Micro & Macro Plan for Implementation of 5S in a Manufacturing Organisation

Micro & Macro Plan for Implementation of 5S in a Manufacturing Organisation Dr. Ravi Shankar Kalva 1, Dr.A.Prabhu Kumar 2, V.Srinivasu 3 1 Professor, Department of Business Management, J B. Institute of