IMPLEMENTATION PROCEDURE OF LEAN METHODS IN LOGISTICS PROCESSES. Roman BEDNÁR, Natália HORŇÁKOVÁ, Helena VIDOVÁ

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1 IMPLEMENTATION PROCEDURE OF LEAN METHODS IN LOGISTICS PROCESSES Roman BEDNÁR, Natália HORŇÁKOVÁ, Helena VIDOVÁ Slovak University of Technology, Institute of Industrial Engineering, Management and Quality, Paulínska 16, Trnava, Abstract Diversification of companies, in the business environment, does not give a great option to the standardisation of procedures. Companies which want to maintain or improve their position in the market should focus on improving their. Each company is characterised by its specific characteristics that make the company unique, but areas such as logistics, production, purchasing and sales have common characteristics that may be separated and special attention can be paid to them. The paper is focused on the steps to implement lean methods related to logistics, because logistics includes many non-value added. Lean methods offer a space to effortless changes through which companies can achieve improving of their market position. The authors also present the results of a survey conducted in the V4 countries. Based on this survey the steps to implement the methods of a lean logistics are proposed in the practical part, what is also the main aim of this paper. Keywords: lean Concept, Implementation, Logistics Processes, Market Research 1. INTRODUCTION The prosperity of the company should be improved in all areas. Therefore older and also new methods should be implemented in the company by simple procedures and not in lengthy and costly way. The existence of Lean Concepts can be observed over the last century, and their impact upon business is of considerable importance. A low level of information and an apprehension of new concepts hindered this process. The lean concept is designed to eliminate waste and implement only those activities that deliver value to customers and their negative impact is the lowest. The concept as a whole is primarily intended for companies with serial production. However, methods and procedures can be divided into logistics, manufacturing, administrative, purchase or sales groups by examining concept principles. Most of them can be used in several areas at the same time. The paper focuses on the steps to implement lean methods related to logistics, because especially logistics can represent the greatest potential for improving. It does not have to be like this because the probability of wasting is higher in this area than in others. The main aim of this paper is to present the detailed information about the implementation of lean methods in field of logistics to the wider business context. The paper is primarily for the readers/businesses that are willing to begin on the road to improvements through lean concepts in logistics without involving external companies. 2. MAIN TEXT Methods of Lean concepts can be used in all areas of business. The biggest intersection can be seen between logistics and the production area. Therefore, the paper attempts to separate the methods that directly enter into business logistics. A survey was conducted in V4 countries, focused on knowledge and the level of use of lean methods in industrial companies. Within this questionnaire, 605 respondents were contacted from industry. 162 organisations answered the questionnaire, which represents a return rate of 26.8%. 39% of the respondents were large companies with a staff of more than 250, 35% were small companies employing up to 50, and 26% of medium-sized companies, where the number of employees ranges from 51 to 250. The questionnaire evaluated the usage of the fundamental concepts of lean

2 manufacturing methods usable in the logistics system, namely: KAIZEN, Teamwork, KANBAN, VSM, 5S, TPM.[1] The results of the survey showed, that companies use this method regardless of the type of production. The type of production is closely related to the vastness and complexity of the logistics system. The methods are ranked from most used to least used in mass production in order by frequency: Teamwork, 5S, KAIZEN, TPM, KANBAN and VSM. [1] In Fig. 1 you can see the differences in representation of types of production. The most frequent is the usage of lean methods in companies dealing with serial production. The lean concept was designed for this type of production. The Fig. 1 also shows that different methods are also used in companies with others types of production. [1] Fig. 1 Using of lean methods in different types of production This section of the paper is specifically focused on the sequence of lean methods implementation steps. These sequences should support the interest of self-help application in companies that are not financially efficient enough to outsource the implementation to another company. In the following section each sequence through the use of diagrams will be described. These are decision diagrams, which correctly direct the user to successful implementation of above mentioned methods and the elimination of NVA (Not value added). The main section of the paper is built on the author s previous research published in the METAL2012 conference text book, entitled the "Application of Lean Principles in Business Logistics". In addition of practical examples of using lean methods in the previous article these methods were divided into two categories. The first category included the methods that directly enter the logistic (KANBAN, VSM) and in the second category were methods that indirectly affect the logistics (Teamwork, KAIZEN, 5S, TPM). [2] The most frequent method according the survey is Teamwork. This method is focused on employee s cooperation in order to achieve a synergistic effect of all employees. Teamwork is a method that indirectly enters into logistics. The sequence of its implementation steps is shown in Fig. 2. Teamwork implementation, like other methods, requires the selection of people who will deal with this process. Teamwork is the way of work organization in teams from 4 to 15 people. [3]

3 Team work Selection of the team for implementation the Full-area implementation Does the selected team have the To focus on To identify business Develop map of teams. To define the team groups by a process map To standardize teams activities To analyze business To synthesize business To provide feedback to team members To define teams autonomy Divide the so that they can exercise group 4-15 people, and to decide on their activities. To schedule a workshop meetings To determine the actions of individuals teams To develop training and information programs Ensure interchangeability of team members To reorganize evaluation, remuneration and motivation Identify team roles Selection of people to the team Fig. 2 The sequence of Teamwork implementation steps The next most frequently used method in terms of industrial practice needs is 5S. The method is oriented to increase the work efficiency at s through its proper organization. Based on our previous research, this method can be classified among those that indirectly enter into logistics. Therefore, it is necessary to consider with less impact to the whole area of logistics. The diagram shows the different stages (pink rectangles), divided into that describe in detail the 5S implementation (see Fig. 3). To prepare red cards To mark aids and tools with cards in To perform oparations bases on the cards Pareto classification of items To sort items in the To determine the number of items in To make an items inventory in the Draw layout of items 1. Sorting 2. Straightening To clean a Selection of the team for implementation the To label control and cleaning frequency in the To define the areas of continuous cleaning 3. Shine To define the areas of periodic review 5S To build a team spirit Train employees to keep according to the standards. 5. Sustaining the Practice To invite employees to the team which is implementing 5S To create a form for entering the cleaning and control in the 4. Standardizing Fig. 3 The sequence of 5S implementation steps KAIZEN (see Fig. 4) is designed to capture the improvement from all the corporate employees. KAIZEN was included in methods that indirectly enter the logistics in previous research. Its principle is continuous improvement in small increments, as opposed to large capital-intensive innovative changes.

4 Selection of the team for implementation the KAIZEN Initial training To develop a system of motivation and rewards for developers and evaluation team Collecting improvement proposals Workplace observation current situation Developer and evaluation team rewarding Evaluation of enterprise-wide benefits Standardization of the improved stage The effect is Motivation for further improvements Positive Negative Recordingof the solution effect Categorization of solution proposal and its results Implementation of improvements in the specific A Proposal of fully-area implementation of solution Is the proposal feasible? Fig. 4 The sequence of KAIZEN implementation steps Selection of the team for implementation solution Developing of action plan Implementation of the final solution TPM this method is utilised to maintain the constant working pace without unexpected failures. TPM is accordingly included in the group of methods within direct impact on logistics. Diagram of the sequence of TPM implementation steps is shown in Fig. 5. [4] Selection of the team for implementation the TPM TPM approval process Selection of demonstrati on facility END Implementati on of 5S principles in the To eliminate deficiencies found during the cleaning Further education of employees Creation of standard for cleaning, lubrication and control Support the management concept of TPM? Mark inspection, cleaning and lubrication zone. Create of vision for maintenance Present a vision of leadership of company. Draft of TPM implementation Classification of machineries and equipments into the group A,B,C,E Draft a maintenance check Proposal on increasing OEE Development of functional and structural decomposition Draft of applying autonomous maintenance Implementation of proposed solutions Identification and classification of critical components of machinery and equipment Proposal for optimalization Improving and expanding the level of TPM failure modes and their causes Scheduled Maintenance Plans Was the fleet of machines expanded after TPM implementation? Selection of appropriate type of maintenance for machine components Establish standards and technical documentation. Visual management Fig. 5 The sequence of TPM implementation steps

5 The TPM implementation is a lengthy process but the initial success can be seen in a short time. Two phases of TPM implementation as phase of process approval and phase of the TPM implementation itself can be seen in the diagram of the sequence of steps. We also refer to Visual Management use in the diagram. Its tools are used in the case of TPM either. The method KANBAN supports decreasing of production batches. Lower production batches mean fewer semi-products in production. The method was classified into the group of methods that directly enter the logistics in the previous research. The sequence of KANBAN implementation steps is shown in Fig. 6. Selection of the team for implementation the KANBAN Employee training Establishing of control loops To edit a layout of machineries and equipments - production line To define a supermarket zones Ensure rapid failures fixes To set the control standards Balance of capacities in material flow To ensure rapid exchange of machineries and equipments Preparation of the production system Estimate a number of KANBAN cards Draft of KANBAN card To place KANBAN boxes Name and description of product Number of pieces in a box Number of boxes in a pallet Label the machine on which the material is processed Label the machine on which the material is then processed To set the time intervals of KANBAN cards collection To reduce the number of kanban cards To place FIFO boards To set the standards of solutions for disagreements To place the control boards Application of KANBAN method Fig. 6 The sequence of KANBAN implementation steps The activities are divided into two phases. First one is the " of a production system" - without this phase implementation is impossible and second one is the "Application of KANBAN" this phase shows the progress of activities especially for the physical location of the elements in the production system. [5] The VSM method belongs to the first ones that are applied in the concept of lean production (see Fig. 7). Selection of product family representative Does the selected team have the Selection of product family representative by ABC analysis or similarity of technological Selection of the team for implementation the Assess the current state value stream map To include in the customer requirements VA index calculation To define the NVA and VA To record parametres of VSM To draw in the material flow from left to right To draw in the information flow from right to left Omplementation A proposal of actions and changes based in action plan Assess the future state value stream map Waste elimination workshop Draw a future state value stream map current situation VA index calculation waste Fig. 7 The sequence of VSM implementation steps

6 It is possible to reveal areas in which improvements start through VSM. This method reveals most of the waste in logistics. In the diagram of sequence of VSM implementation steps four phases can be seen that represent theoretical steps as: 1. Selection of representative for group of products, 2 Presentation of the current state, 3. Presentation of future state and 4. Implementation of measures (actions). The main steps were divided into more specific activities. The most important part of the implementation is to determine VA (Value added) and NVA (Not Value Added). [6] Conclusions In the article, selected methods have been used from the basic concepts of lean manufacturing methods, suitable for application in the logistics business. The survey was based on the use of lean methods in the V4 countries. The main part of the paper was focused on the sequence of each methods implementation steps. This section was mainly focused on displaying the activities through the decision diagrams that describe activities related to the implementation of these methods in detail. More detailed theoretical knowledge of selected methods was mentioned in the paper "LEAN PRINCIPLES APPLICATION IN BUSINESS LOGISTICS" published in the METAL2012 th text book last year. The issue of Lean Concepts implementation in small companies will not be as a matter of course in a short time but it is hoped that our paper can help to inspire industrial companies to increased activity in this area. Implementation is not easy in any way because every company is an individual entity. REFERENCES [1] BEDNÁR, R., VIDOVÁ, H., BELUSKÝ, M., Lean principles application in business logistics. In Metal 2012: 21.mez. metal. konference: BR, Hotel Voronež, Česká republika [CD-ROM]. Ostrava: TANGER: Květen, 2012, ISBN [6]. [2] MARCHWINSKI, C Lean Lexicon: a graphical glossary for Lean Thinkers. s.l. : Lean Enterprise Institute, Inc., ISBN: [3] WITKOWSKI, K. The aspect of integrated logistics for sustainable development, Procedings of the Joint International IGIP-SEFI Annual Conference 2010: Diversity unifies Diversity in Engineering Education, Trnava - Slovakia, 2010 [4] VIDOVÁ, H. The Application of Lean Principles in Business Logistics. Hochschule Anhalt. Kothen 2011, p 120, ISBN [5] WILSON, L How to Implement Lean Manufacturing. s.l. : McGraw Hill Professional, ISBN: [6] SANIUK, S., SANIUK, A., Rapid prototyping of constraint-based production flows in outsourcing, In Advanced Materials Research [online], 2008, Vol , p ,