82

K. Chandrasekaran
completed his
Bachelor of
Technology
(Mechanical) from
IIT Madras, and
Post Graduate
Diploma in industrial
management from
University of Mumbai.
He has over 40
years of experience
in manufacturing,
general management
and consultancy and
has been with RSM
Astute Consulting for
over 14 years.
Lean Manufacturing
Techniques In
Jewellery Industry
S
everal techniques and
models may be adopted
to address issues related
to productivity and
competitiveness. One
such popular set of tools is known as
Lean Manufacturing Techniques.
Te aim of the article is also to
provide an introduction to the Lean
Manufacturing Competitiveness
Scheme promoted by the Government
of India that can be made use of by
the organisations in the jewellery
manufacturing industry.
Te techniques can be used
to improve productivity and
competitiveness. In a globalised world,
increasing competition is a fact of life
and the Indian jewellery industry is no
exception. In such a scenario, the only
way forward for the industry is to become
globally competitive by adopting global
best practices in productivity.
What is Lean?
Lean Manufacturing or Lean Production,
which is ofen known only as Lean, is a
production practice that considers the
expenditure of resources for any goal
other than the creation of value for the
end customer to be wasteful, and thus a
target for elimination.
Lean manufacturing was developed
by the Japanese automotive industry,
principally Toyota, following the
challenge to re-build the Japanese
economy afer World War II. Until
the 1990s, it was only the automotive
industry that had adopted Lean
Manufacturing. Since then, it has
spread to general manufacturing,
consumer electronics, healthcare,
construction, food processing,
logistics and distribution, services,
retail, maintenance and even
government.
Lean means without waste. Lean is
a practice which considers any activity
or efort not contributing to value
creation as waste. In other words it
is a simple way to produce what the
customer wants, at a time when they
want it and at a price they are prepared
to pay, using least resources.
Eliminating waste creates processes
that need less human efort, less
space, less capital, and less time to
make products and services at far less
costs and with much fewer defects,
compared with traditional business
systems. Companies are able to
respond to changing customer desires
with high variety, high quality, low cost,
and with very fast throughput times.
Lean is a set of tools that assists in
the identifcation and steady elimination
of waste. As waste is eliminated, quality
improves while production time and
cost are reduced. Besides the aim of
waste reduction, Lean also focusses on
improving the fow or smoothness of
work.
Lean manufacturing was
developed by the Japanese
automotive industry,
principally Toyota, following
the challenge to re-build
the Japanese economy
after World War II. Until
the 1990s, it was only
the automotive industry
that had adopted Lean
Manufacturing.
[ By K. Chandrasekaran ]
INTERNATIONAL JANUARY 2011
INDUSTRYINSIGHT
Application of Lean
Manufacturing Techniques
in Jewellery industry
Te jewellery industry can also adopt
and beneft from Lean Techniques as
it aims to eliminate waste and improve
fow of work. We have to understand
waste in the context of the jewellery
manufacturing process.
What is waste - Waste can
arise at the following stages:
1. During design stage Work that can
be proactively avoided can be decided
at this stage so that wasteful practices
are not built into work practices.
2. During planning stage Planning
and scheduling can be done in a
manner that prevents loss of time,
less inventories and so on.
3. During operations stage Tis is
reactive as compared to the earlier
actions and is to be addressed
afer the process is in place. Lean
considers the following wastes as
relevant to the operational stage:
Transportation Moving products
that are not actually required to
perform the processing
Inventory All components,
work in process and fnished
products not under process
Motion People or equipment
moving or walking more than is
required to perform the processing
Waiting for the next
production step
Overproduction production
ahead of demand
Over processing due to poor
tool or product design
Defects efort involved in
inspecting and fxing defects
cost of quality
Lean Techniques:
Lean techniques essentially propagate
the following:
1. Design a simple manufacturing
system
2. Recognise that there is always room
for improvement
3. Continually improve the
manufacturing system design /
processes
Te widely used lean manufacturing
techniques are:
1. 5S system: It propagates the
basic set of requirements to keep
a workplace efcient. 5S stand
for Sort, Set in Order, Shine,
Standardise and Sustain and these
can be explained as under:
Sort Eliminate the cluter
When in doubt, throw it out
Set in Order Organise and
label, set boundaries and limits
A place for everything and
everything in its place
Shine Clean everything inside
and out Inspection through
cleaning
Standardise Keep checklists,
charts etc. and make them
visual Everything in a state of
readiness and service
Sustain Maintain discipline
through the implementation of
continual improvements
Te 5S concepts consistently
produce an organised workplace
resulting in increase in quality and
productivity and a reduction in required
work place.
Ultimately, housekeeping and
workplace organisation are directly
linked to achieving discipline in
manufacturing. Lean manufacturing
cannot be achieved without the culture
and discipline of 5S in place.
2. Visual Control: Visual systems are
a form of communication and can
be used to direct fow and identify
problems / needs / status with
minimal interaction from a person.
Typically, these can be no or low
INTERNATIONAL JANUARY 2011 83
cost solutions and can be quickly
implemented to improve people,
information and document fows.
Visual communication uses specifc
methods and techniques to provide
fast, two-way communication
between teams, shifs, co-workers
and management and can be used
anywhere in the organisation.
Simple signals that provide an
immediate understanding of a
situation or condition such as
charts, light signals, lane marking on
foor, safety instructions, warning
signs etc. are examples of visual
control. Tey are generally efcient,
self regulating and worker managed.
3. Standard Operating Procedures
(SOPs): An SOP is a writen
document / instruction detailing
all steps and activities of a process
or procedure. Tese should be
carried out without any deviation
or modifcation to guarantee
the expected outcome. All
quality impacting processes and
procedures should be laid out in
SOPs. Tese SOPs should be the
basis for training new employees
and checking work of experienced
employees. SOPs must be regularly
reviewed and updated to assure
compliance to the regulatory
requirements and work practices.
4. Just in Time (JIT): JIT aims
at producing the right product in
right quantity at the right time. Tis
almost results in zero inventory
and shortest possible cycle time.
Te application of JIT leads to the
following benefts:
Reduction in inventory by more
than 50%
Reduction in lead time by more
than 50%
Reduction in rework
Reduction in space by over 40%
84
Considering the above, examples of waste in jewellery manufacturing can be listed as below:

No.
Waste Efect of waste
1 Rework - Most jewellery pieces are subjected to
rework and the rework percentage is generally very
high depending upon the manufacturing technique
used and the design complexity
Limits competitiveness in establishing selling price
because these costs are ultimately borne by the buyer
Prevents on-time deliveries which cause additional costs in
terms of overtime, premium freight and other administrative
costs
Represents quality problems which may reach customers
even if 100% inspection methods are in place. It is a
statistical fact that 100% inspection is only 85% efective.
2 TR (Total Rejection): Pieces which have become
non-conforming to customer requirements and
having to undergo a non value added melting process
for recovery of precious metal is a waste.
Costs of rejection have to be absorbed by good pieces and in
turn by the customer

TR contributes to approximately 3% -5% of total

production waste.
Sr.
No.
Waste Efect of waste
3 Extra Pieces Produced to compensate for TR

Tese represent additional waste to

compensate original waste.
4 Process Botlenecks Work in process builds up due
to imbalance in capacities

Idle manpower

Idle machinery

High levels of work in process

5 Machine Downtime May happen due to inadequate
maintenance systems

Reduces
manufacturing
capacity

When critical equipment breakdown, the

consequences could be serious
6 Inventories

Inventories held up in all stages from

gold central to fnished goods storage is
considered a waste.

Carrying costs of inventories could add

upto 25% - 30% per year.
INTERNATIONAL JANUARY 2011
INTERNATIONAL JANUARY 2011 85
INDUSTRYINSIGHT
5. Value Stream Mapping: Tis
lean technique is used to analyse the
fow of materials and information
currently required to bring a
product or service to a customer.
Value stream mapping is commonly
used to identify opportunities for
improvement in lead time. Value
stream mapping is also used in
logistics, supply chain, service
industries, product development
etc.
6. Poke Yoke or Mistake proofng:
Tis technique is used to prevent
errors at their source of origin
leading to zero-defect product. Te
idea behind this technique is to free
a persons mind from maintaining
repetitive vigil on the processes. It
is a cost efective tool using very
simple devices to prevent the
production of defective products.
7. Total Productive Maintenance
(TPM): TPM focusses on the
objective of zero breakdowns.
Emphasis is given on frst line
preventive maintenance by the
operators, which is then supported
by initiatives by specialists. TPM
implementation leads to improved
productivity and quality of
products.
8. Kaizen: Kaizen or continuous
improvement is about doing
litle things beter everyday. It
is slow, gradual but continuous
improvement. Problem solving
under Kaizen is a cross functional,
systematic and collaborative
approach.
9. Six Sigma : Six sigma is a
technique to improve the quality
of process outputs by identifying
and removing the causes of defects
(errors) and minimising variability
in manufacturing and business
processes
Benefts of Lean Manufacturing can
be summarised as below:
a) Reduction in waste
b) Improvement in productivity and
quality
c) Introduction of innovative practices
for improving competitiveness
d) Induce good management practices
e) Increase in output
f ) Reduction in customer complaints
g) Beter adherence to delivery
schedules
h) Reduction in stage wise rejections
i) Lesser inventory requirements
j) Optimum utilisation of resources like
space, manpower, materials, equipment,
energy, consumables etc.
k) Orderly work place and
l) Culture of continuous improvement
Lean Manufacturing
Competitiveness Scheme
(LMCS):
Te Ministry of Micro, Small and
Medium Enterprises (MSME),
Government of India has formulated
a National Manufacturing
Competitiveness Programme with
an objective to support the industry in
their endeavour to become competitive.
One of the components of
the National Manufacturing
Competitiveness Programme is the
Lean Manufacturing Competitiveness
Scheme (LMCS).
Te ministry will subsidise the costs
of the scheme to the extent of 80% and
the participating organisations will
have to bear only 20% of the cost. Units
having investment of below Rs.10 crore
in plant and machinery are eligible to
participate in the scheme. Te scheme
will be simultaneously for a group of 8
to 10 companies called a Cluster
Te ministry has established a
system for monitoring the scheme that
will be implemented through accredited
consultants. RSM Astute is one of the
accredited consultants for the scheme.
Kaizen or continuous
improvement is about
doing little things
better everyday. It is slow,
gradual but continuous
improvement. Problem
solving under Kaizen
is a cross functional,
systematic and
collaborative approach.