THE APPLICATION OF LEAN PRINCIPLE IN NIGERIA PACKAGING INDUSTRY (CASE STUDY OF A BREAD FACTORY, NSUKKA, ENUGU STATE)

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THE APPLICATION OF LEAN PRINCIPLE IN NIGERIA PACKAGING INDUSTRY (CASE STUDY OF A BREAD FACTORY, NSUKKA, ENUGU STATE)

ABSTRACT

The immediate impact of the economic downturn and challenging market condition on small and medium scale enterprises (SME) is an urgent demand to implement the effective resource utilization and processing system that will improve productivity. Effective adaptation to the highly competitive environment entails integrating different thought concepts and inventive ideas into the SME processes to reduce manufacturing costs, wastes and improve quality. This paper explores the use of lean concept in SME to improve productivity by reducing operator motion distances, processing time and cost of energy supply. The project reviewed productivity improvement opportunities in Campus bread factory Nsukka using lean principle. The problems in the existing layout were carefully delineated through direct observation of production processes and detailed work study. The resulting data were analyzed to enable the proposal of pertinent modifications in the process. When compared with the existing methods, the new developed method revealed at least 15.62% reduction opportunity in the distance travelled by the operator and decreased the process time by 13.09%. The results also showed that 35.99% reduction of cost of power generation is achievable. A new layout is proposed based on the research realities.

TABLE OF CONTENTS

TITLE PAGE

CERTIFICATION PAGE

DEDICATION

ACKNOWLEDGEMENT

ABSTRACT

TABLE OF CONTENTS

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

1.2 STATEMENT OF PROBLEMS

1.3 OBJECTIVE OF THE STUDY

1.4 PURPOSE OF THE STUDY

1.5 RESEARCH QUESTION

1.6 SIGNIFICANCE OF THE STUDY

1.7 ADVANTAGES OF THE STUDY

1.8 LIMITATION OF THE STUDY

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 ORIGIN OF THE STUDY

2.2 REVIEW OF LEAN SUPPLY CHAIN MANAGEMENT

2.3 THE SUPPLY CHAIN CYCLE

2.4 THE LEAN SUPPLY CHAIN

2.5 BENEFITS AND LIMITATIONS OF IMPLEMENTING A LEAN SUPPLY CHAIN

2.6 APPLICATION OF WASTE AVOIDANCE TO AN ORGANISATION IN EFFORTS TO INITIATE A LEAN SUPPLY CHAIN

2.7 LEAN PRINCIPLES SUITABLE FOR THE PRODUCTION AND PACKAGING INDUSTRY

CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 MATERIALS AND METHODS

3.2 PRODUCTION PROCESSES

3.3 CURRENT LAYOUT

3.4 TIME STUDY

3.5 TAKE TIME CALCULATION

3.6 CYCLE TIME CALCULATION

3.7 SAMPLE USED

CHAPTER FOUR

DATA COLLECTION PRESENTATION AND ANALYSIS

4.1 PROBLEMS IDENTIFIED IN THE CURRENT LAYOUT

4.2 WASTE IN TRANSPORTATION BY MANUAL OPERATION

4.3 ELECTRICAL ENERGY SOURCES IN THE CURRENT LAYOUT

4.4 PROPOSED LAYOUT

4.5 ALTERNATIVE ENERGY SOURCE

4.6 SOLAR ENERGY SYSTEMS

CHAPTER FIVE

5.1 CONCLUSION

5.2 DISCUSSION

5.3 REFERENCES

CHAPTER ONE

1.0 INTRODUCTION

Lean principle is closely related to productivity as good implementation of the methodology translates to improvement in productivity. The mantra of lean concept generally is that the same thing can be achieved using fewer people and lesser resources. This implies that people and resources can be redeployed to create even more value. Its applicability to small and medium scale enterprise (SME) is investigated in this study. An example SME namely; Campus bread factory is used as case study. Bread is a popular stable food in Nsukka in particular and most parts of Nigeria in general. Freshly processed and baked bread is enjoyed by all and sundry since it commands good aesthetic appeal and tastes well. In addition, bread is one of the most ubiquitous foods to get your hands on in time of breakfast. However, bread industry is witnessing unprecedented spate of increase in competitive environment and demand for its products owing mostly to the emergence of new local foods within and around Nsukka. Even though the optimal resource and product mix for maximum profit in bread baking business has been reported (Okolie et al., 2013), there is still no corresponding increase of investors in the industry to cater for the upsurge in its demand. Hence the increasing cost of its major raw materials coupled with the need to improve the productivity of the business in Nsukka municipality necessitates a complementary study to the work of (Okolie et al., 2013). This places great emphasis on better material handling measures and productivity improvement of bread factories. Customer’s demand must be met to sustain their goodwill and this ought to be done with least expenditure on inputs, without sacrificing quality and with minimum wastage of resources. From the foregoing, the bread industry should as a matter of necessity embrace the application of lean concept as an antidote for all forms of wastage in their product cycle. This step will ultimately increase productivity of the enterprise through a proper utilization of man, machine, material and money (MMMM). Lean Thinking represents one of the newest schools of thought in manufacturing since the first presentation of the concept of lean manufacturing in the book “The Machine That Changed the World” (Womack and Daniel, 2003). Lean packaging practice has been described as an integrated system that is intended to maximize the performance of the production and delivery processes in providing customer value while minimizing waste (Waston et al., 2011). Performance dimensions are measured by conformance to quality standards, costs, and variability in processing times and delivery reliability. Previous authors posit that a good means of appreciating lean concept is to view it as a collection of tips, tools, and techniques (i.e. best practices) that have been proven effective for driving waste out of the manufacturing process (Micietova, 2011). Some of the many benefits of lean concept are summarized in figure 1. Researchers have presented estimates of the values of the variables of figure 1 (Micietova, 2011). Lean production has been reported to be in direct contrast with the mass system of production where the major emphasis is on economies of scale that came from making large quantities of items in a batch and queue mode (Weigel, 2000). Lean production facilities may not necessarily be equipped with bulky machinery as in mass production facilities (Micietova, 2011). Instead, it utilizes compact, movable, and easily set up machines. The most important consideration of lean production is that the practices can work synergistically to create a streamlined, high quality system that produces finished products at the pace of customer demand with little or no waste (Shah and Ward, 2003). Some of the obstacles to adopting lean principle

The lean packaging system abides closely to the following five principles:

1. Value: To indentify and specify what generates value from the customer’s /clients perspective.

2. Mapping the value stream: Understanding the entire product life cycle to eliminate waste in single every step of operation.

3. Flow: To maintain a flow in the production process from the sourcing of raw materials to the delivery of the products. In order to minimize waste, the flow needs to be cautiously designed.

4. Pull: Let the customer pull the value and start working only once the orders are received.

5. Perfection: Eliminating unnecessary steps in different levels of operation and achieving perfection.

1.1 BACKGROUND OF THE STUDY

Lean manufacturing or packaging is an operating concept with associated strategies and tactics. Its objectives are: 1) an elimination of anything and everything that doesn’t add value to the end-product; and 2) an increase in product quality (or at least the maintenance of a specified level of quality). “Lean manufacturing” is a phrase coined quite recently; even so, the adjective “lean” has since been appended to a variety of services in addition to a variety of disciplines. In regard to the latter, the phrase, lean packaging, has come into vogue. Terminology notwithstanding, packaging historically has pursued lean principles.

Packaging inherently adds value. In fact, packaging is indispensable for the values known as the four utilities: possession, form, time, and place. In other words, packaging allows consumers to possess products, in the desired form, at the consumer’s desired time, and in the consumer’s desired place. Lean principles can’t logically advocate for the elimination of packaging, but can—and should—advocate for the elimination of overpackaging. What constitutes overpackaging can be subjective. That’s why the analysis should be made in an application-specific context; that is to say, the minimum amount of packaging should be utilized in the fulfillment of the requirements of a given application. That packaging philosophy, while completely consistent with the concept of lean, predates its emergence by decades.

Another packaging concept that’s consistent with lean but predates it is the unit load concept, which recognizes that the movement of a quantity in order to get it from point A to point B should be achieved with the least number of handlings, consistent with limitations imposed by material handling equipment, transportation mode, storage conditions, etc. It adds no value to handle a quantity multiple times when the same result can be had with fewer handlings. Packaging has levels: primary (i.e. a bottle), secondary (i.e. a corrugated shipper), and tertiary (i.e. a unit load). It’s unquestionably lean to handle a unit load rather than to individually handle primary packages, or to individually handle secondary packages.

Lean operations share much in common with sustainability, so much so that the objectives of the former can’t be achieved without residual benefits to the latter. It couldn’t be otherwise, since the elimination of waste and the attainment of targeted outputs from the consumption of fewer resources are at the core of both lean and sustainability. The environment has been a factor in the management of packaging and in packaging-related decision-making for decades prior to the introduction of the phrase, sustainable packaging. Both sustainable packaging and lean packaging are latter-day concepts but their defining characteristics have been components of the discipline of packaging for much longer.

For its entire existence, the discipline of packaging has advanced lean principles by increasing quality for the consumer. A packaged product comprises two components—product and packaging—and an increase in the quality of either component increases the quality of the whole, namely the packaged product. Packaging increases quality through its functions: protection, communication, and convenience/utility. All other factors being equal between two competing packaged products, the one that’s better protected is of greater quality. The same is true relative to the packaged product that’s the better communicator, ditto regarding the one that provides the better levels of convenience/utility. The quest to increase quality for the consumer through packaging drives innovations in materials, containers, components, and features. That’s been the case since the birth of the packaging discipline, with competitive pressures having been an ever-increasing constant.

The objectives of lean (eliminating waste and increasing quality) are subject to the variables of time, costs, and efficiency, with emphasis on small, continuous improvements; however, even the most grizzled veterans among us can’t claim to remember a time when the accepted philosophy was to ignore the aforementioned objectives, variables, and improvements. To the contrary, for generations on end, the ability to deliver quality more timely, at less cost, and at greater efficiency has been acknowledged as the path to a competitive advantage. That’s what packaging-related projects have long been about, not only in the picking of the low-hanging fruit, but in efforts that qualify as long-term projects. When a packaging line is configured (or reconfigured) for streamlined operations, that’s an example of lean. When a packaging machine delivers faster speeds, or occupies a smaller footprint, or embodies diagnostics and controls that don’t require a worker who’s highly technical (and more expensive, wage-wise), those, too, are examples of lean.

The objectives of lean, themselves, are not new, but the tools that have become associated with achieving those objectives are newer, at least in name. There have been companies that long have been about rooting out the causes of defects and eliminating them, even if those efforts didn’t go by the name of Six Sigma. There have been companies that long have been about continuous improvements through teamwork, even if those efforts didn’t go by the name of Kaizen. And there have been companies that long have been about optimizing inventory carrying cost, even if those efforts didn’t go by the name of JIT (Just-In-Time). Regarding JIT, it’s packaging’s protective capabilities that allow shipments to go straight from the receiving docks (without inspection or storage) to the plant floor where they are fed into the operations. In short, whatever the lean tool, packaging has to be included, because packaging is such an integrated component of operations, whether we’re talking about manufacturing or processing.

1.2 PURPOSE OF THE STUDY

Lean is a management philosophy in how to handle resources. The purpose of Lean is to identify and eliminate all factors in a production process that don’t create value for the end customer. Simply put, it is about creating more value for less work. Lean contributes to customizing and improving operational efficiency in an organization, with the goal to reduce lead-time. The principles of Lean date back to the beginning of the 1900s where they started out as an inspiration to a production system adapted for mass production. Since then, the philosophy has had a rapid development and now covers a holistic approach on how an operation can be optimized from top to bottom.

1.3 OBJECTIVE OF THE STUDY

The main objective of this work is to adopt a principle that will reduce waste in bread producing facctory. An average company will waste a significant amount of resources. In cases where the manufacturing process is outdated the level of waste can be close to 90%. At the end of this work, student involved will be able to understand how Lean Manufacturing processes can improve:

• Material Handling

• Inventory

• Quality

• Customer Satisfaction

1.4 SIGNIFICANCE OF THE STUDY

Lean production reduces waste and the costs involved in stock, therefore improving profits. However, the business will need to build a good relationship with the supplier because they will be reliant upon them. if they are not this could lead to a bad reputation and damaged brand image.

The benefits in material handling when lean manufacturing procedures are deployed include fewer moves of material, shorter travel distances in the warehouse and simpler picking routes in the warehouse. These also contribute to savings in inventory and improvements in quality.

By using smaller lots, the inbound and outbound queues are smaller. This reduces the inventory required to be in the queue and therefore the inventory level overall.

Smaller lots mean that any quality issues that arise can be dealt with at the time of manufacture. In manufacturing processes with larger lot sizes, quality issues may not be identified until late into the process and can be costly to correct, both in time and resources.

Improvements in material handling, inventory, and quality all lead to a more successful manufacturing operation. If items are produced on time and delivered to a customer by the delivery due date, customer satisfaction will increase. The same is true if the items sent to the customer are of a higher quality standard. This will reduce the incidence of repairs, returns, and customer complaints.

Ultimately, your lean manufacturing processes need to support your company in delivering its customers with what those customers want, when those customers want it – and accomplish that by reducing costs. That is not only the definition of optimized supply chain but the principle at the core of lean manufacturing.

Whether you are investigating lean manufacturing as a support tool in order to cut waste from your operational processes – or you are looking at Six Sigma for the same reason, you need a program that isn’t just a one-off project, but a change in the way of life at your company. If you’re hoping that lean manufacturing will become a panacea that will fix all your company’s ills – then you’ll need to understand that lean manufacturing isn’t just about fixing one aspect of your shop floor.

A process-oriented change means an evolutionary shift in the way your business operates. Understanding that is your first step to a successful shift toward lean.

1.5 ADVANTAGES OF THE STUDY

• Less infrastructure: A manufacturer implementing lean production only uses the building space, equipment, tools, supplies and manpower necessary to meet near-term inventory demand from buyers.. In contrast to mass production facilities, a building used with a lean production strategy doesn’t have any wasted space. Only the room necessary to meet demand is required. Similarly, the business doesn’t need unused equipment and tools sitting around. Labor shifts are also scheduled to ensure workers don’t stand around with nothing to do.

• Limited waste: The goal of limited waste is a key focus of lean manufacturing relative to mass production. Companies don’t want excess inventory sitting around waiting for customers to want it. This approach eliminates dated or obsolete inventory and the risk that certain items perish or expire. Eliminating waste is cost-effective. It is not necessary to have space or people to manage the extra inventory until it is purchased.

• Strong customer relationships: Lean production is an efficient approach to customer relationships. Unlike mass production, which attempts to meet the needs of all customers when demand occurs, lean production involves meeting the needs of loyal customers on a scheduled or predictable basis. Keeping your best customers happy and in good supply contributes to limited waste, while ensuring that your cash cow customers feel important to your business. It is also easier to customize products or flex production processes when you cater to select buyers.

• Lead times are cut

• Improved quality through the introduction of kaizen and quality circles

• Lower costs and contribute to improved profits

• Staff are more involved and potentially more motivated

• Working environments are safer and cleaner

1.6 STATEMENT OF PROBLEM

• The business may struggle to meet orders if their suppliers fail to deliver raw materials on time

• The business is unlikely to ‘bulk buy’ its raw materials and, therefore, it may lose the benefit of achieving economies of scale

• Buffer stocks are minimal and this may lead to the business having to reject customer orders requiring delivery immediately

1.7 RESEARCH QUESTIONS

Core consideration questions for companies applying in Lean principles implementation include:

i. What are the design requirements essential to Customer Value?