ECONOMIC RESEARCH CENTERDISCUSSION PAPER

No.174

Lean Design and Management for Manufactoring
Enterprise Lifecycle

by
NIU Zhanwen

March 2009

ECONOMIC RESEARCH CENTERGRADUATE SCHOOL OF ECONOMICSNAGOYA UNIVERSITYLEAN DESIGN AND MANAGEMENT FOR MANUFACTORINGENTERPRISE LIFECYCLE
Niu Zhanwen
School of Management, Tianjin University, China, 300072

ABSTRACT
Most enterprises inducting lean production were confined by the innate limitations ofexisting production systems, which make it difficult to fulfill lean production
comprehensively. To solve this problem, the theory of lean design and management forthe manufacturing enterprise lifecycle was proposed. First, the necessities of lean design
were analyzed and its theoretical system was established; second, the principles, process,methods and tools for lean design was introduced. Techniques and theories such as lean
production, facility layout, system simulation and simultaneous engineering were
integrated to support the implementation of lean design and management; finally, a casestudy of a cold-rolling enterprise was analyzed.
Keywords: lean design, lean production, lifecycle, simulation, manufacturing enterprise,production system

I． INTRODUCTION
Nowadays, the study and practice of “lean” have already extended from the production
domains to other stages such as product development and sales. Theories such as Lean
Supply Chain, Lean Six Sigma and Lean Product Development were proposed. For
example, James Morgan and Jeffery liker [1] summarized the product development way
in Toyota Corporation, and proposed a system model of Lean Product Development
which integrated people, process and tools. Scholars in China also suggest that it isnecessary to extend the application scope of lean. For instance, Yongsheng Gu [2]proposed lean factory and technique design for the automobile engine enterprise;
Haicheng Yang [3] suggested lean concept should be extended from manufacturing toevery steps and processes of design stage in order to form a superior plan; Tianbing
Zhang [4] introduced the route of applying lean product design and how to choose
proposal to avoid wasting.
However, few research focus on establishing a complete theoretical system of lean
design and management for manufacturing firms which integrates product development,
factory design and production; in the term of depth, further research is still necessary forconcrete principle, process and available tools for lean design; in the term of time,previous research could be more systematical if they take manufacturing enterprise1

entire lifecycle into account. Therefore, this paper will focus on the theoretical system,
principles, process and available tools of lean design and management for manufacturing
enterprise lifecycle. Then, a case study of a cold-rolling enterprise will be introduced.
II.
THE NECESSARIES OF LEAN DESIGN
A. First-class Potency of Lean production
In the 1980s, Toyota Production System (TPS) was recognized in the world, and it wassummarized as “Lean Production”. And now the practice of lean indicates that thepotency of lean production was first-class in the world:
1) During 2007, Toyota, which produced 9.37 millions automobiles in the global andsold its products in more than 170 countries, has surpassed GM and became the largest
automobile manufacturer in the world.
2) In 2007, profits of Toyota were approximately equal to 15 billion US dollars while
GM and Ford’ profits were negative;3) By February 3, 2007, the market value of Toyota reached 172.3 billion US dollars,
which was 10 times more than GM’s.
B. From Lean Production to Lean Design
Lean Production has proven to be the most effective production system for
manufacturing firms. The way that how manufacturing enterprises induct lean
production is to improve continually the existing production system. However, many
problems inherit in the design stage, which may lead to the high cost, unsatisfactory
effect and difficulties to fulfill “lean” comprehensively in the production and operation
stage.
Many manufacturing enterprises plan to conduct new project or Business Process
Reengineering (BPR). If Lean concept can be introduced in the early stage of enterprise
lifecycle such as project construction period or product development stage, wastes will
be eliminated radically from the headstream, rather than be solved when problems reallyoccur. As a result, the efficiency of investment will be increased and the occupation ofland and other nonrenewable resource will be deduced. In addition, the goals of
improving productivity, saving energy and protecting environment will be easier to be
fulfilled. To conclude, the eight types of waste in the enterprise and solutions by Lean
Design are listed in Table 1.

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Table 1 –Wastes and lean design solutions
8 Deadly Waste
Solutions
Excess production
Capacity design, Pull system design, Leveled production
DelaysContinuous flow, One-piece flow, Standardized work
Unnecessary transport
Production system and logistic system design
Excess or inappropriate processStandardized work, Process design
Inventory
Pull system/Kanban system design, Continuous flow
Unnecessary movement
Standardized work
Making defective items
Jidoka，Lean 6sigma
Unexplored creativity of employee
Organization system design, Enterprise Culture

Techniques of Lean Design stem from lean production to a large extend, such as pull
system, continuous flow and leveled production, and it also introduce some newelements like organization system design, information flow design and etc.
The major distinction between lean design and traditional lean improvement lies in thatthe latter emphasizes on improving an existing system, yet the former stresses on
inducting lean concept from an early stage and eliminate waste from headstream. The
distinctions between lean design and lean improvement are listed in Table 2.

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Table 2 –Distinctions between lean design and lean improvement
Distinction
Concept
Content
MethodFocus
Tools
PotencyTime

Lean Improvement
Improving on an existingproduction system
Production and operation
Continuously improving on
production system
Middle stream in the supply chain:production stage

Lean Design
Inducting from the design stage
Product development, factory design and etc.
Systematical design for production,
information, organization system and etc.
Upstream of production: design stage
Value Engineering, Simultaneous
Engineering simulation and etc.
Limited by data and design
Inducting from an early stage of enterprise
lifecycle

JIT, Jidoka and other tools
Limited by original system
Inducting from a middle stage

The real savings of lean design come from allowing designers to integrate design andproduction, work out design errors on the early stage rather than on the actual system.
The concept of reducing costs through working out problems in the design phase rather
than after a system has been implemented is best illustrated by the rule of tens. This
principle states that the cost to correct a problem increases by a factor of 10 for every
design stage through which it passes without being detected (See Fig. 1).

Figure 1 –Benefit of cost reduction effects in production system lifecycle.

III. SYSTEM, PRINCIPLES AND TOOLS OF LEAN DESIGNA.
Lean Design and Management for Enterprise Lifecycle
Lean Design refers to design for the entire process from the product design to delivering
finished product to customer, including lean product development and lean plant design.
Lean Design primarily contains design for “seven flows”: material flow, information
flow, process flow, value stream, people flow, fund flow and time flow. Lean Design
can also be integrated into a complete system, as shown in Fig. 2.

41) Lean product development. There are several typical wastes in the productdevelopment process: direction conflicts, errors of tool/prototype, premature criterion,
useless information, test and validation, knowledge abandon, Separation of
responsibility, action and knowledge and barriers of communication. Lean methods,
such as Front-loading, set-based concurrent engineering can be utilized to create acontinuous and smooth product development process.
2) Production system design. Apply lean methods and principles, such as U-shaped line,
one-piece flow, and standardized work into the process flow design and production
system design.
3) Logistic system design. Material flow design; select and dispatch transportations;define the batch size according to one-piece flow principle.
4) Information system design. Select information management system, for example the
ERP systems, in order to realize the cooperation between lean and IT technology
effectively; information flow design, enhances information transmission efficiency andreduces information redundancy in production and management
5) Organization system design. Establish motivation mechanism, and create the leanculture to respect and explore the employee’s creativity; People flow design,multiskilled operator training and combined operation design and etc.
6) Production plan and control. Realizes leveled production and Just-in-time production;
time flow design, including Takt time, lead time, cycle time and etc.
7) Production and operation management. Conduct value steam analysis and design,
fund flow management and so on.

Figure 2 – Lean design and management for manufacturing enterprise lifecycle
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B.
Principles
Three main technical support systems for Lean Design are lean production, facility
layout and system simulation technology. Lean thinking refined from lean production is
the resource of concept of lean design. Concrete methods in lean production and facility
layout serve as the technique support for Lean Design. Simulation is a significant tool totest and optimize the proposals of lean design.
Lean design originates from lean production; the lean thinking becomes the philosophy
foundation for lean design. Jeffrey Liker summarized 14 principles for lean production
in “The Toyota Way” [5]. On the basis of these principles and rules of productdevelopment and factory design in Toyota Company, 13 basic principles for lean design
can be summarized from perspectives of concept, content and process, shown in Table 3.
Table 3 –PRINCIPLES FOR LEAN DESIGNCATEGORY
Process: SE
and Frontloading

Content :eliminate
waste from theheadstream
Concept: forma long term
philosophy
and improve
continuously

PRINCIPLES
1) Technicians in different departments work together to put forward different
proposals2) Standardize and integrate process of design and production, equipment andtools and IT technique3) Carry out SE activities in the design stage to synchronize different processes.
4) Make processes flow continuously5) Let the demand of customer pull the systems6) Level out workload of processes
7) Use visual controls
8) Select Information system appropriately; make technology serve for process
9) Respect, develop and encourage staff; appoint and train staff appropriately
10) Eliminate the waste from headstream11)Base management decisions on a long term philosophy
12) Identify the value defined by customers13) Integrate with lean production seamlessly to gain a continuous improvement

C.
Process
Concrete methods for lean design stem from facility layout, production and logistic
system design, management science and so on. Based on these theories and 13 basic
principles, a series of methods and tools for Lean Design can be developed. Thesemethods or tools should be implemented into a standardized process, includingcollecting initial information, creating proposal, optimizing proposal and implementing,as shown in Fig. 3. Note front-loading, whose three basic factors are Sharing “field”,
realizing synchronization through IT technology and implementing SE activities, isrequired to be widely used in the process of Lean design.

6Figure 3 –Standardized process for lean design.

1) Technicians in different department are required to share the “field”, challenge
problems positively and select the optimal solution from several proposals. Then, theoptimal solution will be standardized and be shared by staff. In Toyota, design,
appraisement and production technique departments, main plants and other departments
which directly participate in the production of automobile are all located in the Aichiken and 10 kilometers around it in order to promote the communication of different
departments.
2) Realize synchronization through IT technology. Highly concern about newtechnology, and let technology serve for the process rather than let process be adapt tothe advanced IT tools. Before determining to induct IT tools, check the benefit it canbring about for process. In Toyota, for example, in the early 1980s, two dimensions (2-D)
CAD is the mainstream tool for the design of Powertrain in order to test products earlier
and check the quality of automobiles before mass production. In 1995, 3-D CAD wasused to improve the efficiency of the editorial design through parameters design. In 2000,
Toyota took advantage of IT technology to synchronize the process design andproduction lines design, using x-ray and CT to measure parts and inducting the results
into 3-D CAD.
3) Simultaneous Engineering (SE) activities are required to be carried out in the processof Lean design as much as possible. SE is a systematic approach and technique toparallel and integrate products and related process, including the manufacturing process7and supporting process. It requires product developers to take into account factors suchas function, manufacture, assembly, job scheduling, etc. in different stages of productlife cycle from the very beginning. It also stressed that all departments working together
to minimize the repeated design. By sharing “field” and Realizing synchronization
through IT, Toyota brought the process of roughcast design and equipment/tools designforward and synchronized the process of product design, roughcast design, andequipment/tools design. As a result, the process of design and development cycle time
can be reduced to 10-12 months, as shown in Fig. 4.

Figure 4 –Comparison between design in series and SE activities
.
D.
Tools
It is widely accepted that simulation has become an integral part of effective systemdesign. System simulation technology can be utilized into the following domains:improve equipment utilization, reduce waiting time and queue sizes, establish optimum
batch sizes and part sequencing, train operators in overall system behavior and job
related performance and etc. These techniques can be used into lean design to conduct
production and logistic system design, information flow and value stream analysis andetc. As shown in Fig. 5, in the three-dimension framework of simulation for
manufacturing enterprise [6], in time dimension, simulation model can be introduced
from the early stage of lifecycle to help designer revise and optimize their proposal; in
width dimension, simulation can be used to design the production system and supply
chain; in depth dimension, simulation can be integrated with other information systemsuch as ERP systems to serve useful purpose for production plan and decision-making.

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Figure 5–three-dimension frame of simulation for manufacturing enterprise
IV. CASE STUDY
Lean Design for the project of 900 thousand-ton upscale cold-rolling product of an ironand steel cooperation will be chosen as a case study. Main products of this enterprise are
Cold-rolled coil, Hot Galvanized Coil and Hot Pickling Coil, which have been widelyused in the automobile, refrigerator, air-conditioning, microwave oven and otherindustries. Along with the increasing demands for these products, cold-rolling enterprise
met unprecedented opportunities. This enterprise began to reengineer its businessprocess or rebuild their plant, and adjust its product structure at the same time. This
enterprise is still in the production system design phrase; production system, information
system design and value stream analysis will be selected as illustrations.
A. Production System Design
1) Production line design. The technique process of its main products contain picking,cold-rolling, degreasing, annealing and etc, on the basis of which, the facility layout ofthe plant is shown in Fig. 6.

9Figure 5–Facility layout planning.

The production line of this plant is designed in accordance to the one-piece flow andcontinuous flow principle. Advantages of this U-shaped line are listed in the Table 4.
Table 4 –Advantage of U-shaped LineADVANTAGESReduce transportation
Reduce space
Reduce WIP
In and Out at one accessegress place
Multiskilled Operators
Easier to communicate

INSTRUCTIONS
Machine was arranged by processing, transportation between
processes was reduced
Save the space for transportations and WIP
WIP was reduced because Buffer reduced
Simplify transportation route and avoid movement inside theplantDistance between workstations is short. Operators can handle
different processes
Operators can help each other more readily

2) Visualization of technique process. Simulation software was used to establish themodel for production system in order to realize the visualization of process, whose main
steps contains data collection, model translation, validation and etc. As shown in Fig. 7,
established model for this plant contains 204 entities and hundreds of relationships
between entities, which can be used to test capacity, improve equipment utilization, set
production plan and etc.

10Figure 7. Perspective view of the simulation model.

B. Information system design
According to Michel Nilsson [7], current scheduling software, including some ERP
systems, does not provide sufficient support for generating and verifying alternative
solutions when changes such as rush-orders and machine breakdowns occur. Besides, as
described below, production planning and scheduling of this plant is stricter thancommon manufacturing plants. For example, the Hot Galvanizing Line could not be
halted at will, thus inventory is required to guarantee its continuous work; however,“safety cushion” could be translated into a huge volume of excess inventory whichcauses a great waste. Therefore, simulation analysis of sensitivity of safe production isrequired to define its optimum inventory. The Integrated system between simulation
model and traditional system can be developed as the bridge for the communication
between market demands and production system (See Fig. 8).

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Figure 8. Simulation analysis of sensitivity and scheduling

C. Value Steam Analysis and Design
A value stream is all the actions, both value added and non-value added, which arerequired to bring a product through the main flows essential to nearly every product: theproduction flow from raw material into the arms of the customers, and the design flowfrom concept to launch. Value stream could be used to define value-creating time andnone value-creating time, on the basis of which, waste could be identified andimprovement could be fulfilled to increase productivity and reduce waste.
The price of cold-rolling products fluctuates frequently. When it is expected to rise,companies will increase inventory, which means price fluctuations will impact the
production plan. Different with fully pull system, this enterprise could be converted intoa half-pull system, in which a balance between low inventory and system safety could be
struck. In terms of price stability, production plan could be set according to the Just-intime production and leveled production principle; In terms of price fluctuate, production
should be arranged into a pull system. The value stream map was shown in Fig. 9.

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Fig. 9. Value stream map

CONCLUSION
This paper studied theoretical system, principles, process and tools of the theory of lean
design and management for manufacturing enterprise and illustrates a case study of acold-rolling enterprise finally.
Research results highlight that lean design and management, which extend lean conceptfrom production stage to the whole manufacturing enterprise lifecycle, can eliminate
problems and wastes which could emerge in implementation stage from its headstream
rather than improve on an existing system. It also can swept away barriers forcomprehensively lean production.
Further research could focus on the special methods and tools for lean design and its
connection with lean production.
REFERENCESJames M. Morgan and Jeffrey K. Liker. (2006), The Toyota Product Development System: Integrating People,
Process, and Technology, Productivity Press.
Yong-sheng Gu (2006), “Lean Design for China Automobile Engine Enterprise,” in Automobile & Parts
Technology, Shanghai, vol.35, Augest, pp28-31.
Hai-cheng Yang (2007), “Lean Design,” in Manufacture Information Engineering of China. Beijing, December,
pp1-2.
Tian-bing Zhang (2006), “The Route of Lean Design,” in Global Supply Chain. Beijing, May, pp109-111.
Jeffrey K. Liker (2004), The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer,
McGraw-Hill Professional.
Zhan-wen Niu, Li Zhang, Yu lin, Er-shi Qi (2008), “Three-Dimensio Framework of Production System
Simulation: Begin with the Set-up Stage,” in proceedings of International Conference of Production andOperation Management, in press
Nilsson, M, Solding, P. and De Vin, L.J. (2004), “A System Architecture for Integrated Simulation-Based
Production Planning and Scheduling,” in Mechatronics, Ankara, Turkey, pp.815-824.
Kurimura Gen (2007), “Through the SE activity supported by Front-loading to integrate the value condition of
the high grade product to the design,” in Nikkei Monozukuri, May, pp87-93.

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