COST OPTIMIZATION IN PRODUCTION SYSTEMS : USING LEAN MANUFACTURING

Abstract: In the era of globalization, every company is trying its best to sustain its company’s name and their product in its respective market. The overreach goal of the thesis to optimize the cost in the production system using lean manufacturing. To attain the primary goal of the thesis, three layered approach has been carried out. Firstly, the non-value-added activities in the shop floor has been identified. The tools like VSM and spaghetti diagram is used to identify the non-value-added activities Secondly, the lead time of a particular product has been calculated for a particular product. The lean tools like JIT,5s, TQM, TPM has been used to reduce the lead time. TQM is used to identify the quality issues, TPM is used to identify the maintenance problems and JIT &5s is used to identify the problems in tool arrangement and delivery of the raw materials. The last part of the thesis is to measure the cost-effectiveness by implementing lean manufacturing to produce a particular product family. Tools like Activity based costing is used to allocate the cost involved in the various activities that can be measured by the cost drivers and cost pool. To measure the performance of the production system OEE is used in this thesis