Summary of master's degree work

The concept of "Lean Production" was introduced into circulation by the American - John Krafchik (John Krafcik), one of the co-authors of the book "The machine that changed the world" ("Machine That Changed the World"). This book was published in 1990 and summarized the results of the study of world’s experience of automobile manufacture. In the book the approach in production was named "Lean Production", that was developed in Toyota and markedly different from the approach of major U.S. manufacturers.
Lean Production is a logical concept of management, focused on the optimization of the highest market-oriented business processes, taking into account the motivation of each employee. The Lean manufacturing phenomenon is the basis of the new philosophy of management and a form of nonlinear management.
The aims of this manufacture are[1]:
- Minimization of labor costs,
- Minimizing new products creation terms,
- A guarantee of product delivery to the customer,

The concept of lean production involves the development of the mission, the formation of goals and objectives.

Each company has its own. It comprises the following problems[2]:
• establishment of guidelines to identify bottlenecks;
• planning and management of pilot projects throughout the production system of the enterprise;
• Development of Enterprise Standard for the organization and functioning of lean manufacturing;
• Formation of indicator evaluation of pilot projects and methods to promote their members;
• Organization of replication of the best practices of business units for general use within the corporation. Maximum quality at minimum cost[4].

Lean manufacturing is based on the system of organizing production, developed by Japanese car giant - Toyota (Toyota) - Toyota production system. All methods and tools for lean production, of course, coincide with Toyota’s elaboration. Toyota and, consequently, its production system is rightly considered to be the primary source and standard of lean production.

In general, using the principles of lean manufacturing can provide significant effects. The advantage of the system is in it’s structure: 80% of the institutional arrangements, and only 20% of investment in technology

Prof. OS Vikhansky states that the use of tools and methods of lean manufacturing allows to achieve a significant increase of enterprise efficiency, productivity, improvement of product quality and competitiveness without significant capital investment.

Vumek J. and D. Jones set forth the essence of lean production in the form of five principles[5]:
1 To define the value of a particular product;
2 Determine the flow of value creation for this product;
3 Ensure continuous flow of value creation for the product;
4 Allow the consumer to pull out product;
5 Strive for perfection.

The tools of lean manufacturing can be[7]:
- The system of TPM (Total Productive Maintenance) - Universal maintenance of equipment;
- System 5S (sort, rational layout, cleaning (keep clean), standardization, improvement);
- Quick-changeover SMED (Single-Minute Exchange of Die - changeover / re-equipment in less than 10 minutes);
- Kaizen (kaizen) - continuous improvement;
- Gemba Kaizen - uninterrupted improvement in the place of the additional cost creation;
- Extracting production - production is "pulled" by the customer, rather than "pushed" by the manufacturer.

The Benefits of Lean Production

Lean manufacturing is compared with the mass requires[8]:
- 1 / 2 of human effort in the workplace;
- 1 / 2 of production space;
- 1 / 2 of investments in the quipment;
- 1/ 2 engineer hours on the development of new products;
- 1 / 2 engineer hours on the process of manufacturing.

Lean advantage consists in the results of reorganization which become apparent immediately.[9] It is clearly seen in the sharp reduction of losses.

Lin distinguishes 7 types of losses[10]:
• Loss during transfer and movements of operators;
• Loss on transporting material;
• Loss due to excessive handling;
• Loss from downtime;
• Loss from overproduction;
• Loss from marriage, excessive waste and rework;
• Loss on stocks service.

Examples of utilization
Lean map. Unfolding of the Lean concept in Russia is presented on Lean map - the world's first map of lean production [11]. On the Lean-map created by ICSI and blogging about production management [12], the companies are marked that according to available information, apply the tools of lean manufacturing, as well as lean-people - that is, people being known, significant experience in lean manufacturing and active in the dissemination of lean ideas. The map is constantly supplemented, namely due to the applications and user information. Using the application one can note on the map any organization that deals the methods of lean, and any person having any relation to lean manufacturing.
Lean medicine. According to expert estimations, approximately 50% of medical staff’s time is not used directly on the patient. The transition to personalized medicine is to take place, where the patient receives assistance "at the right time and right place". Health care facilities should be located so that the patient will not have to waste time on numerous travel and waiting in other locations. Now this leads to considerable financial spending for patients and reduces the effectiveness of treatment. In 2006 on the initiative of Lean Enterprise Academy (UK) the first EU conference on the implementation of Lean in healthcare was hosted .
Lean -mail. In the Post Office of Denmark, in the context of lean manufacturing, a large-scale standardization of all the services offered to improve productivity and accelerate the postal shipments took place. For identification and control of postal services "map stream creation of their value" were introduced. Designed and implemented effective system of motivation of postal employees[13].

In recent years in Ukraine, as in the former Soviet Union countries, the interest in management issues, corporate governance, organizational structures of companies has substantially increased. Unfortunately, this interest manifested itself only in recent years[14].
In international practice many new concepts and methods of management, such as: Business process reengineering (BPR), Total Quality Management (TQM), Balanced Scorecard (BSC), statistical process control (SPC), coaching, model ISO international standards 9000, ISO 14000, HACCP, "Five S", "Six Sigma" and many more have recently been created [15]. Unfortunately, post-Soviet countries do not have their developments in this branch of industry. There are no traditions, schools, the experience of predecessors and well-established management systems. Therefore, Ukrainian managers have much to learn from foreign techniques in order to survive and remain competitive.
However, the culture of our country as a whole is very far from the concept of "prudence". This may be manifested in the fact that we have chips stored in the workshops, and procurement of metal is in the open air; fences are built of wood and furniture - made from sawdust; one shop is located in a few kilometers from the other one[16].
The competitive advantage of Ukrainian enterprises can be provided only by high quality and low cost[17]. So today it is necessary to look through the entire organization of production so as to exclude all types of losses.
Today, lean manufacturing is introduced to the Kirovograd machine-building plant "Chervona Zirka " and to the soft drinks enterprise " Panda " in Vinnitsa. The very first stages of Lean technology implementation tend to show positive results.
Also at the factory JSC "Istil". But the technology of lean production works very well, if production is oriented on the market, where there is a stiff competition[18]. However, if for some time, the company stands on the market as a monopolist, manufactures a new product and leads to the deficiency, then in full measure the system can work. It pushes and the producer is pushing as much product on the market, as can be done. The point is that while competition is weak, the customer pays for the extra steps. As competition increases, for every second of working day, which adds no value to the product, the manufacturer begins to pay. Talking about a competitive market, and especially about the competitive market of metal products in Ukraine is still early, but because of the need to introduce the principles of lean production at steel mills it’s worth thinking about.
The most serious problem is the introduction of the ideology Lean for Ukrainian origin - a barrier in people's minds. The ideology of lean production implies that the person who comes to the company should do what is necessary at this time, be a universal soldier: now working in one area, tomorrow in another one, etc. .. In Ukraine, many people believe that if they have a certain qualification, they should not take more than anything else, do not want to learn, to change.
An important part of the motivation of lean manufacturing is a system of remuneration. The most commonly used system by management is a piecework payment, which does not conform to the principles of lean manufacturing, because introducing such a system, management shifts responsibility for the effective organization of labor on the shoulders of the operators. It is very difficult in the construction of lean production to find a competent leader. The management of production staff has its own specificity. Hence - the special peculiarities in training managers to production. At the same time they realize the same function as the leaders.
If you go back to the philosophy of "lean production", there are 14 basic principles, one should not enumerate them, so as one can read about them in the book "Tao of Toyota"[19]. But if to talk about the main point in the philosophy of lean, it's reliance on the human factor and, putting it simply, a teamwork. In the traditional management teamwork means corporate evenings, corporate charter, joint discussion of goals and so on. For "lean manufacturing" is not enough. Ideally, companies adopting lean, should operate the system of lifetime employment. But even if it is not necessary to create an atmosphere "like in a family." Everyone from the CEO to the janitor, help each other work. Nobody punishes workers. In the concept of lean punishments are prohibited, and it is very important.
An obstacle for the introduction of lean manufacturing technologies especially in the metallurgical industry is the fact that the steel mills beginning in the days of the Soviet Union created a large and very large. The order of their work supposed a functional structure. For example, one large department is doing any operation, then another big shop is doing another operation and so on, until the end of the processing cycle of the product. This is completely contrary to the approach of lean manufacturing. Rebuilding of great enterprises is very difficult, especially because, as a rule, the equipment in these factories is large and heavy, it is hard to rearrange and line it up in a chain needed for pulling the system. However, with the right approach, well thought out all the links in the product creation, you can always make really difficult stages in which it is impossible to build a stream, in other parts of the production gradually to create it.
Conclusion: Taking into the consideration the current situation in Ukraine, it is possible to say that our country has a real opportunity to apply the concept of lean production, although it is rather limited[20]. Lean production is already implementing in some of the companies that resulted from awareness of the quality management importance. A great step forward is the fact that CEOs understand the need for the commission of deliberate and systematic action to improve enterprise performance. However, expanding the concept of Lean is limited by the financial problems of firms and incomplete awareness of the importance of the system. Some managers try to implement only separate segments of the system, hoping to get a significant result. Some of them are not sufficiently responsible and carefully monitor its implementation, due to which they suffer from financial losses[21].
Thus, it’s possible to summarize that for the successful implementation of the system company's management should be very serious dealing with innovations, set goals of continuous improvement, get interested in the experiences of similar domestic and foreign enterprises. Only in this case using the principles of lean manufacturing will give significant results.