ECONOMIC JUSTIFICATI ON FOR IMPLEMENTATION OF 5S …CASE STUDY ON M/S. U TECHNOLOGIES PVT LTD Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep, CH Udaya Bhaskar Mechanical

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International Journal of Mechanical Engineering and Technology (IJMET)Volume 8, Issue 5, May 2017, pp.

Available online at http://www.iaeme.com/IJME

ISSN Print: 0976-6340 and ISSN Online: 0976

© IAEME Publication

ECONOMIC JUSTIFICATI

IMPLEMENTATION OF 5S

CASE STUDY ON M/S. U

TECHNOLOGIES PVT LTD

Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep, CH Udaya Bhaskar

Mechanical Engineering, KL University, Greenfields,

Associate Professor, Department of

ABSTRACT

5s and Kaizen might be familiar for MNCs but MSMEs are new for this scenario.

Economic justification is ve

lean manufacturing. This project discusses the economic justification of an MSME i.e.

M/s. Unnathi CNC Technologies pvt.ltd. considering the data gathered over 4 months

to get a justification on econ

Keywords: Kaizen, 5S, MSME, Economic justification, Lean Manufacturing.

Cite this Article: Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep,

CH Udaya Bhaskar Economic Justification for Implementation of 5s in MSMES: A

Case Study on M/S. Unnathi CNC Technologies Pvt.Ltd.

Mechanical Engineering and Technology

http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=8&IType=5

1. INTRODUCTION

1.1. Organisation Overview

UNNATHI CNC Technologies Pvt. Ltd.

machined parts and assemblies for Engineering, Aerospace, Auto, Agricultural and Machine

Tool Industries. They are capable of machining a wide variety of materials such

including Carbon alloy, Stainless Steel, Copper, Aluminum, Brass,

From the small beginnings in 2007 with

CNC Turning Centres and 4 CNC Milling

established in 2007 as a Partnership organization with 5 partners to provide mechanical

components. In the year 2008 this was converted in

Directors on Board. Company

industrial estate in South East Asia.

IJMET/index.asp 306 [email protected]

International Journal of Mechanical Engineering and Technology (IJMET) 2017, pp. 306–319, Article ID: IJMET_08_05_033

http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=8&IType=5

6340 and ISSN Online: 0976-6359

Scopus Indexed

ECONOMIC JUSTIFICATION FOR

IMPLEMENTATION OF 5S IN MSMES: A

CASE STUDY ON M/S. UNNATHI CNC



Mechanical Engineering, KL University, Greenfields, AP, India.

P. Ratna Prasad

Associate Professor, Department of Mechanical Engineering, KL University


Economic justification is very important for implementation of any process let alone



to get a justification on economic prospect.

Kaizen, 5S, MSME, Economic justification, Lean Manufacturing.

Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep,


n M/S. Unnathi CNC Technologies Pvt.Ltd.. International Journal of

Mechanical Engineering and Technology, 8(5), 2017, pp. 306–319.

com/IJMET/issues.asp?JType=IJMET&VType=8&IType=5

Organisation Overview

Technologies Pvt. Ltd. are pioneers in manufacturing of precision


Tool Industries. They are capable of machining a wide variety of materials such

nless Steel, Copper, Aluminum, Brass, etc.

l beginnings in 2007 with 1 CNC Turning Centre, They have grown to a 10

ning Centres and 4 CNC Milling Centres in a span of 2 Years.

in 2007 as a Partnership organization with 5 partners to provide mechanical

components. In the year 2008 this was converted into a Private Limited Company with 4

Directors on Board. Company is situated in Peenya Industrial Area, which is the largest

rial estate in South East Asia.

[email protected]

T&VType=8&IType=5

ON FOR

IN MSMES: A

NNATHI CNC



, India.

ngineering, KL University, AP, India.


ry important for implementation of any process let alone



Kaizen, 5S, MSME, Economic justification, Lean Manufacturing.

Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep,


International Journal of

com/IJMET/issues.asp?JType=IJMET&VType=8&IType=5

are pioneers in manufacturing of precision


Tool Industries. They are capable of machining a wide variety of materials such as and

1 CNC Turning Centre, They have grown to a 10

s in a span of 2 Years. Company was

in 2007 as a Partnership organization with 5 partners to provide mechanical

a Private Limited Company with 4

situated in Peenya Industrial Area, which is the largest

Economic Justification for Implementation of 5s in MSMES: A Case Study on M/S. Unnathi CNC


Unnathi CNC Technologies is an ISO 9001

procedures for machining of components and managing the organization in general. Unnathi

is not a certified designing company, it machines t

specification.

1.2. Organization structure

1.3. Factory Layout

For every industry it's important to be familiar with the layout. This helps a lot to identify the

places and to mark the places where 1S is necessary. This layout is a process layout with a

mixed inspection strategy.


Technologies Pvt.Ltd.


Unnathi CNC Technologies is an ISO 9001-2008 certified company that follows certain


is not a certified designing company, it machines the components based on customer

. Organization structure

Figure 1 Organization structure


es where 1S is necessary. This layout is a process layout with a


[email protected]

2008 certified company that follows certain


he components based on customer


es where 1S is necessary. This layout is a process layout with a



2. LITERATURE REVIEW

Seiri (Sorting):It is the first S of the 5S philosophy which puts emphasis on removal or

elimination of unnecessary items from the workplace. A workplace survey is conducted and

unnecessary items are tagged with red colour and are eliminated from that particular place. It

is easier if we mark the place with red on the layout for reference.

Seiton (Set in order): It is the second S of the 5S philosophy which says about having

certain things in certain places or creating a position for everything and everything should be

in its position. It focuses on efficient storage and partition of things i.e. tools, instruments etc.

Activities include storing similar items mutually, labeling items, Painting floors, use of racks

or shelves for tools etc.

Seiso (Shine): The third ‘S’ focu

better work area. More calm and safe workplace is ensured in third ‘S’

a habit. People/workers should do it spontaneously

be given to the workers. Some standards have to be

workers do the cleaning effectively

Seiketsu (standardize): The high standard of workplace

by standardization. Good work standards have to be maintained

examples of it. To develop the standards



Figure 2 Factory layout

2. LITERATURE REVIEW

It is the first S of the 5S philosophy which puts emphasis on removal or



is easier if we mark the place with red on the layout for reference.

It is the second S of the 5S philosophy which says about having


its position. It focuses on efficient storage and partition of things i.e. tools, instruments etc.


hird ‘S’ focuses on the cleaning. Daily hygiene is must to have a

better work area. More calm and safe workplace is ensured in third ‘S’. The third S should be

People/workers should do it spontaneously. Department wise responsibilities should

. Some standards have to be established and followed

effectively.

he high standard of workplace in an organization can be ensured

. Good work standards have to be maintained. Fast food chains

To develop the standards, employees play a great role in it.


[email protected]

It is the first S of the 5S philosophy which puts emphasis on removal or



It is the second S of the 5S philosophy which says about having


its position. It focuses on efficient storage and partition of things i.e. tools, instruments etc.


ses on the cleaning. Daily hygiene is must to have a

The third S should be

Department wise responsibilities should

established and followed to ensure

organization can be ensured

Fast food chains are the best

employees play a great role in it. Best work



practices are carried out and various ways are find out to ensure that everybody

individual activity in their workplace.

Shitsuke (Sustain): This ‘S’ is considered to be the

the rest. Many firms do the 5S activities for months. But it becomes very difficult to sustain

the activities performed for a longer period of time. Standards have to

after year in an effective way. Counseling of the employees should be done

Proper regulation should be maintained. Also there should be award and reward system to

encourage the employees. It can be a monetary gain or formal a

3. METHODOLOGY

3.1. SERIR

1. Tool room has been identified as the prime location where SERIR is needed.

2. The unnecessary materials are removed and 4m

3. A lack of proper tool keeper setup has been identified and provided with a worktable, chair

and folders to maintain tool logs manually.

Figure 4




practices are carried out and various ways are find out to ensure that everybody

individual activity in their workplace.

his ‘S’ is considered to be the most challenging to implement

. Many firms do the 5S activities for months. But it becomes very difficult to sustain

the activities performed for a longer period of time. Standards have to be maintained year

after year in an effective way. Counseling of the employees should be done


encourage the employees. It can be a monetary gain or formal awarding of a certificate.

Figure 3 5S

identified as the prime location where SERIR is needed.

The unnecessary materials are removed and 4m2 free space has been created after removal.

keeper setup has been identified and provided with a worktable, chair

and folders to maintain tool logs manually.

Figure 4 Tool room Before (left) and After(Right)


[email protected]

practices are carried out and various ways are find out to ensure that everybody carry out their

to implement among

. Many firms do the 5S activities for months. But it becomes very difficult to sustain

be maintained year

after year in an effective way. Counseling of the employees should be done more often.


warding of a certificate.

identified as the prime location where SERIR is needed.

free space has been created after removal.

keeper setup has been identified and provided with a worktable, chair


http://www.iaeme.com/IJMET/index.asp 310 [email protected]

Figure 5 Tool room before (left) and after (right)

Figure 6 Taping table before (right) and taping table after (left)

3.2. SEITON (Set in order):

1. Identified and labeled switchboards with colored labels for effective and quick usage.

2. Separated tapes and nuts and placed them near the taping table.

3. Provided a stacked tray for storing drill bits in tool room.




Figure 7 Unsorted Taps And Nuts (Left) and Sorted Taps and nuts (Right)

Figure 8 Tool sleeves (left) and Re-arranged tool sleeves(Right)



Figure 9 Color coded switchboards for quick identification

3.3. SEISO (Shine):

The third S of 5S focuses on cleanliness and safety conditions of workplace.

1. Tangled and lose wires are tied together with straps.

2. Lose wires of any equipment are covered in bellows pipes.

3. Daily 3S time of 15 minutes is allotted from 10:00 AM to 10:15 AM for operators to clean and

re-arrange their machine premises.

Figure 10 Lose wires (left) and tied wires (right)




Figure 11 Exposed wires (Left) and Protected wires (Right)

3.4. SEIKETSU (Standardize):

1. Different motivational and knowledgeable wall boards are placed at strategic points in the

plant.

2. Employees are asked to follow a set of rules and are monitored by department heads.

Figure 12 Wall boards with knowledgeable information in Kannada and English

3.5. SHITSUKE (Sustain)

1. To avoid absentiesm and lateness, Employee lateness list with daily updates is placed on

notiece board.

2. To encourage the employees, incentives are provided for good attendance.

3. Employees are taken to training workshops on 5S under the supervison of PES University

Banglore.



Figure 13 Notice board with employee lateness list and many more.

Figure 14 Two day workshop on 5S at PES University.

4. BUDGET CALCULATIONS

4.1 Budget for implementing 5s

4.1.1. SEIRI

Location: Tool room

Table 1 Cost to implement Seiri

S.No Items purchased Cost(INR)

1 Work Table Rs.3,299/-

2 Chair Rs.2,650/-

3 Folders Rs.320/-

Total Cost Rs.6269/-




4.1.2. SEITON

Location: Shop floor and Design Room

Table 02 Cost to implement Seiton

S.No Items purchased Cost(INR)

1 Labels Rs.60/-

2 Extra Trays Rs.1600/-

Total Rs.1660/-

4.1.3. SEISO

Location: Shop floor and Inspection Room

Table 3 Cost to implement Seiso

S.No Items Purchased Cost(INR)

1 Cable Binder Rs.180/-

2 Cable protection hose pipe Rs.120/-

3 Wall mount frames about Kaizen Rs.1800/-

Total Cost Rs.2100/-

4.1.4. SEIKETSU

Location: Notice Board area.

Table 4 Cost to implement Seiketsu

S.No Items Purchased Cost(INR)

1 Ribbons Rs.10/-

2 2 day Workshop for 50 Employees Rs.1,20,000/-

3 Paper Rs.100/-

Total Rs.120110/-

4.1.5. SHITSUKE

Table 5 Cost to implement Shitsuke

S.No Item Cost(INR)

1 Consultancy Fees for 3 years Rs.3,00,000/-



4.1.6. Total Budget

Table 6 Total cost to implement 5S.

S.No Category Cost(INR)

1 SEIRI* Rs.6269/-

2 SEITON* Rs.1660/-

3 SEISO* Rs.2100/-

4 SEIKETSU Rs.120110/-

5 SHITSUKE* Rs.300000/-

6 Miscellaneous Rs.4260/-

Total Rs.434399/-

4.2. Savings after implementing 5s:

Space savings: The space saved from removing used grinding wheels and paint cans from

tool room and removing cardboard boxes from shop floor is given in table .

Table 7 Space savings after implementing 5S

S.No Location Area(m2)

1 Tool room 4

2 Shop Floor 13

Maintenance cost savings: The monthly maintenance and breakdown maintenance cost

are considered which could have been prevented with proper daily maintenance checks.

4.2.1. Before 5S

Table 8 Maintenance cost, before implementing 5S.

S.No Month Spares cost Down time cost Total cost

1 May Rs.58470 Rs.75300 Rs.133770

2 June Rs.43980 Rs.65130 Rs.109110

Total Rs.102450 Rs.70215 Rs.242880

Average per month Rs.51225 Rs.35107.5 Rs.121440




After started implementing 5S:

Table 9 Maintenance cost, after started implementing 5S.

S.No Month Spares cost Down time cost Total cost

1 July Rs.30062 Rs.26600 Rs.56662

2 August Rs.71562 Rs.7750 Rs.79312

3 September Rs.31630 Rs.12500 Rs.44130

4 October - Rs.16350 Rs.16350

Total Rs.133254 Rs.63200 Rs.196454

Average per month Rs.33313.5 Rs.15800 Rs.49113.5

Savings in Maintenance cost:

Table 10 Savings in maintenance costs due to 5S.

S.No Type of cost Before 5S After starting 5S Savings % reduction in cost Annual Savings

1 Spares Cost Rs.51225 Rs.33313.5 Rs.17911.5 34.9 Rs.214938/-

2 Down time cost Rs.35107.5 Rs.15800 Rs.19307.5 54.99 Rs.231690/-

Total Maintenance cost Rs.121440 Rs.49113.5 Rs.72326.5 59.55 Rs.867918/-

Setup time savings:

Table 11 Average setup time savings, after implementing 5s.

S.No Type Avg Setting time

Before 5S (mins)

Avg setting time

After starting 5S (mins)

Time difference

(Mins) %Savings

1 Turning 180 129 51 28.3

2 Milling 250 192 58 23.2

Cost saved from setting time:

Table 12 Cost saved in setting time, after implementing 5S.

S.No Type Machine hour rate

(Rs/hr)

Time saved

(mins)

Cost saved per setup

(INR)

Number of setups

per annum

Cost savings

per annum

1 Turning 250.2 52 Rs.212.67/- 3000 (Projected) Rs.6,38,010/-

2 Milling 400.2 58 Rs.386.86/- 1512 (Projected) Rs.5,84,932/-



Total projected savings per annum:

Table 13 Projected annual savings due to implementation of 5s.

S.No Category Projected savings per annum

1 Maintenance Rs.8,67,918/-

2 Setting time Rs.12,22,942/-

Total Savings per annum Rs.20,90,860/-

5. CONCLUSION

After implementing 5s for a period of 4 months, The OEE of the company has risen by 7%

and there is a projected annual savings of INR 20.9 lakhs. For an investment of 4.3 lakhs

which might last for a maximum of 3 years, the organization has reaped full rewards for the

investment in the form of projected savings. The above mentioned savings are quantifiable or

measurable whilst there are many more factors like employee improvement in terms of

knowledge and skill etc. which have also increased significantly which indeed will do the

organization a lot of good.

Figure 15 Cost Vs Savings in INR.

6. FUTURE SCOPE

The basic philosophy of lean manufacturing is 'continuous improvement'. The organization

can eventually implement all the lean manufacturing principles and improve the Overall

Equipment Effiency(OEE) further more to become a world class organization. It will take

significant amount of effort whilst maintaining current standards seeking further improvement

but the efforts will pay off in the future.

4.3

20.9

0

5

10

15

20

25

Total

Investment

Total Savings

per annum

Co

st i

n L

ak

hs

INR

Category

Investment Vs Savings per annum

Investment in Lakhs INR

Savings in Lakhs INR




REFERENCES

[1] Chapman, C. (2005) ‘Clean house with lean 5S’, Quality Progress, Vol. 38, No. 6, pp.27–

32.

[2] Mihail Aurel Titu; Constantin Oprean and Daniel Grecu; Applying the Kaizen Method

and the 5S Technique in the Activity of Post-Sale Services in the Knowledge-Based

Organization; ISSN 2078-0958, IMECS 2010, March 17-19, 2010, Hong-kong.

[3] Records of Lean Manufacturing Consultancy, PES University.

[4] M. Karthick, M. Sundarraj and T. Raja, Design and Control of ATC or Shorter Time

Interval in CNC Machines. International Journal of Mechanical Engineering and

Technology, 8(3), 2017, pp. 77–88.

[5] Ajay Kumar, Simranjeet Singh, Sahil Barry, Shivam Bhardwaj, Er. Ajay Sharma and

Er.Harpreet Singh. Parameter Optimization in Vertical Machining Center CNC for EN45

(Steel Alloy) Using Response Surface Methodology. International Journal of Mechanical

Engineering and Technology, 7(2), 2016, pp. 288–299

[6] Mufaddal A. Saifee and Dr. Usha S. Mehta. Design and Implementation of FPGA Based

G Code Compatible CNC Lathe Controller. International Journal of Electronics and

Communication Engineering & Technology, 7 (1), 2016, pp. 75-86.

[7] Ajay Kumar, Simranjeet Singh, Sahil Barry, Shivam Bhardwaj, Er. Ajay Sharma and Er.

Harpreet Singh. Parameter Optimization In Vertical Machining Center CNC For En45

(Steel Alloy) Using Response Surface Methodology. International Journal of Mechanical

Engineering and Technology, 7(2), 2016, pp. 288–299.

[8] Shaman Gupta; Sanjiv Kumar Jain; The 5S and kaizen concept for overall improvement of

the organisation: a case study; Int. J. Lean Enterprise Research, Vol. 1, No. 1, 2014.

Documents

ECONOMIC JUSTIFICATI ON FOR IMPLEMENTATION OF 5S …CASE STUDY ON M/S. U TECHNOLOGIES PVT LTD Shaik Anwar Hussain, Mudunnuru Sai Pavan, A Durga Sandeep, CH Udaya Bhaskar Mechanical