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Chapter 14

Chapter 14. Lean Operations & JIT. Learning Objectives. You should be able to: Explain what is meant by the term lean operations system List each of the goals of a lean system and explain its importance List and briefly describe the building blocks of lean

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Chapter 14

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  1. Chapter 14 Lean Operations & JIT

  2. Learning Objectives • You should be able to: • Explain what is meant by the term lean operations system • List each of the goals of a lean system and explain its importance • List and briefly describe the building blocks of lean • List the benefits and risks of a lean system Instructor Slides

  3. Lean Operations • Lean operations • A philosophy that encompasses every aspect of the process, from design to after the sale of a product. • Pursues a system that functions with minimal levels of inventory, waste, space and transactions. • A flexible system of operation that uses considerably less resources (activities, people, inventory, space) than a traditional system • Tends to achieve • Greater productivity • Lower costs • Shorter cycle times • Higher quality 14-3

  4. Lean: Ultimate Goal • The ultimate goal: • Achieve a system that matches supply to customer demand; supply is synchronized to meet customer demand in a smooth uninterrupted flow • A balanced system • One that achieves a smooth, rapid flow of materials and/or work through the system History of Lean Operation & Just In Time 14-4

  5. Goals and building blocks of lean systems 14-5

  6. Lean:Supporting Goals • The degree to which lean’s ultimate goal is achieved depends upon how well its supporting goals are achieved: • Eliminate disruptions • Poor quality (lean systems do not carry extra inventory), equipment breakdowns, schedule changes, late deliveries. • Make the system flexible • Mix of products, levels of output. • Require reducing setup-times & lead-times. • Eliminate waste, especially excess inventory • Minimize inventory 14-6

  7. Waste • Represents unproductive resources • Seven sources of waste in lean systems: • Inventory • Idle resource, requires space, cost • Overproduction • Overuse of manufacturing resources • Waiting time • Require space, WIP • Unnecessary transporting • Handling cost, WIP inventory • Processing waste • Unnecessary production steps, scrap • Inefficient work methods • Reduced productivity, increased scrap, increased WIP • Product defects • Rework costs, customer dissatisfaction 14-7

  8. Lean: Building Blocks • Product design • Process design • Personnel/ organizational elements • Manufacturing planning and control 14-8

  9. Building Blocks1. Product Design • Four elements of product design important for lean systems: • Standard parts • Fewer parts, less training, lower costs, routine purchasing, handling and quality inspection. Can use standard processing. • Modular design • Fewer parts, simpler assembly, purchasing, handling, training. • Highly capable systems with quality built in • small lot sizes and absence of buffer stock. • Quality designed into the product and production process. Standardized products, methods and equipment, workers familiar with their jobs. • Concurrent engineering • Bringing together design and manufacturing personnel together early in the design phase to prevent engineering changes. 14-9

  10. Building Blocks2. Process Design • Seven aspects of process design that are important for lean systems: • Small lot sizes • Setup time reduction • Manufacturing cells • Quality improvement • Production flexibility • A balanced system • Little inventory storage • Fail-safe methods 14-10

  11. 2. Process DesignA. Small Lot Sizes AAABBBBB CC AAABBBBBB CCC AAAAAABBBBBBBBBBB CCCCC • In the lean philosophy, the ideal lot size is 1. • Goal: reduce lot size as much as possible (given practical considerations) • Benefits of small lot size • Reduced in-process inventory • Lower total carrying costs • Inspection and rework costs are lower when quality problems do occur • Permits greater flexibility in scheduling = better response to customer demands. • Less inventory to ‘work off’ before implementing product improvements • Increased visibility of problems • Increased ease of balancing operations 14-11

  12. 2. Process DesignB. Setup Time Reduction • Small lot sizes and changing product mixes require frequent setups • Unless these are quick and relatively inexpensive, they can be prohibitive • Setup time reduction requires deliberate improvement efforts • Workers are trained to do their own setups • Single-minute exchange of die (SMED) • A system for reducing changeover time (e.g. 1982 Toyota from 100 to 3 minutes). • Convert activities form “internal” to “external”. 14-12

  13. What is “die?” Instructor Slides

  14. 2. Process DesignD. Quality Improvement • Quality defects during the process can disrupt the orderly flow of work • Focus on finding and eliminating the causes of problems. • Autonomation (jidoka) • Automatic detection of defects during production • Two mechanisms are employed • One for detecting defects when they occur • Another for stopping production to correct the cause of the defects (force immediate attention to the problem) 14-14

  15. 2. Process DesignF. Balanced System • Line balancing helps to achieve a rapid work flow. • Work assigned to each workstation must not exceed cycle time (Takt time). • Takt time • The cycle time needed to match customer demand for final product. • Sometimes referred to as the heartbeat of a lean system • Procedure: • Determine the net time available per shift • If there is more than one shift per day, multiply the net time by the number of shifts • Compute the takt time by dividing the net available time by demand • Using takt time minimizes WIP inventory. 14-15

  16. 2. Process DesignG. Inventory Storage • Lean systems are designed to minimize inventory (waste) • Inventories are buffers that tend to cover up recurring problems that are never resolved • partly because they are not obvious • partly because the presence of inventory makes them seem less serious • The lean approach is to gradually reduce inventories in order to uncover problems and then resolve them. • Advantages: • Lower carrying cost • Less space • Less dependence on buffers • Less rework • Less need use current inventory before implementing design improvements. • Risks: • No safety stock • Opportunity loss when problems arise 14-16

  17. Building Blocks 3. Personnel/Organizational • Five personnel/ organizational elements that are important for lean systems: • Workers as assets • Cross-trained workers • Continuous improvement • Cost accounting • Leadership/project management 14-17

  18. 3. Personnel/Organizational: A. Workers as Assets • Workers as assets • Well-trained and motivated workers are the heart of the lean system • They are given greater authority to make decisions… but more is expected of them 14-18

  19. 3. Personnel/OrganizationalB. Cross-Trained Workers • Cross-trained workers • Workers are trained to perform several parts of a process and operate a variety of machines • Facilitates flexibility • Helps in line balancing 14-19

  20. 3. Personnel/OrganizationalC. Continuous Improvement • Continuous improvement (Kaizen, 改善) • Workers in lean systems have greater responsibility for quality, and they are expected to be involved in problem solving and continuous improvement • Teams of workers and managers who routinely work on problems. • Problem solving “culture”: workers are encouraged to report problems and potential problems. • Andon: System of lights used at each workstation to signal problems or slowdowns (green, amber, red lights) 14-20

  21. Building Blocks4. MPC • Seven elements of Manufacturing Planning and Control (MPC) are particularly important for lean system: • Level loading • Pull systems • Visual systems • Limited work-in-process (WIP) • Close vendor relationships • Reduced transaction processing • Preventive maintenance and housekeeping 14-21

  22. 4. MPCB. Pull Systems • Push system • Work is pushed to the next station as it is completed (without regard to the next station’s readiness). • Work may pile up at workstations that fall behind schedule. • Pull system • Work moves on in response to demand from the next stage in the process. • A workstation pulls output from the preceding workstation as it is needed • Output of the final operation is pulled by customer demand or the master schedule • Pull systems are not appropriate for all operations • Require fairly steady flow of reparative work. • Large variations in volume, product mix, or product design will undermine the system 14-22

  23. 4. MPCB. Pull Systems: Communication • Communication moves backward through the system from station to station • Each workstation (customer) communicates its need for more work to the preceding workstation (supplier) • Assures that supply equals demand • Work moves “just in time” for the next operation • Flow of work is coordinated • Accumulation of excessive inventories is avoided 14-23

  24. 4. MPCC. Visual Systems • Kanban (看板） • Card or other device that communicates demand for work or materials from the preceding station • Kanban is the Japanese word meaning “signal” or “visible record” • Paperless production control system • Authority to pull, or produce, comes from a downstream process. 14-24

  25. 4. MPCC. Visual Systems - kanban • Kanban • A kanban card is affixed to each container • When a workstation needs to replenish its supply of parts, a worker withdraws on container • Each container holds a predetermined quantity • The worker removes the kanban card from the container, posts it, and take the container to the workstation. • The posted card is picked up by a stock person who replenishes the stock with another container • and so on down the line. 14-25

  26. 4. MPCE. Close Vendor Relationships • Relatively small number of suppliers. • Close relationships with (certified) vendors • They are expected to provide frequent, small deliveries of high-quality goods • The burden of ensuring component quality is shifted to the vendor. • Local supplier are preferred in order to reduce lead time (of small frequent deliveries) • Ideally the suppliers themselves will be operating under JIT. • The suppliers become part of an extended integrated JIT system. 14-26

  27. Lean Services • In service the focus is often on the time needed to perform the service - speed is often the order winner • Provide services when they are needed • Lean benefits can be achieved in the following ways: • Eliminate disruptions • e.g., avoid having service providers also answer phones. • Make system flexible • Train workers to handle more variety. • Reduce setup and lead times • Estimate what parts and tools are frequently needed and have them on hand • Eliminate waste • Eliminate errors and duplicate work. • Minimize WIP • e.g., orders waiting to be processed, calls waiting to be answered, packages waiting for delivery, truck waiting to be loaded/unloaded etc. • Simplify the process • e.g., self-service systems such as in retail, ATMs, vending machines, service systems 14-27

  28. Lean vs. Traditional Philosophies 14-28

  29. Lean Systems • Key Risks: • Absence of buffers (personnel, inventory) to fall back on if something goes wrong. • Possible loss off sale and lost customers. • Key benefits: • Reduced waste • inventory levels • scrap and rework • space requirements • High quality • Flexibility • Reduced lead times • Increased productivity and equipment utilization

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