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BUAD306. Lean Operations. Lean Operations. A flexible system of operation that uses considerably less resources than a traditional system Tend to achieve Greater productivity Lower costs Shorter cycle times Higher quality. Lean Operations.
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BUAD306 Lean Operations
Lean Operations • A flexible system of operation that uses considerably less resources than a traditional system • Tend to achieve • Greater productivity • Lower costs • Shorter cycle times • Higher quality
Lean Operations • Three basic elements are present in a lean operating environment: • Demand driven • Waste reduction • Culture dedicated to continuous improvement
Lean Operations Goals • Ultimate Goal: A balanced system that achieves a smooth, rapid flow of materials through the system to match supply to customer demand • Supporting Goals: • Eliminate disruptions • Make system flexible • Eliminate waste
Sources of Waste • Inventory • Waste from overproduction • Waiting time • Unnecessary transport • Processing waste • Product defects/rework • Inefficient work methods • Underutilization of employees
Lean Operations Building Blocks • Product design • Process design • Personnel/organizational elements • Manufacturing planning and control
Lean Ops – Product Design • Standard parts • Modular design • Highly capable production systems • Concurrent engineering
Lean Ops – Process Design • Small lot sizes • Set up time reduction • Increased efficiencies • Limited inventories • Improved quality • Reduction of bottlenecks
Small-Lot Production • “Ideal size” = 1 • Requires less physical space/inventory/eqpt • Moves processes closer together • Greater flexibility in scheduling • Easier to detect quality problems easier to detect • Makes processes more dependent on each other (increases responsibility and quality) Must reduce set-up time to do this!
Inventory Considerations • Inventory Hides Problems • Bad design • Poor quality • Machine breakdowns • Unreliable supplier • Inefficient layout • Decrease inventory to expose problems
Process Design: Fail-Safe Methods • Building safeguards into a process to reduce or eliminate the potential for errors during a process • Examples • Electric breakers • Seatbelt fastener warnings • ATMs that signal if a card is let in a machine
Lean Ops – Personnel/ Organizational Elements • Treat workers as assets • Cross-train workers • Focus on continuous improvement • Training in cost accounting • Strong project management skills
Lean Ops – Manufacturing Planning & Control • Level loading (smooth production) • Pull systems – work moves in response to demand from next step • Visual systems (Kanban) • Close vendor relationships
Converting to Lean Ops • Get top management commitment • Decide which parts need most effort • Obtain support of workers • Start by reducing setup times • Gradually convert operations • Convert suppliers to JIT • Prepare for obstacles Read Text
Obstacles to Conversion • Workers/management may not be cooperative – education is essential • Suppliers may resist the demands of a lean system • Management may have unrealistic expectations (timing, savings) • Entails a change to the corporate culture– not easy to achieve Read Text
Lean Service Industries • Focus is on the time needed to perform the service • Speed is often order winner for services • Examples: • Domino’s Pizza, Fed-X, Jiffy Lube, 911, JIT publishing, etc. Read Text
Course Summary • Key take-aways: • Mathematical-based decision making • Efficiency focus / cost containment • Importance of forecasting • Analysis = key • Never be satisfied with the status quo
