
Operations Management. Just-in-Time and Lean Production Systems. Alan D. Smith. © 2006 Prentice Hall, Inc. Outline. Global Company Profile: Green Gear Cycling Just-in-Time and Lean Production Suppliers Goals of JIT Partnerships Concerns of Suppliers. Outline – Continued. JIT Layout
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Just-in-Time and
Lean Production Systems
Alan D. Smith
© 2006 Prentice Hall, Inc.
When you complete this chapter, you should be able to:
Identify or Define:
When you complete this chapter, you should be able to:
Describe or Explain:
Employees, machines, and suppliers produce units that do not conform to standards, are late, or are not the proper quantity
Engineering drawings or specifications are inaccurate
Production personnel try to produce before drawings or specifications are complete
Customer demands are unknown
Few suppliers
Nearby suppliers
Repeat business with same suppliers
Support suppliers so they become or remain price competitive
Competitive bidding mostly limited to new purchases
Buyer resists vertical integration and subsequent wipeout of supplier business
Suppliers encouraged to extend JIT buying to their suppliers
JIT PartnershipsTable 16.2
Share forecasts of demand
Frequent deliveries of small-lot quantities
Long-term contract
Minimal paperwork to release order (EDI or the Internet)
Little or no permissible overage or underage
Suppliers package in exact quantities
Suppliers reduce production lot sizes
JIT PartnershipsTable 16.2
Minimal product specifications imposed on supplier
Help suppliers meet quality requirements
Close relationships between buyers’ and suppliers’ quality assurance people
Suppliers use poka-yoke and process control charts
JIT PartnershipsTable 16.2
Scheduling inbound freight
Gain control by using company-owned or contract shipping and warehousing
Use of advanced shipping notice (ASN)
JIT PartnershipsTable 16.2
Build work cells for families of products
Include a large number operations in a small area
Minimize distance
Design little space for inventory
Improve employee communication
Use poka-yoke devices
Build flexible or movable equipment
Cross train workers to add flexibility
JIT LayoutReduce waste due to movement
Table 16.3
Use a pull system to move inventory
Reduce lot sizes
Develop just-in-time delivery systems with suppliers
Deliver directly to point of use
Perform to schedule
Reduce setup time
Use group technology
InventoryInventory is at the minimum level necessary to keep operations running
Table 16.4
Inventory level
Process downtime
Scrap
Setup time
Quality problems
Late deliveries
Figure 16.1
100 –
Q1 When average order size = 200
average inventory is 100
Inventory
Q2 When average order size = 100
average inventory is 50
Time
Reduce Lot SizesFigure 16.2
2DS
H(1 - d/p)
2DS
H(1 - d/p)
(3,200,000)(0.6)
800,000
(Q2)(H)(1 - d/p)
2D
Q2 =
S = = = $2.40
Lot Size ExampleD = Annual demand = 400,000 units
d = Daily demand = 400,000/250 = 1,600 per day
p = Daily production rate = 4,000 units
Q = EOQ desired = 400
H = Holding cost = $20 per unit
S = Setup cost (to be determined)
Sum of ordering and holding costs
Cost
T1
Setup cost curves (S1, S2)
T2
S1
S2
Lot size
Lower Setup CostsFigure 16.3
90 min —
Separate setup into preparation and actual setup, doing as much as possible while the machine/process is operating
(save 30 minutes)
Step 1
60 min —
Move material closer and improve material handling (save 20 minutes)
Step 2
45 min —
Standardize and improve tooling (save 15 minutes)
Step 3
25 min —
Use one-touch system to eliminate adjustments (save 10 minutes)
Step 4
15 min —
Training operators and standardizing work procedures (save 2 minutes)
13 min —
Step 5
Repeat cycle until subminute setup is achieved
—
Reduce Setup TimesFigure 16.4
Part numbers mark location
KanbanUser removes a standard sized container
Signal is seen by the producing department as authorization to replenish
Figure 16.6
JIT Level Material-Use Approach
A
A
B
B
B
C
A
A
B
B
B
C
A
A
A
A
A
A
B
B
B
B
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C
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Large-Lot Approach
Time
Scheduling Small LotsFigure 16.5
Customer order
Kanban
Work cell
Ship
Raw Material Supplier
Kanban
Kanban
Final assembly
Kanban
Kanban
Sub-assembly
Kanban
Kanban SignalsPurchased Parts Supplier
Figure 16.7
Demand during Safety lead time + stock
Size of container
Number of kanbans =
The Number of Cardsor Containers250
Number of kanbans = = 5
Number of Kanbans ExampleDaily demand = 500 cakes
Production lead time = 2 days
(wait time +
material handling time +
processing time)
Safety stock = 1/2 day
Container size = 250 cakes
Demand during lead time = 2 days x 500 cakes = 1,000
Use statistical process control
Empower employees
Build fail-safe methods (poka-yoke, checklists, etc.)
Expose poor quality with small lot JIT
Provide immediate feedback
JIT Quality TacticsTable 16.6
A broader perspective suggests other resources like energy and water are wasted but should not be