Lean Operations

1. Lean Operations “Eliminate Waste Through Continuous Improvement”

2. TPS: Toyota Production System • A system that continually searches for and eliminateswaste throughout the value chain. • Views every enterprise activity as an operation and applies its waste reduction concepts to each activity - from Customers to the Board of Directors to Support Staff to Production Plants to Suppliers.

3. Reducing Waste: Push versus Pull System Raw Material Supplier Final Assembly Customer FGI PUSH Raw Material Supplier Final Assembly Customer FGI PULL Information Flow Material Flow TPS System uses Kanbans

4. Penville Game • Compare the performance of • Push system • Pull system • Team system

5. Push System • Every worker maximizes own output, making as many products as possible • Pros and cons: • Focuses on keeping individual operators and workstations busy rather than efficient use of materials • Volumes of defective work may be produced • Throughput time will increase as work-in-process increases (Little’s Law) • Line bottlenecks and inventories of unfinished products will occur • Hard to respond to special orders and order changes due to long throughput time

6. Pull System • Production line is controlled by the last operation, Kanban cards control WIP • Pros and cons • Controls maximum WIP and eliminates WIP accumulating at bottlenecks • Keeps materials busy, not operators. Operators work only when there is a signal to produce. • If a problem arises, there is no slack in the system • Throughput time and WIP are decreased, faster reaction to defects and less opportunity to create defects

7. Team System • Group of cross-trained workers have overlapping responsibility • Pros and cons: • Cross-training and team efforts reduces WIP or the bottleneck concept • Most efficient use of both materials and labor • Cross training means one worker can step out if a problem arises • Higher process responsibility and ownership • Cross training can be costly