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When is Lean too Lean: Discrete Event Simulation and Lean Production. Scott Metlen. ‘Romantic’ Lean & Complex Systems. Strategic variability leading to complex systems Complex system modeling (use discrete event simulation). Waste by Ohno , 1988. Overproduction Transportation Inventory

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Presentation Transcript
romantic lean complex systems
‘Romantic’ Lean & Complex Systems
  • Strategic variability leading to complex systems
  • Complex system modeling (use discrete event simulation)
waste by ohno 1988
Waste by Ohno, 1988
  • Overproduction
  • Transportation
  • Inventory
  • Motion
  • Defective Product
  • Over-processing
  • Waiting
discrete event simulation des
Discrete Event Simulation (DES)
  • Modeling events of a system where time between events is stochastic.
  • To expensive to use in deterministic systems
system variation the cause of waste
System Variation, the Cause of Waste
  • Dysfunctional Variability (Suri, 2005)
    • Inconsistent process times when product is consistent
    • Set up times vary when product does not
    • Raw material varies when it should be consistent
    • Inconsistency of human performance
  • Strategic Variability (Suri, 2005)
    • Mass customization due to market demand
    • Willing to chase spikes and valleys in demand
danger of lean
Danger of Lean
  • Eliminating strategic variation along with dysfunctional variability in the quest to eliminate waste
  • Prevent by simulating system change to determine the affect on profit if the change were executed
example
Example
  • 875 parts used to assemble 10 products
  • Parts for each product collected as a ‘kit’
  • 875 parts had different paths through the production system, scheduling was complex, average scrap rate 2% (complexity of parts and system)
  • FG warehouse kept to make sure each ‘kit’ was shipped on time and complete
  • FG seen as waste, was eliminated and replaced by expediting system to make sure a ‘kit’ shipped on time
results
Results
  • Overtime went to $15 million
  • More production was installed where FG used to be
  • $200,000.00 opportunity cost saved on not having FG inventory
  • On time delivery dropped
  • Scrap rate increased
new solution modeled
New Solution Modeled
  • Modeled Strategic FG inventory
  • $100000 opportunity cost
  • Overtime reduced by $7 million
  • On time delivery reestablished
  • Scrap rate reduced
  • Recommendation was implemented, savings as indicated
take away
Take Away
  • In complex systems using strategic variability, model system before changing that system
  • QUESTIONS