OPM 2, 2013-15, Term 3

T. A. Pai Management Institute, Manipal

Prof Kedar P. Joshi

 One of the most popular systems that incorporate the generic elements
of lean systems is the just-in-time (JIT) system.
The Japanese term for this approach is Kaizen. The key to kaizen is the
understanding that excess capacity or inventory hides process
problems.

The goal is to eliminate the 8 types of waste.

Lean systems

Lean systems affect a firms internal linkages between its core and
supporting processes and its external linkages with its customers and
suppliers.

OPM 2, 2013-15, Term 3

Lean Systems

Overproduction

Waiting
Transportation
Motion
Inventory
Defects

Underutilized Employees

Lean systems

Inappropriate Processing / Process waste

OPM 2, 2013-15, Term 3

Eight Wastes or MUDA

1. Overproduction
Manufacturing an item before it is needed.

Building more than what is demanded.

2. Inappropriate Processing / Process waste

Using expensive high precision equipment when simpler machines would suffice.

Excessive or redundant operations.

3. Waiting

Wasteful time incurred when product is not being moved or processed.

Lean systems

OPM 2, 2013-15, Term 3

Eight Wastes

4. Transportation

Excessive movement and material handling of product between processes.

Unnecessary effort related to the ergonomics of bending, stretching, reaching, lifting, and
walking.

Unnecessary or excessive human activity.

6. Inventory

Excess inventory hides problems on the shop floor, consumes space, increases lead times,
and inhibits communication.

Building more to protect against system problems

Lean systems

5. Motion

OPM 2, 2013-15, Term 3

Eight Wastes

7. Defects

8. Underutilization of Employees

Failure of the firm to learn from and capitalize on its employees knowledge and creativity
impedes long term efforts to eliminate waste.

Lean systems

Quality defects result in rework and scrap, and add wasteful costs to the system in the
form of lost capacity, rescheduling effort, increased inspection, and loss of customer good
will.

OPM 2, 2013-15, Term 3

Eight Wastes

OPM 2, 2013-15, Term 3

Eight Wastes or MUDA : Examples

Lean systems

OPM 2, 2013-15, Term 3

Eight Wastes or MUDA : Examples

Lean systems

OPM 2, 2013-15, Term 3

Eight Wastes or MUDA : Examples

Lean systems

OPM 2, 2013-15, Term 3

Continuous Improvement

Lean systems

Continuous Improvement with Lean Systems

Lean systems

Close supplier ties

Look for ways to improve

efficiency and reduce
inventories throughout the
supply chain
Supplier proximities
Rationalizing number of suppliers
Close supplier relationships

OPM 2, 2013-15, Term 3

Supply Chain Considerations

JIT II
In-plant representative
Benefits to both buyers and
suppliers

Reduce the average level of inventory

Pass through system faster (MLT)
Create uniform workload and prevent overproduction
Increase setup frequency

Lean systems

Small lot sizes

OPM 2, 2013-15, Term 3

Supply Chain Considerations

2. Small lot sizes

Set up time

reduction

Step 1

Separate setup into preparation, and actual setup,

doing as much as possible while the
machine/process is running (save 30 minutes)

90 min

60 min

Move material closer and improve

material handling (save 20 minutes)

Step 2

Standardize and
improve tooling
(save 15 minutes)

Step 3
Eliminate adjustments
(save 10 minutes)

Step 4

Step 5
Training operators and standardizing work
procedures (save 2 minutes)

45 min

25 min
15 min
13 min

Lean systems

Initial Setup Time

OPM 2, 2013-15, Term 3

Supply Chain Considerations

1. Pull method of work flow

Push

Lean systems

method
Pull method

OPM 2, 2013-15, Term 3

Process Considerations

OPM 2, 2013-15, Term 3

Process Considerations
1. Pull/Push method of work flow
PUSH CONTROL

OR

Instruction on
what to make
and where to
send it

Work
centre

Work
centre

Work
centre

Work
centre

DEMAND

PULL CONTROL

Work
centre

Work
centre
Delivery

Request

Request

Request

Work
centre
Delivery

Request

Work
centre
Delivery

DEMAND
Delivery

Lean systems

FORECAST

CENTRAL OPS. PLANNING AND CONTROL SYSTEM

1. Pull method of work flow

OPM 2, 2013-15, Term 3

Process Considerations

Lean systems

1. Pull method of work flow

OPM 2, 2013-15, Term 3

Process Considerations

Lean systems

2. Quality at the source

Jidoka

Andon

Statistical process control

Worker involvement
Inspect own work
Quality circles
Immediate feedback

Lean systems

Poka-yoke

OPM 2, 2013-15, Term 3

Process Considerations

Jidoka means "autonomation" or "automation with a

human touch."

9 10 11 12 13 14

STOP BUTTON
(STOP THE L INE AUTHOR ITY )

The principle's origin goes back to 1902 when Sakichi

Toyoda invented a simple but ingenious mechanism
that detected a broken thread and shut off an

STOP BUTTON
(STOP THE L INE AUTHOR ITY )

rather than continue to run and produce bad output.

Abnormality
Station 5

automatic loom.

That invention allowed one operator to oversee the

operation of up to a dozen looms while maintaining
perfect quality.

2. Quality at the source

Jidoka
Andon

Team Leader

Lean systems

Detect a problem and stop production automatically

OPM 2, 2013-15, Term 3

Process Considerations

Lean systems

Error-proofing, also known as Poka-Yoke, is a technique of

preventing errors by designing the process, equipment, and
tools so that an operation cannot be performed incorrectly.

OPM 2, 2013-15, Term 3

Poka- Yoke

OPM 2, 2013-15, Term 3

An Equipment on ANDON

Lean systems

OPM 2, 2013-15, Term 3

Process Considerations
3. Uniform workstation loads
Takt time

Lean systems

Heijunka
Mixed-model

assembly
Lot size of one
Weekly Production Required
A
B
C
D
E
Traditional Production Plan
Monday
Tuesday
AAAAA
BBBBB
AAAAA
BBBBB
JIT Plan with Level Scheduling
Monday
Tuesday
AABBBB
AABBBB
CDEE
CDEE

10 units
20 units
5 units
5 units
10 units
Wednesday
BBBBB
BBBBB

Thursday
DDDDD
CCCCC

Friday
EEEEE
EEEEE

Wednesday
AABBBB
CDEE

Thursday
AABBBB
CDEE

Friday
AABBBB
CDEE

OPM 2, 2013-15, Term 3

Process Considerations
4. Standardized components and work
methods

Lean systems

Standardized
Work
Detail of each
Process Step

Work Element Sheet

Detail of the Elements
of each Process Step

5. Flexible workforce/ Resources

Capable to do many different things with minimal setup time

Workers assume considerable responsibility

Cross-trained to perform several different duties

Trained to also be problem solvers

Lean systems

OPM 2, 2013-15, Term 3

Process Considerations

6. Automation

Scheduled
Operator

& daily PM

performs PM

Knows machines

Responsible for product quality

8. Five S (5S) practices

Lean systems

7. Total Preventive Maintenance (TPM)

OPM 2, 2013-15, Term 3

Process Considerations

Lean systems

TABLE 8.2 | 5S DEFINED

5S Term
5S Defined
1. Sort
Separate needed from unneeded items (including tools, parts,
materials, and paperwork), and discard the unneeded.
2. Straighten
Neatly arrange what is left, with a place for everything and everything
in its place. Organize the work area so that it is easy to find what is
needed.
3. Shine
Clean and wash the work area and make it shine.
4. Standardize
Establish schedules and methods of performing the cleaning and
sorting. Formalize the cleanliness that results from regularly doing the
first three S practices so that perpetual cleanliness and a state of
readiness are maintained.
5. Sustain
Create discipline to perform the first four S practices, whereby
everyone understands, obeys, and practices the rules when in the
plant. Implement mechanisms to sustain the gains by involving people
and recognizing them via a performance measurement system.

OPM 2, 2013-15, Term 3

1. Five S Method

1. Line flows recommended

waste

Workstations

in close physical proximity to reduce transport &

movement

2. One worker, multiple machines (OWMM)

3. Group technology
Group

parts or products with similar characteristics into families

Lean systems

Eliminate

OPM 2, 2013-15, Term 3

Designing Lean System Layouts

OPM 2, 2013-15, Term 3

One Worker Multiple Machines (OWMM)

Lean systems

One-Worker, Multiple-Machines (OWMM) Cell

Lathing

Drilling

M
Grinding

Receiving and
shipping

Assembly

(a) Jumbled flows in a job shop without GT cells

Lean systems

Milling

OPM 2, 2013-15, Term 3

Process Flows Before and After the Use of GT Cells

OPM 2, 2013-15, Term 3

Process Flows Before and After the Use of GT Cells

L

Assembly
area

Cell 2

Cell 1
Receiving

Cell 3
L

Shipping

(b) Line flows in a job shop with three GT cells

Lean systems

Storage
area

Lean systems

Kanban card for

product 1
Kanban card for
product 2

OPM 2, 2013-15, Term 3

Receiving post

Empty containers
Assembly line 1
O2

O1

Fabrication
cell

O3

Assembly line 2
Full containers

O2

Single-Card Kanban System

OPM 2, 2013-15, Term 3

Receiving post
Storage
area

Lean systems

Kanban card for

product 1
Kanban card for
product 2

Empty containers
Assembly line 1
O2

Fabrication
cell
O3

O1

Assembly line 2
Full containers

O2

Single-Card Kanban System

OPM 2, 2013-15, Term 3

Receiving post
Storage
area

Lean systems

Kanban card for

product 1
Kanban card for
product 2

Empty containers
Assembly line 1
O2

Fabrication
cell
O3

O1

Assembly line 2
Full containers

O2

Single-Card Kanban System

OPM 2, 2013-15, Term 3

Receiving post
Storage
area

Lean systems

Kanban card for

product 1
Kanban card for
product 2

Empty containers
Assembly line 1
O2

Fabrication
cell
O3

O1

Assembly line 2
Full containers

O2

Single-Card Kanban System

OPM 2, 2013-15, Term 3

Receiving post
Storage
area

Lean systems

Kanban card for

product 1
Kanban card for
product 2

Empty containers
Assembly line 1
O2

Fabrication
cell
O3

O1

Assembly line 2
Full containers

O2

Single-Card Kanban System

OPM 2, 2013-15, Term 3

Receiving post
Storage
area

Lean systems

Kanban card for

product 1
Kanban card for
product 2

Empty containers
Assembly line 1
O2

Fabrication
cell
O3

O1

Assembly line 2
Full containers

O2

Single-Card Kanban System

OPM 2, 2013-15, Term 3

Receiving post
Storage
area

Lean systems

Kanban card for

product 1
Kanban card for
product 2

Empty containers
Assembly line 1
O2

Fabrication
cell
O3

O1

Assembly line 2
Full containers

O2

Single-Card Kanban System

OPM 2, 2013-15, Term 3

3. Containers cannot be moved without a

kanban

KANBAN

2. Assembly always withdraws from fabrication

(pull system)

5. Only good parts are passed along

1234567Z

Aisle 5
Bin 47

WS 83

WS 116

4. Containers should contain the same number

of parts
6. Production should not exceed authorization

Lean systems

Part Number:

Location:

Lot Quantity:

Supplier:

Customer:

1. Each container must have a card

Two determinations
Determines

lot size

Number of containers
Estimate

the average lead time needed to produce

a container of parts

Lean systems

Number of units to be held by each container

OPM 2, 2013-15, Term 3

Number of Containers

WIP = (average demand rate) (average time a container spends in the manufacturing process)
+ safety stock

kc = d (w + p )(1 + )
d (w + p )(1 + )
k=
c
where
k=
d=
w=
p=
c=
=

number of containers
expected daily demand for the part
average waiting time
average processing time
number of units in each container
policy variable

Lean systems

WIP = kc

OPM 2, 2013-15, Term 3

Number of Containers

Formula for the number of containers

Average demand during lead time + Safety stock
Number of units per container

WIP = (average demand rate)(average time a container spends in the

manufacturing process) + safety stock

Lean systems

k=

OPM 2, 2013-15, Term 3

Number of Containers

EXAMPLE 8.1
A container of parts spends 0.02 day in processing and 0.08 day in materials
handling and waiting
Daily demand for the part is 2,000 units
Safety stock equivalent of 10 percent of inventory
a. If each container contains 22 parts, how many containers should be authorized?
b.Suppose that a proposal to revise the plant layout would cut materials handling and

waiting time per container to 0.06 day. How many containers would be needed?

Lean systems

The Westerville Auto Parts Company produces rocker-arm assemblies

OPM 2, 2013-15, Term 3

Determining the Appropriate Number of Containers

SOLUTION
a. If

2,000 units/day,
0.02 day,
0.10,
0.08 day, and
22 units

2,000(0.08 + 0.02)(1.10)
k=
22
220
=
= 10 containers
22

b. Figure 8.5 from OM

Explorer shows that
the number of
containers drops to 8.

Lean systems

d=
p=
=
w=
c=

OPM 2, 2013-15, Term 3

Determining the Appropriate Number of Containers

d (w + p )(1 + )
k=
c
1,000(0.05 + 0.01)(1 + 0.1)
=
100

= 6.6, or 7 containers

Lean systems

Item B52R has an average daily demand of 1000 units. The average
waiting time per container of parts (which holds 100 units) is 0.5 day.
The processing time per container is 0.1 day. If the policy variable is
set at 10 percent, how many containers are required?

OPM 2, 2013-15, Term 3

Application 8.1

Container system
Containerless system

Lean systems

Cards are not the only way to signal need

OPM 2, 2013-15, Term 3

Other Kanban Signals

OPM 2, 2013-15, Term 3

Other Kanban Signals

Lean systems

 Shorter lead times

Lower defect rates

Less WIP inventory

Less finished goods inventory

Enhancements in system flexibility

Reduction in floor space requirements
Improvement in communication
Improvement in employee morale

Lean systems

Less raw materials inventory

OPM 2, 2013-15, Term 3

Benefits of JIT Manufacturing

 Production system has a flow structure

Set up times are low
High volume, Repetitive Manufacturing

Lean systems

Demand is stable

OPM 2, 2013-15, Term 3

JIT can be effective If

Product
family

Current state
drawing

Creates a visual map of every

process involved in the flow of
materials and information in a
products value chain

Future state
drawing

Work plan and

implementation

Value Stream Mapping Steps

Lean systems

Value stream mapping is a

qualitative lean tool for eliminating
waste

OPM 2, 2013-15, Term 3

Value Stream Mapping (VSM)

OPM 2, 2013-15, Term 3

Value Stream Mapping

Lean systems

Selected Set of Value Stream Mapping Icons

OPM 2, 2013-15, Term 3

Value Stream
Mapping

Lean systems

A Representative Current State Map for a Family of

Retainers at a Bearings Manufacturing Company

 The house conveys stability

The roof represents the primary goals of high quality, low cost, waste
elimination, and short lead-times
The twin pillars, which supports the roof, represents JIT and Jidoka

Lean systems

A key challenge is to bring underlying philosophy of lean to employees

in an easy-to-understand fashion

OPM 2, 2013-15, Term 3

House of Toyota

OPM 2, 2013-15, Term 3

House of Toyota

Just in Time (JIT)

Culture of
Continuous
Improvement

Takt time
One-piece flow

Jidoka
Manual or automatic
line stop
Separate operator and
machine activities

Pull system

Error-proofing
Visual control

Operational Stability
Heijunka

Standard Work

TPM

Supply Chain

Lean systems

Highest quality, lowest cost, shortest

lead time by eliminating wasted
time and activity

Planning
Forecasting
Material
Supply
Culture

Leadership

Material
Man
Machine

Man
Machine
Material
Monthly /
MRP Run

Weekly

Daily

Hourly

Level
Pull

Accuracy

Monthly

Level
Production
Kanban

Weekly

Daily

Closed
Working in Silos
Policing
Information hoarding
Commander
Crisis Management

Hourly

Flow
Pull

Open
Interconnected Teams
Disciplined Thought
Open Information sharing
Coach
Facilitation

Catalyst
Capability Building

Lean systems

Capability
Capacity &
Utilisation

OPM 2, 2013-15, Term 3

Need of change in fundamental beliefs about managing

operations