LOGO

MODERN FACTORY MANAGEMENT

Course of Production Management

 ISE - Production Management

Contents

 Push system/Pull system

 CONWIP (constant work in process)
 Just – in – time concept
 Kanban System

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Definitions

 A workstation
 A part
 A routing
 A customer order
 A job
 Throughput
 Raw material inventory (RMI)
 Finished goods inventory (FGI)
 WIP
 Cycle time (CT): average cycle time, flow time, through put
time
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Description

 Factory Signature Curve is based on Little’s Law

which stated that the production throughput is equal
to the work-in-process divided by the production flow
time (lead time)
 In formula P = W / L
– Increase Lead time decreases Throughput

– Reduce Lead time increases Throughput

– Reduce WIP decreases Throughput

– Increase WIP increases Throughput

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Operating Policies

 Traditional Push System

 Pull System with Kanban

 Constant Work-in-process (CONWIP)

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Traditional Push System

 Easy to start
 Try to control output by controlling input and observe the
result.

 WIP can be observed but not easy to control

 Not easy to monitor and control
 Tend to have WIP explosion when the system is operated at
close to full capacity

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Pull System with Kanban

 Need to calculate the number of Kanbans at each work center

 Not flexible
 Difficult to handle large changes

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CONWIP

 Keep total number of jobs in the factory at a fixed number

 New job is released to enter the factory after completion of a
job

 Within the system, operate in the same way as the push system
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A Perfect Factory

 4 stations in series

 1 minute process time at each station

 material always available

 no machine breakdown

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Perfect Factory WIP = 1

OUTPUT
Time 0

Time 1

Time 2

Time 3

Time 4

Lead time = 4 Throughput = ¼ = 0.25

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Perfect Factory WIP = 3

OUTPUT
Time 0

Time 1

Time 2

Time 3

Time 4

Lead time = 4 Throughput = 3/4 = 0.75

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Perfect Factory WIP = 4

OUTPUT
Time 0

Time 1

Time 2

Time 3

Time 4

Lead time = 4 Throughput = 4/4 = 1

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Perfect Factory WIP = 5

OUTPUT
5 4 3 2 1 Time 0

Time 1

Time 2

Time 3

Time 4

Time 5

Lead time = 5 Throughput = 5/5 = 1

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Important Information
Throughput
WIP Lead Time
Rate
1 4 0.25
2 4 0.50
3 4 0.75
4 4 1.00
5 5 1.00
6 6 1.00
7 7 1.00
8 8 1.00

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Just-In-Time (JIT) Defined

 JIT can be defined as an integrated set of activities

designed to achieve high-volume production using
minimal inventories (raw materials, work in process,
and finished goods).

 JIT also involves the elimination of waste in

production effort.

 JIT also involves the timing of production resources

(e.g., parts arrive at the next workstation “just in
time”).
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JIT Definitions

 elimination of waste in the production system

 improve quality
 minimize lead time
 reduce costs
 improve productivity

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The Japanese Approach to

Productivity

 Imported technologies
 Efforts concentrated on shop floor
 Quality improvement focus
 Elimination of waste
 Respect for people

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Waste in Operations

1. Waste from overproduction

2. Waste of waiting time
3. Transportation waste
4. Inventory waste
5. (Extra) Processing waste
6. Waste of motion
7. Waste from product defects
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Waste in Operations

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Minimizing Waste:
Focused Factory Networks

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Minimizing Waste:
Group Technology (Part 1)
 Using Departmental Specialization for plant layout can
cause a lot of unnecessary material movement.

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Minimizing Waste:
Group Technology (Part 2)
 Revising by using Group Technology Cells can
reduce movement and improve product flow.

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Minimizing Waste:
Uniform Plant Loading
Suppose we operate a production plant that produces a single product.
The schedule of production for this product could be accomplished
using either of the two plant loading schedules below

Not uniform Jan. Units Feb. Units Mar. Units Total 1,200
3,500 4,300 9,000

or

Uniform Jan. Units Feb. Units Mar. Units Total 3,000

3,000 3,000 9,000

How does the uniform loading help save labor costs?

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Minimizing Waste:
Just-In-Time Production
WHAT IT IS WHAT IT DOES

• Attacks waste
• Management philosophy • Exposes problems and
• “Pull” system though the bottlenecks
plant • Achieves streamlined
production

WHAT IT REQUIRES WHAT IT ASSUMES

• Employee participation
• Industrial engineering/basics
• Continuing improvement • Stable environment
• Total quality control
• Small lot sizes

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Minimizing Waste:
Inventory Hides Problems

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Key Activities in JIT

 Matching demand with product design

 Define product families with specific manufacturing

goals, then design manufacturing system to
facilitate the flow based production of these families

 Establish relationship with suppliers to ensure raw

material delivery in a JIT manner

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Traditional Push System

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Kanban Pull System

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 Kanbans ( 看板 )

■ KANBANS are cards that control the flow of

materials through JIT operations.

■ They arrange the ‘pull’ of materials through a

process.

 There are several ways of using kanbans. The most

common system uses two distinct types of card, a
production kanban and a conveyance kanban.
– Production Kanban: signals the need to produce more parts
– Conveyance Kanban (also called a “Move" or a “Withdrawal”
kanban): signals the need to withdraw parts from one work
center and deliver them to the next work center
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Source: From Assoc. Prof. Ho Thanh Phong, IU lecture notes
 Single-Card Kanban System
Receiving post
Kanban card for Storage
product 1 area
Kanban card for
product 2

Empty containers

Assembly line 1

O2

Fabrication
cell
O1 O3
Assembly line 2

Full containers
O2
Single-Card Kanban System
Receiving post
Kanban card for Storage
product 1 area
Kanban card for
product 2

Empty containers

Assembly line 1

O2

Fabrication
cell
O1 O3
Assembly line 2

Full containers
O2
Single-Card Kanban System
Receiving post
Kanban card for Storage
product 1 area
Kanban card for
product 2

Empty containers

Assembly line 1

O2

Fabrication
cell
O1 O3
Assembly line 2

Full containers
O2
Single-Card Kanban System
Receiving post
Kanban card for Storage
product 1 area
Kanban card for
product 2

Empty containers

Assembly line 1

O2

Fabrication
cell
O1 O3
Assembly line 2

Full containers
O2
Single-Card Kanban System
Receiving post
Kanban card for Storage
product 1 area
Kanban card for
product 2

Empty containers

Assembly line 1

O2

Fabrication
cell
O1 O3
Assembly line 2

Full containers
O2
 Single-Card Kanban System
Receiving post
Kanban card for Storage
product 1 area
Kanban card for
product 2

Empty containers

Assembly line 1

O2

Fabrication
cell
O1 O3
Assembly line 2

Full containers
O2

Figure 8.4 – Single-Card Kanban System

Single-Card Kanban System
Receiving post
Kanban card for Storage
product 1 area
Kanban card for
product 2

Empty containers

Assembly line 1

O2

Fabrication
cell
O1 O3
Assembly line 2

Full containers
O2
 W

W
W

W
 Kanban Cards

Conveyance Kanban Card

Part number to produce: M471-36 Part description: Valve Housing

Lot size needed: 40 Container type: RED Crate

Card number: 2 of 5 Retrieval storage location: NW53D

From work center: 22 To work center: 35

 ISE - Production Management

Minimizing Waste:
Kanban Production Control Systems

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Determining the Number of

Kanbans Needed
 Setting up a kanban system requires determining
the number of kanbans (or containers) needed.

 Each container represents the minimum production

lot size.

 An accurate estimate of the lead time required to

produce a container is key to determining how
many kanbans are required.

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The Number of Kanban Card Sets

Expected demand during leadtime  Safety stock

k
Size of the container
DL1   

C
 k = Number of kanban card sets (a set is a card)
 D = Average number of units demanded over some time period
 L = lead time to replenish an order (same units of time as
demand)
 α = Safety stock expressed as a percentage of demand during
lead time
 C = Container size
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Example 1

 If the lead time for a container is one hour and a

container holds ten parts and the demand per hour
is twenty, the minimum number of kanbans is then

 n = DL(1+ α) / C
n = 20 * 1 * (1 + 0 ) / 10 = 2

 Any positive α will force more kanbans to hold

safety stock.

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Example 2

 A switch assembly is assembled in batches of 4

units from an “upstream” assembly area and
delivered in a special container to a “downstream”
control-panel assembly operation.
 The control-panel assembly area requires 5 switch
assemblies per hour.
 The switch assembly area can produce a container
of switch assemblies in 2 hours.
 Safety stock has been set at 10% of needed
inventory.
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Example 2

Expected demand during leadtime  Safety stock

k
Size of the container
DL 1    5( 2)(1.1)
   2.75 or 3
C 4

Always round up!

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Respect for People

 Level payrolls
 Cooperative employee unions
 Subcontractor networks
 Bottom-round management style
 Quality circles (Small group involvement
activities)

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JIT Requirements:
Design Flow Process

 Link operations
 Balance workstation capacities
 Relayout for flow
 Emphasize preventive maintenance
 Reduce lot sizes
 Reduce setup/changeover time

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JIT Requirements:
Total Quality Control

 Worker responsibility
 Measure SQC (Statistic Quality Control)
 Enforce compliance
 Fail-safe methods
 Automatic inspection

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JIT Requirements:
Stabilize Schedule

 Level schedule

 Underutilize capacity

 Establish freeze windows

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JIT Requirements:
Kanban-Pull

 Demand pull

 Backflush

 Reduce lot sizes

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JIT Requirements:
Reduce Inventory More

 Look for other areas

 Stores
 Transit
 Carousels
 Conveyors

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JIT Requirements:
Improve Product Design

 Standard product configuration

 Standardize and reduce number of parts

 Process design with product design

 Quality expectations

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JIT Requirements:
Work with Vendors

 Reduce lead times

 Frequent deliveries

 Project usage requirements

 Quality expectations

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JIT in Services (Examples)

 Organize Problem-Solving Groups

 Upgrade Housekeeping
 Upgrade Quality
 Clarify Process Flows
 Revise Equipment and Process Technologies

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JIT in Services (Examples)

 Level the Facility Load

 Eliminate Unnecessary Activities
 Reorganize Physical Configuration
 Introduce Demand-Pull Scheduling
 Develop Supplier Networks

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Key elements to successful JIT (1)

 Housekeeping is the organizing of the

workplace for higher productivity
 Quality improvement through process
improvement is necessary so that there are
no interruptions in the flow due to defective
material
 Reduce setup times allow smaller lots
 Preventive maintenance is practiced to
avoid unexpected interruptions
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Key elements to successful JIT (2)

 Incremental inventory is reduced to force

problems into the open
 Workers are cross-trained to allow higher
efficiency for the workforce
 A level schedule is maintained so that flow is
easier to balance throughout the process
 Operations are balanced to allow even flow
and to prevent inventory between work
centers
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Disadvantages & Limitations

 Kanban is intrinsically a system for repetitive manufacturing. It

will not succeed without modification in a non- repetitive
environment

 requires a leveled schedule, standard containers and strict

discipline

 inflexible and cannot easily respond to irregular changes

 requires great cooperation from outside suppliers
 it places emphasis on process technologies, such as product based
flow configurations and may require considerable investment in
developing new methods, procedures, jigs and fixtures, etc.,
perhaps even new capital equipment

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Advantages

 stimulate productivity improvements, reduces

inventory and production lead time, and
within the system constraints, allows the
plant to respond to predictable small demand
variations.
 is a simple system of flow control with visible
means of inventory control
 minimum paperwork

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