1

Lean Production /
Just-in-Time

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 2

Lean Production
 Lean Production 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)
 Lean Production also involves the
elimination of waste in production effort
 Lean Production also involves the timing
of production resources (i.e., parts arrive
at the next workstation “just in time”)

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 3

Waste is ‘anything other than the

minimum amount of equipment,
materials, parts, space, and worker’s
time, which are absolutely essential
to add value to the product.’
— Shoichiro Toyoda
President, Toyota

© 1995 Corel Corp.

© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

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 4

Supplier – Production – Distribution

System
Customer
Supplier Distribution Productions Inventories Distribution
Inventories Inventories
Raw Material Work-in-process Factory
Inventory Inventory Finished Retailer
Goods Inventory
Inventory
Raw material
in-transit
Orders
Component
Inventory

Warehouse
Sub-assembly
Inventory
parts in-transit MRO
Inventory
Orders

Maintenance,
repair, and ordering
supplies in-transit Production and Shipping and
Purchasing Inventory Control Traffic

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 5

Here
Herethe
thecustomer
customerstarts
Pull System
starts
the
theprocess,
process,pulling
pullingan
an
inventory
inventoryitem
itemfrom
from
Final
FinalAssembly…
Assembly…
Then
Thensub-
sub-
assembly Fab Vendor
assemblywork
workisis
pulled
pulledforward
forwardbyby
that
thatdemand…
demand… Sub
Fab Vendor
Customers
Final
Assembly

The Sub Fab

Theprocess
processcontinues
continues Vendor
throughout
throughoutthe
theentire
entire
production
productionprocess
processand
and
supply
supplychain
chain Fab Vendor
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 6

Features of Lean Production

WHAT IT IS WHAT IT DOES

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

WHAT IT REQUIRES WHAT IT ASSUMES

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

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 7

The Toyota Production System

 Based on two philosophies:

– 1. Elimination of waste

– 2. Respect for people

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 8

Elimination of Waste
1. Waste from overproduction
2. Waste of waiting time
3. Transportation waste
4. Inventory waste
5. Processing waste
6. Waste of motion
7. Waste from product defects

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 9

Examples of Elimination of Waste

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 10

These
Thesearearesmall
smallspecialized
specialized
Minimizing Waste: plants
plantsthat
thatlimit
limitthe
therange
range
Focused Factory of
ofproducts
productsproduced
produced
Networks (sometimes
(sometimesonlyonlyone
onetype
typeof
of
product
productforforan
anentire
entire
facility)
facility)

Some
Someplants
plantsin
in
Japan
Japanhave
haveasas
Coordination few
fewas
as30
30and
andas
as
System Integration many
manyasas1000
1000
employees
employees

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 11

Minimizing Waste: Group Technology (Part 1)

Note
Notehow
howthe
theflow
flowlines
linesare
aregoing
goingback
backand
andforth
forth

 Using
UsingDepartmental
DepartmentalSpecialization
Specializationfor
forplant
plantlayout
layoutcan
cancause
causeaalot
lotof
of
unnecessary
unnecessarymaterial
materialmovement
movement

Saw Saw Saw Grinder Grinder

Heat Treat

Lathe Lathe Lathe Press Press Press

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 12

Minimizing Waste:
Group Technology (Part 2)
 Revising
Revisingby
byusing
usingGroup
GroupTechnology
TechnologyCells
Cellscan
canreduce
reducemovement
movement
and
andimprove
improveproduct
productflow
flow

Grinder
1 2
Saw Lathe Lathe Press

Heat Treat

Grinder
Saw Lathe A B Lathe Press

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 13

Minimizing Waste:
Uniform Plant Loading (heijunka)
Suppose
Supposeweweoperate
operateaaproduction
productionplant
plantthat
thatproduces
producesaasingle
single
product.
product. The
Theschedule
scheduleofofproduction
productionfor
forthis
thisproduct
productcould
couldbe
be
accomplished
accomplishedusing
usingeither
eitherof
ofthe
thetwo
twoplant
plantloading
loadingschedules
schedules
below.
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
Howdoes
doesthe
theuniform
uniformloading
loadinghelp
helpsave
savelabor
laborcosts?
costs?
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 14

Inventory

 Traditional: inventory exists in case

problems arise
 JIT objective: eliminate inventory
 JIT requires
– Small lot sizes
– Low setup time
– Containers for fixed number of parts
 JIT inventory: Minimum inventory to keep
system running

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 15

Minimizing Waste: Inventory

Hides Problems
Example: By
identifying defective
Machine
downtime items from a vendor
early in the
Scrap Vendor production process
Work in delinquencies Change the downstream work
orders
process is saved
queues Engineering design Design
(banks) redundancies backlogs

Example: By
Paperwork Inspection Decision identifying defective
backlog backlogs backlogs work by employees
upstream, the
downstream work is
saved
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 16

Inventory Hides Problems

Just as Water in a Lake
Hides Rocks

Inventory level

Inventory level

Process Process
Scrap Scrap
downtime downtime
Setup Setup Quality
Quality time
time problems problems

Late Late
deliveries deliveries

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 17

Reducing Lot Sizes

Increases the Number of
Lots
Customer Lot size = 5
orders 10 Lot 1 Lot 2

Lot size = 2
Lot 1 Lot 2 Lot 3 Lot 4 Lot 5

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 18

…Which Increases
Inventory Costs
Cost

l Cost
To ta
Cost
lding
Ho
Setup Cost

Smaller Optimal Lot Size

Lot Size Lot Size

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 19

Unless Setup Costs are

Reduced
Cost

Cos t
To ta l st
g Co
ldin
Ho

Setup Cost
New optimal Original
optimal Lot Size
lot size
lot size

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 20

Steps to Reduce Setup Time

90 min
Initial Setup Time

Separate setup into preparation, and actual setup,

Step 1 doing as much as possible while the machine/process
is running (save 30 minutes)
60 min
Move material closer and improve
Step 2 material handling (save 20 minutes)
45 min
Standardize and
Step 3 improve tooling (save
15 minutes) 25 min
Use one-touch system to
Training operators and Step 4 15 min
eliminate adjustments (save
standardizing work 13 min
Step 5 10 minutes)
procedures (save 2
minutes)

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 21

Minimizing Waste: Kanban Production

Control Systems This puts the
system back
Once the Production kanban is
Withdrawal were it was
received, the Machine Center
kanban before the item
produces a unit to replace the
was pulled
one taken by the Assembly Line
people in the first place

Storage Storage
Machine Part A Part A Assembly
Center
Line

Production kanban
Material Flow
The process begins by the Assembly Line
people pulling Part A from Storage Card (signal) Flow
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 22

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 23

Determining the Number of

Kanbans Needed
 Setting up a kanban system requires
determining the number of kanbans
cards (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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 24

The Number of Kanban Card Sets

Expected
Expected demand
demand during
during lead
lead time
timeSafety
Safety stock
stock
kk 
Size
Sizeof
of the
thecontainer
container

DL
DL (1
(1SS))

CC
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)
S = Safety stock expressed as a percentage of demand
during leadtime
C = Container size

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 25

Example of Kanban Card

Determination: Problem Data
 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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 26

Example of Kanban Card

Determination: Calculations

Expected
Expecteddemand
demandduring
duringlead timeSafety
leadtime Safetystock
stock
kk 
Size
Sizeof
of the
thecontainer
container

DL
DL(1
(1SS)) 5(2)(1.1)
  5(2)(1.1)22..75
75,,or
or33
CC 44

Always round up!

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 27

Respect for People

 Level payrolls

 Cooperative employee unions

 Subcontractor networks

 Bottom-round management style

 Quality circles (Small Group

Involvement Activities or SGIA’s)

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 28

Lean Tool: 5S
 Sort (Seri) – determine which equipment
is necessary and which is not
 Straighten (Seiton) – have the necessary
equipment in reach and in the right place
 Shine (Seiso) - clean
 Standardize (Seiketsu) – maintain the
above 3 S
 Sustain (Sitsuke) – mental discipline and
readiness

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 29
Why 5S?

• To eliminate the wastes that result from “uncontrolled” processes.

• To gain control on equipment, material & inventory placement and position.

• Apply Control Techniques to Eliminate Erosion of Improvements.

• Standardize Improvements for Maintenance of Critical Process Parameters.

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 30
After 5S

 Clear, shiny aisles

 Color-coded areas
 Slogans & banners
 No work in process

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 31

Value Stream Mapping

 Value stream mapping: a special
type of flowcharting tool for
development of lean processes
– Used to visualize product flows
through various processing steps
 Need a full understanding of the
business including production
processes

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 32

Manufacturing Process
Map

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 33

Value Stream Mapping

Symbols

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 34
Lean Tool: Root Cause Analysis -

USUAL APPROACH
Firefighting! Problem
Problem
Immediate Containment reoccurs
Identified
Action Implemented elsewhere!

Find
someone to
blame!

PREFERRED APPROACH
Immediate Defined Solutions are
Solutions
Problem Containment Root Cause applied across
validated
Identified Action Analysis company and
with data
Implemented Process never return!

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 35

Root Cause Example

Identify Problem

Project Is behind Schedule – Won’t

Finish on Time

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 36

Immediate Action

 Additional resources applied to help get the

project team back on schedule

 No new projects started until Root Cause

Analysis completed

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 37

Root Cause

Didn’t complete project on time

Why?

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 38

Cause and Effect Diagram

Procedures Personnel
Lack of worker
knowledge
Poor project plan
Poor project
mgmt skills Lack of resources

Didn’t complete
project on time

Inadequate Poor Inadequate

computer documentation computer system
programs

Materials Equipment

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 39

Cause and Effect

Procedures Personnel
Lack of worker
knowledge
Poor project plan
Poor project
mgmt skills Lack of resources

Didn’t complete
project on time

Inadequate Poor Inadequate

computer documentation computer system
programs

Materials Equipment

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 40

Root Cause

Didn’t complete project on time

Resources unavailable when needed

Why?

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 41

Didn’t complete project on time

Resources unavailable when needed

Took too long to hire Project Manager

Why?

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 42

Didn’t complete project on time

Resources unavailable when needed

Took too long to hire Project Manager

Lack of specifics given to

Human Resources Dept
Why?

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 43

Didn’t complete project on time

Resources unavailable when needed

Took too long to hire Project Manager

Lack of specifics given to

Human Resources Dept

No formal process for submitting job opening

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 44

Corrective Action
 Permanent – Hired another project
manager to meet needs of next project
team

 Preventive - Developed checklist form

with HR for submitting job openings in the
future

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 45

Lean Implementation Requirements:

Design Flow Process
 Link operations
 Balance workstation capacities
 Redesign layout for flow
 Emphasize preventive maintenance
 Reduce lot sizes
 Reduce setup/changeover time

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 46

Lean Implementation Requirements:

Total Quality Control
 Worker responsibility

 Measure SQC

 Enforce compliance

 Fail-safe methods

 Automatic inspection

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 47

Lean Implementation Requirements:

Stabilize Schedule
 Level schedule

 Underutilize capacity

 Establish freeze windows

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 48

Lean Implementation
Requirements: Kanban-Pull
 Demand pull

 Backflush

 Reduce lot sizes

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 49

Lean Implementation Requirements:

Work with Vendors
 Reduce lead times

 Frequent deliveries

 Project usage requirements

 Quality expectations

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 50

Lean Implementation Requirements:

Reduce Inventory More
 Look for other areas

 Stores

 Transit

 Carousels

 Conveyors

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 51

Lean Implementation Requirements:

Improve Product Design

 Standard product configuration

 Standardize and reduce number of

parts

 Process design with product design

 Quality expectations
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 52

Lean Implementation Requirements:

Concurrently Solve Problems
 Root cause
 Solve permanently
 Team approach
 Line and specialist responsibility
 Continual education

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 53

Lean Implementation Requirements:

Measure Performance

 Emphasize improvement
 Track trends

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