JIT and Lean Operations

Lean Operations
Lean operation
 A flexible system of operation that uses
considerably less resources than a traditional
system
 Tend to achieve
 Greater productivity
 Lower costs
 Shorter cycle times
 Higher quality

Just-in-Time
 A highly coordinated processing system in
which goods move through the system, and
services are performed, just as they are needed
Lean System Characteristics
 A number of characteristics are commonly
found in lean systems:
 Waste reduction
 Continuous improvement
 Use of teams
 Work cells
 Visual controls
 High quality
 Minimal inventory
 Output only to match demand
 Quick changeovers
 Small lot sizes
 Lean culture
Lean System Principles
Five principles embody the way lean
systems function:
1. Identify customer values
2. Focus on processes that create value
3. Eliminate waste to create “flow”
4. Produce only according to customer demand
5. Strive for perfection
Benefits & Risks of Lean Systems
Key Benefits
 Reduced waste
 Lower costs
 Increased quality
 Reduced cycle time
 Increased flexibility
 Increased productivity
Critical Risks
 Increased stress on workers
 Fewer resources available if problems occur
 Supply chain disruptions can halt operations
The Toyota Approach
Toyota’s approach – Toyota Production
System (TPS)

 Muda
 Kanban
 Heijunka
 Kaizen
 Jidoka
Lean Operations: The Beginning
 Lean operations began as lean manufacturing,
also known as JIT in the mid-1900s
 Developed by Taiichi Ohno and Shigeo Ohno of
Toyota
 Focus was on eliminating all waste from every aspect of
the process
Waste is viewed as anything that interferes
with, or does not add value to, the process of
producing automobiles
Lean: Ultimate Goal
The ultimate goal:
 Achieve a balanced system–
One that achieves a smooth, rapid flow of
materials and/or work through the system
Lean: Supporting Goals
The degree to which lean’s ultimate goal
is achieved depends upon how well its
supporting goals are achieved:
1. Eliminate disruptions
2. Make the system flexible
3. Eliminate waste, especially excess
inventory
Waste (MUDA)
Waste
 Represents unproductive resources
 Eight sources of waste in lean systems:
1. Excess inventory
2. Overproduction
3. Waiting time
4. Unnecessary transporting
5. Processing waste
6. Inefficient work methods
7. Product defects
8. Underused people
Kaizen
 The kaizen philosophy for attacking waste is based
upon these ideas:
1. Waste is the enemy, and to eliminate waste it is
necessary to get the hands dirty
2. Improvement should be done gradually and
continuously; the goal is not big improvements done
intermittently
3. Everyone should be involved
4. Kaizen is built on a cheap strategy, and it does not
require spending great sums on technology or
consultants
5. It can be applied everywhere
6. It is supported by a visual system
7. It focuses attention where value is created
8. It is process oriented
9. It stresses that the main effort for improvement should
come from new thinking and a new work style
Lean: Building Blocks
Product design
Process design
Personnel/organizational elements
Manufacturing planning and control
Building Blocks: Product Design
Four elements of product design important
for lean systems:
1. Standard parts
2. Modular design
3. Highly capable systems with quality built in
4. Concurrent engineering
Building Blocks: Process Design
 Eight aspects of process design that are
important for lean systems:
1. Small lot sizes
2. Setup time reduction
3. Manufacturing cells
4. Quality improvement
5. Production flexibility
6. A balanced system
7. Little inventory storage
8. Fail-safe methods
Process Design: Small Lot Sizes
In the lean philosophy, the ideal lot
size is one
Benefits of small lot size
 Reduced in-process inventory
Lower carrying costs
Less storage space is necessary
 Inspection and rework costs are less when
problems with quality do occur
 Permits greater flexibility in scheduling
 Less inventory to ‘work off’ before
implementing product improvements/changes
 Increased visibility of problems
 Increased ease of balancing operations
Process Design: Setup Time
Reduction
 Small lot sizes and changing product mixes
require frequent setups
 Unless these are quick and relatively
inexpensive, they can be prohibitive
 Setup time reduction requires deliberate
improvement efforts
 Single-minute exchange of die (SMED)
 A system for reducing changeover time
 Group technology may be used to reduce setup time by
capitalizing on similarities in recurring operations
Process Design: Manufacturing Cells
One characteristic of lean production
systems is multiple manufacturing cells
Benefits include
 Reduced changeover times
 High equipment utilization
 Ease of cross-training workers
Process Design: Quality
Improvement
Quality defects during the process can
disrupt the orderly flow of work
Autonomation (jidoka)
Automatic detection of defects during
production
Two mechanisms are employed
1. One for detecting defects when they occur
2. Another for stopping production to correct the
cause of the defects
Process Design: Work Flexibility
 Guidelines for increasing flexibility
1. Reduce downtime due to changeovers by reducing
changeover time
2. Use preventive maintenance on key equipment to
reduce breakdowns and downtime
3. Cross-train workers so they can help when bottlenecks
occur or other workers are absent
4. Use many units of small capacity; many small cells make
it easier to shift capacity temporarily and to add or
subtract capacity
5. Use off-line buffers. Store infrequently used safety stock
away from the production area
6. Reserve capacity for important customers
Process Design: Balanced System
 Takt time
 The cycle time needed to match customer
demand for final product
 Sometimes referred to as the heartbeat of a
lean system
Takt time is often set for a work shift
Procedure:
1. Determine the net time available per shift
2. If there is more than one shift per day, multiply
the net time by the number of shifts
3. Compute the takt time by dividing the net
available time by demand
Process Design: Inventory Storage
 Lean systems are designed to minimize
inventory storage
 Inventories are buffers that tend to cover up recurring
problems that are never resolved
 partly because they are not obvious
 partly because the presence of inventory makes them
seem less serious
Process Design: Fail-Safe Methods
Poka-yoke (Fail-safing)
 Building safeguards into a process to reduce or
eliminate the potential for errors during a
process
Examples
 Electric breakers
 Seatbelt fastener warnings
 ATMs that signal if a card is let in a machine
 Designing parts that can only be assembled in the
correct position
Building Blocks:
Personnel/Organizational
Five personnel/organizational elements
that are important for lean systems:
 Workers as assets
 Cross-trained workers
 Continuous improvement
 Cost accounting
 Leadership/project management
Personnel/Organizational:
Workers as Assets
Workers as assets
 Well-trained and motivated workers are the
heart of the lean system
They are given greater authority to make decisions,
but more is expected of them
Personnel/Organizational:
Cross-Trained Workers
Cross-trained workers
 Workers are trained to perform several parts of
a process and operate a variety of machines
Facilitates flexibility
Helps in line balancing
Personnel/Organizational:
Continuous Improvement
Continuous improvement
 Workers in lean systems have greater
responsibility for quality, and they are expected
to be involved in problem solving and
continuous improvement
 Lean workers receive training in
Statistical process control
Quality improvement
Problem solving
Personnel/Organizational:
Cost Accounting
Cost accounting
 Activity-based costing
Allocation of overhead to specific jobs based on
their percentage of activities
Personnel/Organizational:
Leadership
Leadership/project management
 Managers are expected to be leaders and
facilitators, not order givers
 Lean systems encourage two-way
communication between workers and
managers
 Building Blocks: MPC
 Seven elements of manufacturing planning
and control (MPC) are particularly important
for lean system:
1. Level loading
2. Pull systems
3. Visual systems
4. Limited work-in-process (WIP)
5. Close vendor relationships
6. Reduced transaction processing
7. Preventive maintenance and housekeeping
MPC: Level Loading
Lean systems place a strong emphasis on
achieving stable, level daily mix
schedules
 MPS – developed to provide level capacity
loading
 Mixed model scheduling
Three issues need to be resolved
 What is the appropriate product sequence to use?
 How many times should the sequence be repeated
daily?
 How many units of each model should be produced in
each cycle?
MPC: Pull Systems
Push system
 Work is pushed to the next station as it is
completed
Pull system
 A workstation pulls output from the preceding
workstation as it is needed
 Output of the final operation is pulled by
customer demand or the master schedule
 Pull systems are not appropriate for all
operations
Large variations in volume, product mix, or product
design will undermine the system
MPC: Visual Systems
 Kanban
 Card or other device that communicates demand for
work or materials from the preceding station
 Kanban is the Japanese word meaning “signal” or
“visible record”
 Paperless production control system
 Authority to pull, or produce, comes
from a downstream process.
 Two main types of kanbans:
1. Production kanban (p-kanban): signals the need to
produce parts
2. Conveyance kanban (c-kanban): signals the need to
deliver parts to the next work center.
Kanban System
It is apparent that the number of kanban cards in use is an important variable.
One can compute the ideal number of kanban cards using this formula:

Where,
N = Total number of containers (1 card per container)
D = Planned usage rate of using work center
T = Average waiting time for replenishment of parts plus average production time for a
container of parts
X = Policy variable set by management that reflects possible inefficiency in the system
(the closer to 0, the more efficient the system)
C = Capacity of a standard container (should be no more than 10 percent of daily usage
of the part)
Note that D and T must use the same units (e.g., minutes, days).
MPC: Limited WIP
Benefits of lower WIP
 Lower carrying costs
 Increased flexibility
 Aids scheduling
 Saves costs of scrap and rework if there are
design changes
 Lower cycle-time variability
MPC: Close Vendor Relationships
Lean systems typically have close
relationships with vendors
 They are expected to provide frequent, small
deliveries of high-quality goods
A key feature of many lean systems is the
relatively small number of suppliers used
 Preventive Maintenance and
Housekeeping
Preventive maintenance
 Maintaining equipment in good operating
condition and replacing parts that have a
tendency to fail before they actually do fail
Housekeeping
 Maintaining a workplace that is clean and free
of unnecessary materials
 5S
Lean Tools: Value Stream Mapping
Value stream mapping
 A visual tool to systematically examine the
flows of materials and information
Its purpose is to help identify waste and
opportunities for improvement
Data collected:
 Times
 Distances traveled
 Mistakes
 Inefficient work methods
 Waiting times
 Information flows
Lean Tools: 5W2H & Six Sigma
5W2H
 a method of asking questions about a process
that includes what, why, where, when, who, how,
and how much
Lean and Six Sigma
 Lean and six sigma can be viewed as two
complementary approaches to process
improvement
Lean focuses on eliminating non-value-added activity
to maximize process velocity
Six sigma seeks to eliminate process variation
Together the two approaches can achieve process
flow and quality
Transitioning to Lean Systems
1. Make sure top management is committed and that they
know what will be required
2. Decide which parts will need the most effort to convert
3. Obtain support and cooperation of workers
4. Begin by trying to reduce setup times while maintaining
the current system
5. Gradually convert operations, begin at the end and work
backwards
6. Convert suppliers to JIT
7. Prepare for obstacles
Obstacles to Conversion
1. Management may not be fully committed or
willing to devote the necessary resources to
conversion
2. Workers/management may not be cooperative
3. It can be difficult to change the organizational
culture to one consistent with the lean
philosophy
4. Suppliers may
resist