Adventures in production planning and scheduling

Adventures in Production Planning and Scheduling:

Notes on Lean Manufacturing.

For the WAIB 34th Annual Meeting. Scottsdale, Arizona – September, 2006

by Dave Williams – [email protected]

© 2006 Dave Williams 2 / 50

Lean Manufacturing

Lean Manufacturing is another name for the Toyota Production System.


Lean Manufacturing


It was fashioned from the ideas of 2 men:

Sakichi Toyoda

Henry Ford


Lean Manufacturing


The Toyota Production System is a logical approach to two things:


Lean Manufacturing


The Toyota Production System is a logical approach to two things:

Quality,

and Time


Lean Manufacturing: TPS

Jidoka



Jidoka

Heijunka



Jidoka.Andon

Heijunka



Jidoka.Andon

Heijunka.JIT


Lean Manufacturing: the Goal

Zero-Defects

Zero-Inventory


Lean Manufacturing: full synthesis

Jidoka.Andon

Heijunka.JIT

SMED


Lean Manufacturing

First steps into Lean Manufacturing:

1. Mutual Trust between workers and management

2. Multi-skilled workforce

3. Good relationships with suppliers

4. Extremely high quality product

5. Fast set up times < 10 min (a.k.a. SMED - Single Minute Exchange of Dies)

6. Highly reliable equipment

7. A Stable master production schedule


Optional Tools:

Lean Manufacturing


Optional Tools:

– 5S (A common sense approach to ergonomics)

Image source: 5S for Operators: 5 Pillars of the Visual Workplace, Productivity Press, 1995

Lean Manufacturing


Optional Tools:

– 5S– Kanban (A system of currency for inventory transactions)

Image source: unknown

Lean Manufacturing


Optional Tools:

– 5S– Kanban– Kaizen Events (1 to 2 weeks of team-driven improvements)

Lean Manufacturing


Clockwise from Henry Ford:

1. Sakichi Toyoda2. Kiichiro Toyoda3. Eiji Toyoda4. Taichii Ohno5. Shigeo Shingo


Lean Manufacturing: observations

Implementing the Toyota Production System is psychologically improbable assuming Kahneman and Tversky’s Prospect Theory.

When taken together, the resulting system is a so called ‘Hot’ system – Highly Optimized within Tolerances.

Distributed robustness comes from Keiretsu.


Is Lean the best choice?


Many Alternatives

APS (Advanced Planning Systems)

CONWIP (Constant Work in Progress)

CRM (Customer Relationship Management)

DRP (Distribution Resource Planning)

MRP I (Material Requirements Planning)

MRP II (Manufacturing Resource Planning)

ERP (Enterprise Resource Planning)

JIT (Just in Time)

Lean (What is this anyways?)

Six Sigma (Statistics for Managers!)

Lean Six Sigma (What statistics? What Managers? What?)

OPT (Optimized Production Technology)

SPC (Statistical Process Control)

TOC (Theory of Constraints)

TPS (Toyota Production System) TPM (Total Productive Maintenance)

TQM (Total Quality Management)


Is there a more general connection between all of these models?

Perhaps related to these factors:

• Volume and Variety

• Technology Factors

• Economies of scale, scope, network effects and learning

• The Man – Machine interface


The Product-Process MatrixUnit Volume Per SKU

High

Low

Number of Different SKUs

Low

High

Zone 1

Zone 2

Zone 3

Zone 4


The Product-Process MatrixProcess

Product Mix



Job Shop

Custom madefew of each

Product Mix

Inventor’s Studio

One of a Kind

Zone 1



Job Shop

Batch Flow

Line Flow People Paced


Many low volume products

Product Mix

Inventor’s Studio

One of a Kind

Zone 1

Zone 2



Job Shop

Batch Flow


Line Flow Machine Paced



Several high volume products

Product Mix

Inventor’s Studio

One of a Kind

Zone 1

Zone 2

Zone 3


Pure AutomationTechnology Paced


Job Shop

Batch Flow






GlobalCommodity

Product Mix

Inventor’s Studio

One of a Kind

Zone 1

Zone 2

Zone 3

Zone 4


GlobalCommodity


Job Shop

Batch Flow







Product Mix

Inventor’s Studio

One of a Kind

Zone 1

Zone 2

Zone 3

Zone 4



GlobalCommodity


Job Shop

Batch Flow






Product Mix

Inventor’s Studio

One of a Kind

Design HousesAerospaceCommercial Printers

Industrial MachineryApparel

AutomotiveSteel ProductsRubber Products

Electronics ManufacturingPharmaceuticals, Specialty Chemicals

Major ChemicalsPaper, Oil, Steel, Beer, Soda



GlobalCommodity


Job Shop

Batch Flow






Product Mix

Inventor’s Studio

One of a Kind

Zone 1

Zone 2

Zone 3

Zone 4



GlobalCommodity


Job Shop

Batch Flow






Product Mix

Inventor’s Studio

One of a Kind

Sequencing Rules

Zone 2

Zone 3

Zone 4



GlobalCommodity

Sequencing Rules


Job Shop

Batch Flow






Product Mix

Inventor’s Studio

One of a Kind

Theory of Constraints

Zone 3

Zone 4



GlobalCommodity

Sequencing Rules


Job Shop

Batch Flow






Product Mix

Inventor’s Studio

One of a Kind


Zone 3

Periodic Review



GlobalCommodity

Sequencing Rules


Job Shop

Batch Flow






Product Mix

Inventor’s Studio

One of a Kind


Zone 3 ?

Periodic Review



GlobalCommodity

Sequencing Rules


Job Shop

Batch Flow






Product Mix

Inventor’s Studio

One of a Kind


MRP and JIT

Periodic Review



The Product-Process Matrix





MRP and JIT

GlobalCommodity


JIT vs. MRP: hot vs. cold systems

The opposite of ‘Lean’ is not ‘Wasteful’



The opposite of ‘Lean’ is not ‘Wasteful’

The alternative to ‘Lean’ is simply a schedule, otherwise known as a material requirements plan, based on forecasts.



The distinction, in the abstract, is a matter of systems design.

JIT: Hot

MRP: Cold

see Farmer et al., 2002



The distinction, in the abstract, is a matter of systems design.

JIT: Highly Optimized within Tolerances

MRP: Constrained Optimization with Limited Deviations

see Farmer et al., 2002


The Japanese Report not to Forecast

“Operations managers from nearly 1500 major corporations were asked to rank their concerns on various aspects of manufacturing management.* European and North American executives ranked sales forecasting at number 5 and number 4, respectively. Interestingly enough, sales forecasting did not even appear in the list among Japanese managers.”From:

Henry C Co, Moosa Sharafali, Overplanning factor in Toyota's formula for computing the number of kanban

IIE Transactions. Norcross: May 1997.Vol.29, Iss. 5; pg. 409, 7 pgs

*With reference to:

Ferdows, K., Miller, J.G., Nakane, J. and Vollman, T.E., (1985) Evolving global manufacturing strategies: projections into the 1990s. International Journal of Operations Production Management, 6(4), 5-14.


It’s good to have friends

Toyota Motor Shows Its MettleAfter Fire Destroys Parts PlantWall Street Journal 8 May 1997

“Fire incinerated main source of brake valve”

“No Foreign Help Required”

“320 cellular phones, 230 extra phone lines and several dozen sleeping bags for executives”

“36 suppliers, aided by more than 150 other subcontractors”

“tribal groups… Japanese auto makers' blood pacts with their suppliers”


Lean Manufacturing

Further reference:

– Liker, Jeffrey R., The Toyota Way, 2004

– Silver, Edward A., Pyke, David, F., Peterson, Rein, Inventory Management and Production Planning and Scheduling, 1998.


A Word from George Box:1.Every model is an approximation.

2.All models are wrong, some models are useful.

3.Don’t fall in love with a model…

In Statistics for Experimenters , 2005.

(George Box invented the ARIMA model of forecasting)

Adventures in production planning and scheduling

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