Lean Manufacturing

JIT/Lean Production

2008 Pearson Prentice Hall --- Introduction to Operations and Supply Chain Management, 2/e --- Bozarth and Handfield, ISBN: 0131791036

Chapter ObjectivesBe able to:Describe what JIT/Lean is and differentiate between the Lean philosophy and kanban systems.Discuss the Lean perspective on waste and describe the eight major forms of waste, or muda, in an organization. Discuss the Lean perspective on inventory and describe how a kanban system helps control inventory levels and synchronize the flow of goods and materials across a supply chain. Describe how the concepts of the Lean supply chain and Lean Six Sigma represent natural extensions of the Lean philosophy. Explain how a two-card kanban system works. Calculate the number of kanban cards needed in a simple production environment. Show how MRP and kanban can be linked together and illustrate the process using a numerical example.


Some Statistics from1986 ...Framingham (GM)40.7 hours130 defects2 weeksToyota Takaoka16 hours45 defects2 hoursA comparison of:assembly hoursdefects per 100 carsaverage inventory levels


Post World War IIGrowing and rebuilding world economyDemand > SupplyUS Manufacturing:Higher volumesCapital substitutionBreakthrough improvementsThe production problem has been solved


View from JapanVery little capitalWar-ravaged workforceLittle spacePoor or no raw materialsLower demand levelsLittle access to latest technologies U.S. methods would not work


Japanese Approach to OperationsMaximize use of peopleSimplify first, add technology secondGradual, but continuous improvementMinimize waste (including poor quality) Led to the development of the approach known as Just-in-Time


Just-in-TimeRepetitive production systemin which processing and movement of materials and goods occur just as they are needed


Pre-JIT: Traditional Mass Production


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X-Axis

Big lot sizesLots of inventoryPUSH material to next stage

Lower per unit cost

Big purchase shipments

Big pushes of finished goods to warehouses or customers

???

Post-JIT: Lean ProductionTighter coordination along the supply chainGoods are pulled along only make and ship what is needed



X-Axis

Smaller lotsFaster setupsLess inventory, storage spacePULL material to next stage

Minimal or no inventory holding cost

Smaller shipments

Goods are pulled out of plant by customer demand

JIT Goals(throughout the supply chain)Eliminate disruptionsMake the system flexibleReduce setup times and lead timesMinimize inventoryEliminate waste


WasteDefinition:Waste is anything other than the minimum amount of equipment, materials, parts, space, and workers time, which are absolutely essential to add value to the product. Shoichiro Toyoda President, Toyota


Forms of Waste:(muda in Japanese)OverproductionWaitingUnnecessary movementWrong processUnnecessary inventoryExcess motionDefectsUnderutilization of employees


Inventory as a WasteRequires more storage spaceRequires tracking and countingIncreases movement activityHides yield, scrap, and rework problemsIncreases risk of loss from theft, damage, obsolescence


Lean PerspectiveProcess of reducing inventory leads to reduction of the other wastes and exposes problems in order of severity (water and rocks analogy)


Lean Six Sigma & Supply Chain in Lean EnvironmentSix Sigma methodology combines well with Lean goals, helps address the rocks as they become exposed when reducing inventory.Supply chain choices affect many of the wastes. Supplier variances such as lead time and quality create need for safety stock a direction opposite reduction of inventory goals


Examples of Eliminating WastesBig Bobs Automotive Axles:Wheels boughtfrom outsidesupplierAxles made andassembled in house


BEFORE:Shipping in WheelsTruck Cost: $500 (from Peoria)Maximum load of wheels: 10,000Weekly demand of wheels: 500



Warehouse

Bobs

Warehouse

Wheels

AFTER: Shipping in WheelsTruck Cost: $50 (from Burlington)Maximum load of wheels: 500Weekly demand of wheels: 500What wastes have been reduced?



Bobs

Wheels

BEFORE: Making Axles (Different lengths)



Manufacturing

Inventory

Mail Room

Packaging

Manufacturing

Minimum Batch1,000 Axles

Tool Bin

Final Assembly

Push to Final Assembly

Axle MakerSetup: 8 hoursSetup cost: $800

BEFORE: Making Axles (Oops!)What is the outcome of detecting defective axles at the end?



Manufacturing

Inventory

Mail Room

Packaging

Manufacturing

Minimum Batch1,000 Axles

Tool Bin

Final Assembly

Push to Final Assembly

Axle MakerSetup: 8 hoursSetup cost: $800

Quality Assurance

Defect: Axles are not true!

After: Making Axles I(Different lengths)



Manufacturing

Packaging

Manufacturing

Tools next to Maker

No minimum batch size

Final Assembly

Pull to Final Assembly

Axle MakerSetup: 15 min.Setup cost: $25

After: Making Axles II(More improvements)What wastes have been reduced?



Manufacturing

Packaging

Quality Assurance

Manufacturing

Tools next to Maker

Verify Trueness

Final Assembly

Poka-Yoke Device

Axle MakerSetup: 15 min.Setup cost: $0

Building Blocks of JITProduct designStandard partsModular designQualityProcess designPersonnel and organizational elementsManufacturing planning and control


MPC

Staff

ORG

Process

Design

Product

Design

Process DesignFocused FactoriesGroup TechnologySimplified layouts with little storage spaceJidoka and Poka-YokeMinimum setups


Multi-Task Work CellsSeatsAssemblyPackingLegsBackpostsSlats500 chairs per hourPlanning takes place for one area:What does the BOM look like? What about lead times?


Personnel and Organizational ElementsWorkers as assetsCross-trained workersGreater responsibility at lower levelsLeaders as facilitators, not order givers


Classic Organizational View


Top Management

Long-term planningProduct line decisionsExpansion issues

Middle management

Planning, purchasinghiring, and capital decisionsMonitor costs

SupervisorsControl activities in specific areasMonitor quality, delivery, etc.

Direct Labor

Perform predetermined tasks

Technical Staff

Work methods, QCProcess improvements,MIS

Planning Info

Control Info

Detailed Methods,Schedules

JIT Organization View


Top Management

Long-term planningProduct line decisionsExpansion issues

Middle management

Planning, with less purchasing,hiring, and capital decisionsMonitor costs and assist labor

Direct Labor (self-supervising)

Task performance and schedule attainmentControl specific areas of activityMonitor quality, delivery, etc.Participate in hiring and continuous improvement

Technical Ideas

Technical Staff

Training and Technical Support

Planning Info

Control Info

Planning and Control SystemsSmall JITStable and level schedulesMixed Model SchedulingPull versus PushKanban Systems


KanbanUses simple visual signals to control production pull processingExamples: empty slot in hamburger chute empty space on floor kanban card


Kanban ExampleWorkcenter B uses parts produced by Workcenter A

How can we control the flow of materials so that B alwayshas parts and A doesnt overproduce?


Workcenter A

Workcenter B

Kanban card: Signal to produceWhen a container is opened by Workcenter B, its kanban card is removed and sent back to Workcenter A.This is a signal to Workcenter A to produce another box of parts.


Workcenter A

Workcenter B

Kanban Card

Empty Box: Signal to pullEmpty box sent back. Signal to pull another full box intoWorkcenter B.Question: How many kanban cards here? Why?


Workcenter A

Workcenter B

How Many Kanbans?y = number of kanban cardsD = demand per unit of timeT = lead timeC = container capacityX = safety factor


ExampleHourly demand = 300 unitsLead time = 3 hoursEach container holds 300 unitsAssuming no variation in lead-time or demand (x = 0):y = (300 3) / 300 = 3 kanban cards


Example: 8:00 AM


Manufacturing

11:00 AM to Noon

10:00 to 11:00 AM

9:00 to 10:00 AM

8:00 to 9:00 AM

Process B:300 per hour

Process A:300 per hour

One Hour Later at 9:00 AM


Manufacturing

Noon to 1:00 PM

11:00 AM to Noon

10:00 to 11:00 AM

9:00 to 10:00 AM

Process B:300 per hour

Process A:300 per hour

Extended Out Further . . .


B

A

Note:For a kanban system to work, we NEED CONSISTENT demand across the work centersExample - think McDonaldsHow do we ensure this?


Mixed Model SequencingLargest integer that divides evenly into daily requirement is 10:A: 40 / 10 = 4B: 40 / 10 = 4C: 10 / 10 = 1Mixed model sequence: A-B-A-B-A-B-A-B-C


Mini-Quiz: Mixed Model Scheduling and Establishing Kanbans What would sequence be if NOminimum job size?


Sequence with Minimum of 5:60 / 4 = 15 Ds20 / 4 = 5 Es30 / 4 = 7.5 Fs5D - 7F - 5D - 5D - 5E - 5D - 8F - 5D - 5D - 5E Sequence of 55 (27.52)


Kanbans Required: Product DHourly Requirements = 60/8 = 7.5Lead time = 2 hoursContainer size = 2 unitsSafety factor = 10%


Kanban Cards Required:Implications? Impact of container size?


Implementing JITWhat about automation?


Eliminate Surprises

Increase Flexibility

Simplify

Drive Out Waste

Putting the Squeeze on Resources . . .


Squeeze!

Simplify Eliminate Uncertainty Increase Flexibility

YES

PAIN?

NO

Case Study in JIT/Lean ProductionA Bumpy Road for Toyota


Jidoka is Japanese for Stop everything when something goes wrong, a form of stopping quality problems at their source.Poka-Yoke is Japanese for failproofing: Examples are gasoline nozzles, VCR cassettes (they are ejected if inserted incorrectly), inkjet cartridges, etc.

Lean Manufacturing

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