LEAN PRODUCTION

Ron Lembke

Operations Management

WasteWaste 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, Chairman, Toyota Motor Co., 1992-99

If you put your mind to it, you can squeeze water from a dry towel.-- Eiji Toyoda, President 1967-1982

Just-in-Time Downstream processes take parts from

upstream as they need. Like an American Supermarket:

Get what you want when you want it in the quantity you want.

7 Types of Waste (Ohno 1988) Overproduction Time on Hand (waiting time) Transportation Stock on Hand - Inventory Waste of Processing itself Movement Making Defective Products

Seven Elements to Eliminate Waste1. Focused Factories2. Group Technology3. Quality at the Source4. JIT production5. Uniform Plant Loading6. Kanban production control system7. Minimized setup times

1. Focused Factories Small, specialized plants No huge, vertically integrated plants Small plants easier, cheaper to build Tom Peters, “The Pursuit of Wow.”

Group size of 150 Know everyone else in the group

2. Group Technology – Work Cell Products grouped into families

Work cell can produce whole family Cellular layout, not functional, U-shaped, flows through

the work cell Benefits

Much less inventory sitting around Less material movement, fewer workers Quality – facilitated by lower inv levels, cross-training

Cross-training Keep skills sharp

Managers, too – respect them, not just “because they’re your boss,” but they do know what they’re talking about

Reduce boredom & fatigue Understand overall picture, more new ideas

3. Quality at the Source Do it right the first time Stop process, correct errors immediately Not a lot of parts to sift through to find a

good one Can’t afford high defect rates Since low WIP, get quick feedback on

errors

Lowering Inventory Reduces Waste

WIP hides problems

Lowering Inventory Reduces Waste

WIP hides problems

Lowering Inventory Reduces Waste

Reducing WIP makesproblem very visible

STOP

Lowering Inventory Reduces Waste

Remove problem, runWith less WIP

Lowering Inventory Reduces Waste

Reduce WIP again to findnew problems

Performance and WIP Level Less WIP means products go through

system faster reducing the WIP makes you more

sensitive to problems, helps you find problems faster

Stream and Rocks analogy: Inventory (WIP) is like water in a stream It hides the rocks Rocks force you to keep a lot of water (WIP) in

the stream

4. Just In Time-- What is It? Just-in-Time: produce the right parts, at

the right time, in the right quantity Requires repetitive, not big volume Batch size of one Short transit times, keep 0.1 days of supply

5. Uniform Plant Loading (heijunka) Any changes to final assembly are

magnified throughout production process Sequencing:

If mix is 50% A, 25% B, 25% C, produceA-B-A-C-A-B-A-C…

Takt Time Takt time:

Beat or cycle Master production schedule:

10,000 /mo. 500 day, 250 a shift 480 minutes means 1 every 1.92

minutes

6. Kanban Japanese for ‘signboard’ Method for implementing JIT In order to produce, you need both:

material to work on, and an available kanban.

Each work station has a fixed # kanbans.

6. Kanban

Worker 2 finishes a part, outbound moves over

2 has a brown triangle tag available, so 2 gets another part to work on: 2 takes off 1’s blue circle tag giving it back to

1, and puts on her brown triangle tag and moves it

into position.

Flow of work

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6. Kanban

When 3 finishes a part, Finished parts move over one spot He has to have a yellow square tag to put

on, He gets a part from 2’s outbound pile, And gives the brown triangle back to 2

Flow of work

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6. Kanban – “Pull” Production

When 3 finishes a part, Finished parts move over one spot He has to have a yellow square tag available to put on, He gets a part from 2’s outbound pile, And gives the brown triangle back to 2

3’s production will be taken by 4, offstage right. Tag goes back into 3’s bin

End customers pull products through the factory

Flow of work

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6. Kanban – “Blocking”

Worker #3 finishes his part next.

But customers haven’t freed up any of the yellow square kanbans, so there is nothing for 3 to work on now.

3 could maintain his machine, or see anyone needs help

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How is this Different? Processes can become idled (blocked) or

starved Starved: authorization (kanban card) but no

material to work on Blocked: material to work on, but no

authorization Painfully aware of problems in your

system. Orange County Toyota– cleanest DC I’ve

ever seen Material moves through the system so

quickly no in-process recordkeeping is needed. 3M consultant: if we thought computers

would be better than paper, we would have used them. But we didn’t.

Importance of Flow Ohno was very clear about this:

“Kanban is a tool for realizing just-in-time. For this tool to work fairly well, the process must be managed to flow as much as possible. This is really the basic condition. Other important conditions are leveling the product as much as possible, and always working in accordance with standard work methods.-- Ohno, 1988, p. 3

7. Setup Reduction Can’t afford to do huge runs Have to produce in small batches Toyota Die Change: 3 hours down to 3

SMED: Single Minute Exchange of Dies under ten minutes

Make Internal setups into External Internal – process has to be stopped, External External – process can still be running Eliminate Adjustments, Eliminate the Setup?

Some setups bigger than others – printing dye colors

Continuous Process Improvement, anyone?

Lexus -- the early years First two Toyotas imported to U.S. 1957

Toyopet Crowns

Eiji Toyoda’s Ambitious Plans Post-WWII Japanese industry in ruins Early 1950s – toured Rouge plant

2,500 cars in 13 years. Ford: 8,000 per day “Catch up to Americans in 4 years!”

Toyoda made delivery trucks and motorcycles, and not many of either

Elimination of Waste Knew they wouldn’t beat U.S. with

product innovation, concentrated on licensing patents, and producing more efficiently

Costs prevented mass-production, volume strategy of American firms.

Find ways to reduce waste, cost Shigeo Shingo (at right) & Taiichi Ohno, pioneers

Couldn’t Emulate GM GM huge batches in huge factories Japan’s area is 10% less than California

and 70% agricultural. Put entire population of CA into 30% of

state, then add 6 times as many people. (and you thought LA was crowded).

Land extremely expensive Sprawling factories not an option

A contrasting opinion“Inventory is not the root of all evil,

inventory is the flower of all evil.

- Robert Inman,General Motors

Ask ‘Why’ 5 Times 5W = 1H1. Why did the machine stop? Overload and fuse

blew2. Why the overload? Not lubricated3. Why not lubricated? Oil pump not pumping?4. Why not pumping? Pump shaft worn out.5. Why worn out? No screen, scrap got in

Preventative Maintenance Unexpected loss of production is fatal to

system and must be prevented Additional maintenance can prevent

downtime, or minimize length of interruptions, when they do occur

Capacity Buffers System is inflexible, no inventory

buffers, so to respond, need excess capacity

Schedule less than 24 hours per day ‘Two-Shifting’ 4-8-4-8 Cross Training

Characteristics of JIT Partnershps Few, nearby suppliers Supplier just like in-house upstream

process Long-term contract agreements Steady supply rate Frequent deliveries in small lots Buyer helps suppliers meet quality Suppliers use process control charts Buyer schedules inbound freight

Supplier Relationships American model:

keep your nose out of my plant. Gain info to force price cuts Lack of trust between suppliers

Firm encourages suppliers to share knowledge, because they don’t worry about competing

Firm helps supplier increase quality, reduce costs

Summary

The environment can be a control - don’t take setups for granted

Operational details are very important (Ford, Carnegie)

Controlling WIP is important Flexibility is an asset Quality can come first Continual improvement is necessary for

survival