chapter seven lean thinking and lean systems

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Chapter SevenChapter SevenLean Thinking and Lean SystemsLean Thinking and Lean Systems

Operations ManagementOperations ManagementContemporary Concepts and Cases 5/eContemporary Concepts and Cases 5/e

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Chapter OutlineChapter OutlineEvolution of LeanEvolution of Lean

Lean TenetsLean Tenets

The Lean SystemThe Lean System

Stabilizing the Master ScheduleStabilizing the Master Schedule

Controlling Flow with the Kanban SystemControlling Flow with the Kanban System

Reducing Setup Time and Lot SizesReducing Setup Time and Lot Sizes

Changing Layout and Maintaining EquipmentChanging Layout and Maintaining Equipment

Cross-Training, Rewarding, and Engaging WorkersCross-Training, Rewarding, and Engaging Workers

Guaranteeing QualityGuaranteeing Quality

Changing Relationships with SuppliersChanging Relationships with Suppliers

Implementation of LeanImplementation of Lean

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Evolution of LeanEvolution of LeanToyota Production System (TPS)Toyota Production System (TPS)– Developed in the 1960s in JapanDeveloped in the 1960s in Japan– Also known as Just-in-Time (JIT) manufacturingAlso known as Just-in-Time (JIT) manufacturing

First introduced into U.S.A. in 1981 at Kawasaki First introduced into U.S.A. in 1981 at Kawasaki motorcycle plant in Lincoln, Nebraskamotorcycle plant in Lincoln, Nebraska

Lean ProductionLean Production– Term coined in late 1980sTerm coined in late 1980s– Popularized in 1990s by Womack, Jones & Roos, Popularized in 1990s by Womack, Jones & Roos,

“The Machine That Changed the World”“The Machine That Changed the World”

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Specify exactly what creates valueSpecify exactly what creates value

Improve the value streamImprove the value stream

Design the flow to avoid wasteDesign the flow to avoid waste

Produce only what the customer pullsProduce only what the customer pulls

Strive for perfectionStrive for perfection– 5 Whys5 Whys– 5 S5 S– Poka-yoke (mistake proofing)Poka-yoke (mistake proofing)

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Elements of Lean SystemElements of Lean SystemLevel master scheduleLevel master schedule

Use of Kanban systemUse of Kanban system

Small lot sizes (lot size one)Small lot sizes (lot size one)

Quick changeover (set-ups)Quick changeover (set-ups)

Multifunction workersMultifunction workers

Efficient layout (linear flow, low inventories)Efficient layout (linear flow, low inventories)

Quality and continuous improvementQuality and continuous improvement

Close relationships with suppliersClose relationships with suppliers

Frequent deliveries from vendorsFrequent deliveries from vendors

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The Seven WastesThe Seven WastesOverproductionOverproduction: Producing more than the demand for customers resulting in unnecessary : Producing more than the demand for customers resulting in unnecessary inventory, handling, paperwork, and warehouse space.inventory, handling, paperwork, and warehouse space.

Waiting TimeWaiting Time: Operators and machines waiting for parts or work to arrive from suppliers : Operators and machines waiting for parts or work to arrive from suppliers or other operations. Customers waiting in line.or other operations. Customers waiting in line.

Unnecessary TransportationUnnecessary Transportation: Double or triple movement of materials due to poor : Double or triple movement of materials due to poor layouts, lack of coordination and workplace organization.layouts, lack of coordination and workplace organization.

Excess ProcessingExcess Processing: Poor design or inadequate maintenance or processes requiring : Poor design or inadequate maintenance or processes requiring additional labor or machine time.additional labor or machine time.

Too much InventoryToo much Inventory: Excess inventory due to large lot sizes, obsolete items, poor : Excess inventory due to large lot sizes, obsolete items, poor forecasts or improper production planning.forecasts or improper production planning.

Unnecessary MotionUnnecessary Motion: Wasted movements of people or extra walking to get materials.: Wasted movements of people or extra walking to get materials.

DefectsDefects: Use of materials, labor and capacity for production of defects, sorting our bad : Use of materials, labor and capacity for production of defects, sorting our bad parts or warranty costs with customers.parts or warranty costs with customers.

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Inventory as WasteInventory as Waste

““If all our suppliers are guessing, you end If all our suppliers are guessing, you end up with inventory, which is the physical up with inventory, which is the physical embodiment of bad information.” embodiment of bad information.”

––Paul Bell, Dell, Inc. Europe.Paul Bell, Dell, Inc. Europe.

Source: Source: Economist, Economist, 1 April 2000, p. 57.1 April 2000, p. 57.

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Figure 7.2, Inventory Covers Figure 7.2, Inventory Covers ProblemsProblems

Poor Quality

UnreliableSupplier

MachineBreakdownInefficient

Layout

BadDesign

LengthySetupsW

ater

Le

vel

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Water Level Lowered To Water Level Lowered To Expose ProblemsExpose Problems

Poor Quality

UnreliableSupplier

MachineBreakdownInefficient

Layout

BadDesign

LengthySetups

Wat

er

Leve

l

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Water Flows Smoothly Water Flows Smoothly (Problems Pulverized)(Problems Pulverized)

Wat

er

Leve

l

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Affects every aspect of plant operationsAffects every aspect of plant operations– Lot sizingLot sizing– SchedulingScheduling– LayoutLayout– SuppliersSuppliers– Labor relationsLabor relations

Affects the rest of the firmAffects the rest of the firm– EngineeringEngineering– MarketingMarketing– HRHR– FinanceFinance


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Production horizon set according to demandProduction horizon set according to demandProduction schedule repeated each dayProduction schedule repeated each daySupply & demand matched through ‘takt’ Supply & demand matched through ‘takt’ time concept (speed of output)time concept (speed of output)Level production to create uniform loadLevel production to create uniform loadStrive for production of lot size oneStrive for production of lot size oneProduce the right quantity each day—no Produce the right quantity each day—no more and no less.more and no less.


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Kanban means “marker”Kanban means “marker”

A “pull” production systemA “pull” production system

A physical (normally visual) control systemA physical (normally visual) control system

Normally composed of cards and containers Normally composed of cards and containers ((productionproduction card and card and withdrawalwithdrawal card), but card), but can be any type of signalcan be any type of signal

Number of containers:Number of containers:

Kanban SystemKanban System

C

DTn

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The Kanban SystemThe Kanban System

Signals the need for more partsSignals the need for more parts

The Kanban system uses simple cards or signals to The Kanban system uses simple cards or signals to strictly control productionstrictly control production

The basic idea is that no station is permitted to The basic idea is that no station is permitted to produce more than is immediately required by the produce more than is immediately required by the succeeding stationsucceeding station

This simple idea prevents the buildup of inventoryThis simple idea prevents the buildup of inventory

Reducing lead time is the keyReducing lead time is the key

No computer is required!No computer is required!

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Figure 7.4: Kanban SystemFigure 7.4: Kanban System

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Figure 7.5: Kanban CardsFigure 7.5: Kanban Cards

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Examples of Kanban Signals

Kanban cardsTags on a boardGolf ballsLights Faxes/phone callsYelling

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Reducing Setup Times Reducing Setup Times andand Lot Sizes Lot Sizes

Reducing setup times:Reducing setup times:– increases available capacityincreases available capacity– increases flexibilityincreases flexibility– reduces inventoryreduces inventory

Reduce setup times and run times simultaneously Reduce setup times and run times simultaneously to reduce lot sizes and throughput timesto reduce lot sizes and throughput times

Single-digit setup Times (Shigeo Shingo [d. 1990] Single-digit setup Times (Shigeo Shingo [d. 1990] or SMED System)or SMED System)

Small lots require short setups!Small lots require short setups!

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Figure 7.7: Initial Layout Before LeanFigure 7.7: Initial Layout Before Lean

Stockrooms

Supplier A Supplier B

FinalAssembly

Work Centers

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Lean LayoutLean LayoutFinal

Assembly


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Lean Layout with Group TechnologyLean Layout with Group TechnologyFinal

Assembly


Line 1

Line 2

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Engaging WorkersEngaging Workers

Multifunction workersMultifunction workers

Cross-trainingCross-training

New pay system to reflect skills varietyNew pay system to reflect skills variety

TeamworkTeamwork

Suggestion systemsSuggestion systems

Need full worker understanding and Need full worker understanding and cooperationcooperation

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Quality is essential in a lean systemQuality is essential in a lean system

Defects produce wasteDefects produce waste

No inventory to cover up mistakesNo inventory to cover up mistakes

Defects discovered quickly by the next processDefects discovered quickly by the next process

System designed to expose errors and get them System designed to expose errors and get them correctedcorrected

Makes continuous improvement possibleMakes continuous improvement possible

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Changing Relationships with Changing Relationships with SuppliersSuppliers

Suppliers required to make radical changesSuppliers required to make radical changes

Viewed as the ‘external factory’Viewed as the ‘external factory’

Co-locationCo-location

Fewer suppliersFewer suppliers

Frequent deliveries to production lineFrequent deliveries to production line

No inspection—high qualityNo inspection—high quality

Integrated supplier programsIntegrated supplier programs

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Features of Integrated Supplier Programs

1.1. Early supplier selection, preferably in the Early supplier selection, preferably in the design phasedesign phase

2.2. Family of part sourcing to allow supplier to Family of part sourcing to allow supplier to take advantage of Group Technologytake advantage of Group Technology

3.3. Long-term relationships with small number of Long-term relationships with small number of supplierssuppliers

4.4. Paperwork reduction in receiving and Paperwork reduction in receiving and inspection to reduce costsinspection to reduce costs

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Implementation of Lean SystemsImplementation of Lean Systems

Establish a cross-functional teamEstablish a cross-functional team

Determine what value the customer needsDetermine what value the customer needs

Construct a value stream map and use it to eliminate Construct a value stream map and use it to eliminate wastewaste

Flow or pull demand from the customerFlow or pull demand from the customer

Implement the changesImplement the changes

Repeat the cycle on another processRepeat the cycle on another process

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SummarySummary

Evolution of LeanEvolution of Lean




Controlling Flow with the Kanban SystemControlling Flow with the Kanban System

Reducing Setup Time and Lot SizesReducing Setup Time and Lot Sizes

Changing Layout and Maintaining EquipmentChanging Layout and Maintaining Equipment

Cross-Training, Rewarding, and Engaging WorkersCross-Training, Rewarding, and Engaging Workers


Changing Relationships with SuppliersChanging Relationships with Suppliers

Implementation of LeanImplementation of Lean

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End of Chapter Seven

chapter seven lean thinking and lean systems

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