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**Here we continue in the chapter on Lean Systems**

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Master Schedule Side story – I like to play golf and recently I have been playing golf badly (I think I need new grips because the clubs are flying out of my hand!). I called the pro to get a lesson. He said I do things that do not help in hitting the ball. In other words, I do not have a lean swing! Probably more than you want to know, but when I swing the club back I go so far back that I start to lose balance and then hit bad shots. He didn’t say it, but I will remember the phrase, “keep it lean!” Well the master schedule, or final assembly schedule, is a key feature of the lean system because it is the production plan. Let’s look at an example from the book.

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Master Schedule Say over the next month it has been determined that 10,000 units of good A, 5000 units of B and 5000 units of C are needed. If there are 20 days of production in the month then on each of the 20 days: 10000/200 = 500 of A 5000/200 = 250 of B 5000/200 = 250 of C will be made. Now, in a lean system production will NOT have all 500 of A made first and then 250 of B and 250 of C. The production will be mixed and the sequence that will occur in this example is 2 of A, 1 of B and 1 of C. And then the cycle will be repeated. While this may seem odd, the costs of production are balanced across the system.

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Master Schedule Again, on each day production requires 500 A, 250 B and 250 C. If you go to Microsoft Excel and put in the numbers 500, 250 and 250 in separate cells you can then call of the GCD function (the greatest common denominator function) to find the great common denominator of the three numbers. As you might guess here that number is (Other situations may not have as obvious of a result.) (If you have the 3 numbers in cells A1:A3 then in cell A4 type =GCD(a1:a3)) Dividing each of the daily production requirement amounts by the GCD gives you the amount of each good in the sequence: 500/250 = 2 of A, 250/250 = 1 of B and 250/250 = 1 of C.

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Takt time Takt is the German word for the baton the orchestra director uses to keep the musicians on beat. In lean production it is the time between successive units of production. In a lean system the takt time should be set equal to the average demand rate of the market to match production with demand and thus minimize inventories. Takt time = time available for production divided market demand in that time. Example – say there is 420 minutes of production in a day and demand in the day is 1000 units, then takt time = 420/1000 = .42 minutes per unit. 60 seconds times .42 minutes is 25.2 seconds per unit.

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Kanban Kanban is the method of production authorization and materials movement in a lean manufacturing system. Let’s define n = total number of containers in a production area D = the demand rate of the using work center C = container size in number of parts usually less than 10% of daily demand T = time for a container to complete an entire circuit, also called the lead time – there is set-up, the container is filled, may sit waiting, moved, in use and returned to be filled again. It is true that n needs to be n = (DT)/C

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Kanban As an example, say demand at the next work station is 2 parts per minute and a standard container hold 25 parts. Also say it takes 100 minutes for a container to make the circuit. The number of containers needed is n = ((2)(100)/25 = 8 The maximum inventory would be the nC = DT, since the most that can happen is to have all containers full. Note if the size of the container is changed more or fewer containers might be needed, depending on the new size. Plus, if the lead time (which includes set-up) changes more or fewer containers will be needed. The author stresses lead time should be reduced so in that sense fewer containers would be needed.

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Problem 2 page 118 Suppose a lean work center is being operated with a container of size 25 units and a demand rate of 100 units per hour. Also, assume it takes 180 minutes for a container to circulate. How many containers are required to operate this system? By using the formula n = DT/C, the number of containers required is: (3 × 100)/25 = 12 containers Note: 180 minutes = 3 hours B) How much maximum inventory can accumulate? The maximum inventory is simply the container size times the number of containers: 12 x 25 = 300 units C) How many Kanban cards are needed? Each container will have 2 Kanban cards, one production card and one withdrawal card, so 12 x 2 = 24 Kanban cards are required.

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Lean Thinking Womack and Jones extended lean production to what they called lean thinking. Lean thinking has 5 elements: -specify value from the customer’s point of view -create a value stream map and remove waste -flow the product or service through the system -pull the product or service from the customer -strive for perfection, where perfection here means an affordable product or service, delivered rapidly and on time, that meets the customers’ needs.

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© BMA Inc. 2009. All rights reserved. Decision-making Making routine decisions without the “help” of standard costs.

© BMA Inc. 2009. All rights reserved. Decision-making Making routine decisions without the “help” of standard costs.

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