1. Copyright 2006 John Wiley & Sons, Inc. Beni Asllani University of Tennessee at Chattanooga Lean Production Operations Management - 5 th Edition Chapter 15 Roberta Russell & Bernard W. Taylor, III

2. Copyright 2006 John Wiley & Sons, Inc.15-2 Lecture Outline   Basic Elements of Lean Production   Benefits of Lean Production   Implementing Lean Production   Lean Services

3. Copyright 2006 John Wiley & Sons, Inc.15-3 Lean Production   Doing more with less inventory, fewer workers, less space   Just-in-time (JIT) smoothing the flow of material to arrive just as it is needed “JIT” and “Lean Production” are used interchangeably   Muda waste, anything other than that which adds value to the product or service

4. Copyright 2006 John Wiley & Sons, Inc.15-4 Waste in Operations

5. Copyright 2006 John Wiley & Sons, Inc.15-5 Waste in Operations (cont.)

6. Copyright 2006 John Wiley & Sons, Inc.15-6 Waste in Operations (cont.)

7. Copyright 2006 John Wiley & Sons, Inc.15-7 Basic Elements   Flexible resources   Cellular layouts   Pull production system   Kanban production control   Small lot production   Quick setups   Uniform production levels   Total productive maintenance   Supplier networks

8. Copyright 2006 John Wiley & Sons, Inc.15-8 Flexible Resources   Multifunctional workers perform more than one job general-purpose machines perform several basic functions   Cycle time time required for the worker to complete one pass through the operations assigned   Takt time paces production to customer demand

9. Copyright 2006 John Wiley & Sons, Inc.15-9 Standard Operating Routine for a Worker

10. Copyright 2006 John Wiley & Sons, Inc.15-10 Cellular Layouts   Manufacturing cells comprised of dissimilar machines brought together to manufacture a family of parts   Cycle time is adjusted to match takt time by changing worker paths

11. Copyright 2006 John Wiley & Sons, Inc.15-11 Cells with Worker Routes

12. Copyright 2006 John Wiley & Sons, Inc.15-12 Worker Routes Lengthen as Volume Decreases

13. Copyright 2006 John Wiley & Sons, Inc.15-13 Pull System  Material is pulled through the system when needed  Reversal of traditional push system where material is pushed according to a schedule  Forces cooperation  Prevent over and underproduction   While push systems rely on a predetermined schedule, pull systems rely on customer requests

14. Copyright 2006 John Wiley & Sons, Inc.15-14 Kanbans  Card which indicates standard quantity of production  Derived from two-bin inventory system  Maintain discipline of pull production  Authorize production and movement of goods

15. Copyright 2006 John Wiley & Sons, Inc.15-15 Sample Kanban

16. Copyright 2006 John Wiley & Sons, Inc.15-16 Origin of Kanban a) Two-bin inventory systemb) Kanban inventory system Reordercard Bin 1 Bin 2 Q - R Kanban R R Q = order quantity R = reorder point - demand during lead time

17. Copyright 2006 John Wiley & Sons, Inc.15-17 Types of Kanban   Production kanban authorizes production of goods   Withdrawal kanban authorizes movement of goods   Kanban square a marked area designated to hold items   Signal kanban a triangular kanban used to signal production at the previous workstation   Material kanban used to order material in advance of a process   Supplier kanban rotates between the factory and suppliers

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21. Copyright 2006 John Wiley & Sons, Inc.15-21 Determining Number of Kanbans where N = number of kanbans or containers d = average demand over some time period L = lead time to replenish an order S = safety stock C = container size No. of Kanbans = average demand during lead time + safety stock container size N = dL + S C

22. Copyright 2006 John Wiley & Sons, Inc.15-22 Determining Number of Kanbans: Example d = 150 bottles per hour L = 30 minutes = 0.5 hours S = 0.10(150 x 0.5) = 7.5 C = 25 bottles Round up to 4 (to allow some slack) or down to 3 (to force improvement) N= = = = 3.3 kanbans or containers dL + S C (150 x 0.5) + 7.5 25 75 + 7.5 25

23. Copyright 2006 John Wiley & Sons, Inc.15-23 Small Lots  Require less space and capital investment  Move processes closer together  Make quality problems easier to detect  Make processes more dependent on each other

24. Copyright 2006 John Wiley & Sons, Inc.15-24 Inventory Hides Problems

25. Copyright 2006 John Wiley & Sons, Inc.15-25 Less Inventory Exposes Problems

26. Copyright 2006 John Wiley & Sons, Inc.15-26 Components of Lead Time  Processing time Reduce number of items or improve efficiency Reduce number of items or improve efficiency  Move time Reduce distances, simplify movements, standardize routings Reduce distances, simplify movements, standardize routings  Waiting time Better scheduling, sufficient capacity Better scheduling, sufficient capacity  Setup time Generally the biggest bottleneck Generally the biggest bottleneck

27. Copyright 2006 John Wiley & Sons, Inc.15-27 Quick Setups  Internal setup Can be performed only when a process is stopped Can be performed only when a process is stopped  External setup Can be performed in advance Can be performed in advance  SMED Principles Separate internal setup from external setup Separate internal setup from external setup Convert internal setup to external setup Convert internal setup to external setup Streamline all aspects of setup Streamline all aspects of setup Perform setup activities in parallel or eliminate them entirely Perform setup activities in parallel or eliminate them entirely

28. Copyright 2006 John Wiley & Sons, Inc.15-28 Common Techniques for Reducing Setup Time

29. Copyright 2006 John Wiley & Sons, Inc.15-29 Common Techniques for Reducing Setup Time (cont.)

30. Copyright 2006 John Wiley & Sons, Inc.15-30 Common Techniques for Reducing Setup Time (cont.)

31. Copyright 2006 John Wiley & Sons, Inc.15-31 Uniform Production Levels   Result from smoothing production requirements  Kanban systems can handle +/- 10% demand changes  Smooth demand across planning horizon  Mixed-model assembly steadies component production

32. Copyright 2006 John Wiley & Sons, Inc.15-32 Mixed-Model Sequencing

33. Copyright 2006 John Wiley & Sons, Inc.15-33 Quality at the Source   Visual control makes problems visible   Poka-yokes prevent defects from occurring   Kaizen a system of continuous improvement; “change for the good of all”   Jidoka authority to stop the production line   Andons call lights that signal quality problems   Under-capacity scheduling leaves time for planning, problem solving, and maintenance

34. Copyright 2006 John Wiley & Sons, Inc.15-34 Examples of Visual Control

35. Copyright 2006 John Wiley & Sons, Inc.15-35 Examples of Visual Control (cont.)

36. Copyright 2006 John Wiley & Sons, Inc.15-36 Examples of Visual Control (cont.)

37. Copyright 2006 John Wiley & Sons, Inc.15-37 Total Productive Maintenance (TPM)  Breakdown maintenance Repairs to make failed machine operational Repairs to make failed machine operational  Preventive maintenance System of periodic inspection and maintenance to keep machines operating System of periodic inspection and maintenance to keep machines operating  TPM combines preventive maintenance and total quality concepts

38. Copyright 2006 John Wiley & Sons, Inc.15-38 TPM Requirements  Design products that can be easily produced on existing machines  Design machines for easier operation, changeover, maintenance  Train and retrain workers to operate machines  Purchase machines that maximize productive potential  Design preventive maintenance plan spanning life of machine

39. Copyright 2006 John Wiley & Sons, Inc.15-39   Unneeded equipment, tools, furniture; unneeded items on walls, bulletins; items blocking aisles or stacked in corners; unneeded inventory, supplies, parts; safety hazards   Items not in their correct places; correct places not obvious; aisles, workstations, & equipment locations not indicated; items not put away immediately after use   Floors, walls, stairs, equipment, & surfaces not lines, clean; cleaning materials not easily accessible; labels, signs broken or unclean; other cleaning problems   Necessary information not visible; standards not known; checklists missing; quantities and limits not easily recognizable; items can’t be located within 30 seconds   Number of workers without 5S training; number of daily 5S inspections not performed; number of personal items not stored; number of times job aids not available or up-to-date   Keep only what you need   A place for everything and everything in its place   Cleaning, and looking for ways to keep clean and organized   Maintaining and monitoring the first three categories   Sticking to the rules   Seiri (sort)   Seiton (set in order)   Seisou (shine)   Seiketsu (standardize)   Shisuke (sustain) 5S ScanGoalEliminate or Correct

40. Copyright 2006 John Wiley & Sons, Inc.15-40 Supplier Networks   Long-term supplier contracts   Synchronized production   Supplier certification   Mixed loads and frequent deliveries   Precise delivery schedules   Standardized, sequenced delivery   Locating in close proximity to the customer

41. Copyright 2006 John Wiley & Sons, Inc.15-41 Benefits of Lean Production   Reduced inventory   Improved quality   Lower costs   Reduced space requirements   Shorter lead time   Increased productivity

42. Copyright 2006 John Wiley & Sons, Inc.15-42 Benefits of Lean Production (cont.)   Greater flexibility   Better relations with suppliers   Simplified scheduling and control activities   Increased capacity   Better use of human resources   More product variety

43. Copyright 2006 John Wiley & Sons, Inc.15-43 Implementing Lean Production  Use lean production to finely tune an operating system  Somewhat different in USA than Japan  Lean production is still evolving  Lean production isn’t for everyone

44. Copyright 2006 John Wiley & Sons, Inc.15-44 Lean Services  Basic elements of lean production apply equally to services   Most prevalent applications lean retailing lean banking lean health care

45. Copyright 2006 John Wiley & Sons, Inc.15-45 Copyright 2006 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in section 117 of the 1976 United States Copyright Act without express permission of the copyright owner is unlawful. Request for further information should be addressed to the Permission Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information herein.