1. Copyright © 2014 McGraw-Hill Higher Education. All rights reserved. CHAPTER 8 Lean Systems McGraw-Hill/Irwin

2. 8–2 Learning Objectives LO8-1 Explain how lean systems improve internal and supply chain operations LO8-2 Describe the culture changes, tools and techniques needed for implementation LO8-3 Apply lean to product design LO8-4 Recognize strengths and limitations of lean systems LO8-1

3. Lean Systems Defined 8–3 Just-in-time (JIT): an older name for lean systems Toyota Production System (TPS): another name for lean systems, specifically as implemented at Toyota Lean Systems Approach: a philosophy of minimizing the resources needed for processes LO8-1

4. Lean Origins 8–4 LO8-1

5. Principle 1. Precisely specify value for each specific product Principle 2. Identify the value stream for each product Principle 3. Make value flow without interruptions Principle 4. Let the customer pull value from the producer Principle 5. Pursue perfection Lean Principles 8–5 LO8-1

6. Lean Tools and Techniques: Facilities and Resources Total Productive Maintenance (TPM): prevention of breakdowns Group Technology: bring together resources to process a family of items Focused Factories: processes designed to satisfy specific customer segment 8–6 LO8-2

7. Lean Tools and Techniques: Scheduling and Control Takt Time: synchronizing output rate with demand rate Kanban (Pull): output generated in response to actual demand Mixed Model (heijunka): build smaller quantities more frequently Set-up reduction: shorter, easier change- over leads to smaller batches Statistical process control (SPC): use of statistical tools to monitor processes Visual control: performance and problems easily, immediately visible 8–7 LO8-2

8. Setup Reduction: Single Minute Exchange of Dies 8–8 Stage 1: Separate internal and external setups Stage 2: Convert internal setups to external setups Stage 3: Streamline all activities in a setup Setup Reduction LO8-2

9. Lean Tools and Techniques: Continuous Improvement Quality at the source: eliminating defects at their origination points Kaizen Events: short-term, cross-functional focused, intense process improvement Process analysis/Value stream mapping: graphical analysis flow through a process Poka-Yoke: redesign so mistakes are impossible or immediately detectable 5-S: effective housekeeping (sort, straighten, scrub, systematize, standardize) Simplification/Standardization: removing non-value add steps, making processes exactly repeatable 8–9 LO8-2

10. Quality at the Source (Q@S) 8–10 Jidoka Stop and Fix Andons LO8-2

11. Process Analysis / Value Stream Mapping Figure 8-5 8–11 LO8-2

12. Application of Lean Across the supply chain Purchase for lowest total cost (not price) Geographically close partners Fewer suppliers Focus on root cause Work with, not against, suppliers Product Innovation (Lean Design) Exactly meet customer needs Support corporate strategy Reduce opportunities of waste8–12 LO8-3

13. Application of Lean Across the Supply Chain: What could go wrong? 8–13 Types of events causing problems for lean supply chains Operational/Te chnological Social Natural/Hazar d Economy/Comp etition Legal/Politic al SUPPLY CHAIN DISRUPTIONS LO8-4

14. Application of Lean Reducing product design waste: Complexity: few, simple processes Precision: capability to attain specifications Variability: attainable specifications Sensitivity: not easily damaged Immaturity: tested technology Danger: customers & environment are safe High skill: ease for workers and customer 8–14 LO8-3

15. Lean Systems Summary 8–15 1.Lean is a corporate wide approach to identify, control and eliminate waste, within firm and across supply chain 2.Lean principles are guided by seven major objectives 3.There are multiple lean tools that work synergistically 4.Lean should be expanded across firm functions and across the supply chain 5.Lean is not universally applicable