Chapter 16 - Lean Systems Focus on operations strategy, process, technology, quality, capacity, layout, supply chains, and inventory. Operations systems.
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1 Chapter 16 - Lean SystemsFocus on operations strategy, process, technology, quality, capacity, layout, supply chains, and inventory.Operations systems that are designed to create efficient processes by taking a total systems perspective.Known as zero inventory, synchronous manufacturing, stockless production, continuous flow, material as needed, and just-in-time (JIT).The idea: eliminate waste by cutting unnecessary inventory and removing non-value added activities. Produce goods and services as needed and continuously improve operations.
2 JIT System Characteristics Organization of resources, information flows, and decision rules that can enable an organization to realize the benefits of the JIT philosophy.Focuses on reducing inefficiency and unproductive time in processes to improve continuously the process and the quality of the products or services produced.Employee involvement is essential.
3 JIT SystemJIT can be defined as an integrated set of activities designed to achieve high-volume production using minimal inventories (raw materials, work in process, and finished goods).JIT also involves the elimination of waste in production effort.JIT also involves the timing of production resources (e.g., parts arrive at the next workstation “just in time”).
4 Operations Waste (1) Waste from overproduction (2) Waste of waiting time(3) Transportation waste(4) Inventory waste(5) Processing waste(6) Waste of motion(7) Waste from product defects
5 JIT System characteristics “Push” materials flow – Production of an item begins in advance of customer needs. Management schedules the receipt of all raw materials and authorizes the start of production.“Pull” materials flow – Customer demand activates production of an item. Workers can coordinate to keep inventory low: allows closer control of inventory and production for highly repetitive manufacturing processes.
6 JIT System characteristics High QualityJIT requires conformance to specifications and statistical TQM methodsSmall lot sizesUse lot sizes as small as possibleReduces cycle inventoryReduces lead times (decreases pipeline inventory)Small lots allow for flexible scheduling
7 JIT System characteristics Uniform Workstation LoadsDaily load on workstation should be uniform: assemble the same type and number of units each day. Uses capacity planning and line balancing to develop the master production scheduleStandardized components and work methodsModularity – increases repeatability and increased employee efficiencyStandardization helps to achieve high-productivity and low inventory
8 JIT System characteristics Flexible WorkforceTrained to perform more than one taskHelp to relieve bottlenecksLine FlowsReduce frequency of setups: groups of machines and workers can be organized in a product layout and more advanced can be group technology (remember FMS).Automated ProductionInvest in automation to reduce operation costs and improve inefficiencies. Careful: ERP – 65% failure rate.Preventative Maintenance
9 Continuous Improvement TQM and SQCImprove work methods to eliminate scrapImprove with supplier quality as supplier certificationContinuously find methods to improve overall operations
10 Kanban “card” or “visible record” The Japanese refer to Kanban as a simple parts-movement system that depends on cards and boxes/containers to take parts from one work station to another on a production line. Kanban stands for Kan- card, Ban- signal. The essence of the Kanban concept is that a supplier or the warehouse should only deliver components to the production line as and when they are needed, so that there is no storage in the production area. Within this system, workstations located along production lines only produce/deliver desired components when they receive a card and an empty container, indicating that more parts will be needed in production
11 KanbanFollowing advantages of Kanban over the traditional push system:1 A simple and understandable process 2 Provides quick and precise information 3 Low costs associated with the transfer of information 4 Provides quick response to changes 5 Limit of over-capacity in processes 6 Avoids overproduction 7 Is minimizing waste 8 Control can be maintained 9 Delegates responsibility to line workers
12 Kanban Operating Rules Each container must have a cardAssembly line withdraws materials from a cell (pull method)Containers of parts are removed from the storage area always with a cardContainers always have the same number of partsTotal production should not exceed the total amount authorized on the kanbans in the system
13 How many containersThe number of containers determines the amount of authorized inventory.Determine the number of units to be held by each container (EOQ)Determine the number of containers flowing back and forth between supplier and user stationsThe number of containers flowing back and forth between stations directly affects the quantities of WIP and safety stock inventories. Need to measure average lead time needed to produce a container of parts. The lead time is a function of the processing timer per container at the supply station, the wait time during production, and time required for materials handling.
14 How many containersThe number of containers equals the average demand during lead time plus some safety stock to account for unexpected circumstances divided by the number of number of units in one container.
15 JIT IISupplier is brought into the plant to be an active member of the purchasing officeVendor-managed inventoriesFosters close relationshipsBenefits to customer and supplier
16 Implementation issues Organizational considerationsHuman costs – improve loss of autonomy with introduction of teamsCooperation and trustReward systemsProcess considerationsUsually requires changes in process layouts to cell layoutInventory and SchedulingMust use small lot sizes – this requires more setups – if can not decrease setup time, results in larger inventories which offsets advantages of JITPurchasing and logistics – if can not arrange frequent, small shipments, inventory costs can not be realized