1. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Chapter 16 - Lean Systems

2. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Characteristics of Lean Systems: Just-in-Time  Pull method of materials flow  Consistently high quality  Small lot sizes  Uniform workstation loads  Standardized components and work methods  Close supplier ties  Flexible workforce  Line flows  Automated production  Preventive maintenance

3. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Lot Size and Cycle Inventory

4. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Lot Size and Cycle Inventory Lot size = 100 On-hand inventory 51015202530 Time (hours) 100 – 75 – 50 – 25 – 0 – Average cycle inventory Figure 16.1

5. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Lot Size and Cycle Inventory Average cycle inventory Lot size = 100 On-hand inventory 51015202530 Time (hours) 100 – 75 – 50 – 25 – 0 – Figure 16.1

6. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Lot Size and Cycle Inventory Average cycle inventory Lot size = 100 Lot size = 50 On-hand inventory 51015202530 Time (hours) 100 – 75 – 50 – 25 – 0 – Figure 16.1

7. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Lot Size and Cycle Inventory Average cycle inventory Lot size = 100 Lot size = 50 On-hand inventory 51015202530 Time (hours) 100 – 75 – 50 – 25 – 0 – Figure 16.1

8. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Lot Size and Cycle Inventory Average cycle inventory Lot size = 100 Lot size = 50 On-hand inventory 51015202530 Time (hours) 100 – 75 – 50 – 25 – 0 – Figure 16.1

9. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Figure 16.2 Scrap Unreliable suppliers Capacity imbalance Continuous Improvement with Lean Systems

10. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Single-Card Kanban System

11. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Storage area Empty containers Full containers Single-Card Kanban System Receiving post Kanban card for product 1 Kanban card for product 2 Figure 16.3 Fabrication cell O1O1 O2O2 O3O3 O2O2 Assembly line 1 Assembly line 2

12. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Storage area Empty containers Full containers Single-Card Kanban System Receiving post Kanban card for product 1 Kanban card for product 2 Figure 16.3 Fabrication cell O1O1 O2O2 O3O3 O2O2 Assembly line 1 Assembly line 2

13. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Storage area Empty containers Full containers Single-Card Kanban System Receiving post Kanban card for product 1 Kanban card for product 2 Figure 16.3 Fabrication cell O1O1 O2O2 O3O3 O2O2 Assembly line 1 Assembly line 2

14. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Storage area Empty containers Full containers Single-Card Kanban System Receiving post Kanban card for product 1 Kanban card for product 2 Figure 16.3 Fabrication cell O1O1 O2O2 O3O3 O2O2 Assembly line 1 Assembly line 2

15. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Storage area Empty containers Full containers Single-Card Kanban System Receiving post Kanban card for product 1 Kanban card for product 2 Figure 16.3 Fabrication cell O1O1 O2O2 O3O3 O2O2 Assembly line 1 Assembly line 2

16. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Storage area Empty containers Full containers Single-Card Kanban System Receiving post Kanban card for product 1 Kanban card for product 2 Figure 16.3 Fabrication cell O1O1 O2O2 O3O3 O2O2 Assembly line 1 Assembly line 2

17. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Storage area Empty containers Full containers Single-Card Kanban System Receiving post Kanban card for product 1 Kanban card for product 2 Figure 16.3 Fabrication cell O1O1 O2O2 O3O3 O2O2 Assembly line 1 Assembly line 2

18. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Single-Card Kanban System KANBAN Part Number:1234567Z Location:Aisle 5 Bin 47 Lot Quantity:6 Supplier:WS 83 Customer:WS 116 Each container must have a card Each container must have a card Assembly always withdraws from fabrication (pull system) Assembly always withdraws from fabrication (pull system) Containers cannot be moved without a kanban Containers cannot be moved without a kanban Containers should contain the same number of parts Containers should contain the same number of parts Only good parts are passed along Only good parts are passed along Production should not exceed authorization Production should not exceed authorization

19. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Number of Containers

20. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Number of Containers k = d( w + p )( 1 +  ) c d = 2000 units/day p = 0.02 day  = 0.10 w = 0.08 day c = 22 units Westerville Auto Parts Example 16.1

21. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Number of Containers k = 2000( 0.08 + 0.02 )( 1 + 0.10 ) 22 d = 2000 units/day p = 0.02 day  = 0.10 w = 0.08 day c = 22 units Westerville Auto Parts Example 16.1

22. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Number of Containers k = 2000( 0.08 + 0.02 )( 1 + 0.10 ) 22 d = 2000 units/day p = 0.02 day  = 0.10 w = 0.08 day c = 22 units Westerville Auto Parts Example 16.1

23. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Number of Containers k = 10 containers d = 2000 units/day p = 0.02 day  = 0.10 w = 0.08 day c = 22 units Westerville Auto Parts Example 16.1

24. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Number of Containers d = 2000 units/day p = 0.02 day  = 0.10 0.06 w = 0.06 day c = 22 units Westerville Auto Parts k = d( w + p )( 1 +  ) c k = 10 containers Example 16.1

25. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Number of Containers d = 2000 units/day p = 0.02 day  = 0.10 0.06 w = 0.06 day c = 22 units Westerville Auto Parts k = 2000(0.06 + 0.02)(1.10) 22 k = 10 containers Example 16.1

26. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Number of Containers d = 2000 units/day p = 0.02 day  = 0.10 0.06 w = 0.06 day c = 22 units Westerville Auto Parts k = 2000(0.06 + 0.02)(1.10) 22 k = 10 containers Example 16.1

27. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Number of Containers d = 2000 units/day p = 0.02 day  = 0.10 0.06 w = 0.06 day c = 22 units Westerville Auto Parts k = 8 containers k = 10 containers Example 16.1

28. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Number of Containers Westerville Auto Parts d = 2000 units/day p = 0.02 day  = 0.10 0.06 w = 0.06 day c = 22 units k = 8 containers k = 10 containers Figure 16.4

29. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Lean Systems in Services  Consistently high quality  Uniform facility loads  Standardized work methods  Close supplier ties  Flexible workforce  Automation  Preventive maintenance  Pull method of materials flow  Line flows

30. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Sixth Edition © 2002 Prentice Hall, Inc. All rights reserved. Operational Benefits  Reduce space requirements  Reduce inventory investment  Reduce lead times  Increase labor productivity  Increase equipment utilization  Reduce paperwork and simple planning systems  Valid priorities for scheduling  Workforce participation  Increase product quality