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PMBA8155 Operations Management
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Lean Production ___________________________________

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Learning Objectives
 Explain Lean or Just-in-Time (JIT)
Production
 Understand Elements of A Lean System
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What is Lean Production?
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 Lean Production is an integrated set of activities
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designed to achieve high-volume production
using minimal inventories ___________________________________
 Based on the JIT logic: nothing is produced until
it is needed (Items arrive at the next stage of ___________________________________
production “just in time”)
 A philosophy (big JIT) and a production ___________________________________
scheduling system (little JIT) first adopted by
the Toyota Production System
 Major goal: Elimination of all wastes
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Lean Manufacturing at Boeing
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What is JIT ?
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WHAT IT IS WHAT IT DOES
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• Attacks waste
• Management philosophy
• Exposes problems and bottlenecks
• Pull system though the plant
• Achieves streamlined production ___________________________________

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WHAT IT REQUIRES WHAT IT ASSUMES
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• Employee participation
• Industrial engineering/basics • Stable environment
• Continuing improvement
• Total quality control
• Small lot sizes
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JIT Focus:
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Eliminate Wastes
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 Waste from overproduction ___________________________________
 Waste of waiting time
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 Unnecessary transportation waste
 Storing inventory ___________________________________
 Processing waste ___________________________________
 Waste from machine breakdown
 Waste from rework
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 ___________________________________
Basic Elements of Lean ___________________________________
Production
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1. Focused factory networks
2. Group technology ___________________________________
3. Quality at the source
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4. Pull production system
5. Uniform plant loading ___________________________________
6. Kanban production control
7. Small-Lot production ___________________________________
8. Quick setup
9. Preventive maintenance
10. Supplier networks
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Lean Element
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Focused Factory Networks
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Coordination
System Integration
Final Assembly ___________________________________

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Lean Element
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Group Technology
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 Departmental Specialization — Old Layout
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Saw Saw Saw Grinder Grinder
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Heat Treat ___________________________________

Lathe Lathe Lathe Press Press Press

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 Using Departmental Specialization for plant layout can cause a lot of

unnecessary material movement.
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Lean Element
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Group Technology (cont.)
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 Group Technology Cells – New Layout
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Grinder
Saw Lathe 1 2 Lathe Press ___________________________________

Heat Treat ___________________________________

Grinder
A B ___________________________________
Saw Lathe Lathe Press

 Using Group Technology Cells can reduce movement and improve

product flow.
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Lean Element
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Quality at the Source
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 Do it right the first time ___________________________________
 Self-inspection
 Line-stopping empowerment ___________________________________
 Defects prevention
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 Poka-yoke
 Quality circle ___________________________________

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Lean Element
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Pull Production System
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Fab Vendor ___________________________________

Sub ___________________________________
Fab Vendor
Customers Final Assy
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Sub Fab Vendor ___________________________________

Fab Vendor

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 ___________________________________
Lean Element
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Uniform Plant Loading
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Suppose we operate a production plant that produces a single
product. The schedule of production for this product could be ___________________________________
accomplished using either of the two plant loading schedules below.

Non-uniform Jan. Units Feb. Units Mar. Units Total ___________________________________

1,200 3,500 4,300 9,000 ___________________________________
Uniform Jan. Units Feb. Units Mar. Units Total
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3,000 3,000 3,000 9,000

How does the uniform loading help save labor costs?

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Lean Element
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Uniform Plant Loading
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 Maintain a stable mix of products, and firm
monthly schedules. ___________________________________

Monthly Daily ___________________________________

Model demand demand
Small 1200 40 ___________________________________
Midsize 2400 80
Luxury 2400 80 ___________________________________
 The sequence of L-M-S-M-L repeated 40
times per day maintains the proper mix
of models.
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Lean Element ___________________________________

Kanban Production Control System
2.) Once the Production kanban ___________________________________
is received, the Production Withdrawal kanban
Center produces a unit to replace ___________________________________
the one taken by the Assembly

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Storage Storage
Production Part A Part A Assembly
Center Line ___________________________________

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Production kanban Material Flow

1.) The process begins by the Assembly Card (signal) Flow
Line pulling Part A from Storage
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 ___________________________________
Lean Element
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Small-Lot Production
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 Requires less space & capital investment ___________________________________

 Reduces inventory ___________________________________

 Moves processes closer together ___________________________________

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 Makes quality problems easier to detect

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Lean Element
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Quick Setup
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 A requirement for small-lot-size, ___________________________________
mixed-model production.
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 What are the consequences of long
setup times? ___________________________________

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Lean Element
Preventive Maintenance
 Proactive approach that uses periodic
inspection & maintenance to keep
machines operating
 The goal is to achieve zero breakdown
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Lean Element
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Supplier Networks
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 Reliable suppliers are critical to JIT or lean
production ___________________________________
 Supplier selection ___________________________________
 Small number of suppliers; single sourcing
 Long-term agreements ___________________________________
 Geographical proximity
 Frequent information sharing
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 Benefits
 Reduced lead times
 Quality expectations
 Small but frequent deliveries

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Lean Applications in Services ___________________________________
 Lean principles can help improve service processes to be
more efficient and effective by removing waste and ___________________________________
streamlining operations
 Examples of Healthcare Waste: ___________________________________
o Redundant capture of information on admission
o Multiple recording of patient information ___________________________________
o Excess supplies stored in multiple locations
o Excess time spent looking for charts, waiting for ___________________________________
equipment, lab results, X-ray etc.
o Excess setup time in operating rooms
o Patient waiting rooms
o Excess time spent dealing with service complaints
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Lean Applications in Services ___________________________________
 lean retailing: retail stores order smaller
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quantity more frequently to reduce
inventory. ___________________________________
 lean banking: banks make the process for
routine transactions standardized so that ___________________________________
services can be provided more smoothly.
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 lean health care: heal care providers use
the concept of quality circles, mistake-
proofing, and quick setups to reduce
wastes and costs. 21
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Benefits of Lean Production
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1. Reduced inventory 7. Greater flexibility ___________________________________
2. Improved quality 8. Better relations with
3. Lower costs suppliers ___________________________________
9. Simplified scheduling
4. Reduced space
and control activities ___________________________________
requirements
10. Increased capacity
5. Shorter lead time ___________________________________
11. Better use of human
6. Increased productivity resources
12. More product variety

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Limitations of Lean Production
 Lean production isn’t for everyone and
is difficult to implement for
 products with high variability in demand
 high variety of low-volume products
 Risks with unexpected changes in
supply and demand
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Reading:”A key strategy of ___________________________________

Japan's car makers backfires”
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1.) What are the downsides of lean manufacturing?
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Should Toyota change its practice of single
sourcing? ___________________________________
2.) Compare and contrast inventory levels and
stocking points in a lean supply chain and a ___________________________________
traditional supply chain (push system).
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3.) What would you suggest to Toyota to minimize
the impact of a similar disaster in the future?

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