8

Lean Systems

PowerPoint Slides
by Jeff Heyl

For Operations Management, 9e by

Krajewski/Ritzman/Malhotra
2010 Pearson Education

81

Lean Systems
Lean systems affect a firms internal linkages
between its core and supporting processes and its
external linkages with its customers and
suppliers.
One of the most popular systems that incorporate
the generic elements of lean systems is the justin-time (JIT) system.
The Japanese term for this approach is Kaizen.
The key to kaizen is the understanding that excess
capacity or inventory hides process problems.
The goal is to eliminate the eight types of waste.

82

Eight Wastes
TABLE 8.1

THE EIGHT TYPES OF WASTE OR MUDA

Waste

Definition

1. Overproduction

Manufacturing an item before it is needed.

2. Inappropriate
Processing

Using expensive high precision equipment when simpler

machines would suffice.

3. Waiting

Wasteful time incurred when product is not being moved or

processed.

4. Transportation

Excessive movement and material handling of product between

processes.

5. Motion

Unnecessary effort related to the ergonomics of bending,

stretching, reaching, lifting, and walking.

1. Inventory

Excess inventory hides problems on the shop floor, consumes

space, increases lead times, and inhibits communication.

1. Defects

Quality defects result in rework and scrap, and add wasteful

costs to the system in the form of lost capacity, rescheduling
effort, increased inspection, and loss of customer good will.

1. Underutilization of
Employees

Failure of the firm to learn from and capitalize on its employees

knowledge and creativity impedes long term efforts to eliminate
waste.

83

Continuous Improvement

Figure 8.1 Continuous Improvement with Lean Systems

84

Supply Chain Considerations

Close supplier ties

Low levels of capacity slack or inventory

Look for ways to improve efficiency and reduce

inventories throughout the supply chain

JIT II

In-plant representative

Benefits to both buyers and suppliers

Small lot sizes

Reduces the average level of inventory

Pass through system faster

Uniform workload and prevents overproduction

Increases setup frequency

85

Process Considerations
Pull method of work flow

Push method
Pull method

Quality at the source

Jidoka
Poka-yoke
Anadon

Uniform workstation loads

Takt time
Heijunka
Mixed-model assembly
Lot size of one
86

Process Considerations
Standardized components and work
methods
Flexible workforce
Automation
Five S (5S) practices
Total Preventive Maintenance (TPM)

87

Five S Method
TABLE 8.2

5S DEFINED

5S Term

5S Defined

1. Sort

Separate needed from unneeded items (including tools, parts,

materials, and paperwork), and discard the unneeded.

2. Straighten

Neatly arrange what is left, with a place for everything and everything
in its place. Organize the work area so that it is easy to find what is
needed.

3. Shine

Clean and wash the work area and make it shine.

4. Standardize

Establish schedules and methods of performing the cleaning and

sorting. Formalize the cleanliness that results from regularly doing
the first three S practices so that perpetual cleanliness and a state of
readiness are maintained.

5. Sustain

Create discipline to perform the first four S practices, whereby

everyone understands, obeys, and practices the rules when in the
plant. Implement mechanisms to sustain the gains by involving
people and recognizing them via a performance measurement
system.

88

Designing Lean System Layouts

Line flows recommended
Eliminate

waste

One worker, multiple machines (OWMM)

Group technology
Group

parts or products with similar

characteristics into families

89

Group Technology

Figure 8.2 One-Worker, Multiple-Machines (OWMM) Cell

8 10

Group Technology
Figure 8.3 Process Flows Before and After the Use of GT Cells
Lathing

Milling

Drilling

M
Grinding

Receiving and
shipping

Assembly
A

(a) Jumbled flows in a job shop without GT cells

8 11

Group Technology
Figure 8.3 Process Flows Before and After the Use of GT Cells

Assembly
area
A

Cell 2

Cell 1
Receiving

Cell 3
L

Shipping

(b) Line flows in a job shop with three GT cells

8 12

The Kanban System

Receiving post

Kanban card for

product 1
Kanban card for
product 2

Storage
area

Empty containers
Assembly line 1
O2

O1

Fabrication
cell

O3

O2

Assembly line 2
Full containers

Figure 8.4 Single-Card Kanban System

8 13

The Kanban System

Receiving post

Kanban card for

product 1
Kanban card for
product 2

Storage
area

Empty containers
Assembly line 1
O2

O1

Fabrication
cell

O3

O2

Assembly line 2
Full containers

Figure 8.4 Single-Card Kanban System

8 14

The Kanban System

Receiving post

Kanban card for

product 1
Kanban card for
product 2

Storage
area

Empty containers
Assembly line 1
O2

O1

Fabrication
cell

O3

O2

Assembly line 2
Full containers

Figure 8.4 Single-Card Kanban System

8 15

The Kanban System

Receiving post

Kanban card for

product 1
Kanban card for
product 2

Storage
area

Empty containers
Assembly line 1
O2

O1

Fabrication
cell

O3

O2

Assembly line 2
Full containers

Figure 8.4 Single-Card Kanban System

8 16

The Kanban System

Receiving post

Kanban card for

product 1
Kanban card for
product 2

Storage
area

Empty containers
Assembly line 1
O2

O1

Fabrication
cell

O3

O2

Assembly line 2
Full containers

Figure 8.4 Single-Card Kanban System

8 17

The Kanban System

Receiving post

Kanban card for

product 1
Kanban card for
product 2

Storage
area

Empty containers
Assembly line 1
O2

O1

Fabrication
cell

O3

O2

Assembly line 2
Full containers

Figure 8.4 Single-Card Kanban System

8 18

The Kanban System

Receiving post

Kanban card for

product 1
Kanban card for
product 2

Storage
area

Empty containers
Assembly line 1
O2

O1

Fabrication
cell

O3

O2

Assembly line 2
Full containers

Figure 8.4 Single-Card Kanban System

8 19

The Kanban System

2. Assembly always withdraws from

fabrication (pull system)

KANBAN

Part Number:

Location:

Lot Quantity:

Supplier:

Customer:

1. Each container must have a card

3. Containers cannot be moved without a

kanban

1234567Z

Aisle 5
Bin 47

WS 83

WS 116

4. Containers should contain the same

number of parts
5. Only good parts are passed along
6. Production should not exceed
authorization

8 20

Number of Containers
Two determinations
Number of units to be held by each container

Determines lot size

Number of containers

Estimate the average lead time needed to produce a

container of parts

Littles law

Average work-in-process inventory equals the average

demand rate multiplied by the average time a unit spends
in the manufacturing process

8 21

Number of Containers
WIP = (average demand rate)

(average time a container spends in the manufacturing process)

+ safety stock

WIP = kc
kc = d (w + p )(1 + )
d (w + p )(1 + )
k=
c
where
k=
d=
w=
p=
c=
=

number of containers
expected daily demand for the part
average waiting time
average processing time
number of units in each container
policy variable
8 22

Number of Containers
Formula for the number of containers
Average demand during lead time + Safety stock
k=
Number of units per container

WIP = (average demand rate)(average time a container

spends in the manufacturing process) + safety stock

8 23

Determining the Appropriate

Number of Containers
EXAMPLE 8.1
The Westerville Auto Parts Company produces rocker-arm
assemblies
A container of parts spends 0.02 day in processing and 0.08
day in materials handling and waiting
Daily demand for the part is 2,000 units
Safety stock equivalent of 10 percent of inventory
a. If each container contains 22 parts, how many containers
should be authorized?
b. Suppose that a proposal to revise the plant layout would
cut materials handling and waiting time per container to
0.06 day. How many containers would be needed?

8 24

Determining the Appropriate

Number of Containers
SOLUTION
d=
a. If
p=
=
w=
c=

2,000 units/day, b. Figure 8.5 from OM

Explorer shows that
0.02 day,
the number of
0.10,
containers drops to 8.
0.08 day, and
22 units

2,000(0.08 + 0.02)(1.10)
k=
22
220
= 22 = 10 containers

Figure 8.5 OM Explorer Solver for

Number of Containers
8 25

Application 8.1
Item B52R has an average daily demand of 1000 units. The
average waiting time per container of parts (which holds 100
units) is 0.5 day. The processing time per container is 0.1 day. If
the policy variable is set at 10 percent, how many containers
are required?
d (w + p )(1 + )
k=
c
1,000(0.05 + 0.01)(1 + 0.1)
=
100
= 6.6, or 7 containers

8 26

Other Kanban Signals

Cards are not the only way to signal need
Container system
Containerless system

8 27

Value Stream Mapping (VSM)

Value stream mapping
is a qualitative lean
tool for eliminating
waste
Creates a visual map
of every process
involved in the flow of
materials and
information in a
products value chain

Product
family

Current state
drawing

Future state
drawing

Work plan and

implementation
Figure 8.6 Value Stream Mapping Steps
8 28

Value Stream Mapping

Figure 8.7 Selected Set of Value Stream Mapping Icons

8 29

Value Stream Mapping

Figure 8.8 A Representative Current State Map for a Family of

Retainers at a Bearings Manufacturing Company
8 30

House of Toyota
A key challenge is to bring underlying
philosophy of lean to employees in an
easy-to-understand fashion
The house conveys stability
The roof represents the primary goals of
high quality, low cost, waste elimination,
and short lead-times
The twin pillars, which supports the roof,
represents JIT and jidoka

8 31

House of Toyota
Highest quality, lowest cost,
shortest lead time by eliminating
wasted time and activity

Just in Time (JIT)

Takt time

Culture of
Continuous
Improvement

One-piece flow
Pull system

Jidoka
Manual or automatic
line stop
Separate operator and
machine activities
Error-proofing
Visual control

Operational Stability
Heijunka

Standard Work

TPM

Supply Chain

Figure 8.9 House of Toyota

8 32

Operational Benefits and

Implementation Issues
Organizational considerations
Human

costs of lean systems

Cooperation
Reward

and trust

systems and labor classifications

Process considerations
Inventory and scheduling
Schedule

stability

Setups
Purchasing

and logistics

8 33

Solved Problem
A company using a kanban system has an inefficient machine
group. For example, the daily demand for part L105A is 3,000
units. The average waiting time for a container of parts is 0.8
day. The processing time for a container of L105A is 0.2 day,
and a container holds 270 units. Currently, 20 containers are
used for this item.
a. What is the value of the policy variable, ?
b. What is the total planned inventory (work-in-process and
finished goods) for item L105A?
c. Suppose that the policy variable, , was 0. How many
containers would be needed now? What is the effect of the
policy variable in this example?

8 34

Solved Problem
SOLUTION
a. We use the equation for the number of containers and then
solve for :
d (w + p )(1 + )
k=
c
3,000(0.8 + 0.2)(1 + )
=
270
so
20(27)
(1 + ) = 3,000(0.8 + 0.2) = 1.8
= 1.8 1 = 0.8
8 35

Solved Problem
b. With 20 containers in the system and each container holding
270 units, the total planned inventory is 20(270) = 5,400 units
c. If = 0
3,000(0.8 + 0.2)(1 + 0)
k=
270
= 11.11, or 12 containers

The policy variable adjusts the number of containers. In this

case, the difference is quite dramatic because w + p is fairly
large and the number of units per container is small relative to
daily demand.

8 36

8 37