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LEAN Chapter 11 PRODUCTION

Just-in-Time and Lean Systems

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Lean production
can

be defined as an integrated set of activities designed to achieve high-volume production using minimal inventories of raw materials, work in process, and finished goods. It also involves the elimination of waste in production effort
Lean

is also based on the logic that nothing will be produced

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FEATURES OF LEAN PRODUCTION

WHAT IT DOES? WHAT IT IS? Attacks waste (time, inventory, scrap) Management philosophy Exposes problems and bottlenecks Pull System through the plant Achieves streamlined production WHAT IT REQUIRES? Employee participation Industrial Engineering Total Quality Control Small Lot Sizes Continuous Improvement WHAT IT ASSUMES? Stable environment

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JIT and Lean Management

JIT

can be divided into two terms: Big JIT and Little JIT Big JIT (also called Lean Management) is a philosophy of operations management that seeks to eliminate waste in all aspects of a firms production activities: human relations, vendor relations, and the management of materials and inventory Little JIT focuses more narrowly on scheduling goods inventory and

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Here the customer starts Here the customer starts the process, pulling an the process, pulling an inventory item from Final inventory item from Final Assembly Assembly Then sub-assembly Then sub-assembly work is pulled work is pulled forward by that forward by that demand demand
Customers

Pull Logic
Fab Sub Fab Vendor Vendor

Final Assembly
Sub

The process continues The process continues throughout the entire throughout the entire production process production process

Fab

Vendor

Fab

Vendor

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Waste in Operations
1. 2. 3. 4. 5. 6. 7.

Waste from overproduction Waste of waiting time Transportation waste Inventory waste Processing waste Waste of motion Waste from product defects
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Elements that address elimination of waste

1. 2. 3. 4. 5. 6. 7.

Focused factory Networks Group Technology Quality at source Uniform Plant loading (Heijunka) JIT production Kanban Production control Minimized set up times

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Networks: Plant designed for one purpose can be constructed and operated more economically

These are small These are small specialized plants specialized plants that limit the range that limit the range of products produced of products produced (sometimes only one (sometimes only one type of product for an type of product for an entire facility). entire facility). Some plants Some plants in Japan in Japan have as few have as few as 30 and as 30 and as many as as many as 1000 1000 employees employees
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Coordination System Integration

9 Minimizing Waste: Group Technology (Part 1)

Note how the flow lines are going back and forth Note how the flow lines are going back and forth

Using Departmental Specialization for plant layout can cause Using Departmental Specialization for plant layout can cause a lot of unnecessary material movement a lot of unnecessary material movement Saw Saw Saw Grinder Grinder

Heat Treat

Lathe

Lathe

Lathe

Press

Press

Press

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Minimizing Waste: Group Technology (Part 2)

Revising by using Group Technology Cells can reduce Revising by using Group Technology Cells can reduce movement and improve product flow movement and improve product flow

Grinder Saw Lathe

Lathe

Press

Heat Treat

Grinder Saw Lathe

Lathe

Press

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Minimizing Waste: Uniform Plant Loading (heijunka)

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Suppose we operate a production plant that Suppose we operate a production plant that produces a single product. The schedule of produces a single product. The schedule of production for this product could be production for this product could be accomplished using either of the two plant accomplished using either of the two plant loading schedules below. loading schedules below. Heijunkais the levelling of production by Heijunkais the levelling of production by both volume and product mix. This system both volume and product mix. This system does not build products according to the does not build products according to the actual flow of customer actual flow of customer orders.Heijunkatakes the total volume of orders.Heijunkatakes the total volume of orders in a period and levels them out so the orders in a period and levels them out so the same amount and mix are being made each same amount and mix are being made each

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UNLEVELED PRODUCTION
Monday Production

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Tuesday Production

Wednesday Production

Changeover

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UNLEVELED PRODUCTION

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Figure 1gives an example of traditional unlevelled production, for Company X that manufactures tractors.The line makes small, medium, and large tractors. The medium are the big sellers and are made early in the week, Monday through part of Wednesday. There is a changeover and the small tractors are made Wednesday through Friday morning.After another changeover the largest tractors, which are in smallest demand, are made Friday afternoon. This typical unlevelled method creates four problems: Customers usually do not buy products predictably. If the customer decides to buy the large tractors early in the week the plant is in The McGraw-Hill Companies, Inc., trouble.

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LEVELED PRODUCTION
Figure 2represents an example of mixed model levelled production. By reducing the changeover time and employing other Lean methods, the plant is able to build the tractors in any order they want to on their mixed model assembly line. The four benefits of levelling the schedule is: Flexibility to make what the customer wants when they want it. Reduced risk of unsold goods. Balanced use of labour and machines. Smoothed demand on the upstream

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Monday Production

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Tuesday Production

Wednesday Production

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Quality at source

Quality at the source means do it right the first time and when something goes wrong ,stop the process or assembly line immediately. Factory workers become their own inspectors, personally responsible for the quality of their output.

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Minimizing Waste: Just-In-Time Production

WHAT IT IS WHAT IT DOES Management philosophy Pull system though the plant Attacks waste Hydraulic Push Systems

WHAT IT REQUIRES

WHAT IT ASSUMES Stable environment

Employee participation
Continuing improvement Small lot sizes

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Inventory Hides Problems Just as Water in a Lake Hides Rocks

Inventory level Inventory level

Scrap

Proces s Setup Quality downti time proble me ms Late deliverie s

Scrap

Proces s Setup Quality downti time proble me ms Late deliverie s

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Lowering Inventory Reduces Waste

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Work in process inventory level (hides problems) Unreliable Vendors Capacity Imbalances

Scrap

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Lowering Inventory Reduces Waste

Reducing inventory reveals problems so they can be solved.

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Unreliable Vendors

WIP Scrap

Capacity Imbalances

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Lowering Inventory Reduces Waste

Reducing inventory reveals problems so they can be solved.

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Unreliable Vendors

Scrap

WIP Capacity Imbalances

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To Lower Inventory, Reduce Lot Sizes

Inventory Level
Lot Size 200

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Average inventory = 40

Average inventory = 100

Lot Size 80

Average inventory = (Lot size)/2

Time
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Reducing Lot Sizes Increases the Number of Lots

Customer orders 10 Lot size = 5 Lot 2 Lot 1

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Lot size = 2 Lot 1 Lot 2 Lot 3 Lot 4 Lot 5

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Which Increases Inventory Costs

Cost
t Cos otal T

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ost C ng i old H Setup Cost

SmallerOptimal Lot SizeLot Size

Lot Size

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Unless Setup Costs are Reduced

Cost
ost C tal o ost T gC ldin Ho

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Setup Cost
New optimal lot size Original optimal lot size

Lot Size

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Lower Total Cost Requires Small Lot Sizes and Lower Setup Costs

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Cost

T1 T2

Sum of ordering and holding cost

S2

S1

Lot size
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Minimizing Waste: Kanban Production Control Systems

Once the Production kanban is received, the Machine Center produces a unit to replace the one taken by the Assembly Line people in the first place
Storag e Part A

Withdraw al kanban

This puts the system back were it was before the item was pulled

Machine Center

Storag e Part A

Assembly Line

Production kanban The process begins by the Assembly Line

people pulling Part A from Storage

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Respect for People

Level payrolls Cooperative employee unions Reliable Subcontractor networks

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