Chapter 13- JIT/Lean

Kanbans

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Recent Developments in Lean Thinking

1. Lean Six Sigma 2. Lean Supply Chain Management

Eight Commonly Recognized sources of waste

1. Overproduction 2. Waiting 3. Unnecessary Transportation 4. Inappropriate Process 5. Unnecessary Inventory 6. Unnecessary/excess Motion 7. Defects 8. Underutilization of employees

Kanban System,

1. Pull System 2. Other Signaling Methods

Summary of Kanban System

A downstream station pulls finished material out of work center B - Work center B pulls raw material into production - Demand for more raw material in work center B pulls finished material out of work center A

1. Move Card

A kanban card that is used to indicate when a container of parts should be moved to the next process step

2. Production Card

A kanban card that is used to indicate when another container of parts should be produced

1. Lean Six Sigma

A methodology that combines the organizational elements and tools of Six Sigma with Lean's focus on waste reduction

Just-in-Time (JIT)

A philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity. In a broad sense, it applies to all forms of manufacturing and to many service industries as well

Lean

A philosophy or production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities of an enterprise. It involves identifying and eliminating non-value-adding activities in design, production, supply chain, management, and dealing with customers

Kanban System

A production control approach that uses containers, cards, or visual cues to control the production and movement of goods through the supply chain Key Characteristics: - Uses simple signaling mechanisms to indicate when specific items should be produced or moved - Can be used to synchronize activities either within a plant or between different supply chain partners - Are not considered planning tools, but rather control mechanisms that are designed to pull parts or goods through the supply chain based on downstream demand

1. Pull system

A production system in which actual downstream demand sets off a chain of events that pulls material through the various process steps - A kanban system is also called a pull system

Two-Card Kanban System

A special form of the Kanban system that uses on card to control production and another card to control movement of materials 1. Move Card 2. Production card

The Perspective on Inventory.

After a successful Lean program has been put in place, wasted movement and space are eliminated and work centers are moved closer together - Inventory levels are reduced dramatically and work center make only what is needed when it is needed

2. Lean Supply Chain Management

An extension of the Lean philosophy to supply chain efforts beyond production. Lean Supply Chain Management seeks to minimize the level of resources required to carry out all supply chain activities

Waste

Any activity that does not add value to the good or service in the eyes of the consumer - Called "muda" in Japanese - Started with Taiichi Ohno, a Toyota engineer

4. Inappropriate Process

Companies sometimes use overly complex processes when simpler, more efficient ones would do

Synchronizing the Supply Chain Using Kanbans

For a kanban system to work properly, there must be a smooth, consistent flow of material through the links

Inventory Hides Problems

High inventory levels "hide" problems... while lowering inventory exposes problems

2. Waiting

Inefficient layouts or an inability to match demand without output levels may cause waitin

1. Overproduction

Inflexible or unreliable processes may cause organizations to produce goods before they are required

7. Defects

Not only do defects create uncertainty in the process, they rob production capacity by creating products or services that require rework or must be scrapped

6. Unnecessary/excess Motion

Poorly designed processes can lead to unnecessary motion

2. Other Signaling Methods

Single-card systems, where the single card is the production card and the empty container serves as the move signal - Color coding of containers - Designated Storage Spaces - Computerized bar-coding system

Lean Pt 2.

The Lean philosophy can be applied to a wide range of production and service environments - Companies following the Lean philosophy can and do use a wide range of planning and control techniques, not just kanban - The Lean philosophy is entirely consistent with business process improvement, quality improvement, and supplier management initiatives

8. Underutilization of employees

This is the newest form of waste added to the list, and it recognized that too often companies do not fully utilize the skills and decision-making-capabilities of their employees

3. Unnecessary Transportation

Transporting goods always increases costs and the risk of damage, but it does not necessarily provide value to the final customer

The Perspective on Inventory

Triangle represent inventory between work centers A, B and C - The buildup of inventory hides the problems that may occur but at a cost

5. Unnecessary Inventory

Uncertainty with regard to quality levels, delivery lead times, and the like can lead to unnecessary inventory

Controlling Inventory Levels Using Kanbans

y = DT (1+x) / C