Chapter 13- JIT/Lean Production

Requirements for successful lean implementation

*Sustained, disciplined commitment* from executive management. *Ongoing LEAN Strategic and Tactical Planning* *Education/Training in the LEAN building blocks* for all employees. *Empowered Employees* Good *"cultural" change* management. *Supportive ERP system*

Single-minute exchange of Dies (SMED) Principles

*goal is to changeover in 10 minutes* separate internal from external setup convert internal to external setup streamline all aspects of set up perform set up activities in parallel to eliminate them

Lean Simply Defined

*identification* and *elimination* of waste and process acceleration (*speed*) want to speed up the process without losing quality

Waste

*key component that Lean wants to eliminate* any activity that doesn't add value to the good or service in eyes of consumer can be: overproduction, waiting, unnecessary transportation, inappropriate process, unnecessary inventory, unnecessary/excess motion, defects, underutilization of employees, energy resources, or environmental

The Lean Perspective on Inventory

-Triangles represent inventory between work centers A, B and C -Buildup of *inventory hides the problems* that may occur, but at a cost -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 centers make only what is needed, when it is needed

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.

Cellular Flow

Physically linking and arranging manual and machine process steps into the most efficient combination to maximize value-added content while minimizing waste *the aim is single-piece flow*

Basic Tools and Techniques of lean

Pull/kanban cellular/flow tota productive maintenance quality at source point of source storage quick changeover standardized work batch reduction teams 5S Sytem visual controls streamlined layout

not invented here syndrome

Syndrome in which people (managers) refuse to use perfectly good ideas developed elsewhere in favor of their "sometimes inferior" internally-developed ideas.

True

T/F: All systems include *waste* and are *unique*

True

T/F: High inventory levels hide problems while lowering inventory exposes

True

T/F: The Lean philosophy is entirely consistent with business process improvement, quality improvement, and supplier management initiatives

Quick Changeover

The ability to change tooling and fixtures rapidly (usually in minutes) so multiple products in smaller batches can be run on the same equipment.

Batch Size Reduction

The best batch size is one-piece flow if one-piece flow is not appropriate, reduce the batch to the smallest size possible.

Visual Controls

The intent of a visual factory is that the whole workplace is set-up with signs, labels, color-coded markings, etc. such that anyone unfamiliar with the process can, in a matter of minutes, know what is going on, understand the process, and know what is being done correctly and what is out of place.

Potential Obstacles to Lean Enterprise

Top management lacks strategic understanding of Lean Enterprise. Lack of specific Lean Enterprise skills, knowledge. Culture, ego, organizational inertia. Management reluctance to empower people. Fear of change, loss of organizational power. "Not Invented Here" syndrome. Internal systems and hurdles

86%

What percent of the Fortune 500 product and service companies have adopted elements of this lean philosophy?

it will be cut

When you improve the process (time, safety risk, container size), what will happen to the inventory?

requires less space and capital investment, moves processes closer together, makes quality problems easy to detect, and makes processes more dependent on each other

Why is reducing batch size important?

reduces process variability, reduces product variability, more operational consistency, and promotes safety

Why is using standardized work important?

Total Productive Maintenance (TPM)

a Lean equipment maintenance strategy for maximizing overall equipment effectiveness in support of preventing quality problems or downtime while minimizing process interruption

Just-in-time (JIT)

a philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity *it applies to all forms of manufacturing and to many service industries*

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* (most systems dont require computerization), can be used to *synchronize activities* within plant or between supply chain partners (can be important for both PAC and vendor order management), *not planning tools* but control mechanisms that are designed to pull parts/goods through the supply chain (many firms use techniques like MRP to anticipate requirements)

Pull system

a production system in which actual downstream demand sets off a chain of events that pulls material through the various process steps *moves from downstream to upstream* *relies on customer requests*

5S System Plus 1

a system for workplace organization and standardization 1. Sorting (organizing and discarding things not used) 2. Storage (neatness/equipment layout) 3. Shining (workplace cleanliness) 4. Standardize 5. Sustaining (discipline to maintain others) Plus 1: Safety (freedom from conditions that may cause injury or death)

Pull/Kanban/JIT

a system of cascading production and delivery instructions from *downstream* to *upstream* activities in with the upstream doesn't produce until downstream customer signals need *material is pulled* through the system *reverse of traditional push* system *forces cooperation* *prevents over/under production*

Fool Proofing

any mechanism that either prevents a mistake from being made or makes the mistake obvious at glance (essential because cause of defects lie in worker errors)

Motion

any movement of people, equipment, that does not add value

Inventory

any supply in excess of a one-piece flow

companies following Lean

can and do use a wide range of planning and control techniques, not just kanban

inappropriate process

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

Controlling Inventory Levels using kanban

controlling the number of production kanbans (cards, containers, or something else) leads to organization control of amount of inventory *have to determine number of kanbans first* *y = [DT (1+x)]/C* y: number of kanbans D: demand per unit T: time x: safety factor (decimal) C: container size

defects

create uncertainty in the process rob production capacity by creating products or services that require rework or must be scrapped

Value

defined as that which the customer is willing to pay for

Over-processing

efforts that add no value

Goal of Lean

eliminate waste

Value Stream Map purpose

enable the detailed analysis of a process in identifying waste and bottlenecks leading to an improvement plan resulting in more efficient lean process flow and streamlined layout

Steamlined layout

facility layout designed to support lean operational flow and sequence minimize buffers minimize flow time minimize wasted motion minimize floor space

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 and demand rates must be stable.

Waiting

Idle time waiting for manpower, material, machinery/tools, measurement, information, etc.

Teams

In the Lean environment, the emphasis is on working in teams, whether it be improvement teams or daily work teams. Teams as a collective are proven to be more productive than the sum of the individuals within a team.

Quality at source

Inspection and process control by the operators (minimize inspection by indirect labor) so that they are certain that the product or service passed on to the next process is of acceptable quality.

Defective Product

Inspection, sorting, scrapping, replacement or repair

Lean Six Sigma

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

Lean

A philosophy of production that emphasizes the minimization of the amount of resources (including time) used in the various activities of the enterprise involves *identifying* and *eliminating* waste (non-value-added activities in design, production, supply chain management) and *dealing with customers* *can be applied to a wide range of production and service environments*

Value Stream Mapping

A set of specific actions required to bring a product family from raw material to finished goods per customer demand, concentrating on information management and physical transformation tasks.

5S System Plus 1 Benefits

improves safety decreases downtime prevents quality problems identifies problems more quickly develop control through visibility

Energy resources

inefficient/excessive use of power, heat, cooling, etc.

One-piece flow

make one and move on

Overproduction

making more, earlier or faster

Transportation

movement of parts/material in plant

Benefits of Visual Controls

obvious when something is out of place/mission enables management and operators to keep operations running efficiently and meed DC's Operational goals signals malfunctioning equipment sounds safety warnings

Environmental

pollutants/emissions (chemical, nuclear, biological, material)

unnecessary/excess motion

poorly designed processes can lead to this

Advantages of Point of use (source) storage

reduce travel distance by operators reduce cycle time visually monitor inventory

Benefits of Lean

significant cost avoidance (50%) productivity increase (10-50%) WIP reduction (90%) Space utilization improvement (75%) Quality Improvement (90%) Lead time reduction (90%) customer satisfaction improvement (90%)

Standardized Work

the consistent performance of a task or process, according to documented methods, designed without waste and focused on minimal human movement (ergonomics) *objective is for every task, there is a correctly defined method for doing it, and doing it same way every time*

Observations from the MRP record

there is no projected ending inventory (consistent with Lean philosophy of having no more inventory in the system than needed) planned orders all occur in the same week as planned receipts (planning lead time is just 1.6 hours, orders released Ina week should be completed in that week) planned order quantities can be used to calculate the demand rates (D) and production cards for the various weeks

Unnecessary transportation

transporting goods always increases costs and the risk of damage it doesn't necessarily provide value

Unnecessary inventory

uncertainty with regard to quality levels, delivery lead times, and the like can lead to this

People

underutilization of physical, mental, creative, skills, experience, etc.

Point of Use (Source) Storage

Inventoried material, supplies, information, equipment, work, standards, procedures, etc. are stored as close to where they are needed (transformed)

Internal systems and hurdles that may hinder lean

MRP Systems (Support Push Systems) Inflexible accounting methods Multi-location plant operations