OM 300 Module 14: Lean Operations

Improve Throughput

-By pulling material in small lots, inventory cushions are removed, exposing problems and emphasizing continual improvement -Manufacturing cycle time is reduced -Push systems dump orders on the downstream stations regardless of the need

reduce setup costs

-High setup costs encourage large lot sizes -Reducing setup costs reduces lot size and reduces average inventory -Setup time can be reduced through preparation prior to shutdown and changeover

reduce lot sizes

-Ideal situation is to have lot sizes of one pulled from one process to the next -Often not feasible -Can use EOQ analysis to calculate desired setup time -two key changes necessary (improve material handling and reduce setup time)

Lean systems tend to have the following attributes

-Respect and develop employees -Empower employees -Develop worker flexibility -Develop collaborative partnerships with suppliers -Eliminate waste by performing only value-added activities

lean organizations

-Understanding the customer and their expectations -Functional areas communicate and collaborate to make sure customer expectations are met -Implement the tools of Lean throughout the organization

TPS elements

-assembly components -andon -pull system -kanban -standard work practices -minimal machines -kaizen area -jidoka -level schedules -JIT -respect for people -empowered employees

toyota production system

-best quality -lowest cost -shortest lead time -best safety -high moral -customer first, respect for people, continuous improvement

layout tactics

-build work cells for families of products -include a large number operations in a small area -minimize distance -design little space for inventory -improve employee communication -use poka-yoke devices -build flexible or movable equipment -cross-train workers to add flexibility

increased flexibility

-cells designed to be rearranged as volume or designs change -applicable in office environments as well as production settings -facilities both product and process improvement

impact on employees

-employees may be cross trained for flexibility and efficiency -improved communications facilitate the passing on of important information about the process -with little or no inventory buffer, getting it right the first time is critical

lean operations

-encompasses both JIT and TPS -sustains competitive advantage and increases return to stakeholders -supply the customer with exactly what the customer wants, when the customer wants it, without waste, through continuous improvement -driven by pulling customer orders

reduced space and inventory

-inventory must be in very small lots -units are always moving because there is no storage

poka yoke

-japanese for "mistake proof" -"idiot proof" -warning or control designed into a product or process to improve quality

# of kanban cards or containers

-need to know the lead time needed to produce a container of parts -need to know the amount of safety stock needed -number of kanbans = (demand during lead time + safety stock)/size of container

ohno's seven wastes

-overproduction -queues -transportation -inventory -motion -overprocessing -defective products

sources of variability

-poor processes resulting in improper quantities, late, or non-conforming units -inadequate maintenance -unknown and changing customer demands -incomplete or inaccurate drawings, specifications, or bills of material

just-in-time (JIT)

-powerful strategy for improving operations -materials arrive where they are needed when they are needed -identifying problems and driving out waste reduces costs and variability and improves throughput -requires a meaningful buyer-supplier relationship

level schedules

-process frequent small batches rather than a few large batches -make and move small lots so the level schedule is economical -freezing the schedule closest to the due dates can improve performance

reduce inventory

-reducing inventory uncovers the "rocks" -problems are exposed -ultimately there will be virtually no inventory and no problems -Shingo says "inventory is evil"

Four Goals of Supplier Partnerships

-removal of unnecessary activities -removal of in-plant inventory -removal of in-transit inventory -improved quality and reliability

four goals of supplier partnerships

-removal of unnecessary activities -removal of in-plant inventory -removal of in-transit inventory -improved quality and reliability

Two additional Ss

-safety (build good in practices) -support/maintenance (reduce variability and unplanned downtime

kanban

-signals used in a pull system -japanese word for card -the card is an authorization for the next container of material to be produced -a sequence of kanbans pulls the material through the process -many different sorts of signals are used, but the system is still called a kanban

advantages of kanban

-small containers require tight schedules, smooth operations, little variability -shortages create an immediate impact -places emphasis on meeting schedules, reducing lead time and setups, and economic material handling -standardized containers reduce weight, disposal costs, wasted space, and labor

the 5 Ss

-sort/segregate (when in doubt, throw it out) -simplify/straighten (methods analysis tools -shine/sweep (clean daily) -standardize (remove variations from processes -sustain/self-discipline (review work and recognize progress) two additional Ss: -safety (build good in practices) -support/maintenance (reduce variability and unplanned downtime

throughput time

-the time it takes to move an order from receipt to delivery -the rate required to push orders through the production process

lean sustainability

-two sides of the same coin -maximize resource use and economic efficiency -focus on issues outside the immediate firm -driving out waste is the common ground

remove variability

-variability is any deviation from the optimum process -lean systems require managers to reduce variability caused by both internal and external factors -inventory hides variability -less variability results in less waste

eliminate waste

-waste is anything that doe not add value from the customer point of views -ohno's seven wastes and other resources such as energy water, and air are often wasted -efficient, sustainable production minimizes inputs, reduces waste -traditional housekeeping has been expanded to the 5 Ss

more kanban

-when a producer and user are not in visual contact, a card can be used; otherwise, a light or flag or empty spot on the floor may be adequate -usually each card controls a specific quantity of parts although multiple card systems may be used if there are several components or if the lot size is different from the move size

good production systems require that managers address three issues that are pervasive and fundamental to operations management:

1. eliminate waste 2. remove variability 3. improve throughput

True or False: Other resources such as energy, water, and air are often wasted.

True

variability

any deviation from the optimum process

shine/sweep

clean daily

kanban cards provide a ___________ ___________ and ___________ on the amount of work-in-process between cells

direct control; limit

concerns of suppliers

diversification, scheduling, lead time, quality, lot sizes

scheduling

don't believe customers can create a smooth schedule

TPS

emphasizes continuous improvement, respect for people, and standard work practices

setup time

find setup cost and then divide it by the hourly wage

JIT and inventory reduction are effective tools in

identifying causes of variability

a pull system (increases/decreases) throughput

increases

JIT and Competitive advantage

insert photo slides 22 and 23

lean inventory

inventory is at the minimum level necessary to keep operations running

distance reduction

large lots and long production lines with single-purpose machinery are being replaced by smaller flexible cells -often u-shaped for shorter paths and improved communication -often using group technology concepts

quality

limited by capital budgets, processes, or technologies

simplify/straighten

methods analysis tools

JIT

philosophy of continuous and forced problem solving via a focus on throughput and reduced inventory

lean layout

reduce waste due to movement

standardize

remove variations from processes

sustain/self-discipline

review work and recognize progress

lean scheduling

schedules must be communicated inside and outside the organization

lead time

short lead times mean engineering or specification changes can create problems

jidoka

stopping process because of a defect

lean quality

strong relationship: -lean cuts the cost of obtaining good quality because JIT exposes poor quality -because lead times are shorter, quality problems are exposed sooner -better quality means fewer buffers and allows simpler lean systems to be used

supplier partnerships

supplier and purchaser work together to remove waste and drive down costs

the lean techniques used in manufacturing are used in services

suppliers, layouts, inventory, scheduling

complicating factor

the time needed for actual manufacturing (production) to take place

supplier partnerships

these exist when a supplier and purchaser work together to remove waste and drive down costs

diversification

ties to only one customer increases risk

manufacturing cycle time

time between the arrival of raw materials and the shipping of the finished order

sort/segregate

when in doubt, throw it out