Supply Chain Management Chapter 13

JIT Goals

-eliminate disruptions -make system flexible by reducing setup and lead times -minimize inventory -eliminate waste, especially excess inventory

Forms of Waste (Muda in Japanese)

-overproduction -waiting -unnecessary transportation -inappropriate process -unnecessary inventory or motion -defects -underutilization of employees

Just in Time (JIT)

a philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity

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 ex. kanban cards, yellow squares on floor or designated storage spaces

Pull System

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

Two-card kanban system

a special form of the kanban system that used one card to control production and another card to control movement of materials

Key Characteristics of a kanban system

- Simple signaling mechanism (i.e. card) to indicate an item should be produced or moved - Synchronize activities within a plant or across the Supply Chain - Control mechanism designed to "pull" parts through the Supply Chain (can be used with MRP)

Inventory as a waste

-Requires more storage space -Requires tracking and counting -Increases movement activity -Hides yield, scrap, and rework problems -Increases risk of loss from theft, damage, obsolescence

Lean

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

Excess Inventory in the Just in Case Inventory

Causes: equipment breakdowns, absenteeism, poor quality

Supply Chain after eduction in excess inventory

New Process: work centers are located closer together, set up times are reduced, inventory reduced dramatically

Lean Perspective

Process of reducing inventory leads to reduction of the other "wastes" and exposes problems in order of severity. High inventory levels "hide" problems while lowering inventory exposes problems

JIT/Lean Approach to Operations

Simplify first, add technology second Gradual however continuous improvement Minimize waste (including poor quality) Maximize use of people

How many kanbans are needed?

Y = [DT (1 + X)]/C Y= number of kanban cards D= demand per unit of time T= lead time C= container capacity/size X= safety factor

Production Card

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

Move card

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

Waste

any activity that does not add value to the good or service in the eyes of the consumer

Kanban example

found to have 20 kanbans. to find subassemblies...20 x C to find hours work of subassemblies...subassemblies/hourly demand