Ch.16 - Lean systems

Lean Services

- Basic elements of lean production apply equally to services - Most prevalent applications • lean retailing • lean banking • lean health care

Lean Six Sigma and VSM

- Lean: • Eliminates waste and creates flow • More continuous improvement - Six Sigma • Reduces variability and enhances process capabilities • Requires breakthrough improvements - Value Stream Mapping (VSM) • A tool for analyzing process flows and eliminating waste • Specialized icons related to: lean production, material and information flows, "aha" Kaizen bursts

Flexible resources • Reduce downtime by reducing changeover time

-Cycle time: time required for the worker to complete one pass through the operations assigned -Takt time: paces production to customer demand; producing faster than takt time results in a buildup of inventory - Cycle time is adjusted to match takt time by changing worker paths

Flexible resources - general purpose machines perform several basic functions

-Use preventive maintenance to reduce breakdowns • Reserve capacity for important customers

Basic elements

1. Flexible resources 2. Cellular layouts 3. Pull system 4. Kanbans 5. Small lots 6. Quick setups 7. Uniform production levels 8. Quality at the source 9. Total productive maintenance 10. Supplier networks

Lean Production (JIT)

Lean system implemented through just-in-time (JIT) philosophy

Cellular layouts

Manufacturing cells comprised of dissimilar machines brought together to manufacture a family of parts

Flexible Resources • Cross-train workers to help clear bottlenecks

Multifunctional workers perform more than one job

Kanban Production Control Systems

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Muda

waste, anything other than that which adds value to product or service

Leaning the Supply Chain

• "pulling" a smooth flow of material through a series of suppliers to support frequent replenishment orders and changes in customer demand • Firms need to share information and coordinate demand forecasts, production planning, and inventory replenishment with suppliers and supplier's suppliers throughout supply chain • Pull a smooth flow of material through the system • Build a highly collaborative business environment • Adopt the technology to support your system • Consider "near shoring"

5 whys

• A key part in an effective Kaizen is finding the root cause of a problem and eliminating it • A practice of asking "why?" repeatedly until the underlying cause is identified (usually requiring five questions) • Simple, yet powerful technique for finding the root cause of a problem

Total Productive Maintenance (TPM)

• Breakdown maintenance: Repairs to make failed machine operational • Preventive maintenance: System of periodic inspection and maintenance to keep machines operating

TPM requirements

• Design products that can be easily produced on existing machines • Design machines for easier operation, changeover, maintenance • Train and retrain workers to operate machines • Purchase machines that maximize productive potential • Design preventive maintenance plan spanning life of machine

Single-Card Kanban System

• Each container must have a kanban card • Assembly always withdraws from fabrication (pull system) • Containers cannot be moved without a kanban • Containers should contain the same number of parts • Only good parts are passed along • Production should not exceed authorization

Successful JIT partnerships require

• Elimination of unnecessary activities • Elimination of in-plant inventory • Elimination of in-transit inventory • Elimination of poor suppliers

Employee Empowerment

• Empowered employees bring their knowledge and involvement to daily operations • Some traditional staff tasks can move to empowered employees • Training, cross-training, and fewer job classifications can mean enriched jobs • Companies gain from increased commitment from employees

Supplier networks

• Few suppliers • Suppliers located in close proximity to the customer • Repeat business with same suppliers • Mixed loads and frequent deliveries • Precise delivery schedules • Standardized, sequenced delivery • Long-term supplier contracts • Synchronized production • Supplier certification

Lean Production Problems

• Highly variable demand • Large variety of low-volume products • Custom engineered products • Mass production parts • Unexpected changes in demand or supply

JIT Partnerships

• JIT partnerships exist when purchasers work with suppliers (in a supplier network) to remove waste and drive down costs • Support suppliers so they become or remain price competitive • Competitive bidding mostly limited to new purchases • Buyer resists vertical integration and subsequent wipeout of supplier business • Suppliers encouraged to extend JIT buying to their suppliers

Kanbans

• Kanban is the Japanese word for card • Card which indicates standard quantity of production • Paperless production control system • Derived from two-bin inventory system • Maintain discipline of pull production • Authorize production and movement of goods • Authority to pull, or produce comes from a downstream process.

Lean production goals

• Make system flexible • Reserve capacity for important customers • Eliminate disruptions • Minimize inventory • Eliminate waste (all but value-added activities) • Reduce space requirements • Reduce the number of job classes • Make jobs more challenging • Develop close supplier ties and educate them

Benefits of kanbans

• Problems are immediately evident • Allow only limited amount of faulty or delayed material • Puts downward pressure on bad aspects of inventory • Standardized containers reduce weight, disposal costs, wasted space, and labor • Reduced paperwork and simpler planning systems

Components of lead time

• Processing time: Reduce number of items or improve efficiency • Move time: Reduce distances, simplify movements, standardize routings • Waiting time: Better scheduling, sufficient capacity • Setup time: Generally the biggest bottleneck

Types of kanbans

• Production kanban: authorizes production of goods • Withdrawal kanban: authorizes movement of goods • Kanban square: a marked area designated to hold items • Signal kanban: a triangular kanban used to signal production at the previous workstation • Material kanban: used to order material in advance of a process • Supplier kanban: rotates between factory and suppliers

Lean production characteristics

• Pull method of materials flow • Consistently high quality • Small lot sizes • Uniform workstation loads • Flexible work force and processes to help clear bottlenecks • Stable demand schedule • Line flow strategy • Automated production via Autonomation • Preventive maintenance • Kanban production control system

Benefits of Lean Production

• Reduced inventory • Improved quality • Lower costs • Reduced space requirements • Increased equipment utilization • Shorter lead time • Increased productivity • Greater flexibility • Better relations with suppliers • Simplified scheduling and control activities • Valid priorities for production scheduling • Increased capacity • Better use of human resources • Work force participation • More product variety

JIT

• Repetitive production system in which processing and movement of materials and goods occur just as they are needed, usually in small batches • Doing more with less inventory, fewer workers, less space • Smoothing the flow of material to arrive just as it is needed • JIT operates with very little "fat"

Uniform Production levels

• Result from smoothing production requirements on final assembly line • Kanban systems can handle +/- 10% demand changes • Reduce variability with more accurate forecasts • Smooth demand across planning horizon • Mixed-model assembly steadies component production

Determining number of kanbans

• Setting up a kanban system requires determining the number of kanbans cards (or containers) needed • Each container represents the minimum production lot size • An accurate estimate of the lead time required to produce a container is key to determining how many kanbans are required

Small lots

• Small-batch production is an important approach for matching production rate to demand rate. - Producing in more frequent, smaller batches drives the average inventory level down. - But it also increases the number of times equipment must be changed over, which can cut into available capacity. - Small-batch production becomes economical only when changeover times can be reduced sufficiently. • Require less space and capital investment • Move processes closer together • Make quality problems easier to detect • Make processes more dependent on each other

Pull system

• System for moving work where a workstation pulls output from the preceding station as needed. • Reversal of traditional push system where material is pushed according to a schedule • Forces cooperation • Prevent over and underproduction • While push systems rely on a predetermined schedule, pull systems rely on customer requests

Implementing Lean Production

• Use lean production to finely tune an operating system • Somewhat different in USA than Japan • Lean production is still evolving • Lean production is not for everyone

Quality at the source

• Visual control: makes problems visible • Poka-yokes: prevent defects from occurring • Kaizen: a system of continuous improvement; "change for the good of all" • Jidoka: authority to stop the production line • Andons: call lights that signal quality problems • Under-capacity scheduling: leaves time for planning, problem solving, and maintenance

More kanban

• When the producer and user are not in visual contact, a card can be used • When the producer and user are in visual contact, a light or flag or empty spot on the floor may be adequate • Since several components may be required, several different kanban techniques may be employed • Usually each card controls a specific quantity or parts • Multiple card systems may be used if there are several components or different lot sizes • Kanban cards provide a direct control and limit on the amount of work-in-process between cells • In an MRP system, the schedule can be thought of as a build authorization and the kanban a type of pull system that initiates actual production • If there is an immediate storage area, a two-card system can be used with one card circulating between the user and storage area and the other between the storage area and the producer