Chapter 12: Lean Supply Chains

Respect for People - Toyota Production System

Lifetime employment for permanent positons Maintain level payrolls even when business conditions deteriorate Company unions Bonuses View workers as assets Value of cross-trained employee

Production problems hidden by inventory

Machine downtime Scrap Vendor delinquencies Work-in-process queues "banks" Engineering design redundancies Change orders Inspection backlog Paperwork backlog Order entry backlog Decision backlogs

Elimination of waste - Toyota Production System

Waste from over production Waste of waste of waiting time Transportation waste Inventory waste Processing waste Waste of motion Waste from product defects

Value Stream Mapping

-a special type of flowcharting tool used to analyze where value is or is not being added as material flows through a process -requires a full understanding of the business, including production processes

Examples of Waste

Defects overproduction excessive inventories excess motion transportation waiting time idle employees

What are the two tenants of Toyota's Production System

Elimination of waste Respect for people

Kaizen Burst

Japanese word for continuous improvement

Principles of Lean Supply Chain Design

Lean Layouts Lean Production Schedules Lean Supply Chains

Lean Production schedules (2)

Level schedule Uniform plant loading

"A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection"

MEP Lean Network's definition

Kanban Systems

Means "sign" or "instruction card" cards or containers are used

Is Lean a Pull or Push system?

Pull

RFID

Radio Frequency Identification Tags - Improved Inventory Tracking

Uniform Plant Loading

Smoothing the production flow to dampen schedule variation

Customer Value

Something for which the customer is willing to pay

Waste reduction

The optimization of the value adding activities and the elimination of non-value-adding activities

VMI

Vendor Managed Inventory

Manufacturing Cells

a philosophy in which similar parts are grouped into families -eliminated movement and queue time between operations, reduces inventory and reduces employees

Waste

anything that does not add value from the customer's perspective

Colored Golf Balls (kanban)

appropriate golf ball signals production

CFR

collaborative Planning, forecasting and replenishment

Quality at the Sourcee

do it right the first time and if something goes wrong stop the process immediately -workers are responsible and become inspectors

Lean Value Chain

each step in the supply chain should create value or it is considered waste and should be removed

Kanban squares

marked spaces on the floor to identify where material should be stored

3 Characteristics of Lean Suppliers

o Able to respond to changes o Lower prices o Higher quality

2 Characteristics of Lean Procurement

o Key is automation (e-procurement) o Suppliers must see into the customers' operations and the customers must see into their suppliers' operation

Lean is centered on...

preserving value with less work

Just-in-Time Production

producing what is needed when needed and nothing more, anything excess is waste -several shipments a day -JIT exposes problems hidden by inventory

Level schedule

pulls material into final assembly at a constant rate for the best efficiency in production

Container system (kanban)

the container is used as a signal device

Value Stream

the value-added and non-value-added activities required to design, order and provide a product or service