MGMT 390 FINAL

Spaghetti Diagram

Value/NonValue Added Diagram

Virtuous Cycle

complexes of events with no tendency towards equilibrium (social, economic, ecological, etc.) - at least in the short run. Both systems of events have feedback loops in which each iteration of the cycle reinforces the previous one (positive feedback). These cycles will continue in the direction of their momentum until an external factor intervenes and breaks the cycle.

Economic Order Quality (EOC)

equation for inventory that determines the ideal order quantity a company should purchase for its inventory given a set cost of production, demand rate and other variables. This is done to minimize variable inventory costs, and the formula takes into account storage, or holding, costs, ordering costs and shortage costs.

TPS House

Just-in-Time -right part, right amount, right time - Takt time planning (average time between the start of production of one unit and the start of production of the next unit) - Continuous flow - Pull System - Quick Changeover - Integrated logistics Jidoka (In-station quality) - Automatic stops - Andon - Person Machine separation -Error proofing - In-station quality control - Solve root cause of problems People & Teamwork -Selection - Common Goals - Ringi Decision - Cross-Trained Waste Reduction -Genchi Genbutsu -5 Why's -Eyes for Waste - Problem Solving

TPS System

LONG TERM PHILOSOPHY Principle 1: Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals. The Right Process Will Produce the Right Results Principle 2: Create continuous process flow to bring problems to the surface. Principle 3: Use "pull" systems to avoid overproduction Principle 4: Level out the workload (heijunka). (Work like the tortoise, not the hare.) Principle 5: Build a culture of stopping to fix problems, to get quality right the first time. Principle 6: standardized tasks are the foundation for continuous improvement and employee empowerment. Principle 7: Use visual control so no problems are hidden. Principle 8: Use only reliable, thoroughly tested technology the serves your people and processes. Add value to the Organization by Developing Your people and Your Partners Principle 9: Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others. Principle 10: Develop exceptional people and teams who follow your company's philosophy. Principle 11: Respect your extended network of partners and suppliers by challenging them and helping them improve. Continuously Solving Root Problems Drives Organizational Learning Principle 12: Go and see for yourself to thoroughly understand the situation (genchi genbutsu) Principle 13: Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly. Principle 14: Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen).

Heijunka (Leveling)

Leveling of production by both volumes and product mix. LEVELED SCHEDULE 1. Flexibility to make what the customer wants when they want it. 2. Reduced risk of unsold goods. 3. Balanced use of labor and machines. 4. Smoothed demand on upstream processes the plant's suppliers. UNLEVELED SCHEDULE 1. Customers usually do not buy products predictably. 2. There is a risk of unsold goods. 3. The use of resource is unbalanced. 4. Placing an uneven demand on upstream processes.

DIAGRAMS

PG 145, 146, 151, 279, 292, 302

Set-Up Times

Period required to prepare a device, machine, process, or system for it to be ready to function or accept a job. It is a subset of cycle time. Toyota is seeking to speed up this process by having machines that are set up for just one task, rather than multiple ones.

Standardization

making tasks follow a certain sequence of events. Helps keep standard deviation low, and produces more acceptable parts.

Standard Deviation

measure that is used to quantify the amount of variation or dispersion of a set of data values.[1] A low standard deviation indicates that the data points tend to be close to the mean (also called the expected value) of the set, while a high standard deviation indicates that the data points are spread out over a wider range of values.

6 Sigma

seeks to improve the quality of the output of a process by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes. It uses a set of quality management methods, mainly empirical, statistical methods, and creates a special infrastructure of people within the organization who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has specific value targets, for example: reduce process cycle time, reduce pollution, reduce costs, increase customer satisfaction, and increase profits.

Benefits of One Piece Flow

1. Builds in Quality 2. Creates Real Flexibility 3. Creates Higher Productivity 4. Frees up Floor Space 5. Improves Safety 6. Improves Morale 7. Reduces Cost of Inventory

Push VS Pull

Push System The push system of inventory control involves forecasting inventory needs to meet customer demand. Companies must predict which products customers will purchase along with determining what quantity of goods will be purchased. The company will in turn produce enough product to meet the forecast demand and sell, or push, the goods to the consumer. Disadvantages of the push inventory control system are that forecasts are often inaccurate as sales can be unpredictable and vary from one year to the next. Another problem with push inventory control systems is that if too much product is left in inventory. This increases the company's costs for storing these goods. An advantage to the push system is that the company is fairly assured it will have enough product on hand to complete customer orders, preventing the inability to meet customer demand for the product. An example of a push system is Materials Requirements Planning, or MRP. MRP combines the calculations for financial, operations and logistics planning. It is a computer-based information system which controls scheduling and ordering. It's purpose is to make sure raw goods and materials needed for production are available when they are needed. Pull System The pull inventory control system begins with a customer's order. With this strategy, companies only make enough product to fulfill customer's orders. One advantage to the system is that there will be no excess of inventory that needs to be stored, thus reducing inventory levels and the cost of carrying and storing goods. However, one major disadvantage to the pull system is that it is highly possible to run into ordering dilemmas, such as a supplier not being able to get a shipment out on time. This leaves the company unable to fulfill the order and contributes to customer dissatisfaction. An example of a pull inventory control system is the just-in-time, or JIT system. The goal is to keep inventory levels to a minimum by only having enough inventory, not more or less, to meet customer demand. The JIT system eliminates waste by reducing the amount of storage space needed for inventory and the costs of storing goods.

3PL (Third Party Logistics)

A person who solely receives, holds, or otherwise transports a consumer product in the ordinary course of business but who does not take title to the product

Kanban

A scheduling system for lean manufacturing and just-in-time manufacturing (JIT). Kanban is an inventory-control system to control the supply chain. 6 Principles - Later process picks up the number of items indicated by the kanban at the earlier process. - Earlier process produces items in the quantity and sequence indicated by the kanban. - No items are made or transported without a kanban. - Always attach a kanban to the goods. - Defective products are not sent on to the subsequent process. The result is 100% defect-free goods. - Reducing the number of kanban increases the sensitivity.

Visual Control

Any communication device used in the work environment that tells us at a glance how work should be done and whether it is deviating from the standard. Use visual control so no problems are hidden.

Takt Time

Average time between the start of production of one unit and the start of production of the next unit

Bureaucracies

Coercive Bureaucracy - Rigid rule enforcement - Extensive written Rules and Procedures - Hierarchy Controls Enabling Bureaucracy - Empowered employees -Rules and procedures as enabling tools - Hierarchy supports organizational learning Autocratic - Top Down Control -Minimum written rules and procedures - Hierarchy Controls Organic - Empowerment employees - Minimum Rules and Procedures - Little Hierarchy

TPS Principles

- Often the best thing to do is to idle a machine and stop producing parts. - Often it is best to build up an inventory of finished goods in order to level out the production schedule, rather than produce according to the actual fluctuating demand of customer orders. - Often it is best to selectively add and substitute overhead for direct labor. - It is best to selectively use information technology.

Non-Value Added

- Overproduction - Waiting (time on hand) - Unnecessary transport or conveyance - Overprocessing or incorrect processing - Unnecessary movement - Defects - Unused employee creativity

Steps to creating flow

1. Identify who the customer is for the processes and the added value they want delivered 2. Separate out the repetitive process from the unique, one-of-a-kind process and learn how you can apply TPS to the repetitive process. 3. Map the flow to determine value added and non-value added. 4. Think creatively about applying the broad principles of the Toyota Way to these processes using a future-state value stream map. 5. Start doing and learn by doing using a PDCA cycle and then expand it to the less repetitive processes.

Advantages of Cellular Manufacturing

1. Reduction in setup time 2. Reduction in work in progress 3. Reduction in material handling cost and time 4. Reduction in material flow distance 5. Improvement in machine utilization 6. Reduction in production lead time 7. Improvement in quality 8. Better worker morale

4P Model

Section 1: Long-Term Philosophy Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals. Section 2: The Right Process Will Produce the Right Results Create continuous process flow to bring problems to the surface. Use "pull" systems to avoid overproduction Level out the workload (heijunka). (Work like the tortoise, not the hare.) Build a culture of stopping to fix problems, to get quality right the first time. standardized tasks are the foundation for continuous improvement and employee empowerment. Use visual control so no problems are hidden. Use only reliable, thoroughly tested technology the serves your people and processes. Section 3: Add value to the Organization by Developing Your people and Your Partners Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others. Develop exceptional people and teams who follow your company's philosophy. Respect your extended network of partners and suppliers by challenging them and helping them improve. Section 4: Continuously Solving Root Problems Drives Organizational Learning Go and see for yourself to thoroughly understand the situation (genchi genbutsu) Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly. Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen).

14 Toyota Way Principles

Section I — Long-Term Philosophy Principle 1 Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals. People need purpose to find motivation and establish goals. Section II — The Right Process Will Produce the Right Results[edit] Principle 2 Create a continuous process flow to bring problems to the surface. Work processes are redesigned to eliminate waste (muda) through the process of continuous improvement — kaizen. The seven types of muda are: Overproduction Waiting (time on hand) Unnecessary transport or conveyance Overprocessing or incorrect processing Excess inventory Motion Defects Principle 3 Use "pull" systems to avoid overproduction. A method where a process signals its predecessor that more material is needed. The pull system produces only the required material after the subsequent operation signals a need for it. This process is necessary to reduce overproduction. Principle 4 Level out the workload (heijunka). (Work like the tortoise, not the hare). This helps achieve the goal of minimizing waste (muda), not overburdening people or the equipment (muri), and not creating uneven production levels (mura). Principle 5 Build a culture of stopping to fix problems, to get quality right the first time. Quality takes precedence (Jidoka). Any employee in the Toyota Production System has the authority to stop the process to signal a quality issue. Principle 6 Standardized tasks and processes are the foundation for continuous improvement and employee empowerment. Although Toyota has a bureaucratic system, the way that it is implemented allows for continuous improvement (kaizen) from the people affected by that system. It empowers the employee to aid in the growth and improvement of the company. Principle 7 Use visual control so no problems are hidden. Included in this principle is the 5S Program - steps that are used to make all work spaces efficient and productive, help people share work stations, reduce time looking for needed tools and improve the work environment. Sort: Sort out unneeded items Straighten: Have a place for everything Shine: Keep the area clean Standardize: Create rules and standard operating procedures Sustain: Maintain the system and continue to improve it Principle 8 Use only reliable, thoroughly tested technology that serves your people and processes. Technology is pulled by manufacturing, not pushed to manufacturing. Section III — Add Value to the Organization by Developing Your People[edit] Principle 9 Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others. Without constant attention, the principles will fade. The principles have to be ingrained, it must be the way one thinks. Employees must be educated and trained: they have to maintain a learning organization. Principle 10 Develop exceptional people and teams who follow your company's philosophy. Teams should consist of 4-5 people and numerous management tiers. Success is based on the team, not the individual. Principle 11 Respect your extended network of partners and suppliers by challenging them and helping them improve. Toyota treats suppliers much like they treat their employees, challenging them to do better and helping them to achieve it. Toyota provides cross functional teams to help suppliers discover and fix problems so that they can become a stronger, better supplier. Section IV — Continuously Solving Root Problems Drives Organizational Learning[edit] Principle 12 Go and see for yourself to thoroughly understand the situation (Genchi Genbutsu). Toyota managers are expected to "go-and-see" operations. Without experiencing the situation firsthand, managers will not have an understanding of how it can be improved. Furthermore, managers use Tadashi Yamashima's (President, Toyota Technical Center (TTC)) ten management principles as a guideline: Always keep the final target in mind. Clearly assign tasks to yourself and others. Think and speak on verified, proven information and data. Take full advantage of the wisdom and experiences of others to send, gather or discuss information. Share information with others in a timely fashion. Always report, inform and consult in a timely manner. Analyze and understand shortcomings in your capabilities in a measurable way. Relentlessly strive to conduct kaizen activities. Think "outside the box," or beyond common sense and standard rules. Always be mindful of protecting your safety and health. Principle 13 Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly (nemawashi). The following are decision parameters: Find what is really going on (go-and-see) to test Determine the underlying cause Consider a broad range of alternatives Build consensus on the resolution Use efficient communication tools Principle 14 Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen). The process of becoming a learning organization involves criticizing every aspect of what one does. The general problem solving technique to determine the root cause of a problem includes: Initial problem perception Clarify the problem Locate area/point of cause Investigate root cause (5 whys) Countermeasure Evaluate Standardize

Cellular Manufacturing

process of manufacturing which is a subsection of just-in-time manufacturing and lean manufacturing encompassing group technology. The goal of cellular manufacturing is to move as quickly as possible, make a wide variety of similar products, while making as little waste as possible. Cellular manufacturing involves the use of multiple "cells" in an assembly line fashion. Each of these cells is composed of one or multiple different machines which accomplish a certain task. The product moves from one cell to the next, each station completing part of the manufacturing process. Often the cells are arranged in a "U-shape" design because this allows for the overseer to move less and have the ability to more readily watch over the entire process. One of the biggest advantages of cellular manufacturing is the amount of flexibility that it has. Since most of the machines are automatic, simple changes can be made very rapidly. This allows for a variety of scaling for a product, minor changes to the overall design, and in extreme cases, entirely changing the overall design. These changes, although tedious, can be accomplished extremely quickly and precisely.[1]