Chapter 12: Lean Operations

What are alternative forms of Muda? What do they mostly help?

1. Conveyance and transportation 2. Overprocessing 3. Delays and waiting 4. Defects - help service organizations

What are the broader philosophical principals of lean systems?

1. Eliminate Waste 2. Strive for visibility and flexibility in the system 3. Pursue closer relationships with outside suppliers 4. Seek continuous improvement

What changes should an organization make to accomodate frequent deliveries?

1. Eliminate the warehouse 2. Deliver directly to the user 3. Reduce lead times

What are common improvements to reduce the value of S?

1. Eliminating the paperwork traditionally associated with ordering and receiving through electronic data interchange (EDI) with suppliers 2. Streamlining order stocking, retrieval, and handling through bar coding and radio frequency identification (RFID) tagging inventory 3. Investigating in the process of machine setup, to make frequency changeovers quicker and more efficent

To implement lean production, organizations must adopt what three principals?

1. Plan smaller lot sizes to support lower inventory levels 2. Employ effective signaling to support implicit planning 3. Smooth production to support efficient operation

What two items must be investigated before reducing lot sized?

1. potential reduction of any fixed costs associated with ordering 2. Preparation for the frequent deliveries that will result from smaller lot sizes

Run Size

A batch size, or order size, associated with the production of an item

Material Requirements Planning (MRP)

A technique for scheduling the production of multiple items related by both independent and dependent demand

Level Production Strategy

Aggregate planning approach that relies on fixed capacity despite changing demand

Situational Awareness

An individual or organization's comprehension of the surrounding environment and its potential near-future states.

What is a cellular layout? What is the main advantage to a cellular layout?

Cellular Layout is a U-shaped Assembly Line, the main advantage is that it has the ability to shape supply traffic patterns such that they are less likely to interfere with themselves and with the operation of the line

Economies of Scale

Decreasing average unit cost by increasing volume

Lead Time

Display between requesting a product and receiving it

Safety Stock

Inventory held to protect against uncertain supply or demand

Kaizen

Japanese term for a focus on continuous improvements

Andon

Japanese term for a signaling system announcing problems encountered and assistance requested, often implemented as sets of lights over workstations

Poka Yoke

Japanese term for process improvements striving to make the desired outcome of a process inevitable largely by preventing mistakes

Muda

Japanese term for waste, particularly anything a customer is not willing to pay for -enemy of value-added

What is Toyota's formula for the optimal number of Kanban cards to circulate in the loop?

N = DL(1+X)/C

Lean

Operating without waste

Stockpiling

Producing or securing goods in advance of demand

Electronic Data Interchange (EDI)

The linking of two information systems from two different organizations to transfer data and conduct transcations

Radio Frequency Identification (RFID)

The tagging of objects with devices that may be detected and interrogated for information by remote electronic readers, allowing identification and tracking without contact

Run Time

The time required to produce a batch of some item

Vendor-Managed Inventory (VMI)

Transferal of ownership and management of inventory within a system to its external provider, who will be compensated after its use by the system

Quality Ciricle

a group of employees that meets regularly to discuss and develop opportunities for continuous improvement of their operation.

Single Card Kanban

a kanban control arrangement consisting of a single kanban loop, controlling production and limiting inventory levels of some item

Dual Card Kanban

a kanban control arrangement consisting of two kanban loops. The first kanban loop signals and limits production of an item, while the second loop signals and limits withdrawals for consumption of the item

JIT II

a phrase first populated by the Bose Company, emphasizing vendor managed inventory and colocation of those vendors within a production facility

Pull System

a production system that reacts to signals of demand, relying on internal coordination instead of the implementation of explicit plans to achieve outcomes

Planned Order Releases

a schedule of the ordering of a particular item to meet its requirements over a specific time interval

Just-in-time (JIT)

an earlier and alternate term for lean operation, in which a system implicitly operated with minimum inventory and waste -reorder point is deliberately set to zero or near-zero

reorder point

an inventory level that triggers replenishment of an item

Lean Operations trade-off

eliminating inventory vs. eliminating the need for inventory (reasons)

Kanban

in operations, a Japanese term for a signal, often a card. Kanban systems use these signals to regulate production

Draw the historical development of inventory management diagram

in the book Traditional Reorder Point Systems --> Material Requirments Planning --> Lean Operations

Work in Process (WIP)

inventory resulting from transformation of raw materials, but not yet ready for sale to consumers

Partnering

long-term strategic alliance that benefits both parties

Push System

main driver is the forecast, a production system that calculates and anticipates demand, relying on the implementation of explicit plans instead of internal coordination to achieve outcomes

Mixed-model assembly

production of a range of products with a single assembly line, primarily by varying features on an otherwise standardized product

How do you minimize the amount recomended for ordering?

reduce S in the economic order quantity EOQ = sqrt(2DS/H)

Sole Sourcing

relying on a single supplier

Inventory

tangible items awaiting sale or use

Little's Law

the average number of some item in a system equals its average arrival rate multiplied by the average time each unit spends in the system

Kanban Loop

the continuous path of travel of a set of kanbans, governing the production or consumption of some inventory item

Value-added

the difference between the total value of the outputs and the total value of the inputs associated with an operation