Lean Systems

Benefits of Value Stream Mapping

- Creates visual map of every process involved in the flow of materials and information in a products value chain from receipt of raw materials to delivery of products. -Helps managers identify source of wasteful activities.

Process Considerations in Lean Systems

- Pull Method of Workflow (LEAN) - Push Method of Workflow (NOT LEAN) - Quality at the Source - Uniform Workstation Loads - Standardized Components and Work Methods

Close Supplier Ties

-Because lean systems operate with low levels of capacity slack or inventory, firms that use them need to have a close relationship with their suppliers. Frequent shipment of supplies; short lead time; on time arrival; high quality. -The lean system philosophy is to look for ways to improve efficiency and reduce inventories throughout the supply chain. Better communication leads to better planning. Partners rather than adversaries. -JIT II

How Kanban cards are used

-Developed by Toyota; one of the most publicized aspects of Lean System / TPS -A card is attached to each container of items produced -The container holds a given percentage of daily production requirement of an item -When the user of parts empties the container, the card is removed from the container and placed on a receiving post. -The empty container is then taken to the storage area; the card signifies the requirement to produce another container of the part. -When the container is refilled, the card is placed back on the container. Container is returned to the stock room.

The choice between the push and pull methods is often situational

-Firms with highly repetitive processes and well-defined work flows of standardized items often use the pull method because it allows closer control of inventory and output at the workstations -Push systems typically used when processes have long lead times, there is reasonable accurate forecasts of demand, a variety of products that require common processes, and customer who will not wait long. -Firms with assemble-to-order strategy sometimes use both.

The Human Costs of Lean Systems

-Lean systems can be coupled with SPC to reduce variations in output. Requires high degree of regimentation and sometimes stresses the workforce. -In TPS worker must meet specified cycle time, and with SPC, must follow prescribed problem-solving methods. Such system might make workers feel pushed and stressed. May cause productivity loss and quality reduction. -Workers may feel loss of autonomy. -Managers can mitigate some of these through slack and stressing work flow rather than worker pace

Value Stream Mapping - Metrics

-Takt Time --Daily Availability/Daily Demand -Cycle Time -Setup Time -Per Unit Processing Time --Cycle Time + Setup Time -Capacity -Availability/Time at bottleneck

Kanban Signal Container System

-Using the container itself as a signal device. -Works well with containers specifically designed for parts.

Kanban Signal Containerless System

-Using visual means in lieu of containers as a signal device. -Examples: a painted square on a workbench = one unit.

Advantages of small lot sizes

-reduces the average level of inventory (remember inventory holding costs are high!) -pass through system faster -uniform workload and prevents overproduction

TPS - 4 principles

1. All work must be completely specified as to content, sequence, timing, and outcome. 2. All customer-supplier connections should be direct, unambiguously specifying the people involved, the form and quantity of the services or goods to be provided, the way the request are made by each customer, and the expected time in which the requests will be met. --Customer-supplier connections can be internal or external. 3. All pathways should be simple and direct. --Services and goods do not flow to the next available person or machine but to a specific person or machine. --This enables identification of capacity problems by workstation. 4. All improvements should be made using scientific method under the guidance of a teacher at the lowest possible organizational level. --Scientific method involves clearly stating a verifiable hypothesis. --The hypothesis must then be tested under a variety of conditions. --Employees who are doing the work are involved in making improvements.

General Operating Rules of Kanban cards

1. Each container must have a card. 2. Assembly always withdraws from fabrication (pull system). 3. Containers cannot be moved without a kanban. 4. Containers should contain the same number of parts. 5. Only good parts are passed along. 6. Production should not exceed authorization.

Steps to Group Technology (GT)

1. Groups parts or products with similar characteristics into families and sets aside groups of machines for their production. 2. Organize the machine tools needed to perform basic processes into separate cells 3. Machines in each cell require only minor adjustments to accommodate product changeovers from one part to the next in the same product family 4. Queues of materials waiting to be worked on are shortened or eliminated 5. Frequently materials handling is automated so that after loading raw materials into cell worker does not handle machine parts until the job has been completed.

[House of Toyota] Roof

1. Highest quality 2. Lowest cost 3. Shortest lead time by eliminating wasted time and activity

The goal of kaizen is to eliminate the 8 types of waste

1. Overproduction 2. Inappropriate processing 3. Waiting 4. Transportation 5. Motion 6. Inventory 7. Defects 8. Underutilization of employees

Kanban

A Japanese word meaning "card" or "visible record" that refers to cards used to control the flow of production through a factory

House of Toyota

A lean process Comprised of Five Parts: The Roof - Eliminating waste The Pillars - JIT or rate of customer demand and Jidoka - stopping the production line if a defect occurs The Base - operational stability; standardization of work and reduction of variation The Center - culture of continuous improvement

five s practice

A methodology for organizing, cleaning, developing and sustaining a productive work environment. Important cornerstone of reducing waste and unnecessary work. Leads to lower costs, improved on time delivery and productivity, higher product quality, better use of floor space and safe work environment. -sort -straighten -sustain -shine -standardize -sustain

JIT II

A supplier representative works right in the company's plant, making sure the quality and supply of the items are appropriately supplied -Offers benefits to both buyers and suppliers because it provides the organizational structure needed to improve supplier coordination by integrating the logistics, production, and purchasing processes together.

Value Stream Mapping

A widely used qualitative lean tool aimed at eliminating waste or muda

Example of a Lean System

Aldi - Discount supermarket chain -Theo and Karl Albrecht started Aldi -Well known for extreme frugality -Simplicity, consistency and corporate responsibility -Multi-tasking employees that gets paid higher salaries -Investment in technologies (barcoding) reduces wastes -Small store footprint reduces costs -Fewer varieties ensures low cost of procurement Products are delivered in display-ready cases as needed -Stores open 8 a.m. to 8 p.m. on most days -Limiting use of credit cards saves surcharges -Coin systems for carts to ensure return to store by customers

Little's Law

Average work-in-process inventory equals the average demand rate multiplied by the average time a unit spends in the manufacturing process

shine

Clean and wash the work area and make it shine

flexible workforce

Employees trained to perform more than one job; helps relieve bottlenecks without the need for inventory buffer and to do the task for employees on vacation or are sick. Job rotation removes work boredom. Companies with customized service / product require multi-skilled workforce.

continuous improvement with lean systems

Excess capacity and inventory hides underlying problems with the processes that produce a service or product

Steps to Value Stream Mapping

Focus on one product family first. 1. Current state drawing. Start from customer end and work upstream to draw the map by hand. Note actual process times. Information needed for information and materials flows can be gathered from the shop floor. This includes set up or change over time (C/O), cycle time (C/T), uptime, production batch size, people per operation, scrap rate, etc. 2. Generate future state map with more streamlined product flow. 3. Implementation plan for future state.

Standardized components and work methods

In highly repeatable service operations, analyzing work methods and documenting the improvements to use can gain great efficiencies.

Cooperation and Trust in Lean Systems

In lean system workers and first line supervisors taken on responsibilities (scheduling, expediting and productivity) formerly assigned to middle managers. Cooperation and mutual trust between workforce and management is required.

Kaizen

Japanese term for continuous improvement -The key to kaizen is the understanding that excess capacity or inventory hides process problems

[House of Toyota] Right Pillar

Jidoka 1. Manual or automatic line stop 2. Separate operator and machine activities 3. Error-proofing 4. Visual control

[House of Toyota] Left Pillar

Just-in-Time (JIT) 1. Takt time 2. One-piece flow 3. Pull system

Schedule stability

Lean systems used in high-volume, make-to-stock environments cannot respond quickly to scheduling changes because little slack inventory or capacity is available to absorb these changes.

Inventory and Scheduling Considerations

Manufacturing firms need to have stable MPS, short setups and frequent and reliable supplies of materials and components to achieve full potential of the lean system. -Schedule stability -Setups -Purchasing and Logistics

straighten

Neatly arrange what is left, with a place for everything and everything in its place. Organize the work area so that it is easy to find what is needed.

[House of Toyota] Floor

Operational Stability 1. Heijunka 2. Standard work 3. TPM 4. Supply Chain

Reward Systems and Labor Classification in Lean Systems

Reward system must be revamped when Lean System implemented.

Andon

System of lights used at each workstation to signal problems or slowdowns

Quality at the source

The philosophy of making each worker responsible for the quality of his or her work. -Consistently meeting customer's expectations is an important characteristic of Lean Systems. -Worker acts his / her own inspector and never passes defective unit to the next process --Jidoka --Poka-yoke --Andon

purchasing and logistics

The shipments of raw materials and components must be reliable because of the low inventory levels in lean systems

Determining the number of containers

Two determinations 1. Number of units to be held by each container 2. Number of containers flowing back and forth between supplier station and user station.

Total Preventive Maintenance (TPM)

Unplanned machine downtime can be highly disruptive to a lean organization with little capacity slack or buffer inventory. Maintenance is done on a schedule. Workers responsible for minor lubrication / daily equipment check to prevent major equipment downtime. Punch press dies inspection at the end of operation and tagged.

Inappropriate Processing

Using expensive high precision equipment when simpler machines would suffice

Uniform Workstation Loads

a lean system works best if the daily load on individual workstations is relatively uniform

Pull Method of Workflow (LEAN)

a method in which customer demand activates production of the service or item

Push Method of Workflow (NOT LEAN)

a method in which production of the item begins in advance of customer needs -Uses forecast of demand; production of item occurs before customer order

one-worker, multiple-machines (OWMM) cell

a one-person cell in which a worker operates several different machines simultaneously to achieve a line flow

Group Technology (GT)

an option for achieving line-flow layouts with low volume processes; this technique creates cells not limited to just one worker and has a unique way of selecting work to be done by the cell

supply chain considerations in lean systems

close supplier ties small lot sizes

sustain

create discipline to perform the first four S practices, whereby everyone understands, obeys, and practices the rules when in the plant. Implement mechanisms to sustain the gains by involving people and recognizing them through a performance measurement system

motion

effort related to the ergonomics of bending, stretching, reaching, lifting, and walking.

standardize

establish schedules and methods of performing the cleaning and sorting.

Underutilization of employees

failure to learn from and capitalize on employees' knowledge and creativity.

Process Consideration in Lean Systems

firms may have to change their layout. Certain workstation may have to be moved closer together and cells of machines devoted to particular component families may have to be established. --Rearranging a plant to conform to lean practices can be costly. --Many plants receive raw materials and purchased parts by rail; to facilitate smaller and more frequent shipments, truck deliveries would be preferable. Loading docks may need to be reconstructed.

Toyota Production System (TPS)

focus on continuous improvement, respect for people, and standard work practices

Reservation Systems for service processes

help achieve uniform workstation loads. Hospitals schedule surgeries in advance to even out load on facilities; helps them manage resource planning. Differential pricing of service is also used to do the same. Airlines promoting weekend travel or red-eye flights do the same thing.

inventory

hides problems on the shop floor, consumes space, increases lead times, and inhibits communication.

disadvantage of small lot sizes

increases setup frequency

overproduction

manufacturing an item before it is needed

Poka-yoke

mistake-proofing methods aimed at designing fail-safe systems that minimize human error

transportation

movement and material handling of product between processes.

Lean systems

operations systems that maximize the value added by each of a company's activities by removing waste and delays from them

Jidoka

represents a visual management system whereby status of the system in terms of safety, quality, delivery, and cost. Stop the process when something is wrong and fix it on the line. -Frees up workers from tending to machines all the time.

defects

result in rework and scrap, and add wasteful costs to the system in the form of lost capacity, rescheduling effort, increased inspection, and loss of customer good will

sort

separate needed items from unneeded items and discard the unneeded

Setups

small lot sizes must be used. However, because small lots require a large number of setups, companies must significantly reduce setup times

Just-in-time (JIT) philosophy

the belief that waste can be eliminated by cutting unnecessary capacity or inventory and removing non-value-added activities in operations

Heijunka

the leveling of production load by both volume and product mix

If volumes are not sufficient to keep several workers busy on one production line:

the manager might set up a line small enough to keep one worker busy.

TPS is not:

the set of tools and procedures that are widely visible and highly useful. It is the discipline and process of continuous improvement

automation

the use of largely automatic equipment in a system of manufacturing or other production process. -Bank ATM machines, automotive welding, painting, etc

Manufacturers apply the OWMM concept widely because of:

their desire to achieve low inventories.

waiting

time incurred when product is not being moved or processed