Operations management 12th stevenson ch14 JIT and lean operations

Chapter 14 JIT and Lean Operations McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc All rights reserved Chapter 14: Learning Objectives  You should be able to: Explain what is meant by the term lean operations system List each of the goals of a lean system and explain its importance List and briefly describe the building blocks of lean List the benefits of a lean system Outline the considerations important in converting a traditional mode of operations to a lean system Point out some of the obstacles that might be encountered when converting to a lean system Describe value stream mapping Instructor Slides 14-2 Lean Operations Lean operation  A flexible system of operation that uses considerably less resources than a traditional system Tend to achieve  Greater productivity  Lower costs  Shorter cycle times  Higher quality Instructor Slides 14-3 Lean: Ultimate Goal The ultimate goal:  Achieve a system that matches supply to customer demand; supply is synchronized to meet customer demand in a smooth uninterrupted flow  A balanced system One that achieves a smooth, rapid flow of materials and/or work through the system Instructor Slides 14-4 Goals and building blocks of lean systems Instructor Slides 14-5 Lean: Supporting Goals The degree to which lean’s ultimate goal is achieved depends upon how well its supporting goals are achieved: Eliminate disruptions Make the system flexible Eliminate waste, especially excess inventory Instructor Slides 14-6 Waste Waste  Represents unproductive resources  Seven sources of waste in lean systems: Inventory Overproduction Waiting time Unnecessary transporting Processing waste Inefficient work methods Product defects Instructor Slides 14-7 Lean: Building Blocks Product design Process design Personnel/organizational elements Manufacturing planning and control Instructor Slides 14-8 Building Blocks: Product Design Four elements of product design important for lean systems: Standard parts Modular design Highly capable systems with quality built in Concurrent engineering Instructor Slides 14-9 Building Blocks: Process Design  Seven aspects of process design that are important for lean systems: Small lot sizes Setup time reduction Manufacturing cells Quality improvement Production flexibility A balanced system Little inventory storage Fail-safe methods Instructor Slides 14-10 MPC: Level Loading Lean systems place a strong emphasis on achieving stable, level daily mix schedules  MPS – developed to provide level capacity loading  Mixed model scheduling Three issues need to be resolved  What is the appropriate product sequence to use?  How many times should the sequence be repeated daily?  How many units of each model should be produced in each cycle? Instructor Slides 14-26 MPC: Pull Systems Push system  Work is pushed to the next station as it is completed Pull system  A workstation pulls output from the preceding workstation as it is needed  Output of the final operation is pulled by customer demand or the master schedule  Pull systems are not appropriate for all operations Large variations in volume, product mix, or product design will undermine the system Instructor Slides 14-27 MPC: Communication Communication moves backward through the system from station to station  Each workstation (customer) communicates its need for more work to the preceding workstation (supplier) Assures that supply equals demand  Work moves “just in time” for the next operation Flow of work is coordinated Accumulation of excessive inventories is avoided Instructor Slides 14-28 MPC: Visual Systems Kanban  Card or other device that communicates demand for work or materials from the preceding station Kanban is the Japanese word meaning “signal” or “visible record”  Paperless production control system  Authority to pull, or produce, comes from a downstream process  Two main types of kanbans: Production kanban (p-kanban): signals the need to produce parts Conveyance kanban (c-kanban): signals the need to deliver parts to the next work center Instructor Slides 14-29 Kanbans Ideal number of kanban cards DT (1  X ) C where N N Total number of containers (1 card per container) D planned usage rate of using work center Average waiting time for replenishment of parts plus T averageproduction time for a container of parts Policy variable set by management that relectspossibleinefficiency X in the system (the closer to0, the more efficient the system Capacity of a standard container (should be no more C than 10 percentof daily usage of the part Instructor Slides 14-30 MPC: Limited WIP Benefits of lower WIP  Lower carrying costs  Increased flexibility  Aids scheduling  Saves costs of scrap and rework if there are design changes  Lower cycle-time variability Instructor Slides 14-31 MPC: Close Vendor Relationships Lean systems typically have close relationships with vendors  They are expected to provide frequent, small deliveries of high-quality goods A key feature of many lean systems is the relatively small number of suppliers used Instructor Slides 14-32 MPC: Reduced Transaction Processing Lean systems seek to reduce costs associated with the ‘hidden factory’:  Logistical transactions  Balancing transactions  Quality transactions  Change transactions Instructor Slides 14-33 Preventive Maintenance and Housekeeping Preventive maintenance  Maintaining equipment in good operating condition and replacing parts that have a tendency to fail before they actually fail Housekeeping  Maintaining a workplace that is clean and free of unnecessary materials Instructor Slides 14-34 Lean vs Traditional Philosophies Factor Traditional Lean Inventory Much to offset forecast errors, late deliveries Minimal necessary to operate Deliveries Few, large Many, small Lot sizes Large Small Setup; runs Few, long runs Many, short runs Vendors Long-term relationships are unusual Partners Workers Necessary to the work Assets Instructor Slides 14-35 Transitioning to Lean Systems Make sure top management is committed and that they know what will be required Decide which parts will need the most effort to convert Obtain support and cooperation of workers Begin by trying to reduce setup times while maintaining the current system Gradually convert operations, begin at the end and work backwards Convert suppliers to JIT Prepare for obstacles Instructor Slides 14-36 Obstacles to Conversion Management may not be fully committed or willing to devote the necessary resources to conversion Workers/management may not be cooperative It can be difficult to change the organizational culture to one consistent with the lean philosophy Suppliers may resist Instructor Slides 14-37 Lean Services  In service the focus is often on the time needed to perform the service because speed is often the order winner  Lean benefits can be achieved in the following ways:  Eliminate disruptions  Make system flexible  Reduce setup and lead times  Eliminate waste  Minimize WIP  Simplify the process Instructor Slides 14-38 JIT II JIT II:  A supplier representative works right in the company’s plant, making sure there is an appropriate supply on hand  It is often referred to as vendor managed inventory (VMI) Instructor Slides 14-39 Operations Strategy  Be careful to study the requirements and benefits of lean systems before making a decision to convert operations  Evaluate strengths and weaknesses of current operations  The decision to convert can be sequential  Weigh the pros and cons of a lean approach to inventories  Supplier management is critical to a lean operation Instructor Slides 14-40 ... by the term lean operations system List each of the goals of a lean system and explain its importance List and briefly describe the building blocks of lean List the benefits of a lean system... of operations to a lean system Point out some of the obstacles that might be encountered when converting to a lean system Describe value stream mapping Instructor Slides 14-2 Lean Operations Lean. .. flow of materials and/ or work through the system Instructor Slides 14-4 Goals and building blocks of lean systems Instructor Slides 14-5 Lean: Supporting Goals The degree to which lean s ultimate