Lecture Operations and supply chain management: The Core (3/e) – Chapter 12: Lean supply chains

Lecture Operations and supply chain management - Chapter 12: Lean supply chains. After reading the material in this chapter, you should be able to: Explain what lean production is, describe how a pull production system works, understand toyota production system concepts, summarize important attributes of a lean supply chain,...

Lean Supply Chains Chapter 12 McGraw­Hill/Irwin         Copyright © 2013 by The McGraw­Hill Companies, Inc. All rights reserved Learning Objectives Explain what Lean Production is Describe how a pull production system works Understand Toyota Production System concepts Summarize important attributes of a lean supply chain Analyze a supply chain process using value chain mapping Learn the principles of lean supply chain design Learn how a Kanban system works Show examples of applying lean thinking to service companies 12­2 Lean Production 12­3 Lean Logic 12­4 Toyota Production System Eliminatio n o f Was te Waste from overproduction Waste of waiting time Transportation waste Inventory waste Processing waste Waste of motion Waste from product defects Re s pe c t fo r Pe o ple Lifetime employment for permanent positions Maintain level payrolls even when business conditions deteriorate Company unions Bonuses View workers as assets 12­5 Lean Supply Chains 12­6 Lean Focused Supply Chain Components 12­7 Principles of Lean Supply Chain Design 12­8 Lean Concepts   Plant layout designed to ensure balanced work flow with a minimum of WIP inventory Preventive maintenance is emphasized to avoid downtime   Operators perform much of the maintenance to keep equipment reliable Group technology - a philosophy in which similar parts are grouped into families   The processes required to make the parts are arranged in a manufacturing cell Eliminated movement and queue time between operations, reduces inventory, and reduces employees 12­9 Quality/J ust-in-Time  Quality at the source - it right the first time and if something goes wrong, stop the process immediately     Workers are personally responsible for the quality of their output Workers become their own inspectors Workers are empowered to their own maintenance J IT production - producing what is needed when needed and nothing more      Anything over the minimum is waste Typically applied to repetitive manufacturing Idea lot size is one Vendors ship several times a day J IT exposes problems otherwise hidden by inventory 12­10 Lean Production Schedules 12­11 Kanban Systems    Kanban means “sign” or “instruction card” in J apanese Cards or containers are used Make up the Kanban pull system 12­12 Determining the Number of Kanbans Needed    Setting up a Kanban system requires determining the number of Kanbans cards (or containers) needed Each container represents the minimum production lot size An accurate estimate of the lead time required to produce a container is key to determining how many Kanbans are required k =number of Kanban card sets D =average number of units demanded over a given time period L =lead time to replenish an order (in same time units as demand) S =safety stock expressed as a percentage of demand during leadtime C =container size 12­13 Lean Supply Chains 12­14 Lean Supply Chains 12­15 ... unions Bonuses View workers as assets 12­5 Lean Supply Chains 12­6 Lean Focused Supply Chain Components 12­7 Principles of Lean Supply Chain Design 12­8 Lean Concepts   Plant layout designed to... value chain mapping Learn the principles of lean supply chain design Learn how a Kanban system works Show examples of applying lean thinking to service companies 12­2 Lean Production 12­3 Lean. .. Explain what Lean Production is Describe how a pull production system works Understand Toyota Production System concepts Summarize important attributes of a lean supply chain Analyze a supply chain