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©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Management — Bozarth & Handfield
1
JIT/Lean Production
Some Statistics from1986 ...
Framingham (GM) 40.7 hours 130 defects 2 weeks
Toyota Takaoka 16 hours 45 defects 2 hours
A comparison of:1) assembly hours2) defects per 100 cars3) average inventory levels
Post World War II
Growing and rebuilding world economy Demand > Supply US Manufacturing:
Higher volumes Capital substitution “Breakthrough” improvements “The production problem has been solved”
View from Japan
Very little capital War-ravaged workforce Little space Poor or no raw materials Lower demand levels Little access to latest technologies
U.S. methods would not work
Japanese Approach to Operations
Maximize use of people
Simplify first, add technology second
Gradual, but continuous improvement
Minimize waste (including poor quality)
Led to the development of the approach known as Just-in-Time
The Toyota Production System
Based on two philosophies:1. Elimination of waste
2. Respect for people
Just-in-Time
Repetitive production system
in which processing and movement of materials and goods occur just as they are
needed
Pre-JIT: Traditional Mass Production
Big lot sizesLots of inventory”PUSH” material to nextstage
Lowerper unit
cost
Big purchase shipments
Big “pushes” of finished goodsto warehouses or customers
???
Post-JIT: “Lean Production”
Tighter coordination along the supply chainGoods are pulled along
— only make and ship what is neededSmaller lotsFaster setupsLess inventory, storage space”PULL” material to next stage
Minimalor no
inventoryholding
cost
Smaller shipments
Goods are pulled out ofplant by customer demand
JIT Goals(throughout the supply chain)
Eliminate disruptions Make the system flexible Reduce setup times and lead times Minimize inventory Eliminate waste
Waste
Definition:
Waste is ‘anything other than the minimum amount of equipment, materials, parts, space, and worker’s time, which are absolutely essential to add value to the product.’
— Shoichiro Toyoda President, Toyota
Forms of Waste:
Overproduction Waiting time Transportation Processing Inventory Motion Product Defects
Elimination of Waste
1. Focused factory networks2. Group technology3. Quality at the source4. JIT production5. Uniform plant loading6. Kanban production control system7. Minimized setup times 8. Jidoka and Poka-Yoke
Inventory as a Waste
Requires more storage space Requires tracking and counting Increases movement activity Hides yield, scrap, and rework problems Increases risk of loss from theft, damage,
obsolescence
Examples of Eliminating “Wastes”
Big Bob’s Automotive Axles:
Wheels boughtfrom outsidesupplier
Axles made andassembled in house
BEFORE: Shipping in Wheels
Bob’s
Wheels
Warehouse
Truck Cost: $500 (from Peoria)
Maximum load of wheels: 10,000
Weekly demand of wheels: 500
AFTER: Shipping in Wheels
Truck Cost: $50 (from Burlington)
Maximum load of wheels: 500
Weekly demand of wheels: 500
What wastes have been reduced?
Bob’sWheels
Process Design
“Focused Factories” Group Technology Simplified layouts with little storage space Jidoka and Poka-Yoke Minimum setups
Personnel and Organizational Elements
Workers as assets
Cross-trained workers
Greater responsibility at lower levels
Leaders as facilitators, not order givers
Planning and Control Systems
“Small” JIT
Stable and level schedules
Mixed Model Scheduling
“Push” versus “Pull”
Kanban Systems
Kanban
Uses simple visual signals to control production
Examples:
empty slot in hamburger chute
empty space on floor
kanban card
Kanban Example
Workcenter B uses parts produced by Workcenter A
How can we control the flow of materials so that B alwayshas parts and A doesn’t overproduce?
Workcenter A Workcenter B
When a container is opened by Workcenter B, its kanban card is removed and sent back to Workcenter A.This is a signal to Workcenter A to produce another box of parts.
Kanban card: Signal to produceWorkcenter A Workcenter B
Kanban Card
Empty Box: Signal to pull
Empty box sent back. Signal to pull another full box intoWorkcenter B.Question: How many kanban cards here? Why?
Workcenter A Workcenter B
How Many Kanbans?
y = number of kanban cardsD = demand per unit of timeT = lead timeC = container capacityX = fudge factor
Cx)DT(1
y
Lean Production
Lean Production can be defined as an integrated set of activities designed to achieve high-volume production using minimal inventories (raw materials, work in process, and finished goods)
Lean Production also involves the elimination of waste in production effort
Lean Production also involves the timing of production resources (i.e., parts arrive at the next workstation “just in time”)
Minimizing Waste: Focused Factory Networks
CoordinationSystem Integration
These are small specialized plants that limit the range of products produced (sometimes only one type of product for an entire facility)
These are small specialized plants that limit the range of products produced (sometimes only one type of product for an entire facility)
Some plants in Japan have as few as 30 and as many as 1000 employees
Some plants in Japan have as few as 30 and as many as 1000 employees
Minimizing Waste: Group Technology (Part 1)
Using Departmental Specialization for plant layout can cause a lot of unnecessary material movement
Using Departmental Specialization for plant layout can cause a lot of unnecessary material movement
Saw Saw
Lathe PressPress
Grinder
LatheLathe
Saw
Press
Heat Treat
Grinder
Note how the flow lines are going back and forthNote how the flow lines are going back and forth
Minimizing Waste: Group Technology (Part 2)
Revising by using Group Technology Cells can reduce movement and improve product flow
Revising by using Group Technology Cells can reduce movement and improve product flow
Press
Lathe
Grinder
Grinder
A
2
BSaw
Heat Treat
LatheSaw Lathe
PressLathe
1
Minimizing Waste: Uniform Plant Loading (heijunka)
Not uniform Jan. Units Feb. Units Mar. Units Total
1,200 3,500 4,300 9,000
Uniform Jan. Units Feb. Units Mar. Units Total
3,000 3,000 3,000 9,000
Suppose we operate a production plant that produces a single product. The schedule of production for this product could be accomplished using either of the two plant loading schedules below.
Suppose we operate a production plant that produces a single product. The schedule of production for this product could be accomplished using either of the two plant loading schedules below.
How does the uniform loading help save labor costs?How does the uniform loading help save labor costs?
or
Minimizing Waste: Inventory Hides Problems
Work in
process
queues
(banks)
Change
orders
Engineering design
redundancies
Vendor
delinquencies
Scrap
Design
backlogs
Machine
downtime
Decision
backlogsInspection
backlogs
Paperwork
backlog
Example: By identifying defective items from a vendor early in the production process the downstream work is saved
Example: By identifying defective work by employees upstream, the downstream work is saved
Respect for People
Level payrolls
Cooperative employee unions
Subcontractor networks
Bottom-round management style
Quality circles (Small Group Involvement Activities or SGIA’s)
Toyota Production System’s Four Rules1. All work shall be highly specified as to content, sequence, timing,
and outcome
2. Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses
3. The pathway for every product and service must be simple and direct
4. Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization
Lean Implementation Requirements: Total Quality Control
Worker responsibility
Measure SQC
Enforce compliance
Fail-safe methods
Automatic inspection
Lean Implementation Requirements: Stabilize Schedule
Level schedule
Underutilize capacity
Establish freeze windows
Lean Implementation Requirements: Kanban-Pull
Demand pull
Backflush
Reduce lot sizes
Lean Implementation Requirements: Work with Vendors
Reduce lead times
Frequent deliveries
Project usage requirements
Quality expectations
Lean Implementation Requirements: Reduce Inventory More
Look for other areas
Stores
Transit
Carousels
Conveyors
Lean Implementation Requirements: Improve Product Design
Standard product configuration
Standardize and reduce number of parts
Process design with product design
Quality expectations
Lean Implementation Requirements: Concurrently Solve Problems
Root cause Solve permanently
Team approach
Line and specialist responsibility
Continual education
Lean Implementation Requirements: Measure Performance
Emphasize improvement
Track trends
Lean in Services (Examples)
Organize Problem-Solving Groups
Upgrade Housekeeping
Upgrade Quality
Clarify Process Flows
Revise Equipment and Process Technologies
Lean in Services (Examples)
Level the Facility Load
Eliminate Unnecessary Activities
Reorganize Physical Configuration
Introduce Demand-Pull Scheduling
Develop Supplier Networks