Lean Thinking and Just- in-Time Systems JMP 5023 OPERATIONS & TECHNOLOGY MANAGEMENT.

Lean Thinking and Just-in-Time

SystemsJMP 5023 OPERATIONS & JMP 5023 OPERATIONS &

TECHNOLOGY TECHNOLOGY MANAGEMENTMANAGEMENT

What is Lean?What is Lean? Lean = Doing More with LessLean = Doing More with Less Less Time, Inventory, Space, Labor and Less Time, Inventory, Space, Labor and

MoneyMoney Systematic Elimination of WasteSystematic Elimination of Waste Lean – organization focuses on its core Lean – organization focuses on its core

capabilities and devoid of any waste capabilities and devoid of any waste Lean Enterprise – approaches that focus on Lean Enterprise – approaches that focus on

the elimination of waste in all forms and the elimination of waste in all forms and smooth, efficient flow of materials and smooth, efficient flow of materials and information throughout the value chain to information throughout the value chain to obtain faster customer response, higher obtain faster customer response, higher quality and lower costsquality and lower costs

‘The key principle of lean operations is relatively

straightforward to understand: it means moving

towards the elimination of all waste in order to

develop an operation that is faster and more

dependable, produces higher quality products

and services and, above all, operates at low cost.’

Synonyms

continuous flow manufacture

high value-added manufacture

stockless production

low-inventory production

fast-throughput manufacturing

lean manufacturing

Toyota production system

short cycle time manufacturingSource: Corbis/Denis Balihouse

Four Basic Lean Principles

1. Elimination of Waste: eliminate any activities that do not add value in an organization. Includes overproduction, waiting time, processing, inventory, and motion.

2. Increased Speed and Response: better process designs allow efficient responses to customers needs and the competitive environment.

3. Improved Quality: Poor quality creates waste, so improving quality is essential to the lean environment.

4. Reduced Cost: simplifying processes and improving efficiency translates to reduced costs.

Seven Wastes to be EliminatedSeven Wastes to be Eliminated Overproduction or Early ProductionOverproduction or Early Production producing over customer requirements, producing unnecessary producing over customer requirements, producing unnecessary

materials/productsmaterials/products WaitingWaiting time delays, idle time (time during which value is not added to the time delays, idle time (time during which value is not added to the

product)product) TransportationTransportation multiple handling, delay in materials handling, unnecessary handlingmultiple handling, delay in materials handling, unnecessary handling InventoryInventory holding or purchasing unnecessary raw materials, work in process, holding or purchasing unnecessary raw materials, work in process,

and finished goodsand finished goods MotionMotion actions of people or equipment that do not add value to the productactions of people or equipment that do not add value to the product Over processingOver processing unnecessary steps or work elements / procedures (non added value unnecessary steps or work elements / procedures (non added value

work)work) Defective unitsDefective units production of a part that is scrapped or requires reworkproduction of a part that is scrapped or requires rework

Common Examples of Waste in Organizations

Lean Tools and Approaches

VALUE STREAM MAPPING

• difference between value stream mapping (VSM) and traditional flowcharting analysis and service blueprinting is that VSM tries to highlight value-added and non-value-added work activities, that is, the economics of process flow.

• All other aspects of VSM are identical to traditional process flowcharting and flow analysis such as identifying numerically bottleneck work activities and work stations, evaluating process and wait times, and evaluating information flows that accompany physical goods flows.

‘Value stream’ mapping focuses on value-adding activities. It

distinguishes between value-adding and non-value-adding activities.

It is similar to process mapping but different in four ways:

It uses a broader range of information than most process maps.

It is usually at a higher level (5–10 activities) than most process maps.

It often has a wider scope, frequently spanning the whole supply chain.

It can be used to identify where to focus future improvement activities.

‘Value stream’ mapping


SMALL BATCH & SINGLE PIECE FLOW

• Batching is the process of producing large quantities of items as a group before being transferred to the next operation.

• Lean operating systems seek to reduce batch sizes using single-piece flow.

• A transfer batch is part of the original batch (lot) size that is completed at one workstation and moved to the next downstream workstation.

Batch versus Single-Piece Flow Processing


Small Bath and Single-Piece Flow

• Single-piece flow allows companies to better match production to customer demand, avoid large inventory buildups, and ensure uninterrupted movement of WIP through the production system.

• To utilize single-piece flow, a company must be able to change between products quickly and inexpensively by reducing setup times.


The 5Ss

• 5S Principles are used to create a clean and well-organized work environment.

• Messy and disorganized workplaces waste time, energy, and resources.


The 5S principles are as follows:

1. Sort: each item is in the proper place.

2. Set in order: arrange materials so that they are easy-to-use.

3. Shine: clean work area.

4. Standardize: formalize procedures and practices.

5. Sustain: keep the process going.


VISUAL CONTROLS

• Visual controls are indicators for operating activities that are placed in plain sight of all employees so that everyone can quickly and easily understand the status and performance of the work system.

• Examples: electronic scoreboards in production processes, painted areas on the floor where certain boxes and pallets should be placed, employee pull cords to stop production, signal lights on machines, and even Kanban cards.


EFFICIENT LAYOUT & STANDARDIZED OPERATIONS

• The layout, process, equipment, workstations, and jobs must be integrated and arranged in an efficient way.

SUPPLIER RELATIONSHIP MANAGEMENT

• Lean systems require suppliers that will deliver on time and provide high quality products.


SINGLE MINUTE EXCHANGE OF DIES (SMED)

• SMED refers to quick setup or changeover of tolling and fixtures in processes so that multiple products in smaller batches can be run on the same equipment.

• Reducing setup time frees up capacity that can be producing output, and therefore, generating revenue.

• Example: Yammar Diesel reduced machine setup from 9.3 hours to 9 minutes!


STABLE PRODUCTION SCHEDULES

Lean operating systems require uniform and stable production plans and schedules.

QUALITY AT THE SOURCEQuality at the source focuses on doing it

right the first time.

CONTINUOUS IMPROVEMENTSix Sigma compliments lean systems to

assure high-quality output.


Six Sigma and Lean concepts and methods are

often combined into Lean Six Sigma.

• Both are driven by customer requirements.

• Both try to eliminate waste, reduce costs, speed things up, and improve quality.

• Both focus on real dollar savings.

• Both rely on a systematic methodology.

Differences between Lean and Six Sigma

• Lean addresses more visible problems in the processes while Six Sigma focuses on problems like process variation.

• Lean tools are intuitive, simple, and easy to apply; Six Sigma tools include more advanced statistical analysis.

• Lean requires less training, whereas Six Sigma requires advance training and expertise in statistics, control charts, and Black or Master Black Belt specialists.

TPM Equipment Issues and Benefits


Total Productive Maintenance (TPM)

• TPM is focused on ensuring that operating systems will perform their intended function reliably.

• TPM works to prevent equipment failures and downtime, maximizing equipment effectiveness and uptime.

• TPM tries to predict equipment failure rates and perform maintenance before a problem arises.

• The principles of TPM also include employee “ownership” of the equipment.


Manufactured Good Recovery

• In an effort to reduce costs, many companies are actively recovering and recycling parts.

• Options include repairing, refurbishing, remanufacturing, cannibalizing, and recycling.

• This can occur as various points of the supply chain, as shown in the following slide.

Lean Manufacturing Tours

• Timken Company is a leading manufacturer of highly engineered bearings and alloy steels and related products.

• Lean tools that Timken utilized are as follows:

• Eliminate waste: using kaizen to eliminate non-value-added steps from processes.

• Increase speed and response: radically reduce cycle time for new products with integrated supply chain.

• Improve quality: utilizing Six Sigma process variation tools and ISO 9000 quality standards.

• Reduce cost: using technology to reduce costs.

Timken’s DMAIC Toolkit for Lean Six Sigma

JIT aims to meet demand instantly, with perfect quality and no waste

JIT definitions

Improved overall productivity and elimination of waste

Cost-effective production and delivery of only the necessary quantity of parts at the right quality, at the right time and place, while using a minimum amount of facilities, equipment, materials and human resourcesJIT is dependent on the balance between the supplier’s flexibility and the user’s flexibilityJIT is accomplished through the application of elements that require total employee involvement and teamworkA key philosophy of JIT is simplification

WIPDefective materials

ReworkScrap

Downtime

productivity problems

WIPDefective materials

ReworkScrap

Downtime

productivity problems

Reduce the levelof inventory (water) to reveal the operations’ problems

The problem with inventory

Inventory level

Delivering smaller quantities more often can reduce inventory levels

Inventory level

Just-in-Time Systems (JIT)

• In a pull system, employees at a given operation (work station) go to the source of the required parts, such as machining or subassembly, and withdraw the units as they need them.

• By pulling parts from each preceding workstation, the entire manufacturing process is synchronized to the final-assembly schedule.

• Finished goods are made to coincide with the actual rate of customer demand, resulting in minimal inventories and maximum responsiveness.

Just-in-Time Systems (JIT)

• JIT systems are sometimes called a Kanban system.

• A kanban is a flag or a piece of paper that contains all relevant information for an order.

• Slips, called kanban cards, are circulated within the system to initiate withdrawal and production items through the production process.

• The Kanban cards are simple visual controls.

A Two-Card Kanban JIT Operating System

JIT in Service Organizations

• JIT implementations can impact service organizations by increasing service levels at lower costs, thus improving profits.

• In implementing a JIT system, the entire value chain synchronizes its activities and speeds up.

• For information-intensive organizations the Internet is the enabler

Designing Effective JIT Systems

• JIT implementations can impact service organizations by increasing service levels at lower costs, thus improving profits.

• In implementing a JIT system, the entire value chain must synchronize its activities.

• JIT is an integrative operating system that demands the best ideas, methods, and management practices.

Example JIT Characteristics and Best Practices

The lean philosophy of operations is the basis for JIT techniques that include JIT methods of planning and control

The lean philosophy of operations

Eliminate waste Involve everyone Continuous improvement

JIT as a set of techniques for managing operations

Basic working practices

Design for manufacture

Operations focus

Small, simple machines

Flow layout

TPM

Set-up reduction

Total people involvement

Visibility

JIT supply

JIT as a method of planning and control

Pull scheduling

‘Kanban’ control

Levelled scheduling

Mixed modelling

Synchronization

Lean Thinking and Just- in-Time Systems JMP 5023 OPERATIONS & TECHNOLOGY MANAGEMENT.

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