1 Lecture 9 MBF2213 | Operations Management Prepared by Dr Khairul Anuar L9: Lean synchronization
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Lecture 9
MBF2213 | Operations ManagementPrepared by Dr Khairul Anuar
L9: Lean synchronization
Design
Planning and control
Operations strategy
Improvement
Lean operations
The operation supplies…the delivery of products and services only when needed
The market requires…specified time, quantity and
quality of products and services
Lean operations
Lean synchronization – Slack et al. identify the following key questions:
• What is lean synchronization?
• How does lean synchronization eliminate waste?
• How does lean synchronization apply throughout the
supply network?
• How does lean synchronization compare with other
approaches?
Key operations questions
‘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, more dependable,
produces higher quality products and services and,
above all, operates at low cost’.
Lean operations
Synonyms
Continuous flow manufacture
High value-added manufacture
Stockless production
Low-inventory production
Fast-throughput manufacturing
Lean manufacturing
Toyota production system
Short-cycle time manufacturing.
Lean operations (Continued)
Traditional approach
JIT approach
Stage A
Orders
Deliveries
Orders
Deliveries
JIT material flow
Buffer inventory
Stage B
Buffer inventory
Stage C
Stage A Stage CStage B
Lean operations (Continued)
Lean approach
Focus on producing only when needed
Lower-capacity utilization, but
No surplus production goes into inventory
Low inventory so problems are
exposed and solved
Traditional approach
Focus on high-capacity utilization
More production at each stage
Extra productiongoes into inventory
because of continuing stoppages at earlier stages
High inventory means less chance of
problems being exposed and solved
Lean operations (Continued)
More stoppages because of problems
Fewer stoppages
The lean philosophy of operations
Eliminate waste Involve everyone Continuous improvement
Lean 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
Lean as a method of planning and control
Pull scheduling
Kanban control
Levelled scheduling
Mixed modelling
Synchronization
Lean operations (Continued)
Inventory
Of material
(queue of material)
Of information
(queue of information)
Of customers
(queue of people)
Cost Ties up working capital Less current information
and so worth less
Wastes customers’ time
Space Needs storage space Needs memory capacity Need waiting area
Quality Defects hidden, possible
damage
Defects hidden, possible
data corruption
Gives negative perception
Decoupling Makes stages
independent
Makes stages independent Promotes job
specialization/
fragmentation
Utilization Stages kept busy by
work-in-progress
Stages kept busy by work in
data queues
Servers kept busy by
waiting customers
Coordination Avoids need for
synchronization
Avoids need for straight-
through processing
Avoids having to match
supply and demand
Source: Adapted from Fitzsimmons, J.A.
Inventories of materials. Information or customers have similar characteristics
Lean Systems• Lean systems affect a firm’s internal linkages between its
core and supporting processes and its external linkages with its customers and suppliers.
• One of the most popular systems that incorporate the generic elements of lean systems is the just-in-time (JIT) system.
• The Japanese term for this approach is Kaizen. The key to kaizen is the understanding that excess capacity or inventory hides process problems.
• The goal is to eliminate the eight types of waste.
Wastes
TABLE | THE EIGHT TYPES OF WASTE OR MUDA
Waste Definition
1. Overproduction Manufacturing an item before it is needed.
2. Inappropriate Processing
Using expensive high precision equipment when simpler machines would suffice.
3. Waiting Wasteful time incurred when product is not being moved or processed.
4. Transportation Excessive movement and material handling of product between processes.
5. Motion Unnecessary effort related to the ergonomics of bending, stretching, reaching, lifting, and walking.
6. Inventory Excess inventory hides problems on the shop floor, consumes space, increases lead times, and inhibits communication.
7. Defects Quality 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.
8. Underutilization of Employees
Failure of the firm to learn from and capitalize on its employees’ knowledge and creativity impedes long term efforts to eliminate waste.
Activities that consume time, resources and space, but do not contribute to satisfying customer needs.
Over-production
• Make more than is required by the customer, or to make
it earlier than required.
– Taking multiple copies of the document which are not
required.
Waiting time
• Any delay between when one process step/activity ends and
the next step/activity begins.
– Waiting for a manager to approve an application.
Waste (Continued)
Transport
• Movement of work between departments or
offices that do not add to the value of the product
or service.
– Multiple approvals across different departments.
Underwriting
Operations1
IT Operations2
LPC
(Over) Processing
• Adding more value to a service or product than
customers want or will pay for.
– Capturing extra information from the customer which is not used.
Waste (Continued)
Motion
• Needless movement of people.
• While ‘transportation’ refers to the movement of the
work, ‘motion’ involves movement of workers.
– Running to a printer on a different floor for a printout.
Inventory
• More materials or information on hand than is currently
required.
– 100 applications waiting together for data entry.
Waste (Continued)
Defects/Inspection
• Any aspect of the service that
does not conform to customer
needs.
– Incorrect customer details
captured in the system.
Waste (Continued)
• Making extra copies, just in case
• Document movement between departments
• Supervisory approval delays
• Files waiting to be worked on
• Multiple calls to the customer for same issue
• Incorrect customer address
• Cupboard full of office supplies
• Capturing additional fields in the system
• Running for photocopier to other floor on building
• Incorrect processing of salary
• Customer on hold
• Forms moving different locations
Some daily examples
Activity Waste Category
• Over-production
• Transport
• Waiting
• Inventory
• Over-production
• Defect
• Inventory
• Over-processing
• Motion
• Defect
• Waiting
• Transport.
Supply Chain Considerations
• Close supplier ties Low levels of capacity slack or inventory
Look for ways to improve efficiency and reduce inventories throughout the supply chain
JIT
In-plant representative
Benefits to both buyers and suppliers
• Small lot sizes
Reduce the average level of inventory
Pass through system faster
Create uniform workload and prevent overproduction
Increase setup frequency
Process Considerations
• Pull method of work flow– Push method– Pull method
Process Considerations
• Standardized components and work methods
• Flexible workforce
• Automation
• Five S (5S) practices
• Total Preventive Maintenance (TPM)
Lean operations – The 5Ss
TABLE | 5S DEFINED
5S Term 5S Defined
1. Sort Separate needed from unneeded items (including tools, parts, materials, and paperwork), and discard the unneeded.
2. 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.
3. Shine Clean and wash the work area and make it shine.
4. Standardize Establish schedules and methods of performing the cleaning and sorting. Formalize the cleanliness that results from regularly doing the first three S practices so that perpetual cleanliness and a state of readiness are maintained.
5. 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 via a performance measurement system.
Designing Lean System Layouts
• Line flows recommended – Eliminate waste
• One worker, multiple machines (OWMM)
• Group technology
Group parts or products with similar characteristics into families
One Worker Multiple Machines (OWMM)
Figure – One-Worker, Multiple-Machines (OWMM) Cell
• ‘Value stream’ mapping focuses on value-adding activities and
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
House of Toyota
Highest quality, lowest cost, shortest lead time by eliminating
wasted time and activity
Just in Time (JIT)
Takt time
One-piece flow
Pull system
Culture of Continuous
Improvement
Jidoka
Manual or automatic line stop
Separate operator and machine activities
Error-proofing
Visual control
Operational Stability
Heijunka Standard Work TPM Supply Chain
Figure – House of Toyota
• Product leveling/smoothing - technique for reducing the muda (waste)• Jidoka - automation with a human touch (eg machine stops when there is a problem)• Takt - German word Taktzeit, translated best as meter, sets the pace for industrial manufacturing lines so that
production cycle times can be matched to customer demand rate
House of Toyota
Highest quality, lowest cost, shortest lead time by eliminating
wasted time and activity
Just in Time (JIT)
Takt time
One-piece flow
Pull system
Culture of Continuous
Improvement
Jidoka
Manual or automatic line stop
Separate operator and machine activities
Error-proofing
Visual control
Operational Stability
Heijunka Standard Work TPM Supply Chain
Figure – House of Toyota
• Product leveling/smoothing - technique for reducing the muda (waste)• Jidoka - automation with a human touch (eg machine stops when there is a problem)• Takt - German word Taktzeit, translated best as meter, sets the pace for industrial manufacturing lines so that
production cycle times can be matched to customer demand rate• Heijunka is a technique for reducing the Mura (Unevenness) which in turn reduces muda (waste). It was vital to the
development of production efficiency in the Toyota Production System and lean manufacturing. The goal is to produce intermediate goods at a constant rate so that further processing may also be carried out at a constant and predictable rate. Also referred to as production leveling, and production smoothing
Operational Benefits and Implementation Issues
• Organizational considerations – Human costs of lean systems
– Cooperation and trust
– Reward systems and labor classifications
• Process considerations
• Inventory and scheduling
• Schedule stability
• Setups
• Purchasing and logistics
Waste is a large part of most processes
Actual value-add activity may only be 1 –10% of the total process time.
High-level process steps
Prepareapplication
Acquire the customer
Processapplication
Advise customer
Disbursefunds
Activities which add value to the customer: e.g. the credit decision
Activities which don’t add value to the customer but are required by regulation: e.g. Banking laws
Activities which neither add value nor are required by regulation: e.g. carrying files from one
desk to another
Step-by-step activity analysis for value-add to our customer
Mapping the Value Stream – Example
High-level process steps for a loan application process
Inventory levels
Delivering smaller quantities more often can reduceinventory levels
Inventory levels
WIP
Defective materials
ReworkScrap
Downtime
Productivity problems
WIP
Defective materials
ReworkScrap
Downtime
Productivity problems
Reduce the level of inventory (water) to reveal the operations’ problems
The problem with inventory
Small machines
Conventional Western approach is to purchase large machines to get ‘economies of scale’.
These often have long, complex set-ups, and make big batches quickly creating ‘waste’.
Changeovers
Inventory levels
Time
Using several small machines rather than one large one allows simultaneous processing, and is more robust and more flexible.
Small machines (Continued)
Inventory levels
Time
Flow principle
• A process consists of 3 steps – A, B and C.
• It takes one minute to finish each step of the process (A, B and C).
Batch Flow (units processed in batches of 10)
10 Minutes
• How much time will it take for 10 units to move through the process?
A B C
10 Minutes 10 Minutes+ += 30 Minutes
Flow Principle (Continued)
• A process consists of 3 steps – A, B and C.
• It takes one minute to finish each step of the process (A, B and C).
Continuous Flow (unit processed individually, that is, process one, move one)
1 Minute
• How much time will it take for 10 units to move through the process?
1 Minute 10 Minutes+ + = 12 Minutes
A B C
Single-piece flow
• Traffic lights – typical batch processing
• Roundabout – single-piece flow
– Flow of traffic in batches may cause uneven loads
of traffic – traffic may jam on one side while no
vehicle come from other directions.
– Traffic flows as soon as there is capacity in the roundabout
piece by piece.