Top Banner
Operations Management: A supply chain approach Dr. Patricia Deflorin University of Zurich Institute of Strategy and Business Economics Services and Operationsmanagement
59

Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

Apr 07, 2018

Download

Documents

dolien
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

Operations Management: A supply chain approach

Dr. Patricia Deflorin

University of Zurich

Institute of Strategy and Business Economics

Services and Operationsmanagement

Page 2: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 2 Dr. Patricia Deflorin

Overview

1. Operation Strategy: Origins and New Directions

2. Determining Organizational Boundaries: Vertical Integration and

Outsourcing

3. Designing and Managing Operating Networks

4. Creating an Edge through New Process Development

5. Sharpening the Edge: Driving Operations Improvement

Page 3: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 3

Introduction: A Framework for

Improvement Activities

Dr. Patricia Deflorin

Nature of

Knowledge base Incremental/Infrastructural Breakthrough/Structural

Tacit: Learning by

Doing

• Individual Learning

• Within Group Improvement

(PDCA, JIT, TQM)

• Toyota production System, Long-

term “stretch” goals

Explicit: Learning

before Doing

• Across Group Improvements:

benchmarking/ best practices

• Into Group Improvements:

process reengineering,

introducing an ERP system,

World-class practices

Page 4: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 4

Introduction: Toyota Production System

Toyota Motor Corporation's vehicle production system is a way of "making

things" that is sometimes referred to as a "lean manufacturing system" or

a "Just-in-Time (JIT) system," and has come to be well known and studied

worldwide.

This production control system has been established based on many

years of continuous improvements, with the objective of "making the

vehicles ordered by customers in the quickest and most efficient way, in

order to deliver the vehicles as quickly as possible."

http://www2.toyota.co.jp/en/vision/production_system/index.html

Page 5: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 5

Introduction: Toyota Production System

Two central concepts of the Toyota Production System (TPS):

• Jidoka (automation with a human touch)

• The equipment stops immediately when a problem occurs,

preventing defective products from being produced

• Quality must be built in during the manufacturing process!

• Just-in-Time

• Each process produces only what is needed by the next process

• Making only "what is needed, when it is needed, and in the amount

needed!“

http://www2.toyota.co.jp/en/vision/production_system/index.html

Page 6: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 6

Introduction: 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

Page 7: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 7

Philosophy (Long-Term Thinking)

Process (Eliminate Waste)

People & Partners (Respect, Challenge

& Grow Them))

Problem Solving (Continuous Improvement

& Learning)

Toyota’s

Terms • Continual organizational Learning through Kaizen

• Go see for yourself to thoroughly Understand the Situation

(Genchi Genbutsu )

• Make decisions slowly by Consensus, thoroughly considering all options;

Implement Rapidly

•Grow Leaders who live the Philosophy

• Respect, develop, and challenge your People and Teams

• Respect, challenge and help your Suppliers

•Create process “flow” to surface problems

• Use pull systems to avoid over production

• Level out the workload (Heijunka)

• Stop when there is a quality problem (Jidoka)

• Standardize tasks for continuous improvement

• Use Visual Control so no problems are hidden

• Use only reliable, thoroughly tested technology.

•Base management decisions on a Long-term

philosophy, even at the expense of short-term

financial goals

“4P” model of the Toyota Way

Principles:

Page 8: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 8

P1: Philosophy

Philosophy (Long-Term Thinking)

Process (Eliminate Waste)

People & Partners (Respect, Challenge

& Grow Them))

Problem Solving (Continuous Improvement

& Learning)

• Base management decisions on a

long-term philosophy, even at the

expense of short-term financial

goals

Page 9: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 9

P1: Base Your Management Decisions on

a Long-Term Philosophy, Even at the

Expenses of Shot-Term Financial Goals

Toyota‟s Starting Point in Business

“To Generate Value for the Customer, Society and the Economy”.

A Mission Greater than Earning a Paycheck: “Do the Right Thing for the

Company, its Employees, the Customer, and Society as a Whole”.

Dr. Patricia Deflorin

Page 10: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 10

P1: Base Your Management Decisions on

a Long-Term Philosophy, Even at the

Expenses of Shot-Term Financial Goals

1. Honor the language and spirit of the law of every nation and undertake open

and fair corporate activities to be a good corporate citizen of the world.

2. Respect the culture and customs of every nation and contribute to economic

and social development through corporate activities in the communities.

3. Dedicate ourselves to providing clean and safe products to enhance the quality

of life everywhere through all our activities.

4. Create and develop advanced technologies and provide outstanding products

and services that fulfill the needs of customers worldwide.

5. Foster a corporate culture that enhances individual creativity and teamwork

value, while honoring mutual trust and respect between labor and management.

6. Pursue growth in harmony with the global community through innovative

management.

7. Work with business partners in research and creation to achieve stable, long-

term growth and mutual benefits, while keeping ourselves open to new

partnerships.

GUIDING PRINCIPLES AT TOYOTA MOTOR CORPORATION

Page 11: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 11

P2: Processes

Philosophy (Long-Term Thinking)

Process (Eliminate Waste)

People & Partners (Respect, Challenge

& Grow Them))

Problem Solving (Continuous Improvement

& Learning)

•Create process “flow” to surface problems

• Use pull systems to avoid over production

• Level out the workload (Heijunka)

• Stop when there is a quality problem (Jidoka)

• Standardize tasks for continuous improvement

• Use Visual Control so no problems are hidden

• Use only reliable, thoroughly tested technology

Page 12: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 12

1. Most Business Processes are 90% Waste and 10% Value-Added Work.

• Create continuous flow wherever applicable in core manufacturing &

service processes

2. 8 forms of waste.

3. Other Sources of Wastes:

• Muri - No Value-Added beyond Capability, Overburden

• Mura - Unevenness

P2: Create Continuous Process Flow to

Bring Problems to the Surface

Page 13: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 13

P2: Create Continuous Process Flow to

Bring Problems to the Surface

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.

Page 14: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 14

4. “Flow” means that “when your customer places an order, this triggers the

process of obtaining raw materials needed just for that customer‟s order. The

raw material then flow immediately to supplier plants, where workers

immediately fill the order with components, which flow immediately to a plant,

where workers assemble the order, and then the completed order flows

immediately to the customer.”

One-Piece Flow and JIT

5. The Heart of One-Piece Flow – Takt Time (Rhythm in German) – The rate of

Customer Demand - Setting the pace of production and alert workers

whenever they are getting ahead or behind.

P2: Create Continuous Process Flow to

Bring Problems to the Surface

Page 15: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 15

P2: Create Continuous Process Flow to

Bring Problems to the Surface

BENEFITS OF ONE-PIECE FLOW

1. Builds-In Quality

2. Creates Real Flexibility

3. Creates Higher Productivity

4. Frees up Floor Space

5. Improves Safety

6. Improves Morale

7. Reduces Cost of Inventory

Page 16: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 16

P2: Create Continuous Process Flow to

Bring Problems to the Surface

One piece flow:

Cellular Manufacturing is an approach

in which equipment and workstations

necessary to produce a product are

arranged closely together to facilitate

small lot/one piece flow production.

The goal is to have the necessary

flexibility to produce a variety of low

demand products, while maintaining

the same productivity obtained with a

large scale production.

Dr. Patricia Deflorin

Page 17: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 17

P2: Create Continuous Process Flow to

Bring Problems to the Surface

One piece flow vs traditional manufacturing:

In Multi-Machine Handling, also called single process handling, a worker

operates several machines of the same kinds and then passes parts onto

the next process (traditional manufacturing arrangements).

Multi-Machine Handling, traditionally employed to increase efficiency, has

inherent areas of waste and inefficiencies compared to Multi-Process

Handling: larger WIP inventories, longer lead and set up times, frequent

over production, -and delays, quality problems.

Dr. Patricia Deflorin

Page 18: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 18

P2: Create Continuous Process Flow to

Bring Problems to the Surface

Dr. Patricia Deflorin

One piece flow vs traditional manufacturing:

In Muliti-Process handling, a worker operates different kinds of

machines to move parts through a production sequence, one

piece at a time.

Multi-Process handling, also known as U-cell production, enables

“flexible manpower lines” where personnel assignments can be

changed to meet changing production requirements without

compromising productivity.

Page 19: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 19

P2: Create Continuous Process Flow to

Bring Problems to the Surface

One piece flow increases flexibility:

A multi-functional workforce is critical to enable flexible operations where

the range of tasks performed by a given worker can be varied to match

demand.

High demand range of tasks is narrowed

Dr. Patricia Deflorin

Demand decreases range of tasks

each employee performs is broadened

Page 20: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 20

P2: Create Continuous Process Flow to

Bring Problems to the Surface

One piece flow decreases through put time:

All the operations necessary to produce a component or subassembly

are performed in close proximity. Near zero operation-to-operation

transfer times are achieved.

Dr. Patricia Deflorin

Page 21: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 21

P2: Create Continuous Process Flow to

Bring Problems to the Surface

One piece flow builds in quality;

In a process with several operators, work is divided in small operations, so

that a group of operators team together to work at the same speed,

dividing the work load among them. Quality issues are recognized early.

Dr. Patricia Deflorin

Page 22: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 22

P2: Create Continuous Process Flow to

Bring Problems to the Surface

Just-in-Time:

• "Just-in-Time" means making only "what is needed, when it is needed,

and in the amount needed."

• To efficiently produce a large number of products such as

automobiles, which are comprised of some 30,000 parts, it is

necessary to create a detailed production plan that includes parts

procurement, for example.

• Supplying "what is needed, when it is needed, and in the amount

needed" according to this production plan can eliminate waste,

inconsistencies, and unreasonable requirements, resulting in improved

productivity.

http://www2.toyota.co.jp/en/vision/production_system/index.html

Page 23: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 23

P2: Create Continuous Process Flow to

Bring Problems to the Surface

Just-in-time (JIT): Pull vs. Push System:

• In a push system, such as an Material Requirements Planning (MRP)

system, production managers look at the schedule to determine what

to produce next

• Driven by pre-determined production schedule

• In a pull system, such as JIT, production manager look only at the

next stage of production and determine what is needed there

• Driven by demand

Use pull system to avoid overproduction!

JIT uses Kanban system to implement a pull system

Page 24: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 24

P2: Create Continuous Process Flow to

Bring Problems to the Surface

What is Kanban?

• “card” or “visible record”

How to use it?

• A Kanban is attached at a container, when the container is filled with

items produced

• When the container is free up, the Kanban is removed from the

container and put back to the receiving post

When a process goes to the preceding process to retrieve parts, it

uses a kanban to communicate what parts have been used.

Page 25: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 25

P2: Create Continuous Process Flow to

Bring Problems to the Surface

Kanbans are used to control flow of production

• A free kanban at the receiving post signals need for production

• Production stop, if all kanbans are used

• Kanbans are recycled when a container is unloaded at the next step

of production

• More kanban more containers used at the same time larger

WIP

Supermarket method

Page 26: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 26

P2: Create Continuous Process Flow to

Bring Problems to the Surface

A supermarket stocks the items needed by customers when they are

needed in the quantity needed, and has all of these items available for

sale at any time.

Taiichi Ohno (a former Toyota vice president), who promoted the idea of

Just-in-Time, applied this concept, equating the supermarket and the

customer with the preceding process and the next process, respectively.

By having the next process (the customer) go to the preceding process

(the supermarket) to retrieve the necessary parts when they are needed

and in the amount needed, it was possible to improve upon the existing

inefficient production system in which the preceding processes were

making excess parts and delivering them to the next process.

http://www2.toyota.co.jp/en/vision/production_system/index.html

Page 27: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 27

P2: Create Continuous Process Flow to

Bring Problems to the Surface

http://www2.toyota.co.jp/en/vision/production_system/index.html

Page 28: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 28

P2: Create Continuous Process Flow to

Bring Problems to the Surface

Receiving post Kanban card for

product 1

Kanban card for

product 2

Fabrication

cell O1

O2

O3

O2

Storage

area

Empty containers

Full containers

Assembly line 1

Assembly line 2

The Kanban System

Page 29: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 29

P2: Create Continuous Process Flow to

Bring Problems to the Surface

Storage

area

Empty containers

Full containers

Receiving post Kanban card for

product 1

Kanban card for

product 2

Fabrication

cell O1

O2

O3

O2

Assembly line 1

Assembly line 2

Page 30: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 30

P2: Create Continuous Process Flow to

Bring Problems to the Surface

Storage

area

Empty containers

Full containers

Receiving post Kanban card for

product 1

Kanban card for

product 2

Fabrication

cell O1

O2

O3

O2

Assembly line 1

Assembly line 2

Page 31: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 31

P2: Create Continuous Process Flow

to Bring Problems to the Surface

Storage

area

Empty containers

Full containers

Receiving post Kanban card for

product 1

Kanban card for

product 2

Fabrication

cell O1

O2

O3

O2

Assembly line 1

Assembly line 2

Page 32: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 32

P2: Create Continuous Process Flow

to Bring Problems to the Surface

Storage

area

Empty containers

Full containers

Receiving post Kanban card for

product 1

Kanban card for

product 2

Fabrication

cell O1

O2

O3

O2

Assembly line 1

Assembly line 2

Page 33: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 33

P2: Create Continuous Process Flow

to Bring Problems to the Surface

Storage

area

Empty containers

Full containers

Receiving post Kanban card for

product 1

Kanban card for

product 2

Fabrication

cell O1

O2

O3

O2

Assembly line 1

Assembly line 2

Page 34: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 34

P2: Create Continuous Process Flow to

Bring Problems to the Surface

Storage

area

Empty containers

Full containers

Receiving post Kanban card for

product 1

Kanban card for

product 2

Fabrication

cell O1

O2

O3

O2

Assembly line 1

Assembly line 2

Page 35: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 35

Rules of the Kanban System

1. Each container must have a card

2. Assembly always withdraws from fabrication (pull system)

3. Containers cannot be moved without a kanban

4. Containers should contain the same number of parts

5. Only good parts are passed along

6. Production should not exceed authorization

P2: Create Continuous Process Flow

to Bring Problems to the Surface

Page 36: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 36

1. In the application of TPS, the first thing that must be done would be to even out or

level the production. Toyota found out that it can create the leanest operation and

ultimately give customers better service and better quality by leveling out the

production schedule and not always build to order.

2. Comparison between unleveled and leveled schedules of production:

Unleveled Schedule

Disadvantages

Leveled Schedule

Advantages

1. Customers usually do not buy products predictably.

2. There is risk of unsold goods.

3. The use of resources is unbalanced.

4. Placing an uneven demand on upstream processes.

1. Flexibility to make what the customers want, when they

want it.

2. Reduced risk of unsold goods.

3. Balanced use of labor and machines.

4. Smoothed demand on upstream processes and plant

suppliers.

BATCH PROCESSING Economies of Scale foe Each Individual Piece of Equipment

MIXED-MODEL PROCESSING Leveling Customer Demand to a Predictable Sequence

KEY FEATURE Large Batches of Product before Changeover

MIXED-MODEL PROCESSING Elimination of Set-up Time for Changeover

P2: Level Out the Workload (Heijunka)

Page 37: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 37

P2: Level Out the Workload (Heijunka)

3. A small inventory of finished goods is often necessary to protect a supplier‟s

level production schedule from being jerked around b sudden spikes in

demand.

4. To achieve the lean benefits of continuous flow, leveling the workload is

important. Eliminating Muda (Wastes) is only 1/3rd of achieving flow.

Eliminating Muri (Overburden) and Mura (Unevenness) are equally

important.

5. Heijunka (Leveling Workload) focuses on Muri and Mura – by leveling

product volume and mix i.e. leveling the demand on people, equipment, and

suppliers. Standardized work is far easier, cheaper, and faster to manage.

Page 38: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 38

1. Quality should be built-in: requires a method for detecting

defects when they occur and automatically stop production so an

employee can fix the problem before the defect continues

downstream.

2. In-station quality (preventing problems from being passed down

the line) is much more effective and less costly than inspecting

and repairing quality problems after the fact.

3. When equipment shuts down, flags or lights, usually with

accompanying alarm, are used to signal that help is needed to

solve quality problem. This signaling system is called Andon.

P2: Build a Culture of Stopping to Fix

Problems, to Get Quality Right the First

Time (Jidoka)

Page 39: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 39

P2: Build a Culture of Stopping to Fix

Problems, to Get Quality Right the First

Time (Jidoka)

4. The closer to one-piece flow, the quicker quality problems will

surface to be addressed:

• Using countermeasures and Error-proofing (Poka-Yoke) to fix

problems.

• Keep Quality Control simple and involve Team Members:

• Four (4) Key Tools:

• Go and See

• Analyze the situation

• Use one-piece flow and andon to surface problems

• Ask “Why” 5 Times

5. Building-in Quality is a Principle, not a Technology issue:

Page 40: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 40 40

P2: Build a Culture of Stopping to Fix

Problems, to Get Quality Right the First

Time (Jidoka)

Page 41: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 41

1. Standardized Work consists of three elements:

• Takt Time – Time required to complete one job at the pace of customer

demand.

• The sequence of doing things of sequence of processes.

• How much inventory or stock on hand the individual worker needs to have

in order to accomplish the standard work.

2. Standardization is the basis for Continuous Improvement and Quality:

• It is impossible to improve any process until it is standardized

• The Standard Work Chart is posted outwards at the Shop floor – For Team

Leaders & Group Leaders to audit the work.

• Enable those doing the work to design and build in quality by writing the

standardized task procedures themselves.

P2: Standardized Tasks are the

Foundation for Continuous Improvement

and Employee Empowerment

Page 42: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 42

3. Enabling Systems are simply the Best Practice Methods, designed

and improved upon with the participation of the workforce. Standards

help people control their own work. The worker is the most valuable

asset … an analyst and problem solver.

4. Standardizing Work for a New Product Launch:

• Cross-functional “Pilot Team” representing all major areas of the

factory

• They work hand-in-hand with engineering and develop the initial

standardized work used when the product is first launched.

• New standardized processes are then turned over to the

production team to improve.

P2: Standardized Tasks are the

Foundation for Continuous Improvement

and Employee Empowerment

Page 43: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 43

The Principle - Clean It Up, Make Visual:

• 5 S Programs that comprise a series of activities for eliminating wastes

that contribute to errors, defects, and injuries in the workplace.

• Seiri (Sort/Arrange) - Sort through items and keep only what is

needed while disposing what is not.

• Seiton (Straighten/Orderliness) – a place for everything and

everything in its place.

• Seiso (Shine/Cleanliness) – the cleaning process acts as a form of

inspection that exposes abnormal and pre-failure conditions that

could hurt quality or cause machine failure.

• Seiketsu (Standardize/Create rules) – Develop systems and

procedures to maintain and monitor the first 3 S‟s (Seiri, Seiton &

Seiso).

• Shitsuke (Sustain/Self discipline) – Maintaining a stabilized

workplace is an ongoing process of continuous improvement.

P2: Use Visual Control So No Problems

are Hidden

Page 44: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 44

1. The Principle – Adoption of New Technology must Support your

People, Process and Values: • New technology is introduced only after it is proven through direct

experimentation with the involvement of a broad cross-section of

people:

• Analyze the impact it may have on existing processes.

• Analyze to see if it conflicts with Toyota‟s philosophies and

operating principles – (1) Valuing People over Technology (2)

Using consensus Decision Making (3) Operational focus on Waste

Elimination.

• The Technology must be highly visual and intuitive.

2. People Do the Work, Computers Move the Information: • IT- Tool to support the People and Processes.

• Inventory is generally a symptom of poorly controlled processes.

• Ultimately, manufacturing is about making things!

P2: Use Only Reliable, Thoroughly

Tested Technology that Serves Your

People and Processes

Page 45: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 45

P3: People and Partners

Philosophy (Long-Term Thinking)

Process (Eliminate Waste)

People & Partners (Respect, Challenge

& Grow Them))

Problem Solving (Continuous Improvement

& Learning)

• Grow Leaders who live the Philosophy

• Respect, develop, and challenge your People

and Teams

• Respect, challenge and help your Suppliers

Page 46: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 46

P3: Respect Your Extended Network of

Partners and Suppliers by Challenging

Them and Helping Them Improve

1. Find Solid Partners and Grow Together to Mutual Benefit in the Long-

Term:

• Serious investment in building a network of highly capable suppliers

integrated into Toyota‟s extended lean enterprise i.e. grow the

business together and mutually benefit in the long-term.

• Supplier development includes a series of aggressive targets and

challenges to meet those stretch targets, e.g. innovation,

engineering, manufacturing and overall reliability.

Page 47: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 47

P3: Respect Your Extended Network of

Partners and Suppliers by Challenging

Them and Helping Them Improve

2. Partnering with Suppliers While Maintaining Internal Capability:

• Toyota outsources 70% of the components of the vehicle, but still want

to maintain internal competency even in components it outsources i.e.

Concept of Self Reliance.

• Toyota will learn with suppliers, but will never transfer all the core

knowledge and responsibility in any key area to suppliers.

• Once Toyota has the internal expertise, they could selectively

outsource.

• E.g. Joint Venture with Matsushita - Panasonic EV Energy, to

develop Battery Technology.

• E.g. Set up its own Electronics Plant instead of relying on Denso

Page 48: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 48

P3: Respect Your Extended Network of

Partners and Suppliers by Challenging

Them and Helping Them Improve

3. Working with Suppliers for Mutual Learning of TPS:

• Toyota works with highly capable suppliers that are following TPS or an

equivalent system:

• Toyota needs its suppliers to be as capable as its own plants at

building and delivering high quality components JIT.

• Toyota cannot cut costs unless suppliers cut costs.

• Methodology - “Learning by Doing” , Real Projects on the shop floor,

Jishuken – Voluntary Study Groups.

4. Saving “Sick” Suppliers Through TPS:

• Toyota nurses them out of their „sickness‟ in a very holistic way.

• Developing a system of evaluating and classifying suppliers

Page 49: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 49

P3: Respect Your Extended Network of

Partners and Suppliers by Challenging

Them and Helping Them Improve

5. Developing an Extended Learning Enterprise Means Enabling

Others.

Learning

Enterprise

Enabling

System

Clear Expectations

Stable, Reliable Processes

Fair & Honorable Business Relations

Next Level

Of Improvement

Stability

SUPPLY CHAIN NEED OF HIERARCHY

Page 50: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 50

P3: Go and See for Yourself to

Thoroughly Understand the Situation

(Genchi Genbutsu)

1. Genchi Genbutsu – Distinguishes the Toyota Way from other

management approaches: • You cannot be sure you really understand any parts of the business

problem unless you go and see for yourself firsthand.

• Tables and Numbers may measure results, but they do not reveal the

details of the actual process being followed everyday.

2. The Principle: Deeply Understanding and Reporting What You See: • Genchi – means the actual location; Genbutsu – means the actual

material or products.

• Genchi Genbutsu – „going to the place to see the actual situation for

understanding‟.

• Requires skill to analyze and understand the current situation.

• Collecting Data and Analysis will tell you if your Common Sense is Right!

Page 51: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 51

P3: Go and See for Yourself to

Thoroughly Understand the Situation

(Genchi Genbutsu)

3. Ten Management Principles (Yamashita): 1. Always keep the final target in mind.

2. Clearly assign tasks to yourselves and others.

3. Think and speak based on verified, proven information and data.

• Go and confirm the facts for yourself.

• You are responsible for the information you are reporting to others.

4. Take full advantage of the wisdom and experiences of others to send,

gather or discus information.

5. Share your information with others in a timely manner

• Always consider who will benefit from receiving the information.

6. Always report, inform and consult in a timely manner.

7. Analyze and understand shortcomings in your capabilities in a

measurable way.

• Clarify the skills and knowledge that you need to further develop

yourself.

8. Relentlessly strive to conduct kaizen activities.

9. Think “outside the box” or beyond common sense and standard rules.

10. Always be mindful of protecting your safety and health.

Page 52: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 52

P4: Problem Solving

Philosophy (Long-Term Thinking)

Process (Eliminate Waste)

People & Partners (Respect, Challenge

& Grow Them))

Problem Solving (Continuous Improvement

& Learning)

• Continual organizational Learning through Kaizen

• Go see for yourself to thoroughly Understand the

Situation (Genchi Genbutsu )

• Make decisions slowly by Consensus, thoroughly

considering all options, Implement Rapidly

Page 53: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 53

P4: Become A Learning Organization

through Relentless Reflection (Hansei)

and Continuous Improvement (Kaizen)

A Learning Organization as a place where people continually

expand their capacity to create the results they truly desire,

where new and expansive patterns of thinking are nurtured,

where collective aspiration is set free, and where people are

continually learning how to learn together.

1. The Principle: Identify Root Causes and Develop Countermeasures:

2. Getting to the Root Cause by Asking Five (5) Times: • Most Problems do not call for complex statistical analysis, but instead

require painstaking, detailed problem solving.

• Toyota does not have a Six Sigma Program.

• True problem solving requires “identifying” root-cause rather than

source, the root-cause hidden behind the source.

• To keep asking until the root cause(s) are determined.

Page 54: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 54

P4: Become A Learning Organization

through Relentless Reflection (Hansei)

and Continuous Improvement (Kaizen)

Direct Cause

Cause

Cause

Cause

Cause

1. Initial Problem Perception (large, Vague, Complicated Problem)

2. Clarify the Problem

The “Real” Problem

3. Locate Area/Point

of Cause

POC

Grasp the

Situation

Cause

Investigation

Why?

Why?

Why?

Why?

Why?

Basic Cause and Effect

Investigation

4. Five (5) Why? Investigation

Of Root Cause

Root Cause

5. Countermeasure

6. Evaluate

7. Standardize

Page 55: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 55

P4: Become A Learning Organization

through Relentless Reflection (Hansei)

and Continuous Improvement (Kaizen)

3. Process vs. Results Orientation – The Role of Metrics: Three (3) types of measures:

1. Global Performance Measures – How is the Company Doing?

• Uses Financial, Quality and Safety Measures.

2. Operational Performance Measures – How is the Plant or Department

Doing?

• Painstakingly track progress on key metrics and compare with

aggressive targets.

• The metrics tend be specific to a process.

3. Stretch Improvement Metrics – How is the Business Unit or Work Group

Doing?

• Sets stretch goals for the corporation and translated to business

units etc.

• Tracking at the work group and project level.

• The measures are very particular to what the teams are trying to

accomplish.

Page 56: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 56

P4: Become A Learning Organization

through Relentless Reflection (Hansei)

and Continuous Improvement (Kaizen)

Target for Organization

Time

Quality

Cost

Innovation

EXECUTIVE STAFF

High Level Plan

Improvement?

Who? Method?

Target? Time?

MANAGER/SUPERVISOR

Plan - Do

Work plan by item

Action

Measurement

Countermeasure

WORK TEAM

Check

Improvement?

Method? Result?

Measure?

Target & Time?

ALL 3 LEVELS

POLICY DEPLOYMENT PROCESS (HOSHIN KANRI)

4. Hoshin Kanri - Directing and Motivating Organizational Learning: • The Key to Organizational Learning is to Align Objectives of all Employees

toward Common Goals.

• Simply setting Specific, Measurable, Challenging Goals and then measuring

progress is highly motivating.

Page 57: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 57

Philosophy (Long-Term Thinking)

Process (Eliminate Waste)

People & Partners (Respect, Challenge

& Grow Them))

Problem Solving (Continuous Improvement

& Learning)

Toyota’s

Terms • Continual organizational Learning through Kaizen

• Go see for yourself to thoroughly Understand the Situation

(Genchi Genbutsu )

• Make decisions slowly by Consensus, thoroughly considering all options;

Implement Rapidly

•Grow Leaders who live the Philosophy

• Respect, develop, and challenge your People and Teams

• Respect, challenge and help your Suppliers

•Create process “flow” to surface problems

• Use pull systems to avoid over production

• Level out the workload (Heijunka)

• Stop when there is a quality problem (Jidoka)

• Standardize tasks for continuous improvement

• Use Visual Control so no problems are hidden

• Use only reliable, thoroughly tested technology.

•Base management decisions on a Long-term

philosophy, even at the expense of short-term

financial goals

Summary: “4P” model of the Toyota Way

Principles:

Page 58: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 58

Presentations/Handouts

Dr. Patricia Deflorin

Date Topic Literature Handouts Presentation

Co-

Presentation

12.5.

Le

an

Shah 2003 Group 1 and 8 Group 8 Group 1

Scherrer 2009 Group 3 and 9 Group 9 Group 3

Womack 1994 Group 5 and 10

Womack 1996 Group 6 and 9

Shah 2007 Group 2 and 7

Page 59: Operations Management: A supply chain approach - UZH · Operations Management: A supply chain approach ... (PDCA, JIT, TQM) •Toyota production System, Long- ... What is Kanban?

5/4/2010 / 59

Dr. Patricia Deflorin

[email protected]

Thank you for your attention!

Questions?

Dr. Patricia Deflorin