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Lean SystemsLean Systems8
For For Operations Management, 9eOperations Management, 9e by by Krajewski/Ritzman/Malhotra Krajewski/Ritzman/Malhotra © 2010 Pearson Education© 2010 Pearson Education
PowerPoint Slides PowerPoint Slides by Jeff Heylby Jeff Heyl
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Lean SystemsLean 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.
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Eight WastesEight Wastes
TABLE 8.1 | THE EIGHT TYPES OF WASTE OR MUDAWaste Definition1. Overproduction Manufacturing an item before it is needed.2. Inappropriate
ProcessingUsing 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.
1. Inventory Excess inventory hides problems on the shop floor, consumes space, increases lead times, and inhibits communication.
1. 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.
1. 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.
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Continuous ImprovementContinuous Improvement
Figure 8.1 – Continuous Improvement with Lean Systems
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Supply Chain ConsiderationsSupply 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 II In-plant representative Benefits to both buyers and suppliers
Small lot sizes Reduces the average level of inventory Pass through system faster Uniform workload and prevents overproduction Increases setup frequency
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Process ConsiderationsProcess Considerations
Pull method of work flow Push method Pull method
Quality at the source Jidoka Poka-yoke Anadon
Uniform workstation loads Takt time Heijunka Mixed-model assembly Lot size of one
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Process ConsiderationsProcess Considerations
Standardized components and work methods
Flexible workforceAutomationFive S (5S) practicesTotal Preventive Maintenance (TPM)
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Five S MethodFive S Method
TABLE 8.2 | 5S DEFINED5S Term 5S Defined1. 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.
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Designing Lean System LayoutsDesigning Lean System Layouts
Line flows recommended Eliminate waste
One worker, multiple machines (OWMM)Group technology
Group parts or products with similar characteristics into families
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Group TechnologyGroup Technology
Figure 8.2 – One-Worker, Multiple-Machines (OWMM) Cell
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Group TechnologyGroup Technology
Drilling
D D
D D
Grinding
G G
G G
G G
Milling
M M
M M
M M
Assembly
A A
A A
Lathing
Receiving and shipping
L
L L
L L
L L
L
(a) Jumbled flows in a job shop without GT cells
Figure 8.3 – Process Flows Before and After the Use of GT Cells
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Group TechnologyGroup Technology
(b) Line flows in a job shop with three GT cells
Cell 3
L M G G
Cell 1 Cell 2
Assembly area
A A
L M DL
L MShippingD
Receiving
G
Figure 8.3 – Process Flows Before and After the Use of GT Cells
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The Kanban SystemThe Kanban System
Receiving postKanban card for product 1Kanban card for product 2
Fabrication cell
O1
O2
O3
O2
Storage area
Empty containers
Full containers
Assembly line 1
Assembly line 2
Figure 8.4 – Single-Card Kanban System
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The Kanban SystemThe Kanban System
Storage area
Empty containers
Full containers
Receiving postKanban card for product 1Kanban card for product 2
Fabrication cell
O1
O2
O3
O2
Assembly line 1
Assembly line 2
Figure 8.4 – Single-Card Kanban System
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The Kanban SystemThe Kanban System
Storage area
Empty containers
Full containers
Receiving postKanban card for product 1Kanban card for product 2
Fabrication cell
O1
O2
O3
O2
Assembly line 1
Assembly line 2
Figure 8.4 – Single-Card Kanban System
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The Kanban SystemThe Kanban System
Storage area
Empty containers
Full containers
Receiving postKanban card for product 1Kanban card for product 2
Fabrication cell
O1
O2
O3
O2
Assembly line 1
Assembly line 2
Figure 8.4 – Single-Card Kanban System
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The Kanban SystemThe Kanban System
Storage area
Empty containers
Full containers
Receiving postKanban card for product 1Kanban card for product 2
Fabrication cell
O1
O2
O3
O2
Assembly line 1
Assembly line 2
Figure 8.4 – Single-Card Kanban System
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The Kanban SystemThe Kanban System
Storage area
Empty containers
Full containers
Receiving postKanban card for product 1Kanban card for product 2
Fabrication cell
O1
O2
O3
O2
Assembly line 1
Assembly line 2
Figure 8.4 – Single-Card Kanban System
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The Kanban SystemThe Kanban System
Storage area
Empty containers
Full containers
Receiving postKanban card for product 1Kanban card for product 2
Fabrication cell
O1
O2
O3
O2
Assembly line 1
Assembly line 2
Figure 8.4 – Single-Card Kanban System
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The Kanban SystemThe Kanban SystemK
AN
BA
N
Part Num
ber:1234567Z
Location:A
isle 5B
in 47
Lot Quantity:
6
Supplier:W
S 83
Custom
er:W
S 116
1. Each container must have a card2. Assembly always withdraws from
fabrication (pull system)3. Containers cannot be moved without a
kanban4. Containers should contain the same
number of parts5. Only good parts are passed along6. Production should not exceed
authorization
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Number of ContainersNumber of Containers
Two determinationsNumber of units to be held by each container
Determines lot sizeNumber of containers
Estimate the average lead time needed to produce a container of parts
Little’s law Average work-in-process inventory equals the average
demand rate multiplied by the average time a unit spends in the manufacturing process
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Number of ContainersNumber of Containers
WIP = (average demand rate) (average time a container spends in the manufacturing process)+ safety stock
WIP = kc
kc = d (w + p )(1 + α)
k = d (w + p )(1 + α)
c
where k =number of containersd =expected daily demand for the partw =average waiting timep =average processing timec =number of units in each containerα =policy variable
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Number of ContainersNumber of Containers
Formula for the number of containers
k = Average demand during lead time + Safety stockNumber of units per container
WIP = (average demand rate)(average time a container spends in the manufacturing process) + safety stock
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Determining the Appropriate Determining the Appropriate Number of ContainersNumber of Containers
EXAMPLE 8.1 The Westerville Auto Parts Company produces rocker-arm
assemblies A container of parts spends 0.02 day in processing and 0.08
day in materials handling and waiting Daily demand for the part is 2,000 units Safety stock equivalent of 10 percent of inventory
a. If each container contains 22 parts, how many containers should be authorized?
b. Suppose that a proposal to revise the plant layout would cut materials handling and waiting time per container to 0.06 day. How many containers would be needed?
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Determining the Appropriate Determining the Appropriate Number of ContainersNumber of Containers
SOLUTIONa.If d =2,000 units/day, p =0.02 day, α =0.10, w =0.08 day, andc =22 units
k =2,000(0.08 + 0.02)(1.10)
22
= = 10 containers22022
b. Figure 8.5 from OM Explorer shows that the number of containers drops to 8.
Figure 8.5 – OM Explorer Solver for Number of Containers
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Application 8.1Application 8.1
Item B52R has an average daily demand of 1000 units. The average waiting time per container of parts (which holds 100 units) is 0.5 day. The processing time per container is 0.1 day. If the policy variable is set at 10 percent, how many containers are required?
k = d (w + p )(1 + α)
c
= 6.6, or 7 containers
=1,000(0.05 + 0.01)(1 + 0.1)
100
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Other Kanban SignalsOther Kanban Signals
Cards are not the only way to signal needContainer systemContainerless system
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Value Stream Mapping (VSM)Value Stream Mapping (VSM)
Value stream mapping is a qualitative lean tool for eliminating waste
Creates a visual “map” of every process involved in the flow of materials and information in a product’s value chain
Work plan and implementation
Future state drawing
Current state drawing
Product family
Figure 8.6 – Value Stream Mapping Steps
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Value Stream MappingValue Stream Mapping
Figure 8.7 – Selected Set of Value Stream Mapping Icons
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Value Stream MappingValue Stream Mapping
Figure 8.8 – A Representative Current State Map for a Family of Retainers at a Bearings Manufacturing Company
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House of ToyotaHouse of Toyota
A key challenge is to bring underlying philosophy of lean to employees in an easy-to-understand fashion
The house conveys stabilityThe roof represents the primary goals of
high quality, low cost, waste elimination, and short lead-times
The twin pillars, which supports the roof, represents JIT and jidoka
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House of ToyotaHouse 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 8.9 – House of Toyota
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Operational Benefits and Operational Benefits and Implementation IssuesImplementation Issues
Organizational considerations Human costs of lean systems Cooperation and trust Reward systems and labor classifications
Process considerationsInventory and scheduling
Schedule stability Setups Purchasing and logistics
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Solved ProblemSolved Problem
A company using a kanban system has an inefficient machine group. For example, the daily demand for part L105A is 3,000 units. The average waiting time for a container of parts is 0.8 day. The processing time for a container of L105A is 0.2 day, and a container holds 270 units. Currently, 20 containers are used for this item.
a. What is the value of the policy variable, α?b. What is the total planned inventory (work-in-process and
finished goods) for item L105A?c. Suppose that the policy variable, α, was 0. How many
containers would be needed now? What is the effect of the policy variable in this example?
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Solved ProblemSolved Problem
SOLUTIONa. We use the equation for the number of containers and then
solve for α:
k = d (w + p )(1 + α)
c
so
α = 1.8 – 1 = 0.8
=3,000(0.8 + 0.2)(1 + α)
270
(1 + α) = = 1.8 20(27)
3,000(0.8 + 0.2)
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Solved ProblemSolved Problem
b. With 20 containers in the system and each container holding 270 units, the total planned inventory is 20(270) = 5,400 units
c. If α = 0
k =
= 11.11, or 12 containers
3,000(0.8 + 0.2)(1 + 0)270
The policy variable adjusts the number of containers. In this case, the difference is quite dramatic because w + p is fairly large and the number of units per container is small relative to daily demand.
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