IENG 451 / 452 Just In Time Processes: Cells, Stores, Kanban, Demand IENG 451 - Lecture 21 Just In Time Processes: Cells, Stores, Kanban, Demand 4/30/2018 IENG 451 Operational Strategies (c) 2016 D.H. Jensen

Production Cell Layouts Production Cells process work. Four mfg layouts: Islands are cells that process work in isolation from each other. There is typically a pile of WIP before the process (M/C) and another pile of WIP after it. Material Handling Equipment (MHE) will come and move the WIP from cell to cell when a batch is ready. Connected Islands process work independently, but are connected by MHE to move the output of the cell to the next automatically. The length of the MHE is related to the WIP at the next cell. Connected Islands with Full Work Control are similar, but a signal (kanban) from the next cell back to the current cell prevent excess WIP between the cells. Continuous Flow Cells are laid out side by side so that a single piece moves with the operator between all the processes, so that there is zero inventory within the cells, and only necessary WIP (stores) in-between cells (to buffer for cycle time differences) 4/30/2018 IENG 451 Operational Strategies

Production Cell Layouts Islands are disconnected from each other by WIP, physically and informationally. Connected Islands are connected by WIP and disconnected physically and informationally. Connected Islands with Full Work Control are connected informationally to reduce WIP, but disconnected physically. Cells are completely connected, and eliminate WIP (except for time buffering). Adapted from Dennis (2015) p.85 4/30/2018 IENG 451 Operational Strategies

Production Cell Layout Comparisons Adapted from Dennis (2015) p.85 From Dennis (2015) p.85 4/30/2018 IENG 451 Operational Strategies

IENG 451 Operational Strategies Push and Pull Systems Push Systems move production information from the management towards the consumer: Use master production schedules and material requirements plans to release material into the plant for production, downstream. These documents use forecasted demands and economic order quantities to schedule the process, usually in large lots (to minimize time losses due to set-ups / change-overs) Super-fast material handling equipment is used between large WIP inventories to deliver goods on-time Inventory control is difficult in production because the control tools are of a planning nature, and cannot actually manipulate or control inventory Software, hardware and personnel for push systems tend to be expensive … and are not value-added 4/30/2018 IENG 451 Operational Strategies

Push System Diagrammed Information from the MRP computer triggers material orders. When production materials arrive, the system produces the product according to the MRP schedule: Adapted from Black & Hunter (2002) p.216 4/30/2018 IENG 451 Operational Strategies

IENG 451 Operational Strategies Push and Pull Systems Pull Systems move production information from the consumer towards the management: Uses actual customer demand to open a position for material from the plant to stimulate production, upstream. These positions (bins / containers) circulate in links between workstations to schedule the process, usually in small lots (to minimize time losses due to demand variations) Simple material handling equipment (or manual movement) is used between small WIP inventories to deliver goods just-in-time Inventory control is easy in production because the control tools are of a physical nature, actually controlling inventory and communicating simply at the same time. Hardware and personnel for pull systems tend to be inexpensive … and though not value-added, tend to be minimal. 4/30/2018 IENG 451 Operational Strategies

Pull System Diagrammed Arrival of a kanban card / container triggers each cell to produce the product according to actual consumer demand. Work cells are decoupled by small WIP stores, sized for lead-time or cycle-time: Adapted from Black & Hunter (2002) p.216 4/30/2018 IENG 451 Operational Strategies

Prerequisites for (Pull) Kanban System The kanban system will not work unless the organization has already undertaken the following prerequisite tasks (Black & Hunter, 2003) : Quality Control with Total Preventative Maintenance (TPM) Set Up Time Reduction (SMED) Leveled & Balanced Production Standardized Work Process Cells (typically u-shaped) Toyota is not the only company to successfully implement kanban … and there are some that implement it and fail There are some companies that have developed hybrids of push and pull systems that outperform kanban … … but all successful implementations require these prereq’s … and trying to implement kanban without the prereq’s is like putting a tight suit on a fat man! 4/30/2018 IENG 451 Operational Strategies

Pull System Diagrammed Kanban also works with stores (WIP) where differing cycle times require buffering, such as at assembly processes. This is a kanban circulation pattern. From Dennis (2015) p.98 4/30/2018 IENG 451 Operational Strategies

IENG 451 Operational Strategies Kanban Cards Kanban cards provide: The production information necessary, or … The store withdrawal information required. There is NO material movement without a kanban card. It is like the money to pay for the product. From Dennis (2015) p.98 4/30/2018 IENG 451 Operational Strategies

Heijunka (Production Leveling) The kanban system does not directly couple the customer to the cell, but it is coupled through the Heijunka box: Daily demand from all the customers is aggregated at the facility. The daily production is leveled for all the cells to avoid strain. The Heijunka box is populated by kanban withdrawal cards for the day’s production. The Heijunka box is used to visually track the required production for each customer with respect to TAKT time. Production occurs in the time order, only. 4/30/2018 IENG 451 Operational Strategies

Heijunka (Production Leveling) The kanban system does not directly couple the customer to the cell, but it is coupled through the Heijunka box: Daily demand from all the customers is aggregated at the facility. The daily production is leveled for all the cells / operators to avoid strain. The Heijunka box is populated by kanban cards for the day’s production. Production occurs in the specified time order, only. The Heijunka box is used to control the specified time order, and visually track the required production for each customer with respect to TAKT time. After Dennis (2015) p.111, corrected 4/30/2018 IENG 451 Operational Strategies

Heijunka (Production Leveling) How do you populate and work with the Heijunka box? Daily demand from all the customers is aggregated for the cell for the shift. 4/30/2018 IENG 451 Operational Strategies

Heijunka (Production Leveling) How do you populate and work with the Heijunka box? Daily demand from all the customers is aggregated for the cell for the shift. The shift TAKT time is computed for the cell. 4/30/2018 IENG 451 Operational Strategies

Heijunka (Production Leveling) How do you populate and work with the Heijunka box? Daily demand from all the customers is aggregated for the cell for the shift. The shift TAKT time is computed for the cell. The first product TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for the first product. 4/30/2018 IENG 451 Operational Strategies

Heijunka (Production Leveling) How do you populate and work with the Heijunka box? Daily demand from all the customers is aggregated for the cell for the shift. The shift TAKT time is computed for the cell. The first product TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for the first product. The next product TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for the next product … 4/30/2018 IENG 451 Operational Strategies

Heijunka (Production Leveling) How do you populate and work with the Heijunka box? Daily demand from all the customers is aggregated for the cell for the shift. The shift TAKT time is computed for the cell. The first product TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for the first product. The next product TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for the next product … … until each product’s TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for all products. 4/30/2018 IENG 451 Operational Strategies

Heijunka (Production Leveling) How do you populate and work with the Heijunka box? Daily demand from all the customers is aggregated for the cell for the shift. The shift TAKT time is computed for the cell. The first product TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for the first product. The next product TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for the next product … … until each product’s TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for all products. At the cell, production occurs in time order, only – so production is level … 4/30/2018 IENG 451 Operational Strategies

Heijunka (Production Leveling) How do you populate and work with the Heijunka box? Daily demand from all the customers is aggregated for the cell for the shift. The shift TAKT time is computed for the cell. The first product TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for the first product. The next product TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for the next product … … until each product’s TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for all products. At the cell, production occurs in time order, only – so production is level … 4/30/2018 IENG 451 Operational Strategies

Heijunka (Production Leveling) How do you populate and work with the Heijunka box? Daily demand from all the customers is aggregated for the cell for the shift. The shift TAKT time is computed for the cell. The first product TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for the first product. The next product TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for the next product … … until each product’s TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for all products. At the cell, production occurs in time order, only – so production is level … 4/30/2018 IENG 451 Operational Strategies

Heijunka (Production Leveling) How do you populate and work with the Heijunka box? Daily demand from all the customers is aggregated for the cell for the shift. The shift TAKT time is computed for the cell. The first product TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for the first product. The next product TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for the next product … … until each product’s TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for all products. At the cell, production occurs in time order, only – so production is level … 4/30/2018 IENG 451 Operational Strategies

Heijunka (Production Leveling) How do you populate and work with the Heijunka box? Daily demand from all the customers is aggregated for the cell for the shift. The shift TAKT time is computed for the cell. The first product TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for the first product. The next product TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for the next product … … until each product’s TAKT time is computed and the Heijunka box is populated by kanban cards for the shift’s production for all products. At the cell, production occurs in time order, only – so production is level … … and the Heijunka box visually tracks the production status for each customer (and the cell) with respect to the TAKT time, like a bar chart! 4/30/2018 IENG 451 Operational Strategies

IENG 451 Operational Strategies Six Kanban Rules Kanban implementation rules MUST be strictly followed: Rule 1: Never ship defective items Stop production and fix the problem Rule 2: The customer withdraws only what is needed Corollaries for (WIP) stores: No withdrawal of goods without a kanban A kanban accompanies each item Withdraw only the indicated products in the indicated quantities Rule 3: Produce only the quantity withdrawn by the customer … and produce only in the sequence that you received kanbans Rule 4: Level production This avoids the need for excess production capacity Rule 5: Use kanban to fine tune production The system cannot respond to major changes in production. Design for expected demand, but produce only according to actual demand! Rule 6: Stabilize and strengthen the process 4/30/2018 IENG 451 Operational Strategies

Responding to Demand Variation Responding to customer demand variation – three options: Option 1: Absorb day-to-day demand with a finished goods store. Preferred option – implemented with little difficulty, and reduced by understanding our customer better. Option 2: Run a little overtime each shift or run an occasional extra shift. Also implemented fairly easily, but increases costs a bit more. Option 3: Adjust TAKT time as needed & toggle the number of operators. This is more difficult and expensive, because we must also … … change standardized work charts, and … … retrain and redeploy workers. If variation is a given, why is this any better than PUSH production? Because both systems require design for expected demand … … but PULL systems produce only according to actual demand! 4/30/2018 IENG 451 Operational Strategies

IENG 451 Operational Strategies Questions & Issues 4/30/2018 IENG 451 Operational Strategies (c) 2016 D.H. Jensen