OPSM 301 Operations Management Class 25: Lean production Toyota Manufacturing System Ch Koç University Zeynep Aksin

High-Inventory Manufacturing D : 3/4 hr/unit B : 1/10 hr/unit C : 1 hr/unit B : 1/10 hr/unit A : 1/2 hr/unit Time (hours) months (24 hrs a day, 7 days a week) inventory avg. inventory Order : 1000 units

Low-Inventory Manufacturing D : 3/4 hr/unit B : 1/10 hr/unit C : 1 hr/unit B : 1/10 hr/unit A : 1/2 hr/unit Time (hours) months avg. inventory Order : 1000 units inventory Move batches of 200 Release materials according to the bottleneck

When do you detect quality problems? D B C B A Damage done Quality control

How do you incorporate engineering changes? D B C B A Engineering change one month after start of order

Shorter Lead time - High margins D B C B A overtime No overtime Quoted lead time of the order is 3 months

Due-date performance D B C B A Forecast validity

Batch Flow Operations Carry a Lot of Inventory

Some Japanese  Kaizen-continuous improvement  Muda-eliminate waste  Jidoka-quality at the source, root cause  Heijunka-level production, mix model  Kanban-JIT (just intime)-a mechanism to “pull” production

Zero non-value added activities (muda) Zero defects, zero breakdowns, zero inventory, zero set-up Production flow synchronized with demand (JIT) One-unit-at-a-time flow Mixed model production (heijunka) Piece-by-piece transfer (ikko-nagashi) Match production demand based on Takt time Pull instead of push Supermarket / Kanban Make-to-order Quality methods to reduce defects Fool-proofing (poka-yoke) and visual feed-back Detect-stop-alert (Jidoka) Defects at machines (original Jidoka) Defects in assembly (Andon cord) Build-in-quality (tsukurikomi) Flexibility Standardization of work Worker involvement Quality circles (Kaizen) Fishbone diagrams (Ishikawa) Skill development / X-training Reduction of Variability Quartile Analysis Standard operating procedures Adjustment of capacity to meet takt-time Multi-task assignment Reduce inventory to expose defects 8.5

Zero Inventories Zero Defects Flexibility / Zero set-ups Zero breakdowns Zero handling / non value added Just-in-time Production Kanban Classical Push “Real” Just-in-time Mixed Production Set-up reduction Autonomation Competence and Training Continuous Improvement Quality at the source OrganizationMethodsPrinciples The System of Lean Production (Toyota, Citroen, …)

Avoid unnecessary inventory To be seen more as an ideal To types of (bad) inventory: a. resulting from defects / rework b. absence of a smooth process flow Remember the other costs of inventory (capital, flow time) Pictures: Citroen Inventory in process Buffer argument: “Increase inventory” Toyota argument: “Decrease inventory” Principles of Lean Production: Zero Inventory and Zero Defects

Flexible machines with short set-ups Allows production in small lots Real time with demand Large variety Maximize uptime Without inventory, any breakdown will put production to an end preventive maintenance Avoid Non-value-added activities, specifically rework and set-ups Principles of Lean Production: Zero Set-ups, Zero NVA and Zero Breakdowns

Push: make to forecastPull: Synchronized production Pull: Kanban Visual way to implement a pull system Amount of WIP is determined by number of cards Kanban = Sign board Work needs to be authorized by demand Classical MRP way Based on forecasts Push, not pull Still applicable for low cost parts Part produced for specific order (at supplier) shipped right to assembly real-time synchronization for large parts (seat) inspected at source Methods of Lean Production: Just-in-time

Cycle Inventory Cycle Inventory Cycle Inventory Cycle Inventory Production with large batches End of Month Beginning of Month Cycle Production with large batches End of Month Beginning of Month Cycle Production with large batches End of Month Beginning of Month Cycle Production with large batches End of Month Beginning of Month Inventory End of Month Beginning of Month Produce Sedan Produce Station wagon End of Month Beginning of Month Produce Sedan Produce Station wagon End of Month Beginning of Month Produce Sedan Produce Station wagon End of Month Beginning of Month Produce Sedan Produce Station wagon Methods of Lean Production: Mixed Production and Set-up reduction

Create local decision making rather than pure focus on execution Use machines / tools, but avoid the lights-off factory Automation with a human touch Cross training of workers Develop problem solving skills Organization of Lean Production: Autonomation and Training 10-16

Solve the problems where they occur - this is where the knowledge is - this is the cheapest place Traditional: inspect and rework at the end of the process Once problem is detected, send alarm and potentially stop the production Own ProcessNext ProcessEnd of LineFinal Inspection End User $$$$$ Rework Reschedule very minor minor delay Significant Rework Delayed delivery Overhead Warranty cost recalls reputation overhead Defect found Defect fixed Organization of Lean Production: Continuous Improvement and Quality-at-the- source 10-17

The River Analogy Defects Defective Materials Machine BreakdownsLong Set ups Long Lead timesUnsuitable Equipment Uneven Schedules Unreliable Suppliers Inefficient LayoutsAbsenteeism Rigid Work Rules

Ongoing objectives  Improve process flows –Efficient plant layout –Fast and accurate flow of material and information  Increase process flexibility –Reduce changeover times –Cross-training  Decrease process variability –Flow rates –Processing times –Quality  Minimize processing costs –Eliminate transportation, inspection, rework

How?  Improve process flows –Cellular layouts –Demand pull mechanisms  Increase process flexibility –Fast changeovers –Smaller lotsizes, level production  Decrease process variability –Standardize –Improve supplier reliability and capacity –Safety capacity, preventive maintenance –Fast feedback and correction  Minimize processing costs –Improve quality, eliminate non-value-adding activities