OPNS 430- Savaskan 1 Lean Operations (JIT) Module House Building Game The transition to Lean Ops The Paradigm of Lean Operations: The ideal Basic philosophy of Lean Ops Methods for synchronization & waste reduction Approaching the ideal with Product Variety: TPS Managing variety & flexibiltiy Toyota Production System (TPS)

OPNS 430- Savaskan KEEP DESKS CLEAR! Only need a pen or pencil. Please keep desks and aisles clear of notebooks, PCs, backpacks etc. Please do not disturb materials!

OPNS 430- Savaskan HouseBuilding.com: Manufacturing Operations Production Control (color sheets, log sheets, scissors) (scissors) Base Punch (scissors) Final Assembly (tape) Base Weld (stapler) Quality Control Customer Roof Base Form

OPNS 430- Savaskan Production Control Operating Procedures Prepare a batch of 4 units. –Cut each sheet (one at a time) into two: roof and base. –Write the batch number on the roof and the base. All items in the same batch have the same number. The numbers have to match in assembly. –Repeat 4 times, which yields one batch When 4 units (one batch) are complete, “release” the batch. –Put the batch in your out-basket: it’s ready for pickup by the trucker. –Record release time for each batch. Release one batch each minute.

OPNS 430- Savaskan Truckers Operating Procedures Truckers are responsible for transporting work in process inventory between production steps. You can carry only one batch of 4 roofs or 4 bases at a time. Not both! Production Control (color sheets, log sheets, scissors) (scissors) Base Punch (scissors) Final Assembly (tape) Base Weld (stapler) Quality Control Customer Roof Base Form (scissors)

OPNS 430- Savaskan Roof Operating Procedures Cut the roof along double lines, one at a time. Fold roof along dotted line at top. Think quality! Work in batches of 4 units. When a batch is ready, call the trucker and send to Final Assembly. Ask trucker for inputs when needed.

OPNS 430- Savaskan Base Cut Operating Procedures Cut the base along double lines, one at a time. Think quality! Work in batches of 4 units When a batch is ready, call the trucker and send to Base Form. Ask trucker for inputs when needed.

OPNS 430- Savaskan Base Form Operating Procedures Fold the lines on the base (4 folds). Work in batches of 4 units When a batch is ready, call the trucker to send them to Base Weld. Ask trucker for inputs when needed

OPNS 430- Savaskan Base Weld Operating Procedures Staple base on top and bottom about ¼ inch from the edge. Work in batches of 4 units. When a batch is ready, call the trucker to send them to Final Assembly. Ask trucker for inputs when needed.

OPNS 430- Savaskan Final Assembly Operating Procedures Tape the roof to the base (2 tapes). Work in batches of 4 units. When a batch is ready, send them to QA. (No trucker required.) Ask trucker for inputs when needed.

OPNS 430- Savaskan Quality Assurance Operating Procedures Check each batch if they conform to quality standards! If the house conforms to quality standards, put it on the market. Once on the market no more rework! Customers can reject houses Quality Standards Batch numbers must match. Folds and cuts should be along appropriate lines. –Folds should be crisp and cuts should be straight. Roof should be centered and door should be visible. –Top of base should be flush with roof. Staples and tape should be centered and parallel to the ground. –Not too much tape. About one inch. –Staples about ¼ inch from edge.

OPNS 430- Savaskan HouseBuilding.com: Improved Operational Performance Flow time T House # 1 T o - T i = T Quality Q = R/ R o Inventory I Output R o Input R i House # 16 T o - T i = T Sales R Team (color)

OPNS 430- Savaskan Lean Operations (JIT) Module House Building Game The transition to Lean Ops The Paradigm of Lean Operations: The ideal Basic philosophy of Lean Ops Methods for synchronization & waste reduction Approaching the ideal with Product Variety: TPS Managing variety & flexibiltiy Toyota Production System (TPS)

OPNS 430- Savaskan Paradigm of Lean Operations: In Search for the Holy Grail = The ideal Process Synchronization of all flows 1 x 1 production on demand defect free At lowest possible cost Waste = Gap between ideal and actual è How do we set up a system to continually reduce waste ?

OPNS 430- Savaskan Toyota’s waste elimination in Operations 1. Overproduction 2. Waiting 3. Inessential handling 4. Non-value adding processing 5. Inventory in excess of immediate needs 6. Inessential motion 7. Correction necessitated by defects

OPNS 430- Savaskan Process Change # 1: Functional vs. Cell Layout Production Control FA Base Cut Roof Cut Base Assy Production Control FA Base Cut Roof Cut Base Assy Production Control FA Base Cut Roof Cut Base Assy

OPNS 430- Savaskan Managing Flows: the Process View By rethinking the IBM Austin assembly plant and introducing cells, distance traveled by a card was cut from 1.5 miles to 200 yards. Floor space was reduced to half and production tripled with about the same number of workers.

OPNS 430- Savaskan Teams in Cells and Lean Ops Advantages –Consistent with the moral ideal of “autonomy.” –Empowers the workforce through participation and autonomy in managing daily activities –Gives unprecedented responsibility to workers: Immediate and impartial feedback of problems Investigation of process improvements Monitoring quality They also gain better understanding of the process Challenges: –Less WIP means more tight coupling and less autonomy Rigid procedures and interdependence of cells –From monthly 30-day goals before to 3-minute goals now Does not leave much room for variability

OPNS 430- Savaskan Process Change # 2: Cut Batch Sizes Machine 1 1unit/min Machine 2 1 unit/min Batch Size = 4 unitsBatch size = 1 unit 16 min 20 M1 0 1min M min 5 8min 12min M1M2M1M

OPNS 430- Savaskan Process Change #3: Push vs. Pull (Just-In-Time operations) JIT = have exactly what is needed, in the quantity it is needed, when it is needed, where it is needed. “hand-to-mouth” material flow needed by whom?

OPNS 430- Savaskan Process Change #3 : Push vs. Pull Production Roof Cut Base Cut Roof Form Base Form & Weld AssemblyProduction Roof Cut Base Cut Roof Form Base Form & Weld AssemblyProduction Limited I No Limit Push Rout Rin Rout Pull How much I? What is the role of I? Product flows Information Flows

OPNS 430- Savaskan THE DICE GAME Average Capacity of Each Stage = OUTPUT Buffer INPUT Buffer 6 Face Fair Dice Average Process Capacity = Play The Game Unfair Dice which rolls into either 3 or 4 Average Capacity of Each Step = Average Capacity of The Process =

OPNS 430- Savaskan Reducing waste: Increase Problem Visibility Lower the Water to Expose the Rocks Scrap & Rework Missed Due Dates Too Much Space Late Deliveries Poor Quality Machine Downtime Engineering Change Orders Long queues Too much paperwork 100% inspection Inventory

OPNS 430- Savaskan Sample results from Match Game Initial buffer levels Standard die Die that only rolls 3 or Reporting average output per round after 200 rounds given that system starts with given inventory in every buffer.

OPNS 430- Savaskan The impact of inventory and variability: Output of Match Game 6-face die (  =1.9) 2-face die (  =0.7)

OPNS 430- Savaskan Time plays the role of Inventory in Lean Service Operations TIME

OPNS 430- Savaskan Take-Aways Basics of Lean Operations Paradigm of Lean Operations: Strive for the ideal by eliminating waste Synchronize –Layout: Cellular operations –Reduced batch sizes 1x1 –JIT –Pull production control systems (vs. push) Improve –Increase problem visibility (river analogy) : Reduce buffering gradually Implementation Control Inventory by Kanban

OPNS 430- Savaskan Toyota Production System

OPNS 430- Savaskan IDEAL PROCESS Synchronized 1x1 Low Cost 1.Mechanisms – Tools JIT-Pull (Kanban) Cellular Layout Batch size of 1 Heijunka 2. Visibility River Analogy (lower inventory to expose the problems -- experimentation) Andon and Jidoka 3. Improve / Kaizen Remove waste and Learn TPS: Best Implementations of Lean Ops Integrated - Dynamic - Pragmatic Discipline Follow Standard Operation Procedures Update the operating procedures Move closer to the ideal

OPNS 430- Savaskan How to run Lean Operations: Managing Variety Monthly Production Requirement: ModelSedanStation Wagon Quantity10,0005,000 How should production be scheduled for the month?

OPNS 430- Savaskan Synchronize: Heijunka Mixed Level/Balanced Production Batch Production Schedule Mixed Production Schedule (AAAABBBB..)(ABAB...) Product Apr/ Apr/ A B time FGI time FGI Change over Which one is better for the supplier?

OPNS 430- Savaskan Reducing Waste: Reduced Setup Times What happens if we have long setup/changeover times? How do synchronized production with variety (product mix)?

OPNS 430- Savaskan Synchronize: Heijunka Uniform Plant Loading/Planning This does not mean building a single product. Rather: –maintain a stable mix of products –and firm frozen schedules based on actual orders from the dealers Benefits: Good Flow, Low inventory Costs: Must reduce changeover costs

OPNS 430- Savaskan Synchronize: Heijunka Involve Supplier PAINT SHOP Batch Process Seat Installation 350 work stations cycle time 57 secs takt time 350 x 57 secs = 5.54 hrs Supplier sequence info seats

OPNS 430- Savaskan What is the cost of pulling the cord? Cycle time =57 seconds FINAL 30 members 12 pulls / member-shift 1 stop /member-shift 30 stops/ shift Min %85 – max %95 run ratio  Out of 450minutes/shift  450*0.15 = 67.5 minutes (mx. stopping time) 450*0.05=22.5 minutes (min. stopping time) 22.5 minutes / 30 = 0.75 min/stop 67.5/30 = 2.25 min/stop

OPNS 430- Savaskan 1 to 3 cars… Are we loosing this production? Overtime costs per cycle (57 secs/car) $17/hr * 1.5 (overtime) * 57secs/(60min*60sec) = $0.425/member-car 30 members = $12.75 /car 3 cars …. $37 What is the cost of pulling the cord? Is it expensive ? Depends!! 1 station or the whole production line!

OPNS 430- Savaskan TMM Inc. What is the real problem at Kentucky? The circle is broken! Time between the occurrence of the problem and the awareness of the problem separated! No jidoka tool in place to create visibility to determine the root cause for the seat problem.

OPNS 430- Savaskan Team & Team Leader Superintendent “Lean” Plant Floor Organization Group Leaders

OPNS 430- Savaskan Involvement Human Resources Management Work Systems Programs Suggestion Programs Employees as Citizens Standardized Work/Kaizen Responsibility pushed down QC Circles Employee Development Rewards and Recognition Examples Empowerment Programs JIT/JIDOKA Respect for People Organization in Lean Operations

OPNS 430- Savaskan Leadership: Three Models Old “ Dictator” Style : “Do it my way” Empowerment Style: “ Do it your way” Lean Style: “Follow me”

OPNS 430- Savaskan Knowledge Dissemination at Toyota Toyota Global Production Center Facility opened (GPC) opened in July 2003 with the mission of rapidly training large number of mid-level plant managers from overseas and Japan in best practices. New facility trains experts to support Toyota’s expanding scale of global manufacturing. Traditional approach was use a mother plant to spread out best practices. This approach leads to variability in skill levels. Goal is to use a global manufacturing network that can produce high quality products consistently and can easily handle model shifts at far flung factories.

OPNS 430- Savaskan Training for New Models

OPNS 430- Savaskan Training for New Models

OPNS 430- Savaskan

Reducing Waste by Quality at the Source Defects Found at: Own ProcessNext ProcessEnd of LineFinal Inspection End User’s Hand $ $ $ $ $ Impact to the Company  Very Minor  Delay  Rework  Resched. of work  Significant Rework  Delay in Delivery  Additional Inspection  Warranty costs  Administra tive costs  Reputation  Loss of Market Share

OPNS 430- Savaskan Reducing Waste by Visibility Quality at the Source Fool-proof/Fail-safe design (Poka-Yoke) Inspection (Jidoka) –Self –Automated –Line-stopping empowerment (Andon) Human infrastructure Tools

OPNS 430- Savaskan.... Final words on TPS TPS is a dynamic production management system that aims for the “ideal” through continuous improvement. Includes, but goes way beyond JIT. Pillars: –Synchronization: through JIT + Heijunka –Quality at Source: through Jidoka –Continuous Improvement (Kaizen): through empowerment, visibility & stress

OPNS 430- Savaskan Learning Objectives: Lean Operations Lean Operations A methodogical way to approaching the Ideal and reduce waste Tools –Efficient Workflow: Cellular Layout –Pull system: JIT (by using KANBANS) –1X1 –Level Mixed Production: Heijunka Quality at the Source: by using Jidoka Tools Continuous Improvement: Kaizen through Change Management and Empowerment