8 – 1 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Lean Systems 8 For Operations Management, 9e by Krajewski/Ritzman/Malhotra © 2010 Pearson Education PowerPoint Slides by Jeff Heyl

8 – 2 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Lean 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.

8 – 3 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Eight Wastes TABLE 8.1 | THE EIGHT TYPES OF WASTE OR MUDA WasteDefinition 1.OverproductionManufacturing an item before it is needed. 2.Inappropriate Processing Using expensive high precision equipment when simpler machines would suffice. 3.WaitingWasteful time incurred when product is not being moved or processed. 4.TransportationExcessive movement and material handling of product between processes. 5.MotionUnnecessary effort related to the ergonomics of bending, stretching, reaching, lifting, and walking. 6. InventoryExcess inventory hides problems on the shop floor, consumes space, increases lead times, and inhibits communication. 7. DefectsQuality 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.

8 – 4 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Continuous Improvement Figure 8.1 – Continuous Improvement with Lean Systems

8 – 5 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Supply 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

8 – 6 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Process Considerations Pull method of work flow  Push method  Pull method Quality at the source  Jidoka  Poka-yoke  Andon Uniform workstation loads

8 – 7 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Process Considerations Standardized components and work methods Flexible workforce Automation Five S (5S) practices Total Preventive Maintenance (TPM)

8 – 8 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Five S Method TABLE 8.2 | 5S DEFINED 5S Term5S Defined 1.SortSeparate needed from unneeded items (including tools, parts, materials, and paperwork), and discard the unneeded. 2.StraightenNeatly 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.ShineClean and wash the work area and make it shine. 4.StandardizeEstablish 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.SustainCreate 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.

8 – 9 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Designing Lean System Layouts Line flows recommended  Eliminate waste One worker, multiple machines (OWMM) Group technology  Group parts or products with similar characteristics into families

8 – 10 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Group Technology Figure 8.2 – One-Worker, Multiple-Machines (OWMM) Cell

8 – 11 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Group Technology Drilling DD DD Grinding GG GG GG Milling MM MM MM Assembly AA AA Lathing Receiving and shipping L LL LL LL L (a) Jumbled flows in a job shop without GT cells Figure 8.3 – Process Flows Before and After the Use of GT Cells

8 – 12 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Group Technology (b) Line flows in a job shop with three GT cells Cell 3 LM G G Cell 1 Cell 2 Assembly area A A L M D L L M Shipping D Receiving G Figure 8.3 – Process Flows Before and After the Use of GT Cells

8 – 13 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. The Kanban System Receiving post Kanban card for product 1 Kanban card for product 2 Fabrication cell O1O1 O2O2 O3O3 O2O2 Storage area Empty containers Full containers Assembly line 1 Assembly line 2 Figure 8.4 – Single-Card Kanban System

8 – 14 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. The Kanban System Storage area Empty containers Full containers Receiving post Kanban card for product 1 Kanban card for product 2 Fabrication cell O1O1 O2O2 O3O3 O2O2 Assembly line 1 Assembly line 2 Figure 8.4 – Single-Card Kanban System

8 – 15 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. The Kanban System Storage area Empty containers Full containers Receiving post Kanban card for product 1 Kanban card for product 2 Fabrication cell O1O1 O2O2 O3O3 O2O2 Assembly line 1 Assembly line 2 Figure 8.4 – Single-Card Kanban System

8 – 16 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. The Kanban System Storage area Empty containers Full containers Receiving post Kanban card for product 1 Kanban card for product 2 Fabrication cell O1O1 O2O2 O3O3 O2O2 Assembly line 1 Assembly line 2 Figure 8.4 – Single-Card Kanban System

8 – 17 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. The Kanban System Storage area Empty containers Full containers Receiving post Kanban card for product 1 Kanban card for product 2 Fabrication cell O1O1 O2O2 O3O3 O2O2 Assembly line 1 Assembly line 2 Figure 8.4 – Single-Card Kanban System

8 – 18 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. The Kanban System Storage area Empty containers Full containers Receiving post Kanban card for product 1 Kanban card for product 2 Fabrication cell O1O1 O2O2 O3O3 O2O2 Assembly line 1 Assembly line 2 Figure 8.4 – Single-Card Kanban System

8 – 19 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. The Kanban System Storage area Empty containers Full containers Receiving post Kanban card for product 1 Kanban card for product 2 Fabrication cell O1O1 O2O2 O3O3 O2O2 Assembly line 1 Assembly line 2 Figure 8.4 – Single-Card Kanban System

8 – 20 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. The Kanban System KANBAN Part Number: Z Location:Aisle 5 Bin 47 Lot Quantity:6 Supplier:WS 83 Customer:WS 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

8 – 21 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 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

8 – 22 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Value Stream Mapping Figure 8.7 – Selected Set of Value Stream Mapping Icons

8 – 23 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Value Stream Mapping Figure 8.8 –A Representative Current State Map for a Family of Retainers at a Bearings Manufacturing Company

8 – 24 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Operational Benefits and Implementation Issues Organizational considerations  Human costs of lean systems  Cooperation and trust  Reward systems and labor classifications Process considerations Inventory and scheduling  Schedule stability  Setups  Purchasing and logistics

8 – 25 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.