Copyright 2006 John Wiley & Sons, Inc. Beni Asllani University of Tennessee at Chattanooga Lean Production Operations Management - 5 th Edition Chapter 15 Roberta Russell & Bernard W. Taylor, III

Copyright 2006 John Wiley & Sons, Inc.15-2 Lecture Outline   Basic Elements of Lean Production   Benefits of Lean Production   Implementing Lean Production   Lean Services

Copyright 2006 John Wiley & Sons, Inc.15-3 Lean Production   Doing more with less inventory, fewer workers, less space   Just-in-time (JIT) smoothing the flow of material to arrive just as it is needed “JIT” and “Lean Production” are used interchangeably   Muda waste, anything other than that which adds value to the product or service

Copyright 2006 John Wiley & Sons, Inc.15-4 Waste in Operations

Copyright 2006 John Wiley & Sons, Inc.15-5 Waste in Operations (cont.)

Copyright 2006 John Wiley & Sons, Inc.15-6 Waste in Operations (cont.)

Copyright 2006 John Wiley & Sons, Inc.15-7 Basic Elements   Flexible resources   Cellular layouts   Pull production system   Kanban production control   Small lot production   Quick setups   Uniform production levels   Total productive maintenance   Supplier networks

Copyright 2006 John Wiley & Sons, Inc.15-8 Flexible Resources   Multifunctional workers perform more than one job general-purpose machines perform several basic functions   Cycle time time required for the worker to complete one pass through the operations assigned   Takt time paces production to customer demand

Copyright 2006 John Wiley & Sons, Inc.15-9 Standard Operating Routine for a Worker

Copyright 2006 John Wiley & Sons, Inc Cellular Layouts   Manufacturing cells comprised of dissimilar machines brought together to manufacture a family of parts   Cycle time is adjusted to match takt time by changing worker paths

Copyright 2006 John Wiley & Sons, Inc Cells with Worker Routes

Copyright 2006 John Wiley & Sons, Inc Worker Routes Lengthen as Volume Decreases

Copyright 2006 John Wiley & Sons, Inc Inventory Hides Problems

Copyright 2006 John Wiley & Sons, Inc Less Inventory Exposes Problems

Cost Impact of Inventory  High inventory  high inventory holding costs  High inventory hides problems, and the company pays for the cost of the problems  In manufacturing, high inventory requires large lot sizes Long manufacturing lead times Long manufacturing lead times Harder to meet changing customer demand Harder to meet changing customer demand Delays in introducing new or improved products Delays in introducing new or improved products

Reducing Inventory Kanban Pull System  Production kanban: authorization to make a container of parts No production can be done without a production kanban and an empty container No production can be done without a production kanban and an empty container  Withdrawal kanban: authorization to get a container of parts for use in the next process step  Work in process (WIP) inventory WIP < (number of kanbans)(lot size) WIP < (number of kanbans)(lot size) Lot size = number of parts of a certain type produced at one time Lot size = number of parts of a certain type produced at one time

Reducing Inventory Kanban Pull System

Copyright 2006 John Wiley & Sons, Inc Pull System  Material is pulled through the system when needed  Reversal of traditional push system where material is pushed according to a schedule  Forces cooperation  Prevent over and underproduction   While push systems rely on a predetermined schedule, pull systems rely on customer requirements

Reducing Inventory Small Lot Sizes and Quick Setups  Benefits of small lot sizes Shorter manufacturing lead time  Faster response to changes in customer demand Shorter manufacturing lead time  Faster response to changes in customer demand Lower inventory and inventory holding costs Lower inventory and inventory holding costs  Small lot sizes require more setups Setups must be done more quickly and at lower costs. This is necessary Setups must be done more quickly and at lower costs. This is necessary To ensure adequate capacity To ensure adequate capacity To control setup costs To control setup costs To avoid production delays To avoid production delays

Copyright 2006 John Wiley & Sons, Inc Uniform Production Levels   Result from smoothing production requirements  Kanban systems can handle +/- 10% demand changes  Smooth demand across planning horizon  Mixed-model assembly steadies component production

Copyright 2006 John Wiley & Sons, Inc Mixed-Model Sequencing

Copyright 2006 John Wiley & Sons, Inc Quality at the Source   Visual control makes problems visible   Poka-yokes prevent defects from occurring   Kaizen a system of continuous improvement; “change for the good of all”   Jidoka authority to stop the production line   Andons call lights that signal quality problems   Under-capacity scheduling leaves time for planning, problem solving, and maintenance

Copyright 2006 John Wiley & Sons, Inc Examples of Visual Control

Examples of Visual Control (2) Copyright 2006 John Wiley & Sons, Inc.15-24

Copyright 2006 John Wiley & Sons, Inc Examples of Visual Control (3)

Copyright 2006 John Wiley & Sons, Inc Total Productive Maintenance (TPM)  Breakdown maintenance Repairs to make failed machine operational Repairs to make failed machine operational  Preventive maintenance System of periodic inspection and maintenance to keep machines operating System of periodic inspection and maintenance to keep machines operating  TPM combines preventive maintenance and total quality management concepts

Copyright 2006 John Wiley & Sons, Inc   Unneeded equipment, tools, furniture; unneeded items on walls, bulletins; items blocking aisles or stacked in corners; unneeded inventory, supplies, parts; safety hazards   Items not in their correct places; correct places not obvious; aisles, workstations, & equipment locations not indicated; items not put away immediately after use   Floors, walls, stairs, equipment, & surfaces not lines, clean; cleaning materials not easily accessible; labels, signs broken or unclean; other cleaning problems   Necessary information not visible; standards not known; checklists missing; quantities and limits not easily recognizable; items can’t be located within 30 seconds   Number of workers without 5S training; number of daily 5S inspections not performed; number of personal items not stored; number of times job aids not available or up-to-date   Keep only what you need   A place for everything and everything in its place   Cleaning, and looking for ways to keep clean and organized   Maintaining and monitoring the first three categories   Sticking to the rules   Seiri (sort)   Seiton (set in order)   Seisou (shine)   Seiketsu (standardize)   Shisuke (sustain) 5S ScanGoalEliminate or Correct

Copyright 2006 John Wiley & Sons, Inc Supplier Networks   Long-term supplier contracts   Synchronized production with suppliers   Supplier certification   Mixed loads and frequent deliveries   Precise delivery schedules   Standardized, sequenced delivery   Locating in close proximity to the customer

Copyright 2006 John Wiley & Sons, Inc Benefits of Lean Production   Reduced inventory   Improved quality   Lower costs   Reduced space requirements   Shorter lead time   Increased productivity

Copyright 2006 John Wiley & Sons, Inc Benefits of Lean Production (2)   Greater flexibility   Better relations with suppliers   Simplified scheduling   Increased capacity   Better use of human resources   More product variety than repetitive manufacturing   More efficient than intermittent manufacturing

Limitations of lean production  If the company makes only a small number of high-volume items, then mass production or continuous manufacturing will be more efficient  Lean production does not work well when many low-volume items make scheduling hard many low-volume items make scheduling hard total demand is seasonal or highly variable total demand is seasonal or highly variable the company must accommodate large rush orders the company must accommodate large rush orders the company is small and cannot afford enough equipment for cellular manufacturing the company is small and cannot afford enough equipment for cellular manufacturing Copyright 2006 John Wiley & Sons, Inc.15-31

Copyright 2006 John Wiley & Sons, Inc Lean Services  Basic elements of lean production apply equally to services   Most prevalent applications lean retailing lean banking lean health care

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