Just In Time (JIT) & Lean Operations Presented by: Venessa King, Abbey Hagin, Jeffrey George, AJ Kaler, and Luis Quesada

The Systems ●Push System ●Pull System (Just-In-Time) ●Continuous Improvement (Just-In-Time)

Push System ●Traditional system ●Work is pushed to the next station as it is completed ●No regard to next station’s readiness for work ●Risk of bottlenecks

Push System Demonstration Rolo Pretzel Delights

Workstations and Process Warehouse Raw Materials Prep Place pretzels on baking tray Place Rolos on top of pretzels Bake 350  for 2 minutes Finishing Top with pretzel Cool for 1 ½ minutes

●Prep workstation quickly builds excess inventory ●Cycle time increases with bottleneck in Bake workstation Little’s Law

WIP & Cycle Time Push System WIP Prep15 Bake1 Finish0 Total16 Finished Units4 Cycle Time +8.5 minutes

The Systems ●Push System ●Pull System (Just-In-Time) ●Continuous Improvement (Just-In-Time)

Lean Operations ●Began as lean manufacturing in the mid 1900’s ●Developed by Toyota ●Influenced by the limited resources available at that time

Characteristics of Lean Systems ●Waste Reduction – A hallmark of lean systems ●Continuous Improvement – Never ending efforts to improve ●Use of Teams – Cross-functional teams, especially for process improvement ●Work Cells – Along with cellular layouts allow for better communication and use of people ●Visual Controls – Simple signals that enable efficient flow and quick assessment of operations

Characteristics Continued… ●High Quality – In processes and in output ●Minimal Inventory – Excess inventory is viewed as a waste ●Output to Only Match Demand – Throughout the entire system; referred to as a “demand pull” ●Quick Changeovers – Enables variety for batch production ●Small Lot Sizes – Enables variety for batch production ●Lean Culture – Entire organization embraces lean concepts and strives to achieve them

5 Principles of Lean Systems 1.Identify customer values 2.Focus on processes that create value 3.Eliminate waste to create “flow” 4.Produce only according to customer demand 5.Strive for perfection

Key Benefits of Lean Systems ●Reduce waste due to emphasis on waste reduction ●Lower costs due to reduced waste and lower inventories ●Increase quality motivated by customer focus and the need for high-quality processes ●Reduce cycle time due to elimination of non-value-added operations ●Increase flexibility due to quick changeovers and small lot sizes ●Increase productivity due to elimination of non-value-added processes

Key Risks of Lean Systems ●Increase stress on workers due to increased responsibilities for equipment changeovers, problem solving, and process and quality improvement ●Fewer resources available if problems occur (inventory, time, people) ●Supply chain disruptions can halt operations due to minimal inventory of time buffers

The Toyota Approach ●Toyota served as the model of lean systems, particularly in manufacturing ●Known as the Toyota Production System (TPS) ●Toyota terminology commonly adopted for lean systems: o Muda – Waste and inefficiency o Kanban – Manual system that signals the need for parts or materials o Heijunka – Workload leveling o Kaizen – Continuous improvement of the system o Jidoka – Quality at the source (automation)

Balanced System Goals ●Achieve a smooth, rapid flow of materials and/or work through the system ●Make the process time as short as possible by using resources in the best possible way ●Eliminate disruptions ●Make the system flexible ●Eliminate waste, especially excess inventory

Different Types of Wastes ●Excess Inventory ●Overproduction ●Waiting Time ●Unnecessary Transporting ●Processing Waste ●Inefficient Work Methods ●Product Defects ●Underused People

Building Blocks ●Product Design ●Process Design ●Personnel/Organizational Elements ●Manufacturing, Planning and Control

Product Design ●Standard Parts – Fewer parts to deal with so less training time and reduced costs ●Modular Design – Extension of standard parts; clusters of parts treated as a single unit ●Highly Capable Production Systems – Without good quality, there is a disruption in the smooth flow of work ●Concurrent Engineering – Changes in engineering could cause disruptions

Process Design ●Small Lot Sizes – Reduce inventory and lower costs ●Set-up Time Reduction – Strong emphasis on reducing set-up times ●Manufacturing Cells – Specialized areas to reduce changeover times ●Quality Improvement – Automation to detect problems in the work flow

Process Design Continued… ●Work Flexibility – Ways to increase and reduce bottlenecks ●Balanced System – Time needed for work assigned to each workstation must be less than or equal to the cycle time ●Inventory Storage – Lean systems are designed to minimize inventory storage ●Fail Safe Methods – Methods to prevent breakdowns in productions

5 Key Personnel/Organizational Elements of Lean Systems ●Workers as assets ●Cross-trained workers ●Continuous improvement ●Cost accounting ●Leadership/project management

Pull Systems ●Good for steady flow of repetitive work ●Workstation pulls output from the preceding station as it is needed ●Demand comes from customer or master schedule ●Supply equals demand – “Just in time” ●Better coordination – just enough output to meet anticipated demand of next station including flow rate and time ●If long cycle time, buffer of stock in between workstations triggered by dip of supply level threshold ●Reduces excessive inventory

Pull System Demonstration Rolo Pretzel Delights

Andon ●Japanese communication system of green/yellow/red lights at workstations to signal when and where there are problems or slowdowns during production ●Requires active support and involvement from all management levels to create culture for all workers ●Dedicated team focuses on how to continuously improve ●Communicating goals and achievements key to success

Andon Goals ●Reduce inventories ●Reduce setup cost and time ●Improve quality ●Increase the output rate ●Cut waste and inefficiency

●Prep workstation no longer builds up inventory ●Cycle time consistent Little’s Law

WIP & Cycle Time Push SystemPull System WIP Prep150 Bake11 Finish00 Total161 Finished Units44 Cycle Time +8.5 minutes3.5 minutes

The Systems ●Push System ●Pull System (Just-In-Time) ●Continuous Improvement (Just-In-Time)

7 Key Manufacturing Planning and Control Elements ●Level loading ●Pull systems ●Visual systems ●Limited work-in-process ●Close vendor relationships ●Reduced transaction processing ●Preventative maintenance and housekeeping

Visual Systems ●Pull system workflow is dictated by “next-step-demand” Shout & WaveKanban Card Demand Communication

Continuous Improvement Demonstration with Kanban Rolo Pretzel Delights

Compute Kanban The number of kanban cards in a system is an important variable N = DT(1 + X) C N = Total number of containers D = Planned usage rate T = Avg waiting time for replenishing + Avg production time X = Possible inefficiency of system C = Capacity of standard container

Rolo Pretzel Delights Example N = (864)(0.01)( ) 9 N = ? D = 864 parts/day T =.01 day X =.10 C = 9 parts/sheet

Vendor Relationships The Good The Bad & The Ugly

Reduced Transaction Processing ●Logistical ●Balancing ●Quality ●Change

Traditional Supplier Networks

Tiered Supply Networks

The Kaizen Philosophy for Eliminating Waste 1.Waste is the enemy, and to eliminate it we must get our hands dirty 2.Improve gradually and continuously instead of major changes infrequently 3.Involve everyone: top managers, middle managers, and workers 4.Built on a cheap strategy; it does not require spending a large amount of money on technology and consultants 5.Can be applied anywhere

Kaizen Philosophy Continued… 6.Supported by a visual system: a total transparency of procedures, processes, and values, making problems and wastes visible to all 7.Focuses attention where value is created 8.Process oriented 9.Stresses that the main effort of improvement should come from new thinking and a new work style 10.Essence of organizational learning is to learn while doing

Value Stream Mapping ●Sketch of entire process: o Arrival of supplies o Delivery to customer ●Quick walkthrough ●Data collection

Value Improvement ●Increase value (Customer) o Identify steps o Eliminate if no value created o Repeat

Office Waste ●Excess inventory ●Over processing ●Waiting times ●Unnecessary transportation ●Processing waste ●Inefficient work methods ●Mistakes ●Underused people

Transition ●Management commitment ●Effort required ●Worker support ●Reduce set up time ●Convert backwards ●Suppliers

Obstacles ●Culture ●Suppliers: o Resource & long term commitment o Quality control – supplier o Frequent deliveries o Frequent changes

Lean Services ●Eliminate disruptions ●System flexibility ●Reduce setup/processing time ●Eliminate Waste ●Minimize Process ●Simplify Process

Continuous Improvement Demonstration Rolo Pretzel Delights

Work-In-Process

WIP & Cycle Time Push SystemPull SystemContinuous Improvement WIP Prep1500 Bake112 Finish001 Total1613 Finished Units447 Cycle Time +8.5 minutes3.5 minutes

Operation Summary ●Balanced, smooth workflow operation