8.0 LEAN Chuah Shu Chin B Jennise Tan Teng Teng B Yeow See Leong B

Outline 8.1 Lean Production and JIT  Terms of JIT and Lean Operations  Goals of JIT  Some impacts in capacity  Building blocks 8.2 Pull System 2

Terms of JIT & Lean Operations Just-in-time (JIT): A highly coordinated processing system in which goods move through the system, and services are performed, just as they are needed. 3

Example 4

Initially, JIT referred to the movement of materials, parts, and semi-finished goods within a production system. The scope of JIT broadened and became associated with lean operations. 5

Lean Operations: A highly coordinated system that uses minimal resources and produces high-quality goods or service. 6 Depends on having high quality processes in place. The terms JIT/lean operations are often used interchangeably

JIT / Lean Production A system for scheduling production that results in low levels of work-in-process and inventory. It encompasses the entire organization. To pursue a system that functions well with minimal levels of inventories, minimal waste, minimal space, and minimal transactions. 7

Summary JIT Goals and Building Blocks Product Design Process Design Personnel Elements Manufacturing Planning Eliminate disruptions Make the system flexible Eliminate waste A balanced rapid flow Ultimate Goal Supporting Goals Building Blocks 8

is a balanced system. Achieves a smooth, rapid flow of materials through the system. Goals of JIT 9 Supporting Goals 1.Eliminate disruptions 2.Make system flexible 3.Eliminate waste, especially excess inventory Ultimate Goal

Sources of Waste Overproduction Waiting time Unnecessary transportation Processing waste Inefficient work methods Product defects 10

11 Example 1.Rack unnecessarily oversized taking up too much space on the line. 2.Example of wasted non-value-creating space. 3.Onerous operator task. 4.Unnecessary motions. 5.Operator idleness. Without JIT

12 1.Sequencing on line: e.g.: 2 people-carriers, 1 two-door, 1 saloon car… 2.Lightened logistics, small trains. 3.Small containers, less stock. 4.Line side compression, concentration on added value, reduction of waste. 5.Flexible multi-product line. 6.Operators creating added value. With JIT

Capacity: an upper limit on the rate of output. Capacity 13

Some Impacts in Capacity Design of facilities: size, provision for expansion. Locational factors: transportation costs, labor supply, energy sources. Facilities Quantity capability of a process, output quality, productivity. Process factor Task that make up a job, the training, skill, and experience required to perform a job. Human factors Scheduling, inventory stocking decision, late deliveries, acceptability of purchased materials and parts, and quality inspection and control procedure. Operational factors 14

Building block Process Design Product Design Manufacturing Planning & Control Personnel/ Organizational Elements Building Blocks 15

1.Product Design Workers have fewer parts to deal with, and training time and costs are reduced. Benefit- the ability to use standard processing. Standard Parts Greatly reduces the numbers of parts to deal with, simplifying assembly, purchasing, handling, training, and so on. Benefit-reducing the number of different part contained in the BOM for various product. Modular Design Engineering changes can be very disruptive to smooth operations. Benefit- it can substantially reduce this obstacle. Concurrent Engineering 16

2.Process Design Small lot size enable JIT systems to operate effectively. Permit greater flexibility in scheduling. Small Lot sizes Small lot and changing product mixes frequent setups. Longer setup times require holding more inventory than with short setup times. Setup Time Reduction The cells contain the machines and tools needed to process families of parts having similar processing requirements. Benefits of this cells are reduced changeover times, high utilization of equipment, and ease of cross-training operators. Manufacturing Cells The occurrence of quality defects during the process can disrupt the orderly flow of work. Consist of two mechanism-a)detecting defects when they occur. - b)stopping production to correct the cause of the defects Quality Improvements 17

3.Personnel/Organizational Elements is a fundamental tenet of the JIT philosophy. Well-trained and motivated workers are the heart of JIT system. Worker as Assets Workers are cross-trained to perform several parts of a process and operate variety of machines. Help one another when bottlenecks occur and help line balancing. Cross-Trained Workers Workers have greater responsibility for equality than workers in traditional systems. JIT workers receive excessive training in statistical process control, quality improvement, and problem solving. Continuous Improvement Traditional accounting distort overhead allocation because they allocate it on the basis of direct labor hours. Activity-based costing. It designed to more closely reflect the actual amount of overhead consumed by particular activity. Cost Accounting 18

4. Manufacturing Planning and Control Control of moving the work rests with the following operation; each workstation pulls the output from the preceding station. Work moves on in response to demand from the next stage in the process Pull System When work finished at a station, the output is pushed to the next station Work moves on as it is completed, without regard to the next station readiness for the work. Push system Keeping the workplace clean as well as keeping it free of any materials that are not needed for the production. Is the part of 5’s:sort,straighten, sweep, standardize, self- discipline Housekeeping Preventive maintenance which emphasize maintaining equipment in good operating condition and replacing parts that have a tendency to fail before they fail. Workers are often responsible for maintaining their own equipment. Preventive Maintenance 19

PULL SYSTEM 20

Pull System Replace material / parts based on demand, produce only what is needed A workstation pulls output from the preceding station as it is needed No pushing of materials into production to meet future demand 21

Starts with the last workstation in the production line or with the customer & works backward through the system. 22

Objectives Provides visual control of all resources A method of controlling the resources by replacing only what has been consumed. Eliminating waste of handling, storage, expediting, obsolescence, repair, rework, facilities, equipment, excess inventory Manufacture and ship only what has been consumed 23

PullPush Production precisionProduction approximation Actual consumptionAnticipated usage Small lotsLarge lots Low inventoryHigh inventory Waste reductionOver production Management by sightManagement by firefighting Better communicationPoor communication Produce based on orderProduce based on forecast Material Requirement Planning (MRP) Kanban system 24

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Benefits of Pull System Better communication Allow manufacture of only what is needed by the customer Highlights quality issues quickly Organize the workplace Support continuous improvements Provide a common system for moving material through a plant Low unit cost Good customer service 26

Conclusion of JIT JIT manufacturing is a coordinated production system that enables the right quantities or parts to arrive when they are needed precisely where they are needed. Key elements of JIT manufacturing are the pull system and kanban production, small lot sizes and quick setups, uniform plant loading, flexible resources, and streamlined layout. 27