1. OM&PM/Class 4b1 1Operations Strategy 2Process Analysis 3Lean Operations –Class 3b: House Game –Class 4a: The Paradigm of Lean Operations: The ideal –Class 4b: Getting to the ideal with Product Variety: TPS »Managing variety/flexibility »Toyota Production System 4Supply Chain Management 5Capacity Management in Services 6Total Quality Management 7Business Process Reengineering Operations Management & Performance Modeling

2. OM&PM/Class 4b2 How to run Lean Operations: Managing Variety  Monthly Production Requirement:  How should production be scheduled for the month?

3. OM&PM/Class 4b3 Synchronize: Heijunka Mixed Level/Balanced Production Batch Production Schedule Mixed Production Schedule (AAAABBBB..)(ABAB...) Product Apr/12.................15...........................30 Apr/12....................15.......................30 A B time FGI time FGI

4. OM&PM/Class 4b4 Synchronize: Heijunka Uniform Plant Loading  This does not mean building a single product.  Rather: –maintain a stable mix of products, –and firm frozen schedules based on actual orders  Benefits:  Costs:Must reduce scale economies

5. OM&PM/Class 4b5 Reducing Waste: Reduced Setup Times  What are the consequences of long setup times?  A requirement for small-lot-size, mixed-model production?

6. OM&PM/Class 4b6 Reducing Waste: Mixed-Load Pickup and Delivery Part A Plant Part B Plant Part C Plant Assembly Line Part A Plant Part B Plant Part C Plant Assembly Line Individual Pickup Mixed-Load Pickup

7. OM&PM/Class 4b7 Reducing Waste: Quality at the Source

8. OM&PM/Class 4b8 Reducing Waste: Quality at the Source  Fool-proof/Fail-safe design (Poka-Yoke)  Inspection –Self –Automated ( Jidoka )  Line-stopping empowerment (Andon) * Human infrastructure

9. OM&PM/Class 4b9 Continuous Improvement: Kaizen  Increase visibility of waste  Targeted improvements –Active worker involvement –Time for experimentation –Supplier involvement  Exploratory stress * Human infrastructure

10. OM&PM/Class 4b10.... Lean Operations: Best Implementation is TPS  TPS is a 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

11. OM&PM/Class 4b11 Class 4b: Learning Objectives  Lean Operations: In Search for the Holy Grail and zero Waste –Efficient Workflow: Cellular Layout –Level Mixed Production: Heijunka »Reduced batch sizes –Pull Execution: Kanbans –Quality at source: Jidoka –Continuous Improvement: Kaizen Flow Synchronization Low Cost Get ever closer to ideal