1. JIT/Lean Production Chapter 13

2. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 2 1. Define Just-in-Time.

3. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 3 Just-in time  Just-in-time – A philosophy of manufacturing, applicable to manufacturing and services based on planned elimination of all waste and on continuous improvement of productivity © 2010 APICS Dictionary

4. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 4 2. Define Lean.

5. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 5 Lean  Lean – A philosophy of production that emphasizes the minimization of the amount of all resources (including time) used in the various activities of an enterprise. It includes identifying and eliminating non-value-adding activities. © 2010 APICS Dictionary

6. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 6 Performance Advantage of a Lean Plant Circa 1986 Kicked off the JIT/Lean Production Revolution in the late 1980’s/early 1990’s Figure 13.1

7. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 7 Lean Philosophy  The Lean philosophy can be applied to a wide range of production and service environments.  Companies following the Lean philosophy can and do use a wide range of planning and control techniques, not just kanban.  The Lean philosophy is consistent with business process improvement, quality improvement, and supplier management initiatives.

8. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 8 3. Define Lean Supply Chain Management.

9. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 9 Lean Supply Chain Management  Lean supply chain management – a process that seeks to minimize the level of resources required to carry out all supply chain activities. © 2010 APICS Dictionary

10. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 10 4. Define Waste.

11. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 11 Waste  Waste – Any activity that does not add value to the good or service in the eyes of the consumer.  Called “muda” in Japanese  Identification of lean wastes began with Taiichi Ohno, a Toyota engineer.

12. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 12 5. What are the sources of waste?

13. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 13 Eight Lean Wastes  Overproduction  Waiting  Unnecessary transportation  Inappropriate process  Unnecessary inventory  Unnecessary/excess motion  Defects  Underutilization of employees

14. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 14 Lean Perspective on Inventory  Triangles represent inventory between work centers A, B, and C.  The buildup of inventory hides problems (at a cost) that may occur. Figure 13.2

15. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 15 Lean Perspective on Inventory  After a Lean transformation, wasted movement and space are eliminated and work centers are moved closer together.  Inventory levels are reduced dramatically and work centers make only what is needed when it is needed. Figure 13.3

16. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 16 Lean Perspective on Inventory Process of reducing inventory leads to reduction of the other “wastes” and exposes problems in order of severity (‘water and rocks’ analogy) Figure 13.4

17. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 17 Recent Developments in Lean Thinking  Lean Six Sigma – A methodology that combines the organizational elements and tools of Six Sigma with Lean’s focus on waste reduction.  Lean Supply Chain Management – An extension of the Lean philosophy to supply chain efforts beyond production. Lean supply chain management seeks to minimize the level of resources required to carry out all the supply chain activities.

18. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 18 6. What is the Kanban system?

19. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 19 Kanban System  Kanban system – A production control approach that uses containers, cards, or visual cues to control the production and movement of goods through the supply chain.  Key characteristics:  Uses simple signaling mechanisms to indicate when specific items should be produced or moved.  Can be used to synchronize activities either within a plant or between different supply chain partners.  Are not considered planning tools, but rather control mechanisms that are designed to pull parts or goods through the supply chain based on downstream demand.

20. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 20 Kanban System  Two-card kanban system – Uses one card to control production and another card to control movement of materials.

21. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 21 Kanban System for Two Work Centers Figure 13.5

22. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 22 Release of Finished Materials from Work Center B Figure 13.6

23. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 23 Pulling of Raw Materials into Production at Work Center B Figure 13.7

24. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 24 Removal of Finished Materials from Work Center A Figure 13.8

25. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 25 Two-card System Summary  A downstream system station pulls finished material out of work center B.  Work center B pulls raw material into production.  Demand for more raw material in work center B pulls finished material out of work center A.

26. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall13 - 26 Pull System  Pull system – A production system in which actual downstream demand sets off a chain of events that pulls material through the various process steps.  A kanban system is also called a pull system.