1. Operations Management Session 6
Lean Production
Operations Management Session 6

2. Objectives By the end of this session, student will be able to:
Discuss relative merits of different types of relationships with suppliers
Discuss criteria for selection of suppliers
Identify different purchasing strategies
Evaluate different approaches to e-procurement

3. Topics Make/Buy decision Vertical integration Purchasing strategies
Kieretsu
Supply chain partnerships
Virtual companies
Supplier selection
Purchasing techniques
E-procurement

4. Lean Operations & JIT Lean Philosophy of Operations
Eliminate Waste
Involve Everyone
Continuous Improvement
JIT as a set of techniques for managing operations
Basic working practices
Design for manufacture
Operations focus
Small simple machines
Flow layout
TPM
Set-up reduction
Total people involvement
Visibility
JIT supply
JIT as a method of planning and control:-
Pull scheduling
Kanban control
Levelled scheduling
Mixed modelling
Synchronisation

5. Eliminate Waste
Muda – anything that does not add value for the customer
Products in storage
Products being inspected
Products waiting in queues
Defective products
Unnecessary movement of materials or workers

6. Involve Everyone
“High dependency” – JIT and TQM heighten the dependency of an organisation on its agencies – especially employees and suppliers
“Respect for humans”
Team-based problem solving
Job enrichment
Job rotation
Multi-skilling

7. Continuous Improvement - kaizen
Generate sustained involvement in CI
Ability to link CI activities to the strategic goals of the company
Move CI activity across organisational boundaries
Manage strategically the development of CI
Articulate and demonstrate CI’s values
Ability to learn through CI activity

8. Basic Working Practices
Discipline - standards of quality and safety
Flexibility – removal of grading structures and restrictive practices
Equality – fair and egalitarian personnel policies
Autonomy – delegate responsibility
Development of personnel - training
Quality of working life – security of employment, involvement in decision making
Creativity – improving the job
Total people involvement – selecting new recruits, dealing directly with suppliers and customers, planning and reviewing

9. Design for Manufacture
If a product is easy to make it will be economical to produce
Consider the manufacturability early in the design phase
Integrate product design with process planning and design
Fewer components
Use of sub-assemblies
Better use of materials
Improvement of processing techniques

10. Operations Focus
“Simplicity, repetition and experience breed competence”
Focus each process on a limited set of products, technologies and markets
Structure operations objectives so that they are focused and coherent

11. Small Simple Machines
Several small machines can perform different processes simultaneously
If one large machine breaks down the process stops completely
Small machines can be moved easily
Lower risk investment decision

12. Layout for Smooth Flow Process Layout Work Cell 1 2 2 5 4 3 1 6 LATHE
SAW 2
SAW
PRESS
LATHE 2
SAW 5 4
LATHE
HEAT TREAT
LATHE
GRINDER 3 1
PRESS
GRINDER
HEAT TREAT 6
PRESS
GRINDER

13. Total Productive Maintenance (TPM)
Five Goals: -
Improve equipment effectiveness – examine faults to see if equipment can be used more effectively
Achieve autonomous maintenance – operators take part in maintenance leaving engineers to improve systems
Plan maintenance – fully worked out approach
Train all staff in relevant maintenance skills – appropriate and continuous training
Achieve early equipment management – ‘maintenance prevention’ at design and installation stage

14. Set-up Reduction
The time taken to change over the process from one activity to the next.
eg. pre-set tools so that a complete unit is fixed to the machine instead of having to be built up while the machine is stopped

15. Steps to Reduce Setup Time
Initial Setup Time
Separate setup into preparation, and actual setup, doing as much as possible while the machine/process is running (save 30 minutes)
Move material closer and improve material handling (save 20 minutes)
Standardize and improve tooling (save 15 minutes)
90 min
60 min
45 min
25 min
15 min
Use one-touch system to eliminate adjustments (save 10 minutes)
Training operators and standardizing work procedures (save 2 minutes)
Step 1
Step 2
Step 3
Step 4
Step 5
13 min

16. Visibility Performance measures are clearly displayed
Coloured lights indicate stoppages – Andon
SPC control charts regularly updated and clearly displayed
Visual control systems – kanbans
Workplace layouts clear and open plan

17. JIT Suppliers Incoming material and finished goods involve waste
Buyer and supplier form JIT partnerships
JIT partnerships eliminate
Unnecessary activities
In-plant inventory
In-transit inventory
Poor suppliers 22

18. Kanban Control Japanese word for card
Pronounced ‘kahn-bahn’ (not ‘can-ban’)
Authorizes production from downstream operations
‘Pulls’ material through plant
May be a card, flag, verbal signal etc.
Used often with fixed-size containers
Add or remove containers to change production rate

19. Case Study Toyota Production System
From Operations Management 4th ed., Slack et al

20. Levelled Scheduling Heijunka Production needed in 20 day period:
Product A = 3000
Product B = 1000
Product C = 1000
Current batch sizes:
Product A = 600
Product B = 200
Product C = 200
By reducing set up times can produce batch sizes small enough for 1 day:
Product A = 150
Product B = 50
Product C = 50
Considerably reduces inventory and makes the process more responsive

21. Labor Specialization Involves Breaking jobs into small component parts
Assigning specialists to do each part
First noted by Adam Smith (1876)
Observed how workers in pin factory divided tasks into smaller components
Found in manufacturing & service industries 15

22. Labour Specialisation Often Reduces Cost
Greater dexterity & faster learning
Less lost time changing jobs or tools
Use more specialized tools
Pay only for needed skills 16

23. Job Expansion Process of adding more variety to jobs
Intended to reduce boredom associated with labor specialization
Methods
Job enlargement
Job enrichment
Job rotation
Employee empowerment 17

24. Job Expansion/Enrichment
Control
Planning
Enriched Job
Enlarged Job
Task #2
Present Job
Task #3 18

25. Job Expansion Constraints
Higher capital cost
Workers’ preferences
Example: Some people prefer simple jobs
Higher wages required
Smaller labour pool
Increased accident rates
Lack of technology 19

26. Employee Empowerment Employee Empowerment Decision-Making Control
Planning 21

27. Job Design Continuum Self-directed Teams
Increasing reliance on employees contribution and increasing acceptance of responsibility by employee
Empowerment
Enrichment
Enlargement
Specialization 22

28. Limitations to Job Enlargement/Job Enrichment
Higher capital cost
Many individuals prefer simple jobs
Higher wages are required since the worker must utilize a higher level of skill
A smaller labor pool exists of persons able and willing to perform enriched or enlarged jobs
Increased accident rates may occur
Current technology in some industries does not lend itself to job enlargement and enrichment 23

29. Case Study
Create a schedule for a motor race pit stop