1. Chapter 13 Lean Systems
This presentation covers the material in Chapter 13 - Lean Systems.

2. APICS Definition of JIT
“A philosophy of manufacturing based on planned elimination of waste & continuous improvement of productivity.” …...

3. APICS Definition of JIT
“The primary elements of just-in-time are to:
Have only required inventory when needed,
Improve quality to zero defects,
Reduce lead times by reducing setup times, queue lengths, & lot sizes,
Incrementally revise operations themselves, and
Accomplish these things at minimum cost”.

4. APICS Definition of Lean Manufacturing
“A philosophy of production that emphasizes minimization of amount of all resources (including time) used in various activities of enterprise. It involves:
… Identifying & eliminating non-value-adding activities,
… Employing teams of multi-skilled workers,
… Using highly flexible, automated machines”

5. Calculate Number of Containers

6. Traditional View of Manufacturing
Key objective was to fully utilize capacity so that more products were produced by fewer workers & machines.
How? With large queues of in-process inventory waiting at work centers.
Workers & machines never had to wait for product to work on, so capacity utilization was high & production costs were low.
Result: products spent most of their time in manufacturing just waiting

7. JIT Manufacturing Philosophy
Main objective of JIT manufacturing is to reduce manufacturing lead times
This is primarily achieved by drastic reductions in work-in-process (WIP)
The result is a smooth, uninterrupted flow of small lots of products throughout production

8. Characteristics of Lean Systems: Just-in-Time
Pull method of materials flow
Consistently high quality
Small lot sizes
Uniform workstation loads
Standardized components and work methods
Close supplier ties
Flexible workforce
Line flows
Automated production
Preventive maintenance
This slide builds the key characteristics of JIT as described in the text.

9. Pull vs. Push System
Push—production of item begins before customer demand
Pull—production of item is triggered by customer demand

10. Consistently High Quality
Eliminate scrap & rework to achieve uniform product flow
Quality at the source—workers serve as their own quality inspector
Supplier quality must be 3 or better
Stopping assembly line probably means missed deliveries

11. Small Lot Sizes As small as possible to eliminate carrying inventory
Small lots cut lead times
Small lots help achieve level workload
But, small lots
Increase setups
Drive shorter setup times

12. Reducing Inventories through Setup Time Reduction
Central to JIT is reduction of production lot sizes so inventory levels are reduced
Smaller lot sizes result in more machine setups
More machine setups, if they are lengthy, result in:
Increased production costs
Lost capacity (idle machines during setup)
Answer is: REDUCE MACHINE SETUP TIMES

13. Uniform Workstation Loads
Same quantity and type products each day
Difficult to impossible in a job shop
Mixed-model assembly
Produce a mix of products in small lots

14. Working Toward Repetitive Manufacturing
Reduce Setup Times & Lot Sizes to Reduce Inventories
Change Factory Layout to Allow Streamlined Flows
Convert Process-Focused Layout to Cellular Manufacturing (CM) Centers
Install Flexible Manufacturing Systems (FMS)
…..more

15. Working Toward Repetitive Manufacturing
Standardize Parts Designs
Train Workers for Several Jobs
Implement Preventive Maintenance (PM) Programs
Install Effective Quality Control Programs
Develop an Effective Subcontractor Network

16. Standardized Components & Work Methods
Productivity tends to increase with increased repetition
Standardization of components reduces raw material inventory requirements

17. Closer Supplier Ties Close relationship required
Frequent delivery often directly to the assembly line
Consistently high quality
JIT manufacturers usually seek:
Local suppliers
Reduced inventory in supplier’s warehouse also
Long-term partnerships with suppliers

18. Flexible Workforce Workers can perform multiple jobs
Workers rotate to other jobs based on vacations, relieve bottlenecks, or even relieve boredom

19. Line Flows Can reduce setups One worker multiple machines (OWMM)
One worker may follow product through entire manufacturing operation

20. Automated Production Important part of JIT
However, for some tasks humans consistently outperform machines

21. Preventive Maintenance
Scheduled downtime to maintain equipment & reduce unscheduled maintenance
Use skilled technicians to maintain high-tech machines

22. Changes Required for JIT
JIT requires certain changes to factory & way it is managed:
Stabilize production schedules
Make factories more focused
Increase work center capacities
Improve product quality
Cross-train workers
Reduce equipment breakdowns
Develop long-term supplier relations

23. Eliminating Waste in Manufacturing
Make only what is needed now.
Reduce waiting by coordinating flows & balancing loads.
Reduce or eliminate material handling & shipping.
Eliminate unneeded production steps.
Reduce setup times & increase production rates.
Eliminate unnecessary human motions.
Eliminate defects & inspection.

24. People Make JIT Work
JIT has strong element of training & involvement of workers.
Culture of mutual trust & teamwork must be developed.
Attitude of loyalty to team & self-discipline must be developed.
Another crucial element of jit is empowerment of workers, giving them authority to solve production problems.

25. Elements of JIT Purchasing
Cooperative & long-term relationship between customer & supplier.
Supplier selection based not only on price, but also delivery schedules, product quality, & mutual trust.
Suppliers usually located near factory.
Deliveries directly to production line.
Parts delivered in small, standard-size containers with minimum of paperwork & in exact quantities.
Delivered material is of near-perfect quality.

26. Benefits of JIT Inventory levels drastically reduced:
Frees up working capital for other projects
Less space is needed
Customer responsiveness increases
Total product cycle time drops
Product quality is improved
Scrap & rework costs go down
Forces managers to fix problems & eliminate waste .... or it won’t work!

27. Uncovering Production Problems
We Must Lower Water Level!
Quality
Problems
Material
Shortages
Machine
Breakdowns
Workload
Imbalances
Worker
Absenteeism
Out-of-Spec
Materials
In-Process
Inventory
Production

28. Lot Size and Cycle Inventory
On-hand inventory
Time (hours)
100 –
75 –
50 –
25 –
0 –
Average cycle inventory

29. Lot Size and Cycle Inventory
Average cycle inventory
Lot size = 100
On-hand inventory
Time (hours)
100 –
75 –
50 –
25 –
0 –

30. Lot Size and Cycle Inventory
Average cycle inventory
Lot size = 100
Lot size = 50
On-hand inventory
Time (hours)
100 –
75 –
50 –
25 –
0 –

31. Lot Size and Cycle Inventory
Average cycle inventory
Lot size = 100
Lot size = 50
On-hand inventory
Time (hours)
100 –
75 –
50 –
25 –
0 –

32. Lot Size and Cycle Inventory
Average cycle inventory
Lot size = 100
Lot size = 50
On-hand inventory
Time (hours)
100 –
75 –
50 –
25 –
0 –

33. Kanban Production Control
At core of JIT manufacturing at Toyota is kanban, an amazingly simple system of planning & controlling production.
Kanban, in Japanese, means card or marquee.
Kanban is means of signaling to upstream workstation that downstream workstation is ready for upstream workstation to produce another batch of parts.

34. Kanbans & Other Signals
There are two types of kanban cards:
A conveyance card (c-kanban)
A production card (p-kanban)
Signals come in many forms other than cards, including:
An empty crate
An empty designated location on floor

35. Conveyance Kanban Conveyance Kanban Card
Part number to produce: M Part description: Valve Housing
Lot size needed: Container type: RED Crate
Card number: 2 of Retrieval storage location: NW53D
From work center: To work center: 35

36. Production Kanban Production Kanban Card
Part number to produce: M Part description: Valve Housing
Lot size needed: Container type: RED crate
Card number: 4 of Completed storage location: NW53D
From work center: To work center: 35
Materials required:
Material no. 744B Storage location: NW48C
Part no. B Storage location: NW47B

37. Flow of Kanban Cards & Containers
P-Kanban & Empty Container
C-Kanban & Empty Container
In-Process
Storage
Parts Flow
Downstream WC #2
Upstream WC #1
Full Container & P-Kanban
Full Container & C-Kanban
When Worker at Downstream Work Center #2 Needs Container of Parts, She Does Following:
She Takes C-Kanban From Container Just Emptied.
She Finds a Full Container of Needed Part in Storage.
She Places C-Kanban in Full Container & Removes P-Kanban From Full Container & Places It on a Post at Work Center #1.
She Takes Full Container of Parts With Its C-Kanban Back to Work Center #2.

38. Containers in a Kanban System
Kanban is a simple idea of replacement of containers of parts, one at a time
Containers are reserved for specific parts, are purposely kept small, & always contain same standard number of parts for each part number
At Toyota containers must not hold more than about 10% of day’s requirements.
There is minimum of two containers for each part number, one at upstream “producing” work center & one at downstream “using” work center

39. Single-Card Kanban System
Receiving post
Kanban card for product 1
Storage area
Kanban card for product 2
Assembly line 1
Assembly line 2
Empty containers
Fabrication cell O1 O2 O3
Full containers

40. Single-Card Kanban System
Receiving post
Kanban card for product 1
Storage area
Kanban card for product 2
Assembly line 1
Assembly line 2
Empty containers
Fabrication cell O1 O2 O3
The process starts with a card for the first product.
Full containers

41. Single-Card Kanban System
Receiving post
Kanban card for product 1
Storage area
Kanban card for product 2
Assembly line 1
Assembly line 2
Empty containers
Fabrication cell O1 O2 O3
The fabricated product moves to full container storage.
Full containers

42. Single-Card Kanban System
Receiving post
Kanban card for product 1
Storage area
Kanban card for product 2
Assembly line 1
Assembly line 2
Empty containers
Fabrication cell O1 O2 O3
Full containers are moved to final assembly.
Full containers

43. Single-Card Kanban System
Receiving post
Kanban card for product 1
Storage area
Kanban card for product 2
Assembly line 1
Assembly line 2
Empty containers
Fabrication cell O1 O2 O3
The same process is followed for product 2.
Full containers

44. Single-Card Kanban System
Receiving post
Kanban card for product 1
Storage area
Kanban card for product 2
Assembly line 1
Assembly line 2
Empty containers
Fabrication cell O1 O2 O3
Full containers

45. Single-Card Kanban System
Receiving post
Kanban card for product 1
Storage area
Kanban card for product 2
Assembly line 1
Assembly line 2
Empty containers O2
Fabrication cell O1 O3
Full containers O2

46. Single-Card Kanban System
Each container must have a card
Assembly always withdraws from fabrication (pull system)
Containers cannot be moved without a kanban
Containers should contain the same number of parts
Only good parts are passed along
Production should not exceed authorization
Part Number: Z
Location: Aisle 5
Bin 47
Lot Quantity: 6
Supplier: WS 83
Customer: WS 116
KANBAN
This slide presents the general operating rules for a single card system as presented in the text.

47. Lean Systems in Services
Consistently high quality
Uniform facility loads
Standardized work methods
Close supplier ties
Flexible workforce
Automation
Preventive maintenance
Pull method of materials flow
Line flows
This slide builds the key elements of lean service systems as described in the text.

48. Operational Benefits Reduce space requirements
Reduce inventory investment
Reduce lead times
Increase labor productivity
Increase equipment utilization
Reduce paperwork and simple planning systems
Valid priorities for scheduling
Workforce participation
Increase product quality
This slide builds the operational benefits of lean systems as described in the text.

49. Implementation Issues
Organizational considerations
Human cost of JIT systems
Cooperation and trust
Reward systems and labor classifications
Process considerations
Inventory and scheduling
MPS stability
Setups
Purchasing and logistics