1. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Chapter 15 Lean operations and JIT Source: Tibbet and Britten

2. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Lean operations and JIT Operations strategy Design Improvement Planning and control Operations management Lean operations and JIT The operation supplies … the delivery of products and services only when needed The market requires … specified time, quantity and quality of products and services

3. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 ‘The key principle of lean operations is relatively straightforward to understand: it means moving towards the elimination of all waste in order to develop an operation that is faster and more dependable, produces higher quality products and services and, above all, operates at low cost.’

4. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Synonyms continuous flow manufacture high value-added manufacture stockless production low-inventory production fast-throughput manufacturing lean manufacturing Toyota production system short cycle time manufacturing Source: Corbis/Denis Balihouse

5. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Traditional approach JIT approach stage A orders deliveries orders deliveries JIT material flow buffer inventory stage B buffer inventory stage C stage A stage Cstage B

6. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 JIT approach focus on producing only when needed fewer stoppages low inventory so problems are exposed and solved no surplus production goes into inventory lower capacity utilization, but Traditional approach focus on high capacity utilization more stoppages because of problems high inventory means less chance of problems being exposed and solved extra production goes into inventory because of continuing stoppages at stages more production at each stage JIT and capacity utilization

7. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 JIT aims to meet demand instantly, with perfect quality and no waste JIT definitions More fully: Improved overall productivity and elimination of waste Cost-effective production and delivery of only the necessary quantity of parts at the right quality, at the right time and place, while using a minimum amount of facilities, equipment, materials and human resources JIT is dependent on the balance between the supplier’s flexibility and the user’s flexibility JIT is accomplished through the application of elements that require total employee involvement and teamwork A key philosophy of JIT is simplification Source: Empics

8. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 The lean philosophy of operations is the basis for JIT techniques that include JIT methods of planning and control The lean philosophy of operations Eliminate waste Involve everyoneContinuous 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 Synchronization

9. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 The 5 S’s Sort (Seiri) Eliminate what is not needed and keep what is needed. Straighten (Seiton) Position things in such a way that they can be easily reached whenever they are needed. Shine (Seiso) Keep things clean and tidy; no refuse or dirt in the work area. Standardize (Seiketsu) Maintain cleanliness and order – perpetual neatness. Sustain (Shitsuke) Develop a commitment and pride in keeping to standards.

10. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 ‘Value stream’ mapping focuses on value-adding activities. It distinguishes between value-adding and non-value-adding activities. It is similar to process mapping but different in four ways:  It uses a broader range of information than most process maps.  It is usually at a higher level (5–10 activities) than most process maps.  It often has a wider scope, frequently spanning the whole supply chain.  It can be used to identify where to focus future improvement activities. ‘Value stream’ mapping

11. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 ‘Value stream’ map for an industrial air-conditioning installation service T/T = Task time TTT = Total throughput time V-A T = Value-added time C/T = Cycle time Survey Order Assemble Frame Wait in branch Wait for assembly Ship to branch and wait Wait for installers Install T/T = 0.5 Avail = 100% C/T = 30 T/T = 0.5 Avail = 100% C/T = 10 T/T = 5.0 Avail = 100% C/T = 12.5 T/T = 0.75 Avail = 100% C/T = 17 T/T = 0.75 Avail = 100% C/T = 35 Cash management Completion confirmation Operations planning Job tracking confirmations Sales office ForecastsInvoice status 30 mins 58 hrs 30 mins 96 hrs 5 hrs 48 hrs 60 mins 48 hrs 60 mins TTT = 258 hrs V-A T = 8 hrs

12. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Inventory level Delivering smaller quantities more often can reduce inventory levels Inventory level

13. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 operation movement inspection storage Activities: Waste (muda) Which of these symbols signify non-value- adding activities?  influencing the throughput efficiency Types of waste: delay over-production waiting time transport process inventory motion defective goods

14. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 WIP Defective materials ReworkScrap Downtime productivity problems WIP Defective materials ReworkScrap Downtime productivity problems Reduce the level of inventory (water) to reveal the operations’ problems The problem with inventory

15. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Small machines The conventional Western approach is to purchase large machines to get ‘economies of scale’. These often have long, complex set-ups, and make big batches, quickly creating ‘waste’.

16. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 JIT small machines approach: emphasis: flexibility economies of scope Using several small machines rather than one large one allows simultaneous processing, is more robust and is more flexible easy to move (layout) quick set-up flexible scheduling options cheaper tooling fewer set-ups needed planned maintenance easier

17. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 continuous improvement in small steps, to expose waste and eliminate it gradual reduction of inventory identify exposed problems emphasis: In JIT systems: eliminate these problems repeat the cycle Visible, enforced improvement ‘Traditional’ production systems often accept waste and use the insurance of all types of inventory

18. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Levelled scheduling equalizes the mix of products made each day 250 A 250 A 100 A 150 B 50 B 200 C 250 A 250 A 100 A 150 B 50 B 200 C 600 A 200 B 200 C 600 A 200 B 200 C Batch size A = 600, B = 200, C = 200 Scheduling in large batches Batch size A = 150, B = 50, C = 50 Levelled scheduling 150 A 50 B 50 C 150 A 50 B 50 C 150 A 50 B 50 C 150 A 50 B 50 C 150 A 50 B 50 C 150 A 50 B 50 C 150 A 50 B 50 C 150 A 50 B 50 C 150 A 50 B 50 C 150 A 50 B 50 C 150 A 50 B 50 C 150 A 50 B 50 C 150 A 50 B 50 C 150 A 50 B 50 C 150 A 50 B 50 C 150 A 50 B 50 C

19. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 complex structures simple structures JIT MRP JIT and/or MRP PERT simple routings complex routings JIT, MRP, or both?

20. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Key Terms Test Just-in-time (JIT) A method of planning and control and an operations philosophy that aims to meet demand instantaneously with perfect quality and no waste. Kaizen Japanese term for continuous improvement. Set-up reduction The process of reducing the time taken to change over a process from one activity to the next; also called single minute exchange of dies (SMED) after its origins in the metal pressing industry.

21. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Key Terms Test Single minute exchange of dies (SMED) Alternative term for set-up reduction. Andon A light above a workstation that indicates its state: whether working, waiting for work, broken down, etc. Andon lights may be used to stop the whole line when one station stops.

22. Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Key Terms Test Kanban Japanese term for card or signal; it is a simple controlling device that is used to authorize the release of materials in pull control systems such as those used in JIT. Levelled scheduling (Heijunka) The idea that the mix and volume of activity should even out over time so as to make output routine and regular, sometimes known by the Japanese term ‘heijunka’.