Lean Operations

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• Lean Operations
• Just-In-Time

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• Chapter Coverage
• What are lean operations and JIT?
• Differences between traditional approach and JIT
• Disadvantage of JIT
• Lean philosophy of operations
• JIT techniques
• JIT planning and control

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• Lean operations
• Is the philosophy of moving towards zero waste in
  order to develop an operation that is
• faster,
• more dependable,
• produces higher quality products and service, and
• operates at low cost.
• Founded on doing the simple things well, on
  gradually doing them better and reducing waste
  every step of the way.

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• Just In Time, JIT
• JIT is an approach of producing goods and
  services exactly when they are needed.
• Minimum inventory if not zero
• Customers wait
• Encourages efficiency
• Quality not sacrificed

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JIT definitions(textbook definitions)

• JIT aims to meet demand instantly, with perfect
  quality and no waste
• 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
  suppliers flexibility and the users flexibility
• it is accomplished through the application of
  elements which require total employee involvement
  and team-work
• a key philosophy of JIT is simplification

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Differences between traditional approach and JIT

• Traditional approach vs. JIT

Cont
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Cont

• Traditional approach vs. JIT

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• Traditional approach

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JIT approach
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• Disadvantage of JIT
• The main sacrifice of JIT is low capital
  utilization (see Fig 15.10).
• Why is capital utilization in JIT systems low?
• Produce only when needed.
• Any stoppage will affect the rest of the system
  causing complete stoppage.
• JIT argument - No point producing output just for
  its own sake, it is counter productive because
  extra inventory hides problems and hinders
  improvement.

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Disadvantage of JIT Low capacity utilization
JIT APPROACH
focus on producing only when needed
TRADITIONAL APPROACH
fewer stoppages
lower capacity utilization, but
focus on high capacity utilization
low inventory so problems are exposed and solved
more stoppages because of problems
more production at each stage
no surplus production goes into inventory
high inventory means less chance of problems
being exposed and solved
extra production goes into inventory because of
continuing stoppages at stages
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The problem with inventory
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• Lean philosophy of operations
• Eliminate waste
• The involvement of everyone
• Continuous improvement

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• Eliminate Waste
• Waste can be defined as an activity which does
  not add value.
• Identifying waste is the first step towards
  elimination.
• The seven types of waste are

• Over production
• Waiting time
• Transport
• Process

• Inventory
• Motion
• Defective goods

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• Over production producing more than is
  immediately needed by the next process in the
  operation greatest source of waste.
• Waiting times Machine and labour waiting time
  are considered waste and they are measure in
  terms of machine efficiency and labour
  efficiency.
• Transport Moving materials around the plant and
  together with the double and triple handling of
  WIP, does not add value. Layout changes which
  bring processes closer together, improvement in
  transport methods and workplace organization can
  reduce waste.

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• Process the process itself can be a source of
  waste. For example, some operations may only
  exist because of poor component design.
• Inventory all inventory should be a target for
  elimination. However, it is only by tackling the
  causes of inventory that it can be reduced.
• Motion an operator may look busy but sometimes
  no value is being added by the work.
  Simplification of work is a rich source of
  reduction in the waste of motion.

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• Defective goods quality waste is often very
  significant in operation, even if actual measure
  of quality are limited. Total cost of quality
  are much greater than what meets the eye.

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• The involvement of everyone
• Lean approach to people management is called
  respect-for-humans system.
• It encourages
• Team based problem solving
• Job enrichment less monotonous, more
  responsibility, rewarding
• Job rotation change department, stage,
  function, cell
• Multi-tasking
• Its intention
• High degree of personal responsibility leads to
  ownership of job

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• Continuous improvement
• Lean objectives are expressed in ideals such as
• to eliminate waste completely
• Can never be fully achieved
• Require continuous improvement to move closer.

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• JIT techniques
• Adopt basic working practices
• Discipline comply to work standards that are in
  place for the safety of staff and the
  environment, and for the quality of the product.
• Flexibility give more responsibility to those
  capable even if it is beyond hes grade.
• Equality discard unfair and divisive personnel
  policies e.g. uniforms and pay structure
• Autonomy delegate decision making
  responsibilities to personnel involve in direct
  activity

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Cont

• Development of personnel staff training
• Quality of working life e.g. involvement in
  decision making, security of employment,
  enjoyment and working area facilities
• Creativity some enjoy not just doing a job
  successfully by improving it for the next time.
• Total people involvement take part in selection
  of new recruit, spending improvement budget,
  quality issues, etc.

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Cont

• Design for ease of processing
• Design determines 70 80 of production cost
• Design improvement can reduce product cost and
  make more efficient production process.
• Example reduce number of components, use better
  or cheaper material.
• Emphasize operations focus
• Concept of simplicity, repetition and experience
  breed competence.
• Focus processes on manageable sets of products,
  technologies, volumes and markets
• Structure operations objective so that they are
  consistent and coherent

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Cont

• Use small simple machines
• Use several small machines rather than one big
  one.
• Can produce few different components at a given
  time instead of batch by batch production.
• More robust, mobile, layout flexibility and
  reduce investment risk.
• Layout for smooth flow
• Long process routes provide opportunity for
  delay, inventory build up, adds no value to the
  product and slow down cycle time
• Workstations are close together, use U shaped
  line, use cell layout.

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Adopt Total Productive Maintenance (TPM)
Cont
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Cont

• Reduce set-up times
• Set-up time is the time taken to changeover the
  process from one activity to the next. During
  this time operation seizes. It is reduced by
  cutting out
• time taken to search for tools and equipment,
• Pre-preparation of tasks which delay changeover
  and
• Constant practice of set-up routines
• Ensure visibility
• More transparent operation is easier for staff to
  share in its management and improvement.
• Problems are easily detected and information
  becomes simple, fast and visual.
• Adopt JIT through the supply chain
• Expand JIT culture to key suppliers

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• JIT planning and control
• JIT planning and control is based on the
  principle of a pull system
• What are push planning and control pull
  planning and control?

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Push philosophies of planning and control
PUSH CONTROL
FORECAST
CENTRAL OPS. PLANNING AND CONTROL SYSTEM
OR
Instruction on what to make and where to send it
Work centre
Work centre
Work centre
Work centre
DEMAND

• Signal pushes work through the process
• Activities are scheduled by means of a central
  system and completed in line with central
  instructions
• No consideration for succeeding stages
  requirements
• High inventory

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Pull philosophies of planning and control
PULL CONTROL
Request
Request
Request
Request
Work centre
Work centre
Work centre
Work centre
DEMAND
Delivery
Delivery
Delivery
Delivery

• Signal pulls work only when required.
• Only customer can trigger movement sets the
  work pace.
• Lesser chances of inventory build-up.
• JIT favored.

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• Kanban control
• It is a system used of JIT planning and control.
• Based on the pull planning and control.
• Kanban is the Japanese word for card or signal.
• Card or signal used by customer stage to instruct
  supplier stage to send more materials.

Cont
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Cont

• Kanban control
• Three types of Kanban
• The move or conveyor kanban
• Signals a previous stage that material can be
  withdrawn from inventory.
• The production kanban
• Signals a production process to start producing a
  part to be place in inventory.
• The vendor kanban
• Signals an external supplier to send material to
  a stage.

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Cont

• Kanban control
• Receipt of kanban triggers movement, production
  or supply of one unit.
• Two kanbans ? two units
• Kanban comes in different form empty container,
  verbal instruction, color tokens, etc
• Two kanban procedure
• Single-card system either move or vendor kanban
• Dual-card system use move and production kanban

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• Each stage has a work center and an area for
  holding inventory.
• Loop 1 Stage B requires more parts ? withdraw a
  container from output stock of stage A ? empty
  container is kanban and sent to stage A work
  center ? signal for stage A to start production
• Loop 2 Move kanban taken from holding box to
  output stock point ? signal to move a full
  container from stage A to stage B.

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• Kanban rules
• Each container must have a kanban card indicating
  part number and description, user and maker
  location, and quantity.
• The parts are always pulled by the user or
  customer.
• No parts are started without a kanban.
• All containers contain exactly their number of
  parts.
• No defective parts may be sent to the user or
  customer.
• The maker can only produce enough parts to make
  up what has been withdrawn.
• The number of kanbans should be reduced.
• The time period should be made shorter

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• The End