House Building Game

1
Lean Operations (JIT)

• House Building Game
• The transition to Lean Ops
• The Paradigm of Lean Operations The ideal
• Basic philosophy of Lean Ops
• Lean tools for synchronization waste reduction
• Towards a system of continuous improvement
• Approaching the ideal with Product Variety TPS
• Managing variety flexibiltiy
• Toyota Production System (TPS)

2
Paradigm of Lean Operations In Search for the
Holy Grail

• The ideal Process
• Synchronization of all flows
• 1 x 1
• production on demand
• defect free
• At lowest possible cost
• Waste Gap between ideal and actual
• How do we sync at lowest cost? gt Lean Tools
• How do we set up a system to continually reduce
  waste ?

3
The architect behind Lean Operations Toyotas
Taiichi Ohno and waste elimination

• Taiichi Ohno Toyota Production System Beyond
  Large-Scale Production
• Sources of waste at Toyota
• 1. Overproduction
• 2. Waiting
• 3. Inessential handling
• 4. Non-value adding processing
• 5. Inventory in excess of immediate needs
• 6. Inessential motion
• 7. Correction necessitated by defects
• Lean operations has been defined as a business
  system for organizing and managing product
  development, operations, suppliers, and customer
  relations that requires less human effort, less
  space, less capital, and less time to make
  products with fewer defects to precise customer
  desires, compared with the previous system of
  mass production.

4
Lean Tool 1 cut batch sizes An illustrative
example

• Consider the following 4-step process
• What is
• The bottleneck
• The process capacity or maximal R
• The theoretical flow time Tth
• The minimal amount of inventory needed to run at
  capacity
• Ith
• Call this scenario 1, the best. Lets now
  consider what happens if we have (transfer)
  batches

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Lean Tool 1 cut batch size ABCD example
continued

• Batch Shop (Batchsize 4)

0
1
2
3
4
1
2
Elapsed Time
3
4
1
9
2
0
3
1
4
2
1
9
2
0
3
1
4
2
T
T I R
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Lean Tool 2 process on demand
pull Just-In-Time operations

• JIT have exactly what is needed, in the
  quantity it is needed, when it is needed, where
  it is needed.
• hand-to-mouth material flow
• needed by whom?

7
Lean Tool 2 Synchronization with demand
customer demand pulls product
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Lean Tool 2 how make pull system in house game?
Production control
Roof cut
Base cut
FA
Base assembly
9
Lean Tool 2 Pull Implementation Kanban
Production Control Systems
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Lean Tool 3 Quality at the Source
Defects
Own Station

Next Station

End of Line

Final
End Users
Found at

Inspection

Hand

















Impact to the

Very

Minor

Rework


Significant

Warranty
Company


Minor

Delay

Rework

costs


Resched.


of work


Delay in

Adminis
tra
Delivery

tive costs




Additional

Reputation

Inspection



Loss of
Market
Share



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Quality at the Source Illustration via warranty
problems and costs
Source Business Week, June 25, 2001.
Source JD Power 1QS, May 2001

• Who is accountable for product warranty costs?
  How should it be shared among supply chain
  partners to create incentives to improve product
  quality and customer satisfaction?

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Reducing Waste Quality at the Source

• Fool-proof/Fail-safe design (Poka-Yoke)
• Inspection
• Self
• Automated (Jidoka)
• Line-stopping empowerment (Andon)
• Human infrastructure

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Lean Tool 4 Resource Pooling
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Lean Tool 5 Heijunka Mixed Level/Balanced
Production

• Batch Production Schedule Mixed Production
  Schedule
• (AAAABBBB..) (ABAB...)
• Product April 1.................15...........
  ................30 April
  1....................15.......................30
• A
• B

FGI
FGI
time
time
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Lean Tool 6 From Functional Layout to Product
Cell organization
Department 1
Production Control
Production Control
Production Control
Cell 1
Department 2
Department 2
Roof Cut
Roof Cut
Roof Cut
Base Cut
Base Cut
Base Cut
Department 2
Department 2
Base Assy
Base Assy
Base Assy
FA
FA
FA
Cell 3
Cell 2
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Managing Flows the Process View product cells

• Recall By rethinking the IBM Austin assembly
  plant and introducing cells, distance traveled by
  a card was cut from 1.5 miles to 200 yards. Floor
  space was reduced to half and production tripled
  with about the same number of workers.
• Pros of cells
• Cons of cells

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Teams in Cells and Lean Ops Human Resources
issues

• Advantages
• Consistent with the moral ideal of autonomy.
• Empowers the workforce through participation and
  autonomy in managing daily activities
• Gives unprecedented responsibility to workers
• Immediate and impartial feedback of problems
• Investigation of process improvements
• Monitoring quality
• They also gain better understanding of the
  process
• Challenges
• Less WIP means more tight coupling and less
  autonomy
• Rigid procedures and interdependence of cells
• Team dynamics incentives, team pressure,
• From monthly 30-day goals before to 3-minute
  goals now
• Does not leave much room for variability

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The impact of inventory and variability The
match game in The Goal
Output Buffer
Input Buffer

• What is the theoretical throughput (long-run
  average) of each kid? R
• What is the theoretical throughput (long-run
  average) of the process?
• What is the actual throughput of the process?
• Key drivers of actual throughput

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Towards a system of continuous improvement
Decrease variability and Cap inventory
2-face die (s0.7)
6-face die (s1.9)
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Towards a system of continuous improvement
Increase Problem Visibility River Analogy
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Visibility Time plays the role of Inventory in
Lean Service Operations
TIME
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Towards a system of continuous improvement
Kaizen Tools

• Increase visibility of waste
• Targeted improvements
• Active worker involvement
• Time for experimentation
• Supplier involvement
• Exploratory stress
• Human infrastructure

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SILS shipping in line sequence Business Mall
adjacent to Russelsheims LeanField
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Smartville, Hambach, France Integrating
suppliers directly
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Learning Objectives Lean Operations

• Paradigm of Lean Operations
• Strive for the ideal by eliminating waste
• This is a total business management system
• Synchronization Tools
• Reduced batch sizes
• Pull production control systems (vs. push)JIT
  Kanban control
• Quality at the source
• Resource pooling
• Level loading (Heijunka)
• Layout Cellular operations
• Set up a System for Continuous Improvement
• Reduce variability (blockage starvation in
  match game)
• Increase visibility (river analogy)
• Improve human infrastructure