Transcript Introduction to Operations and Supply Chain Management

Just-in-Time/Lean Production
A repetitive production system
in which the processing and movement
of materials and goods occur
just as they are needed!
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Pre-JIT: Traditional Mass Production
Big lot sizes
Lots of inventory
”PUSH” material to next
stage
Big purchase shipments
???
Lower
per unit
cost
Big “pushes” of finished goods
to warehouses or customers
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Post-JIT: “Lean Production”
Tighter coordination along the supply chain
Goods are pulled along
— only make and ship what is needed
Smaller shipments
Minimal
or no
inventory
holding
cost
Smaller lots
Faster setups
Less inventory, storage space
”PULL” material to next stage
Goods are pulled out of
plant by customer demand
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JIT Goals
(throughout the supply chain)
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Eliminate disruptions
Make the system flexible
Reduce setup times and lead times
Minimize inventory
Eliminate waste
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Waste
Definition:
Waste is ‘anything other than the minimum
amount of equipment, materials, parts,
space, and worker’s time, which are
absolutely essential to add value to the
product.’
— Shoichiro Toyoda
President, Toyota
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Forms of Waste:
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Overproduction
Waiting time
Transportation
Processing
Inventory
Motion
Product Defects
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Inventory as a Waste
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Requires more storage space
Requires tracking and counting
Increases movement activity
Hides yield, scrap, and rework
problems
• Increases risk of loss from theft,
damage, obsolescence
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Building Blocks of JIT
• Product design
Standard parts
Modular design
Quality
C
MP
Sta
Pr o
ces
Pr o
duc
t
s
ff
G
OR
Des
ign
Des
ign
• Process design
• Personnel and organizational elements
• Manufacturing planning and control
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Process Design
• “Focused Factories”
• Group Technology
• Simplified layouts with little storage
space
• Jidoka and Poka-Yoke
• Minimum setups
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Personnel and Organizational
Elements
• Workers as assets
• Cross-trained workers
• Greater responsibility at lower levels
• Leaders as facilitators, not order givers
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Classic Organizational View
Top Management
Technical Staff
Long-term planning
Product line decisions
Expansion issues
Work methods, QC
Process improvements,
MIS
Middle management
Planning, purchasing
hiring, and capital decisions
Monitor costs
Supervisors
Planning Info
Control Info
Control activities in specific areas
Monitor quality, delivery, etc.
Direct Labor
Perform predetermined tasks
Detailed Methods,
Schedules
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JIT Organization View
Top Management
Long-term planning
Product line decisions
Expansion issues
Technical Staff
Training and Technical
Support
Planning, less purchasing
hiring, and capital decisions
Monitor costs and assist labor
Planning Info
Direct Labor (self-supervising)
Task performance and schedule attainment
Control specific areas of activity
Monitor quality, delivery, etc.
Participate in hiring and continuous
improvement
Technical Ideas
Middle management
Control Info
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Planning and Control Systems
• “Small” JIT
• Stable and level schedules
– Mixed Model Scheduling
• “Push” versus “Pull”
– Kanban Systems
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Kanban
Uses simple visual signals to control
production
• Examples:
 empty slot in hamburger chute
 empty space on floor
 kanban card
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Kanban Example
Workcenter A
Workcenter B
Workcenter B uses parts produced by Workcenter A
How can we control the flow of materials so that B always
has parts and A doesn’t overproduce?
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Kanban card: Signal to produce
Workcenter A
Workcenter B
Kanban Card
When a container is opened by Workcenter B, its kanban card is
removed and sent back to Workcenter A.
This is a signal to Workcenter A to produce another box of parts.
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Empty Box: Signal to pull
Workcenter A
Workcenter B
Empty box sent back. Signal to pull another full box into
Workcenter B.
Question: How many kanban cards here? Why?
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How Many Kanbans?
DT(1  x)
y
C
y
D
T
C
X
=
=
=
=
=
number of kanban cards
demand per unit of time
lead time
container capacity
fudge factor
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Example
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Hourly demand = 300 units
Lead time = 3 hours
Each container holds 300 units
Assuming no variation in lead-time or
demand (x = 0):
y = (300  3) / 300 = 3 kanban cards
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Extending the pull system
B
A
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Note:
• For a kanban system to work, we NEED
CONSISTENT demand across the work
centers
• How do we ensure this?
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Mixed Model Sequencing
Product
Monthly
Demand
Daily
Requirement
A
800
40
B
800
40
C
200
10
Largest integer that divides evenly into daily
requirement is 10:
A: 40 / 10 = 4
B: 40 / 10 = 4
C: 10 / 10 = 1
Mixed model sequence: A-B-A-B-A-B-A-B-C
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Implementing JIT
Eliminate
Surprises
Increase
Flexibility
Simplify
What about
automation?
Drive Out
Waste
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Putting the Squeeze on Resources
Squeeze!
NO
PAIN?
YES
– Simplify
– Eliminate Uncertainty
– Increase Flexibility
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