Transcript Production and Operations Management: Manufacturing and
Lean Manufacturing
After completing the chapter you will: Learn how a production pull system works Study Toyota Production System concepts Learn about how value stream mapping can be used to identify wasteful activities See how Kanban cards can be used to control a pull system Understand how to accomplish lean production See examples of lean concepts applied to service systems
◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ Five key principles at Solectron to drive ‘Lean’ Value Value Chain Pull Flow Kaizen/Continuous Improvement Lean + Six Sigma In-depth statistical metrics Easier identification and quicker resolution of quality issues Improve Solectron’s quality and reduces waste
In dictionary… If you describe an organization as lean, you mean that it has become more efficient and less wasteful by getting rid of staff, or by dropping projects which were unprofitable.
◦ In the context of supply chains, Lean production refers to a focus on eliminating as much waste as possible ◦ ◦ Value chain Each step in the SC processes should create value.
If a step does not create value it should be removed from the process
◦ Lean production has evolved from JIT (Just-In-Time) production concepts pioneered in Japan at Toyota.
◦ In the 90s, The term lean was adopted in place of JIT To emphasize the goal of systematically eliminating waste throughout their SCs
◦ Lean production An integrated set of activities designed to achieve production using minimal inventories of raw materials, WIP, and finished goods.
Nothing will be produced until it is needed.
◦ ◦ ◦ To enable the pull process to work smoothly, High levels of quality at each stage of the process Strong vendor relations Fairly predictable demand for the end product
◦ ◦ TPS Was developed to improve quality and productivity A lean production ◦ ◦ Two philosophies Elimination of waste Respect for people
◦ Waste Anything other than the minimum amount of equipment, materials, parts, and workers which are absolutely essential to production ◦ ◦ ◦ ◦ ◦ ◦ ◦ Seven prominent types of waste Waste from overproduction Waste of waiting time Transportation waste Inventory waste Processing waste Waste of motion Waste from product defects
◦ Value chain mapping An approach that has been adopted to analyze a process to identify steps that can be improved.
Focused factory networks Group technology Quality at the source JIT production Uniform plant loading Kanban production control system Minimized setup times
◦ Small specialized plants rather than large vertically integrated mfg. facilities Toyota has 12 plants located around Toyota City Plants designed for one purpose can be constructed and operated more economically.
Coordination System Integration These are small specialized plants that limit the range of products produced (sometimes only one type of product for an entire facility) Some plants in Japan have as few as 30 and as many as 1000 employees
◦ ◦ ◦ GT improves product flow Eliminate movement and queue (waiting) time between operations Reduce inventory Reduce number of employees
Do it right the first time and when something goes wrong, stop the process or assembly line immediately.
Andon system ( http://www.toyotageorgetown.com/tps.asp
) Factory workers become their own inspectors.
◦ JIT Producing what is needed when needed and no more.
◦ Under JIT, Ideal lot size or production batch is one.
Keeping transfer quantities small –1/10 of a day’s production. The goal is to drive all inventory queues to zero, thus minimizing inventory investment and shortening lead times.
Work in process queues (banks) Machine downtime Scrap Vendor delinquencies Change orders Engineering design redundancies Design backlogs Paperwork backlog Inspection backlogs Decision backlogs
Example: By identifying defective items from a vendor early in the production process the downstream work is saved Example: By identifying defective work by employees upstream, the downstream work is saved
◦ ◦ Heijunka Smoothing the production flow to dampen the reaction waves that normally occur in response to schedule variation Make adjustments as small as possible by setting a firm monthly production plan for which the output rate is frozen.
Suppose we operate a production plant that produces a single product. The schedule of production for this product could be accomplished using either of the two plant loading schedules below.
Not uniform Jan. Units 1,200 Feb. Units 3,500 Mar. Units 4,300 Total 9,000
or
Uniform Jan. Units 3,000 Feb. Units 3,000 Mar. Units 3,000
How does the uniform loading help save labor costs?
Total 9,000
Cards Kanban squares Container system Colored golf balls
◦ Setting up a kanban system requires Determination of the number of kanban cards (or containers) needed ◦ Each container represents The minimum production lot size Accurate estimate of the lead time needed to produce a container of parts is the key to determining the number of container.
◦ ◦ ◦ ◦ ◦ Muffler fabrication needs Catalytic converter (CC) Key sentences Catalytic converters are made in batches of 10 units.
The CC cell can respond to an order for a batch of CCs in approximately four hours.
The muffler assembly fabrication cell averages approximately eight assemblies per hour.
Management has decided to have safety stock equivalent to 10% of the needed inventory
◦ Machines must be quickly set up To produce the mixed models on the line.
◦ ◦ Two types of setup Internal setups Must be done while a machine is stopped External setups Can be done while the machine is running
◦ ◦ Lifetime employment for permanent positions Permanent workers Have job security More flexible Remain with a company Do all they can to help a firm achieve its goal Cooperative relationship between unions and management Bonuses encourage workers to improve productivity Management views workers as assets
◦ ◦ ◦ Partnership with suppliers Toyota relies heavily on subcontract networks Some suppliers are usually serving multiple customers Long term partnerships with suppliers and customers
Lean Layouts and Design Flows Lean Applications for Line Flows Lean Application for Workcenter Shops Six-Sigma Quality A Stable Schedule Work with Suppliers
◦ ◦ ◦ Lean layouts Balanced work flow with a minimum of WIP Linked operations through a pull system Internal and external logistics ◦ ◦ Preventive maintenance Flows are not interrupted by downtime or malfunctioning equipment Operators perform much of the maintenance
Reductions in setup and changeover times
◦ In a pure lean environment, No employee does any work until the product has been pulled from the end of the line by the market.
◦ When a product is pulled, A replenishment unit is pulled from upstream operations.
◦ ◦ The rules of the flow layout Employees to keep completed units at their workstation If someone takes the completed work away, the employee must move upstream in the flow to get additional work to complete.
◦ ◦ Workcenters vs. Lean Lean can be used if demand can be stabilized ◦ Stabilizing demand Easier when the demand is from downstream Internal customer Rather than an end customer Distributor Individual purchaser
Quality & Lean ◦ When employees are responsible for quality, ◦ Lean works at its best because only good quality products are pulled through the system When all products are good, No “just-in-case” extra inventory is needed.
Quality & Product Design ◦ Standard product configuration ◦ Fewer and standardized parts
◦ Lean production requires… A stable schedule over a lengthy time horizon Level scheduling Freeze windows Underutilization of capacity
◦ ◦ Level schedule Material to be pulled in uniform pattern Uniform enough to allow the various elements of production to respond to pull signals ◦ A given production system equipped with flexible setups and a fixed amount of material in the pipelines can respond
◦ Freeze window Period of time during which the schedule is fixed no further changes are possible ◦ Backflush Parts are periodically removed from inventory and accounted for based on the number of units produced
Under lean production ◦ Hedge providers Excess labor Excess machines Overtime Underutilization = excess capacity ◦ Cheaper than carrying excess inventory When demand is ◦ Greater than expected ◦ Overtime, part-time labor During idle periods Work group activities, workstation housekeeping, special projects
◦ ◦ Sharing information Sharing a firm’s projected usage requirements with its vendors, Vendors have a long-run picture of the demands Linked online Sharing production scheduling ◦ ◦ Confidence Confidence in the supplier or vendor’s delivery commitment allows reductions of buffer inventories Some suppliers even deliver to a location on the production line
1.Design Flow Process 2.Total Quality Control 3.Stabilize Schedule 4.Kanban Pull 5.Improve Product Design 6.Reduce Inventory More 7.Work with Vendors
Successfully applied by service firms ◦ ◦ ◦ ◦ Suitability depends on Firm’s markets Production and equipment technology Skill set Corporate culture 10 applications are introduced
◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ Organize problem-solving groups “Quality circles” are extended from mfg. to services Honeywell, First Bank, Miller, etc Upgrade housekeeping Only the necessary items are kept in a work area Everything is clean and in a constant state of readiness McDonald’s, Disneyland Upgrade Quality Process quality Consistently producing products and services McDonald’s
Clarify process flows ◦ ◦ Clarification of flows can improve process performance Fedex, Supermaids Revise equipment and process technologies ◦ Speedi-Lube, A hospital Level the facility load ◦ ◦ McDonald’s, Post office Eliminate unnecessary activities A step that does not add value is a candidate for elimination
◦ Reorganize physical configuration Work area configuration Introduce demand-pull scheduling ◦ ◦ ◦ Demand-pull (customer-driven) scheduling is necessary Wendy’s Develop supplier networks Cooperative association of suppliers and customers working over the long term for mutual benefit.
Lean ◦ Toyota Production System Elimination of waste ◦ GT, Heijunka, Kanbansystem, etc Respect for people Lean implementation requirements Lean Services
Lean Production seeks to achieve high volume production using which of the following?
a.
Minimal inventory of raw materials b.
Minimal inventory of work-in-process c.
d.
e.
Minimal inventory of finished goods All of the above None of the above
In the Toyota Production System, the “elimination of waste” involves which of the following?
a.
Overproduction b.
c.
Waiting time Transportation d.
e.
All of the above None of the above
In the Pull System the partner that begins the process of “pulling” is which of the following?
a.
Customers b.
c.
Vendors Fabrication personnel d.
e.
CEO All of the above
A Lean Production program requires which of the following?
a.
Employee participation b.
c.
Total quality control Small lot sizes d.
e.
Continuing improvement All of the above
Inventory has been known to hide which of the following production problems?
a.
Scrap b.
c.
Vendor delinquencies Decision backlogs d.
e.
All of the above None of the above
You want to determine how many kanban card sets you need for an operation. You find that average number of units demanded is 1,000 per hour, the lead time to replenish the order for this item is 10 hours, the container size is 10 units, and the safety stock is estimated to be 5% of the expected demand. Which of the following is the desired number of kanban card sets?
a.
1050 b.
1000 c.
d.
e.
605 500 None of the above
When trying to implement Lean system a “stabilized schedule” includes which of the following?
a.
Demand pull b.
c.
d.
e.
Backflush Fail-safe methods All of the above None of the above