8 Lean Systems PowerPoint Slides by Jeff Heyl For Operations Management, 9e by Krajewski/Ritzman/Malhotra © 2010 Pearson Education 8–1 Lean Systems  Lean systems affect a firm’s internal linkages between its core and supporting processes and its external linkages with its customers and suppliers  One of the most popular systems that incorporate the generic elements of lean systems is the justin-time (JIT) system  The Japanese term for this approach is Kaizen The key to kaizen is the understanding that excess capacity or inventory hides process problems  The goal is to eliminate the eight types of waste 8–2 Eight Wastes TABLE 8.1 | THE EIGHT TYPES OF WASTE OR MUDA Waste Definition Overproduction Manufacturing an item before it is needed Inappropriate Processing Using expensive high precision equipment when simpler machines would suffice Waiting Wasteful time incurred when product is not being moved or processed Transportation Excessive movement and material handling of product between processes Motion Unnecessary effort related to the ergonomics of bending, stretching, reaching, lifting, and walking Inventory Excess inventory hides problems on the shop floor, consumes space, increases lead times, and inhibits communication Defects Quality defects result in rework and scrap, and add wasteful costs to the system in the form of lost capacity, rescheduling effort, increased inspection, and loss of customer good will Underutilization of Employees Failure of the firm to learn from and capitalize on its employees’ knowledge and creativity impedes long term efforts to eliminate waste 8–3 Continuous Improvement Figure 8.1 – Continuous Improvement with Lean Systems 8–4 Supply Chain Considerations  Close supplier ties  Low levels of capacity slack or inventory  Look for ways to improve efficiency and reduce inventories throughout the supply chain  JIT II  In-plant representative  Benefits to both buyers and suppliers  Small lot sizes  Reduces the average level of inventory  Pass through system faster  Uniform workload and prevents overproduction  Increases setup frequency 8–5 Process Considerations  Pull method of work flow   Push method Pull method  Quality at the source    Jidoka Poka-yoke Anadon  Uniform workstation loads     Takt time Heijunka Mixed-model assembly Lot size of one 8–6 Process Considerations Standardized components and work methods Flexible workforce Automation Five S (5S) practices Total Preventive Maintenance (TPM) 8–7 Five S Method TABLE 8.2 | 5S DEFINED 5S Term 5S Defined Sort Separate needed from unneeded items (including tools, parts, materials, and paperwork), and discard the unneeded Straighten Neatly arrange what is left, with a place for everything and everything in its place Organize the work area so that it is easy to find what is needed Shine Clean and wash the work area and make it shine Standardize Establish schedules and methods of performing the cleaning and sorting Formalize the cleanliness that results from regularly doing the first three S practices so that perpetual cleanliness and a state of readiness are maintained Sustain Create discipline to perform the first four S practices, whereby everyone understands, obeys, and practices the rules when in the plant Implement mechanisms to sustain the gains by involving people and recognizing them via a performance measurement system 8–8 Designing Lean System Layouts Line flows recommended  Eliminate waste One worker, multiple machines (OWMM) Group technology  Group parts or products with similar characteristics into families 8–9 Group Technology Figure 8.2 – One-Worker, Multiple-Machines (OWMM) Cell – 10 Number of Containers  Formula for the number of containers Average demand during lead time + Safety stock k= Number of units per container WIP = (average demand rate)(average time a container spends in the manufacturing process) + safety stock – 23 Determining the Appropriate Number of Containers EXAMPLE 8.1  The Westerville Auto Parts Company produces rocker-arm assemblies  A container of parts spends 0.02 day in processing and 0.08 day in materials handling and waiting  Daily demand for the part is 2,000 units  Safety stock equivalent of 10 percent of inventory a If each container contains 22 parts, how many containers should be authorized? b Suppose that a proposal to revise the plant layout would cut materials handling and waiting time per container to 0.06 day How many containers would be needed? – 24 Determining the Appropriate Number of Containers SOLUTION d a = 2,000 units/day, p= 0.02 day, α= 0.10, w= 0.08 day, and c= 22 units b Figure 8.5 from OM Explorer shows that the number of containers drops to 2,000(0.08 + 0.02)(1.10) k= 22 220 = 22 = 10 containers Figure 8.5 – OM Explorer Solver for Number of Containers – 25 Application 8.1 Item B52R has an average daily demand of 1000 units The average waiting time per container of parts (which holds 100 units) is 0.5 day The processing time per container is 0.1 day If the policy variable is set at 10 percent, how many containers are required? d (w + p )(1 + α) k= c 1,000(0.05 + 0.01)(1 + 0.1) = 100 = 6.6, or containers – 26 Other Kanban Signals Cards are not the only way to signal need Container system Containerless system – 27 Value Stream Mapping (VSM)  Value stream mapping is a qualitative lean tool for eliminating waste  Creates a visual “map” of every process involved in the flow of materials and information in a product’s value chain Product family Current state drawing Future state drawing Work plan and implementation Figure 8.6 – Value Stream Mapping Steps – 28 Value Stream Mapping Figure 8.7 – Selected Set of Value Stream Mapping Icons – 29 Value Stream Mapping Figure 8.8 – A Representative Current State Map for a Family of Retainers at a Bearings Manufacturing Company – 30 House of Toyota A key challenge is to bring underlying philosophy of lean to employees in an easy-to-understand fashion The house conveys stability The roof represents the primary goals of high quality, low cost, waste elimination, and short lead-times The twin pillars, which supports the roof, represents JIT and jidoka – 31 House of Toyota Highest quality, lowest cost, shortest lead time by eliminating wasted time and activity Just in Time (JIT)  Takt time Culture of Continuous Improvement  One-piece flow  Pull system Jidoka  Manual or automatic line stop  Separate operator and machine activities  Error-proofing  Visual control Operational Stability Heijunka Standard Work TPM Supply Chain Figure 8.9 – House of Toyota – 32 Operational Benefits and Implementation Issues Organizational considerations  Human costs of lean systems  Cooperation  Reward and trust systems and labor classifications Process considerations Inventory and scheduling  Schedule stability  Setups  Purchasing and logistics – 33 Solved Problem A company using a kanban system has an inefficient machine group For example, the daily demand for part L105A is 3,000 units The average waiting time for a container of parts is 0.8 day The processing time for a container of L105A is 0.2 day, and a container holds 270 units Currently, 20 containers are used for this item a What is the value of the policy variable, α? b What is the total planned inventory (work-in-process and finished goods) for item L105A? c Suppose that the policy variable, α, was How many containers would be needed now? What is the effect of the policy variable in this example? – 34 Solved Problem SOLUTION a We use the equation for the number of containers and then solve for α: d (w + p )(1 + α) k= c 3,000(0.8 + 0.2)(1 + α) = 270 so 20(27) (1 + α) = 3,000(0.8 + 0.2) = 1.8 α = 1.8 – = 0.8 – 35 Solved Problem b With 20 containers in the system and each container holding 270 units, the total planned inventory is 20(270) = 5,400 units c If α = 3,000(0.8 + 0.2)(1 + 0) k= 270 = 11.11, or 12 containers The policy variable adjusts the number of containers In this case, the difference is quite dramatic because w + p is fairly large and the number of units per container is small relative to daily demand – 36 – 37 ... perform the first four S practices, whereby everyone understands, obeys, and practices the rules when in the plant Implement mechanisms to sustain the gains by involving people and recognizing them... 2,000 units/day, p= 0.02 day, α= 0.10, w= 0 .08 day, and c= 22 units b Figure 8.5 from OM Explorer shows that the number of containers drops to 2,000(0 .08 + 0.02)(1.10) k= 22 220 = 22 = 10 containers... parts  Little’s law  Average work-in-process inventory equals the average demand rate multiplied by the average time a unit spends in the manufacturing process – 21 Number of Containers WIP = (average