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OperationsManagement,Chapter16JITandLeanOperations,PowerPointpresentationtoaccompanyHeizer/RenderPrinciplesofOperationsManagement,7eOperationsManagement,9e,Outline,GlobalCompanyProfile:ToyotaMotorCorporationJust-in-Time,theToyotaProductionSystem,andLeanOperationsEliminateWasteRemoveVariabilityImproveThroughput,OutlineContinued,Just-in-TimeJITPartnershipsConcernsofSuppliersJITLayoutDistanceReductionIncreasedFlexibilityImpactonEmployeesReducedSpaceandInventory,OutlineContinued,JITInventoryReduceVariabilityReduceInventoryReduceLotSizesReduceSetupCostsJITSchedulingLevelSchedulesKanban,OutlineContinued,JITQualityToyotaProductionSystemContinuousImprovementRespectforPeopleStandardWorkPracticesLeanOperationsBuildingaLeanOrganizationLeanOperationsinServices,LearningObjectives,Whenyoucompletethischapteryoushouldbeableto:,Definejust-in-time,TPS,andleanoperationsDefinethesevenwastesandthe5SsExplainJITpartnershipsDetermineoptimalsetuptime,LearningObjectives,Whenyoucompletethischapteryoushouldbeableto:,DefinekanbanComputetherequirednumberofkanbansExplaintheprinciplesoftheToyotaProductionSystem,ToyotaMotorCorporation,Largestvehiclemanufacturerintheworldwithannualsalesofover9millionvehiclesSuccessduetotwotechniques,JITandTPSContinualproblemsolvingiscentraltoJITEliminatingexcessinventorymakesproblemsimmediatelyevident,ToyotaMotorCorporation,CentraltoTPSisacontinuingefforttoproduceproductsunderidealconditionsRespectforpeopleisfundamentalSmallbuildingbuthighlevelsofproductionSubassembliesaretransferredtotheassemblylineonaJITbasisHighqualityandlowassemblytimepervehicle,Just-In-Time,TPS,andLeanOperations,JITisaphilosophyofcontinuousandforcedproblemsolvingviaafocusonthroughputandreducedinventoryTPSemphasizescontinuousimprovement,respectforpeople,andstandardworkpracticesLeanproductionsuppliesthecustomerwiththeirexactwantswhenthecustomerwantsitwithoutwaste,Just-In-Time,TPS,andLeanOperations,JITemphasizesforcedproblemsolvingTPSemphasizesemployeelearningandempowermentinanassembly-lineenvironmentLeanoperationsemphasizeunderstandingthecustomer,EliminateWaste,WasteisanythingthatdoesnotaddvaluefromthecustomerpointofviewStorage,inspection,delay,waitinginqueues,anddefectiveproductsdonotaddvalueandare100%waste,OhnosSevenWastes,OverproductionQueuesTransportationInventoryMotionOverprocessingDefectiveproducts,EliminateWaste,Otherresourcessuchasenergy,water,andairareoftenwastedEfficient,ethical,andsociallyresponsibleproductionminimizesinputs,reduceswasteTraditional“housekeeping”hasbeenexpandedtothe5Ss,The5Ss,Sort/segregatewhenindoubt,throwitoutSimplify/straightenmethodsanalysistoolsShine/sweepcleandailyStandardizeremovevariationsfromprocessesSustain/self-disciplinereviewworkandrecognizeprogress,The5Ss,Sort/segregatewhenindoubt,throwitoutSimplify/straightenmethodsanalysistoolsShine/sweepcleandailyStandardizeremovevariationsfromprocessesSustain/self-disciplinereviewworkandrecognizeprogress,TwoadditionalSsSafetybuildingoodpracticesSupport/maintenancereducevariabilityandunplanneddowntime,RemoveVariability,JITsystemsrequiremanagerstoreducevariabilitycausedbybothinternalandexternalfactorsVariabilityisanydeviationfromtheoptimumprocessInventoryhidesvariabilityLessvariabilityresultsinlesswaste,SourcesofVariability,IncompleteorinaccuratedrawingsorspecificationsPoorproductionprocessesresultinginincorrectquantities,late,ornon-conformingunitsUnknowncustomerdemands,SourcesofVariability,IncompleteorinaccuratedrawingsorspecificationsPoorproductionprocessesresultinginincorrectquantities,late,ornon-conformingunitsUnknowncustomerdemands,BothJITandinventoryreductionareeffectivetoolsinidentifyingcausesofvariability,ImproveThroughput,ThetimeittakestomoveanorderfromreceipttodeliveryThetimebetweenthearrivalofrawmaterialsandtheshippingofthefinishedorderiscalledmanufacturingcycletimeApullsystemincreasesthroughput,ImproveThroughput,Bypullingmaterialinsmalllots,inventorycushionsareremoved,exposingproblemsandemphasizingcontinualimprovementManufacturingcycletimeisreducedPushsystemsdumpordersonthedownstreamstationsregardlessoftheneed,Just-In-Time(JIT),PowerfulstrategyforimprovingoperationsMaterialsarrivewheretheyareneededwhentheyareneededIdentifyingproblemsanddrivingoutwastereducescostsandvariabilityandimprovesthroughputRequiresameaningfulbuyer-supplierrelationship,JITandCompetitiveAdvantage,Figure16.1,JITandCompetitiveAdvantage,Figure16.1,JITPartnerships,JITpartnershipsexistwhenasupplierandpurchaserworktogethertoremovewasteanddrivedowncostsFourgoalsofJITpartnershipsare:RemovalofunnecessaryactivitiesRemovalofin-plantinventoryRemovalofin-transitinventoryImprovedqualityandreliability,JITPartnerships,Figure16.2,ConcernsofSuppliers,DiversificationtiestoonlyonecustomerincreasesriskSchedulingdontbelievecustomerscancreateasmoothscheduleChangesshortleadtimesmeanengineeringorspecificationchangescancreateproblemsQualitylimitedbycapitalbudgets,processes,ortechnologyLotsizessmalllotsizesmaytransfercoststosuppliers,JITLayout,Table16.1,Reducewasteduetomovement,DistanceReduction,Largelotsandlongproductionlineswithsingle-purposemachineryarebeingreplacedbysmallerflexiblecellsOftenU-shapedforshorterpathsandimprovedcommunicationOftenusinggrouptechnologyconcepts,IncreasedFlexibility,CellsdesignedtoberearrangedasvolumeordesignschangeApplicableinofficeenvironmentsaswellasproductionsettingsFacilitatesbothproductandprocessimprovement,ImpactonEmployees,EmployeesarecrosstrainedforflexibilityandefficiencyImprovedcommunicationsfacilitatethepassingonofimportantinformationabouttheprocessWithlittleornoinventorybuffer,gettingitrightthefirsttimeiscritical,ReducedSpaceandInventory,Withreducedspace,inventorymustbeinverysmalllotsUnitsarealwaysmovingbecausethereisnostorage,Inventory,Inventoryisattheminimumlevelnecessarytokeepoperationsrunning,Table16.2,ReduceVariability,Inventorylevel,Figure16.3,Inventorylevel,ReduceVariability,Scrap,Setuptime,Latedeliveries,Qualityproblems,Processdowntime,Figure16.3,ReduceLotSizes,Figure16.4,ReduceLotSizes,IdealsituationistohavelotsizesofonepulledfromoneprocesstothenextOftennotfeasibleCanuseEOQanalysistocalculatedesiredsetuptimeTwokeychangesnecessaryImprovematerialhandlingReducesetuptime,LotSizeExample,D=Annualdemand=400,000unitsd=Dailydemand=400,000/250=1,600perdayp=Dailyproductionrate=4,000unitsQ=EOQdesired=400H=Holdingcost=$20perunitS=Setupcost(tobedetermined),Setuptime=$2.40/($30/hour)=0.08hr=4.8minutes,ReduceSetupCosts,HighsetupcostsencouragelargelotsizesReducingsetupcostsreduceslotsizeandreducesaverageinventorySetuptimecanbereducedthroughpreparationpriortoshutdownandchangeover,LowerSetupCosts,Figure16.5,ReduceSetupTimes,Figure16.6,JITScheduling,SchedulesmustbecommunicatedinsideandoutsidetheorganizationLevelschedulesProcessfrequentsmallbatchesFreezingtheschedulehelpsstabilityKanbanSignalsusedinapullsystem,Table16.3,Betterschedulingimprovesperformance,JITScheduling,LevelSchedules,ProcessfrequentsmallbatchesratherthanafewlargebatchesMakeandmovesmalllotssothelevelscheduleiseconomical“Jellybean”schedulingFreezingthescheduleclosesttotheduedatescanimproveperformance,SchedulingSmallLots,Figure16.7,Kanban,KanbanistheJapanesewordforcardThecardisanauthorizationforthenextcontainerofmaterialtobeproducedAsequenceofkanbanspullsmaterialthroughtheprocessManydifferentsortsofsignalsareused,butthesystemisstillcalledakanban,Kanban,UserremovesastandardsizedcontainerSignalisseenbytheproducingdepartmentasauthorizationtoreplenish,Figure16.8,Kanban,Figure16.9,PurchasedPartsSupplier,Sub-assembly,Finalassembly,MoreKanban,Whentheproduceranduserarenotinvisualcontact,acardcanbeusedWhentheproduceranduserareinvisualcontact,alightorflagoremptyspotonthefloormaybeadequateSinceseveralcomponentsmayberequired,severaldifferentkanbantechniquesmaybeemployed,MoreKanban,UsuallyeachcardcontrolsaspecificquantityorpartsMultiplecardsystemsmaybeusedifthereareseveralcomponentsordifferentlotsizesInanMRPsystem,theschedulecanbethoughtofasabuildauthorizationandthekanbanatypeofpullsystemthatinitiatesactualproduction,MoreKanban,Kanbancardsprovideadirectcontrolandlimitontheamountofwork-in-processbetweencellsIfthereisanimmediatestoragearea,atwo-cardsystemcanbeusedwithonecardcirculatingbetweentheuserandstorageareaandtheotherbetweenthestorageareaandtheproducer,TheNumberofKanbanCardsorContainers,NeedtoknowtheleadtimeneededtoproduceacontainerofpartsNeedtoknowtheamountofsafetystockneeded,NumberofKanbansExample,Dailydemand=500cakesProductionleadtime=2days(Waittime+Materialhandlingtime+Processingtime)Safetystock=1/2dayContainersize=250cakes,Demandduringleadtime=2daysx500cakes=1,000,AdvantagesofKanban,AllowonlylimitedamountoffaultyordelayedmaterialProblemsareimmediatelyevidentPutsdownwardpressureonbadaspectsofinventoryStandardizedcontainersreduceweight,disposalcosts,wastedspace,andlabor,Quality,StrongrelationshipJITcutsthecostofobtaininggoodqualitybecauseJITexposespoorqualityBecauseleadtimesareshorter,qualityproblemsareexposedsoonerBetterqualitymeansfewerbuffersandallowssimplerJITsystemstobeused,JITQualityTactics,Table16.4,ToyotaProductionSystem,ContinuousimprovementBuildanorganizationalcultureandvaluesystemthatstressesimprovementofallprocessesPartofeveryonesjobRespectforpeoplePeoplearetreat
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