Discussion 7 - 327
Chapter 7:
Lean Thinking and Lean Systems
Operations Management in the
Supply Chain: Decisions and Cases,
6th edition
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
7-2
Chapter 7 Outline • Evolution of Lean
• Lean Tenets
• Stabilizing the Master Schedule
• Controlling Flow with the Kanban System
• Reducing Setup Time and Lot Sizes
• Changing Layout and Maintaining Equipment
• Cross-Training, Rewarding, and Engaging Workers
• Guaranteeing Quality
• Changing Relationships with Suppliers
• Implementation of Lean
7-3
Evolution of Lean • Toyota Production System (TPS)
• Developed in Japan (limited resources)
• Also known as Just-in-Time (JIT) manufacturing
• Came to U.S.- 1981 at Kawasaki motorcycle plant in
Lincoln, Nebraska
• Lean Production
• Term coined in late 1980s
• Popularized in 1990s by Womack, Jones & Roos, “The
Machine That Changed the World”
7-4
Lean Tenets • Create product/service value from customer perspective
• Reduce waste - muda
• Identify, study, improve the value stream • Observe the process - gemba
• Ensure simple, smooth, error-free flow • Determine takt time
• Produce only what is pulled by customer • Use kanbans
• Strive for perfection • Hold kaizen events, 5S, 5 Whys
7-5
The Seven Forms of Waste
Overproduction: Producing more than the demand for customers, resulting in
unnecessary inventory, handling, paperwork, and warehouse space.
Waiting time: Operators and machines waiting for parts or work to arrive from
suppliers or other operations. Customers waiting in line.
Unnecessary transportation: Double or triple movement of materials due to
poor layouts, lack of coordination, and poor workplace organization.
Excess processing: Poor design or inadequate maintenance or processes,
requiring additional labor or machine time.
Too much inventory: Excess inventory due to large lot sizes, obsolete items,
poor forecasts, or improper production planning.
Unnecessary motion: Wasted movements of people or extra walking to get
materials.
Defects: Use of material, labor, and capacity for production of defects, sorting
out bad parts, or warranty costs with customers.
7-6
Value Stream Mapping
• Value stream is all processing steps to complete
product/service
• Extension of process flowcharting
• Includes value-adding/non-value-adding activities
• Requires direct observation of process – gemba
• “Is this step or task necessary in creating value to the
customer?”
• Change and improve process
7-7
Inventory Covers Problems (Figure 7.2)
Poor
quality
Unreliable
supplier
Machine
breakdown Inefficient
layout
Bad
design
Lengthy
setups
W a te
r L e v e l
Water level indicates level of inventory in the system
7-8
Water Level Lowered To Expose Problems
Poor
quality
Unreliable
supplier
Machine
breakdown Inefficient
layout
Bad
design
Lengthy
setups
W a te
r L e v e l
Water level indicates level of inventory in the system
7-9
Water Flows Smoothly – once problems are solved
W a te
r L e v e l
Water level indicates level of inventory in the system
Problems reduced/solved
7-10
5 Whys Technique • Explores cause-and-effect relationships that underlie problems
(root causes)
• Enables root causes to be identified/resolved
• Example: Truck won’t start
• Why? Battery is dead.
• Why? Alternator not functioning.
• Why? Alternator belt is broken.
• Why? Truck was not maintained as recommended.
• Why? Truck is old; no replacement parts available.
• Solution? Find source for parts, or purchase new truck.
7-11
5S Technique • Organize workspace to improve employee morale, safety,
process efficiency.
• Reduces time looking for “things.”
Seiri to Sort (keep, toss)
Seiton to Straighten or set in order
Seiso to Shine, sweep, or clean
Seiketsu to Standardize
Shitsuke to Sustain (maintain)
7-12
Elements of Lean System
• Stabilizing the master schedule
• Controlling flow with kanban system
• Reducing setup time (quick changeover)
• Small lot sizes (lot size one)
• Efficient layout (linear flow, low inventories)
• Preventive maintenance
• Cross-training, rewarding workers
• Quality and continuous improvement
• Close relationships with suppliers (frequent deliveries)
7-13
Stabilizing the Master Schedule
• Production horizon set according to demand
• Production schedule repeated each day
• Uniform load – level work load across workers/machines
• Takt time – match supply (production rate ) to demand rate
• Produce planned quantity each day - no more
• Desirable, but not essential, to a lean system
7-14
Kanban System • Kanban - “marker” (card, sign)
• “Pull” production system
• Visual control system of cards and containers, or other
signal type
• Number of containers:
C
DT n
D = Demand rate (at work center)
T = Time for container to complete circuit
C = Container size (# units)
7-15
The Kanban System
• Signals the need for more parts
• Uses simple cards or signals to control production/inventory
• Each work center receives production order (card) from succeeding work center
• Prevents the buildup of inventory
• Reduces lead time
• Extends to receiving orders from suppliers
7-16
Kanban System (Figure 7.3)
7-17
Kanban Cards (Figure 7.4)
7-18
Reducing Setup Time and Lot Sizes • Reducing setup time:
• increases available capacity
• increases flexibility to meet schedule changes
• reduces inventory
• Setup types
• Single (single digit minutes)
• One-touch (less then 1 min; 2-step process)
• Internal (while machine stopped)
• External (while machine operating)
• Lot size reduction
• Goal: single-unit production
7-19
Non-Lean Layout (Figure 7.6)
Stockrooms
Supplier A Supplier B
Final
Assembly Work Centers
7-20
Lean Layout Final
Assembly
Supplier A Supplier B
Work Centers
7-21
Lean Layout with Group Technology (Cellular Manufacturing Layout)
Final
Assembly
Supplier A Supplier B
Line 1
Line 2
7-22
Engaging Workers
• Multifunction, cross-trained workers
• Flexibility to move to busy work centers
• New pay system to reflect skills variety
• Workers contribute individually and collaboratively
• Perform own maintenance and inspection
• Teamwork – problem solving
• Suggestion systems
7-23
Quality in a Lean System
• Quality is essential input into lean system
• Defects are waste
• No inventory to cover up mistakes
• System designed to expose errors; correct them at their
source (so not repeated)
• Continuous improvement of the process
7-24
Supplier Relationships • Viewed as the ‘external factory’
• Co-location; frequent deliveries
• Fewer suppliers
• No inspection—high quality is assumed (required)
• Integrated supplier programs
• Early supplier selection
• Family-of-parts sourcing
• Long-term strategic relationship
• Reduce paperwork and inspection
7-25
Implementation of Lean Systems
• Establish a cross-functional team
• Determine what value customers need
• Construct value stream map
• Eliminate waste (non-value-adding activities)
• Use customer demand to pull work thru process
• Implement team’s suggested changes
• Repeat the cycle on another process
7-26
Chapter 7 Summary • Evolution of Lean
• Lean Tenets
• Stabilizing the Master Schedule
• Controlling Flow with the Kanban System
• Reducing Setup Time and Lot Sizes
• Changing Layout and Maintaining Equipment
• Cross-Training, Rewarding, and Engaging Workers
• Guaranteeing Quality
• Changing Relationships with Suppliers
• Implementation of Lean