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ch13.pptSCM 304 Principles of Supply Chain Management
Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved
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JIT/Lean Production
Chapter 13
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You will learn
Describe JIT/Lean and differentiate between the Lean philosophy and kanban systems.
Discuss the Lean perspective on waste and describe the eight major forms of waste, or muda, in an organization.
Discuss the Lean perspective on inventory.
Describe how a kanban system helps control inventory levels and synchronize the flow of goods and material across a supply chain.
Describe how the concepts of Lean supply chain and Lean Six Sigma represent natural extensions of the Lean philosophy.
Lean (1 of 2)
Lean – A philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities of an enterprise. It involves identifying and eliminating non-value-adding activities in design, production, supply chain management, and dealing with customers.
© 2013 APICS Dictionary
Source: leanopedia.com
Lean (2 of 2)
Lean Manufacturing – A way to eliminate waste and improve efficiency in a manufacturing environment
Lean focuses on flow, the value stream and eliminating muda, the Japanese word for waste
Lean manufacturing is the production of goods using less of everything compared to traditional mass production: less waste, human effort, manufacturing space, investment in tools, inventory, and engineering time to develop a new product
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Source: web-cab.com
Just-in-time (1 of 2)
Just-in-time – A philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity. In a broad sense, it applies to all forms of manufacturing and to many service industries as well.
© 2013 APICS Dictionary
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Source: saleswarp.com
Just-in-time (2 of 2)
Lean was generated from the Just-in-time (JIT) philosophy of continuous and forced problem solving
Just-in-time is supplying customers with exactly what they want when they want it
With JIT, supplies and components are “pulled” through a system to arrive where they are needed when they are needed
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Lean and JIT
https://www.youtube.com/watch?v=wfsRAZUnonI
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Toyota Production System (2 of 2)
Lean Manufacturing (also called the Toyota Production System (TPS)) is created by Toyota Motor Company’s Eiji Toyoda and Taiichui Ohno
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Toyota Production System (2 of 2)
Figure 13.1 The Performance Advantage of a JIT Plant, Circa 1986
Source: Based on J. Womack, D. Jones, and D. Daniel Roos, The Machine That Changed the World: The Story of Lean Production (New York: HarperCollins,1991).
Principles to Toyota Production System (1 of 2)
Work shall be completely specified as to content, sequence, timing, and outcome
Every customer-supplier connection, both internal and external, must be direct and specify personnel, methods, timing, and quantity of goods or services provided
Product and service flows must be simple and direct – goods and services are directed to a specific person or machine
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Principles to Toyota Production System (2 of 2)
Since the Toyota Production System requires that activities, connections, and flow paths have built-in tests to signal problems automatically, gaps become immediately evident.
Results of the TPS are improvements in reliability, flexibility, safety, and efficiency.
These lead to increase in market share and profitability.
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The Lean Perspective on Waste (1 of 5)
Waste – Any activity that does not add value to the good or service in the eyes of the consumer.
© 2016 APICS Dictionary
Products being stored
Products being inspected/delayed
Products waiting in queues
defective products
Source: www.slideshare.net/johndeken/lean-presentation-ppt
The Lean Perspective on Waste (2 of 5)
Eight commonly recognized sources of waste
Unnecessary transportation
Unnecessary inventory
Unnecessary/excess motion
Waiting
Overproduction
Inappropriate process
Defects
Underutilization of employees
Source: tulip.co
Copyright 2009 John Wiley & Sons, Inc.
The Lean Perspective on Waste (3 of 5)
Copyright 2009 John Wiley & Sons, Inc.
The Lean Perspective on Waste (4 of 5)
Copyright 2009 John Wiley & Sons, Inc.
The Lean Perspective on Waste (5 of 5)
The Lean Perspective on Inventory (1 of 3)
Triangles represent inventory between work centers A, B, and C.
The buildup of inventory hides the problems/disruptions that may occur but at a cost.
Figure 13.2 Inventory Positioned throughout a Supply Chain
The Lean Perspective on Inventory (2 of 3)
After a successful Lean program has been put in place, wasted movement and space are eliminated and work centers are moved closer together.
Inventory levels are reduced dramatically and work centers make only what is needed when it is needed.
Figure 13.3 Supply Chain after the Elimination of Excess Inventories
The Lean Perspective on Inventory (3 of 3)
https://www.youtube.com/watch?v=jPp_3-zfPaQ
Copyright 2009 John Wiley & Sons, Inc.
Inventory Hides Problems
Copyright 2009 John Wiley & Sons, Inc.
Less Inventory Exposes Problems
Key Lean Manufacturing Techniques
Lean is a journey! The Journey never ends!
Toyota estimates it is only 50% waste-free
Where to start?
5S
Kanban
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5s
5S - Strategy for creating a well organized, smoothly flowing manufacturing process
Five Elements of 5S:
Sort
Stabilize
Shine
Standardize
Sustain
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Source: 5smanagement.com/
Benefits of 5s
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Source: 5stoday.com
Increases organization and efficiency
Avoids wasted motion
Increases safety
Eliminates unnecessary inventory
Offers improvements at an inexpensive cost
© 2004 Superfactory™. All Rights Reserved.
Waste Identification – 5s
What waste can be identified in the following photos?
© 2004 Superfactory™. All Rights Reserved.
After 5S
Clear, shiny aisles
Color-coded areas
Slogans & banners
No work in process
5s in healthcare
https://www.youtube.com/watch?time_continue=1&v=aMkXICM1-98&feature=emb_logo
Kanban Systems (1 of 10)
Kanban system – A production control approach that uses containers, cards, or visual cues to control the production and movement of goods through the supply chain.
Source: blogs.sap.com
Source: twinbin.com
Kanban Systems (2 of 10)
Key characteristics:
Uses simple signaling mechanisms to indicate when specific items should be produced or moved.
Can be used to synchronize activities either within a plant or between different supply chain partners.
Are not considered planning tools, but rather control mechanisms that are designed to pull parts or goods through the supply chain based on downstream demand.
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Kanban Systems (3 of 10)
Two-card kanban system – A special form of the Kanban system that uses one card to control production and another card to control movement of materials.
Move card – A kanban card that is used to indicate when a container of parts should be moved to the next process step.
Production card – A kanban card that is used to indicate when another container of parts should be produced.
Kanban Systems (4 of 10)
Figure 13.5 Kanban System for Two Work Centers
Kanban Systems (5 of 10)
Figure 13.6 Release of Finished Materials from Work Center B
Kanban Systems (6 of 10)
Figure 13.7 Pulling of Raw Materials Into Production at Work Center B
Kanban Systems (7 of 10)
Figure 13.8 Removal of Finished Materials from Work Center A
Kanban Systems (8 of 10)
Summary of Kanban System
A downstream station pulls finished material out of work center B. (Figure 13.6)
Work center B pulls raw material into production. (Figure 13.7)
Demand for more raw material in work center B pulls finished material out of work center A. (Figure 13.8)
Kanban Systems (9 of 10)
Pull system – A production system in which actual downstream demand sets off a chain of events that pulls material through the various process steps.
A kanban system is also called a pull system.
Kanban Systems (10 of 10)
Other signaling methods:
Single-card systems, where the single card is the production card and the empty container serves as the move signal
Color coding of containers
Designated storage spaces
Computerized bar-coding systems
Benefits of Kanban
Highly visible systems
Simple, effective, and inexpensive
Reduces inventory and eliminates stockouts
Improves the quality of service
Improves lead times
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Recent Developments in Lean Thinking
Lean Six Sigma – A methodology that combines the organizational elements and tools of Six Sigma with Lean’s focus on waste reduction.
Lean Supply Chain Management – An extension of the Lean philosophy to supply chain efforts beyond production. Lean supply chain management seeks to minimize the level of resources required to carry out all supply chain activities.
Synchronizing the Supply Chain Using Kanbans
For a kanban system to work properly, there must be a smooth, consistent flow of material through the links of supply chain.
Figure 13.9 Using Kanban to Synchronize the Supply Chain
