Homework 2

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JIT Implementation using Value Analysis A Case Study (For help, See tutorial on page 4)

Consider the steel cabinet manufacturing line with the following process flow diagram. (see Figure 1**) Processing, storage/handling time (Hrs) 0.3 Hr 0.15 96 hrs. (storage time) 8 Hrs. (storage time) 0.20 Hrs 0.1 Hrs Inspection, And Rework 3.0 Hrs. (storage time) 0.5 Hrs. (Storage time) 0.1 Hrs Inspection and 0.1 Hrs for Rework 0.5 Hrs 3.00 Hrs 1.5 Hr , 0.1 Hrs for Inspection and 0.1 Hrs for Rework

34 hours ( 2.5 hours from plant to Company To Customers warehouse and 31.5 hrs. From warehouse to customers

Figure 1** ** See “Legend” for Figure 1 on page 3.

Steel coil preprocessing stamping

Buffer Inventory

1 Step Cabinet Manufacturing

Inspect (QC station)

Rework

Buffer Inventory

Spray and Dry

Buffer Inventory

Rework

Inspect (QC station)

Inspect (QC Station)

Rework

Coil Storage

Final assembly

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The value-added analysis using a flow chart is a mechanism to improve cycle times and productivity by visually separating value-adding from non-value-adding activities. The process is very straightforward and explained here. Follow this procedure apply it to the case study.

Lis 1. List all of the steps in the process from beginning to end (Figure 1)

2. Figure 1 shows a box for every step, in sequence.

3. Use the production rate in each box and determine the Total Cycle Time.

4. Identify those steps that do not add value to the process. Non value-added operations.

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5. to separate the value-added and non-value-added activities, move the boxes representing non- value-added processes to the right of the value added steps (as shown in Fiq.. 2)

. 6 From the information collected in step 5 determine the Non-Value-Added Cycle Time. This is the maximum waste that could be eliminated from the processing operations

. 7. Repeat step 5 and 6 above for all operations and then determine the Value Added Cycle time. . Now determine the ratio R1= value added time as % of total cycle time)

. 8. Move the boxes representing the value-added processes to the left of the value- adding steps (see Fig 2) Calculate the percentage of the current Total Cycle Time that is spent on Non-Value- Added operations. Construct a pie chart to communicate the analysis performed in steps 7 and 8 above. A recent study by a group of Industrial Engineers proved that some operation simplification and./or modifications could eliminate waste and substantially shorten the total cycle time. The following assumptions/facts must be used as the basis for elimination some non-value-added operations

• Assume A)-The existing Layout could not be modified, B)-The existing layout could be modified

• A stock entering a buffer storage must be moved to the next process within 0.5 hours

• Only one Inspection-Rework station should be used throughout the manufacturing cycle (You need to determine which one to keep). Note that, all other inspection functions could be incorporated into the individual processes. In addition, the items found defective in a processing station will be allowed to move through the system (with no further processing) and will be rejected at the end of the line.

• Steel coil inventory time should be reduced to 10 hours.

10.

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10. After step 8, the remaining processes are usually called Target Processes. a)- Develop the Diagram of the new layout (similar to figure 2) with Target Processes only, and determine the total Target Cycle Time. b)- Determine the ratio R2= value added time as % of total cycle time). Compare R1 and R2 and comment on the changes/improvements because of waste elimination.

c)- Analyze the Non-Value-Added steps (in the improved system) and suggest at least 3 alternatives method of improving those non value added activities.

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APPENDIX

V Value-Added Non-Value-Added

Figure 2

Symbols used in Figure 1: Symbol Used to indicate Processing Unit Storage (buffer or offline storage) Rework/Reclamation station Material/product handling (Time requires insignificant) Material/product handling (Time requires significant)

Operation 2

Operati on 1

Operati on c

R e w o r k

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Tutorial: Value Added & Waste elimination

Necessary and Un-necessary Activities.

Distinguishing necessary, nonvalue-added activities from the unnecessary,

purely wasteful ones is tricky because unnecessary activities in organizations

often seem necessary. For example, most purchasing-related tasks are

necessary because they procure the materials needed by value-added activities

for transformation the raw material into the final output.

Inspecting incoming parts for defects or counting materials in inventory also

seem necessary; inspection prevents defective parts from going into the

product (a valuable endeavor) and counting ensures that inventories are kept at

the right levels (also valuable). But the fact that an activity fulfills a valuable

purpose should not be confused with its adding value. For activities like

inspection and counting, alternatives might exist that would eleminate the

need for either. For example, requiring vendors to deliver only zero-defect

parts would eliminate the need for incoming inspection.

Here is a simple procedure to keep all this straight:

About each step, task, or activity in a process ask:

1. Does it transform something? If yes, go to 2. If no, go to 4.

2. Are customers willingly to pay for it? If yes, go to 3. If no, go to 4.

3. Is it done right the first time? If yes, it’s a value-added activity. If no, go to 4.

4. Is it necessary for the business or regulations? If yes, it’s a necessary nonvalue-

added activity. If no, it’s an unnecessary nonvalue-added activity, waste.

Support Organization:

To distinguish value-added from nonvalue-added activities, it is useful to

think of an organization as comprised of two organizations: One, the

production organization, makes the product or provides the service; the

other, the support organization, assists and supports the production

organization but does little that qualifies as value added. In common parlance,

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the production organization is called the line (or frontline) and the support

organization is called the staff.

The number of activities classified within the support organization can be very

large. Some of these activities include:

• Planning, control, and accounting activities.

• Logistical activities.

• Quality Activities.

• Change activities

Waste Elimination

Sources Of Waste

When all the obvious sources of waste have been removed, continuous

improvement efforts switch to searching for the hidden sources. What are

classified as waste?

Toyota’s Seven Wastes + 1

◾ Waste from producing defects

◾ Waste from overproduction

◾ Wasted (nonutilized) human talent

◾ Waste in transportation

◾ Waste from inventory

◾ Waste of motion

◾ Waste in processing

A way to help remember the eight wastes is the acronym DOWNTIME:

Defects, Overproduction, Waiting, Nonutilized human talent,

Transportation, Inventory, Motion, and Excess processing.

Canon’s Nine Wastes Toyota’s seven wastes emphasize factory wastes. Canon corporation uses a

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broader classification scheme of nine wastes that could be applied even to

service companies:

◾ Waste caused by work-in-process

◾ Waste caused by defects

◾ Waste in equipment

◾ Waste in expense

◾ Waste in indirect labor

◾ Waste in planning

◾ Waste in human resources

◾ Waste in operations

◾ Waste in startup

Classifying wastes is useful because it is easier to focus on wastes than to try

to attack everything at once. A company can begin eliminating waste by using

the eight or nine waste categories, then tailor the categories to better suit its

purposes and programs.

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Improvement Kickoff Making housekeeping the responsibility of everyone is a way to ease workers

into the improvement process and to prepare them for greater responsibility

later on. To this end, staffers and frontline workers should get together to

clean and organize their workplace. Keeping it that way on a continuous basis.

Five-S One way to instigate and maintain ongoing, workplace improvement is with a

5S projects. 5S refers to Japanese names for five steps to workplace

organization. The five Ss are:

◾ (sort): sort everything; toss out anything not needed ◾ (straighten): specify a place for everything; designate locations by number, color coding, name; put everything in its place,

◾ (shine): wash, clean, or paint everything so abnormal or problematic situations become obvious).

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◾ (standardize): Standardize (create procedures, rules, or guidelines for maintaining the first three Ss

◾ (sustain): self-discipline (develop habits and culture to maintain a clean, organized

NOTE: At some companies, a sixth S for safety is added and everything is organized with an eye on safety as well as functionality.