SCM

Fahido

om5-17.pptx

Home >Business & Finance homework help >Management homework help >SCM

Lean Operating Systems

COLLIER/EVANS

Explain the four principles of lean operating systems

Describe the basic lean tools and approaches

Explain the concept of Lean Six Sigma and how it is applied to improving operations performance

Explain how lean principles are used in manufacturing and service organizations

Describe the concepts and philosophy of just-in-time operating systems

LEARNING OUTCOMES

‹#›

OM5 | CH17

Lean Thinking

Approaches that focus on the elimination of waste in all forms, and smooth, efficient flow of materials and information throughout the value chain

To obtain faster customer response, higher quality, and lower costs

Lean operating systems: Manufacturing and service operations that apply the principles of lean enterprise

‹#›

OM5 | CH17

Principles of Lean Operating Systems

‹#›

OM5 | CH17

Eliminate waste

Eliminate any activities that do not add value in an organization

Increase speed and response

Better process designs allow efficient responses to customers’ needs and the competitive environment

Improve quality

Poor quality reduces yields, requiring extra inventory, processing time, and space for scrap and rework

Reduce cost

Simplifying processes and improving efficiency translates to reduced costs

17.1 Common Examples of Waste in Organizations

‹#›

OM5| CH17

Exhibit

Lean Tools and Approaches

5Ss: Derived from Japanese terms

Seiri (sort) - Each item is in the proper place

Seiton (set in order) - Arrange materials so that they are easy to find and use

Seiso (shine) - Clean work area

Seiketsu (standardize) - Formalize procedures and practices

Shitsuke (sustain) - Keep the process going

‹#›

OM5 | CH17

Visual Controls

Indicators for operating activities that are placed in plain sight of all employees

So that, everyone can quickly and easily understand the status and performance of the work system

Known as andon, from the Japanese term

‹#›

OM5 | CH17

Single Minute Exchange of Dies (SMED)

Quick setup or changeover of tooling and fixtures in processes

So that multiple products in smaller batches can be run on the same equipment

Reducing setup time frees up capacity that can be producing output, and therefore, generating revenue

‹#›

OM5 | CH17

Small Batch and Single-Piece Flow

Batching: Process of producing large quantities of items as a group before being transferred to the next operation

Single-piece flow: Concept of ideally using batch sizes of one

To utilize single-piece flow, a company must be able to change between products quickly and inexpensively by reducing setup times

‹#›

OM5 | CH17

Quality and Continuous Improvement

Quality at the source requires doing it right the first time

Eliminates the opportunities for waste

As an organization continuously improves its processes, it eliminates rework and waste

Makes the processes leaner

‹#›

OM5 | CH17

Total Productive Maintenance (TPM)

Focused on ensuring that operating systems will perform their intended function reliably

Goals

Maximize equipment effectiveness and eliminate unplanned downtime

Create worker ownership of equipment

Improve equipment operation through employee involvement activities

‹#›

OM5 | CH17

Lean Six Sigma

Lean tools focus on streamlining processes, while Six Sigma tools focus on root causes of problems

Draws upon the best practices of both approaches

Important part of implementing a strategy built upon sustainability

‹#›

OM5 | CH17

Key differences between lean production and Six Sigma

Lean production

Focused on efficiency

Tools are intuitive and easy to apply

Companies start with lean principles

Six Sigma

Focused on effectiveness

Tools require advanced training

Companies evolve toward sophisticated Six Sigma approaches

‹#›

OM5 | CH17

Just-in-Time Systems

Introduced at Toyota a half-century ago

Push system: Produces finished goods inventory in advance of customer demand using a forecast of sales

Parts and subassemblies are pushed through the operating system based on a predefined schedule that is independent of actual customer demand

Have long setup times and large batch sizes, resulting in high WIP inventories

‹#›

OM5 | CH17

Just-in-Time Systems

Pull system: Employees at a given operation go to the source of the required parts, and withdraw the units as they need them

By pulling parts from each preceding workstation, the entire manufacturing process is synchronized to the final-assembly schedule

Finished goods are made to coincide with the actual rate of customer demand

Results in minimal inventories and maximum responsiveness

‹#›

OM5 | CH17

Just-in-Time Systems

Based on pull-production, synchronizing the entire manufacturing process to the final assembly schedule

Results in smaller inventory between production stages, lower costs, and less physical capacity requirements

‹#›

OM5 | CH17

Kanban

Flag or a piece of paper that contains all relevant information for an order

Part number

Description

Process area used

Time of delivery

Quantity available

Quantity delivered

Production quantity

‹#›

OM5 | CH17

Kanban

Circulated within the system to initiate withdrawal and production items through the production process

Simple visual controls

‹#›

OM5 | CH17

17.2 A Two-Card Kanban JIT Operating System

‹#›

OM5| CH17

Exhibit

Calculation of Number of Kanban Cards Required

K = d(p + w)(1+α)/C

Where,

K = Number of kanban cards in the operating system

d = Average daily production rate as determined from the master production schedule

w = Waiting time of kanban cards in decimal fractions of a day

‹#›

OM5 | CH17

Calculation of Number of Kanban Cards Required

K = d(p + w)(1+α)/C

Where,

p = Processing time per part, in decimal fractions of a day

C = Capacity of a standard container in the proper units of measure

α = Policy variable determined by the efficiency of the process and its workstations and the uncertainty of the workplace

‹#›

OM5 | CH17

Calculation of Number of Kanban Cards Required

Number of kanban cards is directly proportional to the amount of work-in-process inventory

Managers and employees strive to reduce the number of cards in the system

Through reduced lead times (p or w), lower α values, or other improvements

‹#›

OM5 | CH17

JIT in Service Organizations

Service organizations are increasingly applying JIT

Firms have reduced order cycle time, office space requirements, and inventory investments, and have increased profits

Lean techniques can be detrimental to customer services that are based on human interactions

‹#›

OM5 | CH17

Lean operating systems is defined as manufacturing and service operations that apply the principles of lean enterprise

Lean tools focus on streamlining processes, while Six Sigma tools focus on root causes of problems

SUMMARY

‹#›

OM5 | CH17

5ss

Batching

Kanban

Lean operating systems

Lean thinking

Pull system

Push system

Single minute exchange of dies (SMED)

Single-piece flow

Total productive maintenance (TPM)

Visual controls

KEY TERMS

‹#›

OM5 | CH17

‹#›

OM5 | CH17