Operations Management JIT and Lean Operations Power Point

Operations Management JIT and Lean Operations Power. Point presentation to accompany Heizer/Render Operations Management © 2008 Prentice Hall, Inc. 16 – 1

Outline þ Global Company Profile: Toyota Motor Corporation þ Just-in-Time, the Toyota Production System, and Lean Operations þ Eliminate Waste þ Remove Variability þ Improve Throughput © 2008 Prentice Hall, Inc. 16 – 2

Outline – Continued þ Just-in-Time þ JIT Partnerships þ Concerns of Suppliers þ JIT Layout þ Distance Reduction þ Increased Flexibility þ Impact on Employees þ Reduced Space and Inventory © 2008 Prentice Hall, Inc. 16 – 3

Outline – Continued þ JIT Inventory þ Reduce Variability þ Reduce Inventory þ Reduce Lot Sizes þ Reduce Setup Costs þ JIT Scheduling þ Level Schedules þ Kanban © 2008 Prentice Hall, Inc. 16 – 4

Outline – Continued þ JIT Quality þ Toyota Production System þ Continuous Improvement þ Respect for People þ Standard Work Practices þ Lean Operations þ Building a Lean Organization þ Lean Operations in Services © 2008 Prentice Hall, Inc. 16 – 5

Learning Objectives When you complete this chapter you should be able to: 1. Define just-in-time and lean operations 2. Define the seven wastes and the 5 Ss 3. Explain JIT partnerships © 2008 Prentice Hall, Inc. 16 – 6

Learning Objectives When you complete this chapter you should be able to: 4. Define kanban þ Explain the principles of the Toyota Production System © 2008 Prentice Hall, Inc. 16 – 7

Toyota Motor Corporation þ Largest vehicle manufacturer in the world with annual sales of over 9 million vehicles þ Success due to JIT þ Continual problem solving is central to JIT þ Eliminating excess inventory makes problems immediately evident © 2008 Prentice Hall, Inc. 16 – 8

Toyota Motor Corporation þ Respect for people is fundamental þ Small building but high levels of production þ Subassemblies are transferred to the assembly line on a JIT basis þ High quality and low assembly time per vehicle © 2008 Prentice Hall, Inc. 16 – 9

Just-In-Time and Lean Operations þ JIT is a philosophy of continuous and forced problem solving via a focus on throughput and reduced inventory þ Lean production supplies the customer with their exact wants when the customer wants it without waste © 2008 Prentice Hall, Inc. 16 – 10

Just-In-Time, TPS, and Lean Operations þ JIT emphasizes forced problem solving þ Lean operations emphasize understanding the customer © 2008 Prentice Hall, Inc. 16 – 11

Eliminate Waste þ Waste is anything that does not add value from the customer point of view þ Storage, inspection, delay, waiting in queues, and defective products do not add value and are 100% waste © 2008 Prentice Hall, Inc. 16 – 12

Ohno’s Seven Wastes þ Overproduction þ Queues þ Transportation þ Inventory þ Motion þ Overprocessing þ Defective products © 2008 Prentice Hall, Inc. 16 – 13

Eliminate Waste þ Other resources such as energy, water, and air are often wasted þ Efficient, ethical, and socially responsible production minimizes inputs, reduces waste þ Traditional “housekeeping” has been expanded to the 5 Ss © 2008 Prentice Hall, Inc. 16 – 14

The 5 Ss þ Sort/segregate – when in doubt, throw it out þ Simplify/straighten – methods analysis tools þ Shine/sweep – clean daily þ Standardize – remove variations from processes þ Sustain/self-discipline – review work and recognize progress © 2008 Prentice Hall, Inc. 16 – 15

The 5 Ss þ Sort/segregate – when in doubt, throw it out þ Simplify/straighten – methods analysis tools Ss Two additional þ Shine/sweep – clean daily practices þ Safety – build in good þ Standardize – remove variations þ Support/maintenance – reduce fromvariability processes and unplanned þ Sustain/self-discipline – review work downtime and recognize progress © 2008 Prentice Hall, Inc. 16 – 16

Remove Variability þ JIT systems require managers to reduce variability caused by both internal and external factors þ Variability is any deviation from the optimum process þ Inventory hides variability þ Less variability results in less waste © 2008 Prentice Hall, Inc. 16 – 17

Sources of Variability 1. Incomplete or inaccurate drawings or specifications 2. Poor production processes resulting in incorrect quantities, late, or non-conforming units 3. Unknown customer demands © 2008 Prentice Hall, Inc. 16 – 18

Sources of Variability 1. Incomplete or inaccurate drawings or specifications 2. Poor production processes resulting in incorrect quantities, late, or non-conformingnunits ory t n e v i d n a s l T I o J o t h t e o v i t B c e f f 3. Unknown customer demands e e r s of tion a e s u a reduc c g n i y f i t n e d in i ty i l i b a i r a v © 2008 Prentice Hall, Inc. 16 – 19

Improve Throughput þ The time it takes to move an order from receipt to delivery þ The time between the arrival of raw materials and the shipping of the finished order is called manufacturing cycle time þ A pull system increases throughput © 2008 Prentice Hall, Inc. 16 – 20

Improve Throughput þ By pulling material in small lots, inventory cushions are removed, exposing problems and emphasizing continual improvement þ Manufacturing cycle time is reduced þ Push systems dump orders on the downstream stations regardless of the need © 2008 Prentice Hall, Inc. 16 – 21

Just-In-Time (JIT) • Powerful strategy for improving operations • Materials arrive where they are needed when they are needed • Identifying problems and driving out waste reduces costs and variability and improves throughput • Requires a meaningful buyer-supplier relationship © 2008 Prentice Hall, Inc. 16 – 22

JIT and Competitive Advantage Figure 16. 1 © 2008 Prentice Hall, Inc. 16 – 23

JIT and Competitive Advantage Figure 16. 1 © 2008 Prentice Hall, Inc. 16 – 24

JIT Partnerships þ JIT partnerships exist when a supplier and purchaser work together to remove waste and drive down costs þ Four goals of JIT partnerships are: þ Removal of unnecessary activities þ Removal of in-plant inventory þ Removal of in-transit inventory þ Improved quality and reliability © 2008 Prentice Hall, Inc. 16 – 25

Concerns of Suppliers þ Diversification – ties to only one customer increases risk þ Scheduling – don’t believe customers can create a smooth schedule þ Changes – short lead times mean engineering or specification changes can create problems þ Quality – limited by capital budgets, processes, or technology þ Lot sizes – small lot sizes may transfer costs to suppliers © 2008 Prentice Hall, Inc. 16 – 26

JIT Layout Reduce waste due to movement JIT Layout Tactics Build work cells for families of products Include a large number operations in a small area Minimize distance Design little space for inventory Improve employee communication Use poka-yoke devices Build flexible or movable equipment Cross-train workers to add flexibility Table 16. 1 © 2008 Prentice Hall, Inc. 16 – 27

Distance Reduction þ Large lots and long production lines with single-purpose machinery are being replaced by smaller flexible cells þ Often U-shaped for shorter paths and improved communication þ Often using group technology concepts © 2008 Prentice Hall, Inc. 16 – 28

Impact on Employees þ Employees are cross trained for flexibility and efficiency þ Improved communications facilitate the passing on of important information about the process þ With little or no inventory buffer, getting it right the first time is critical © 2008 Prentice Hall, Inc. 16 – 29

Reduced Space and Inventory þ With reduced space, inventory must be in very small lots þ Units are always moving because there is no storage © 2008 Prentice Hall, Inc. 16 – 30

Reduce Variability Inventory level Process downtime Scrap Setup time Quality problems Late deliveries Figure 16. 3 © 2008 Prentice Hall, Inc. 16 – 31

Reduce Variability Inventory level Process downtime Scrap Setup time Quality problems Late deliveries Figure 16. 3 © 2008 Prentice Hall, Inc. 16 – 32

JIT Scheduling þ Schedules must be communicated inside and outside the organization þ Level schedules þ Process frequent small batches þ Freezing the schedule helps stability þ Kanban þ Signals used in a pull system © 2008 Prentice Hall, Inc. 16 – 33

Kanban þ Kanban is the Japanese word for card þ The card is an authorization for the next container of material to be produced þ A sequence of kanbans pulls material through the process þ Many different sorts of signals are used, but the system is still called a kanban © 2008 Prentice Hall, Inc. 16 – 34

Kanban 1. User removes a standard sized container 2. Signal is seen by the producing department as authorization to replenish Signal marker on boxes Figure 16. 8 © 2008 Prentice Hall, Inc. Part numbers mark location 16 – 35

Kanban Finished goods Kanban Customer order Work cell Ship Kanban Raw Material Supplier Final assembly Kanban Purchased Parts Supplier Kanban Subassembly Figure 16. 9 © 2008 Prentice Hall, Inc. 16 – 36

Toyota Production System þ Continuous improvement þ Build an organizational culture and value system that stresses improvement of all processes þ Part of everyone’s job þ Respect for people þ People are treated as knowledge workers þ Engage mental and physical capabilities þ Empower employees © 2008 Prentice Hall, Inc. 16 – 37

Toyota Production System þ Standard work practice þ Work shall be completely specified as to content, sequence, timing, and outcome þ Internal and external customer-supplier connection are direct þ Product and service flows must be simple and direct þ Any improvement must be made in accordance with the scientific method at the lowest possible level of the organization © 2008 Prentice Hall, Inc. 16 – 38

Lean Operations þ Different from JIT in that it is externally focused on the customer þ Starts with understanding what the customer wants þ Optimize the entire process from the customer’s perspective © 2008 Prentice Hall, Inc. 16 – 39

Building a Lean Organization þ Transitioning to a lean system can be difficult þ Lean systems tend to have the following attributes þ Use JIT techniques þ Build systems that help employees produce perfect parts þ Reduce space requirements © 2008 Prentice Hall, Inc. 16 – 40

Building a Lean Organization þ Develop partnerships with suppliers þ Educate suppliers þ Eliminate all but value-added activities þ Develop employees þ Make jobs challenging þ Build worker flexibility © 2008 Prentice Hall, Inc. 16 – 41

JIT in Services þ The JIT techniques used in manufacturing are used in services þ Suppliers þ Layouts þ Inventory þ Scheduling © 2008 Prentice Hall, Inc. 16 – 42

ЭЪТИБОРИНГИЗ УЧУН РАҲМАТ! Мамуржон Рахимов mamurjon@gmail. com 93 -503 -6632 © 2008 Prentice Hall, Inc. 16 – 43