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Operations Strategy

An Introduction to Lean

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Operations Strategy

Operations Planning & Control

Levelled Scheduling
Examples of strategy elements: Push
Business Analysis Tools (other tools in later sections) OPT
Process Charts, Pareto, I-O, string diagrams DMRP
Value Stream Mapping Pull
Process Mapping 2-Bin (traditional)
Value Chain analysis Kanban
Benchmarking Visual workplace instructions
Standard work practices
Monitoring systems
Design Techniques/Principles - Product & MSD Balanced scorecard
MSD methodologies Visual Controls
Cell organisation SPC
GT Cells Supply Chain Mgt
Coding & Classification
Product cells Agile?
Negare Cells (&Agile?)
Process Cells Strategy? Improvement Techniques
Concurrent design/development
Continuous Improvement
Product FMEA
Quality Circles/Improvement Groups
Process FMEA
Capability Studies
Organisation/Human Aspects 5 S's
Virtual enterprise organisation Supplier Development
Teamworking Supplier Partnerships
Worker operational flexibility Supplier Assocs
Worker empowerment (job enlargement) Vendor managed inventory/Integrated supply
Change Management
Payment systems (modern v traditional)

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Operations Strategy, how to get to World Class performance

How to be competitive (‘world class’)

ƒ Apply an ‘off the shelf’ philosophy?
ƒ i.e. Lean, Agile etc. ‘I want to be like Toyota’

ƒ Develop a coherent Manufacturing/Operations Strategy

ƒ match the market requirements to the factory’s

Market Requirements: Factory Capabilities
Competitive Price Low cost
Reliable Delivery Line based dedicated
Responsive to changing
requirements Reliable delivery to firm
Wide product range, short
life Change-overs expensive
….. Specification …..

Operations Strategy

ƒ Examine ‘Philosophies’ first

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Operations Strategy: Philosophies

Operations Philosophies
ƒ Philosophies are prescriptive
ƒ Lean (Toyota/JIT)
ƒ Agile (QRM, Adaptable)
ƒ Prescriptive & Comprehensive
ƒ this is why you should do it
ƒ this is what you should do

ƒ May degenerate into an ad-hoc approach, e.g.

ƒ Good Practice/Benchmarking
ƒ Factory visits, competitor analysis
ƒ Apply good/accepted ideas
ƒ e.g we must have Kanban or ERP
ƒ Forgets the ‘why’
ƒ may not be coherent, co-ordinated or best use of

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Operations Strategy: TPS/Lean/JIT

Lean Manufacturing
ƒ Womack, Jones & Roos1 define Lean as:
ƒ ‘combines the advantages of craft & mass
ƒ ‘is “lean” because it uses less of everything
compared to mass production’
ƒ ‘Lean producers … set their sights explicitly on
perfection’ in contrast to mass who are content
with ‘good enough’
ƒ and say companies achieve this through:
ƒ ‘teams of multi-skilled workers’
ƒ ‘highly flexible, increasingly automated machines’

1 The machine that changed the world

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Operations Strategy: TPS/Lean/JIT

Lean, JIT & Toyota Production System (TPS)

ƒ ‘leanness’ is doing more with less,
less e.g. hrs/car
ƒ Just-In-Time (JIT) was defined by operations
academics (see Slack et al) as a target + the means
to achieve it:
ƒ eliminate waste by involvement of people + continuous
ƒ ‘waste’ = using less: people, plant, materials, money
ƒ See Ohno’s 7 “wastes” (TPS)
ƒ Overproduction , Over-processing (unnecessary op’s or
actions), Waiting,
ƒ Transport (handling materials), Movement (people, plant that
does not add value)
ƒ Defective units including rework
ƒ Inventory

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Operations Strategy: TPS/Lean/JIT Implementation

Implementation of Lean (the ‘How’)

ƒ The JIT-like explanation is a mixture of objectives and means
ƒ Everyone wants to eliminate waste, they just disagree about how
it should be done!
ƒ Lean/TPS/JIT prescribes how the objective should be attained
ƒ this is fine if the recipe is universally applicable
ƒ But, the JIT toolbox is rather large!
ƒ see the Bicheno Toolbox2
ƒ Some actions that don’t fall too obviously into the involvement +
continuous improvement categories
ƒ levelled scheduling, kanban, concurrent design
ƒ Do we use all of them, or just some?
ƒ Recasting the objective(s) might help to clarify matters

2 another reference text

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Operations Strategy: Predictability & Responsiveness

Lean/JIT aims for Predictability and Responsiveness

ƒ Predictability removes need for excess resource
ƒ resources (waste) reduced: stock, people, capacity etc
ƒ SPC, TPM, levelled scheduling, supplier development ….
remove sources of uncertainty

ƒ Responsiveness actions needed to cope with the sources of

variability (external or internal) that remain
ƒ team work, SMED (setup reduction), cells, …. improve
responsiveness (but within limits)

ƒ Actual implementation focus depends on conditions in the

ƒ The TPS/JIT/Lean set of actions can be seen to arise from their
application context, in particular the repetitious nature of volume
ƒ We will look at other types of industry later in the year
ƒ Each company must decide on their implementation plan

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Implementation Techniques

‘Bricks’ in the Wall

ƒ e.g. This was the view of an automotive parts company:

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