Operations Management A Supply

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SAGE Publishing, 2017
Instructor Resource

Answers to End-of-Chapter Questions

Chapter 9: Lean Systems
Review Questions

1. What is lean thinking, and how is it different from JIT?

Answer:

Lean thinking has today almost entirely replaced use of the term JIT. Lean systems are based on the Toyota
Production System and seek to optimize use of time, human resources, and assets, while improving
productivity and quality. In the early 1980s, these practices started making their way to the Western world,
first as JIT and then today, as lean. Eliminating waste is the most essential element in the use of lean systems.

2. What does the Toyota Production System have to do with JIT and lean?

Answer:

Lean systems are based on the Toyota Production System. Toyota implemented what they referred
to as total quality control (TQC) in concert with their kanban system. This then became the final
piece of the Toyota Production System, and was later refined and renamed total quality
management (TQM). When a material movement or production signal or card (called a kanban) was
used, the system became much more effective. This began to be called the kanban or JIT system
within Toyota.

3. What is the most essential element of the lean philosophy? Why?

Answer:

Eliminating waste is the most essential element in the use of lean systems. Excess inventories are considered a
fundamental form of waste, and as inventories are reduced, problems with lead times, quality, supplier
deliveries, and timing are typically uncovered. Eventually, these problems are remedied, resulting in higher
levels of quality and customer service.

4. What person or people at Toyota is (are) most responsible for the development of the JIT concept?

Answer:

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Taiichi Ohno, working at Toyota from the very beginning, expanded the concepts established by Kiichiro and
Eiji, by developing and refining methods to produce items only as they were needed for assembly. He too,
visited Detroit several times to observe auto manufacturing techniques. After World War II, the destroyed
Toyoda production facilities were rebuilt, with Taiichi playing a major role in establishing the low-batch
production principles developed earlier.

5. How did the Toyota Production System get started?

Answer:

In 1950, Eiji Toyoda traveled to Detroit to study Ford’s automobile manufacturing system and was
particularly impressed with their quality improvement activities. He was also impressed with Ford’s
daily automobile output of 7,000 cars, compared to Toyoda’s cumulative 13 year output to date of
just 2,700 cars. Back in Japan, Eiji began implementing the flow production concepts he had seen at
Ford, and this became a foundation element of what was later referred to as the Toyota Production
System.

6. What is poka-yoke, who developed the concept, and what do you think it has to do with lean?

Answer:

Shigeo Shingo developed the concept of poka-yoke in 1961, while he was employed as a consultant at Toyota.
Poka-yoke means error- or mistake-proofing. The idea is to design processes such that mistakes or defects are
prevented from occurring in the first place, and if they do occur, then further errors are prevented. This is a
major element of lean, since it can reduce significant waste.

7. What are the seven wastes?

Answer:

See Table 9.2.

8. What are the Five-Ss and from where did they originate?

Answer:

See Table 9.3. The original Five-S’s came from Toyota and were Japanese words relating to industrial
housekeeping.

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9. What is SMED, and why would lean manufacturers want to achieve SMED?

Answer:

Lean manufacturers try to achieve SMED, which stands for single-minute exchange of die. The SMED system is
a set of techniques that make it possible to perform equipment setup operations in a matter of minutes –
ultimately, in the single-digit (less than 10 minute) range. If the SMED principles are followed, significant
reductions in setup time can be obtained.

10. What are kanbans and why are they used in lean systems?

Answer:

A kanban can be a card or some other type of signal, which indicates a need for items from the upstream
manufacturing cell, processing unit, or external supplier that is providing the needed material. In this way,
nothing is provided until a downstream demand occurs. In a lean system, this is a good way to minimize
inventory buildups.

11. How is a kaizen blitz different from kaizen?

Answer:

A continuous improvement effort is known as kaizen. In U.S. firms, the kaizen blitz has become popular, and
refers to typically a one-week, concentrated improvement effort covering many areas at once and involving
many workers in the firm.

12. How are lean services different from lean manufacturers? How are they the same?

Answer:

In many respects, services are like manufacturers—they have inventories, employees, procedures, locations,
equipment, suppliers, and customers. In other words, various forms of waste can be identified and removed
from most service processes. Lean practices are being used in banking, financial services, insurance,
healthcare, utilities, retail, and government agencies to deliver high quality, low cost services to increasingly
demanding customers. Lean services focus primarily on customer needs; they develop creative problem-
solving abilities to improve and standardize processes to satisfy customers.

13. Why is process visibility important for an effective lean system?

Answer:
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Lean involves the standardization of processes, so services must enable process visibility prior to any
standardization efforts. Process visibility means that transactions and other activities in a process are known
to users, and are performing accurately. Process visibility allows processes to be correctly aligned with key
business goals.

14. Discuss the linkage between lean systems and sustainability.

Answer:

Since lean systems are concerned with eliminating waste throughout the firm and its supply chains, the
linkage between lean and sustainability should seem clear. Adopting lean practices reduces waste and leads to
improved environmental performance and profitability. Further, lean systems increase the possibility that
firms will adopt more advanced environmental management systems, leading to yet further performance
improvements.

15. How can a company create a lean culture?

Answer:

This is where many organizations fail in their lean transformations. They successfully implement a number of
lean practices, but fail to make the activities become permanent, daily habits throughout the organization. The
management side of the lean culture requires teaching others every day how to systematically strive toward
the firm’s lean transformation with action and overcoming obstacles. The activities of lifelong learning and
improvement must be taught daily by the firm’s leaders. Managers can get lost in the bad habit of classroom
training followed by telling associates to go forth and improve. When this occurs in an organization, lean
merely becomes a fad. Leaders must become the teachers in the organization, and this is what will drive the
lean culture.

Discussion Questions
1. Discuss the seven wastes in terms of a business with which you are familiar.

Answer:

See Table 9.2 for the seven wastes. Answers will vary based on the company chosen.

2. Apply the Five-Ss to improve how you could complete your daily chores or homework assignments.

Answer:

See Table 9.3 for the Five-Ss. Answers will vary based on the student’s chores/homework.

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3. Use an example to show how you could use lean thinking with a supplier and then with a customer.

Answer:

Give a supplier more business, but have them deliver smaller quantities more frequently. Locate closer to an
important customer, delivering smaller quantities more frequently.

4. Can a company be lean if its suppliers and customers are not practicing lean? Explain.

Answer:

Yes, companies can practice lean inside the firm—reduce lot sizes, adopt 5-Ss, reduce waste…

5. What are the advantages and disadvantages of making small, frequent purchases from just a few suppliers?
How do we overcome the disadvantages?

Answer:

Small, frequent purchases allow firms to reduce inventory carrying costs while practicing small batch
production. It also enables better customer service. The disadvantage is that if a supplier is late or their quality
is poor, it could cause a stockout. The way to overcome this is to find a reliable supplier, and give them a lot of
business, to help them keep their delivery costs down.

6. Why should lean layouts be “visual”? How can this be accomplished?

Answer:

It makes it easy for operators at one processing center to monitor work occurring at other centers. In lean
manufacturing facilities, all purchased and WIP inventories are located on the production floor at their points
of use, and the good visibility makes it easy to spot inventory buildups when machine breakdowns and
bottlenecks occur.

7. Reducing production lot sizes and increasing equipment setups are common practices in most lean production
settings. Why? How can this be accomplished?

Answer:

Small batch scheduling drives down costs by reducing system inventories. It also makes the firm more flexible
to meet varying customer demands. Maintaining a set, level, small batch production schedule will also allow
suppliers to anticipate and schedule their deliveries, resulting in fewer late deliveries. This is accomplished

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with the use of kanbans. When manufacturing cells need parts or materials, they use a kanban to signal their
need for items from the upstream manufacturing cell, processing unit, or external supplier that is providing
the needed material.

8. How could your school implement lean practices? How could they sustain a lean culture?

Answer:

Will vary. Lean services (university) should focus on customer needs (students, parents, local population); they
develop creative problem-solving abilities to improve and standardize processes to satisfy these customers,
while using tools for increasing quality, reducing waste, and improving service delivery.

Point-and-Click Video Questions

1. What are the basic discussions of the two lean gurus?

Answer:

“Lean thinking” will increase the competiveness of a firm. Places like India and China will adopt lean thinking
quickly to remain competitive in the market. Lean thinking is easier to implement in a small company.

2. What are the actual Five S’s used at Kyocera’s office?

Answer:

Sort, Straighten, Standardize, Shine, Sustain.

3. Describe the activities undertaken at the die shop, when they implemented lean.

Answer:

They required managers to read “The Toyota Way”, two weeks prior to implementing changes. Employees
were required to attend training sessions for two days in a classroom. They took employees on tours of
assembly plants that used lean principles. The facility layout was reorganized to eliminate wasted movements.
They made sure that improvements that were put into place were sustainable and being sustained.

4. Explain what SMED really means and describe the two types of setups.

Answer:

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Single (digital) minute exchange of dies. It means to reduce the changeover time to less than 10 minutes.
Internal setups are activities that take place while the machine is stopped. External setups are activities that
take place when machine is running. Shutting the machine down and going to get the needed tools is an
example of internal setup.

5. What is the actual round trip taken by a container in the kanban demonstration?

Answer:

Container is filled at the punch press station. Then material is stored in a specified area. The next station is a
press brake station. The container is then sent back to the punch press for restock.

6. What are the arguments the two experts gave about applying lean in a service?

Answer:

If you have a process, that process can be improved using the lean methodology. It can really be deployed in
any business. There are variabilities within processes and lean smoothes out the process and reduces the
variabilities to reduce waste and increase flow.

Problems

1. Boehm Compressors uses a lean production assembly line to make its compressors. In one assembly
area, the demand is 100 parts per eight-hour day. It uses a container that holds eight parts. It
typically takes about six hours to round-trip a container from one work center to the next and back
again. They also desire to hold 15 percent safety stock of this part in the system.

a) How many containers should Boehm Compressors be using?

b) Calculate the maximum system inventory for this part.

c) If they reduced the number of containers by one, how would this impact the required round-trip
time, all else constant?

Answer:

a) K = (DT(1+S))/C = [(100/8)(6)(1.15)]/8 = 10.8, or 11 containers.

b) 11(8) = 88 parts

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c) Use K = 10, solve for T: 10 = [(100/8)(1.15)T]/8; T = 80/(12.5)(1.15) = 5.56 hrs

2. A lean system has the following characteristics:

Demand rate = 20 parts per hour; safety stock required = 5 percent; number of containers used = 14;
lead time to replenish an order = 6 hours.

a) Calculate the container size for the 14 containers.

b) Calculate the maximum system inventories.

c) If the required safety stock was changed to zero, what impact would this have on the container

size?

Answer:

a) C = (DT(1+S))/K = [(20)(6)(1.05)]/14 = 9 parts

b) 9(14) = 126

c) C = 120/14 = 8.57 or 9 parts, so no change.

3. A lean system uses 22 containers, each of which can hold 15 parts. The lead time required to round
trip one container through the system is normally 4 hours. The usual safety stock level is 10 percent.

a) What is the maximum demand rate this system can accommodate?

b) If demand is expected to be double the rate found in a) by the end of the year, what are all the

ways the system can accommodate this change?

Answer:

a) D = CK/T(1+S) = 15(22)/4(1.10) = 75 parts/hr.

b) The C could double to 30 parts; the K could double to 44 containers; the T could shrink to 2 hours.

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4. A manufacturing assembly line has a demand for a specific part of 1200 parts per eight-hour day. It
wants to design a lean system using containers. It takes about four hours to round-trip a container
from one work center to the next and back again. They also want to hold 10 percent safety stock of
this part in their system.

a) Design a container system and state each container’s size and how many are needed.

b) Calculate the maximum system inventory for this part.

Answer:

a) D = 150/hr; T = 4 hrs; S = 1.10

So K = (150)(4)(1.1)/C, or 660/C; if C= 10, would need 66 containers.

Other combinations will work, as long as KC=660.

b) 660 is the max. inventory