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Institute of Technology of Cambodia

Department of Industrial and Mechanical Engineering

Assignment and Homeworks

Lecturer : Mr. SENG Piseth


Subject : LEAN Manufacturing

Student : KHECHHUN Seyhak


ID : e20190387
Group : I5-Industrial

Academic Year: 2023-2024


Chapter2: JIT Lean Philosophy

Assignment1

Aircraft are expensive. Airlines try to use them Airlines like Aloha Airlines, that serves
round the clock because they can't make Hawall, particularly value the aircraft's
money from aircraft that are sitting idle on the flexibility. It allows them to provide frequent
ground. It is called 'running the aircraft hot in reliable services in both passenger and cargo
the industry. For many smaller airlines, the markets. So the aircraft that has been carrying
biggest barrier to running hot is that their passengers around the islands during the day
markets are not large enough to justify can be used to ship fresh supplies over night to
passenger flights during the day and night. So, the hotels that uncerpin the tourist industry.
in order to avoid aircraft being idle over night, The flexibility also allows the airline to
they must be used in some other way. That was respond to emergencies. When Hurricane Iniki
the motive behind Boeing's 737 'Quick hit the islands the passenger market collapsed
Change' (QC) aircraft. With it, airlines have unit damage could be repaired, but there was a
the flexibility to use it for passenger flights huge increase in the amount of cargo traffic to
during the day and, with less than a one-hour repair the island's facilities.
changeover (set- up) time, use it as a cargo
airplane throughout the night. Boeing Questions
engineers designed frames that hold entire
1 If the changeover between 'passengers' and
rows of seats that could smoothly glide on and 'cargo' took 2 hours instead of 1 hour, how
off the aircraft allowing twelve seats to be much impact do you think it would have on the
usefulness of the aircraft?
rolled into place at once. When used for cargo,
the seats are simply rolled out and replaced by 2 For an aircraft that carries passengers all the
special cargo containers designed to fit the time, what is the equivalent of set-up
reduction? And why might it be important?
curve of the fuselage and prevent damage to
the interior. Before rein- stalling the seats the
sidewalls are thoroughly cleaned so that, once
the seats are in place, passengers cannot tell the
difference between a QC aircraft and a normal
737.

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Select 5 of the JIT techniques and briefly describe their key purpose and how they contribute to
JIT operations.
1. Kanban Cards: Implement visual cards at each stage of the turnaround process (cleaning,
baggage loading, refueling, etc.) to signal completion and trigger the next step. This reduces
waiting time and ensures smooth flow.
2. Pull System: Instead of pre-scheduling every activity, only begin tasks when triggered by the
completion of the previous one. This avoids unnecessary work and adapts to real-time needs.
3. Small Batch Processing: Minimize baggage handling by prioritizing individual passenger
unloading and loading instead of large group movements. This reduces congestion and speeds
up the process.
4. Continuous Improvement: Regularly analyze turnaround times, identify bottlenecks, and
implement small, incremental improvements. This fosters a culture of continuous optimization.
5. Supplier Partnerships: Build close relationships with ground handling companies and
maintenance providers to ensure availability of equipment and personnel, minimizing delays
and increasing reliability.
Impact of Increased Changeover Time on QCs

1. If the changeover between 'passengers' and 'cargo' took 2 hours instead of 1 hour
• Lost revenue: Two hours of downtime translates to fewer flights or less cargo capacity per
day. This directly reduces an airline's revenue generation potential.
• Operational inefficiency: The longer setup time disrupts schedules, leading to delays and
missed connections. It also increases ground crew requirements and adds complexity to
logistics.
• Reduced flexibility: Airlines would be less likely to switch between passenger and cargo
configurations due to the extended downtime. This limits their ability to adapt to market
demands and capitalize on opportunities.
• Competition: Airlines with faster turnaround times or dedicated passenger/cargo fleets would
gain an edge.
2. For an aircraft that carries passengers all the time, what is the equivalent of set-up reduction?
And why might it be important?
• Implementing quick refueling and ground servicing procedures.
• Using efficient baggage handling systems to minimize loading and unloading times.
• Optimizing cabin cleaning and security checks.
• Employing self-service technologies for boarding and ticket management. Streamlining
passenger communication and procedures.

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Chapter4: Overall Equipment Effectiveness (OEE)

Homework

Question 1:
a) Explain the problems that might occur when trying to use and compare OEE data between
similar manufacturing plants.
b) Data has been collected for a machine over a number of weeks and is contained in Table 1,
calculate the OEE value for this resource.
c) Discuss the results you obtain and suggest the areas where any improvement effort should be
focused.
Table 1: Performance data (weekly average)

Answer1:
a) The problem that might occur when trying to use and compare OEE data between similar
manufacturing plants:
• Type of products that produce in the line are different, so we can’t note the problem
clearly.
• Small stop happens in production line then we don’t record it because they think that it’s
simple break.
• All produces have to be family products because it’s easy to compare key elements such
available rate, performance rate, and quality rate.
b) Calculate the OEE value for this resource
Given data:
𝑇𝑜𝑡𝑎𝑙 𝐵𝑟𝑒𝑎𝑘𝑠 𝑡𝑖𝑚𝑒 = (20 𝑚𝑖𝑛𝑠⁄𝑠ℎ𝑖𝑓𝑡) × (3 𝑠ℎ𝑖𝑓𝑡𝑠⁄𝑑𝑎𝑦) × (5 𝑑𝑎𝑦𝑠⁄𝑤𝑒𝑒𝑘 )
= 300 𝑚𝑖𝑛𝑠⁄𝑤𝑒𝑒𝑘
Max. time available = (8 ℎ⁄𝑠ℎ𝑖𝑓𝑡 × 60 𝑚𝑖𝑛𝑠⁄ℎ)(3𝑠ℎ𝑖𝑓𝑡𝑠⁄𝑑𝑎𝑦) × 5𝑑 ⁄𝑤𝑒𝑒𝑘

3
= 7200 𝑚𝑖𝑛𝑠⁄𝑤𝑒𝑒𝑘
𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 = 𝑚𝑎𝑥. 𝑡𝑖𝑚𝑒 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 − 𝑡𝑜𝑡𝑎𝑙 𝑏𝑟𝑒𝑎𝑘𝑠 𝑡𝑖𝑚𝑒
= 7200 − 300 = 6900 𝑚𝑖𝑛𝑠. 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘

𝑇𝑜𝑡𝑎𝑙 𝐵𝑟𝑒𝑎𝑘𝑑𝑜𝑤𝑛 𝑙𝑜𝑠𝑠𝑒𝑠 = 24 𝐵𝑇𝑠 × 5𝑚𝑖𝑛𝑠 ⁄𝐵𝑇 + 15 BTs × 60𝑚𝑖𝑛𝑠 ⁄𝐵𝑇


= 1020𝑚𝑖𝑛𝑠⁄𝑤𝑒𝑒𝑘
𝑆𝑒𝑡 𝑢𝑝 𝑙𝑜𝑠𝑠𝑒𝑠 = 20 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝑐ℎ𝑎𝑛𝑔𝑒𝑜𝑣𝑒𝑟𝑠 × 45𝑚𝑖𝑛𝑠⁄𝑐ℎ𝑎𝑛𝑔𝑒𝑜𝑣𝑒𝑟
= 900mins
𝑇𝑜𝑡𝑎𝑙 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑙𝑜𝑠𝑠𝑒𝑠 = 𝑏𝑟𝑒𝑎𝑘𝑑𝑜𝑤𝑛 𝑙𝑜𝑠𝑠𝑒𝑠 + 𝑆𝑒𝑡 𝑢𝑝 𝑙𝑜𝑠𝑠𝑒𝑠
= 1020mins + 900mins = 1920 mins
𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 = 𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 − 𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑙𝑜𝑠𝑠𝑒𝑠
= 6900𝑚𝑖𝑛𝑠 − 1920𝑚𝑖𝑛𝑠 = 4980 𝑚𝑖𝑛𝑠⁄𝑤𝑒𝑒𝑘
𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 4980
𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑅𝑎𝑡𝑒, 𝑎 = = = 0.72
𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 6900
Performance:
Given production time = 70 ℎ × 60 𝑚𝑖𝑛𝑠⁄ℎ = 4200𝑚𝑖𝑛𝑠
But the operation time is found = 4980mins. Thus, Speed Losses= 4980 − 4200 =
780 𝑚𝑖𝑛𝑠
Net Operating time = 𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒𝑠 − 𝑇𝑜𝑡𝑎𝑙 𝑠𝑝𝑒𝑒𝑑 𝑙𝑜𝑠𝑠𝑒𝑠
= 4980𝑚𝑖𝑛𝑠 − 780𝑚𝑖𝑛𝑠 = 4200𝑚𝑖𝑛𝑠
𝑁𝑒𝑡 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 4200
Performance Rate, 𝑝 = 𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 = 4980 = 0.84

Stated: No. of Good units produced = 60000 𝑢𝑛𝑖𝑡𝑠


No. of Defective units produced = 1000 + 1500 = 2500 𝑢𝑛𝑖𝑡𝑠
Total No. units produced 60000 + 2500 = 62500 𝑢𝑛𝑖𝑡𝑠
2500
Percentage defects = 60000 = 0.041 𝑜𝑟 4.1 %

Quality Losses = 4.1% × (𝑛𝑒𝑡 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒) = 0.041 × 4200 = 172.2 𝑚𝑖𝑛𝑠
Valuable operating time = 𝑛𝑒𝑡 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 − 𝑞𝑢𝑎𝑙𝑖𝑡𝑦 𝑙𝑜𝑠𝑠𝑒𝑠
= 4200 − 172.2 = 4027.8 𝑚𝑖𝑛𝑠
𝑣𝑎𝑙𝑢𝑎𝑏𝑙𝑒 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 4027.8
Quality rate, 𝑞 = = = 0.96
𝑛𝑒𝑡 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 4200

Finally, OEE = 𝑎 × 𝑝 × 𝑞 = 0.72 × 0.84 × 0.96 = 0.58 𝑜𝑟 58 %


Loading time= 6900𝑚𝑖𝑛𝑠
Valuable operating time= 4027.8𝑚𝑖𝑛𝑠
OEE= 58%

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The OEE gain is poor enough. It shows that out of 6900mins loading time available each
week, only 4027.8mins is actually being used effectively.
c) This operation of the production is low because the availability rate is poor. The availability
losses that include breakdown losses 17 hours and setup losses 15 hours, which cause a
huge loss in the production. The production should reduce the availability losses by
improving effective maintenance, and investigate the cause of setup losses. In addition,
they should in the production rate by increase allowed time for products produced by
production control.
Question 2:

a) OEE is used as a measure of resource effectiveness. Discuss the OEE method by outlining
its key elements and their relationship. Use a diagram to aid your answer.
b) A press line produces metal components for the aero-space industry. Performance data has
been collected for the line over a number of weeks and is contained in Table 1. Calculate
the OEE value for this resource and discuss the results you obtained.
Table 1: Performance data (weekly average)

Answer2:
a) Discuss the OEE method by outlining its key elements and their relationship. Use a
diagram to aid your answer.
b) Calculate the OEE value for this resource

Given data:
𝑇𝑜𝑡𝑎𝑙 𝐵𝑟𝑒𝑎𝑘𝑠 𝑡𝑖𝑚𝑒 = (30 𝑚𝑖𝑛𝑠⁄𝑠ℎ𝑖𝑓𝑡) × (3 𝑠ℎ𝑖𝑓𝑡𝑠⁄𝑑𝑎𝑦) × (5 𝑑𝑎𝑦𝑠⁄𝑤𝑒𝑒𝑘 )
= 450 𝑚𝑖𝑛𝑠⁄𝑤𝑒𝑒𝑘

Max. time available = (8 ℎ⁄𝑠ℎ𝑖𝑓𝑡 × 60 𝑚𝑖𝑛𝑠⁄ℎ) × (3𝑠ℎ𝑖𝑓𝑡𝑠⁄𝑑𝑎𝑦) × 5𝑑 ⁄𝑤𝑒𝑒𝑘

5
= 7200 𝑚𝑖𝑛𝑠 ⁄𝑤𝑒𝑒𝑘

𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 = 𝑚𝑎𝑥. 𝑡𝑖𝑚𝑒 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 − 𝑡𝑜𝑡𝑎𝑙 𝑏𝑟𝑒𝑎𝑘𝑠 𝑡𝑖𝑚𝑒


= 7200 − 450 = 6750 𝑚𝑖𝑛𝑠⁄𝑤𝑒𝑒𝑘 or 112.5 hours

𝑇𝑜𝑡𝑎𝑙 𝐵𝑟𝑒𝑎𝑘𝑑𝑜𝑤𝑛 𝑙𝑜𝑠𝑠𝑒𝑠 = 15 𝐵𝑇𝑠 × 2ℎ𝑜𝑢𝑟𝑠⁄𝐵𝑇 + 12 BTs × 0.5ℎ𝑜𝑢𝑟 ⁄𝐵𝑇


= 36 ℎ𝑜𝑢𝑟𝑠 ⁄𝑤𝑒𝑒𝑘
𝑆𝑒𝑡 𝑢𝑝 𝑙𝑜𝑠𝑠𝑒𝑠 = 6 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝑐ℎ𝑎𝑛𝑔𝑒𝑜𝑣𝑒𝑟𝑠 × 3 ℎ𝑜𝑢𝑟𝑠 ⁄𝑐ℎ𝑎𝑛𝑔𝑒𝑜𝑣𝑒𝑟
= 18 hours
𝑇𝑜𝑡𝑎𝑙 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑙𝑜𝑠𝑠𝑒𝑠 = 𝑏𝑟𝑒𝑎𝑘𝑑𝑜𝑤𝑛 𝑙𝑜𝑠𝑠𝑒𝑠 + 𝑆𝑒𝑡 𝑢𝑝 𝑙𝑜𝑠𝑠𝑒𝑠
= 36 hours + 18 hours = 54 hours
𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 = 𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 − 𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑙𝑜𝑠𝑠𝑒𝑠
= 112.5 ℎ𝑜𝑢𝑟𝑠 − 54 ℎ𝑜𝑢𝑟𝑠 = 58.5 ℎ𝑜𝑢𝑟𝑠⁄𝑤𝑒𝑒𝑘
𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 58.5
𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑅𝑎𝑡𝑒, 𝑎 = = = 0.52
𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 112.5
Performance:
Given production time = 45 ℎ𝑜𝑢𝑟𝑠
But the operation time is found = 58.5 hours. Thus, Speed Losses= 58.5 − 45 = 13.5ℎ
Net Operating time = 𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒𝑠 − 𝑇𝑜𝑡𝑎𝑙 𝑠𝑝𝑒𝑒𝑑 𝑙𝑜𝑠𝑠𝑒𝑠
= 58.5 ℎ − 13.5 ℎ = 45 ℎ𝑜𝑢𝑟𝑠
𝑁𝑒𝑡 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 45
Performance Rate, 𝑝 = = = 0.77
𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 58.5

Stated: No. of Good units produced = 16000 𝑢𝑛𝑖𝑡𝑠


No. of Defective units produced = 100 + 350 = 450 𝑢𝑛𝑖𝑡𝑠
Total No. units produced 16000 + 450 = 16450 𝑢𝑛𝑖𝑡𝑠
450
Percentage defects = = 0.027 𝑜𝑟 2.7 %
16450

Quality Losses = 2.7% × (𝑛𝑒𝑡 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒) = 0.027 × 45 = 1.2 ℎ𝑜𝑢𝑟𝑠


Valuable operating time = 𝑛𝑒𝑡 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 − 𝑞𝑢𝑎𝑙𝑖𝑡𝑦 𝑙𝑜𝑠𝑠𝑒𝑠
= 45 − 1.2 = 43.8 ℎ𝑜𝑢𝑟𝑠
𝑣𝑎𝑙𝑢𝑎𝑏𝑙𝑒 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 43.8
Quality rate, 𝑞 = = = 0.97
𝑛𝑒𝑡 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 45

Finally, OEE = 𝑎 × 𝑝 × 𝑞 = 0.52 × 0.77 × 0.97 = 0.39 𝑜𝑟 39 %


▪ Loading time= 112.5 ℎ𝑜𝑢𝑟𝑠
▪ Valuable operating time= 43.8 ℎ𝑜𝑢𝑟𝑠
=> OEE= 39%

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From calculation, the value of OEE is 39%. We assume that our performance is very low.
We take for schedule time is 112.5 hours but we actually use only 43.8 hours for doing our
work.

Question3:

Data has been collected for a machine over a number of weeks and is contained in Table 1.
a) Calculate the OEE value for this resource.
b) Discuss the results you obtain and suggest areas where any improvement effort should be
focused.
Table 1: Performance data (weekly average)

Answer3:
a) Calculate the OEE value for this resource.
Given data:
𝑇𝑜𝑡𝑎𝑙 𝐵𝑟𝑒𝑎𝑘𝑠 𝑡𝑖𝑚𝑒 = (25 𝑚𝑖𝑛𝑠⁄𝑠ℎ𝑖𝑓𝑡) × (3 𝑠ℎ𝑖𝑓𝑡𝑠⁄𝑑𝑎𝑦) × (5 𝑑𝑎𝑦𝑠⁄𝑤𝑒𝑒𝑘 )
= 375 𝑚𝑖𝑛𝑠⁄𝑤𝑒𝑒𝑘

Max. time available = (8 ℎ⁄𝑠ℎ𝑖𝑓𝑡 × 60 𝑚𝑖𝑛𝑠⁄ℎ)(3𝑠ℎ𝑖𝑓𝑡𝑠⁄𝑑𝑎𝑦) × 5𝑑 ⁄𝑤𝑒𝑒𝑘


= 7200 𝑚𝑖𝑛𝑠 ⁄𝑤𝑒𝑒𝑘

𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 = 𝑚𝑎𝑥. 𝑡𝑖𝑚𝑒 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 − 𝑡𝑜𝑡𝑎𝑙 𝑏𝑟𝑒𝑎𝑘𝑠 𝑡𝑖𝑚𝑒


= 7200 − 375 = 6825 𝑚𝑖𝑛𝑠. 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘

𝑇𝑜𝑡𝑎𝑙 𝐵𝑟𝑒𝑎𝑘𝑑𝑜𝑤𝑛 𝑙𝑜𝑠𝑠𝑒𝑠 = 8 𝐵𝑇𝑠 × 45𝑚𝑖𝑛𝑠⁄𝐵𝑇 + 45 BTs × 5𝑚𝑖𝑛𝑠⁄𝐵𝑇


= 585𝑚𝑖𝑛𝑠⁄𝑤𝑒𝑒𝑘
𝑆𝑒𝑡 𝑢𝑝 𝑙𝑜𝑠𝑠𝑒𝑠 = 42 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝑐ℎ𝑎𝑛𝑔𝑒𝑜𝑣𝑒𝑟𝑠 × 60𝑚𝑖𝑛𝑠⁄𝑐ℎ𝑎𝑛𝑔𝑒𝑜𝑣𝑒𝑟
= 2520mins
𝑇𝑜𝑡𝑎𝑙 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑙𝑜𝑠𝑠𝑒𝑠 = 𝑏𝑟𝑒𝑎𝑘𝑑𝑜𝑤𝑛 𝑙𝑜𝑠𝑠𝑒𝑠 + 𝑆𝑒𝑡 𝑢𝑝 𝑙𝑜𝑠𝑠𝑒𝑠
7
= 585mins + 2520mins = 3105 mins
𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 = 𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 − 𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑙𝑜𝑠𝑠𝑒𝑠
= 6825𝑚𝑖𝑛𝑠 − 3105𝑚𝑖𝑛𝑠 = 3720 𝑚𝑖𝑛𝑠⁄𝑤𝑒𝑒𝑘
𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 3720
𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑅𝑎𝑡𝑒, 𝑎 = = = 0.545
𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 6825
Performance:
Given production time = 50 ℎ × 60 𝑚𝑖𝑛𝑠⁄ℎ = 3000𝑚𝑖𝑛𝑠
But the operation time is found = 3720mins. Thus, Speed Losses= 3720 − 3000 = 720 𝑚𝑖𝑛𝑠
Net Operating time = 𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒𝑠 − 𝑇𝑜𝑡𝑎𝑙 𝑠𝑝𝑒𝑒𝑑 𝑙𝑜𝑠𝑠𝑒𝑠
= 3720𝑚𝑖𝑛𝑠 − 720𝑚𝑖𝑛𝑠 = 3000𝑚𝑖𝑛𝑠
𝑁𝑒𝑡 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 3000
Performance Rate, 𝑝 = = = 0.806
𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 3720

Stated: No. of Good units produced = 42000 𝑢𝑛𝑖𝑡𝑠


No. of Defective units produced = 10000 + 4000 = 14000 𝑢𝑛𝑖𝑡𝑠
Total No. units produced 42000 + 14000 = 62500 𝑢𝑛𝑖𝑡𝑠
14000
Percentage defects = 56000 = 0.25 𝑜𝑟 25 %

Quality Losses = 25% × (𝑛𝑒𝑡 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒) = 0.25 × 3000 = 750 𝑚𝑖𝑛𝑠
Valuable operating time = 𝑛𝑒𝑡 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 − 𝑞𝑢𝑎𝑙𝑖𝑡𝑦 𝑙𝑜𝑠𝑠𝑒𝑠
= 3000 − 750 = 2250 𝑚𝑖𝑛𝑠
𝑣𝑎𝑙𝑢𝑎𝑏𝑙𝑒 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 2250
Quality rate, q= = 3000 = 0.75
𝑛𝑒𝑡 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒

Finally, OEE = 𝑎 × 𝑝 × 𝑞 = 0.545 × 0.806 × 0.75 = 0.329 𝑜𝑟 32.9 %

Loading time= 6825𝑚𝑖𝑛𝑠


Valuable operating time= 2250𝑚𝑖𝑛𝑠
OEE= 32.9%

The OEE gain is very poor. It shows that out of 6825mins loading time available each week, only
2250mins is actually being used effectively.

b) The OEE is very poor that need to investigate all the six big losses. Availability rate is 0.54
causes by the enormous losses of setup losses and breakdown losses. In setup losses, 42
products changeovers averaging 1hour each that make long time. The production should
define the problem that cause many changeovers and reduce the time. Moreover, they should
reduce unplanned stops in breakdown losses by improving effective maintenance.

8
Furthermore, the speed losses are large that is not good for the performance. The quality also
does not perform well because the defective product rate is high 25%. The investigation must
be applied to identify the defective product. Therefore, we can find quickly solution to reduce
the losses of the production.

Question 4:
Data has been collected for a machine over a number of weeks and is contained in Table 1.
a) Calculate the OEE value for this resource.
b) Discuss the results you obtain and suggest areas where any improvement effort should be
focused.
Table 1: Performance data (weekly average)

Answer4:
a) Calculate the OEE value for this resource.
Given data:
𝑇𝑜𝑡𝑎𝑙 𝐵𝑟𝑒𝑎𝑘𝑠 𝑡𝑖𝑚𝑒 = (40 𝑚𝑖𝑛𝑠⁄𝑠ℎ𝑖𝑓𝑡) × (3 𝑠ℎ𝑖𝑓𝑡𝑠⁄𝑑𝑎𝑦) × (6 𝑑𝑎𝑦𝑠⁄𝑤𝑒𝑒𝑘 )
= 720 𝑚𝑖𝑛𝑠⁄𝑤𝑒𝑒𝑘

Max. time available = (8 ℎ⁄𝑠ℎ𝑖𝑓𝑡 × 60 𝑚𝑖𝑛𝑠⁄ℎ)(3𝑠ℎ𝑖𝑓𝑡𝑠⁄𝑑𝑎𝑦) × 6𝑑 ⁄𝑤𝑒𝑒𝑘


= 8640 𝑚𝑖𝑛𝑠 ⁄𝑤𝑒𝑒𝑘

𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 = 𝑚𝑎𝑥. 𝑡𝑖𝑚𝑒 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 − 𝑡𝑜𝑡𝑎𝑙 𝑏𝑟𝑒𝑎𝑘𝑠 𝑡𝑖𝑚𝑒


= 8640 − 720 = 7920 𝑚𝑖𝑛𝑠. 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘

𝑇𝑜𝑡𝑎𝑙 𝐵𝑟𝑒𝑎𝑘𝑑𝑜𝑤𝑛 𝑙𝑜𝑠𝑠𝑒𝑠 = 12 𝐵𝑇𝑠 × 60𝑚𝑖𝑛𝑠⁄𝐵𝑇 + 22 BTs × 5𝑚𝑖𝑛𝑠⁄𝐵𝑇


= 830𝑚𝑖𝑛𝑠⁄𝑤𝑒𝑒𝑘
𝑆𝑒𝑡 𝑢𝑝 𝑙𝑜𝑠𝑠𝑒𝑠 = 20 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝑐ℎ𝑎𝑛𝑔𝑒𝑜𝑣𝑒𝑟𝑠 × 70𝑚𝑖𝑛𝑠⁄𝑐ℎ𝑎𝑛𝑔𝑒𝑜𝑣𝑒𝑟

9
= 1400mins
𝑇𝑜𝑡𝑎𝑙 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑙𝑜𝑠𝑠𝑒𝑠 = 𝑏𝑟𝑒𝑎𝑘𝑑𝑜𝑤𝑛 𝑙𝑜𝑠𝑠𝑒𝑠 + 𝑆𝑒𝑡 𝑢𝑝 𝑙𝑜𝑠𝑠𝑒𝑠
= 830mins + 1400mins = 2230 mins
𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 = 𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 − 𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑙𝑜𝑠𝑠𝑒𝑠
= 7920𝑚𝑖𝑛𝑠 − 2230𝑚𝑖𝑛𝑠 = 5690 𝑚𝑖𝑛𝑠⁄𝑤𝑒𝑒𝑘
𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 5690
𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑅𝑎𝑡𝑒, 𝑎 = = = 0.718
𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 7920
Performance:
Given production time = 42 ℎ × 60 𝑚𝑖𝑛𝑠⁄ℎ = 2520𝑚𝑖𝑛𝑠
But the operation time is found = 5690mins. Thus, Speed Losses= 5690 − 2520 = 3170 𝑚𝑖𝑛𝑠
Net Operating time = 𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒𝑠 − 𝑇𝑜𝑡𝑎𝑙 𝑠𝑝𝑒𝑒𝑑 𝑙𝑜𝑠𝑠𝑒𝑠
= 5690𝑚𝑖𝑛𝑠 − 3170𝑚𝑖𝑛𝑠 = 2520𝑚𝑖𝑛𝑠
𝑁𝑒𝑡 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 2520
Performance Rate, 𝑝 = 𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 = 5690 = 0.44

Stated: No. of Good units produced = 20000 𝑢𝑛𝑖𝑡𝑠


No. of Defective units produced = 1800 + 2300 = 4100 𝑢𝑛𝑖𝑡𝑠
Total No. units produced 20000 + 4100 = 24100 𝑢𝑛𝑖𝑡𝑠
4100
Percentage defects = = 0.17 𝑜𝑟 17 %
24100
Quality Losses = 17% × (𝑛𝑒𝑡 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒) = 0.17 × 2520 = 428.4 𝑚𝑖𝑛𝑠
Valuable operating time = 𝑛𝑒𝑡 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 − 𝑞𝑢𝑎𝑙𝑖𝑡𝑦 𝑙𝑜𝑠𝑠𝑒𝑠
= 2520 − 428.4 = 2091.6 𝑚𝑖𝑛𝑠
𝑣𝑎𝑙𝑢𝑎𝑏𝑙𝑒 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 2091.6
Quality rate, q= = = 0.83
𝑛𝑒𝑡 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 2520

Finally, OEE = 𝑎 × 𝑝 × 𝑞 = 0.718 × 0.44 × 0.83 = 0.26 𝑜𝑟 26 %

Loading time= 7920𝑚𝑖𝑛𝑠


Valuable operating time= 2091.6𝑖𝑛𝑠
OEE= 26%

The OEE gain is very poor. It shows that out of 7920mins loading time available each week, only
2091.6mins is actually being used effectively. it loses many minutes that can affect to our
company and low to be profitable.
b) The OEE is very poor that need to investigate all the six big losses. Availability rate is 0.71
causes by the enormous losses of setup losses and breakdown losses. In setup losses, 12
products changeovers averaging 1hour each that make long time. The production should define
10
the problem that cause many changeovers and reduce the time. Moreover, they should reduce
unplanned stops in breakdown losses by improving effective maintenance. Furthermore, the
speed losses are large that is not good for the performance. The quality also does not perform
well because the defective product rate is high 17%. The investigation must be applied to
identify the defective product. Therefore, we can find quickly solution to reduce the losses of
the production.

11
Given data:
Operation: 225 days per year, 2 shifts of 8 hours per day, 5 days per week.
a. Calculate the weekly valuable operating hour for each machine.
1. Machine 1
• Maximum time available: 2 × 8 ℎ𝑜𝑢𝑟𝑠 × 5 𝑑𝑎𝑦𝑠 = 80 ℎ𝑜𝑢𝑟𝑠 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘
• No break time, so 𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 = 𝑚𝑎𝑥𝑖𝑚𝑢𝑚 𝑡𝑖𝑚𝑒 = 80 ℎ𝑜𝑢𝑟𝑠
• 𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑙𝑜𝑠𝑠𝑒𝑠 = 15 ℎ𝑜𝑢𝑟𝑠
• 𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 = 80 − 15 = 65 ℎ𝑜𝑢𝑟𝑠
• Total idling = 5 ℎ𝑜𝑢𝑟𝑠
• During idling period, there is 10% lost in actual operating time:
= 0.1 × (65 − 5) = 0.6 ℎ𝑜𝑢𝑟𝑠
• 𝑇𝑜𝑡𝑎𝑙 𝑠𝑝𝑒𝑒𝑑 𝑙𝑜𝑠𝑠𝑒𝑠 = 5 + 0.6 = 5.6 ℎ𝑜𝑢𝑟𝑠
• Net operating time = total loading time – total speed losses = 65 – 5.6 = 59.4 hours
• Stated that 3% of parts produced are defective. Therefore,
• Quality losses = 3% × net operating time = 0.03 × 59.4 = 1.782 hours
• Valuable operating time = net operating time – quality losses
= 59.4 – 1.782 = 57.418 hours

12
2. Machine 2
• Maximum time available = 80 hours
• Loading time = maximum time available = 80 hours
• Availability losses = 7 hours
• Total loading time = 80 – 7 = 73 hours
• Idling time = 5 hours
• Total speed losses = 5 hours
• Net operating time = total loading time – speed losses = 73 hours – 5 hours = 68 hours
• Stated that 0.8% of parts produced are defective, therefore
• Quality losses = 0.8% × net operating time = 0.008 × 68 = 0.544 hours
• Valuable operating time = net operating time – quality losses
= 68 – 0.544 = 67.456 hours
3. Machine 3
• Loading time = maximum time available = 80 hours
• Availability losses = 7 hours
• Total loading time = loading time – availability losses =80 – 7 = 73 hours
• Idling time = 1.5 hours
• Total speed losses = 1.5 hours
• Net operating time = total loading time – total speed losses = 73 – 1.5 = 71.5 hours
• Stated that 0.4% of the part produced are defective
• Quality losses = 0.4% × net operating time = 0.004 × 71.5 = 0.286 hours
• Valuable operating time = net operating time – quality losses
= 71.5 – 0.286 = 71.214 hours
b. Calculate the OEE for each machine showing the three separate factors and all calculations.
1. Machine 1
𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 65
• Availability rate, 𝑎 = = 80 = 0.8125
𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑡𝑖𝑚𝑒
𝑁𝑒𝑡 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 65−5.6
• Performance rate, 𝑝 = 𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 = = 0.91
65
𝑄𝑢𝑎𝑙𝑖𝑡𝑦 𝐿𝑜𝑠𝑠𝑒𝑠 59.4−1.782
• Quality Rate, 𝑞 = 𝑁𝑒𝑡 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 = = 0.96
59.4

𝑂𝐸𝐸 = 𝑎 × 𝑝 × 𝑞 = 0.8125 × 0.91 × 0.96 = 0.71


2. Machine 2
𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 73
• Availability rate, 𝑎 = = 80 = 0.91
𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑡𝑖𝑚𝑒
𝑁𝑒𝑡 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 68
• Performance rate, 𝑝 = 𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 = 73 = 0.93

13
𝑄𝑢𝑎𝑙𝑖𝑡𝑦 𝐿𝑜𝑠𝑠𝑒𝑠 67.456
• Quality Rate, 𝑞 = 𝑁𝑒𝑡 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 = = 0.992
68

𝑂𝐸𝐸 = 𝑎 × 𝑝 × 𝑞 = 0.91 × 0.93 × 0.992 = 0.84


3. Machine 3
𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 73
• Availability rate, 𝑎 = = 80 = 0.91
𝐿𝑜𝑎𝑑𝑖𝑛𝑔 𝑡𝑖𝑚𝑒
𝑁𝑒𝑡 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 71.5
• Performance rate, 𝑝 = 𝑇𝑜𝑡𝑎𝑙 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 = = 0.98
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𝑄𝑢𝑎𝑙𝑖𝑡𝑦 𝐿𝑜𝑠𝑠𝑒𝑠 71.214
• Quality Rate, 𝑞 = 𝑁𝑒𝑡 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑇𝑖𝑚𝑒 = = 0.996
71.5

𝑂𝐸𝐸 = 𝑎 × 𝑝 × 𝑞 = 0.91 × 0.98 × 0.996


c. The production wishes to achieve the extra 10% throughput from the total department.
When comparing OEE of these three machines, machine 1 has the lowest OEE value. Therefore,
machine 1 must be selected for improvement to achieve the mission. Moreover, machine 1 is head
machine in the process. The production is running depend on machine 1. Under any circumstance,
machine1 is breakdown and take long time to repair the production will be stopped or stuck in the
needed time.
d. Examine the data and suggest how the improvement in OEE could be achieved.
1. Machine 1
It has the lowest OEE compares to other machines. The OEE result is 71% which required
to investigate the problem occurring in the process. It needs an effectively maintenance to reduce
the availability loss cause by setup loss and breakdown loss. In addition, it must be identified the
root cause of the slow running. In the other hand, the total quality losses are the highest in the
among machines.
2. Machine 2 and 3
They are better OEE result 84% and 88% respectively. Both machines also need a better
maintenance to reduce the availability time as much as possible.

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Chapter6: Kanban System
Question1:

(a) Explain how the JIT “pull” system operates and the benefits it offers.
JIT (Just-in-Time) is a lean manufacturing philosophy that emphasizes producing and delivering
goods only when they are needed, in the exact quantities required, and at the precise time they are
needed.

➢ Key features of the JIT "pull" system:


1. Demand-driven production: Production is triggered by actual customer demand, not
by anticipation or forecasts.
2. Small batch sizes: Production occurs in smaller, more frequent batches to reduce
inventory and improve responsiveness.
3. Kanban system: Visual signals (Kanban cards) are used to control the flow of
materials and information between production stages, ensuring only needed items are
produced.
4. Continuous improvement: JIT emphasizes ongoing efforts to eliminate waste, reduce
lead times, and enhance quality.
➢ Benefits of JIT "pull" system: Reduced inventory levels:
1. This lowers storage costs, frees up working capital, and minimizes the risk of
obsolescence.
2. Improved cash flow: Less tied-up capital in inventory leads to better cash flow for
other business activities.
3. Enhanced flexibility: The system can quickly adapt to changes in demand, reducing
the risk of overproduction or stockouts.
4. Shorter lead times: Faster production cycles result in quicker response to customer
needs.
5. Improved quality: Increased focus on quality control and defect prevention arises
from less inventory to buffer errors.
6. Reduced waste: JIT encourages the elimination of non-value-adding activities,
reducing waste and improving efficiency.
(b) Calculate the number of Kanban’s a company requires for the following situation and the
relative inventory level.
Utilisation rate = 800 units/hr
Delay time = 45 mins.
Capacity = 50 units Operating variation = 15%

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Lead Time (L) = T + (V * T) = 0.75 + (0.15 * 0.75) = 0.8625 hrs

Number of Kanban cards (N) = (L * R) / C = (0.8625 * 800) / 50 = 13.8 (Round up to 14 for a


whole number of Kanban cards)

Inventory Level = N * C = 14 * 50 = 700 units

(c) The following options have been proposed to reduce the inventory level for the situation
outlined in (b). Which option would you choose and why?
Option- A: Variation rate becomes 7.5%
Option-B: The capacity is increased to 100 units
Option-C: The delay time is halved
1. Option A: Reduce Variation Rate to 7.5%
• New Lead Time (L) = 0.75 + (0.075 * 0.75) = 0.80625 hrs
• New Number of Kanban cards (N) = (0.80625 * 800) / 50 = 13.1, round up to 14
• Inventory Level = 14 * 50 = 700 units (no change)
2. Option B: Increase Capacity to 100 units
• New Number of Kanban cards (N) = (0.8625 * 800) / 100 = 7.7, round up to 8
• Inventory Level = 8 * 100 = 800 units (slight increase)
3. Option C: Halve Delay Time to 22.5 mins
• New Lead Time (L) = 0.375 hrs
• New Number of Kanban cards (N) = (0.375 * 800) / 50 = 6
• Inventory Level = 6 * 50 = 300 units (significant reduction)

Question 2:

(a) Explain how the single card Kanban’s system works and outline the key benefits the adoption
of this system brings to an organization.

The single card Kanban system is a lean manufacturing tool used to manage production flow
and optimize inventory levels. It works with a single card representing a specific quantity of
material or components (typically the minimum necessary to run a subsequent process). The card
travels with the material through the production stages, triggering replenishment only when it
reaches the final point. This creates a pull system, where production is driven by actual demand,
avoiding overproduction and unnecessary inventory buildup.

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Key Benefits:

• Reduced inventory levels: Lower storage costs, less risk of obsolescence, and improved
cash flow.
• Improved lead times: Faster production cycles and quicker response to customer needs.
• Increased visibility: Clearer workflow and easier identification of bottlenecks. Enhanced
flexibility: Easier adaptation to changing demand patterns.
• Improved communication: Clearer signals between production stages and departments.
(b) Calculate the number of Kanban’s a company requires for the following situation and identify
the inventory level. R = 500 units/hour T = 30 mins C = 100 units X = 10%

Calculate the number of Kanban cards,

• Lead Time (L): L = T + (X * T) = 30 mins + (0.1 * 30 mins) = 33 mins


• The Number of Kanban Cards (N): N = (L * R) / C = (33 mins * 500 units/hour) / 100 units
= 16.5

Therefore, the company requires 17 Kanban cards (rounding up for safety stock). This indicates
an inventory level of 1,700 units (N * C = 17 * 100).

(c) The company has decided the existing inventory level is too high and has proposed the
following options for you to consider to reduce the inventory level. Which option would you
choose and why?
• Option A: X = 0: Eliminating safety stock would bring the inventory down to 1,600 units
(N * C = 16 * 100). This is the most aggressive approach, requiring perfect demand
forecasting and potentially increasing the risk of stockouts.
• Option B: T/2: Halving the delay time to 15 minutes would lead to 8.25 Kanban cards (L
* R / C = 16.5 mins * 500 units/hour / 100 units). This reduces inventory to 825 units (N *
C = 8.25 * 100). It improves responsiveness but might require process optimization.
• Option C: Capacity = 150: Increasing capacity by 50% would require only 11 Kanban cards
(L * R / C = 33 mins * 750 units/hour / 100 units). This reduces inventory to 1,100 units
(N * C = 11 * 100) while providing buffer against demand variability.

Option B offers good inventory reduction and faster response while demanding some process
optimization.

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Question3:

(a) Explain how the “pull” system operates and the benefits it offers when compared to the
“push” system. A diagram should be used to aid your answer.
Pull system, production is triggered by actual customer demand, not by forecasts or
anticipation. Materials and products only flow through the system as needed, "pulled" by
downstream stages, rather than being "pushed" based on predetermined schedules.

• Demand-driven production: Starts only when a customer order or signal from the next
stage requests more product.
• Kanban system (or similar): Visual signals like Kanban cards control the flow of
materials and communicate demand. Small batch sizes: Production occurs in smaller
quantities to reduce inventory and increase flexibility.
• Continuous flow: Aims for a smooth, uninterrupted flow of materials and information to
minimize waste and delays.
Push System, production decisions are based on forecasts and schedules, often leading to
overproduction and inventory buildup.

• Forecast-driven production: Schedules based on anticipated demand, not actual orders.


• No Kanban system: Materials are "pushed" through the system regardless of actual
downstream needs.
• Large batch sizes: Production occurs in large, predetermined quantities to achieve
economies of scale.
• Intermittent flow: Production stops and starts based on scheduled batches, creating delays
and inefficiency.

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Benefits of Push and Pull system:

Push Pull
• High inventory levels: Increased storage • Reduced inventory levels: Lower storage
costs, risk of obsolescence, and tied-up costs, more cash flow, and less
capital. obsolescence risk.
• Long lead times: Slow to respond to • Enhanced lead times: Faster production
changes in demand, leading to cycles and quicker response to demand
overproduction or stockouts. changes.
• Low flexibility: Difficulty adapting to • Increased flexibility: Adapts readily to
demand fluctuations, creating fluctuations in demand without
inefficiencies. overproduction or stockouts.
• Reduced quality: Potential for lower • Improved quality: More focus on quality
quality due to increased pressure to meet control due to less "buffer" inventory.
production schedules. • Reduced waste: Encourages elimination of
• Increased waste: More non-value-adding non-value-adding activities due to limited
activities due to inefficiency and buffer stocks.
overproduction.

(b) Calculate the number of Kanban’s a company requires for the following situation and
identify the inventory level.

Utilization rate = 850/hr,

Delay time = 60 mins.

Capacity = 50 units Operating variation = 12%

1. Lead Time (L) = T + (V * T) = 1 + (0.12 * 1) = 1.12 hours


2. Number of Kanban cards (N) = (L * R) / C = (1.12 * 850) / 50 = 19.44 (Round up to 20
for a whole number of Kanban cards)
3. Inventory Level = N * C = 20 * 50 = 1000 units

Therefore, the company requires 20 Kanban cards, resulting in an inventory level of 1000 units.

(c) Inventory Reduction Recommendation


➢ Option A: Reduce Variation Rate to 6%
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• New Lead Time (L) = 1 + (0.06 * 1) = 1.06 hours
• New Number of Kanban cards (N) = (1.06 * 850) / 50 = 18.15, round up to 19
• Inventory Level = 19 * 50 = 950 units (5% decrease)
➢ Option B: Halve Delay Time to 30 mins
• New Lead Time (L) = 0.5 hours
• New Number of Kanban cards (N) = (0.5 * 850) / 50 = 8.5, round up to 9
• Inventory Level = 9 * 50 = 450 units (55% decrease)
➢ Option C: Increase Capacity to 250 units
• New Number of Kanban cards (N) = (1.12 * 850) / 250 = 3.95, round up to 4
• Inventory Level = 4 * 250 = 1000 units (no change)
From each option below we define option B, halving the delay time, as it offers the most
significant inventory reduction (55%) without requiring major capacity changes or relying solely
on variation reduction. This would lead to substantial cost savings, improved cash flow, and a
more responsive system.

Question 4:

(a) Explain how a single card Kanban system operates and how it contributes to JIT product
flow. A diagram should be used to aid your answer.
The single card Kanban system is a Lean manufacturing tool used to manage production
flow and optimize inventory levels within a Just-in-Time (JIT) philosophy. Its operates are:

• Single Card for a Specific Quantity: Each Kanban card represents a specific quantity of
material or components needed for a downstream process. This could be a set number of
parts, a predetermined weight of raw materials, or any other measurable unit.
• Pull-based Production: The card travels with the material through the production stages.
Only when the downstream process uses up all the materials associated with the card and
needs more, do they "pull" another card upstream, triggering replenishment.
• Visual Signal and Inventory Control: The presence of the card at a station indicates work
to be done and the absence signifies completion. This creates a visual control system,
preventing overproduction and unnecessary inventory buildup.
• Continuous Flow: As materials flow smoothly based on actual downstream demand, the
system aims for continuous production, minimizing buffer stocks and lead times.

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Example of Flow diagram Kanban

(b) Calculate the number of Kanban’s a company requires for the following situation:
Utilization rate = 600/hr Delay time = 45 mins. Capacity = 150 units Operating variation = 15%
Given: R = 600units/hours, T = 45 mins = 45/60 = 0.75 hours, C = 150 units and V = 15% = 0.15

By using formula: 𝐿𝑒𝑎𝑑 𝑇𝑖𝑚𝑒: 𝐿 = 𝑇 + (𝑉 × 𝑇) = 0.75 + (0.15 × 0.75) = 0.8625 ℎ𝑜𝑢𝑟𝑠

𝐿 × 𝑅 0.8625 × 600
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐾𝑎𝑛𝑏𝑎𝑛: 𝑁 = = = 3.45 ≈ 4 𝑢𝑛𝑖𝑡𝑠
𝐶 150

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝐿𝑒𝑣𝑒𝑙 = 𝑁 × 𝐶 = 4 × 150 = 600 𝑢𝑛𝑖𝑡𝑠

Therefore, the company required 4 Kanban card and resulting in an Inventory Level 600 units.

(c) The following options have been proposed to reduce the inventory level for the situation
outlined in (b). Which option would you choose and why? Option- A: Variation rate becomes
5% Option-B: The delay time is halved Option-C: Capacity is increased to 300 unit.
➢ Option A: Reduce Variation Rate to 5%
• New Lead Time (L) = 0.75 + (0.05 * 0.75) = 0.8 hours
• New Number of Kanban cards (N) = (0.8 * 600) / 150 = 32
• Inventory Level = 32 * 150 = 4800 units (9% decrease)
➢ Option B: Halve Delay Time to 22.5 mins
• New Lead Time (L) = 0.375 hours
• New Number of Kanban cards (N) = (0.375 * 600) / 150 = 15
• Inventory Level = 15 * 150 = 2250 units (57% decrease)
➢ Option C: Increase Capacity to 300 units
• New Number of Kanban cards (N) = (0.8625 * 600) / 300 = 17.25, round up to 18
• Inventory Level = 18 * 300 = 5400 units (no change)
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When we calculated the Option B have recommended, halving the delay time, as it offers the
most significant inventory reduction (57%) without requiring major capacity changes or relying
solely on variation reduction. This would lead to substantial cost savings, improved cash flow, and
a more responsive system.

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