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Chapter 12

Lean Production

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OBJECTIVES
 Lean Production Defined
 The Toyota Production System
 Lean Implementation
Requirements
 Lean Services

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Lean Production
 An integrated set of activities
designed to achieve high-volume
production using minimal
inventories (raw materials, work in
process, and finished goods)
 Involves the elimination of waste in
production effort
 Involves the timing of production
resources (i.e., parts arrive at the
next workstation “just in time”)

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All . 5 Here Herethe thecustomer customerstarts starts the theprocess.pulling pullingan an Pull System inventory inventoryitem itemfrom from Final FinalAssembly… Assembly… Then Thensub- sub- Fab Vendor assembly assemblywork workisis pulled pulledforward forwardbyby that Sub thatdemand… demand… Fab Vendor Final Customers Assembly The Theprocess processcontinues continues Sub Fab Vendor throughout throughoutthe theentire entire production productionprocess processand and supply supplychain chain Fab Vendor McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. process.. Inc.

Inc.. 6 Features of Lean Production WHAT IT IS WHAT IT DOES • Management philosophy • Attacks waste • Exposes problems and bottlenecks • “Pull” system though the plant • Achieves streamlined production WHAT IT REQUIRES WHAT IT ASSUMES • Employee participation • Industrial engineering/basics • Stable environment • Continuing improvement • Total quality control • Small lot sizes McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. All .

7 The Toyota Production System  Based on two philosophies: – 1. Inc. Elimination of waste – 2. All .. Respect for people McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies.

All . Processing Waste 6. Transportation Waste 4. Waste from Overproduction 2. Inc. Waste of Waiting Time 3. 8 Seven Types of Waste (Fujio Cho) 1. Waste from Product Defects McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. Waste of Motion 7. Inventory Waste 5..

Minimized setup times McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. Inc. All . Kanban production control system 7. 9 Elements to Address Elimination of Waste 1. Group technology 3.. JIT production 5. Focused factory networks 2. Uniform plant loading 6. Quality at the source 4.

Inc. 10 Minimizing Waste: These Thesearearesmall smallspecialized specialized Focused Factory plants plantsthat thatlimit limitthe therange range of ofproducts productsproduced produced Networks (sometimes (sometimesonlyonlyone onetype typeof of product productforforan anentire entire facility) facility) Some Someplants plantsin in Japan Japanhave haveasas Coordination few fewas as30 30and andasas System Integration many manyasas1000 1000 employees employees McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies.. All .

All .. Inc. 11 Minimizing Waste: Group Technology (Part 1) Note Notehow howthe theflow flowlines linesare aregoing goingback backand andforth forth  Using UsingDepartmental DepartmentalSpecialization Specializationfor forplant plantlayout layoutcan cancause causeaa lot lotof ofunnecessary unnecessarymaterial materialmovement movement Saw Saw Saw Grinder Grinder Heat Treat Lathe Lathe Lathe Press Press Press McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies.

Inc.. 12 Minimizing Waste: Group Technology (Part 2)  Revising Revisingby byusing usingGroup GroupTechnology TechnologyCells Cellscan canreduce reducemovement movementand and improve improveproduct productflow flow Grinder 1 2 Saw Lathe Lathe Press Heat Treat Grinder Saw Lathe A B Lathe Press McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. All .

stop the process immediately and address  Workers are trained and empowered to control their own process McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. All . 13 Minimizing Waste: Quality at the Source  Do it right the first time  When something goes wrong. Inc..

. Inc. All . ordered only as needed McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. 14 Minimizing Waste: JIT Production  Produce what is needed when it is needed  Intended for repetitive manufacturing  Low inventory.

. Inc. 15 Minimizing Waste: Inventory Hides Problems Productivity Machine Problems downtime Scrap Vendor delinquencies Change Inventory Work in orders process queues Engineering design Design (banks) redundancies backlogs Paperwork Inspection Decision backlog backlogs backlogs McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. All .

the backlog backlogs downstream work is saved McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. 16 Minimizing Waste: Inventory Hides Problems Example: By identifying defective items from a Machine vendor early in the downtime production process the downstream work is Scrap Vendor saved delinquencies Change Inventory Work in orders process queues Engineering design Design (banks) redundancies backlogs Example: By identifying Paperwork Inspection Decision defective work by backlogs employees upstream. Inc. All ..

500 4. Inc.000 or Uniform Jan. All .000 3. Not uniform Jan. below.000 3. Units Feb. product. Units Feb. Units Total 3.300 9. 17 Minimizing Waste: Uniform Plant Loading (heijunka) Suppose Supposeweweoperate operateaaproduction productionplant plantthat thatproduces producesaasingle single product. Units Mar.000 9.200 3. Units Total 1. The Theschedule scheduleofofproduction productionfor forthis thisproduct productcould couldbe be accomplished accomplishedusing usingeither eitherof ofthe thetwo twoplant plantloading loadingschedules schedules below.. Units Mar.000 How Howdoes doesthe theuniform uniformloading loadinghelp helpsave savelabor laborcosts? costs? McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies.

the Machine Center Withdrawal system back produces a unit to replace the kanban were it was one taken by the Assembly Line before the item people in the first place was pulled Storage Storage Machine Part A Part A Assembly Center Line Production kanban Material Flow The process begins by the Assembly Line people pulling Part A from Storage Card (signal) Flow McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. Inc. 18 Minimizing Waste: Kanban Production Control Systems Once the Production kanban is This puts the received. All ..

Inc. 19 Determining the Number of Kanbans Needed  Setting up a kanban system requires determining the number of kanbans cards (or containers) needed  Each container represents the minimum production lot size  An accurate estimate of the lead time required to produce a container is key to determining how many kanbans are required McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. All ..

All . 20 The Number of Kanban Card Sets Expected demand during lead time + Safety stock k= Size of the container DL(1 + S ) = C k = Number of kanban card sets (a set is a card) D = Average number of units demanded over some time period L = lead time to replenish an order (same units of time as demand) S = Safety stock expressed as a percentage of demand during lead time C = Container size McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. Inc..

Inc. 21 Example of Kanban Card Determination: Problem Data  A switch assembly is assembled in batches of 4 units from an “upstream” assembly area and delivered in a special container to a “downstream” control-panel assembly operation  The control-panel assembly area requires 5 switch assemblies per hour  The switch assembly area can produce a container of switch assemblies in 2 hours  Safety stock has been set at 10% of needed inventory McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies.. All .

75. or 3 C 4 Always round up! McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. Inc. All .1) = = = 2. 22 Example of Kanban Card Determination: Calculations Expected demand during lead time +Safety stock k = Size of the container DL (1+ S ) 5(2)(1..

Inc. 23 Respect for People  Level payrolls  Cooperative employee unions  Subcontractor networks  Bottom-round management style  Quality circles (Small Group Involvement Activities or SGIA’s) McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies.. All .

All work shall be highly specified as to content. Inc. The pathway for every product and service must be simple and direct 4. Every customer-supplier connection must be direct. at the lowest possible level in the organization McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies.. and there must be an unambiguous yes- or-no way to send requests and receive responses 3. 24 Toyota Production System’s Four Rules 1. sequence. Any improvement must be made in accordance with the scientific method. and outcome 2. under the guidance of a teacher. All . timing.

All . Inc. Total Quality Control 3.. Improve Product Design McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. Design Flow Process 2. Work with Vendors 6. 25 Accomplishing Lean Production 1. Reduce Inventory More 7. Stabilize Schedule 4. Kanban Pull 5.

Inc. 26 Lean Implementation Requirements: Design Flow Process  Link operations  Balance workstation capacities  Redesign layout for flow  Emphasize preventive maintenance  Reduce lot sizes  Reduce setup/changeover time McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. All ..

All . 27 Lean Implementation Requirements: Total Quality Control  Worker responsibility  Measure: SQC (Statistical Quality Control)  Enforce compliance  Fail-safe methods  Automatic inspection McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies.. Inc.

Inc. 28 Lean Implementation Requirements: Stabilize Schedule  Level schedule  Underutilize capacity  Establish freeze windows McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. All ..

. Inc. All . 29 Lean Implementation Requirements: Kanban-Pull  Demand pull  Backflush  Reduce lot sizes McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies.

Inc. All . 30 Lean Implementation Requirements: Work with Vendors  Reduce lead times  Frequent deliveries  Project usage requirements  Quality expectations McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies..

All . Inc.. 31 Lean Implementation Requirements: Reduce Inventory More  Look for other areas  Stores  Transit  Carousels  Conveyors McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies.

32 Lean Implementation Requirements: Improve Product Design  Standard product configuration  Standardize and reduce number of parts  Process design with product design  Quality expectations McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. All . Inc..

33 Lean Implementation Requirements: Concurrently Solve Problems  Root cause  Solve permanently  Team approach  Line and specialist responsibility  Continual education McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. Inc.. All .

. All . Inc. 34 Lean Implementation Requirements: Measure Performance  Emphasize improvement  Track trends McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies.

Inc.. Organize Problem-Solving Groups 2. Clarify Process Flows 5. Upgrade Quality 4. All . 35 Lean in Service Industry (How To) 1. Revise Equipment and Process Technologies McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. Upgrade Housekeeping 3.

Introduce Demand-Pull Scheduling 10. Inc. All . Develop Supplier Networks McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. 36 Lean in Service Industry (How To) 6. Level the Facility Load 7. Eliminate Unnecessary Activities 8.. Reorganize Physical Configuration 9.

None of the above Answer: d. All of the above e. Minimal inventory of work-in-process c. 37 Question Bowl Lean Production seeks to achieve high volume production using which of the following? a. Minimal inventory of raw materials b.. Minimal inventory of finished goods d. Inc. All of the above McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. All .

Inc. 38 Question Bowl In the Toyota Production System. Waiting time c. Overproduction b. All . Transportation d. None of the above Answer: d. All of the above McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies.. the “elimination of waste” involves which of the following? a. All of the above e.

Customer McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. Customers b.. All . CEO e. Inc. 39 Question Bowl In the Pull System the partner that begins the process of “pulling” is which of the following? a. Vendors c. All of the above Answer: a. Fabrication personnel d.

All . Employee participation b. All of the above (Also included in Industrial engineering/basics) McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. Small lot sizes d. 40 Question Bowl A Lean Production program requires which of the following? a. Total quality control c. Continuing improvement e.. All of the above Answer: e. Inc.

None of the above Answer: d. All . Inc.. All of the above e. Scrap b. All of the above McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. Decision backlogs d. Vendor delinquencies c. 41 Question Bowl Inventory has been known to hide which of the following production problems? a.

1050 ([1000x10](1+0.05)/10=1050) McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. and the safety stock is estimated to be 5% of the expected demand.000 per hour. the lead time to replenish the order for this item is 10 hours. All .. the container size is 10 units. Which of the following is the desired number of kanban card sets? a. 500 e. Inc. 42 Question Bowl You want to determine how many kanban card sets you need for an operation. None of the above Answer: a. 1000 c. You find that average number of units demanded is 1. 605 d. 1050 b.

Backflush include: level c. All of the above capacity. None of the above (These b. None of the above establish freeze windows. underutilization d. Fail-safe methods schedule. Demand pull Answer: e. and e. 43 Question Bowl When trying to implement Lean system a “stabilized schedule” includes which of the following? a.) McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. Inc.. All .

44 End of Chapter 12 McGraw-Hill/Irwin ©The McGraw-Hill Companies. .