Inleiding tot de logistiek (3542)

Prof. dr. Kris Braekers

Course overview
Inventory Quality Warehouse
SC strategy + Production
Introduction managemen managemen managemen
Inv. Mgmt. strategy
t t t

HC 1 HC2 HC 3 HC 4 HC 5 HC 6

WZ 2: WZ 4:
WZ 1: WZ 3:
/ / case case
exercises exercises
study study

Ch.1+7 Ch.2+12 Ch.12 Ch.16 Ch.5+6 /

Responsiecollege

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JIT and lean production
(chapter 16)
What you (should) know already

Supplier Manufacturer Distributor Retailer Customers

 What is the effect of producing in large batches?

a) More inventory, more setup costs
b) More inventory, less setup costs
c) Less inventory, more setup costs
d) Less inventory, less setup costs

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Example
 Three products (A,B,C) to be processed on 1 machine
 You require 10 units of each product (at the end of) each day
 Production capacity: 30 units per day
 Setup cost when switching between products
Production schedule
Alternative 1 Alternative 2
A B C A B C
Day 1
Day 2
Day 3
Inventory after day 3
# setups

Total inventory after day 3

Total # setups

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Example
 Three products (A,B,C) to be processed on 1 machine
 You require 10 units of each product (at the end of) each day
 Production capacity: 30 units per day
 Setup cost when switching between products
Production schedule
Alternative 1 Alternative 2
A B C A B C
Day 1 30
Day 2 30
Day 3 30
Inventory after day 3 0 10 20
# setups 1 1 1

Total inventory after day 3 30

Total # setups 3

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Example
 Three products (A,B,C) to be processed on 1 machine
 You require 10 units of each product (at the end of) each day
 Production capacity: 30 units per day
 Setup cost when switching between products
Production schedule
Alternative 1 Alternative 2
A B C A B C
Day 1 30 10 10 10
Day 2 30 10 10 10
Day 3 30 10 10 10
Inventory after day 3 0 10 20 0 0 0
# setups 1 1 1 3 3 3

Total inventory after day 3 30 0

Total # setups 3 9

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A traditional way of producing
 Large lot/batch sizes
 WIP inventory between production steps
 Grouping similar equipment in workcenters (process layout)
 Quality checks at the end of the process (or at specific points)

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A traditional way of producing
 Large lot/batch sizes
 WIP inventory between production steps
 Grouping similar equipment in workcenters (process layout)
 Quality checks at the end of the process (or at specific points)

 some downsides?

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A traditional way of producing
 Large lot/batch sizes
 WIP inventory between production steps
 Grouping similar equipment in workcenters (process layout)
 Quality checks at the end of the process (or at specific points)

 Downsides:
 Substantial WIP inventories
 Long throughput/flow times
 Fluctuation in demand for components in upstream processes
 Internal transportation
 In case of detecting a defect
 Substantial rework or scrap
 Difficult to find root of the problem

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A traditional way of producing
 Large lot/batch sizes
 WIP inventory between production steps
 Grouping similar equipment in workcenters (process layout)
 Quality checks at the end of the process (or at specific points)

 Downsides:
 Long throughput/flow times

Inventory?
1 min. 1 min. 1 min. Flow time?
Cycle time?

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A traditional way of producing
 Large lot/batch sizes
 WIP inventory between production steps
 Grouping similar equipment in workcenters (process layout)
 Quality checks at the end of the process (or at specific points)

 Downsides:
 Long throughput/flow times

Inventory = 0 (3)
1 min. 1 min. 1 min. Flow time = 3 min.
Cycle time = 1 min.

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A traditional way of producing
 Large lot/batch sizes
 WIP inventory between production steps
 Grouping similar equipment in workcenters (process layout)
 Quality checks at the end of the process (or at specific points)

 Downsides:
 Long throughput/flow times

Inventory = 0 (3)
1 min. 1 min. 1 min. Flow time = 3 min.
Cycle time = 1 min.

Inventory?
1 min. 1 min. 1 min. Flow time?
Cycle time?
2 units 2 units

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A traditional way of producing
 Large lot/batch sizes
 WIP inventory between production steps
 Grouping similar equipment in workcenters (process layout)
 Quality checks at the end of the process (or at specific points)

 Downsides:
 Long throughput/flow times

Inventory = 0 (3)
1 min. 1 min. 1 min. Flow time = 3 min.
Cycle time = 1 min.

Inventory = 4 (7)
1 min. 1 min. 1 min. Flow time = 7 min.
Cycle time = 1 min.
2 units 2 units

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A traditional way of producing
 Large lot/batch sizes
 WIP inventory between production steps
 Grouping similar equipment in workcenters (process layout)
 Quality checks at the end of the process (or at specific points)

 Downsides:
 Substantial WIP inventories
 Long throughput/flow times
 Fluctuation in demand for components in upstream processes
 Internal transportation
 In case of detecting a defect
 Substantial rework or scrap
 Difficult to find root of the problem

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A new concept

Toyota
Production
System

Just-in-time
Lean production
scheduling

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A new concept based on simple ideas

Eliminate
waste (Muda)

Reduce WIP Smooth flow

inventory of products

Continuous
improvement

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Waste?
 “Anything other than the minimum amount of equipment,
materials, parts, space, and time which are absolutely
essential to add value to the product”

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Waste?

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Waste?

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Lean production and its basic elements

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Increase flexibility
 Machine operating time vs. worker operating time

 Multi-functional workers
 Additional training
 Rotation schedules

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Increase flexibility

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Increase flexibility
 Machine operating time vs. worker operating time

 Multi-functional workers

 Flexible general purpose machines

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Increase flexibility
 Machine operating time vs. worker operating time

 Multi-functional workers

 Flexible general purpose machines

 Takt time & cycle time

 Takt time:
 Time that may be between two successive units when matching the demand rate

 Cycle time:
 Planned time between two successive units
 Time a worker needs to complete one pass through his operations

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Increase flexibility
 Machine operating time vs. worker operating time

 Multi-functional workers

 Flexible general purpose machines

 Takt time & cycle time

 Cellular layouts (manufacturing cells)

 Group dissimilar machines
 A small assembly line

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Increase flexibility

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Increase flexibility

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Increase flexibility
 Machine operating time vs. worker operating time

 Multi-functional workers

 Flexible general purpose machines

 Takt time & cycle time

 Cellular layouts (manufacturing cells)

 Group dissimilar machines
 A small assembly line

 improved worker efficiency

 reduced internal transports
 fewer setups
 …

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Smooth the flow
 Pull system
 Kanbans
 Small lots
 Quick setups
 Uniform production levels

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Smooth the flow: push vs. pull

Push Pull
Only take what you
Produce based on need and can
schedule process
immediately

Each station Only produce if next

“pushes” finished station has taken
items to the next your output (avoid
station excess production)

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Smooth the flow: kanbans
 Kanban
 = card, sign (representing a number of units that may be produced)
 Resembles fixed-order quantity system

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Smooth the flow: kanbans
 Kanban
 = card, sign (representing a number of units that may be produced)
 Resembles fixed-order quantity system
 Maintain the pull-discipline
 Many different types
 Dual kanbans (Toyota)
 Signal kanbans
 Supplier kanbans

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Smooth the flow: kanbans

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Smooth the flow: kanbans

(source: toyota-global.com)

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Smooth the flow: kanbans

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Smooth the flow: kanbans
 Kanban
 = card, sign (representing a number of units that may be produced)
 Resembles fixed-order quantity system
 Maintain the pull-discipline
 Many different types
 Dual kanbans (Toyota)
 Signal kanbans
 Supplier kanbans

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Smooth the flow: kanbans
 Kanban
 = card, sign (representing a number of units that may be produced)
 Resembles fixed-order quantity system
 Maintain the pull-discipline
 Many different types
 Dual kanbans (Toyota)
 Signal kanbans
 Supplier kanbans

Reorder
Kanban
point system

Goal: reduce
Goal: create
inventory +
fixed order
maintain pull
policy
principle

Reorder when Container size

inventory equals usually smaller
demand during than demand
lead time during lead time

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Smooth the flow: kanbans
 Number of kanbans?

average demand during lead time + safety stock

No. of Kanbans =
container size

dL + S
N =
where C

N = number of kanbans or containers

d = average demand over some time period
L = lead time to replenish an order
S = safety stock
C = container size

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Smooth the flow: kanbans
 Number of kanbans?

d = 150 bottles per hour

L = 30 minutes = 0.5 hours
S = 0.10 (150 x 0.5) = 7.5
C = 25 bottles

dL + S (150 x 0.5) + 7.5

N= =
C 25
75 + 7.5
= = 3.3 kanbans or containers
25

Round up to 4 (to allow some slack) or

down to 3 (to force improvement)

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Smooth the flow: small lots
 Small lots:
 Less inventory
 Less space
 Less holding costs
 Makes processes dependent on each other
 Reveals errors and bottlenecks more easily

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Smooth the flow: small lots
 Small lots:
 Less inventory
 Less space
 Less holding costs
 Makes processes dependent on each other
 Reveals errors and bottlenecks more easily

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Smooth the flow: small lots
 Small lots:
 Less inventory
 Less space
 Less holding costs
 Makes processes dependent on each other
 Reveals errors and bottlenecks more easily

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Smooth the flow: small lots
 Small lots:
 Less inventory
 Less space
 Less holding costs
 Makes processes dependent on each other
 Reveals errors and bottlenecks more easily

 Reducing inventory
 By reducing container size and/or number of kanbans
 Requires either:
 Reducing safety stock
 Reducing lead time
 Processing time
 Move time
 Waiting time
 Setup time

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Smooth the flow: quick setups

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Smooth the flow: quick setups

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Smooth the flow: quick setups

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Smooth the flow: quick setups
 SMED: single-minute exchange of dies
 Method to reduce setup times
 Steps:
 Internal vs. external setups
 Internal  external
 Streamline actions, do in parallel or eliminate

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Smooth the flow: quick setups

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Smooth the flow: uniform production levels
 Uniform production levels
 Crucial for having a smooth flow of products through production process
 Obtained by smoothing the production requirements on the final step in
the process
 Reduce variability by more accurate forecasts
 Smooth demand across planning horizon (heijunka) + mixed item production
 ≠ make-to-order

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Smooth the flow: uniform production levels
 Traditional production vs. mixed model production

(source: reliableplant.com)

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Toyota production system

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Continuously improve
 Quality at the source
 Visual control
 Poka-yoke

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Continuously improve

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Continuously improve
 Quality at the source
 Visual control
 Poka-yoke

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Continuously improve
 Quality at the source
 Visual control
 Poka-yoke
 Kaizen = continuous improvement
 Requires participation of every worker
 Find the root cause of a problem (5 Why’s)

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Continuously improve
 Quality at the source
 Visual control
 Poka-yoke
 Kaizen = continuous improvement
 Requires participation of every worker
 Find the root cause of a problem (5 Why’s)
 Jidoka = authority to stop the production line
 Workers are responsible for quality
 Undercapacity scheduling

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Continuously improve
 Quality at the source
 Visual control
 Poka-yoke
 Kaizen = continuous improvement
 Requires participation of every worker
 Find the root cause of a problem (5 Why’s)
 Jidoka = authority to stop the production line
 Workers are responsible for quality
 Undercapacity scheduling

 Total productive maintenance

 Breakdown maintenance vs. preventive maintenance
 Total quality
 Involvement, zero defects, strategic focus
 5 S’s

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Continuously improve
 Quality at the source
 Visual control
 Poka-yoke
 Kaizen = continuous improvement
 Requires participation of every worker
 Find the root cause of a problem (5 Why’s)
 Jidoka = authority to stop the production line
 Workers are responsible for quality
 Undercapacity scheduling

 Total productive maintenance

 Breakdown maintenance vs. preventive maintenance
 Total quality
 Involvement, zero defects, strategic focus
 5 S’s

 Supplier networks

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Continuously improve
 Supplier networks
 Long-term contracts
 Synchronized production
 Supplier certification
 Deliveries:
 Mixed loads
 Frequent
 Precise schedules
 Sequenced
 In close proximity

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Implementing lean
 Think about the essence, not the tools
 Can have substantial benefits
 Not applicable in every context
 High demand variability, or large uncertainties
 Large variety of low-volume products, or high-volume standardized
products
 Custom-engineered products

 Leaning the supply chain

 Total SC cost is important
 Share information and coordinate planning

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Smooth the flow: an example
 Example:
 Video on Blackboard
 HC4_push_vs_pull.mp4
(source: The Big Lean Simulation Library, LLC (CC BY-ND 4.0))

 2-step production process

Step 1: transfer: Step 2:
0.5 sec./unit 10 sec. 1.25 sec./unit

 100 units to be produced

 For some reason, after 30 units, step 1 starts producing defective units
 This is corrected as soon as the defect is noticed in step 2

 Assumptions:
 Setup times are 0
 Products are transported one by one from step 1 to step 2 (via conveyor)

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 Setting:
Smooth the flow: an example
 3 scenarios:
Scenario Details WIP inventory Time to notice Defective units
first defective produced
product

Push • Both steps produce the 100

units as soon as they can

Pull • Kanban system introduced

• 10 kanbans
(container size of 1 unit)

Pull + • 2 sec. instead of 10 sec.

reduced • 4 kanbans
distance (container size of 1 unit)

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Smooth the flow: an example
 3 scenarios:
Scenario Details WIP inventory Time to notice Defective units
first defective produced
product

Push • Both steps produce the 100 Up to 67 units 33.8 sec. 68

units as soon as they can

Pull • Kanban system introduced 9-10 12.0 sec. 10

• 10 kanbans
(container size of 1 unit)

Pull + • 2 sec. instead of 10 sec. 3-4 4.5 sec. 4

reduced • 4 kanbans
distance (container size of 1 unit)

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To conclude

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Enkele voorbeeldvragen
 Zie discussievragen (“Questions”) aan einde hoofdstuk
 Vooral: 1,3,4,5,6,7,9,12,13,17,20,23,25,27,31(a+b)

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Voorbereiding werkzitting
 Voorbereiding WZ:
 Lees de case op Blackboard
 Beantwoord key questions 1, 2 en 3

 Assumptie:
 Enkel bestellingen van 1 dozijn (‘dozen’) koekjes
 Komt overeen met 1 ‘tray’/plateau voor in de oven

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