To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Chapter 11 Just-In-Time and Lean Production To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved.

Producing only what is needed, when it is needed Producing only what is needed, when it is needed A philosophy A philosophy An integrated management system An integrated management system JITs mandate: Eliminate all waste JITs mandate: Eliminate all waste What is JIT ?

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Basic Elements of JIT 1.Flexible resources 2.Cellular layouts 3.Pull production system 4.Kanban production control 5.Small-lot production 6.Quick setups 7.Uniform production levels 8.Quality at the source 9.Total productive maintenance 10.Supplier networks

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Figure 11.1 Waste in Operations

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Figure 11.1 Waste in Operations

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Figure 11.1 Waste in Operations

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Flexible Resources Multifunctional workers Multifunctional workers General purpose machines General purpose machines Study operators & improve operations Study operators & improve operations

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Standard Operating Routine for a Worker Standard Operating Routine Sheet 1 Worker:Russell Cycle Time:2 min Order ofOperations time Operations:10:20:30:40:501:001:101:201:301:401:502:00 Pick up material Unload/ load machine 1 Unload/ load machine 2 Unload/ load machine 3 Inspect/ pack Figure 11.2

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Cellular Layouts Group dissimilar machines in manufacturing cell to produce family of parts Group dissimilar machines in manufacturing cell to produce family of parts Work flows in one direction through cell Work flows in one direction through cell Cycle time adjusted by changing worker paths Cycle time adjusted by changing worker paths

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Manufacturing Cell with Worker Routes Worker 1 Worker 2 Worker3 Cell 1 Figure 11.3

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Worker Routes Lengthened as Volume Decreases Cell 5 Worker 2 Cell 2 Worker 1 Cell 1 Worker 3 Cell 3 Cell 4 Figure 11.4

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. The Pull System Material is pulled through the system when needed Material is pulled through the system when needed Reversal of traditional push system where material is pushed according to a schedule Reversal of traditional push system where material is pushed according to a schedule Forces cooperation Forces cooperation Prevent over and underproduction Prevent over and underproduction

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Kanban Production Control System Kanban card indicates standard quantity of production Kanban card indicates standard quantity of production Derived from two-bin inventory system Derived from two-bin inventory system Kanban maintains discipline of pull production Kanban maintains discipline of pull production Production kanban authorizes production Production kanban authorizes production Withdrawal kanban authorizes movement of goods Withdrawal kanban authorizes movement of goods

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. A Sample Kanban

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. The Origin of Kanban a) Two-bin inventory systemb) Kanban inventory system Reordercard Bin 1 Bin 2 Q - R Kanban R R Q = order quantity R = reorder point - demand during lead time Figure 11.5

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Types of Kanbans Figure 11.6

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Types of Kanbans Figure 11.6

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Types of Kanbans Figure 11.6

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Types of Kanbans Kanban Square Kanban Square Marked area designed to hold items Marked area designed to hold items Signal Kanban Signal Kanban Triangular kanban used to signal production at the previous workstation Triangular kanban used to signal production at the previous workstation Material Kanban Material Kanban Used to order material in advance of a process Used to order material in advance of a process Supplier Kanbans Supplier Kanbans Rotate between the factory and suppliers Rotate between the factory and suppliers

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Determining Number of Kanbans where 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 No. of Kanbans = average demand during lead time + safety stock container size N = dL + S C

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Determining the 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 Round up to 4 (to allow some slack) or down to 3 (to force improvement) N= = = = 3.3 kanbans or containers dL + S C (150 x 0.5) Example 11.1

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Small-Lot Production Requires less space & capital investment Requires less space & capital investment Moves processes closer together Moves processes closer together Makes quality problems easier to detect Makes quality problems easier to detect Makes processes more dependent on each other Makes processes more dependent on each other

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Inventory Hides Problems

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Lower Levels of Inventory Expose Problems

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Components of Lead Time Processing time Processing time Reduce number of items or improve efficiency Reduce number of items or improve efficiency Move time Move time Reduce distances, simplify movements, standardize routings Reduce distances, simplify movements, standardize routings Waiting time Waiting time Better scheduling, sufficient capacity Better scheduling, sufficient capacity Setup time Setup time Generally the biggest bottleneck Generally the biggest bottleneck

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. SMED Principles 1.Separate internal setup from external setup 2.Convert internal setup to external setup 3.Streamline all aspects of setup 4.Perform setup activities in parallel or eliminate them entirely

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Common Techniques for Reducing Setup Time Figure 11.8

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Common Techniques for Reducing Setup Time Figure 11.8

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Common Techniques for Reducing Setup Time Figure 11.8

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Uniform Production Results from smoothing production requirements Results from smoothing production requirements Kanban systems can handle +/- 10% demand changes Kanban systems can handle +/- 10% demand changes Smooths demand across planning horizon Smooths demand across planning horizon Mixed-model assembly steadies component production Mixed-model assembly steadies component production

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Mixed-Model Sequencing Example 11.2

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Quality at the Source Jidoka is authority to stop production line Jidoka is authority to stop production line Andon lights signal quality problems Andon lights signal quality problems Undercapacity scheduling allows for planning, problem solving & maintenance Undercapacity scheduling allows for planning, problem solving & maintenance Visual control makes problems visible Visual control makes problems visible Poka-yoke prevents defects Poka-yoke prevents defects

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Visual Control Figure 11.9

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Visual Control Figure 11.9

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Visual Control Figure 11.9

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Kaizen Continuous improvement Continuous improvement Requires total employment involvement Requires total employment involvement Essence of JIT is willingness of workers to Essence of JIT is willingness of workers to Spot quality problems Spot quality problems Halt production when necessary Halt production when necessary Generate ideas for improvement Generate ideas for improvement Analyze problems Analyze problems Perform different functions Perform different functions

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Total Productive Maintenance (TPM) Breakdown maintenance Breakdown maintenance Repairs to make failed machine operational Repairs to make failed machine operational Preventive maintenance Preventive maintenance System of periodic inspection & maintenance to keep machines operating System of periodic inspection & maintenance to keep machines operating TPM combines preventive maintenance & total quality concepts TPM combines preventive maintenance & total quality concepts

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. TPM Requires Management to: Design products that can be easily produced on existing machines Design products that can be easily produced on existing machines Design machines for easier operation, changeover, maintenance Design machines for easier operation, changeover, maintenance Train & retrain workers to operate machines Train & retrain workers to operate machines Purchase machines that maximize productive potential Purchase machines that maximize productive potential Design preventive maintenance plan spanning life of machine Design preventive maintenance plan spanning life of machine

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Supplier Policies 1. 1.Locate near to the customer 2. 2.Use small, side loaded trucks and ship mixed loads 3. 3.Consider establishing small warehouses near to the customer or consolidating warehouses with other suppliers 4. 4.Use standardized containers and make deliveries according to a precise delivery schedule 5. 5.Become a certified supplier and accept payment at regular intervals rather than upon delivery

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Benefits of JIT 1.Reduced inventory 2.Improved quality 3.Lower costs 4.Reduced space requirements 5.Shorter lead time 6.Increased productivity 7.Greater flexibility 8.Better relations with suppliers 9.Simplified scheduling and control activities 10.Increased capacity 11.Better use of human resources 12.More product variety

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. Use JIT to finely tune an operating system Use JIT to finely tune an operating system Somewhat different in USA than Japan Somewhat different in USA than Japan JIT is still evolving JIT is still evolving JIT isnt for everyone JIT isnt for everyone JIT Implementation

To Accompany Russell and Taylor, Operations Management, 4th Edition, 2003 Prentice-Hall, Inc. All rights reserved. JIT In Services JIT In Services Competition on speed & quality Competition on speed & quality Multifunctional department store workers Multifunctional department store workers Work cells at fast-food restaurants Work cells at fast-food restaurants Just-in-time publishing for textbooks Just-in-time publishing for textbooks Construction firms receiving material just as needed Construction firms receiving material just as needed