Lecture Operations management: Creating value along the supply chain (Canadian edition) - Chapter 16

OPERATIONS MANAGEMENT:
Creating Value Along the Supply Chain,
Canadian Edition
Robert S. Russell, Bernard W. Taylor III, Ignacio Castillo, Navneet Vidyarthi

CHAPTER 16
Lean Systems

6-1


Learning Objectives
— Basic Elements of Lean Production
— Benefits of Lean Production
— Implementing Lean Production
— Lean Services
— Leaning the Supply Chain
— Lean Six Sigma
— Lean and the Environment
— Value Stream Mapping

6-2


Lean Production
—Doing more with less inventory, fewer workers,

less space
—Just-in-time (JIT)

—smoothing the flow of material to arrive just as it is

needed
—“JIT” and “Lean Production” are used interchangeably
—Muda
—waste, anything other than that which adds value to
product or service

6-3


Seven Wastes in Operations

6-4


Seven Wastes in Operations

6-5


Seven Wastes in Operations

6-6


Basic Elements
1.
2.
3.
4.

5.
11.
12.
13.
14.

Flexible resources
Cellular layouts
Pull system
Kanbans
Small lots
Quick setups
Uniform production levels
Quality at the source
Total productive
maintenance
15. Supplier networks
6-7


Flexible Resources
—Multifunctional workers
—perform more than one job
—general-purpose machines perform several basic
functions
—Cycle time
—time required for the worker to complete one pass
through the operations assigned
—Takt time
—paces production to customer demand

6-8


Standard Operating Routine
for a Worker

6-9


Cellular Layouts
—Manufacturing cells
—comprised of dissimilar machines brought together to
manufacture a family of parts
—Cycle time is adjusted to match takt time by

changing worker paths

6-10


Cells With Worker Routes

6-11


Worker Routes Lengthen
as Volume Decreases

6-12

Pull System
—Material is pulled through the system when needed
—Reversal of traditional push system where material

is pushed according to a schedule
—Forces cooperation
—Prevent over and underproduction
—While push systems rely on a predetermined
schedule, pull systems rely on customer requests

6-13


Kanbans
—Card which indicates standard quantity of

production
—Derived from two-bin inventory system
—Maintain discipline of pull production
—Authorize production and movement of goods

6-14


Sample Kanban

6-15

Origin of Kanban

a) Two-bin inventory system

b) Kanban inventory system

Bin 1

Kanban
Bin 2

Reorder
card

Q-R
R

R

Q = order quantity
R = reorder point = demand during lead time

6-16


Origin of Kanban
—a) Two-bin inventory

—b) Kanban inventory

system:
system:
—Order of size Q is placed —
Bin 1 has been
when Bin 1 is empty, i.e., eliminated, i.e., there is
reorder point is reached
always an order in
(see also EOQ)
transit
—Reorder point
corresponds to lead time —Q-R inventory
eliminated. i.e.,
demand
—When shipment arrives
inventory levels have
Bin 1 and Bin 2 are
been significantly
empty and will be refilled reduced
6-17


Dual Kanban System
— Production kanban
— authorizes production of goods

— Withdrawal kanban
— authorizes movement of goods

6-18

Other Kanbans
—Kanban square
—a marked area
designated to hold items

—Kanban rack
—allocated slots to hold
items

6-19


Other Kanbans
— Signal kanban
— a triangular kanban used to signal

production at the previous
workstation

— Kanban post office holding:
— Material kanbans
— used to order material in advance of a process
— Supplier kanbans
— rotates between the factory and suppliers

6-20

Determining Number of Kanbans

No. of Kanbans =

average demand during lead time + safety stock
container size
N =

where

dL + S
C

N
d
L
S

= number of kanbans or containers
= average demand over some time period
= lead time to replenish an order
= safety stock, usually given as percentage
of demand during lead time
C = container size
6-21


Determining Number of Kanbans
d
L

S
C

= 150 bottles per hour
= 30 minutes = 0.5 hours
= 0.10(150 x 0.5) = 7.5
= 25 bottles

(150 x 0.5) + 7.5
dL + S
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)

6-22


Small Lots
—Require less space and capital investment
—Move processes closer together
—Make quality problems easier to detect
—Make processes more dependent on each other

6-23


Inventory Hides Problems
— High inventory (= water) levels hide problems (= rocks) and

allow for smooth sailing

6-24


Less Inventory Exposes Problems
— Forcing inventory (= water) levels down exposes problems

(= rocks) which then must be removed

6-25