Lecture Operations and supply chain management: The Core (3/e) – Chapter 12: Lean supply chains

Lean Supply Chains
Chapter 12
McGraw­Hill/Irwin

        Copyright © 2013 by The McGraw­Hill Companies, Inc. All rights reserved.


Learning Objectives
1.
2.
3.
4.
5.
6.
7.
8.

Explain what Lean Production is.
Describe how a pull production system works.
Understand Toyota Production System concepts.
Summarize important attributes of a lean supply
chain.
Analyze a supply chain process using value
chain mapping.
Learn the principles of lean supply chain design.
Learn how a Kanban system works.
Show examples of applying lean thinking to
service companies.
12­2

Lean Production

12­3


Lean Logic

12­4


Toyota Production System
Eliminatio n o f Was te
1.
2.
3.
4.
5.
6.
7.

Waste from
overproduction
Waste of waiting time
Transportation waste
Inventory waste
Processing waste
Waste of motion
Waste from product
defects

Re s pe c t fo r Pe o ple
1.

2.

3.
4.
5.

Lifetime employment
for permanent
positions
Maintain level
payrolls even when
business conditions
deteriorate
Company unions
Bonuses
View workers as
assets

12­5


Lean Supply Chains

12­6


Lean Focused Supply Chain

Components

12­7


Principles of Lean Supply Chain
Design

12­8


Lean Concepts




Plant layout designed to ensure balanced work
flow with a minimum of WIP inventory
Preventive maintenance is emphasized to avoid
downtime




Operators perform much of the maintenance to keep
equipment reliable

Group technology - a philosophy in which similar
parts are grouped into families




The processes required to make the parts are
arranged in a manufacturing cell
Eliminated movement and queue time between
operations, reduces inventory, and reduces
employees
12­9


Quality/J ust-in-Time


Quality at the source - do it right the first time and
if something goes wrong, stop the process
immediately






Workers are personally responsible for the quality of
their output
Workers become their own inspectors
Workers are empowered to do their own maintenance

J IT production - producing what is needed when
needed and nothing more







Anything over the minimum is waste
Typically applied to repetitive manufacturing
Idea lot size is one
Vendors ship several times a day
J IT exposes problems otherwise hidden by inventory
12­10


Lean Production Schedules

12­11


Kanban Systems






Kanban
means
“sign” or
“instruction
card” in

J apanese
Cards or
containers
are used
Make up
the Kanban
pull system
12­12


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

k =number of Kanban card
sets
D =average number of units
demanded over a given time
period
L =lead time to replenish an
order (in same time units as
demand)
S =safety stock expressed as
a percentage of demand during
leadtime
C =container size

12­13


Lean Supply Chains

12­14


Lean Supply Chains

12­15