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The McGraw-Hill Companies,

2

McGraw-Hill/Irwin

Chapter 12

Lean Production

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Lean Production Defined

The Toyota Production System

Lean Implementation

Requirements

Lean Services

OBJECTIVES

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Lean Production

An integrated set of activitiesdesigned to achieve high-volumeproduction using minimal

inventories (raw materials, work inprocess, and finished goods) Involves the elimination of waste in

production effort Involves the timing of production

resources (i.e., parts arrive at thenext workstation just in time)

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Pull SystemHere the customer starts

the process, pulling an

inventory item from

Final Assembly

Here the customer starts

the process, pulling an

inventory item from

Final Assembly

Then sub-

assembly work is

pulled forward bythat demand

Then sub-

assembly work is

pulled forward by

that demand

The process continues

throughout the entire

production process and

supply chain

The process continuesthroughout the entire

production process and

supply chain

Customers

Sub

Sub

Fab

Fab

Fab

Fab

Vendor

Vendor

Vendor

Vendor

Final

Assembly

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Features of Lean Production

Management philosophy Pull system though the plant

WHAT IT IS

Employee participation Industrial engineering/basics Continuing improvement Total quality control Small lot sizes

WHAT IT REQUIRES

Attacks waste Exposes problems and bottlenecks Achieves streamlined production

WHAT IT DOES

Stable environment

WHAT IT ASSUMES

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The Toyota Production System

Based on two philosophies:

1. Elimination of waste

2. Respect for people

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Seven Types of Waste (Fujio Cho)

1. Waste from Overproduction

2. Waste of Waiting Time

3. Transportation Waste

4. Inventory Waste

5. Processing Waste

6. Waste of Motion

7. Waste from Product Defects

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Elements to Address Elimination

of Waste

1. Focused factory networks

2. Group technology

3. Quality at the source

4. JIT production

5. Uniform plant loading

6. Kanban production control system7. Minimized setup times

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Minimizing Waste:

Focused Factory

Networks

CoordinationSystem Integration

These are small specialized

plants that limit the range

of products produced

(sometimes only one type of

product for an entire

facility)

These are small specialized

plants that limit the range

of products produced

(sometimes only one type of

product for an entire

facility)

Some plants in

Japan have as

few as 30 and as

many as 1000

employees

Some plants in

Japan have as

few as 30 and as

many as 1000

employees

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Minimizing Waste: Group Technology (Part 1)

Saw Saw

Lathe PressPress

Grinder

LatheLathe

Saw

Press

Heat Treat

Grinder

Note how the flow lines are going back and forthNote how the flow lines are going back and forth

Using Departmental Specialization for plant layout can cause a

lot of unnecessary material movement

Using Departmental Specialization for plant layout can cause a

lot of unnecessary material movement

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Minimizing Waste:

Group Technology (Part 2)

Revising by using Group Technology Cells can reduce movement andimprove product flow

Revising by using Group Technology Cells can reduce movement andimprove product flow

Press

Lathe

Grinder

Grinder

A

2

BSaw

Heat Treat

LatheSaw Lathe

PressLathe

1

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Do it right the first time

When something goes wrong,

stop the process immediately andaddress

Workers are trained and

empowered to control their ownprocess

Minimizing Waste:

Quality at the Source

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Produce what is needed when it is

needed

Intended for repetitivemanufacturing

Low inventory, ordered only as

needed

Minimizing Waste:

JIT Production

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Minimizing Waste: Inventory

Hides Problems

Work in

process

queues

(banks)

Changeorders

Engineering design

redundancies

Vendor

delinquencies

Scrap

Design

backlogs

Machine

downtime

Decision

backlogs

Inspection

backlogs

Paperwork

backlog

Inven

to

ry

Productivity

Problems

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Work in

process

queues

(banks)

Changeorders

Engineering design

redundancies

Vendor

delinquencies

Scrap

Design

backlogs

Machine

downtime

Decision

backlogs

Inspection

backlogs

Paperwork

backlog

Inven

to

ry

Minimizing Waste: Inventory

Hides ProblemsExample: By identifyingdefective items from a

vendor early in the

production process the

downstream work is

saved

Example: By identifying

defective work by

employees upstream, the

downstream work is

saved

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Minimizing Waste:

Uniform Plant Loading (heijunka)

Not uniform Jan. Units Feb. Units Mar. Units Total

1,200 3,500 4,300 9,000

Uniform Jan. Units Feb. Units Mar. Units Total

3,000 3,000 3,000 9,000

Suppose we operate a production plant that produces a singleproduct. The schedule of production for this product could be

accomplished using either of the two plant loading schedules

below.

Suppose we operate a production plant that produces a singleproduct. The schedule of production for this product could be

accomplished using either of the two plant loading schedules

below.

How does the uniform loading help save labor costs?How does the uniform loading help save labor costs?

or

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Minimizing Waste: Kanban Production

Control Systems

Storage

Part A

Storage

Part AMachine

CenterAssembly

Line

Material Flow

Card (signal) Flow

Withdrawal

kanban

Once the Production kanban isreceived, the Machine Center

produces a unit to replace the

one taken by the Assembly Line

people in the first place

This puts thesystem back

were it was

before the item

was pulled

The process begins by the Assembly Line

people pulling Part A from Storage

Production kanban

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Determining the Number of

Kanbans Needed

Setting up a kanban system requiresdetermining the number of kanbanscards (or containers) needed

Each container represents the minimumproduction lot size

An accurate estimate of the lead time

required to produce a container is keyto determining how many kanbans arerequired

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The Number of Kanban Card Sets

C

SDL

k

)(1

containertheofSize

stockSafetytimeleadduringdemandExpected

+=

+=

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 asdemand)

S= Safety stock expressed as a percentage of demand

during lead time

C= Container size

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Example of Kanban Card Determination:

Problem Data

A switch assembly is assembled in batches of4 units from an upstream assembly area anddelivered in a special container to adownstream control-panel assembly

operation The control-panel assembly area requires 5

switch assemblies per hour

The switch assembly area can produce acontainer of switch assemblies in 2 hours

Safety stock has been set at 10% of neededinventory

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Example of Kanban Card Determination:

Calculations

3or,75.2

4

5(2)(1.1))(1

containertheofSize

stockSafetytimeleadduringdemandExpected

==+

=

+

=

C

SDL

k

Always round up!

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Respect for People

Level payrolls Cooperative employee unions

Subcontractor networks

Bottom-round management style

Quality circles (Small GroupInvolvement Activities or SGIAs)

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Toyota Production Systems Four Rules

1. All work shall be highly specified as to content,sequence, timing, and outcome

2. Every customer-supplier connection must bedirect, and there must be an unambiguous yes-or-no way to send requests and receiveresponses

3. The pathway for every product and service mustbe simple and direct

4. Any improvement must be made in accordancewith the scientific method, under the guidance ofa teacher, at the lowest possible level in theorganization

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Accomplishing Lean Production

1. Design Flow Process

2. Total Quality Control

3. Stabilize Schedule

4. Kanban Pull

5. Work with Vendors

6. Reduce Inventory More

7. Improve Product Design

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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

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Lean Implementation Requirements:

Total Quality Control

Worker responsibility

Measure: SQC (Statistical Quality Control)

Enforce compliance

Fail-safe methods Automatic inspection

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Lean Implementation Requirements:

Stabilize Schedule

Level schedule

Underutilize capacity

Establish freeze windows

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Lean Implementation Requirements:

Kanban-Pull

Demand pull

Backflush

Reduce lot sizes

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Lean Implementation Requirements:

Work with Vendors

Reduce lead times

Frequent deliveries

Project usage requirements

Quality expectations

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Lean Implementation Requirements:

Reduce Inventory More

Look for other areas

Stores

Transit

Carousels

Conveyors

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Lean Implementation Requirements:

Improve Product Design

Standard product configuration

Standardize and reduce number of

parts

Process design with product design

Quality expectations

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Lean Implementation Requirements:

Concurrently Solve Problems

Root cause Solve permanently

Team approach

Line and specialist responsibility

Continual education

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Lean Implementation Requirements:

Measure Performance

Emphasize improvement

Track trends

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Lean in Service Industry(How To)

1. Organize Problem-Solving Groups

2. Upgrade Housekeeping

3. Upgrade Quality

4. Clarify Process Flows

5. Revise Equipment and ProcessTechnologies

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6. Level the Facility Load

7. Eliminate Unnecessary Activities

8. Reorganize Physical Configuration

9. Introduce Demand-Pull Scheduling

10. Develop Supplier Networks

Lean in Service Industry(How To)

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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 work-in-process

c. Minimal inventory of finished goods

d. All of the above

e. None of the above

Answer: d. All of the above

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Question Bowl

In the Toyota Production System,

the elimination of wasteinvolves which of the following?

a. Overproduction

b. Waiting time

c. Transportation

d. All of the above

e. None of the above

Answer: d. All of the above

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Question Bowl

In the Pull System the partner that begins

the process of pulling is which of the

following?

a. Customers

b. Vendors

c. Fabrication personnel

d. CEO

e. All of the above

Answer: a. Customer

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Question Bowl

A Lean Production program

requires which of the following?

a. Employee participation

b. Total quality control

c. Small lot sizes

d. Continuing improvement

e. All of the aboveAnswer: e. All of the above (Also included in Industrial

engineering/basics)

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Question Bowl

Inventory has been known to hide which

of the following productionproblems?

a. Scrap

b. Vendor delinquenciesc. Decision backlogs

d. All of the above

e. None of the aboveAnswer: d. All of the above

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Question BowlYou want to determine how many kanban card

sets you need for an operation. You findthat average number of units demanded is1,000 per hour, the lead time to replenish theorder for this item is 10 hours, the containersize is 10 units, and the safety stock isestimated to be 5% of the expected demand.

Which of the following is the desired numberof kanban card sets?

a. 1050

b. 1000

c. 605d. 500

e. None of the above

Answer: a. 1050 ([1000x10](1+0.05)/10=1050)

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Question Bowl

When trying to implement Lean

system a stabilized scheduleincludes which of the following?

a. Demand pull

b. Backflush

c. Fail-safe methods

d. All of the abovee. None of the above

Answer: e. None of

the above (Theseinclude: level

schedule,

underutilization

capacity, andestablish freeze

windows.)

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End of Chapter 12