D30 LeanOps

Operations Management:
Lean Operations (JIT) Module

MBPF House Manufacturing Game

The transition to Lean Ops
The Paradigm of Lean Operations: The ideal

Methods for synchronization & waste reduction Increasing visibility for continuous improvement
Approaching the ideal with Product Variety: TPS

Managing variety & flexibiltiy Toyota Production System (TPS)
S. Chopra/Operations/Lean Ops
MBPF Inc. Factory Layout

Production Control
Roof Punch Roof Form
Base Punch Base Form
Base Weld
Final Assembly
S. Chopra/Operations/Lean Ops 2
Paradigm of Lean Operations: The Ideal Process
Synchronization of all flows

1x1 production on demand defect free
At lowest possible cost Waste = Gap between ideal and actual
How do we set up a system to continually reduce waste ?

Toyotas waste elimination in Operations

1. Overproduction 2. Waiting 3. Inessential handling
4. Non-value adding processing

5. Inventory in excess of immediate needs
6. Inessential motion
7. Correction necessitated by defects
Synchronize: Cut Batch Sizes

Example Process:
0 1 2 3 4 5
A
1 min/job
B
1 min/job
C
1 min/job
D
1 min/job
Batch Mfg (Lotsize = 5)

Space
0 1 2 3 4 5
Flow Mfg (Lotsize = 1)

1 1 1
Space
1
1
5
A B C D
10
Time
5
5 5
10
15 20
15 20
5
Synchronization with demand: customer demand pulls product

PUSH: Inputs availability triggers execution
Supplier Process Customer
inputs
outputs
PULL: Outputs need triggers execution

Supplier Process Customer
inputs
outputs
Implementation: Kanban Production Control Systems
Kanban
Job
Processing center i
WIP
Processing center i + 1
Reducing Waste: Quality at the Source

Defects Found at: Own Process
$
Next Process $
End of Line
Final Inspection
End Users Hand
Impact to the Company
Very Minor
Minor Delay
Rework Resched. of work
Significant Rework Delay in Delivery Additional Inspection
Warranty costs Administra tive costs Reputation Loss of Market Share
Reducing Waste: Quality at the Source

Fool-proof/Fail-safe design (Poka-Yoke) Inspection
Self Automated (Jidoka)
Line-stopping empowerment (Andon)
Human infrastructure
Reducing Waste: Flexible Resources

Cross training of workforce Use of IT in services
10
Reducing Waste: From Functional Layout to Cells

Production Control
Production Control Roof Cut Roof Cut
Production Control Roof Cut Base Cut
Production Control Base Cut Base Cut Base Assy

Roof Cut
Base Cut
FA
Base Assy
FA
FA
FA
Base Base Assy Assy
QC
QC
QC
FA
Base Assy
FA
Base Assy
11
Synchronize: Just-In-Time operations

JIT = have exactly what is needed, in the quantity it is needed, when it is needed, where it is needed. Reduce transfer batches Pull rather than push work Quality at source Flexible resources Set up cells
12
THE DICE GAME
INPUT Buffer
OUTPUT Buffer
6 Face Fair Dice

Average Capacity of Each Stage =
Average Process Capacity
Unfair Dice which rolls into either 3 or 4

Average Capacity of Each Step =
Average Capacity of The Process =
Play The Game

The impact of inventory and variability: Output of Match Game

195 185
2-face die (s=0.7)

Series1 Series2 Series3 Series4 Series5 Average
Output after 50 Runs
175
165
6-face die (s=1.9)
155
145
135 0 5 10 15 20 25 Starting Inventory in each Buffer
14
Reducing waste: Increase Problem Visibility Lower the Water to Expose the Rocks
Missed Due Dates Late Deliveries
Too Much Space
Inventory
Too much paperwork Engineering Change Orders Long queues
Scrap & Rework

Poor Quality 100% inspection
Machine Downtime
15
Lean Operations: Causal Link Diagram

Source: Lieberman and Demeester
Time plays the role of Inventory in Lean Service Operations
TIME
17
Continuous Improvement: Kaizen

Increase visibility of waste Targeted improvements
Active worker involvement Time for experimentation Supplier involvement
Exploratory stress
Human infrastructure
18
Learning Objectives Basic Lean Operations

Paradigm of Lean Operations:

Strive for the ideal by eliminating waste
Synchronize
Reduced batch sizes Pull production control systems (vs. push): Kanban Quality at source Layout: Cellular operations
Improve
Increase problem visibility (river analogy)
19
How to run Lean Operations: Managing Variety
Monthly Production Requirement:
Model Quantity
Sedan 10,000
Station Wagon 10,000
How should production be scheduled for the month?
20
Synchronize: Heijunka Mixed Level/Balanced Production

Batch Production Schedule (AAAABBBB..)
Product Apr/12.................15...........................30
Mixed Production Schedule (ABAB...)

Apr/12....................15.......................30
A B
FGI
FGI
time
time
21
Reducing Waste: Reduced Setup Times
What happens if we have long setup/changeover times?
How to synchronize production with variety (discuss Midwest Molding)?
22
Reducing Waste: Mixed-Load Pickup and Delivery

Part A Plant
Part B Plant
Assembly Line
Individual Pickup
Part C Plant
Part A Plant
Part B Plant
Assembly Line
Mixed-Load Pickup
Part C Plant
23
Lean Operations: Best Implementation is TPS

TPS is a production management system that aims for the ideal through continuous improvement Includes, but goes way beyond JIT. Pillars:
Synchronization Quality at Source Continuous Improvement (Kaizen): through visibility & empowerment
....
24
Learning Objectives: Lean Operations for Variety
Lean Operations: In Search for the Holy Grail and zero Waste
Level Mixed Production: Heijunka
Reduced batch sizes
Pull Execution: Kanbans Quality at source: Jidoka Efficient Workflow: Cellular Layout Continuous Improvement: Kaizen
Flow Synchronization Low Cost Get ever closer to ideal
25

D30 LeanOps

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Operations Management:

Lean Operations (JIT) Module

MBPF House Manufacturing Game

The Paradigm of Lean Operations: The ideal

Approaching the ideal with Product Variety: TPS

MBPF Inc. Factory Layout

Roof Punch Roof Form

Base Punch Base Form

Paradigm of Lean Operations: The Ideal Process

Synchronization of all flows

At lowest possible cost Waste = Gap between ideal and actual

How do we set up a system to continually reduce waste ?

Toyotas waste elimination in Operations

4. Non-value adding processing

Synchronize: Cut Batch Sizes

Batch Mfg (Lotsize = 5)

Flow Mfg (Lotsize = 1)

Synchronization with demand: customer demand pulls product

PULL: Outputs need triggers execution

Implementation: Kanban Production Control Systems

Reducing Waste: Quality at the Source

End Users Hand

Impact to the Company

Rework Resched. of work

Significant Rework Delay in Delivery Additional Inspection

Warranty costs Administra tive costs Reputation Loss of Market Share

Reducing Waste: Quality at the Source

Self Automated (Jidoka)

Line-stopping empowerment (Andon)

Reducing Waste: Flexible Resources

Reducing Waste: From Functional Layout to Cells

Production Control Roof Cut Roof Cut

Production Control Roof Cut Base Cut

Production Control Base Cut Base Cut Base Assy

Base Base Assy Assy

Production Control Roof Cut Base Cut

Synchronize: Just-In-Time operations

THE DICE GAME

6 Face Fair Dice

Unfair Dice which rolls into either 3 or 4

Average Capacity of The Process =

Play The Game

The impact of inventory and variability: Output of Match Game

2-face die (s=0.7)

Output after 50 Runs

6-face die (s=1.9)

135 0 5 10 15 20 25 Starting Inventory in each Buffer

Missed Due Dates Late Deliveries

Too Much Space

Too much paperwork Engineering Change Orders Long queues

Scrap & Rework

Lean Operations: Causal Link Diagram

Time plays the role of Inventory in Lean Service Operations

Continuous Improvement: Kaizen

Active worker involvement Time for experimentation Supplier involvement

Learning Objectives Basic Lean Operations

Paradigm of Lean Operations:

Increase problem visibility (river analogy)

How to run Lean Operations: Managing Variety

Monthly Production Requirement:

Station Wagon 10,000

How should production be scheduled for the month?