4 Lean Operation and Jit

15.
Lean Operations & Just-In-Time
Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.2
Chapter Coverage
What are lean operations and JIT? Differences between traditional approach and JIT Disadvantage of JIT Lean philosophy of operations JIT techniques JIT planning and control
Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 15
15.3
Lean operations:
Is the philosophy of moving towards zero order to develop an operation that is:
1) 2) 3) 4)
waste in
faster, more dependable, produces higher quality products and service, and operates at low cost.
Founded on doing the simple things well, on gradually doing them better and reducing waste every step of the way.
15.4
Just In Time, JIT:

1) JIT is an approach of producing goods and services exactly when they are needed. 2) Minimum inventory if not zero 3) Customers wait 4) Encourages efficiency 5) Quality not sacrificed
15.5
JIT definitions:
(textbook definitions)
JIT aims to meet demand instantly, with perfect quality and no waste more fully: improved overall productivity and elimination of waste cost-effective production and delivery of only the necessary quantity of parts at the right quality, at the right time and place, while using a minimum amount of facilities, equipment, materials and human resources JIT is dependent on the balance between the suppliers flexibility and the users flexibility it is accomplished through the application of elements which require total employee involvement and team-work
a key philosophy of JIT is simplification

15.6
Differences between traditional approach and JIT
Traditional approach vs. JIT

Traditional approach 1) Buffer inventory between each stage act as insulation and gives some degree of independence from upstream stages. 2) More buffer better insulation. 3) Stage A experience breakdown, Stage B can continue producing for some time. 4) Stage C can continue for longer time. 5) Problems in Stage A is not spread throughout.
JIT 1) Parts are produced as they are ordered no buffer inventory. 2) Stage A experience breakdown, immediately all stages will have to stop. 3) Problems in Stage A is apparent to all and becomes everybody's responsibility. 4) Improves the chances of problem being solved.
Cont
15.7
Cont
Traditional approach vs. JIT

Traditional approach JIT
6)
7)
Problems are confined within the stage and go unnoticed for a period of time. Seek efficiency by protecting each part of the operation from disruption.
5)
Seek efficiency through exposure of system problems, making problems more evident and change the motivational structure of the whole system towards solving the problem.
15.8
Traditional approach:
buffer inventory stage A stage B buffer inventory stage C
15.9
JIT approach:
orders stage A stage B orders stage C
deliveries
deliveries
15.10
Disadvantage of JIT:
The main sacrifice of JIT is low capital utilization (see Fig 15.10). Why is capital utilization in JIT systems low?
i. ii. Produce only when needed. Any stoppage will affect the rest of the system causing complete stoppage.
JIT argument - No point producing output just for its own sake, it is counter productive because extra inventory hides problems and hinders improvement.
15.11
JIT APPROACH
focus on producing only when needed
TRADITIONAL APPROACH
fewer stoppages
focus on high capacity utilization lower capacity utilization, but low inventory so problems are exposed and solved
more production at each stage
more stoppages because of problems high inventory means less chance of problems being exposed and solved
no surplus production goes into inventory
extra production goes into inventory because of continuing stoppages at stages
Disadvantage of JIT: Low capacity utilization

15.12
The problem with inventory

Reduce the level of inventory (water) to reveal the operations problems
productivity problems
WIP Defective materials Scrap Rework
Downtime
WIP Defective materials productivity problems Scrap Downtime Rework
15.13
Lean philosophy of operations:

1. Eliminate waste 2. The involvement of everyone 3. Continuous improvement
15.14
Eliminate Waste:
Waste can be defined as an activity which does not add value. Identifying waste is the first step towards elimination. The seven types of waste are:
1. 2. 3. 4.
Over production Waiting time Transport Process
5. Inventory 6. Motion 7. Defective goods
15.15
1. Over production producing more than is immediately needed by the next process in the operation greatest source of waste. 2. Waiting times Machine and labour waiting time are considered waste and they are measure in terms of machine efficiency and labour efficiency. 3. Transport Moving materials around the plant and together with the double and triple handling of WIP, does not add value. Layout changes which bring processes closer together, improvement in transport methods and workplace organization can reduce waste.
15.16
4. Process the process itself can be a source of waste. For example, some operations may only exist because of poor component design. 5. Inventory all inventory should be a target for elimination. However, it is only by tackling the causes of inventory that it can be reduced. 6. Motion an operator may look busy but sometimes no value is being added by the work. Simplification of work is a rich source of reduction in the waste of motion.
15.17
7. Defective goods quality waste is often very significant in operation, even if actual measure of quality are limited. Total cost of quality are much greater than what meets the eye.
15.18
The involvement of everyone:

Lean approach to people management is called respect-for-humans system. It encourages:
Team based problem solving Job enrichment less monotonous, more responsibility, rewarding Job rotation change department, stage, function, cell Multi-tasking
Its intention:
High degree of personal responsibility leads to ownership of job
15.19
Continuous improvement:
Lean objectives are expressed in ideals such as to eliminate waste completely Can never be fully achieved Require continuous improvement to move closer.
15.20
JIT techniques:
1) Adopt basic working practices:
Discipline comply to work standards that are in place for the safety of staff and the environment, and for the quality of the product. b. Flexibility give more responsibility to those capable even if it is beyond hes grade. c. Equality discard unfair and divisive personnel policies e.g. uniforms and pay structure d. Autonomy delegate decision making responsibilities to personnel involve in direct activity a.
15.21
Cont
Development of personnel staff training Quality of working life e.g. involvement in decision making, security of employment, enjoyment and working area facilities g. Creativity some enjoy not just doing a job successfully by improving it for the next time. h. Total people involvement take part in selection of new recruit, spending improvement budget, quality issues, etc. e. f.
15.22
Cont
Design determines 70% 80% of production cost Design improvement can reduce product cost and make more efficient production process. Example: reduce number of components, use better or cheaper material. Concept of simplicity, repetition and experience breed competence. Focus processes on manageable sets of products, technologies, volumes and markets Structure operations objective so that they are consistent and coherent
2) Design for ease of processing:
3) Emphasize operations focus:

15.23
Cont
Use several small machines rather than one big one. Can produce few different components at a given time instead of batch by batch production. More robust, mobile, layout flexibility and reduce investment risk. Long process routes provide opportunity for delay, inventory build up, adds no value to the product and slow down cycle time Workstations are close together, use U shaped line, use cell layout.
4) Use small simple machines:
5) Layout for smooth flow:
15.24
Cont
6)
Adopt Total Productive Maintenance (TPM):

Unreliable processes create waste, for example, waiting time, delays in downstream operations. In a JIT system: operate correctly detect problems lubricate, clean, adjust collect data training operators long-term planned maintenance condition monitoring operator involvement care for equipment ensuring total reliability
operators taught to care for processes: maintenance personnels role changes:
emphasis:
15.25
8) Reduce set-up times:
Cont
Set-up time is the time taken to changeover the process from one activity to the next. During this time operation seizes. It is reduced by cutting out:
time taken to search for tools and equipment, Pre-preparation of tasks which delay changeover and Constant practice of set-up routines
9) Ensure visibility:
More transparent operation is easier for staff to share in its management and improvement. Problems are easily detected and information becomes simple, fast and visual. Expand JIT culture to key suppliers
10) Adopt JIT through the supply chain:
15.26
JIT planning and control

JIT planning and control is based on the principle of a pull system What are push planning and control & pull planning and control?
15.27
Push philosophies of planning and control
PUSH CONTROL CENTRAL OPS. PLANNING AND CONTROL SYSTEM

Instruction on what to make and where to send it
FORECAST OR
Work centre
Work centre
Work centre
Work centre
DEMAND
Signal pushes work through the process Activities are scheduled by means of a central system and completed in line with central instructions No consideration for succeeding stages requirements High inventory
15.28
Pull philosophies of planning and control
PULL CONTROL
Request Request Request Request
Work centre
Delivery
Work centre
Delivery
Work centre
Delivery
Work centre
Delivery
DEMAND
Signal pulls work only when required. Only customer can trigger movement sets the work pace.
Lesser chances of inventory build-up.

JIT favored.
15.29
Kanban control
It is a system used of JIT planning and control. Based on the pull planning and control. Kanban is the Japanese word for card or signal. Card or signal used by customer stage to instruct supplier stage to send more materials.
Cont
15.30
Cont
Kanban control
Three types of Kanban:
1. The move or conveyor kanban
Signals a previous stage that material can be withdrawn from inventory.
2.
The production kanban

Signals a production process to start producing a part to be place in inventory.
Signals an external supplier to send material to a stage.
3.
The vendor kanban
15.31
Cont
Kanban control
Receipt of kanban triggers movement, production or supply of one unit. Two kanbans two units Kanban comes in different form empty container, verbal instruction, color tokens, etc Two kanban procedure:
Single-card system: either move or vendor kanban Dual-card system: use move and production kanban
15.32
Work centre A Work centre B
m m m m m m m
Stage A
Stage B
Output stock
Output stock Empty standard container Flow path for standard containers Flow path for move kanban
Full standard container

m Move kanban
Kanban holding box

15.33
Each stage has a work center and an area for holding inventory. Loop 1: Stage B requires more parts withdraw a container from output stock of stage A empty container is kanban and sent to stage A work center signal for stage A to start production Loop 2: Move kanban taken from holding box to output stock point signal to move a full container from stage A to stage B.
15.34
Kanban rules: Each container must have a kanban card indicating part number and description, user and maker location, and quantity. The parts are always pulled by the user or customer. No parts are started without a kanban. All containers contain exactly their number of parts. No defective parts may be sent to the user or customer. The maker can only produce enough parts to make up what has been withdrawn. The number of kanbans should be reduced. The time period should be made shorter
15.35
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4 Lean Operation and Jit

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15.

Lean Operations & Just-In-Time

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Just In Time, JIT:

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

a key philosophy of JIT is simplification

Differences between traditional approach and JIT

Traditional approach vs. JIT

Traditional approach vs. JIT

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

more production at each stage

no surplus production goes into inventory

extra production goes into inventory because of continuing stoppages at stages

Disadvantage of JIT: Low capacity utilization

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

The problem with inventory

WIP Defective materials Scrap Rework

WIP Defective materials productivity problems Scrap Downtime Rework

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Lean philosophy of operations:

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Over production Waiting time Transport Process

5. Inventory 6. Motion 7. Defective goods

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

The involvement of everyone:

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

2) Design for ease of processing:

3) Emphasize operations focus:

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

4) Use small simple machines:

5) Layout for smooth flow:

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Adopt Total Productive Maintenance (TPM):

operators taught to care for processes: maintenance personnels role changes:

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

8) Reduce set-up times:

10) Adopt JIT through the supply chain:

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

JIT planning and control

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Push philosophies of planning and control