lean operations module

Lin/Operations/Lean Ops 1

Lean Operations Module House Building Game

» The transition to Lean Ops

The Paradigm of Lean Operations: The ideal» Basic philosophy of Lean Ops

» Methods for synchronization & waste reduction

» Managing variety & flexibiltiy

Approaching the ideal : TPS» Continuous improvement

» Toyota Production System (TPS)


Paradigm of Lean Operations:In Search for the Holy Grail

= The ideal Process Synchronization of all flows

» 1 x 1

» 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 ?1. Improving synchronization

2. Visibility for continuous improvement


Toyota’s 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


House Game Improvements:What did your team do?


Lean Tool #1: Cut Batch SizesA Simple Example

What is the theoretical flow time of the process? What is the capacity of the process? What does that imply for the amount of inventory

needed in the process?

1 min/job

A B C D

1 min/job 1 min/job 1 min/job


Synchronize: Cut Batch Sizes

Batch Mfg (Batch size = 4)Flow Mfg (Batch size = 1)

Example: A

1 min/job

B

1 min/job

C

1 min/job

D

1 min/job

Ela

psed

Tim

e

11

1

1

1

0

4

Ela

psed

Tim

e

8

22

22

2

33

3

3

12

44

4

B C DA1-4

0

4

8

5-8

9-12

12

13-16

16

20

A B C D

556

17-20

5-8

5-8

5-8

1-4

1-4

1-49-12

9-12 1-413-16


Lean Tool #2: customer demand pulls product -- Synchronization with demand

Supplierinputs outputs

Process Customer

PUSH: Inputs availability triggers execution

Supplierinputs outputs

Process Customer

PULL: Outputs need triggers execution


Implementation: Kanban Production Control Systems

Kanban

Processing center i

Processing center i + 1

WIP

Job


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 Set up cells


Lean Tool #3: From Functional Layout to Cells

ProductionControl

ProductionControl

ProductionControl

RoofCut

RoofCut

RoofCut

BaseCut

BaseCut

BaseCut

FA BaseAssyFA FA Base

AssyBaseAssy

QC QC QC

ProductionControl

FA

BaseCut

RoofCut

BaseAssy

ProductionControl

FA

BaseCut

RoofCut

BaseAssy

ProductionControl

FA

BaseCut

RoofCut

BaseAssy


Managing Flows: the Process View & product cells

Recall: “By rethinking the IBM Austin assembly plant and introducing cells, distance traveled by a card was cut from 1.5 miles to 200 yards. Floor space was reduced to half and production tripled with about the same number of workers.”

Pro’s of cells:

Con’s of cells:


Teams in Cells and Lean Ops: Human Resources issues

Advantages– Consistent with the moral ideal of “autonomy.”– Empowers the workforce through participation and autonomy in managing

daily activities– Gives unprecedented responsibility to workers:

» Immediate and impartial feedback of problems» Investigation of process improvements» Monitoring quality» They also gain better understanding of the process

Challenges:– Less WIP means more tight coupling and less autonomy

» Rigid procedures and interdependence of cells– Team dynamics: incentives, team pressure, …– From monthly 30-day goals before to 3-minute goals now

» Does not leave much room for variability


Lean Tool #4:Quality at the Source

Defects Found at:

Own Process Next Process End of Line Final Inspection

End User’s Hand

$ $ $ $ $

Impact to the Company

Very Minor

Minor Delay

Rework Resched.

of work

Significant Rework

Delay in Delivery

Additional Inspection

Warranty costs

Administrative costs

Reputation Loss of

Market Share


Quality at the Source

Fool-proof/Fail-safe design (Poka-Yoke) Inspection

– Self

– Automated (Jidoka)

Line-stopping empowerment (Andon)

Human infrastructure


How to run Lean Operations:Managing Variety

Monthly Production Requirement:

Model Sedan StationWagon

Quantity 10,000 10,000

How should production be scheduled for the month?


Synchronize: Heijunka Mixed Level/Balanced Production

Batch Production Schedule Mixed Production Schedule

(AAAABBBB..) (ABAB...)

Product Apr/12.................15...........................30 Apr/12....................15.......................30

A

B

time

FGI

time

FGI


Reducing Waste: Reduced Setup Times

What happens if we have long setup/changeover times?

How do synchronized production with variety (product mix)?


Synchronize: HeijunkaUniform Plant Loading

This does not mean building a single product.

Rather: – maintain a stable mix of products,

– and firm frozen schedules based on actual orders

Benefits:

Costs: Must reduce scale economies


Reducing Waste:Mixed-Load Pickup and Delivery

Part A Plant

Part B Plant

Part C Plant

AssemblyLine

Part A Plant

Part B Plant

Part C Plant

AssemblyLine

IndividualPickup

Mixed-LoadPickup


THE DICE GAME

Average Capacity of Each Stage =

OUTPUTBuffer

INPUTBuffer

6 Face Fair Dice

Average Process Capacity =

Play The Game

Unfair Dice which rolls into either 3 or 4

Average Capacity of Each Step =

Average Capacity of The Process =

http://www.kellogg.nwu.edu/faculty/chopra/ftp/omd30/leanoperations/dicegame/pageone.htm


The impact of inventory and variability:Output of Match Game

135

145

155

165

175

185

195

0 5 10 15 20 25

Starting Inventory in each Buffer

Ou

tpu

t af

ter

50 R

un

s

Series1

Series2

Series3

Series4

Series5

Average

6-face die (=1.9)

2-face die (=0.7)


Reducing waste: Increase Problem VisibilityLower the Water to Expose the Rocks

Scrap &Rework

Missed Due DatesToo Much Space

Late Deliveries

Poor Quality

Machine Downtime

Engineering Change Orders

Long queues

Too much paperwork

100% inspection

Inve

ntor

y


Time plays the role of Inventory in Lean Service Operations

TIME


Toyota Motor Manufacturing, USA


Toyota financial performance

Fig 1: The Economist, 2005. Fig 2: Barron’s 2004.


Impact of Toyota Name on Resale Value

2002 ModelYear MSRP

2005 ResaleValue w/45K miles

Resale/MSRP

Corolla

CE $ 12,568 $ 10,050 80%

S $ 12,793 $ 10,800 84%

LE $ 13,383 $ 10,500 78%

Prizm

Base $ 14,330 $ 8,725 61%

Lsi $ 16,395 $ 9,580 58%

Resale values taken from Cars.com for average condition January, 2005.


The Changing Cost of Warranty Management

Warranty Problems YR2001

100

110

120

130

140

150

160

170

Toyota Honda Nissan GM DC Ford

Prob

lem

s pe

r 10

0 V

ehic

les

Warranty Cost Comparison

0100200300

400500600700

Toyota GM FordW

arra

nty

Cos

t per

Veh

icle

Warranty Problems per Vehicle vs. Warranty Costs

(*) (**)

(*)JD Power 1QS, May 2001 (**) Business Week Article, June 25, 2001.


Continuous Improvement: Kaizen

Increase visibility of waste Targeted improvements

– Active worker involvement

– Time for experimentation

– Supplier involvement

Exploratory stress

Human infrastructure

Lin/Operations/Lean Ops 29....

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


Learning ObjectivesLean Operations

Paradigm of Lean Operations: Strive for the ideal by eliminating waste

Flow Synchronization– Reduced batch sizes

» Level Mixed Production: Heijunka

– Pull production control systems (vs. push)» Implementation: Kanban

– Layout: Cellular operations– Quality at the source

Continuous Improvement– Increase problem visibility (river analogy)– Kaizen

lean operations module

Documents

lean tool

cons of cells

pros of cells

flow mfg batch size

ideal processsynchronization

moral ideal of autonomy

time operations jit

toyotas waste elimination