just in time and lean operation chapter presentation
DESCRIPTION
This presentation encompasses all the topics under "JIT AND LEAN OPERATIONS". It is largely based on the textbook by Jay Heizer and Barry Render 9th Edition PLEASE HIT LIKE IF IT'S HELPFUL! :DTRANSCRIPT
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LEAN OPERATiONS
Presented By:Group 7
Pearson Education, Inc. publishing as Prentice Hall © 2011
Based on the textbook by Heizer and RenderMost of the figures from the book:
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What is JIT?
• A corporate system designed to produce output within the minimum lead time and at the lowest total cost by continuously identifying and eliminating all forms of corporate waste and variance.
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Looking Back
• JIT originated in Japan, post WWII• Driven by a need survive after the
devastation caused by the war• JIT gained worldwide prominence in
the 1970s• Toyota Motor Co. developed JIT
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Toyota Motor Corp.
• Largest vehicle manufacturer • Techniques of JIT, TPS and Lean
Operation• Introduced by Taiichi Ohno
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Main assembly complex Supplier buildings surround
main assembly complex
Implementation of JIT and TPS at Toyota plant
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Just-In-Time, TPS, andLean Operations
• JIT - continuous and forced problem solving via a focus on throughput and reduced inventory
• TPS -continuous improvement, respect for people, and standard work practices
• Lean production - supplies the customer with exact wants when the customer wants it without waste
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Just In Time
Good production systems require that managers address three issues that are
pervasive and fundamental to operations management: eliminate waste, remove
variability, and improve throughput
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Three Elements of JIT
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Eliminate Waste
• Waste is anything that does not add value from the customer point of view
• Storage, inspection, delay, waiting in queues, and defective products do not add value and are 100% waste
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Shigeo Shingo
The most dangerous kind of waste is the waste we do not recognize
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Ohno’s Seven Wastes
• Overproduction• Queues• Transportation• Inventory• Motion• Over processing• Defective
products
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Common Causes of Waste
• Layout (distance)• Long setup time• Incapable
processes• Poor maintenance• Poor work
methods• Lack of training
• Inconsistent performance measures
• Ineffective production planning
• Lack of workplace organization
• Poor supply quality/reliability
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Eliminate Waste
• Efficient, sustainable production minimizes inputs, reduces waste
• Traditional “housekeeping” has been expanded to the 5 Ss
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The 5 Ss
• Sort/segregate – when in doubt, throw it out
• Simplify/straighten – methods analysis tools
• Shine/sweep – clean daily• Standardize – remove variations from
processes• Sustain/self-discipline – review work and
recognize progress
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© 2011 Pearson Education, Inc. publishing as Prentice Hall
Two additional Ss
• Safety- build in good practices
• Support Maintenance- reduce variability and unplanned downtime
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Reducing Waste: Push Vs Pull
• Material Flow
• Information Flow
• Customer• Raw
• Material• Supplier
• Final• Assembly
• PUSH
CustomerRaw
MaterialSupplier
FinalAssembly
PULL
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Remove Variability
• JIT systems require managers to reduce variability caused by both internal and external factors
• Variability is any deviation from the optimum process
• Inventory hides variability• Less variability results in less
waste
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Inventory is Evil
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Sources of Variability
1. Incomplete or inaccurate drawings or specifications
2. Poor production processes resulting in incorrect quantities, late, or non-conforming units
3. Unknown customer demands
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Improve Throughput
• The time it takes to move an order from receipt to delivery
• The time between the arrival of raw materials and the shipping of the finished order is called manufacturing cycle time
• A pull system increases throughput
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Improve Throughput
• By pulling material in small lots, inventory cushions are removed, exposing problems and emphasizing continual improvement
• Manufacturing cycle time is reduced
• Push systems dump orders on the downstream stations regardless of the need
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JIT and Competitive Advantage
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JIT and Competitive Advantage
© 2011 Pearson Education, Inc. publishing as Prentice Hall
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JIT Partnerships• JIT partnerships exist when a
supplier and purchaser work together to remove waste and drive down costs
• Four goals of JIT partnerships are:• Removal of unnecessary activities• Removal of in-plant inventory• Removal of in-transit inventory• Improved quality and reliability
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JIT Partnerships
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JIT Layout•Reduces another kind of waste -“Movement” •Places material directly where needed•Eg. Toyota
JIT Layout Tactics•Build work cells for families of products•Include a large number operations in a small area•Minimize distance•Design little space for inventory•Improve employee communication•Use poka-yoke (fail safe) devices•Build flexible or movable equipment•Cross-train workers to add flexibility
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Concerns of Suppliers
• Diversification – ties to only one customer increases risk
• Scheduling – don’t believe customers can create a smooth schedule
• Changes – short lead times mean engineering or specification changes can create problems
• Quality – limited by capital budgets, processes, or technology
• Lot sizes – small lot sizes may transfer costs to suppliers
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JIT Inventory•Why does extra inventory exist?•“Just In Case” •cover problems•Just-in-time Inventory•Minimum inventory to keep a perfect system running
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JIT Inventory•JIT Inventory Tactics•Four tactics
• Reduce Setup Costs
•Reduce Variability
• Reduce Inventory
• Reduce Lot Size
4 1
23
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•Inventory hides variability & problems•Analogy with the lake full of rocks
Inventory level
Process downtimeScrap
Setup time
Late deliveries
Quality problems
Water:Inventory Flow
Rocks:Problems
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•Uncovering of the “rocks”•Reveals problems, variability•Management clears the lakeInventory
level
Process downtimeScrap
Setup time
Late deliveries
Quality problems Problems
revealed
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No problems No inventory
Inventory level
Process downtime removed
No scrap
Setup time
reducedLate
deliveries
Quality problems removed
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•Key to JIT:“Good product in small lot sizes”•Reduces Inventory Costs
Q2 When average order size = 100average inventory is 50
200 –
100 –
Inve
ntor
y
Time
Q1 When average order size = 200average inventory is 100
Lowering the order size Increases the Order size Decreases Inventory
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•Ideal Situation•Lot Sizes of ONE pulled from ONE process to the next•But, unrealistic•Small lot sizes possible but Single lot size not feasible
•Two necessary changes:•Improve Material Handling•Reduce Setup time
•EOQ for Desired Setup time
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Lot Size Example: Crate Furniture Inc.D = Annual demand = 400,000 unitsd = Daily demand = 400,000/250 = 1,600 per dayp = Daily production rate = 4,000 unitsQ = EOQ desired = 400H = Holding cost = $20 per unitS = Setup cost (to be determined)
Q = 2DSH(1 - d/p)
Q2 = 2DSH(1 - d/p)
S = = = $2.40(Q2)(H)(1 - d/p)
2D(3,200,000)(0.6)
800,000
Setup time = $2.40/($30/hour) = 0.08 hr = 4.8 minutes
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• High setup costs encourage large lot sizes
Ultimate Solution: Reducing setup costs
Reduces lot size & average inventory
Reduces Optimum order size
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Holding cost
T2
S2
Setup cost curves (S1, S2)T1
S1
Cost
Lot size
Sum of ordering and holding costs
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• Setup time can be reduced through preparation prior to shutdown and changeover
• Reduced Setup times=A major JIT Component
• Setup Costs highly correlated with Setup time
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© 2011 Pearson Education, Inc. publishing as Prentice Hall
Reduce Setup Times
Figure 16.6
Use one-touch system to eliminate adjustments (save 10 minutes)Step 4
Step 5Training operators and standardizing work procedures (save 2 minutes)
Step 2Move material closer and
improve material handling (save 20 minutes)
Step 1
Separate setup into preparation and actual setup, doing as much as possible while the machine/process
is operating (save 30 minutes)
Step 3Standardize and
improve tooling (save 15 minutes)
Initial Setup Time 90 min —
60 min —
45 min —
25 min —
15 min —13 min —
—Repeat cycle until subminute setup is achievedStep 6
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JIT Scheduling• Better Scheduling
OrganizationSuppliers
Effective Scheduling1 •Supports JIT
2 •Improves ability to meet customer orders
3 •Drives down inventory
4 •Allows smaller lot sizes
5 •Reduces work-in-process
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JIT Scheduling: Example Ford Motor CompanyFord
communicates its schedules to bumper Polycon
Industries
Schedule describes: Style and color of the bumper for each
vehicle
It transmits the information to
Polycon Warehouse personnel
PW Personnel load the
bumpers onto conveyors
leading to the loading dock
Bumpers are then trucked to
ford plant
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JIT Scheduling: Two major tools
Level Schedules
Kanban
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1. Level Schedules: Jelly Bean Scheduling• Technique processes frequent small batches• Many “always changing” small lots
A B CA AAB B B B B C
JIT Level Material-Use Approach
A CA AA B B B B B C CB B B BA A
Large-Lot Approach
Time
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Freezing
• Not allowing changes • Improves the performance• The portion closest to the due dates• Allows
– Production system to function– Schedule to be met
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2. Kanban: Only when ready
• “Kanban”-Japanese word for “card”• Technique that uses “pull” system• Match or nearly match the processing time• Card=an authorization for the next
container of material to be produced• Empty containers• Lights• Flag or rag• Colored golf balls
Signaling devices to control the
flow of material
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© 2011 Pearson Education, Inc. publishing as Prentice Hall
Kanban
1. User removes a standard sized container
2. Signal is seen by the producing department as authorization to replenish
Part numbers mark location
Signal marker on boxes
Figure 16.8
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Work cell
Raw Material Supplier
Kanban
Purchased Parts
Supplier
Sub-assembly
Ship
Kanban
Kanban
Kanban
Kanban
Finished goods
Customer order
Final assembly
Kanban
Kanban
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Number of Kanban Cards or Containers
• 1st – Set the size of each container– Need to know the lead time needed to produce a
container of parts– Need to know the amount of Safety Stock needed
• 2nd – Calculate no of Kanbans
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Example: No of Kanban: Hobbs Bakery
• Daily Demand =500 cakes• Production Lead Time =2 days• Safety Stock =0.5 days• Container size =250 cakes• Now, Demand during lead time =2 days x 500
cakes = 1,000
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Quality
JIT cuts the cost of obtaining good quality
JIT improves
quality
Better quality means fewer
buffers=Easier-to use JIT
system
•Strong Relationship between JIT & Quality
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© 2011 Pearson Education, Inc. publishing as Prentice Hall
JIT Quality Tactics
Use statistical process controlEmpower employeesBuild fail-safe methods (poka-yoke, checklists, etc.)Expose poor quality with small lot JITProvide immediate feedback
Table 16.4
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• Continuous improvement• Build an organizational culture and value system
that stresses improvement of all processes• Part of everyone’s job
• Respect for people• People are treated as
knowledge workers• Engage mental and
physical capabilities• Empower employees
Toyota Production System
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• Standard work practice• Work shall be completely specified as to
content, sequence, timing, and outcome• Internal and external customer-supplier
connection are direct• Product and service flows must be simple and
direct• Any improvement must be made in
accordance with the scientific method at the lowest possible level of the organization
Toyota Production System
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Lean Operations
• Different from JIT in that it is externally focused on the customer
• Starts with understanding what the customer wants
• Optimize the entire process from the customer’s perspective
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Building a Lean Organization
• Transitioning to a lean system can be difficult
• Lean systems tend to have the following attributes
• Use JIT techniques• Build systems that help
employees produce perfect parts• Reduce space requirements
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Building a Lean Organization
• Develop partnerships with suppliers
• Educate suppliers• Eliminate all but value-added
activities• Develop employees• Make jobs challenging• Build worker flexibility
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JIT in Services
The JIT techniques used in manufacturing are used in services
• Suppliers• Layouts• Inventory• Scheduling
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Group 7
THANK YOUANY QUESTIONS?