JIT and Lean operations

Chapter 16

Objectives1. Understand lean operations and its

differences with mass production.

2. Recognize the 7 wastes.

3. Learn the differences between push and pull systems

4. Describe how kanban works in a pull system.

5. Identify the ways of coping with variability in the production process

Making bespoke shoesA pair of bespoke shoes begins with a vision. I meet

personally with every client to take measurements and imprints of the feet, draft a design and select materials. [snip]

To make a pair of shoes by hand is an arduous process that requires over sixty hours of meticulous labor. The pattern must be drafted and perfected. The uppers must be cut and fashioned to the lasts. The infrastructure must be constructed, and the welts must be hand-sewn to the insole. My bespoke shoes are constructed entirely of leather and provide the foot unparalleled support; the result is strong, structurally sound footwear.

Before the shoe is soled, I meet again with the client. This additional fitting allows me to make whatever small revisions are necessary to achieve a flawless fit. The shoe is then soled and exquisitely finished with hand-painted London waists and natural waxes. When every detail is perfected, I will personally deliver or ship the finished shoes, along with custom trees and flannel bags, to the customer.

From http://www.perryercolino.com/bespoke_shoes.php

Craft production1 skilled worker does all tasksFocus: qualityPros

Workers engaged, interestedResponsibility for the final product improves

qualityCons

High wage workers (need to understand whole process)

Long lead timesWorker absences lower productionLong and risky training cycles

The next step – Mass productionWorkers do 1 or 2 simple tasksProducts built to forecastFocus: economies of scalePros

Low wage, easily trainable workersLarge quantities possible

ConsLong lead timesBoredomVariable qualityHigh WIPDependent on forecast

Large lotsPro

Economies of scaleLow setup costs on a per-unit basis

ConsNeed advance planning (overproduction)Need storage (queues waste time)Need financing (inventory waste)Transport and storage on floor (wasted

transportation and motion)Tracking complexity (over-processing)Lag in realizing defectsLot-wide defects

LeanPros

Still 1 or 2 tasks/workerWorkers engaged by process improvementWorkers goal-orientedProduce to customer demand, not forecastReduce inventory

Cons?

Lean focuses on waste elimination1. Overproduction through forecasting errors2. Queues3. Transportation4. Inventory5. Unneeded motion6. Over-processing (no-value added

processing)7. Defects

Variability as a source of wasteCons:

Increases WIP and lead time even in well-balanced processes

Decreases qualityCoping with variability

Junk defects and produce with overtimeShip to customers, pay warranty costsRigorous end-of-line testingAdapt designRoot-cause analysis

Perform experiments

Push versus pull systems

Push: “build it and they will come.” Plan. Then do.Needed if lead times are very longImmediate product availability

Pull: Don’t act until asked.Adapts to demand changesConfiguration is possibleUncovers quality problems more quickly. (Why?)

KanbanJapanese for “card”*What to produce when and in what quantitySteps

1. User takes product with a kanban attached.2. Kanban is sent to the producer as a signal

to restock product.3. Producer delivers product with kanban.

Doesn’t need to be a card http://www.youtube.com/watch?v=xPyEtuLT

BmM

* = Many lean terms are taken Japanese even if there are perfectly good English equivalents. Worse, redundancies like “kanban cards” are regularly used.

Lean operationsCons

Inventory can be a buffer to problems (also a pro)Barriers to implementation

Works best in already well controlled processes allowing experiments

Seemingly obvious (Examine further in Toyota case)

Day-to-day problems can soak up process improvement time

Requires managers give up some control to workers

“Plan. Then do.” is more intuitive.Traditional goal of production is plan execution, not

process improvement

JIT versus TPS versus LeanJust-in-time

Products available “just in time” for use.Toyota Production System

Perform repeatable experimentsSee the Toyota case and “Decoding the DNA

of the Toyota Production System” in HBR by Spear and Bowen (1999)

Lean operationsFocus on elimination of waste

Terms used interchangeably in practice

Objectives1. Understand lean operations and its

differences with mass production.

2. Recognize the 7 wastes.

3. Learn the differences between push and pull systems

4. Describe how kanban works in a pull system.

5. Identify the ways of coping with variability in the production process