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OM&PM/Class 4b 1 1 Operations Strategy 2 Process Analysis 3 Lean Operations – Class 3b: House Game – Class 4a: The Paradigm of Lean Operations: The ideal – Class 4b: Getting to the ideal with Product Variety: TPS » Managing variety/flexibility » Toyota Production System 4 Supply Chain Management 5 Capacity Management in Services 6 Total Quality Management 7 Business Process Reengineering Operations Management & Performance Modeling

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Page 1: OM&PM/Class 4b1 1Operations Strategy 2Process Analysis 3Lean Operations –Class 3b: House Game –Class 4a: The Paradigm of Lean Operations: The ideal –Class

OM&PM/Class 4b 1

1 Operations Strategy

2 Process Analysis

3 Lean Operations– Class 3b: House Game

– Class 4a: The Paradigm of Lean Operations: The ideal

– Class 4b: Getting to the ideal with Product Variety: TPS» Managing variety/flexibility

» Toyota Production System

4 Supply Chain Management

5 Capacity Management in Services

6 Total Quality Management

7 Business Process Reengineering

Operations Management & Performance Modeling

Page 2: OM&PM/Class 4b1 1Operations Strategy 2Process Analysis 3Lean Operations –Class 3b: House Game –Class 4a: The Paradigm of Lean Operations: The ideal –Class

OM&PM/Class 4b 2

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?

Page 3: OM&PM/Class 4b1 1Operations Strategy 2Process Analysis 3Lean Operations –Class 3b: House Game –Class 4a: The Paradigm of Lean Operations: The ideal –Class

OM&PM/Class 4b 3

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

Page 4: OM&PM/Class 4b1 1Operations Strategy 2Process Analysis 3Lean Operations –Class 3b: House Game –Class 4a: The Paradigm of Lean Operations: The ideal –Class

OM&PM/Class 4b 4

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

Page 5: OM&PM/Class 4b1 1Operations Strategy 2Process Analysis 3Lean Operations –Class 3b: House Game –Class 4a: The Paradigm of Lean Operations: The ideal –Class

OM&PM/Class 4b 5

Reducing Waste: Reduced Setup Times

What are the consequences of long setup times?

A requirement for small-lot-size, mixed-model production?

Page 6: OM&PM/Class 4b1 1Operations Strategy 2Process Analysis 3Lean Operations –Class 3b: House Game –Class 4a: The Paradigm of Lean Operations: The ideal –Class

OM&PM/Class 4b 6

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

Page 7: OM&PM/Class 4b1 1Operations Strategy 2Process Analysis 3Lean Operations –Class 3b: House Game –Class 4a: The Paradigm of Lean Operations: The ideal –Class

OM&PM/Class 4b 7

Reducing Waste:Quality at the Source

DefectsFound at:

Own Process Next Process End of Line FinalInspection

End User’sHand

$ $ $ $ $

Impact to theCompany

VeryMinor

MinorDelay

Rework Resched.

of work

SignificantRework

Delay inDelivery

AdditionalInspection

Warrantycosts

Administrative costs

Reputation Loss of

MarketShare

Page 8: OM&PM/Class 4b1 1Operations Strategy 2Process Analysis 3Lean Operations –Class 3b: House Game –Class 4a: The Paradigm of Lean Operations: The ideal –Class

OM&PM/Class 4b 8

Reducing Waste:Quality at the Source

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

– Self

– Automated (Jidoka)

Line-stopping empowerment (Andon)

Human infrastructure

Page 9: OM&PM/Class 4b1 1Operations Strategy 2Process Analysis 3Lean Operations –Class 3b: House Game –Class 4a: The Paradigm of Lean Operations: The ideal –Class

OM&PM/Class 4b 9

Continuous Improvement: Kaizen

Increase visibility of waste Targeted improvements

– Active worker involvement

– Time for experimentation

– Supplier involvement

Exploratory stress

Human infrastructure

Page 10: OM&PM/Class 4b1 1Operations Strategy 2Process Analysis 3Lean Operations –Class 3b: House Game –Class 4a: The Paradigm of Lean Operations: The ideal –Class

OM&PM/Class 4b 10....

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: through JIT + Heijunka

– Quality at Source: through Jidoka

– Continuous Improvement (Kaizen): through empowerment, visibility & stress

Page 11: OM&PM/Class 4b1 1Operations Strategy 2Process Analysis 3Lean Operations –Class 3b: House Game –Class 4a: The Paradigm of Lean Operations: The ideal –Class

OM&PM/Class 4b 11

Class 4b: Learning Objectives

Lean Operations: In Search for the Holy Grail and zero Waste– Efficient Workflow: Cellular Layout

– Level Mixed Production: Heijunka» Reduced batch sizes

– Pull Execution: Kanbans

– Quality at source: Jidoka

– Continuous Improvement: Kaizen

Flow Synchronization

Low Cost

Get ever closer to ideal


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