paglialunga mgt314 chapter 16
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Paglialunga MGT314 Chapter 16TRANSCRIPT
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-1
Operations Operations ManagementManagement
Just-in-Time and Lean Production Just-in-Time and Lean Production SystemsSystems
Chapter 16Chapter 16
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
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OutlineOutline JUST-IN-TIME AND LEAN PRODUCTION GLOBAL COMPANY PROFILE: GREEN GEAR
CYCLING SUPPLIERS
Goals of JIT Partnerships Concerns of Suppliers
JIT LAYOUT Distance Reduction Increased Flexibility Impact on Employees Reduced Space and Inventory
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-3
Outline - ContinuedOutline - Continued INVENTORY
Reduce Variability Reduce Inventory Reduce Lot Sizes Reduce Setup Costs
SCHEDULING Level Schedules Kanban
QUALITY EMPLOYEE EMPOWERMENT LEAN PRODUCTION JIT IN SERVICES
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-4
Learning ObjectivesLearning ObjectivesWhen you complete this supplement, you should
be able to :Identify or Define:
Types of waste Variability Kanban
Describe or Explain: Just-in-Time (JIT) philosophy Pull systems Push systems The goals of JIT partnerships Lean Production
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-5
Waste is ‘anything other than the minimum amount of equipment, materials, parts, space, and worker’s time, which are absolutely essential to add value to the product.’
— Shoichiro Toyoda President, Toyota
© 1995 Corel Corp.
Introductory QuotationIntroductory Quotation
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-6
Green Gear CyclingGreen Gear Cycling Designs and manufacturers high performance
travel bicycles (bike-in-a-suitcase!) Strategy is mass customization with low inventory,
work cells, and elimination of machine setups. Major focus on JIT and supply-chain management. Two lines with seven work cells One day throughput time Focus on quality
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-7
Supplier – Production – Distribution Supplier – Production – Distribution SystemSystem
Supplier DistributionInventories
Raw materialin-transit
Sub-assemblyparts in-transit
Maintenance,repair, and orderingsupplies in-transit
Raw MaterialInventory
Work-in-processInventory
FactoryFinishedGoods
Inventory
ComponentInventory
MROInventory
PurchasingProduction and
Inventory ControlShipping and
Traffic
RetailerInventory
Orders
WarehouseInventory
Productions Inventories Customer DistributionInventories
Orders
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© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-8
Management philosophy of continuous and forced problem solving
Supplies and components are ‘pulled’ through system to arrive where they are needed when they are needed.
What is Just-in-Time?What is Just-in-Time?
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© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-9
Lean ProductionLean Production
Lean Production supplies customers with exactly what the customer wants, when the customer wants, without waste, through continuous improvement.
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-10
Attacks waste Anything not adding value to the product
From the customer’s perspective
Exposes problems and bottlenecks caused by variability Deviation from optimum
Achieves streamlined production By reducing inventory
What Does Just-in-Time Do?What Does Just-in-Time Do?
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-11
Overproduction Waiting Transportation Inefficient processing Inventory Unnecessary motion Product defects
© 1995 Corel Corp.
Types of WasteTypes of Waste
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© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-12
Waste Reduction (%)
82%
50%
50%
30%
30%
20%
40%
0% 20% 40% 60% 80% 100%
Work-in-Process Inventory
Raw Material Inventory
Lead Time
Space
Finished Goods Inventory
Scrap
Setup Time
JIT Reduced WasteJIT Reduced Wasteat Hewlett-Packardat Hewlett-Packard
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© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-13
Push versus PullPush versus Pull
Push system: material is pushed into downstream workstations regardless of whether resources are available
Pull system: material is pulled to a workstation just as it is needed
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-14
Suppliers reduced number of vendors supportive supplier relationships quality deliveries on time
Layout work-cell layouts with testing at each step of the process group technology movable, changeable, flexible machinery high level of workplace organization and neatness reduced space for inventory delivery direct to work areas
JIT Contribution to Competitive JIT Contribution to Competitive AdvantageAdvantage
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Inventory small lot sizes low setup times specialized bins for holding set number of parts
Scheduling zero deviation from schedules level schedules suppliers informed of schedules Kanban techniques
JIT Contribution to Competitive JIT Contribution to Competitive Advantage - ContinuedAdvantage - Continued
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JIT Contribution to Competitive JIT Contribution to Competitive Advantage - ContinuedAdvantage - Continued
Preventive Maintenance scheduled daily routine operator involvement
Quality Production statistical process control quality by suppliers quality within firm
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JIT Contribution to Competitive JIT Contribution to Competitive Advantage - ContinuedAdvantage - Continued
Employee Empowerment empowered and cross-trained employees few job classifications to ensure flexibility of employees training support
Commitment support of management, employees, and suppliers
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© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-18
ResultsResults
Queue and delay reduction, speedier throughput, freed assets, and winning orders
Quality improvement, reduces waste and wins orders Cost reduction increases margin or reduces selling
price Variability reductions in the workplace reduces waste
and wins orders Rework reduction, reduces waste and wins orders
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-19
YieldingYielding
Faster response to the customer at lower cost and higher quality
A competitive advantage!
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-20
Suppliers
Preventive Maintenance
Layout
Inventory
Scheduling
Quality
Employee Empowerment
JIT
Just-in-TimeJust-in-TimeSuccess FactorsSuccess Factors
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-21
Few Nearby Repeat business Analysis and support to enable desirable suppliers to
become or stay price competitive Competitive bidding mostly limited to new purchases Buyer resists vertical integration and subsequent wipeout
of supplier business Suppliers encouraged to extend JIT to their suppliers (2nd
and 3rd tier suppliers)
Characteristics of JIT PartnershipsCharacteristics of JIT PartnershipsSuppliers
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© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-22
Characteristics of JIT Partnerships Characteristics of JIT Partnerships Quantities
Steady output rate Frequent deliveries in small-lot quantities Long-term contract agreements Minimal or no paperwork (use EDI or internet) Delivery quantities fixed for whole contract term Little or no permissible overage or underage Suppliers package in exact quantities Suppliers reduce their production lot sizes
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Minimal product specifications imposed on suppliers
Help suppliers meet quality requirements Close relationship between buyers’ and
suppliers quality assurance people Suppliers use poka-yoke and process control
charts instead of lot-sampling techniques
Characteristics of JIT Partnerships Characteristics of JIT Partnerships Quality
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-24
Characteristics of JIT Partnerships Characteristics of JIT Partnerships Shipping
Scheduling of inbound freight Gain control by use of company-owned or
contract shipping and warehousing Use of Advanced Shipping Notice (ASN)
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-25
Goals of JIT partnershipsGoals of JIT partnerships
Elimination of unnecessary activitiesElimination of in-plant inventoryElimination of in-transit inventoryElimination of poor suppliers
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
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Diversification Poor customer scheduling Frequent engineering changes Quality assurance Small lot sizes Physical proximity
Concerns of SuppliersConcerns of Suppliers
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-27
Streamlined ProductionStreamlined Production
Flow with JIT
Traditional Flow
CustomersSuppliers
Customers
Suppliers
Production Process (stream of water)
Inventory (stagnant ponds) Material
(water in stream)
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© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-28
JIT objective: Reduce movement of people and material Movement is waste!
JIT requires Work cells for product families Moveable or changeable machines Short distances Little space for inventory Delivery directly to work areas
LayoutLayout
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Process Layout Work Cell
Saw
Lathe
Grinder
HeatTreat
Lathe
Lathe
Lathe Saw
HeatTreat
Grinder
Grinder
Press
Press 1
1
2
3
45
2
6
Saw
Press
Work Cell versusWork Cell versus Process Layout Process Layout
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Inventory Hides Problems Just as Inventory Hides Problems Just as Water in a Lake Hides RocksWater in a Lake Hides Rocks
ScrapSetup time
Late deliveries
Quality problems
Process downtime
ScrapSetup time
Late deliveries
Quality problems
Process downtime
Inventory level
Inventory level
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Scrap
Work in process inventory level(hides problems)
Unreliable Vendors
Capacity Imbalances
Lowering InventoryLowering Inventory Reduces Waste Reduces Waste
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-32
Scrap
Reducing inventory revealsproblems so they can be solved.
Unreliable Vendors
Capacity Imbalances
WIP
Lowering InventoryLowering Inventory Reduces Waste Reduces Waste
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-33
Scrap
Reducing inventory revealsproblems so they can be solved.
Unreliable Vendors
Capacity Imbalances
WIP
Lowering InventoryLowering Inventory Reduces Waste Reduces Waste
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-34
Customer orders 10
Lot size = 5Lot 1 Lot 2
Lot size = 2Lot 1 Lot 2 Lot 3 Lot 4 Lot 5
Reducing Lot Sizes Increases the Reducing Lot Sizes Increases the Number of LotsNumber of Lots
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© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-35
Unless Setup Costs are ReducedUnless Setup Costs are Reduced
Lot Size
Cost
Holding CostTotal Cost
Setup Cost
Original optimal lot size
New optimal lot size
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-36
Steps to Reduce Setup TimeSteps to Reduce Setup TimeInitial Setup Time
Separate setup into preparation, and actual setup, doing as much as possible while the machine/process
is running (save 30 minutes)
Move material closer and improve material handling (save 20 minutes)
Standardize and improve tooling (save
15 minutes)
90 min
60 min
45 min
25 min
15 minUse one-touch system to
eliminate adjustments (save 10 minutes)
Training operators and standardizing work procedures (save 2
minutes)
Step 1
Step 2
Step 3
Step 513 min
Step 4
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A
A A B B B C
JIT Small Lots
Large-Lot Approach
Time
Time
A A B B B C
A A A B B B B B B C C
JIT produces same amount in same time if setup times are lowered
Small versus Large LotsSmall versus Large Lots
Small lots also increase flexibility to meet customer demands
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Japanese word for card Pronounced ‘kahn-bahn’ (not ‘can-ban’)
Authorizes production from downstream operations ‘Pulls’ material through plant
May be a card, flag, verbal signal etc. Used often with fixed-size containers
Add or remove containers to change production rate
KanbanKanban
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Diagram of Outbound Stockpoint Diagram of Outbound Stockpoint with Warning-Signal Markerwith Warning-Signal Marker
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Kanban Signals “Pull” Material Kanban Signals “Pull” Material Through the ProcessThrough the Process
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© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-41
JIT in ServicesJIT in Services
All the techniques used in
manufacturing are used in services
SuppliersSuppliers
LayoutsLayouts
InventoryInventory
SchedulingScheduling
Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 0745816-42
Attributes of Lean Producers - TheyAttributes of Lean Producers - They use JIT to eliminate virtually all inventory build systems to help employees product a perfect part every
time reduce space requirements develop close relationships with suppliers educate suppliers eliminate all but value-added activities develop the workforce make jobs more challenging reduce the number of job classes and build worker flexibility