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Chapter 15

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Chapter 15

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  1. Chapter 15 Just-In-Time and Lean Production

  2. What is JIT ? • Producing only what is needed, when it is needed • A philosophy • An integrated management system • JIT’s mandate: Eliminate all waste

  3. Lean Operations: Best Implementation is Toyota Production System • TPS is a production management system that aims for the “ideal” through continuous improvement • Includes, but goes way beyond JIT. Pillars: • Synchronization • Reduce transfer batch sizes • Level load production • Pull production control systems (vs. push): Kanban • Quality at source • Layout: Cellular operations • Continuous Improvement (Kaizen): through visibility & empowerment ....

  4. Basic Elements of JIT Flexible resources Cellular layouts Pull production system Kanban production control Small-lot production Quick setups Uniform production levels Quality at the source Total productive maintenance Supplier networks

  5. 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

  6. Other Important Points • Only make what you need • only buy what you need,when you need it • SMED – single minute exchange of dies • continuous process improvement • as the level of the water lowers, new problems or inefficiencies are identified

  7. Waste in Operations

  8. Waste in Operations

  9. Waste in Operations

  10. Flexible Resources • Multifunctional workers • General purpose machines • Study operators & improve operations

  11. Cellular Layouts • Group dissimilar machines in manufacturing cell to produce family of parts • Work flows in one direction through cell • Cycle time adjusted by changing worker paths

  12. The Push System • Pre-planned issues of supplies/merchandise regardless of customer demand criteria • Creates excess and shortages • not efficient over the long run

  13. The Pull System • Material is pulled through the system when needed • Reversal of traditional push system where material is pushed according to a schedule • Forces cooperation • Prevent over and underproduction

  14. Kanban Production Control System • Kanban card indicates standard quantity of production • Derived from two-bin inventory system • Kanban maintains discipline of pull production • Production kanban authorizes production • Withdrawal kanban authorizes movement of goods

  15. A Sample Kanban

  16. a) Two-bin inventory system b) Kanban inventory system Bin 1 Kanban Bin 2 Reorder card Q - R R R Q = order quantity R = reorder point - demand during lead time The Origin of Kanban

  17. Types of Kanbans

  18. Types of Kanbans

  19. Types of Kanbans • Bin Kanban - when bin is empty replenish • Kanban Square • Marked area designed to hold items • Signal Kanban • Triangular kanban used to signal production at the previous workstation • Material Kanban • Used to order material in advance of a process • Supplier Kanbans • Rotate between the factory and suppliers

  20. average demand during lead time + safety stock container size No. of Kanbans = dL + S C N = Determining Number of Kanbans where N = number of kanbans or containers d = average demand over some time period L = lead time to replenish an order S = safety stock C = container size

  21. 75 + 7.5 25 dL + S C (150 x 0.5) + 7.5 25 Determining the Number of Kanbans d = 150 bottles per hour L = 30 minutes = 0.5 hours S = 0.10(150 x 0.5) = 7.5 C = 25 bottles N = = = = 3.3 kanbans or containers Round up to 4 (to allow some slack) or down to 3 (to force improvement)

  22. Small-Lot Production In theory: • Requires less space & capital investment • Moves processes closer together • Makes quality problems easier to detect • Makes processes more dependent on each other

  23. Too Much Space Missed Due Dates Late Deliveries Too much paperwork Inventory Engineering Change Orders Scrap & Rework 100% inspection Long queues Poor Quality Machine Downtime Reducing waste: Increase Problem Visibility Lower the Water to Expose the Rocks

  24. Inventory Hides Problems

  25. Components of Lead Time • Processing time • Reduce number of items or improve efficiency • Move time • Reduce distances, simplify movements, standardizeroutings • Waiting time • Better scheduling, sufficient capacity • Setup time • Generally the biggest bottleneck

  26. SMED Principles Separate internal setup from external setup Convert internal setup to external setup Streamline all aspects of setup Perform setup activities in parallel or eliminate them entirely

  27. Common Techniques for Reducing Setup Time • Preset Buttons/settings • Quick fasteners • Reduce tool requirements • Locator pins • Guides to prevent misalignment • Standardization • Easier movement

  28. Uniform Production • Results from smoothing production requirements • Kanban systems can handle +/- 10% demand changes • Smooths demand across planning horizon • Mixed-model assembly steadies component production

  29. Quality at the Source • Jidoka is authority to stop production line • Andon lights signal quality problems • Undercapacity scheduling allows for planning, problem solving & maintenance • Visual control makes problems visible • Poka-yoke prevents defects (mistake proof the system)

  30. Visual Control

  31. Visual Control In use at Harley-Davidson and at Opal Plant - Russelsheim

  32. Visual Control

  33. Kaizen • Continuous improvement • Requires total employment involvement • Essence of JIT is willingness of workers to • Spot quality problems • Halt production when necessary • Generate ideas for improvement • Analyze problems • Perform different functions

  34. Total Productive Maintenance (TPM) Commercial industry answer to PMCS • Breakdown maintenance • Repairs to make failed machine operational • Preventive maintenance • System of periodic inspection & maintenance to keep machines operating • TPM combines preventive maintenance & total quality concepts

  35. TPM Requires Management to: • Design products that can be easily produced on existing machines • Design machines for easier operation, changeover, maintenance • Train & retrain workers to operate machines • Purchase machines that maximize productive potential • Design preventive maintenance plan spanning life of machine

  36. Goals of JIT Reduced inventory - where? Improved quality Lower costs Reduced space requirements Shorter lead time Increased productivity Greater flexibility Better relations with suppliers Simplified scheduling and control activities Increased capacity Better use of human resources More product variety Continuous Process Improvement

  37. JIT Implementation • Use JIT to finely tune an operating system • Somewhat different in USA than Japan • JIT is still evolving • JIT as an inventory reduction program isn’t for everyone - JIT as a CPI program is! • Some systems need Just-in-Case inventory

  38. JIT In Services • Competition on speed & quality • Multifunctional department store workers • Work cells at fast-food restaurants • Just-in-time publishing for textbooks - on demand publishing a growing industry • Construction firms receiving material just as needed

  39. Reverse Logistics: Important or Irritant? Estimated $100 billion industry in 2006

  40. “In an ideal world, reverse logistics would not exist.” Jim Whalen, “In Through the Out Door,” Warehousing Management, March 2001

  41. “Now, more than ever, reverse logistics is seen as being important.” Dale Rogers, Going Backwards, 1999

  42. Reverse Logistics - What is it?The Army’s Definition The return of serviceable supplies that are surplus to the needs of the unit or are unserviceable and in need of rebuild or remanufacturing to return the item to a serviceable status

  43. Reverse Logistics - What is it?The Commercial Perspective • Reverse Logistics is the process of moving products from their typical final destination to another point, for the purpose of capturing value otherwise unavailable, or for the proper disposal of the products.

  44. Typical Reverse Logistics Activities • Processing returned merchandise - damaged, seasonal, restock, salvage, recall, or excess inventory • Recycling packaging materials/containers • Reconditioning, refurbishing, remanufacturing • Disposition of obsolete stuff • Hazmat recovery

  45. Why Reverse Logistics? • Competitive advantage • Customer service - Very Important: 57% - Important: 18% - Somewhat/unimportant:23% • Bottom line profits

  46. Reverse Logistics - New Problem? • Sherman • Montgomery Ward’s - 1894 • Recycling/remanufacturing in 1940s • World War II - 77,000,000 square feet of storage across Europe with over $6.3 billion in excess stuff • Salvage and reuse of clothing and shoes in the Pacific Theater World War II

  47. Key Dates in Reverse Logistics • World War II – the advent of refurbished automobile parts due to shortages • 1984 - Tylenol Scare - Johnson and Johnson • 1991 - German ordinance that put teeth in environmental reverse pipeline • Summer 1996 – UK Packaging and Packaging Waste Legislation • 1998 - first real study of reverse logistics in the US - University of Nevada, Reno • 2001 – EU goal of 50-65% recovering or recycling of packaging waste

  48. Reverse Logistics A US Army Perspective

  49. Operation Iraqi Freedom The US Army moved the equivalent of 150 Wal-Mart Supercenters to Kuwait in a matter of a few months

  50. Military Operations and Excess “In battle, troops get temperamental and ask for things which they really do not need. However, where humanly possible, their requests, no matter how unreasonable, should be answered.” George S. Patton, Jr.