MGOC20 Operations Management Lecture 11 PDF

# MGOC20 – Operations Management - Lecture 11 ## Chapter 16 – Lean and Just in Time, the 5s Approach ### 1. Lean & Just-in-Time (JIT) - Based on the Toyota Production System - Development efforts were led by Taiichi Ohno, a VP who wanted to eliminate waste in all its various forms in production ope...

# MGOC20 – Operations Management - Lecture 11 ## Chapter 16 – Lean and Just in Time, the 5s Approach ### 1. Lean & Just-in-Time (JIT) - Based on the Toyota Production System - Development efforts were led by Taiichi Ohno, a VP who wanted to eliminate waste in all its various forms in production operations. ### Taiichi Ohno's seven forms of waste (Muda): 1. Production of defective parts 2. Production of more parts than needed 3. Excessive inventories 4. Unnecessary movement of people 5. Unnecessary handling of materials 6. Having parts or workers waiting 7. Unnecessary processing steps ### Just-in-time Production Concept Production and delivery of exactly required number of each component to downstream operation in manufacturing sequence just at the moment when the component is needed ### Prerequisites for JIT 1. A pull system of production control 2. Setup time reduction to allow for smaller batch sizes to be made 3. Stable and reliable production operations ## 2. Prerequisites for JIT: Pull System of Production Control - Order to make/deliver of parts at each workstation in the production sequence comes from the downstream station that uses parts - JIT is based on a pull system of production control - Alternative is push system, parts produced at each station irrespective of immediate need for them at downstream station ### Toyota's way of implementing a pull system of production control is through use of Kanban - Kanban is the Japanese word for card. - The card is an authorization for the next container of material to be produced. - A sequence of kanbans pulls material through the process. - Many different sorts of signals are used, but the system is still called a Kanban. ### Two types of kanbans: - **Production kanban** – authorizes upstream station to produce a batch of parts - **Transport kanban** – authorizes transport of the parts to the downstream station The image displays a production system from material/parts supplier to customer order using Kanban cards (pull signals) at each station. ### How Kanban works: - [https://www.youtube.com/watch?v=tum1lLwy6gE](https://www.youtube.com/watch?v=tum1lLwy6gE) ### Relationship of JIT and Quality #### Traditional production - Inventory buffers are used just in case defective parts are made upstream. - Defective units are taken off line and replaced with acceptable units. - Policy tends to perpetuate cause of poor quality, defective parts continues to be produced. A diagram shows the traditional production process where the work-in-process inventory hides problems. Unreliable vendors and scrap cause capacity imbalances. #### JIT production - Due to virtually no inventory buffer, a single defect draws attention to quality problem, whole line shuts down, forces company to take corrective action and find permanent solution. - Inventory costs money and hides process and material problems - Reducing inventory reveals problems so they can be solved - Hence JIT encourages improved process and product quality ## 3. Requisites for JIT - Setup Time Reduction - The goal of JIT is to reduce inventory. - Reducing setup times to make a batch → reduces setup cost → reduces batch size - Smaller production batch size results in lower inventory levels ### Internal setup elements - can only be done while the production machine/line is stopped ### External setup elements - can do while machine/line is running A triangle chart displays the initial setup time of 90 minutes, divided into 5 steps to reduce setup time, reaching a total setup time of 13 minutes. ## 4. Requisites for JIT - Stable and Reliable Production Operations 1. On-time delivery of components 2. Defect-free components and materials 3. Reliable production equipment 4. Cooperative workforce, committed, and cross-trained 5. Dependable supplier base ### Policies for dealing with vendors 1. Reducing total number of suppliers, allowing remaining suppliers to do more business 2. Entering into long-term agreements & partnership with suppliers, so that suppliers do not have to worry about competitive bidding for every order. 3. Establishing quality and delivery standards and selecting suppliers on basis of their capacity to meet these standards. 4. Placing company's own employees in supplier's plant to help them implement JIT 5. Selecting parts supplier near company's plants to min transportation delay/delivery problems ## 5. Standardize Work Procedures - Standardize work procedures are established in Toyota system. 1. **Standardize sequence of tasks to make product (methods study)** - **Flowchart (Process Diagram):** A chart that describes the steps in a process 2. **Standardize cycle time to make product (eg. A part produced every 5min)** - Time study used to determine length of time taken to complete each task. Summing the task time gives cycle time to make the product. ### Traditional Production VS Just-in-Time Production | Feature | Traditional Production | JIT/Lean Production| |---|---|---| | Deliveries | Just-in-case deliveries | Just in time deliveries| | Inventory | Just in case inventory | Minimum inventory | | Quality | Acceptable quality level | Strive for perfect first-time quality | | Workforce | Workers told what to do | Worker teams / empowerment | | Production Systems | Inflexible production System | Flexible production systems | | Improvement | If aint' broke, don't fix it | Continuous improvement | ### Video: JIT at Arnold Palmer Hospital ## 6. The 5S System - Managers have always pursued “housekeeping” for a neat, orderly, and efficient workplace as a means of reducing waste. - Operation managers commonly use a checklist – now known as the 5S. | Japanese word | English equivalent | |---|---| | Seiri | Sort | | Seiton | Set in order, simplify access | | Seiso | Shine, sweep, scrub | | Seiketsu | Standardize | | Shitsuke | Self-discipline, sustain | ### 5S elements 1. **Sort:** Sorting things in work station area, dispose not needed items, eliminate clutter 2. **Set in order:** organize tools according to frequency use, provide easy access items most often needed 3. **Shine:** Cleaning work station area, inspecting it to make sure everything in proper place. 4. **Standardize:** standardize work procedures, location for tools. Goal is to remove variations from processes. 5. **Self discipline:** each person at station responsible for taking care of equipment they operate, cleaning, perform minor maintenance tasks. ### 5S Garage example: - [http://www.youtube.com/watch?v=tUtc3x3xDFc](http://www.youtube.com/watch?v=tUtc3x3xDFc)