Chapter 17Lean Operating Systems

TRUE/FALSE
1. Lean enterprise refers to approaches that focus on the elimination of defects and errors throughout the
value chain.
ANS: F

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2. In lean thinking, waste need not be classified as simply material waste such as scrap and defective
parts.
ANS: T

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3. Synchronization of the value chain is a lean approach to increasing speed and response.
ANS: T

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4. According to the Toyota Motor Company, waiting time is a necessary evil in production and is not
classified as waste.
ANS: F

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5. The 5Ss focus on improving waste generated by inefficient transportation.

ANS: F

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6. Firms use the 5S principles to create a clean and organized work environment.
ANS: T

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7. A clean and organized work area is an important principle of lean thinking.

ANS: T

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8. Single minute exchange of dies (SMED) frees up capacity for other productive uses.
ANS: T

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9. Large batches often provide economies of scale and helps firms match inventory to market demand.
ANS: F

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10. To accomplish single piece flow, a manufacturer needs the ability to change between products quickly
and inexpensively.
ANS: T

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11. Lean operating systems seek to apply the principles of continuous flow to the production of discrete
parts by reducing batch size, ideally to a size of one.
ANS: T

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12. Lean Six Sigma is simply the union of lean approaches with quality improvement techniques, each of
which has been used independently in other applications.
ANS: T

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13. The goal of total productive maintenance is to minimize the costs associated with routine maintenance
activities.
ANS: F

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14. A goal of total productive maintenance is to have zero accidents in the entire life cycle of the operating
system.
ANS: T

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15. Lean principles are of primary benefit to manufacturers and provide little value to service
organizations.
ANS: F

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16. In a JIT system, the computer inventory data is the interface and control point between customers and
supply cycles.
ANS: F

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17. In a push system, finished goods inventory is produced in advance of customer demand using a
forecast of sales.
ANS: T

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18. JIT systems are based on the concept associated with pull systems rather than push systems.
ANS: T

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19. Kanban is a Japanese term for elimination of waste.

ANS: F

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20. The number of Kanban cards is directly proportional to the amount of work-in-process inventory.
ANS: T

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21. Six Sigma addresses visible problems in processes; lean production is more concerned with less visible
problems.
ANS: F

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22. Lean production is focused on efficiency by reducing waste and improving process flow, while Six
Sigma is focused on effectiveness by reducing errors and defects.
ANS: T

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23. Production Kanbans trigger the movement of parts.

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ANS: F

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24. Total Productive Maintenance (TPM) strives to relieve machine operators of routine maintenance so
that they can focus entirely on being productive.
ANS: F

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25. When producing a broad goods or service mix with diverse requirements on common equipment, the
ideal strategy is to run large batches.
ANS: F

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MULTIPLE CHOICE
1. Which of the following is not a basic principle of a lean operating system?
a. Elimination of waste
b. Batching
c. Increased speed and response
d. Improved quality
ANS: B

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2. According to the Toyota Motor Company, which of the following is not one of the seven major waste
categories?
a. Overproduction
b. Transportation
c. Motion
d. Single-piece flow
ANS: D

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3. Long lead-times and higher work-in-process is most closely related to which of Toyota's "Seven Major
Waste Categories?"
a. Overproduction
b. Single-piece flow
c. Waiting time
d. Transportation
ANS: C

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4. Which of the following is not one of the 5Ss?

a. Synchronize
b. Standardize
c. Shine
d. Sustain
ANS: A

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5. In the 5Ss, items identified as unnecessary and thus removed from a workplace would be included with
which S?
a. Sort
b. Synchronize
c. Shine
d. Standardize

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ANS: A

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6. Quick setup or changeover of tooling and fixtures is associated with ____.

a. Visual controls
b. Single minute exchange of dies
c. 5Ss
d. Six Sigma
ANS: B

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7. Total Production Maintenance (TPM)

a. Puts total responsibility on maintenance workers
b. Puts total responsibility on equipment operators
c. Eliminates all down time
d. Employees preserve and protect their equipment
ANS: D

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8. Total productive maintenance (TPM) seeks to do all of the following except ____.
a. Maximize equipment effectiveness
b. Create worker ownership
c. Foster continuous improvement efforts
d. Enable multiple products in small batches to be run on the same equipment
ANS: D

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9. Quality at the source requires

a. Starting with a plan
b. Having reliable suppliers
c. Doing it right the first time
d. Having a good design
ANS: C

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10. Toyota classified waste into seven major categories. Those categories include all of the following
except
a. Motion
b. Ordering
c. Inventory
d. Waiting
ANS: B

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11. Which of the following is least related to a push system?

a. Maximum customer responsiveness
b. Predefined schedule
c. Finished goods inventory
d. Based on forecast
ANS: A

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12. Which of the following is least related to a pull system?

a. Building inventory
b. Final assembly schedule
c. Real time information

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d. Sales rate
ANS: A

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13. A withdrawal Kanban

a. Authorizes production
b. Authorizes suppliers to produce
c. Authorizes the transfer of an empty container
d. Authorizes shipping to customers
ANS: C

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14. The number of Kanban cards is dependent on all of the following except
a. Average daily demand rate
b. Setup time
c. Part waiting time
d. Safety stock
ANS: B

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15. Which one of the following statements is true concerning Lean Six Sigma?
a. Lean principles focus on advanced statistical methods.
b. Lean principles have been developed over a sixty year plus period of time.
c. Lean principles include the 5Ss framework and practices.
d. Six Sigma and lean principles are not related they are separate bodies of knowledge.
ANS: C

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16. Southwest Airlines illustrates the application of "lean principles" when it

a. reduces airplane turnaround time at airport gates.
b. assigns airplane seats.
c. serves all passengers in-flight dinners.
d. requires a change of ticket fee for missing a scheduled flight.
ANS: A

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17. Which one of the following statements is true?

a. Postponement is the process of delaying orders from suppliers because it is very difficult
to order from geographically dispersed businesses.
b. General Motors supply chain is a good example of a push system.
c. Dell Computers supply chain is a good example of push system.
d. Flexibility and responsive service are top priorities compared to low cost in an efficient
supply chain.
ANS: B

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18. Principles of lean operating systems include all of the following except
a. Eliminate waste
b. Reduce workforce
c. Increase speed and response
d. Reduce cost
ANS: B

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19. Which of the following "lean" ideas is false?

a. Activities not adding value are a waste.

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b. Accidents are a form of waste.

c. A pull system produces waste.
d. Overproduction is a form of waste.
ANS: C

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20. Ford Motor Company has decided to switch to a pull system of manufacturing and distribution for its
vehicles. Which one of the following is most likely to occur?
a. Inventory levels will increase.
b. Component parts and subassemblies will be replenished only when needed.
c. Dealer parking lot space will need to be increased.
d. Finished goods inventory will decrease, but raw materials and work-in-process inventories
will increase.
ANS: B

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21. In a Kanban system, the numerator of the formula K =[d(p + w)(1 + )]/C is analogous to
a. demand during the lead time only in a fixed quantity inventory system.
b. safety stock only in a fixed period inventory system.
c. the order up-to-level (M) in a fixed period inventory system.
d. the reorder point (r) in a fixed quantity inventory system.
ANS: D

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22. ABC Manufacturing uses a Kanban system for a component. The daily demand is 800 units. Each
container has a combined waiting and processing time of 0.34 days. If the container size is 50 and
efficiency (safety) factor is 9 percent, how many Kanban card sets should be authorized (round up)?
a. 5 sets
b. 6 sets
c. 7 sets
d. 8 sets
ANS: B

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23. Which one of the following statements is true?

a. The heijunka system is a system of boxes much like in a mailroom set of boxes attached to
a wall used to smooth production outputs.
b. Producing goods early is a principle of lean.
c. A university publication printed with 100% post-consumer recycled fiber is an example of
total productive maintenance practice.
d. Preventive maintenance is not a part of lean principles and practices.
ANS: A

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SHORT ANSWER
1. Define lean enterprise and the four principles of lean operating systems.
ANS:
Lean enterprise refers to approaches that focus on the elimination of waste in all forms, and smooth,
efficient flow of materials and information throughout the value chain to obtain faster customer
response, higher quality and lower costs.
Lean operating systems have four basic principles.
1.
Elimination of waste
2.
Increased speed and response
3.
Improved quality

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4.

Reduced cost

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2. Discuss the seven major categories of waste as defined by Toyota.
ANS:
The Toyotas Motor Company classified waste into the following seven major categories:
1.
Over-production - For example, to avoid an expensive setup cost, a company makes a
batch of 100 when they only had orders for 50; or, they make a batch of 52 instead of 50
in case there are rejects. Over-production ties up production facilities, and the resulting
excess inventory simply sits idle.
2.
Waiting time - Longer lead-times and higher work-in-progress results from allowing
queues to build up between operations.
3.
Transportation - Poor layout leads to the waste of time and effort spent in moving
products around the factory.
4.
Processing - Scrap that often results from poor product or process design exemplifies
the traditional notion of waste.
5.
Inventory - Inventory waste is the expense incurred to meet the requirements needed to
maintain, handle and store idle stock.
6.
Motion - Motion waste is the result of inefficient workplace design, and the location of
tools and materials.
7.
Production defects - Production defects are a result of not performing work correctly
the first time.
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3. Explain the purpose of visual controls and give examples.
ANS:
Visual controls are indicators for operating activities that are placed in plain sight of all employees so
that everyone can quickly and easily understand the status and performance of the work system. For
example, if a machine fails or a part is defective or manufactured incorrectly, a light might turn on or a
buzzer might sound, indicating that immediate action should be taken. Many firms have cords that
operators can pull that tell supervisors and other workers that a problem has occurred. Some firms use
electronic scoreboards to keep track of daily performance. These scoreboards are located where
everyone can see them and report key metrics such as volume, quality levels, speed of service, and so
on.
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4. Explain the concept of Single Minute Exchange of Die (SMED).
ANS:
Long setup times waste manufacturing resources. Short setup times, on the other hand, enable a
manufacturer to have frequent changeovers and move toward single-piece flow, thus achieving high
flexibility and product variety. Reducing setup times also frees up capacity for other productive uses.
Single Minute Exchange of Die (SMED) refers to quick setup or changeover of tooling and fixtures
in processes so that multiple products in smaller batches can be run on the same equipment.
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5. Contrast batching with single-piece flow.

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ANS:
Batching is the process of producing large quantities of items as a group before being transferred to
the next operation. By running large batches, setups and teardowns are reduced, providing economies
of scale. However, this often builds up inventory that might not match market demand, particularly in
highly dynamic markets.
Single-piece flow is the concept of ideally using batch sizes of one. However, to do this economically
requires the ability to change between products quickly and inexpensively.
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6. Explain the 5Ss.
ANS:
The 5Ss are derived from Japanese terms: seiri (sort), seiton (set in order), seiso (shine), seiketsu
(standardize) and shitsuke (sustain).
Sort refers to ensuring that each item in a workplace is in its proper place or identified as

unnecessary and removed.

Set in order means to arrange materials and equipment so that they are easy to find and

use.
Shine refers to a clean work area. Not only is this important for safety, but it is also

important because as a work area is cleaned, maintenance problems such as oil leaks can
be identified before they cause problems.
Standardize means to formalize procedures and practices to create consistency and

ensure that all steps are performed correctly.

Sustain means to keep the process going through training, communication and

organizational structures.
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7. How does Total Productive Maintenance (TPM) affect lean operating systems?
ANS:
Total Productive Maintenance (TPM) is focused on ensuring that operating systems will perform
their intended function reliably. The goal of TPM is to prevent equipment failures and downtime -ideally, to have "zero accidents, zero defects and zero failures" in the entire life cycle of the operating
system. TPM has been described as the health care system for the operating system. TPM seeks to

Maximize overall equipment effectiveness and eliminate unplanned downtime

Create workers' "ownership" of the equipment by involving them in maintenance activities
Foster continuous efforts to improve equipment operation through employee involvement
activities

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8. Discuss the differences between lean production and Six Sigma.
ANS:
Lean production addresses visible problems in processes. Six Sigma is more concerned with less
visible problems such as variation in performance. Lean is focused on efficiency by reducing waste
and improving process flow, while Six Sigma is focused on effectiveness by reducing errors and
defects.

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Another difference is that lean tools are more intuitive and easier to apply by anybody in the
workplace, while many Six Sigma tools require advanced training and expertise of specialists,
particularly in statistical analysis.
9. Compare and contrast a push system vs. a pull system.
ANS:
Traditional factories use a push system, which produces finished goods inventory in advance of
customer demand, using a forecast of sales. Parts and subassemblies are "pushed" through the
operating system based on a pre-defined schedule that is independent of actual customer demand.
In a pull system, employees at a given operation go to the source of required parts, such as machining
or subassembly, and withdraw the units as they need them. Then, just enough new parts are
manufactured or procured to replace those withdrawn. As the process from which parts were
withdrawn replenishes the items transferred out, it draws on the output of its preceding process, etc.
Finished goods are made to coincide with the actual rate of demand, resulting in minimal inventories
and maximum responsiveness.
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10. Define a Kanban. Describe how it helps execute a pull system.
ANS:
A Kanban is a flag or a piece of paper that contains all relevant information for an order: part number,
description, process area used, time of delivery, quantity available, quantity delivered, production
quantity, etc. The Kanban system begins when the customer buys or uses the good and an empty
container is created.
Step 1:

Step 2:

Step 3:

The withdraw Kanban authorizes the material handler to transfer empty containers
to the storage area. Withdraw Kanbans trigger the movement of parts. The material
handler detaches the withdraw-ordering Kanban that was attached to the empty
container and places the Kanban card in the storage area or on the Kanban receiving
post, leaving the empty container.
A material handler for the supply cycle places a production Kanban on the empty
container and this authorizes the gateway workstation to produce parts. Production
Kanbans trigger the production of parts. The container holds a small lot-size of
parts. Without the authorization of the production Kanban, the gateway workstation
and all other workstation may be idle. The gateway workstation must be scheduled
to meet the sales rate and it pulls parts from all other workstations. The other
workstations in the process do not need to be scheduled because they get their
production orders from the production Kanban that pulls parts through the supply
process.
The supply process returns a full container of parts to the storage area with the
production Kanban attached. The Kanban process is complete when the material
handler for the customer process picks up a full container of parts and takes the
production Kanban card off the container. Normally, the material handler drops off
a withdrawal Kanban and empty container when they pick up a full container of
parts.

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PROBLEM

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1. Hinge Manufacturing Company employs a Kanban system for a component part. The daily demand is
900 hinges. Each container has a wait time of 0.05/day, and a processing time of 0.37 days. The
Container size is 60 hinges and the safety factor ( ) is 10%.
a.
b.

How many Kanban card sets should be authorized?

What is the maximum inventory of this hinge in the system?

ANS:
a.
K = Average daily demand during lead time plus a safety stock/Number of units per
container
K = d(p + w)(1 + )/C
d = 900
w = 0.05
p = 0.37
C = 60
= .10
K = d(p + w)(1 + )/C = 900(0.37 + 0.05)(1 + .1)/60 = 6.93, rounded up to 7
b.

Maximum inventory = K x C = 420

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2. A manufacturer of automobile engines is designing a new Kanban system for engine #321. The
demand for #321 is 75/day and they are built in groups of 8. The total process and wait time is 3 days.
The manager wants an alpha () of 2 or 200%. How many Kanbans are required?
ANS:
K = Average daily demand during lead time plus a safety stock/Number of units per container
K = d(p + w)(1 + )/C
d = 75
p+w=3
C=8
=2
K = d(p + w)(1 + )/C = 75(3)(1 + 2)/8 = 84.375 or rounded up to 85
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3. A company is using Kanban containers. There are two adjacent work centers, a downstream (using)
and an upstream (producing) one. The using work center has a production rate of 200 parts per day and
each container holds 20 parts. It takes .5 days for a container to make the entire cycle from the time it
leaves the upstream center until it is returned, filled with production, and leaves again. The manager
wants a safety factor () of 20%. The company is interested in reducing the number of containers.
a. What is the number of containers currently in use?
b. If the number of parts a container holds is increased to 24 parts, how many containers are needed?
c. If the company wants the number of containers (holding 20 parts each) to be 5, what must the
safety factor become?
ANS:
a. K = d(p + w)(1 + )/C = [(200) (.5) (1+.2)] / 20 = 6 containers
b. K = d(p + w)(1 + )/C = [(200) (.5) (1 +.2)] / 24 = 5 containers

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c. = [KC d(p + w)] / d(p + w) = [(5)(20) (200)(.5)] / (200)(.5) = .00

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4. A company is using a Kanban system with 2 containers, each holding 50 parts, between a downstream
(using) and an upstream (producing) work center. The using work center can handle 250 jobs per day.
The average elapsed time for the entire cycle is currently .25 days. The company is concerned with the
safety factor for the operation and the size of the containers.
a. What is the efficiency rating of the current operation?
b. If the company decides to use only one container, how many parts must it hold?
c. If the safety factor is changed to .12 and there are still 2 containers, how many parts must each
container now hold?
ANS:
a. = [KC d(p + w)] / d(p + w) = [(2)(50) (250)(.25)]/[(250)(.25)] = .60
b. C = [d(p + w) (1 + )] / K = [(250) (.25) (1 + .6)] / 1 = 100
c. C = [d(p + w) (1 + )]/K = [(250)(.25)(1 + .12)]/2 = 35 parts
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5. A manufacturing company is using a two-container Kanban system between a downstream (using) and
an upstream (producing) work center. Each container holds 25 parts. The using work center can handle
100 parts per day. The average elapsed time for the entire cycle is currently .40 days. The company is
concerned about the efficiency of the operation.
a.
b.
c.
d.

What is the safety factor for the current operation?

What is the maximum authorized inventory for this part?
If the number of containers is reduced to one, how many parts must it hold?
If the efficiency is changed to .10 and the number of parts per container is increased to 44, how
many containers will be needed?

ANS:
a. = [KC d(p + w)] / d(p + w) = [(2)(25) (100)(.40)] /[(100)(.40)] = .25
b. KC = 2(25) = 50
c. C = [d(p + w) (l + )] / K = [(100)(.40)(1 + .25)] / 1 = 50 parts
d. K = [d(p + w) (l + )] / C = [(100)(.40)(1 + .10)] / 44 = 1 container
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