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Chapter 16

Lean Systems
Russell and Taylor
Operations Management, 8th Edition

Lecture Outline

Basic Elements of Lean Production Slide 4


Implementing Lean Systems Slide 47
Lean Six Sigma Slide 49
Value Stream Mapping Slide 50
Lean and the Environment Slide 54
Lean Services Slide 56

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Learning Objectives
Explain how the basic elements of lean eliminate waste,
create flow and continuously improve operations
Assess the benefits of lean, as well as the difficulties in
implementing lean systems
Explain how the complementary concepts of lean and six
sigma work together for process improvement
Construct and interpret a value stream map
Create strategies for implementing lean in service
industries
Use lean concepts and techniques to enhance
environmental initiatives
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Basic Elements of Lean Production


Doing more with less inventory, fewer workers,
less space
Just-in-time (JIT)

smoothing the flow of material to arrive just as it is


needed
JIT and Lean Production are used interchangeably

Muda

waste, anything other than that which adds value to


product or service

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Waste in Operations

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Waste in Operations

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Waste in Operations

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Elements of Lean Production


1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Flexible resources
Cellular layouts
Pull system
Kanbans
Small lots
Quick setups
Uniform production levels
Quality at the source
Total productive
maintenance
Supplier networks

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Flexible Resources
Multifunctional workers

perform more than one job

General-purpose machines perform several


basic functions
Cycle time

time required for the worker to complete one pass


through the operations assigned

Takt time

paces production to customer demand

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Standard Operating Routine


for a Worker

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Cellular Layouts
Manufacturing cells
comprised of dissimilar machines brought together to
manufacture a family of parts

Cycle time is adjusted to match takt time by


changing worker paths

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Cells With Worker Routes

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Worker Routes Lengthen


as Volume Decreases

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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
While push systems rely on a predetermined
schedule, pull systems rely on customer requests

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Kanbans
Card which indicates standard quantity of
production
Derived from two-bin inventory system
Maintain discipline of pull production
Authorize production and movement of goods

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Sample Kanban

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Origin of Kanban

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Types of Kanban
Production kanban

authorizes production of
goods

Withdrawal kanban

authorizes movement of
goods

Kanban square

Signal kanban
triangular kanban to
signal production at the
previous workstation

Material kanban
to order material in
advance of a process

a marked area designated Supplier kanban


to hold items
rotates between the
factory and suppliers

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Dual Kanban System

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Other Kanbans

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Other Kanbans

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Determining Number of Kanbans


No. of Kanbans =

average demand during lead time + safety stock


container size
dL + S
N =
C

where
N
d
L
S
C

= number of kanbans or containers


= average demand over some time period
= lead time to replenish an order
= safety stock
= container size

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Determining Number of Kanbans


d
L
S
C

N=

= 150 bottles per hour


= 30 minutes = 0.5 hours
= 0.10 (150 x 0.5) = 7.5
= 25 bottles

dL + S
=
C

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Determining Number of Kanbans


d
L
S
C

= 150 bottles per hour


= 30 minutes = 0.5 hours
= 0.10 (150 x 0.5) = 7.5
= 25 bottles

(150 x 0.5) + 7.5


dL + S
N=
=
25
C
75 + 7.5
=
= 3.3 kanbans or containers
25
Round up to 4 (to allow some slack) or
down to 3 (to force improvement)

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Small Lots

Require less space and capital investment


Move processes closer together
Make quality problems easier to detect
Make processes more dependent on each other

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Inventory Hides Problems

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Less Inventory Exposes Problems

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Components of Lead Time


Processing time
Reduce number of items or improve efficiency

Move time
Reduce distances, simplify movements, standardize
routings

Waiting time
Better scheduling, sufficient capacity

Setup time
Generally the biggest bottleneck

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Quick Setups
Internal setup
Can be performed only
when a process is
stopped

External setup
Can be performed in
advance

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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

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Techniques for Reducing Setup Time

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Uniform Production Levels


Result from smoothing production requirements
on final assembly line
Kanban systems can handle +/- 10% demand
changes
Reduce variability with more accurate forecasts
Smooth demand across planning horizon
Mixed-model assembly steadies component
production

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Mixed-Model Sequencing

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Quality at the Source


Visual control
makes problems visible

Poka-yokes
prevent defects from
occurring

Kaizen
a system of continuous
improvement; change for
the good of all

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Jidoka
authority to stop the
production line

Andons
call lights that signal quality
problems

Under-capacity
scheduling
leaves time for planning,
problem solving, and
maintenance

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Examples of Visual Control

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Examples of Visual Control

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Examples of Visual Control

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5 Whys
A key part in an effective Kaizen is finding the
root cause of a problem and eliminating it
A practice of asking why? repeatedly until the
underlying cause is identified (usually requiring
five questions)
Simple, yet powerful technique for finding the
root cause of a problem

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Total Productive Maintenance (TPM)


Breakdown maintenance
Repairs to make failed machine operational

Preventive maintenance
System of periodic inspection and maintenance to
keep machines operating

TPM combines preventive maintenance and


total quality concepts

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TPM Requirements
Design products that can be easily produced on
existing machines
Design machines for easier operation,
changeover, maintenance
Train and retrain workers to operate machines
Purchase machines that maximize productive
potential
Design preventive maintenance plan spanning
life of machine

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5S Workplace Scan
5S Scan

Goal

Eliminate or Correct

Seiri
(sort)

Keep only what you


need

Unneeded equipment, tools, furniture;


unneeded items on walls, bulletins; items
blocking aisles or stacked in corners;
unneeded inventory, supplies, parts; safety
hazards

Seiton
(set in order)

A place for
everything and
everything in its
place

Items not in their correct places; correct places


not obvious; aisles, workstations, & equipment
locations not indicated; items not put away
immediately after use

Seisou
(shine)

Cleaning, and
looking for ways to
keep clean and
organized

Floors, walls, stairs, equipment, & surfaces not


clean; cleaning materials not easily accessible;
lines, labels, signs broken or unclean; other
cleaning problems

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5S Workplace Scan
5S Scan
Seiketsu
(standardize)

Shisuke
(sustain)

Goal

Eliminate or Correct

Maintaining and
monitoring the first
three categories

Necessary information not visible; standards


not known; checklists missing; quantities and
limits not easily recognizable; items cant be
located within 30 seconds

Sticking to the rules

Number of workers without 5S training; number


of daily 5S inspections not performed; number
of personal items not stored; number of times
job aids not available or up-to-date

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Supplier Networks

Long-term supplier contracts


Synchronized production
Supplier certification
Mixed loads and frequent deliveries
Precise delivery schedules
Standardized, sequenced delivery
Locating in close proximity to the customer

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Benefits of Lean Production

Reduced inventory
Improved quality
Lower costs
Reduced space requirements
Shorter lead time
Increased productivity

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Benefits of Lean Production

Greater flexibility
Better relations with suppliers
Simplified scheduling and control activities
Increased capacity
Better use of human resources
More product variety

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Implementing Lean Systems


Use lean production to finely tune an operating
system
Somewhat different in USA than Japan
Lean production is still evolving
Lean production is not for everyone

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Drawbacks of Lean Production

Highly variable demand


Large variety of low-volume products
Custom engineered products
Mass production parts
Unexpected changes in demand or supply

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Lean Six Sigma


Lean and Six Sigma are natural partners for
process improvement
Lean
Eliminates waste and creates flow
More continuous improvement

Six Sigma
Reduces variability and enhances process capabilities
Requires breakthrough improvements

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Value Stream Mapping (VSM)


A tool for analyzing process flows and
eliminating waste
Specialized icons related to
lean production
material and information flows
aha Kaizen bursts

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VSM Shapes

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VSM for Milling & Welding

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VSM for Emergency Room

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Lean and the Environment


Identify environmental waste along with other
forms
These can indicate poor process design
Reduce costs of
material
energy
regulatory compliance

Reduce worker health and safety risks

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US EPA Recommendations
Commit to eliminate environmental waste
Involve staff with environmental expertise in
planning for & implementing lean events
Find & drive out environmental waste in specific
processes by using lean tools
Empower & enable workers to eliminate
environmental waste in their work areas
Use environmental, health & safety icons in VSM

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Lean Services
Basic elements of lean production apply equally
to services
Most prevalent applications

lean retailing
lean banking
lean health care
supply chain

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Leaning the Supply Chain


pulling a smooth flow of material through a
series of suppliers to support frequent
replenishment orders and changes in customer
demand
Firms need to share information and coordinate
demand forecasts, production planning, and
inventory replenishment with suppliers and
suppliers suppliers throughout supply chain

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Leaning the Supply Chain


Pull a smooth flow of material through the
system
Build a highly collaborative business
environment
Adopt the technology to support your system
Consider near shoring

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