Bài giảng Operations Management - Chapter 16: Just-In-Time and Lean Production Systems

Operations ManagementJust-in-Time and Lean Production SystemsChapter 161OutlineJUST-IN-TIME AND LEAN PRODUCTIONGLOBAL COMPANY PROFILE: GREEN GEAR CYCLINGSUPPLIERSGoals of JIT PartnershipsConcerns of SuppliersJIT LAYOUTDistance ReductionIncreased FlexibilityImpact on EmployeesReduced Space and Inventory2Outline - ContinuedINVENTORYReduce VariabilityReduce InventoryReduce Lot SizesReduce Setup CostsSCHEDULINGLevel SchedulesKanbanQUALITYEMPLOYEE EMPOWERMENTLEAN PRODUCTIONJIT IN SERVICES3Learning ObjectivesWhen you complete this supplement, you should be able to :Identify or Define:Types of wasteVariabilityKanbanDescribe or Explain:Just-in-Time (JIT) philosophyPull systemsPush systemsThe goals of JIT partnershipsLean Production4Waste 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 Quotation5Green Gear CyclingDesigns 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 cellsOne day throughput timeFocus on quality6Supplier – Production – Distribution SystemSupplier DistributionInventoriesRaw materialin-transitSub-assemblyparts in-transitMaintenance,repair, and orderingsupplies in-transitRaw MaterialInventoryWork-in-processInventoryFactoryFinishedGoodsInventoryComponentInventoryMROInventoryPurchasingProduction andInventory ControlShipping andTrafficRetailerInventoryOrdersWarehouseInventoryProductions InventoriesCustomer DistributionInventoriesOrders7Management philosophy of continuous and forced problem solvingSupplies and components are ‘pulled’ through system to arrive where they are needed when they are needed.What is Just-in-Time?8Lean ProductionLean Production supplies customers with exactly what the customer wants, when the customer wants, without waste, through continuous improvement.9Attacks wasteAnything not adding value to the productFrom the customer’s perspectiveExposes problems and bottlenecks caused by variabilityDeviation from optimumAchieves streamlined productionBy reducing inventoryWhat Does Just-in-Time Do?10OverproductionWaitingTransportationInefficient processingInventoryUnnecessary motionProduct defects© 1995 Corel Corp.Types of Waste11Waste Reduction (%)82%50%50%30%30%20%40%0%20%40%60%80%100%Work-in-Process InventoryRaw Material InventoryLead TimeSpaceFinished Goods InventoryScrapSetup TimeJIT Reduced Wasteat Hewlett-Packard12Variability Occurs BecauseEmployees, machines, and suppliers produce units that do not conform to standards, are late, or are not the proper quantityEngineering drawings or specifications are inaccurateProduction personnel try to produce before drawings or specifications are completeCustomer demands are unknown13Push versus PullPush system: material is pushed into downstream workstations regardless of whether resources are availablePull system: material is pulled to a workstation just as it is needed14Suppliersreduced number of vendorssupportive supplier relationshipsquality deliveries on time Layoutwork-cell layouts with testing at each step of the processgroup technologymovable, changeable, flexible machineryhigh level of workplace organization and neatnessreduced space for inventorydelivery direct to work areasJIT Contribution to Competitive Advantage15Inventorysmall lot sizeslow setup timesspecialized bins for holding set number of partsSchedulingzero deviation from scheduleslevel schedulessuppliers informed of schedulesKanban techniquesJIT Contribution to Competitive Advantage - Continued16JIT Contribution to Competitive Advantage - ContinuedPreventive Maintenancescheduleddaily routineoperator involvementQuality Productionstatistical process controlquality by suppliersquality within firm17JIT Contribution to Competitive Advantage - ContinuedEmployee Empowermentempowered and cross-trained employeesfew job classifications to ensure flexibility of employeestraining supportCommitmentsupport of management, employees, and suppliers18ResultsQueue and delay reduction, speedier throughput, freed assets, and winning ordersQuality improvement, reduces waste and wins ordersCost reduction increases margin or reduces selling priceVariability reductions in the workplace reduces waste and wins ordersRework reduction, reduces waste and wins orders19YieldingFaster response to the customer at lower cost and higher qualityA competitive advantage!20SuppliersPreventive MaintenanceLayoutInventorySchedulingQualityEmployee EmpowermentJITJust-in-TimeSuccess Factors21Incoming material and finished goods involve wasteBuyer and supplier form JIT partnerships JIT partnerships eliminateUnnecessary activitiesIn-plant inventoryIn-transit inventoryPoor suppliers Suppliers22FewNearbyRepeat businessAnalysis and support to enable desirable suppliers to become or stay price competitiveCompetitive bidding mostly limited to new purchasesBuyer resists vertical integration and subsequent wipeout of supplier businessSuppliers encouraged to extend JIT to their suppliers (2nd and 3rd tier suppliers)Characteristics of JIT PartnershipsSuppliers23Characteristics of JIT Partnerships QuantitiesSteady output rateFrequent deliveries in small-lot quantitiesLong-term contract agreementsMinimal or no paperwork (use EDI or internet)Delivery quantities fixed for whole contract termLittle or no permissible overage or underageSuppliers package in exact quantitiesSuppliers reduce their production lot sizes24Minimal product specifications imposed on suppliersHelp suppliers meet quality requirementsClose relationship between buyers’ and suppliers quality assurance peopleSuppliers use poka-yoke and process control charts instead of lot-sampling techniquesCharacteristics of JIT Partnerships Quality25Characteristics of JIT Partnerships ShippingScheduling of inbound freightGain control by use of company-owned or contract shipping and warehousingUse of Advanced Shipping Notice (ASN)26Goals of JIT partnershipsElimination of unnecessary activitiesElimination of in-plant inventoryElimination of in-transit inventoryElimination of poor suppliers27DiversificationPoor customer schedulingFrequent engineering changesQuality assuranceSmall lot sizesPhysical proximityConcerns of Suppliers28Streamlined ProductionFlow with JITTraditional FlowCustomersSuppliersCustomersSuppliersProduction Process (stream of water)Inventory (stagnant ponds)Material(water in stream)29JIT objective: Reduce movement of people and materialMovement is waste!JIT requiresWork cells for product familiesMoveable or changeable machinesShort distancesLittle space for inventoryDelivery directly to work areasLayout30Process LayoutWork CellSawLatheGrinderHeatTreatLatheLatheLatheSawHeatTreatGrinderGrinderPressPress11234526SawPressWork Cell versus Process Layout31Layout TacticsBuild work cells for families of productsMinimize distanceDesign little space for inventoryImprove employee communicationUse poka-yoke devicesBuild flexible or movable equipmentCross train workers to add flexibility32Traditional: inventory exists in case problems ariseJIT objective: eliminate inventoryJIT requiresSmall lot sizesLow setup timeContainers for fixed number of partsJIT inventory: Minimum inventory to keep system runningInventory33JIT Inventory TacticsUse a pull system to move inventoryReduce lot sizeReduce setup timeDevelop Just-in-Time delivery systems with suppliersDeliver directly to point of usePerform-to-scheduleReduce setup timeUse group technology34Inventory Hides Problems Just as Water in a Lake Hides RocksScrapSetup timeLate deliveriesQuality problemsProcess downtimeScrapSetup timeLate deliveriesQuality problemsProcess downtimeInventory levelInventory level35ScrapWork in process inventory level(hides problems)Unreliable VendorsCapacity ImbalancesLowering Inventory Reduces Waste36ScrapReducing inventory revealsproblems so they can be solved.Unreliable VendorsCapacity ImbalancesWIPLowering Inventory Reduces Waste37ScrapReducing inventory revealsproblems so they can be solved.Unreliable VendorsCapacity ImbalancesWIPLowering Inventory Reduces Waste38To Lower Inventory, Reduce Lot SizesTimeInventory LevelLot Size 200Lot Size 80Average inventory = 100Average inventory = 40Average inventory = (Lot size)/239Customer orders 10Lot size = 5Lot 1Lot 2Lot size = 2Lot 1Lot 2Lot 3Lot 4Lot 5Reducing Lot Sizes Increases the Number of Lots40Which Increases Inventory CostsLot SizeCostHolding CostTotal CostSetup CostOptimal Lot SizeSmallerLot Size41Unless Setup Costs are ReducedLot SizeCostHolding CostTotal CostSetup CostOriginal optimal lot sizeNew optimal lot size42Frequent Orders can Reduce Average InventoryTimeInventory100200Q1 When average order size = 200, average inventory is 100Q2 When average order size = 100, average inventory is 5043Lower Total Cost Requires Small Lot Sizes and Lower Setup CostsLot sizeSum of ordering and holding costT1T2S2S1Cost44Steps to Reduce Setup TimeInitial Setup TimeSeparate 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 min60 min45 min25 min15 minUse one-touch system to eliminate adjustments (save 10 minutes)Training operators and standardizing work procedures (save 2 minutes)Step 1Step 2Step 3Step 513 minStep 445Involves timing of operationsJIT requiresCommunicating schedules to suppliersLevel schedulesFreezing part of schedule nearest due dateSmall lotsKanban techniquesScheduling46JIT Scheduling TacticsCommunicate the schedule to suppliersMake level schedulesFreeze part of the schedulePerform to scheduleSeek one-piece-make and one-piece-moveEliminate wasteProduce in small lotsUse kanbansMake each operation produce a perfect part47Reduce ripple effect of small variations in schedules (e.g., final assembly) Production quantities evenly distributed over time (e.g., 7/day)Build same mix of products every dayResults in many small lotsItem Monthly Quantity Daily Quantity A 40 2  B 60 3Level Schedules48AAABBBCJIT Small LotsLarge-Lot ApproachTimeTimeAABBBCAAABBBBBBCCJIT produces same amount in same time if setup times are loweredSmall versus Large LotsSmall lots also increase flexibility to meet customer demands49Comparison of Level and Large Lot Material-use Approaches50Japanese word for cardPronounced ‘kahn-bahn’ (not ‘can-ban’)Authorizes production from downstream operations‘Pulls’ material through plantMay be a card, flag, verbal signal etc.Used often with fixed-size containersAdd or remove containers to change production rateKanban51Diagram of Outbound Stockpoint with Warning-Signal Marker52Kanban Signals “Pull” Material Through the Process53Kanban: Additional PointsWhen producer and user are not in visual contact, a card may be used; otherwise, a light, flag, or empty spot on the floor may work.Because a pull station may require several resupply components, several kanban pull techniques can be used at the same station.Usually, each card controls a specific quantity of parts, although multiple card systems can be used if the producing cell produces several components or the lot size is different from the move size.In an MRP system, the schedule can be thought of as a “build” authorization and the kanban as a type of “pull” system that initiates the actual production.54Kanban: Additional Points - ContinuedThe kanban cards provide direct control (limit) on the amount of work-in-process between cells.If there is an intermediate storage area, a two-card system may be used; one card circulates between user and storage area, and the other circulates between the storage area and the producing area.55All activities involved in keeping equipment in working orderDone to prevent failureJIT requiresScheduled & daily PMOperator performs PMKnows machinesResponsible for product qualityPreventive Maintenance (PM)56JIT exposes quality problems by reducing inventoryJIT limits number defects with small lotsJIT requires TQMStatistical process controlWorker involvementInspect own workQuality circlesImmediate feedbackQuality57JIT Quality TacticsUse statistical process controlEmpower employeesBuild failsafe methods (poka-yoke, checklists, etc.)Provide immediate feedback58Get employees involved in product & process improvementsEmployees know job best!JIT requiresEmpowermentCross-trainingTraining supportFew job classifications© 1995 Corel Corp.Employee Empowerment59JIT in ServicesAll the techniques used in manufacturing are used in servicesSuppliersLayoutsInventoryScheduling60Attributes of Lean Producers - Theyuse JIT to eliminate virtually all inventorybuild systems to help employees product a perfect part every timereduce space requirementsdevelop close relationships with supplierseducate supplierseliminate all but value-added activitiesdevelop the workforcemake jobs more challengingreduce the number of job classes and build worker flexibility61