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Lean Operations: Process Synchronization and Improvement

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Title: Lean Operations: Process Synchronization and Improvement


1
Lean Operations Process Synchronization and
Improvement
Chapter 10
2
Introduction
  • Lean Operations
  • Perfected by Japanese automaker - Toyota
  • A more efficient process
  • Adopted in USA by the aerospace industry in
    1990s
  • Some turnaround times were lowered by 30-50
  • Maintenance productivity improved by 25-50

3
Introduction
  • Overall
  • Many industries have adopted lean operations
  • Why??
  • Improved performance including
  • Cost
  • Quality
  • Response time

4
Introduction
Quick review
5
10.1 Processing Networks
  • Processing Networks consists of information and
    material flows of multiple products through a
    sequence of interconnected processes.

6
10.1 Processing Networks
  • Plants Supply Chains
  • Two different levels
  • Plants any singly owned, independently managed
    and operated facility (i.e., manufacturing site,
    service unit, storage warehouse)
  • Supply Chain a network of interconnected
    facilities
  • Diverse ownership
  • Flows of information and materials between the
    facilities (i.e., raw materials suppliers,
    finished goods producers, wholesalers,
    distributors, retailers)

7
10.2 The Process Ideal Synchronization
Efficiency
  • What is an Ideal Process?
  • A process that achieves synchronization at the
    lowest possible cost

Process Synchronization The ability of the
process to meet customer demand in terms of their
quantity, time, quality and location requirements.
Process Efficiency Measured in terms of the total
processing costs. Less cost, more efficient!!.
8
10.2 The Process Ideal Synchronization
Efficiency
  • Perfectly Synchronized Process that is LEAN will
    develop, produce and deliver these ONLY on
    demand
  • Exactly what is needed (not wrong or defective
    products)
  • Exactly how much is needed (neither more or less)
  • Exactly when it is needed (not before or after)
  • Exactly where it is needed (not somewhere else)

9
10.2 The Process ideal Synchronization
Efficiency
  • Just-In-Time (JIT)
  • When the four just rights come together
  • Action is taken only when it becomes necessary!!!
  • In Manufacturing - production of only necessary
    flow units in necessary quantities at necessary
    times!!!

10
10.2 The Process ideal Synchronization
Efficiency
  • Synchronized Networks
  • Outflow of one process is the inflow to another
    process!!!!
  • REQUIRES PRECISE MATCHING OF SUPPLY DEMAND
  • All stages are required to be tightly linked with
    flow of information and product
  • Ideally the processing stages are achieved for
    lowest possible cost!!!!

11
10.3 Waste and Its Sources
  • ANYTHING LESS THAN IDEAL PERFORMANCE IS AN
    OPPORTUNITY FOR IMPROVEMENT!!!
  • Low Efficiency High Processing Costs

Defective products, high inventories, delays,
stock outs
Lack of Synchronization
12
10.3 Waste and Its Sources
Waste producing inefficiently, producing
wrong or defective products, producing in
quantities that are too small/large, delivering
early/late
  • Sources of Waste
  • Producing defective products
  • Producing too much product
  • Carrying inventory
  • Waiting due to unbalanced workloads
  • Unnecessary processing
  • Unnecessary worker movement
  • Transporting materials

13
10.3 Waste and Its Sources
  • Waste Elimination
  • Short term strategies include
  • Cycle Safety inventories
  • Safety capacity
  • Non-Value adding activities (transportation,
    inspection, rework, process control)

14
10.3 Waste and Its Sources
  • Waste Elimination (contd)
  • Long-Term Strategy
  • Improve the overall processes
  • Build in flexibility, predictability, stability
    to eliminate temporary fixes.
  • i.e.? Reduce setup costs to make it more
    economical to produce small batches.

15
10.3 Waste and Its Sources
  • The River Analogy The boat can sail in shallow
    water (lean operations) if we are able to find
    ways to remove the imperfections on the river
    bottom!!!

FG
FM
WIP
Defects
Defective Materials
Long Setups
Machine Breakdowns
Long Lead Times
Unsuitable Equipment
Uneven Schedules
Unreliable Suppliers
Absenteeism Rigid Work Rules
Inefficient Layouts
16
10.4 Improving Flows in a Plant Basic
Principles of Lean Operations
  • Many buzz-words for managing and achieving
    efficiency within a plant
  • Lean operations
  • Just-in-time production
  • Zero inventory program
  • Synchronous manufacturing
  • Agile manufacturing
  • Toyota Production System (TPS)

17
10.4 Improving Flows in a Plant Basic
Principles of Lean Operations
  • LEAN OPERATIONS HAS FOUR OBJECTIVES
  • To improve process flows
  • Efficient plant layout and fast/accurate flow of
    materials and information
  • To increase process flexibility
  • Reducing equipment changeover times
    cross-functional training
  • To decrease process variability
  • Flow rates, processing times, and quality
  • To minimize processing costs
  • Eliminate non-value adding activities
    (transportation, inspection, rework)

18
10.4 Improving Flows in a Plant Basic
Principles of Lean Operations
  • WHY?????
  • First three goals improve Process Synchronization
  • Last goal improves Cost Efficiency

19
10.4 Improving Flows in a Plant Basic
Principles of Lean Operations
  • Classic Example
  • Efficiency/Synchronization for mass production
  • Henry Fords Rouge, Michigan plant
  • Totally integrated with steel mill, glass
    factory, machine tools, electrical systems,
    assembly line, well-trained (well-paid) workers
  • Minimal low time cost
  • Everything in place except product variety!

20
10.4 Improving Flows in a Plant Basic
Principles of Lean Operations
Efficiency/Synchronization for Mass
Production Ford Motor Company 1910 Rouge,
Michigan Plant
Source lthttp//www.shadetreemechanic.com/ford_ce
ntennial_in_atlanta.htmgt
21
10.4.1 Improving Process Architecture Cellular
Layouts
  • Process Architecture the network of activities
    and resources
  • One method
  • FUNCTIONAL LAYOUTS
  • Different product types follow different routings
    through the resource poolsenabling each flow
    unit to be sent to any available station in the
    pool.

22
10.4.1 Review of Process Architectures Job Shop
Functional Layout Resources that perform the
same function are physically pooled together
JOB SHOPS
23
10.4.1 Improving Process Architecture Cellular
Layouts
  • Alternate to Process-based Functional Layout

CELLULAR LAYOUT
All workstations that perform successive
operations on a given product are grouped
together to form a CELL
24
10.4.1 Improving Process Architecture Cellular
Layouts
Product 1
A
C
B
Output
Input
Example Henry Fords Assembly Line for the
Model T
25
10.4.1 Improving Process Architecture Cellular
Layouts


ADVANTAGES
  • Facilitates synchronous flow of information and
    materials between processing stations
  • Physical proximity of cells reduce transportation
    of low units
  • Moves small batches of flow units quickly
  • Encourages teamwork cross functional skill
    development
  • Improved communication between stations
  • Improves synchronization where each station
    produces parts only if the next station needs
    them
  • Easier to recognize and report problems
  • Quicker ability to correct defects

26
10.4.1 Improving Process Architecture Cellular
Layouts
-
-
DISADVANTAGES
  • Resources are dedicated to specific cells
  • Resources cannot be used by other cells
  • Lose advantage of resource pooling
  • Worker incentives must be team oriented, not
    individual performance based
  • REMEDIES
  • Use flexible resources that are cross functional
  • Peer pressure to control productivity of team
    members

27
10.4.2 Improving Information Material Flow
Demand Pull
  • TWO APPROACHES
  • PUSH Input availability triggers production
    where emphasis is on keeping busy and maximize
    resource utilization (as long as there is work)
  • Planning Tool MRP (Material Requirements
    Planning)
  • MRP End-Product demand forecasts are exploded
    backwards to determine parts requirements at each
    station

28
10.4.2 Improving Information Material Flow
Demand Pull
  • PUSH works well under these conditions if
  • All information is accurate
  • Forecasts of finished goods are correct
  • There is no variability in processing times
  • If one of these conditions at any stages is not
    met will
  • DISTURB PLANNED FLOW AND DESTROY SYNCHRONIZATION
    THROUGHOUT THE PROCESS!!

29
10.4.2 Improving Information Material Flow
Demand Pull
  • Demand-Pull Where demand from a customer
    station triggers production.
  • Consequences of Demand-Pull -- -- -- Each station
    produces only on demand from its customer station
  • The demand is actually downstream
  • Two requirements to make a pull system work
  • Must have a well-defined customer with a
    well-defined supplier process.
  • Must produce the quantity needed only when
    signaled to do so by its customer

30
10.4.2 Improving Information Material Flow
Demand Pull
31
10.4.2 Improving Information Material Flow
Demand Pull
  • Demand Signaling Customer needs a way to signal
    (inform) the supplier of its need.
  • Customers demand starts a chain reaction
  • For withdrawals and replenishments of
    intermediate parts
  • EOQ-ROP system is a Pull system where ROP
    triggers production at the supplier and EOQ
    determines the quantity produced

32
10.4.2 Improving Information Material Flow
Demand Pull
  • Synchronized Pull When the delivery of parts
    are in sequence
  • Suppliers must have greater ability and
    capability to achieve a synchronized pull
    effectively

33
10.4.3 Improving Process Flexibility Batch-Size
Reduction
  • Each station must know HOW MUCH TO PRODUCE AT A
    TIME
  • Level Production where small quantities are
    produced frequently to mach customer demand
  • i.e., if demand is 10000 sedans and 5000 SUVs,
    the production would call for producing 2 sedans
    and then 1 SUV, and then repeat the sequence
  • Changeover Costs and Batch Reduction Goal of
    level production is reduction of changeover costs
    (fixed setup or transportation costs of each
    batch)
  • I.E. In auto production expensive parts like
    seats are produced in batches of one, wipers in
    larger batches
  • Study the Changeover process to use special
    tools to speed it up, customize some machines,
    keep some machines already set up.
  • Consider small-batch production

34
10.4.4 Quality at Source Defect Prevention
Early Detection
  • Defective flow units increase average flow time
    and cost!!!
  • WHY?
  • It necessitates inspection and rework!!!
  • Anticipate and then Compensate for the problem
  • Hold extra safety inventory in the buffer
  • This increases avg. flow time and cost
  • Plan and control Quality
  • Prevent defects for occurring in the first place
  • Detect and correct them as soon as they appear

35
10.4.4 Quality at Source Defect Prevention
Early Detection
  • Defect Prevention
  • Careful design of both product and process
  • Simplification standardization
  • Mistake-proofing (poka yoke)
  • Parts are designed to halt automatically when
    defective units are fed into them (parts are
    designed to minimize chances of incorrect
    assembly)
  • Defect Visibility
  • Early detection/corrections more effective
    economical

36
10.4.4 Quality at Source Defect Prevention
Early Detection
  • Defect visibility (contd)
  • Early detection helps tracing to the source
  • Contribution to better synchronization and lower
    costs
  • Early detection requires constant vigilance and
    monitoring!!
  • Decentralized Control
  • Employees must be empowered
  • with authority and the means to
  • identify correct problems at the local level

37
10.4.4 Quality at Source Defect Prevention
Early Detection
  • Decentralized Control (contd)
  • In typical plants, line workers dont feel the
    responsibility, motivation or security to point
    out problems.
  • BEST STRATEGIES OF LEAN OPERATIONS ARE
  • Preventing problems through better planning
  • Highlighting problems as soon as they occur
  • Delegating problem solving to the local level

38
10.4.5 Reducing Processing Variability
Standardization of Work Maintenance, and Safety
Capacity
  • Reduce Variability
  • Standardize work at each stage and specify it
    clearly
  • Advantages to Standardization
  • Reduces variability from changing personnel
  • Reduces variability from one production cycle to
    the next
  • Makes it easier to identify sources of waste that
    can be eliminated

39
10.4.5 Reducing Processing Variability
Standardization of Work Maintenance, and Safety
Capacity
  • Lean Operations try to
  • Minimize carrying safety inventory due to
    increased flow time
  • Maintain some safety capacity as production
    against variability
  • These could be extra machines, workers, overtime
  • These forms of safety capacity should be
    flexible so that it can be used as needed!!

40
10.4.6 Visibility of Performance
  • A company needs to see (measure) process
    performance from the customers perspective
  • I.E. Time per call
  • Measure Percentage of Customers that had a
    problem resolved with one call
  • Actual performance (along with expectations)
    should be visible at each work cell
  • Not for punishment, but to provide quick feedback
    for corrective action

41
10.4.7 Managing Human Resources Employee
Involvement
  • SYNCHRONIZATION WITHIN A PLANT REQUIRES
  • Cooperation
  • Contribution
  • Commitment
  • Elton Mayos Hawthorne Experiments at Western
    Electric showed that
  • Research has shown that workers involved in the
    decision-making process are better motivated and
    productive

42
10.4.7 Managing Human Resources Employee
Involvement
  • In Companies with Lean Operations
  • Workers are cross-trained to provide the company
    with flexible workers.
  • Workers are in work teams in cells and may
    perform certain managerial duties such as
    material ordering, hiring, scheduling
  • Great importance on recruiting and training of
    workers

43
10.4.8 Supplier Management Partnerships
  • Outsourcing Provides a flexible alternative to
    producing in-house
  • BUT- - - purchased materials account for a major
    portion of product cost and are a major source of
    quality problems!!
  • Lean approach
  • Choose only a few capable suppliers
  • Cultivate cooperative, long-term relationships

44
10.4.8 Supplier Management Partnerships
  • In Lean Operations
  • Suppliers are an extension of the plant
  • Processing without inventories or quality
    inspection
  • Synchronization requires defect-free material
  • Frequent deliveries, small batches
  • Suppliers process be able to produce small
    quantities on demand

45
10.4.8 Supplier Management Partnerships
  • YOU ARE TREATING THE SUPPLIERS AS PARTNERS

46
10.4.1 10.4.8 SUMMARY
  • Lean Operations aim to sustain continuous flow
    processing in an economical manner
  • Synchronize material and information flows
  • Increase flexibility
  • Reduce variability
  • Decrease processing costs

47
Chapter 10
  • Lean Operations
  • Process Synchronization and Improvement
  • Questions??
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