Title: Just-In-Time and Lean Production
1Chapter 15
- Just-In-Time and Lean Production
2 JIT In Services
- Competition on speed quality
- Multifunctional department store workers
- Work cells at fast-food restaurants
- Just-in-time publishing for textbooks - on demand
publishing a growing industry - Construction firms receiving material just as
needed
3What is JIT ?
- Producing only what is needed, when it is needed
- A philosophy
- An integrated management system
- JITs mandate Eliminate all waste
4Lean Operations Best Implementation is Toyota
Production System
- TPS is a production management system that aims
for the ideal through continuous improvement - Includes, but goes way beyond JIT. Pillars
- Synchronization
- Reduce transfer batch sizes
- Level load production
- Pull production control systems (vs. push)
Kanban - Quality at source
- Layout Cellular operations
- Continuous Improvement (Kaizen) through
visibility empowerment
....
5Toyotas waste elimination in Operations
- 1. Overproduction
- 2. Waiting
- 3. Inessential handling
- 4. Non-value adding processing
- 5. Inventory in excess of immediate needs
- 6. Inessential motion
- 7. Correction necessitated by defects
6Waste in Operations
7Waste in Operations
8Waste in Operations
9Flexible Resources
- Multifunctional workers
- General purpose machines
- Study operators improve operations
10The Push System
- Pre-planned issues of supplies/merchandise
regardless of customer demand criteria - Creates excess and shortages
- not efficient over the long run
11The 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
12Kanban Production Control System
- Kanban card indicates standard quantity of
production - Derived from two-bin inventory system
- Kanban maintains discipline of pull production
- Production kanban authorizes production
- Withdrawal kanban authorizes movement of goods
13A Sample Kanban
14Types of Kanbans
- Bin Kanban - when bin is empty replenish
- Kanban Square
- Marked area designed to hold items
- Signal Kanban
- Triangular kanban used to signal production at
the previous workstation - Material Kanban
- Used to order material in advance of a process
- Supplier Kanbans
- Rotate between the factory and suppliers
15Components 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
16Common Techniques for Reducing Setup Time
- Preset Buttons/settings
- Quick fasteners
- Reduce tool requirements
- Locator pins
- Guides to prevent misalignment
- Standardization
- Easier movement
17Uniform Production
- Results from smoothing production requirements
- Kanban systems can handle /- 10 demand changes
- Smooth demand across planning horizon
- Mixed-model assembly steadies component production
18Quality at the Source
- Jidoka is authority to stop production line
- Andon lights signal quality problems
- Undercapacity scheduling allows for planning,
problem solving maintenance - Visual control makes problems visible
- Poka-yoke prevents defects (mistake proof the
system)
19Kaizen
- Continuous improvement
- Requires total employment involvement
- Essence of JIT is willingness of workers to
- Spot quality problems
- Halt production when necessary
- Generate ideas for improvement
- Analyze problems
- Perform different functions
20Goals of JIT
- Reduced inventory - where?
- Improved quality
- Lower costs
- Reduced space requirements
- Shorter lead time
- Increased productivity
- Greater flexibility
- Better relations with suppliers
- Simplified scheduling and control activities
- Increased capacity
- Better use of human resources
- More product variety
- Continuous Process Improvement
21JIT Implementation
- Use JIT to finely tune an operating system
- Somewhat different in USA than Japan
- JIT is still evolving
- JIT as an inventory reduction program isnt for
everyone - JIT as a CPI program is! - Some systems need Just-in-Case inventory
22Chapter 14
23Enterprise Resource Planning (ERP)
- Organizes and manages a companys business
processes by sharing information across
functional areas - Connects with supply-chain and customer
management applications - Largest ERP provider SAP
24ERP Modules
25ERP Implementation
- First step is to analyze business processes
- Which processes have the biggest impact on
customer relations? - Which process would benefit the most from
integration? - Which processes should be standardized?
26Customer Relationship Management (CRM)
- Plans and executes business processes that
involve customer interaction - Changes focus from managing products to managing
customers - Point-of-sale data is analyzed for patterns used
to predict future behavior
27Supply Chain Management
- Supply chain planning
- Supply chain execution
- Supplier relationships
- Distinctions between ERP and SCM are becoming
increasingly blurred
28ERP and MRP
- MRP (material requirements planning) was the
precursor to ERP - Primarily a production planning and control
system - MRP evolved to MRP II (manufacturing resource
planning) - ERP and ERP II continue to extend the links
through all business processes
29Material Requirements Planning
- Computerized inventory control production
planning system - Schedules component items when they are needed -
no earlier and no later
30When to Use MRP
- Dependent and discrete items
- Complex products
- Job shop production
- Assemble-to-order environments
31Material Requirements Planning
32Master Production Schedule
- Drives MRP process with a schedule of finished
products - Quantities represent production not demand
- Quantities may consist of a combination of
customer orders demand forecasts - Quantities represent what needs to be produced,
not what can be produced
33Basic MRP Processes
- Exploding the bill of material
- Netting out inventory
- Lot sizing
- Time-phasing requirements
34MRP Outputs
- Planned orders
- Work orders
- Purchase orders
- Changes to previous plans or existing schedules
- Action notices
- Rescheduling notices
35Capacity Requirements Planning (CRP)
- Computerized system that projects load from
material plan - Creates load profile
- Identifies underloads and overloads
36Capacity Terms
- Load profile
- Compares released and planned orders with work
center capacity - Capacity
- Productive capability includes utilization and
efficiency - Utilization
- of available working time spent working
37More Capacity Terms
- Efficiency how well the machine or worker
performs compared to a standard output - Load
- The standard hours of work assigned to a facility
- Load percent
- The ratio of load to capacityLoad
(load/capacity)x100
38Capacity Requirements Planning
39Initial Load Profile
40Remedies for Underloads
- Acquire more work
- Pull work ahead that is scheduled for later time
periods - Reduce normal capacity
41Remedies for Overloads
- Eliminate unnecessary requirements
- Reroute jobs to alternative machines or work
centers - Split lots between two or more machines
- Increase normal capacity
- Subcontract
- Increase the efficiency of the operation
- Push work back to later time periods
- Revise master schedule
42Adjusted Load Profile
43Chapter 16
44Scheduling
- Specifies when labor, equipment, facilities are
needed to produce a product or provide a service - Last stage of planning before production occurs
45Scheduling by Process Type
- Process Industry
- Linear programming
- EOQ with noninstantaneous replenishment
- Mass Production
- Assembly line balancing
- Project
- Project -scheduling techniques (PERT, CPM)
46Objectives in Scheduling
- Meet customer due dates
- Minimize job lateness
- Minimize response time
- Minimize completion time
- Minimize time in the system
- Minimize overtime
- Maximize machine or labor utilization
- Minimize idle time
- Minimize work-in-process inventory
- Efficiency
47Shop Floor Control
Scheduling and monitoring day to day production
of a job
- Loading - Check availability of material,
machines labor - Sequencing - Release work orders to shop issue
dispatch lists for individual machines - Monitoring - Maintain progress reports on each
job until it is complete
48Loading
- Allocate work to machines (resources)
- Perform work on most efficient resources
- Use assignment method of linear programming to
determine allocation
49Sequencing
- Prioritize jobs assigned to a resource
- If no order specified use first-come first-served
(FCFS) - Many other sequencing rules exist
- Each attempts to achieve to an objective
50Sequencing Rules
- FCFS - first-come, first-served
- LCFS - last come, first served
- DDATE - earliest due date
- CUSTPR - highest customer priority
- SETUP - similar required setups
- SLACK - smallest slack
- CR - critical ratio
- SPT - shortest processing time
- LPT - longest processing time
51Critical Ratio Rule
Ties scheduling to Gantt Chart or PERT/CPM and
project crashing
52Sequencing Jobs Through Many Machines/Processes
- Facility is dynamic, new jobs added
- Develop global sequencing rules
- First-in-system, first-served (FISFS)
- Work-in-next-queue (WINQ)
- Fewest remaining operations (NOPN)
- Slack per remaining operation (S/OPN)
- Remaining work (RWK)
- Study system via simulation
53Monitoring
- Gantt Chart
- Shows both planned and completed activities
against a time scale - Input / Output Control
- Monitors the input and output from each work
center
54Advanced Planning and Scheduling Systems
- Infinite - assumes infinite capacity
- Loads without regard to capacity
- Then levels the load and sequences jobs
- Finite - assumes finite (limited) capacity
- Sequences jobs as part of the loading decision
- Resources are never loaded beyond capacity
55Advanced Planning and Scheduling Systems
- Advanced planning and scheduling (APS)
- Add-ins to ERP systems
- Constraint-based programming (CBP) identifies a
solution space and evaluates alternatives - Genetic algorithms based on natural selection
properties of genetics - Manufacturing execution system (MES) monitors
status, usage, availability, quality
56Theory of Constraints
- Not all resources are used evenly
- Concentrate on the bottleneck resource
- Synchronize flow through the bottleneck
- Use process and transfer batch sizes to move
product through facility
57Theory of Constraints
- What to Change
- What to Change to
- How to cause the change
58Quality is a measure of goodness that is
inherent to a product or service. Bottom line
perspective has to be from the Customer fitness
for use
59What Is Quality?
- The degree of excellence of a thing (Websters
Dictionary) - The totality of features and characteristics
that satisfy needs (ASQ) - Fitness for use
- Quality of design
60Quality
- Quality Management not owned by any functional
area cross functional - Measure of goodness that is inherent to a product
or service
61FedEx and Quality
- Digitally Assisted Dispatch System communicate
with 30K couriers - 1-10-100 rule ? 1 if caught and fixed as
soon as it occurs, it costs a certain amount of
time and money to fix ? 10 if caught later
in different department or location as much as
10X cost ? 100 if mistake is caught by
the customer as much as 100X to fix
62Product Quality Dimensions
- Product Based found in the product attributes
- User Based if customer satisfied
- Manufacturing Based conform to specs
- Value Based perceived as providing good value
for the price
63Dimensions of Quality (Garvin)
- Performance
- Basic operating characteristics
- Features
- Extra items added to basic features
- Reliability
- Probability product will operate over time
64Dimensions of Quality (Garvin)
- Conformance
- Meeting pre-established standards
- Durability
- Life span before replacement
- Serviceability
- Ease of getting repairs, speed competence of
repairs
65Dimensions of Quality (Garvin)
- Aesthetics
- Look, feel, sound, smell or taste
- Safety
- Freedom from injury or harm
- Other perceptions
- Subjective perceptions based on brand name,
advertising, etc
66Service Quality
- Time Timeliness
- Customer waiting time, completed on time
- Completeness
- Customer gets all they asked for
- Courtesy
- Treatment by employees
67Service Quality
- Consistency
- Same level of service for all customers
- Accessibility Convenience
- Ease of obtaining service
- Accuracy
- Performed right every time
- Responsiveness
- Reactions to unusual situations
68Quality of Conformance
- Ensuring product or service produced according to
design - Depends on
- Design of production process
- Performance of machinery
- Materials
- Training
69Quality Philosophers
- Walter Shewhart Statistical Process Control
- W. Edwards Deming
- Joseph Juran strategic and planning based
- Armand Fiegenbaum total quality control entire
business must be involved in quality improvement
70Demings 14 Points
- Create constancy of purpose
- Adopt philosophy of prevention
- Cease mass inspection
- Select a few suppliers based on quality
- Constantly improve system and workers
- Institute worker training
71Demings 14 Points
- Instill leadership among supervisors
- Eliminate fear among employees
- Eliminate barriers between departments
- Eliminate slogans
- Remove numerical quotas
72Demings 14 Points
- Enhance worker pride
- Institute vigorous training and education
programs - Develop a commitment from top management to
implement these 13 points
73The Deming Wheel(or PDCA Cycle)
Also known as the Shewart Cycle
74Six Sigma
- Quality management program that measures and
improves the operational performance of a company
by identifying and correcting defects in the
companys processes and products
75Six SigmaStarted By Motorola
- Define
- Measure
- Analyze
- Improve
- Control
Made Famous by General Electric 40 of GE
executives bonuses tied to 6 sigma implementation
76Malcolm Baldrige National Quality Award
- Category 3 determine requirements,
expectations, preferences of customers and
markets - Category 4 what is important to the customer
and the company how does company improve
77Total Quality Management
- Customer defined quality
- Top management leadership
- Quality as a strategic issue
- All employees responsible for quality
- Continuous improvement
- Shared problem solving
- Statistical quality control
- Training education for all employees
78Strategic Implications of TQM
- Quality is key to effective strategy
- Clear strategic goal, vision, mission
- High quality goals
- Operational plans policies
- Feedback mechanism
- Strong leadership
79TQM in Service Companies
- Inputs similar to manufacturing
- Processes outputs are different
- Services tend to be labor intensive
- Quality measurement is harder
- Timeliness is important measure
- TQM principles apply to services
80Cost of Quality
- Cost of achieving good quality
- Prevention
- Planning, Product design, Process, Training,
Information - Appraisal
- Inspection and testing, Test equipment, Operator
81Cost of Quality
- Cost of poor quality
- Internal failure costs
- Scrap, Rework, Process failure, Process downtime,
Price-downgrading - External failure costs
- Customer complaints, Product return, Warranty,
Product liability, Lost sales
82Employees and Quality Improvement
- Employee involvement
- Quality circles
- Process improvement teams
- Employee suggestions
83Cause-and-Effect Diagram
Also known as Ishikawa Diagram or Fish Bone
84Hot House Quality
- Lots of Hoopla and no follow through
85ISO 90002000
- Customer focus
- Leadership
- Involvement of the people
- Process approach
- Systems approach to management
- Continual process improvement GAO
- Factual approach to decision making
- Mutually beneficial supplier relationships
86Implications Of ISO 9000
- Truly international in scope
- Certification required by many foreign firms
- U.S. firms export more than 150 billion
annually to Europe - Adopted by U.S. Navy, DuPont, 3M, ATT, and
others
87ISO Accreditation
- European registration
- 3rd party registrar assesses quality program
- European Conformity (CE) mark authorized
- United States 3rd party registrars
- American National Standards Institute (ANSI)
- American Society for Quality (ASQ)
- Registrar Accreditation Board (RAB)
88Upcoming
- Final Exam
- Harley Paper
- Presentations