Chapter 13

Lean Systems

APICS Definition of JIT

A philosophy of manufacturing based
on planned elimination of waste &
continuous improvement of
productivity. ...

APICS Definition of JIT

The primary elements of just-in-time are to:
Have only required inventory when needed,
Improve quality to zero defects,
Reduce lead times by reducing setup times,
queue lengths, & lot sizes,
Incrementally revise operations themselves,
and
Accomplish these things at minimum cost.

APICS Definition of Lean

Manufacturing
A philosophy of production that
emphasizes minimization of amount of all
resources (including time) used in various
activities of enterprise. It involves:
Identifying & eliminating non-value-adding
activities,
Employing teams of multi-skilled workers,
Using highly flexible, automated machines

Calculate Number of Containers

d ( w p )(1 )
k
c
where:
k = number containers
d = expected daily demand
w = avg waiting + material handling times
p = avg processing time
c = number parts in container
= policy variable

Traditional View of Manufacturing

Key objective was to fully utilize capacity

so that more products were produced by
fewer workers & machines.
How? With large queues of in-process
inventory waiting at work centers.
Workers & machines never had to wait
for product to work on, so capacity
utilization was high & production costs
were low.
Result: products spent most of their time
in manufacturing just waiting

JIT Manufacturing Philosophy

Main objective of JIT manufacturing is
to reduce manufacturing lead times
This is primarily achieved by drastic
reductions in work-in-process (WIP)
The result is a smooth, uninterrupted
flow of small lots of products throughout
production

Characteristics of Lean Systems:

Just-in-Time
Pull method of materials flow
Consistently high quality
Small lot sizes
Uniform workstation loads
Standardized components and work methods
Close supplier ties
Flexible workforce
Line flows
Automated production
Preventive maintenance

Pull vs. Push System

Pushproduction of item begins before
customer demand
Pullproduction of item is triggered by
customer demand

Consistently High Quality

Eliminate scrap & rework to achieve
uniform product flow
Quality at the sourceworkers serve as
their own quality inspector
Supplier quality must be 3 or better
Stopping assembly line probably means
missed deliveries

Small Lot Sizes

As small as possible to eliminate
carrying inventory
Small lots cut lead times
Small lots help achieve level workload
But, small lots
Increase setups
Drive shorter setup times

Reducing Inventories
through Setup Time Reduction

Central to JIT is reduction of production lot

sizes so inventory levels are reduced
Smaller lot sizes result in more machine
setups
More machine setups, if they are lengthy,
result in:
Increased production costs
Lost capacity (idle machines during setup)

Answer is:
REDUCE MACHINE SETUP TIMES

Uniform Workstation Loads

Same quantity and type products each
day
Difficult to impossible in a job shop

Mixed-model assembly
Produce a mix of products in small lots

Working Toward Repetitive

Manufacturing
Reduce Setup Times & Lot Sizes to Reduce
Inventories
Change Factory Layout to Allow Streamlined
Flows
Convert Process-Focused Layout to Cellular
Manufacturing (CM) Centers
Install Flexible Manufacturing Systems (FMS)
..more

Working Toward Repetitive

Manufacturing
Standardize Parts Designs
Train Workers for Several Jobs
Implement Preventive Maintenance (PM)
Programs
Install Effective Quality Control Programs
Develop an Effective Subcontractor
Network

Standardized Components
& Work Methods
Productivity tends to increase with
increased repetition
Standardization of components reduces
raw material inventory requirements

Closer Supplier Ties

Close relationship required
Frequent delivery often directly to the
assembly line
Consistently high quality
JIT manufacturers usually seek:
Local suppliers
Reduced inventory in suppliers warehouse also
Long-term partnerships with suppliers

Flexible Workforce
Workers can perform multiple jobs
Workers rotate to other jobs based on
vacations, relieve bottlenecks, or even
relieve boredom

Line Flows
Can reduce setups
One worker multiple machines (OWMM)
One worker may follow product through
entire manufacturing operation

Automated Production
Important part of JIT
However, for some tasks humans
consistently outperform machines

Preventive Maintenance
Scheduled downtime to maintain
equipment & reduce unscheduled
maintenance
Use skilled technicians to maintain
high-tech machines

Changes Required for JIT

JIT requires certain changes to factory & way
it is managed:
Stabilize production schedules
Make factories more focused
Increase work center capacities
Improve product quality
Cross-train workers
Reduce equipment breakdowns
Develop long-term supplier relations

Eliminating Waste in Manufacturing

Make only what is needed now.
Reduce waiting by coordinating flows & balancing
loads.
Reduce or eliminate material handling & shipping.
Eliminate unneeded production steps.
Reduce setup times & increase production rates.
Eliminate unnecessary human motions.
Eliminate defects & inspection.

People Make JIT Work

JIT has strong element of training &
involvement of workers.
Culture of mutual trust & teamwork must be
developed.
Attitude of loyalty to team & self-discipline must
be developed.
Another crucial element of jit is empowerment
of workers, giving them authority to solve
production problems.

Elements of JIT Purchasing

Cooperative & long-term relationship between
customer & supplier.
Supplier selection based not only on price, but also
delivery schedules, product quality, & mutual trust.
Suppliers usually located near factory.
Deliveries directly to production line.
Parts delivered in small, standard-size containers
with minimum of paperwork & in exact quantities.
Delivered material is of near-perfect quality.

Benefits of JIT
Inventory levels drastically reduced:
Frees up working capital for other projects
Less space is needed
Customer responsiveness increases

Total product cycle time drops

Product quality is improved
Scrap & rework costs go down
Forces managers to fix problems & eliminate
waste .... or it wont work!

Uncovering Production Problems

We Must Lower Water Level!

Production
Problems

Machine
Breakdowns

In-Process
Inventory

Workload
Imbalances
Worker
Absenteeism

Out-of-Spec
Materials

Material
Shortages

Quality
Quality
Problems
Problems

Lot Size and Cycle Inventory

100
Average cycle
inventory

On-hand inventory

75

Lot size = 100

50

25

0
5

10

15
Time (hours)

20

25

30

Lot Size and Cycle Inventory

100
Average cycle
inventory

On-hand inventory

75

Lot size = 100

50

25

0
5

10

15
Time (hours)

20

25

30

Lot Size and Cycle Inventory

100
Average cycle
inventory

On-hand inventory

75

50

Lot size = 100

25

Lot size = 50

0
5

10

15
Time (hours)

20

25

30

Lot Size and Cycle Inventory

100
Average cycle
inventory

On-hand inventory

75

50

Lot size = 100

25

Lot size = 50

0
5

10

15
Time (hours)

20

25

30

Lot Size and Cycle Inventory

100
Average cycle
inventory

On-hand inventory

75

50

Lot size = 100

25

Lot size = 50

0
5

10

15
Time (hours)

20

25

30

Kanban Production Control

At core of JIT manufacturing at Toyota is
kanban, an amazingly simple system of
planning & controlling production.
Kanban, in Japanese, means card or
marquee.
Kanban is means of signaling to upstream
workstation that downstream workstation is
ready for upstream workstation to produce
another batch of parts.

Kanbans & Other Signals

There are two types of kanban cards:
A conveyance card (c-kanban)
A production card (p-kanban)

Signals come in many forms other than

cards, including:
An empty crate
An empty designated location on floor

Conveyance Kanban
Conveyance Kanban Card
Part number to produce: M471-36

Part description: Valve Housing

Lot size needed: 40

Container type: RED Crate

Card number: 2 of 5

Retrieval storage location: NW53D

From work center: 22

To work center: 35

Production Kanban
Production Kanban Card
Part number to produce: M471-36

Part description: Valve Housing

Lot size needed: 40

Container type: RED crate

Card number: 4 of 5

Completed storage location: NW53D

From work center: 22

To work center: 35

Materials required:
Material no. 744B
Part no. B238-5

Storage location: NW48C

Storage location: NW47B

Flow of Kanban Cards &

Containers
P-Kanban &
Empty Container

C-Kanban &
Empty Container

In-Process
Storage
Downstream
WC #2

Upstream
WC #1
Full Container &
P-Kanban

Parts Flow

Full Container &

C-Kanban

Containers in a Kanban System

Kanban is a simple idea of replacement of

containers of parts, one at a time
Containers are reserved for specific parts,
are purposely kept small, & always contain
same standard number of parts for each
part number
At Toyota containers must not hold more
than about 10% of days requirements.
There is minimum of two containers for
each part number, one at upstream
producing work center & one at
downstream using work center

Single-Card Kanban System

Receiving post

Kanban card for

product 1
Kanban card for
product 2

Storage
area

Empty containers
Assembly line 1
O2

O1

Fabrication
cell

O2

O3

Assembly line 2
Full containers

Single-Card Kanban System

Receiving post

Kanban card for

product 1
Kanban card for
product 2

Storage
area

Empty containers
Assembly line 1
O2

O1

Fabrication
cell

O2

O3

Assembly line 2
Full containers

Single-Card Kanban System

Receiving post

Kanban card for

product 1
Kanban card for
product 2

Storage
area

Empty containers
Assembly line 1
O2

O1

Fabrication
cell

O2

O3

Assembly line 2
Full containers

Single-Card Kanban System

Receiving post

Kanban card for

product 1
Kanban card for
product 2

Storage
area

Empty containers
Assembly line 1
O2

O1

Fabrication
cell

O2

O3

Assembly line 2
Full containers

Single-Card Kanban System

Receiving post

Kanban card for

product 1
Kanban card for
product 2

Storage
area

Empty containers
Assembly line 1
O2

O1

Fabrication
cell

O2

O3

Assembly line 2
Full containers

Single-Card Kanban System

Receiving post

Kanban card for

product 1
Kanban card for
product 2

Storage
area

Empty containers
Assembly line 1
O2

O1

Fabrication
cell

O2

O3

Assembly line 2
Full containers

Single-Card Kanban System

Receiving post

Kanban card for

product 1
Kanban card for
product 2

Storage
area

Empty containers
Assembly line 1
O2

O1

Fabrication
cell

O2

O3

Assembly line 2
Full containers

Single-Card Kanban System

Lot Quantity:

Location:

Part Number:

WS 83

Aisle 5
Bin 47

1234567Z

fabrication (pull system)

Containers cannot be moved
without a kanban
Containers should contain the
same number of parts
Only good parts are passed along
Production should not exceed
authorization

KANBAN

Supplier:

WS 116

Customer:

Each container must have a card

Assembly always withdraws from

Lean Systems in Services

Consistently high quality

Uniform facility loads
Standardized work methods
Close supplier ties
Flexible workforce
Automation
Preventive maintenance
Pull method of materials flow
Line flows

Operational Benefits

Reduce space requirements

Reduce inventory investment
Reduce lead times
Increase labor productivity
Increase equipment utilization
Reduce paperwork and simple

planning systems
Valid priorities for scheduling
Workforce participation
Increase product quality

Implementation Issues

Organizational considerations

Human cost of JIT systems

Cooperation and trust
Reward systems and labor
classifications

Process considerations
Inventory and scheduling

MPS stability
Setups
Purchasing and logistics