JIT and Lean Operations

Chapter 14

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You should be able to:LO 14.1 Explain the terms lean operations and JITLO 14.2 Describe the main characteristics of lean systemsLO 14.3 List the five principles of the way lean system functionLO 14.4 List some of the benefits and some of the risks of lean

operationsLO 14.5 Describe the Toyota Production System (TPS)LO 14.6 List the three goals of a lean system and explain its importance

of eachLO 14.7 List the eight wastes according to lean philosophyLO 14.8 Identify and briefly discuss the four building blocks of a lean

production systemLO 14.9 Describe key lean improvement toolsLO 14.10 Outline considerations for successful conversion from a

traditional system to a lean systemLO 14.11 Describe some of the obstacles to lean success

Chapter 14: Learning Objectives

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Lean operationA flexible system of operation that uses

considerably less resources than a traditional systemTend to achieve

Greater productivityLower costsShorter cycle timesHigher quality

Just-in-TimeA highly coordinated processing system in

which goods move through the system, and services are performed, just as they are needed

Lean Operations

LO 14.1

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A number of characteristics are commonly found in lean systems:Waste reductionContinuous improvementUse of teamsWork cellsVisual controlsHigh qualityMinimal inventoryOutput only to match demandQuick changeoversSmall lot sizesLean culture

Lean System Characteristics

LO 14.2

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Five principles embody the way lean systems function:1. Identify customer values2. Focus on processes that create value3. Eliminate waste to create “flow”4. Produce only according to customer demand5. Strive for perfection

Lean System Principles

LO 14.3

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Key BenefitsReduced wasteLower costsIncreased qualityReduced cycle timeIncreased flexibilityIncreased productivity

Critical RisksIncreased stress on workersFewer resources available if problems occurSupply chain disruptions can halt operations

Benefits & Risks of Lean Systems

LO 14.4

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Lean operations began as lean manufacturing, also known as JIT in the mid-1900s

Developed by Taiichi Ohno and Shigeo Ohno of Toyota Focus was on eliminating all waste from every aspect of

the processWaste is viewed as anything that interferes with, or

does not add value to, the process of producing automobiles

Lean Operations: The Beginning

LO 14.5

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Lean: Supporting GoalsThe degree to which lean’s ultimate goal is

achieved depends upon how well its supporting goals are achieved:1. Eliminate disruptions2. Make the system flexible3. Eliminate waste, especially excess inventory

LO 14.6

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WasteRepresents unproductive resourcesEight sources of waste in lean systems:

1. Excess inventory2. Overproduction3. Waiting time4. Unnecessary transporting5. Processing waste6. Inefficient work methods7. Product defects8. Underused people

Waste

LO 14.7

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Four elements of product design important for lean systems:1. Standard parts2. Modular design3. Highly capable systems with quality built in4. Concurrent engineering

Building Blocks: Product Design

LO 14.8

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Building Blocks: Personnel/OrganizationalFive personnel/organizational elements

that are important for lean systems:Workers as assetsCross-trained workersContinuous improvementCost accountingLeadership/project management

LO 14.8

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Seven elements of manufacturing planning and control (MPC) are particularly important for lean system:1. Level loading2. Pull systems3. Visual systems4. Limited work-in-process (WIP)5. Close vendor relationships6. Reduced transaction processing7. Preventive maintenance and housekeeping

Building Blocks: MPC

LO 14.8

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Value stream mappingA visual tool to systematically examine the

flows of materials and informationIts purpose is to help identify waste and

opportunities for improvementData collected:

TimesDistances traveledMistakesInefficient work methodsWaiting timesInformation flows

Lean Tools: Value Stream Mapping

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1. Make sure top management is committed and that they know what will be required

2. Decide which parts will need the most effort to convert

3. Obtain support and cooperation of workers

4. Begin by trying to reduce setup times while maintaining the current system

5. Gradually convert operations, begin at the end and work backwards

6. Convert suppliers to JIT

7. Prepare for obstacles

Transitioning to Lean Systems

LO 14.10

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1. Management may not be fully committed or willing to devote the necessary resources to conversion

2. Workers/management may not be cooperative

3. It can be difficult to change the organizational culture to one consistent with the lean philosophy

4. Suppliers may resist

Obstacles to Conversion

LO 14.11