JIT TPS and Lean Operations 16 2014 Pearson Education Inc 2014 Pearson Education Inc 16 1 Learning Objectives When you complete this chapter you should be able to 1 Define just in time TPS and lean operations 2 Define the seven wastes and the 5 Ss 3 Explain JIT partnerships 4 Determine optimal setup time 5 Define kanban 6 Compute the required number of kanbans 7 Explain the principles of the Toyota Production System 2014 Pearson Education Inc 16 2 TPS Elements 2014 Pearson Education Inc 16 3 JIT TPS Lean Operations Good production systems require that managers address three issues that are pervasive and to operations management and improve throughput 2014 Pearson Education Inc 16 4 Just In Time TPS and Lean Operations JIT is a philosophy of and forced via a focus on throughput and reduced inventory TPS emphasizes continuous respect for people and work practices Lean production supplies the customer with their exact wants when the customer wants it without waste 2014 Pearson Education Inc 16 5 Just In Time TPS and Lean Operations JIT emphasizes problem solving TPS emphasizes employee learning and in an assembly line environment Lean operations emphasize the customer 2014 Pearson Education Inc 16 6 Eliminate Waste Waste is anything that does not add from the customer point of view Storage inspection delay waiting in queues and defective products do not add value and are 100 2014 Pearson Education Inc 16 7 Ohno s Seven Wastes 2014 Pearson Education Inc 16 8 Eliminate Waste Other such as energy water and air are often wasted Efficient sustainable production inputs reduces waste Traditional housekeeping has been expanded to 2014 Pearson Education Inc 16 9 The 5 Ss when in doubt throw it out methods analysis tools clean daily remove variations from processes review work and recognize progress 2014 Pearson Education Inc 16 10 Remove Variability JIT systems require managers to reduce variability caused by both and factors Variability is any from the process Inventory variability Less variability results in less waste 2014 Pearson Education Inc 16 11 Sources of Variability 1 or inaccurate drawings or specifications 2 production processes resulting in incorrect quantities late or non conforming units 3 customer demands 2014 Pearson Education Inc 16 12 Improve Throughput The time it takes to move an order from receipt to delivery The time between the arrival of raw materials and the shipping of the finished order is called manufacturing cycle time A system increases throughput 2014 Pearson Education Inc 16 13 Improve Throughput By pulling material in small lots inventory cushions are removed exposing problems and emphasizing Manufacturing cycle time is Push systems dump orders on the downstream stations regardless of the need 2014 Pearson Education Inc 16 14 Just In Time JIT Powerful strategy for improving operations Materials arrive they are needed they are needed Identifying problems and driving out waste reduces costs and variability and improves throughput Requires a meaningful buyer supplier relationship 2014 Pearson Education Inc 16 15 JIT Partnerships JIT partnerships exist when a supplier and purchaser work together to remove waste and costs Four goals of JIT partnerships are Removal of activities Removal of in plant inventory Removal of in transit inventory quality and reliability 2014 Pearson Education Inc 16 16 Concerns of Suppliers ties to only one customer increases risk don t believe customers can create a smooth schedule time short lead times mean engineering or specification changes can create problems limited by capital budgets processes or technology sizes small lot sizes may transfer costs to suppliers 2014 Pearson Education Inc 16 17 Distance Reduction Large lots and long production lines with single purpose machinery are being replaced by smaller flexible cells Often for shorter paths and improved communication Often using concepts 2014 Pearson Education Inc 16 18 Increased Flexibility Cells designed to be rearranged as volume or designs change Applicable in office environments as well as production settings Facilitates both and improvement 2014 Pearson Education Inc 16 19 Impact on Employees Employees may be cross trained for and efficiency Improved communications facilitate the passing on of important information about the process With little or no inventory buffer is critical 2014 Pearson Education Inc 16 20 Reduced Space and Inventory With reduced space inventory must be in very small lots Units are always moving because there is no storage 2014 Pearson Education Inc 16 21 Reduce Inventory Reducing inventory uncovers the rocks Problems are Ultimately there will be virtually no inventory and no problems Inventory Shingo says 2014 Pearson Education Inc 16 22 Reduce Lot Sizes Ideal situation is to have lot sizes of one pulled from one process to the next Often not feasible Can use EOQ analysis to calculate desired setup time Two key changes necessary Improve material handling Reduce setup time 2014 Pearson Education Inc 16 23 Lot Size Example D Annual demand 400 000 units d Daily demand 400 000 250 1 600 per day p Daily production rate 4 000 units Q EOQ desired 400 H Holding cost 20 per unit S Setup cost to be determined Setup time 2 40 30 hour 0 08 hr 4 8 minutes 2014 Pearson Education Inc 16 24 Reduce Setup Costs High setup costs encourage large lot sizes Reducing setup costs reduces lot size and reduces average inventory Setup time can be reduced through prior to shutdown and changeover 2014 Pearson Education Inc 16 25 JIT Scheduling Schedules must be communicated and the organization schedules Process frequent small batches Freezing the schedule helps stability Signals used in a pull system 2014 Pearson Education Inc 16 26 Level Schedules Process frequent small batches rather than a few large batches Make and move small lots so the level schedule is Jelly bean the schedule closest to the due dates can improve performance 2014 Pearson Education Inc 16 27 Kanban Kanban is the Japanese word for card The card is an for A sequence of kanbans the next container of material to be produced material through the process Many different sorts of signals are used but the system is still called a kanban 2014 Pearson Education Inc 16 28 Kanban Material Parts Supplier Work cell Final assembly Finished goods Customer order Kanban Kanban Kanban 2014 Pearson Education Inc 16 29 More Kanban When the producer and user are not in visual contact a card can be used When the producer and