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UT Knoxville BUAD 341 - Principles of Lean Operations
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BA341 9th Edition Lecture 9Outline of Last Lecture I. Layout Strategies II. Fixed-Position (project) LayoutIII. Process-oriented (Job Shop) LayoutIV. Cellular Layout (Work Cell)V. Repetitive and Product-oriented layoutVI. Continuous Process LayoutVII. Product-Process MatrixOutline of Current LectureVIII. HistoryIX. The cost of variety X. The lean enterpriseXI. Lean ProductionXII. Process FlowXIII. Systems for Managing FlowXIV.Process Performance MetricsXV. Little’s Law Current LecturePrinciples of Lean OperationsStarting with some history:- In 1955 Japan produced less than 70,000 vehicles, U.S. made 9.2 million that year- In 1980 Japan’s production exceeded 11 millions, while U.S. achieved just over 8 millionThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- The development of the lean (JIT) manufacturing techniques had an important role in Japan’s development - The Toyota Production System (TPS) was inspired by Henry Ford’s assembly line- Henry Ford’s system created flow from ore to final product:o One companyo One locationo One producto Long life cycleso Unlimited demand- Ford did not use forecasting and only had one model- In the 1920’s General Motors replace Ford as the worlds largest automobile manufacturer by giving the customer a choice: - Different product lines: Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac- Different colors, body styles and options - Yearly model changes- GM was able to accommodate this varietyThe cost of variety:- Think of how General Motor’s differed from Ford in terms of:o Schedulingo Factory Layouto Organizationo Accounting- Batch production sacrifices flow. For example, an aluminum cola can from ore to customer:o passes through eight firms, fourteen storage points o is picked up and put down 30 timeso 24% of raw material is scrapped somewhere along the wayo requires 319 days to do 3 hours of workNext step in history: The Lean Enterprise- Taiichi Ohno, the father of TPS and lean production principles, combined Ford’s assemblyline idea and supermarket operations- The goal is to eliminate waste and to produce only what’s needed on any given day, rather than in anticipation of demando Produce the right part in the right place at the right time (in other words, “Just in Time” – JIT)Lean Production is:- A set of integrated activities designed too Achieve high-volume production, whileo Minimizing waste in the production process, e.g., Reduce inventories of raw materials, WIP and finished products (overproduction) Reduce defects and rework due to poor quality Reduce waiting due to resource or part unavailability Reduce unnecessary transportation and motion (when working on a unit, only do the needed movement, no more) Reduce overprocessing – work that doesn’t add valueProcess Flow:- Represents the logical sequence of steps (transform inputs into outputs) needed to deliver the product/service to the customer - It may include the passing of information or materials from one step to the nextTriangles are the waiting line; squares are the steps in production; arrows is the moving unitSystems for Managing Flow- Make-to-Stock (Push) - output is pushed to the next station as it is completed (based on Demand Forecast)- Make-to-Order (Pull) - a workstation pulls output from the preceding station as needed (based on Demand- fixed inventory)Drum-Buffer-Rope (DBR)- in the Book the Goal the boy scout hike went to the beat of the drum- TOC’s approach to controlling flowo Drum – represents the system bottleneck, gives the beat for the whole system o Buffer – a protection for the drum, measured in time – all resources that feed thebottleneck must be given enough time to overcome any delays o Rope – release materials only when needed Prevents early release of materials Prevents accumulation of WIPProcess Performance Metrics- Throughput Time (THt) or Turn Around Time (TAT) or Lead Time or Cycle Timeo Total time required to complete one unit of a product or service- “The longer an article is in the process of manufacture and the more it is moved about, the greater its ultimate cost.” Henry Ford, 1926- Shorter THt -> Less Cost -> More ProfitWhat Is considered WIP (Work-in-Process)?- Items (Parts) in process- Items (Parts) waiting to be processedLittle’s Law- WIP = THt x THr, whereo WIP – represents amount of work in processo THt – is the throughput time (i.e., time in system)o THr – is the throughput rate  Defines the output rate that a process is expected to produce over a period of time (units/time) Represents a measure of process capacity Equals the inverse of the process time of a


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UT Knoxville BUAD 341 - Principles of Lean Operations

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