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Lean Production and the Just-in-Time Philosophy

Lean Production and the Just-in-Time Philosophy. Lean Production. Elimination of All Waste – Waste is Anything that Does Not Add Value to Product. Continuous Improvement of Productivity. Seven Sources of Waste (Toyota). Process – Minimize Scrap, Lot Sizes, Costs

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Lean Production and the Just-in-Time Philosophy

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  1. Lean Production and the Just-in-Time Philosophy

  2. Lean Production • Elimination of All Waste – Waste is Anything that Does Not Add Value to Product. • Continuous Improvement of Productivity

  3. Seven Sources of Waste (Toyota) • Process – Minimize Scrap, Lot Sizes, Costs • Methods – Minimize Wasted Motions & Effort • Movement – Minimize Moving & Storing Parts • Defects – Eliminate • Wait Time – Minimize • Overproduction – Eliminate • Inventory – Eliminate or Reduce

  4. Additional Ways to Eliminate Waste • Limited Product Range • Standardization of Components • Poke-Yoke (Fail Safe) • Kaizen • Takt Time • Value Stream Mapping

  5. Value Stream Mapping Example

  6. Just-In-Time (JIT) Is Pursuit of • Zero Inventories • Zero Transactions • Zero “Disturbances” – Routine Execution of Schedule • Total Quality Management (TQM)

  7. How Does JIT Minimize Inventories? 1. Lot-Size Stocks – Allows Routine Batching of Orders and Quantity Discounts • JIT Reduces Set Up and Order Costs by Automation, Group Technology, Contracts. • Lot Sizes and Inventory Are Reduced. • Vendor Contracts Allow Firm to Receive Quantity Discounts without Inventory.

  8. How Does JIT Minimize Inventories? Lot-Size Stocks • Suppose Demand = 5, Holding Cost = $2, and Set Up = $5 Lot Size Holding Set Up Total 1 $1.00 $25.00 $26.00 5* 5.00 5.00 10.00 10 10.00 2.50 12.50 • Q* = 5 and Cost = $10.00

  9. How Does JIT Minimize Inventories? Lot-Size Stocks • Suppose Demand = 5, Holding Cost = $2, and Set Up = $.20 Lot Size Holding Set Up Total 1* $1.00 $1.00 $2.00 5 5.00 0.20 5.20 10 10.00 0.10 10.10 • Q* = 1 and Cost = $2.00

  10. How Does JIT Minimize Inventories? 2. Safety (Buffer) Stocks – Extra Inventory Set Aside for Uncertain Demand or Problems. • JIT Advocates Customer Contracts. • JIT Seeks to Eliminate Problems through Redundancy and Flexible Work Force.

  11. How Does JIT Minimize Inventories? 3. Anticipation (Seasonal)Stocks – Allows Anticipation of Seasonal Surges in Demand. • JIT Advocates Chase Production Planning Strategy. • JIT Reduces Change in Production Costs (Setup, Hiring, Changeover).

  12. How Does JIT Minimize Inventories? 4. TransportationStocks – Inventory in Transit from One Point to Another. • JIT Advocates Reduced Distances between Transit Points.

  13. JIT and Product Design • Quality at the Source • Standard and Modular Parts • Reducing “Real” Levels – Bill of Materials • Design for Cellular Manufacturing

  14. Work Cell Example

  15. Work Cell Example

  16. JIT and Process Design • Setup Time Reduction – Job Shops Become More Like Assembly Lines. • Production Flexibility • Cellular Manufacturing • Process Inventory and Throughput Time Reduction

  17. JIT and Job Design • Skilled and Motivated Work Force • Continual Learning and Improvement • Cross Training • Worker Flexibility • Surge Capacity Must Be Available

  18. JIT Ratio Analysis • Lead Time to Work Content Production Lead Time / Work Content  5 • Process Speed to Sales Rate (Takt Time) Process Speed / Sales Rate or Use  5 • Pieces to Work Stations or Operators Number of Pieces / Number of Stations  5

  19. Kanban Systems Single-Card • One Card per Item, Lot, or Container • Cards in Rack Imply Production on Part • Cards Indicating Assemble Part Can Be Used to Trigger Ordering More Parts

  20. Kanban Systems Two-Card • First Card Is Transport or Withdrawal or Conveyance Card – Placed in Stock of Exiting Part, Authorizes Replacement • Second Card Is Production Card – Placed in Work Center Box to Authorize Production

  21. Kanban Systems

  22. Use of Two-Card Kanban

  23. Kanban Systems • Each Container – Only One Kanban • No Partials – Each Container Filled, Empty, or Being Filled or Empty • Production or Movement Must be Authorized by Kanban

  24. Number of Kanban Containers N = DT(1+X)/C N = Number of Containers (or Cards) D = Demand or Usage Rate T = Mean Waiting or Lead Time for Part Replenishment + Mean Production Time Using Parts X = Inefficiency (1- Efficiency) (0 is Best) C = Capacity of Standard Container

  25. Number of Kanban Containers Example: D = 100 Parts per Hour T = 90 Minutes (1.5 Hours) X = 0.1 C = 84 Parts N = (100)(1.5)(1.1)/84 = 1.96 ≈ 2

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