Bcure.: Titbett and Srltlen

Introduction examines an IS or (Jln. It Is

a method of "' .... ''' .. '''1,.''' .. '''' n.",nl'"fI .. ,n and control. Although much of the on

planníng and control issues, in the 'lean' concept has much wider impllcations tor improving

in the ideas behind operations much of

principies, which once were a radical from traditional operations have

now themselves orthodox. In chapter the

for the (and sometimes services) only when they are needed

internal or external customers?' Figure 15.1 places lean operations and JIT in the overall model 01

operations management.

15.1 This chapter covers lean operations and just~in~time

r",,,,,..'t"'''15 Lean operatíons and JIT

What ¡s the lean approach and how ¡s It different from traditional operations practice?

What are the main elements the lean philosophy?

Wha.t are the techniques 01 JIT?

How can JIT be use,d for planning and control?

Can JIT be used in """"'U!I""," operations?

Il Ca.n JIT and MRP coexist?

Seen as the leading practitioner and the main of the lean approach, the Toyota Motor Company has

aU Its processes simultaneously to give high-quality, fast throughput and exceptional productivíty. [t has done this by developlng a set of that has what We now cal! lean or just-in-time but which Toyota caUs the Toyota Production The TPS has two themes, in-time' and 'jidoka'. Just-in-time is defined as the rapid and coordinated movement of throughout the

and network to meet customer

j ;;tl

I ~ demand. li is operationa[¡zed by means of heijunka

(Ievelllng and smoothing tMe ftow of kanban ---------'~ (>:ínll1::lJlíl1l1 to the preceding process that more are needed) and nagare (Iaying out processes to achieve smootMer flow 01 parts the process). Jidoka is described as 'humanizing tM interface between and machine', Toyota's phifosophy ls that the machíne is there to serve the purpose, The operator should be 113ft free to exercise his or her íUc!ClAfnAflt Jidoka ls by means of fai!-safeing (or machine jidoka), Ilne-stop authority (or human jidoka) and visual control status of production processes and vísíbility of process

Toyota believes that both just-In-time and jidoka should be applied ruthlessly to the eliminatíon of waste, where waste is defined as 'anythlng other than the mínimum amount of equípment, items, parts and workers that are

"'''''''V'U''''¡y essentíal to production'. Cho identified seven types 01 waste that must be ellminated rrom all processes. They are waste from over productíon, waste from waiting time, transportatíon waste, inventory waste, waste, waste of motion and waste from product defects. this, authorlties on Toyota ciaím that Its strength líes in understanding the differences between the tools and used with

Toyota operations and the overall philosophy of its approach to lean synchronization. This ls what some have cailed the ,:¡r"",,,,r,,,,,f ""r'",rlrw of the production system, 'namely,

that activities, connections and production flows in a Toyota factory are rigidly at the same time nn,,,,,"'Hn,,,, are enormously flexible and adaptable. Activíties

and processes are constanUy being and to a level of enabling the company to continually innovate and improve',1

One influential study of Toyota identifíed tour rules that the delivery and development activlties

wiíhin the company.l

~ Rule one - all work shall be highly specified as to content, sequence, timing and outcome.

~ Rule two - every customer-suppl1er connection mus! be direct and there musí be an unambiguous yes OY no method of sending and responses.

~ Rule three - the route for every product and service musí be simple and directo

!!1l\ Rule tour - any musí be made in accomance with the scientífíc meíhod, under the guidance of a teacher and at the lowest possible level in the organization.

Pan Three Planning and control

Just -in-time (JiT) A method DT planning and control ond an operations

aims to meet demand Instontaneously \IIlth perfect qualit'! and no waste,

lIT ""1nI1J'1! and no wastc.

Im)<,,,tnrll ollscures intrinsic problems

Chapter 15 Lean operations and JIT

(a) Traditional approach - buffers separata stages

(b) JIT approach - deliveries are macle 011 request

Orders Orders

Deliveries Deliverjes

15.2 (a) Traditional and (b) JIT flow between stages

and the consequences the problem will be prevented from spreading to the whole process. However, contrast this position with that illustrated in the bottom process in Figure 15.2, which is an extreme fonn of JIT. Here items are worked on and then passed directly to the next stage 'just-in-time', Problems at any stage have a very different effect in such a process. For example, now if stage A stops workíng, B will notíce immediately and stage e very 500n after. Stage problem ls now quickly exposed to the whole proce5s, alI of which ls affected by the problem. One result of this i8 that re5ponsibility for solving the problem is no longer confined to the staff at stage A but í5 now shared by everyone. Thi8 considerably improves of the problem being solved, if only beca use ít 1S now too important to be ignored. In other words, by preventing Ínventory from accumulating benveen stages, the operation has increased the chances of the intrinsic efficiency of the plant being improved.

Although símplified, this example highlights the differences benveen a traditional and a approach. Although they both to encourage high effidency, they take different

routes to doíng so. Traditíonal approaches seek to encourage efficiency by protecting each part of the operation from disruption. Long, unintermpted mns are its ideal state. The JIT approach takes the opposite view. Exposure of processes (although not suddenly, as in our simplified example) to problems can both make them more evident and change the 'motiva­tion structure' the whole system tOVliards solving the problems. JIT se es as a

Hes over the processes and prevents problems being noticed. The idea of obscuring effects of inventory is often illustrated diagrammatícally, as in Figure 15.3. The many problems oE fue operation are shown as rocks in a river bed which cannot be seen because of the depth of the water. The water in analogy represents the inventory in the operation. Yet, even though the rocks cannot be seen, they slow the progress of the river's flow and cause turbulence. Gradual1y redudng the depth of the water (inventory) exposes the worst of the problems which can be resolved, after which the water 1S lowered further, exposíng more problems, and so on. The same argument can be used to characterize the relationship between the stages of production on a larger scale, where each stage is a 'macro' operation. Here stages A, B and e couId be a supplier operation, one's own operatíon and a customer's operation, respectívely.

Pan Three Planning and control

15.3 ReduoinQ the level 01 lnventory (water) allows opel"ations management (the ship) to see the problems in the operation (the rooks) and work to reduce them

(a) Traditional appl'oaoh

More production at eaoh

Focus on high

utllizatlon""

More stc,ppagE,s because of problems

t means less chance of problems being

eX¡::losE~d and solved

Extra goes í nto I n"",nt('\Y\i

beoause of continuing stolPpa.ges at

(b) JIT appl"oaoh

Focus on

Lower capacity utllization, but

\

when needed

No surpius VU\JvUV! goes

¡nto invento!)'

Fewer stopp;ag.,s

Low invento!)' so

15.4 The different views of capacity utili:zation in (a) tl"aditional and (b) JIT apPl'oaohes to operatíons

Chapter 15 lean operations and JIT

-8 8 set

Terminology in this area is sometimes a little confusing also evolved over time. We are using two terms here almost interchangeably, and 'just-in-time'. Generally, lean can be viewed as a philosophy of operations management. In other words, it gives a dear view which can be used to guide the way operations are managed in many different contexts. Within this philosophy there is a collection of many tools and techniques that both imple­ment and support the lean philosophy. These techniques are more generally called just-in-time techniques. Some of to01s and techniques are well known outside the lean sphere and relate to activities covered in other chapters of this book ather techniques relate specifically to the way production Ís planned and controlled under a lean regime. This chap­ter summarizes lean philosophy, draws together some of the JIT techniques descríbed elsewhere, and treats more detail the planning and control aspects of JIT (see Figure 15.5).

The lean approach to managing operations i8 founded on doing the simple things well, on gradually doing them better and (above all) on squeezing out waste every step of the way. aften seen as leading practitioner of the lean approach in Japan, the Toyota Motor Company has developed a set of practices which has shaped what we now call1ean or JIT. Sorne argue that the origins of JIT lie within Toyotas reaction to 'oil shock' of rising oil prices in the 1970s. The need for improved manufacturing efficiencies that this pro­voked spurred Toyota to accelerate JIT ideas which were already forming. These developments by Toyota, and other Japanese manufacturers, were also encouraged by the natÍonal cultural and economic circumstances. Japan's attitude towards waste ('make every grain of count'), together with lts position as a crowded and virtually naturally resource­less country, produced ideal conditions in which to devise an approach that emphasizes low waste and high added value.

Three key defme the lean philosophy that in turn underpins the techniques of JIT: eliminatión of waste, the involvement of staff in the operation and the drive for continu­

ous improvement.4 We willlook at each briefly in turno

The lean philosophy of operations

111 Eliminate waste 111 !nvolve everyone • Contínuous ímprovement

JIT as a set oftechniques for managing operations

• Basic working practices • TPM • Design for manufacture • Set-up reduction • Operatlons focus • Total people involvement • Small simple machines • V[sibiliiy 111 Flow layout 111 JIT supply

JIT as a method of planning and control

111 Pull scheduling 111 Kanban confrol 111 LeveHed scheduHng 111 Mixed modening 111 Synchronization

15.5 The lean philosophy of operations is the basis fol' JIT techniques that include JIT methods of planning and control

Pan: Tlm;,e Planning and control

The eHm¡natiol1 OÍ uvaste ís to leal1 appmaGhes

Arguably the most significant part of the lean philosophy is its focus on the elímínation of aIl forms of ,vaste. Waste can defined as any activity which does not add value. Two simple devíces are commonly used in lean improvement. One, 'the seven forms of waste', ís concemed with identifying waste as the first step towards elimínating ít; the other, 'the 5S's', is a simple set of principIes for reducing waste.

The seven forms of waste

The seven tlJpes of 'lijaste Toyota has identified seven cf which have been found to apply in many different

The 5S's

types of operations - both service and production - and which form the core oflean philosophy.

@ Over-production. Produdng more than is immediately needed by the nen process in the operation is the greatest so urce of waste according to Toyota.

@ Waiting time. Equipment effidency and labour efficiency are two popular measures which are widely used to measure equipment and labour waiting time, respectively. Less obvious is the amount waiting tíme of items, disguised by operators who are kept busy produc­ing W1P which ís not needed at the time.

@ Transport. Moving items around the operation, together with the double and triple han-dling vVIP, does not add vaIue. Layout changes which bring processes doser together, improvements in transport methods and workplace organization can aU reduce waste. .

@ Process. The process itself may be a source of waste. Some operations may exist only because of poor component design or poor maintenance and so could be eliminated.

@ lnventory. All inventory should become a target for elimination. However, it lS only by tackling the causes of inventory that it can be reduced.

@ Metion. An operator may Iook busy but sometímes no vaIue is being added by the work Simplification is a rich source of reduction in the waste of motion.

@ Defectives. Quality waste i8 often very significant operations. Total costs of quality are much greater than has traditionaUy been considered and it is therefore more important to attack the causes of such costs. This lS discussed further in Chapter 20.

The

The 5-S comes odginally from Japan and although the translation lnto English i8 approximate, they are generaUy taken to represent foUowing:

1 Sort (Seiri). Eliminate what is not u,,'~u. .. ·y what is needed. 2 Position things a way that they can be easily reached whenever

they are needed. 3 Shine (Seise). Keep things elean and tidy; no refuse or dirt in the work area. 4 Standardize (Seiketsu). Maintain deanliness and order - perpetual neatness. 5 Sustain (Shitsuke). Develop a commitment and pride in keeping to standards.

The 5$'s can be thought of as a simple housekeeping methodology to organize work areas that focuses on visual order, organization, deanliness standardízation. It helps to elimi­nate aH types of waste relating to uncertainty, waiting, searching for relevant information, creating vadation and so on. By what is unnecessary and making everything ciear and predictable, ciutter is reduced, needed items are always in the same place and work i8 made easier and faster.

Just-in-time principies can be taken to an extreme. When just-in-time ideas first stalied to have an impact on operatlons practice in the West, some authorlties advocated the reduc­tion of between-process inventories to zero. While in the long term this provides the ultimate in motivation .101" operations managers to ensure the efficiency and reliability of

stream mapping

í:n>l1in'h""15 Lean operatíons and JIT

each proces::> it does noí admit tha possiblllty 01 soma processes always baing intrinsically less than totally reliable. An alternative view is to allow imrentories (albe!t small onas) around procass stages with hígher-íhan-averaga uncertainty. This aí laast allows sorne protection for the rest 01 the system. The same ideas apply to just-In-time delivary betwaan factories. Tha Toyota Motor Corp., ofien seen as the epítoma of modem JIT, has suffered from Its low inter-plant inventory policles. 80th the Kobe earthquaka and fires in supplier plants have caused produotion aí Toyota's main factorias ta olosa down for saveral days bacause 01 a shortage of parts. Even in the best-regulatad networks, one can no! always account for such avanís.

time

measure for \-vaste a ,...,rr,rp,oc

mnr",,"'," moved, checked or subject to anything nW~Cf1"P<C through the So, at

activities

Valua straam

Part Three Planníng and control

PerkillS is one oUne world's leaders in the of industrial diesel

world, As well as reputation tor ease of servíoe alang with low costs maintenance and Perkins musí be to a and efficient service ta its global network of distrlbutors and dealers who parts and

clase to the customer throughout tha world. This Is why throughput afficiancy ls so ímportapt to tha company. 'Far us it is a tool that enabfes the va/ue stream to be examined both inside Perkins and beyond ii. Warking with our suppliers we can use measurement and themaps to improvement. In addition the map enables us fa monitor the current state and understand tne effect that improvement activitíes have on achíeving

incrEla:sed oef'Celltac,e of vafue-added activitfes

lead time. We a/so wanted to train agents within base and our

suppliers to carry out this themsefves and sustain year-on-year QCD Improvements: (Jim Shaw, Supply Chaln Develioprne!lt I\lIi'm''ln".,.\

~

~ ,f

~ b-________________________________________ ~~

1 Sketch out what you think may be the in a value stream map tor a company like Perkins,

:2 What seem to be the to Perkins 01 thls An¡'1rnAnrl ';>

Key

T IT '" Task time TIT = Tota! throughout time V-AT", VaJue-adqed time CIT '" Cycle ttme

=258 hra

15.6 Value stream map for an industrial ¡:¡ír.r.tWlclí'l'í,nnínn installation service

."",,,n ..... 15 Lean oo¡::wations and JIT

:::: 59 minutes :::: 11 HHjllUUC,)

=1

== 31 minutes :::: 15 HUJllUU'L"

:::: 1 hour 55 mUlUt(;s.

this was a aPl:Jrecmble ¡JHJ'VH;iH" or

Part Three PIO,""'W\N and control

Not al! commentators see JIT·influenced people-management as onf'''"<>II\I

Uve. The JIT approach to people can be viewed as patronizing. It may some extent, less autocratic than some Japanese management practice from earlier times. However, it Is certainly not in line with some of the Job design philosophies which

a high emphasis on contribution and commitment, described in Chapter 9. Even in Japan the approach 01 JIT is not without its critics. Kamata wrote an autobiographical descrlption of life as an , at a Toyota plant called Japan in the Passing Lane. His account speaks of 'the h1humanity and the unquestioning adherence' of working under such a Similar criticisms have been volced by some trade union representatives.

meet

Kaízen must be on the way in which an ~L,,,~"'L"~'.L~'H

Japanese word for continuous improvement is H,"""',-,,,, Japanese term lar cootinuous improvement

It i5 fully 18.

One effect of an increasíng global approach to business has been to highllght the relatively high labour costs which

companies have to live with. This has red to two broad trends. The first is that many Anrli"".ArÍl1f'l companles are increasíng the proportion of servlce in their product Th¡s can he[p to reduce the importance of costs because customers are to pay for the extra service value added, TM second trend Is to attempt to reduce

costs through a lean philosophy and JIT methods. Take two

Junghelnrich ls one of the world's of 11ft trucks. lts are found all over the world in T",r'TrIf"AC! warehouses and that needs heavy

moving short distances. The factory makes over 30,000 11ft trucks ayear of around 10,000 varieties which are based on ten baslc nlt:!'ffnt'm",

JIT methods of manufacture aUow the company to assemble each in three hours. Only three or four years prevlously it would have taken 18 hours, Between 1998 and 2000 the company Increased output from Its Hamburg plant by 30 per cent, wlth 10 per cent fewer workers. Hans-Peter the ""''''I"\,,,m.'·''

attrlbutes much of the company's success to improved links with Its suppllers and smooth fiow withín ihe

'To be in this ffff.1W'iIJ'\I

Komax ís the world's maker of the machines that make hamesses for automobiles. lbe company Is based in Switzerland lika {'¡A,rm;mv

has high labour costs. on sales of around $100 miHíon, it 99 per cent of iis production. thís company doubled Its sales whiie reducing the number of

it succeeded in this because of a policy of outsourcing some 01 ¡ts manufacturing. But this couid work ordy with JIT

to deliver every two om'8ní7f'!cJ 1:hem to deliver three times a week. This reduced inventories throughput time.

and up

1 nri'1r.ir,IA<:: contribuía to costs in

Chapter 15 Lean operations and JIT

The 'engine room' of the lean philosophy is a collection of JIT too1$ and techniques which are the means for cutting out waste. There are many techniques which couId be termed JIT techniques and theyfollow on naturally and logically from the overalllean philosophy.

Adopt basic working practices

Basic can be considered as the method of operationalízing the 'involve­ment of everyone' lean principie. They are held to be the basic preparation of the operatíon and its staff for implementíng JIT. They indude the following:

iIII Discipline - Work standards which are critical for the safety of company members and the environment, and for the quality of the product, must be followed by everyone all the time.

l!íI Flexibílity - It should be possible to expand responsibilities to the extent of people's capa­bilities. This applies as equally to managers as it does to shop-floor personnel. Barriers to flexibility, such as grading structures and restrictive practices, should be removed.

l!íI Equality - UnfaÍr and divisive personnel policies should be discarded. Many companies implement the egalitarian message through to company uniforms, consistent pay struc­tures which do not differentiate between full-time staff and hourly rated staff, and open-plan offices.

l!íI Autonomy - Delegate increasing responsibility to peopIe involved in direct activitíes of the business, so that management's task becomes one of supporting the shop floor. Delegation means such things as giving direct Hne staff the responsibility for stopping processes in the event of problems, scheduling work and materÍals arrival, gathering performance-monitoring data and general problem solving.

~ Development of personnel- Over time, aim is to create more company members who can support the rigours of being competitive.

i9 Quality of working life (QWL) - This may indude, for example, involvement in decision making, security of employrnent, enjoyment and working area facilities.

i9 Creativity -: This is one of the indispensable elements of motivation. Most of us enjoy not just doing the job successfully but also improvrng 1t for the next time.

@ Total people involvement - Staff take on much more responsibility to use their abilities to the benefit of the compan)' as a whole. They are expected to participate in activíties such as selection new dealíng directly with suppliers customers over sched­ules, quality issues and delivery information, spending improvement budgets and planning and reviewing work done each day through communication meetings.

In it i5 difficult to aH the l;¡asic working practices at the same time. There are trade-offs between discipline, autonomy and creativity, for example. It lS best to consider these basíc working practices as goals to be achieved.

Design for ease of processing

Studies in automotive and aerospace companies have shown that design determines 70-80 per cent of production costs.7 Design improvements can dramatícally reduce product cost through changes in the number of components and sub-assemblies and better use of materi­als and processing techniques. Often improvements of this magnitude would not be remotely possible by manufacturing efficiency improvements alone.

Emphasize operations focus

The concept behind focus is that simplicity, repetition and experience breed 8 Focus within operations means:

Pan Thl"ee and contror

process on a HUjen",',,-, HHUlas,vu

so

ABe

15.7 Using sevel"al small machines rather than (me larga eme allows siml..lltaneol..ls pl'ocessing, is more robl..lst and is more flexible

Ghi:::lnt ... y 15 Lean operations and JiT

>.u, .. u.,~ over to an example). to

reductíon ~e ~a ~~ The process of reducing lhe tl¡ne to changeover a process fmm ()ne actívity lo lhe next; also called single minute 8xchange 01 dies

a variety of such as cutting out to search for too1s and equipment, pre-preparation of which dday changeovers and the constant practice

routines. Setup reduction is also caBed because this was

afler its origins in the

Alterna!ive term tor set~up reduGtion,

<® too1s so a is to instead of having to be up whíle machine is stopped. Preferably, a11 should be carded out exter-nally, so that the internal setup is an assembly operation only;

<® attach different tools to a standard fIXture. to a simple and ""'HU'U

<® loading and ~H,'~~~H'''' as ro11er r"'hV{'V"r<

an:5paTeIlT an the easier it is to share in its Problems are more easily rtp'fPrr,;¡

Visibility measures indude things and information becomes simple,

workplace and an area to displaying

Aircraft are OVI"O'''''''''' Aldines tr'j to use them round the clock because they can't make money from aircraft that are sitting ¡die on the It is called 'running the alrcraft hot' in the industry. Formany smaller the

biggest barrler to runníng hot Is that their markets are not large enough to justity passenger flights the and nighí. So, in arder to avoid aircraft being ¡die

musí be used in some other way. Tha! was the motive behind 737 'Ouick Change' (OC)

aircraft. With ¡t, arrlines have the flexibilíty to use it for

PaSsenger fUghts during ihe and, with less than a one-hour changeover (setup) time, use it as a cargo airplane throughout tha designed

trames that hold entire rows of seats that can smoothly gl1de on and off the aJrcraft twelve saats to be mUed ¡nto place at once. When used far cargo, the seats

are simpiy rolled out and specia! cargo cantainers designed to fit the curve of the and prevent to the Inter[or. Befare the

seats the sidewaUs are cleaned so that, once the seats are in passengers cannot tell the

difference between a OC aircraft and a normal 737.

Aloha Airlines, which serves Hawaii, particularly

values the alrcraft's flexibUity. It allows it to provide

frequent, reliable sefvices in both passenger and cargo

markets. So the alrcraft that has been earrying

passengers around the islands the day can be

used to fresh to the hotels that

also aliows

the aldine to to When Hurricane

Iniki hit the islands, the passenger market collapsed until

damage could be but there was a huge

inorease in ihe amount of cargo traffic to repair the

island's facUíties.

1 lf the nflFlOv,Rr between

took two hours instead 010ne, how mueh do you think Jt would have on the usefulness of the aircraft?

2 Fo. an aircraft that carries passengers all the time, what

ls the equivafent of setup reduction? And why might Jt be important?

Part Three

Anden A líght anove a workstatioo that ¡ndlcates its state, whether worklng, waiting for work, broken dO'Nfl, etc., Andan lights may be to stop Li]e whoie llne when one station stops,

and control

A particularly ímportant to >"'4""',,,.<.:

Table 15.1 ;:!mu .... linn'\C< lean supply cOl"lcept

Factor

Nature of competition

How suppliers are selecíed by customers

¡;;;'J{,~h<""f'1I"" of informatlol1 between supplier ano customer

Delivery practica

Attitude fo quailty

Source: Adapted from lammlng, R,

Prentice HalL

Lean characteristics

Global operation; local presence

Dependent upon all1ances/collaboration

Early lnvolvement 01 established

Re-sourcing as a last resort after attempts to improve

True transparency: costs, etc.

Two-way: discussion of costs and volumes

Technical and commercial informaiíon

Electronic data Intl>rf'I,,,,r,n,,,,

Kanban for production deliveries

investmenís dlscussed

with fluctuations

True

Local,

fr,,.¡nAI'!nn delíveríes

and ¡ntemationaJ JIT

Príce reductions based upon cost reductions from order onwards: from joint efforts of supplíer and customer

schemes bacome

Mutual agreement on quallty

Continual ínteractíon and kaízen

as goal

18)

Sfr;,feCTÍes for lnnovation and Lean Supply,

Jaoanese term far card ar it ís simple

controlling devíce !hat 18 usad to authorlze the ralease 01 mataríais in pul! conllol systems such as those usad in Jll

Ch" .. "t"'''15 Lean operations and JIT

Tabie 15.2 The leal"l/JIT ;:¡m:¡rO:Rfll1

Process

Productlservice

Process technology

Job design

Process and control

Maintenance

Be clear about operations and a 'focus' qU"lrA(lV

where so that processes cancentrate on a narrow set of products, services or objectives.

Ensure smooth flow along processes and fast throughput by working on small batches and balancing capacity and flow.

IrlHUfrlLl!1tHLItlHV in

lean ~Y¡"~¡''¡b~

rather than large

Reduce the distance travelled a process raute as much as possible and make routes obvious.

Use small flexible procesa equlpment, preferably that can be moved Into dlfferent configurations.

Concentrate on equipplng 81aff with necessary skms, being olear what Is and encourage autonomy,

Use pull control untíl ít Is needed.

Minlmize m\J¡",ntn!V po"sible because it obscures nm,n¡p,mq

Imt"\rn\!ArnPI"\T must be contlnuous. It Is the momentum of Im."\rnltArn"",T which Is more than the rate of improvement

AII unexpected breakdown rs waste; concentrate en preventing disruptien total productive maintenance 19).

Al! errors are further sources of waste; everyone In the operation must be involved in an error-free state,

it is or even to

Pal1Three and control

lIIIc The move 01" conveyance kanban. A move kanban is material can be

"'4O,",J<'-";:> are recelveCl, supply of tvvo or standard containers of

which movement, or snpply can

Chapter 15 Lean operations and JIT

StageA B

Work centre A Work centre B

Output stock Output stock

Empty standard container

FuI! standard container

m Move kanban

U Kanban holding box

--~...... Flow path fol' standard containers

---.;)10>.... Flow path for move kanban

15.8 The operation oUne single-card kanban system of pl.IlI control

íHm!lE1""\ Leve!ied

The idea ttlat the míx and volume of acllvlty should even out over time so as to make oulput routine and regular, sometimes known by the Japanese term

This sequence of actions and the flow of kanbans may at first seem complicated. However, in practice their use provides a straightforward and transparent method of calling for material only when it is needed and limiting the which accumulates between stages. The number of kanbans put into the loops between the stages or between the stock points and the work centres is equal to number of containers in the and therefore the inventory wruch can accumulate. Takíng a kanban out loop has fue effect of redudng fue inventory.

is the Japanese word for levelled so that mixand volume are even over tlme. For example, instead of producing 500 parts in one batch, which would cover the needs for the ne:A.'Í three months, levelled scheduling would require the operation to make only one

per hour regularly. The principie of levelled scheduling is straightforward but the requirements to put it into are quite severe, although the benefits resulting from it can substantial. The move from conventional to levelled scheduling is illustrated in Figure 15.9. eonventionally, if a mix was required in a time period (usually a month), a batch size would be calculated for each product and the batches produced in sorne sequence. Figure 15.9(a) shows three products (A, E and e) which are produced in batch sizes of 600, 200 and 200, respectively. Starting at 1, the unit commences producing product A. During day 3, the batch of 600 As 1S finished and despatched to the next stage. The batch of Es is started but is not fmished until day 4. The remainder of day 4 is spent makíng the batch of es and both batches are despatched at the end of that day. The cycle then repeats itself. The consequence using large batches ls, first, that relatively large amounts of inventory accumulate within and between the units, and second, that most days are different from one another in terms of what they are expected to produce (in more complex clrcumstances, no hvo days would be the same).

If the flexibility unít could be increased so the batch sizes were reduced to a quarter of their previous levels (see Figure 15.9b), a batch of each product can now be completed in a single day. Smaller batches of inventory are moving between stage, which will reduce the overalllevel of work-in-progress in the operation. Just as significant is the impact on the regularity and rhythm of the process. Now, every day, the activity in the process is the same. This makes planning and control much easier. So, if on day 1 the daily batch of A was ished 11.00 am and all the batches were successfully completed in the day, then the

Pan Three Plarming and contra!

(a)

Scheduling in Jarge batches

(b)

I..evelled scheduling Over a 2Cl-\Jay peried

~ t i t 150 A 50 50 B S 50 50 e e

~ t t i i 1BO A

50 50 50 B S S 50 50 50 e e e

15.9 Levelled SCll"le(lUllll1g eqlAauze5 the mix of

i i 150 i50 A A 50 50 B S 50 50 e e

Needtomake

t i i ¡ 150 150 150 150 A A A A 50 50 50 50 B B B B

51} 50 50 50 e e e e

i 50 S 50 e

i

Salch size 01

600 A

Reduce batch A = ISO si;:e le: B = 50

e = 50

i i i 50 S

50 50 50 e e e

Chapter 15 Lean operatíons and JIT

Suppose the number of products required in the 20-day period are:

Product A ::: 1920 Product B == 1200 Product e == 960

Assuming an eight-hour day, the cyele for each product - that is, the ínterval between the production of each of the same type of product (see ehapter 7 for a full explanation of cyde time r -1S as follows:

Product A, cyde time;:: 20 X 8 X 60/1920 == 5 mins Prodúct B, cycle time == 20 X 8 X 60/1200::: 18 mins Product cyele time == 20 X 8 X 60/960 == 10 mins

the production must produce:

1 of A every 5 minutes 1 unit of B every 8 minutes 1 unít e every 10 minutes.

Put another way, by finding the common factor

8 units of A every 40 minutes 5 units of B 40 minutes 4 units of e every 40 minutes

8 and 10:

means a sequence which mixes eight units of A, of B and four of e, and repeats itself every 40 minutes, will produce the required output. There will be many dif­ferent ways of sequendng the products to achieve this

... BAeABAeABAeABAeAB ... repeat~~ct ... repeated

This sequence repeats itself every 40 minutes and produces fue correct mix of products to satisfy monthly reQIUlrem.enl:s.

Also related to levelled scheduling i5 or the repeated of parts. It means that ultimately processes can be made so flexible that they achieve the JIT ideal of a 'batch size of one'. The sequence individual items emerging from a process couId be reduced pro­gressívely until 1t produced a steady stream of each item flowing continuously. So, for example, rather than produce 200 As, 120 Bs and 80 es, a steady mixed stream in the same ratio is produced (AA B A B e A B eA '"

A concept to levelled scheduling can be applied to many transportation processes. For example, a chain of convenience stores may need to make deliveries of all the dífferent types of products it sells every week. Traditionally it may have despatched a truck loaded with one particular product around stores so that each store received the appropriate amount of the product which would it one This is equivalent to the large batches in the previous example. An alternatíve would be to despatch smaller quantities of all products in a single truck more frequently. Then each store would receive smaller deliveries more frequently, inventory would be and the system could respond to trends in demand more because more means more opportunity to the quantity delivered to a store. This is illustrated in Figure 15.10.

Pan Three Planníng and control

15.10 smaller

hwentory levels

""", .. IH'i",., more often can reduce inyentory leyels

Tabla 15.3 Inventory and quauas haye similar characteristics

Cost

Utilizatlen

Ofmaterial (queue

Ties up wr\rfdrln

Needs

Of informatiorl ef infermatien)

Of customers (queue of people)

Wastes customer's time

Needs waiting area

Gives """''''1\'''' ",c"',,clIntí<m

Prometes

Ceordination Aveids need for Avoíds need for straight- Avoids haying te match and demand

Source: Adapteo from Fitzsimmons, J A (1990) 'Making continua! improvement; a competitíve strategy tor service flrms', in 8owen, DE, Chase, RB" 1.G, ano Assocíates (eos) Serviee Management Effectiveness, Jossey-Bass, Copyright © 1990 John Wiley &, Sons, Inc" reprinted with permission,

nO"'nTIfV'C and JIT

in service found in rnanufacturíng industries because

pnKessed in sorne way. the examples.

;::,upCI"rn¡'lrK,el:S usually replenish their shelves only when custorners taken sufficient r.Vf'm,ont of

tíme.

IS

even most the

Many high visibility services are based on a system. For example, these chefs only create their dishes when customer demand 'pulls' the service.

Part Three Planníng and control

was the Mobiie Army H('ven"";",, or MASH units made famous In the film and lrelevision series of the same name. MASH units with iheir treatment rooms and nn¡~mt'ín('! theatres could be moved at short so as to them close to the action where were needed. In so saved thousands of Uves fasi access to sultable treatment Also, soldiers with minar wounds could be treated and retumed to servlce Now that nr}"l'lnIA

is usad to Mobile Parts nV"I-I"'<'"'' These wlll be used to manufacture ""r,lal"ornc.rn

vehicles, tanks and other weapons 'on clemand', close te the field ei operatíon. Ir is macle possible through th e of a caned ,nc.,r"'""_Uthn,, rl'l,F'\h\l

This makas it pOl',sible to creata soltd from a

~ MRP is

""I,,,,,tl,,,,,,,r,nr1 ln mInutes rather than hours. A laser traces a to create a solid made of sintered powdered materials such as polymers or metals. Although stlll in Its the "''-'''/''0'''+

AY,,,inrArlforaniJIic.atic}n

'1 Manufacturing through the process described aboye 1s many times more than conventionai tAI".hnr,lnr,iA1'l

about '" v "''' " au

on the accuracy

characteristics 01 JIT

Chapter 15 Lean operations ane! J1T

., Dedsion making for operations control ls largely decentralized¡ taetical decisions do not rely on comput~-based information processing.

~ JIT scheduling is ~rate-based' (calculated in terms of output of a part per unit of time) rather than volume-based (the absolute number of parts to be made in a given day or week).

~ JITassumes (and encourages) resouree t1ex.ibility and minimized lead times. ~ JIT planning and control concepts are only one part of a wider and explidt JIT philoso­

phy of operations.

JIT and MRP similarities and dífferences

The irony is that JIT and M:RP have similar objectives. JIT scheduling aims to connect the new network of internal and external suppIy processes by means of invisible conveyors so that parís rnove only in response to coordinated and synchronized signals derived from end­customer demando MRP seeks to meet projected customer demand by directing that items are produced only as needed to meet that demando However, there are differences. M:RP i5 driven by the master production schedule. which identifies future end-item demando It models a fixed lead-time environment, using the power of the computer to calculate how many of, and when, each part should be made. Its output is in the form of time-phased requirements plans that are éentralIy calculated and coordinated. Parts are rnáde in response to central instruetions. Day-to-day distutbances, such as inaccurate stock records, under­mine M:RP authority and can make the plans unworkable. While MRP is excellent at planning, it is weak at control. JIT scheduling airos to meet demand instantaneously through simple control systems based on kanban. If the total throughput time (P) is less than the demand lead time (D), then JIT systems should be capable of meeting that demando But if the P:D ratio is greater than 1, some speculative production wi1l be needed. And if demand is suddenly far greater than expected for certain products, the JIT system may be unable to cope. Pull scheduling is a reactive concept that works best when independent demand has been levelled and dependent demand synchronized. While ¡IT may be good at control, it is weak on planning.

MRP is also better at dealing with complexity, as measured by numbers of items being processed. It can handle detailed requirements even for 'strangers'. JIT pull scheduling lS less capable oí responding instantaneously to changes in demand as the part count, options and colours increase. Therefore, JIT production systems favour designs based on simpler prod­uct structures with high parts commonality. Such disciplines challenge needless complex.ity, so that more parts may be brought under puIl-scheduling control. Putting the relative advantages aÍld disadvantages of JIT and MRP together suggests two approaches to blend­ing the approaches.

Separate systams ror different products >-

Using the runners, repeaters, strangers terminology deseribed earlier, pull scheduling using kanban can be used fot <runners' and <repeaters~ MRP is then necessary only for strangers, for which wotks orders are issued to identify what must be done at each stage, and then the work itself is monitored to push materials through manufacturing stages. The advantage of this is that by increasing responsiveness and· reducing inventories, it makes it worthwhile to.

increase their number by design simplification.

MRP for ovarall control and JIT for internal control MRP planning of supplier rnaterials airos to ensure that sufficient patts are in the pipeline to enable them to be calIed up 'just-in-time'. The master production schedule is broken down by meanS of MRP for supplier schedules (foreeast future demand), while actual materials requirements for supplies are signalled by means of kanban to facilitate JIT delivery. Within the factory, al1 materials movements are governed by kanban loops between operations. The (drum beat' for the factory is set by the faCtory assembly schedule.

Pal1Thl"ee and control

use MRP which guide

structures \ "-

"- \ PERT "- " "- " " "-

" .... " MRP

....

" "

JIT/MRP

" "- \ "-

"- \

" \

Simple JIT \ \ \

structures \

Simple

Source: From Vose, CA and Harrison, A for Imr,!",n1Antlntl

Time Manufacture, Copyright © 1987 Springer, "'I-"'''uu"",u

to use means

Just-in-

The L;omr:¡a'lfOr1 Website to the book­Guide' to eech l'n<,nrc,r

peiars¡onea.CCI.ulKfslaC:1l: - also has a brief

What is the lean approach and how is it different from traditional openatíons

Lean is an approach to operations which tries to meet demand instantaneously wlth quality and no waste, It is an whích dlffers from tradítlonaf insomuch as It stresses waste elimination and tast throughput, both of which contributa to low inventories.

Chapter 15 Lean operations and JIT

The abiHty to deHver just-in-time not on!y sayas working capital (through reducing inventory levels) buí also has a significant impact on the ability of an operation to improve its intrinsic efficiency.

What are the main elements of the lean philosophy?

Lean philosophy can be summarized as concerning three overlapping elements: (a) the elimi­nation of waste in all lts forms, (b) the inclusion of all staff of the operation in íts improvement, and (e) the idea that all improvement should be on a continuous bas!s.

What are the technlques of JIT?

The techniques which are usually associaíed with JIT (not specifically eoncerned with planning and control; see next point) are:

- developing 'basie working praetices' whieh support waste elimination and continuous improvement;

- design for manufacture;

- focused operations whith reduce complexlty;

- using simple, sman machines which are robust and flexible;.

- rearranging layout and flow to enhance simpiíeity of flow;

- employing total productive maintenance (see Chapter 19) to encourage reliability;

- reducing setup and changeover times to enhance flexibillty;

- involving all staff in the improvement of the operation;

- making problems visible to all staff.

How can JIT be used tor planning and control?

Many JIT techniques directly concem planning and control, such as:

- pul! scheduling;

- kanban control;

- levelled scheduling;

- synchronization of flow;

- mixed-model schedui1ng.

Can JIT be used in service operations?

Many of the aboye techniques are direetly applicable in service operations, although some translation is required occasionally.

Can JIT and MRP coexist?

Although they may seem to be different approaches to planning and control, they can be com­bined in several ways to form a hybrid system.

The way in which they can be combined depends en the complexity of preduct structures, the complexity of product routing, the volume-variety characterlstics of the operation and the level of control required.