Lean Operations

The Lean Philosophy

• Eliminate Waste
– Defects, inventory, lead time

• Expose Sources of Waste

– Problem visibility, fast feedback and correction

• Continuous Improvement
– Process improvements through employee involvement

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 Why is Lean Important?
Quality
Delivering what the Customer wants
Lead Time
Deliver Quickly
Competitiveness
Productivity
Delivering at Low Cost

Jidoka

• Moment you see a problem: Stop and Resolve

the problem.

• Detect, Stop, Fix

• Early Detection is Crucial

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 Jidoka

• Jidoka in assembly line = andon cord.

• The andon cord is a long rope that runs
adjacent to the assembly line at Toyota, and
it allows each operator along the line to pull
the cord and thereby stop the line.
• When an operator recognizes a problem,
they pull the cord and stop the line.

Reducing Waste: Increase Problem Visibility

Lower the Water to Expose the Rocks

Inventory Hides Problems

Too Much
Missed Due Dates Space

Late
Deliveries
Inventory

Too much paperwork

Scrap & Unreliable
Rework Vendors

Poor 100% inspection Long queues

Machine
Quality
Downtime

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 Problem Visibility: Andon

Jidoka
• What’s the trade-off involved here :
Andon/Jidoka

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 Jidoka
• Positive:
– High Quality
– Quality at Source

• Negative:
– Halting line (lost production)
– Capacity wastage

Push versus Pull

A Pull system initiates production as a

reaction to present demand, while Push
initiates production in anticipation of
future demand.

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 Push versus Pull

• Push system: material is pushed into

downstream workstations regardless of
whether resources are available

• Pull system: material is pulled to a

workstation just as it is needed

Synchronization with demand:

customer demand pulls product
PUSH: Inputs availability triggers execution
Push: Centralized planning of stocks in anticipation of future demand

Supplier Process Customer

inputs outputs

PULL: Output need triggers execution

Supplier Process Customer

inputs outputs

Pull: Decentralized control of material flow in reaction to current demand

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How does Pull work in Practice?

Level Production: Heijunka

Model Monthly Daily Time
Quantity Quantity between two
identical
vehicle
(minutes)
Sedan 5000 250 2

Assumption: Cycle time

Hardtop 2,500 125 4 is 1 minute

Wagon 2,500 125 4

Heijunka Sequence: SHSWSHSW……

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 Level Production: Heijunka

Model Monthly Daily Time

Quantity Quantity between two
identical
vehicle
(minutes)
Sedan 5000 250 2

Hardtop 2,500 125 4

Wagon 2,500 125 4

What happens if sequence is

5000 S followed by 2500 H and the 2500 W?
When does make it sense to follow the above sequence?

Level Production: Heijunka

A A

B B

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 Heijunka
• How does it help:
– Reduced average inventory
– Hence, shortens average lead time (Why ?)
– Production matched Market Demand more
closely
– Supplier work plan is also levelled

Lean Operations

• Lean operations requires stable demand

to maintain a stable production plan
schedule

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 Lean Operations
• How do you deal with spiky demand
profile?

Lean Production: Smooth, Continuous and Stability of Flow

• Operate at Low Utilization

• This can be Costly!!!

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 Finished Goods Inventory Helps Smooth
Production Activities

.. ..
Fabrication
.. . . .
Subassembly
.. ..
Final Assembly

.. . .. .
Warehouse Market

. ..
.. .
..
.. .

Fabrication Subassembly Final Assembly Warehouse Market

Finished
Goods
Inventory

• Finished Goods Inventory (FGI) Helps

Smooth Production Activities

• FGI decouples Downstream Market

Demand (which can be highly Uncertain)
from Upstream Production Plan

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 Lean System
Reduce Cost Reduce Inventory
will

Through Process Improvements (Kaizen)

by

Reduce Setups Reduce Lead time

by
Reduce Variability

by
will
Reduce Defects

Principle of Toyota Production System

Multi-skilled and Empowered Workforce

Standardized Work Heijunka Kaizen

J
Right Qty J I
Right Mix I D
Right Time T O Perfect Quality
K
A

TPS
Cost Control through Elimination of Waste

Jishnu Hazra IIMB

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 Lean Production in Practice

• Standardize the Process

– Cannot Improve Process unless you Standardize the Process

• JIT is not shifting inventories to suppliers

– Requires close relationship with suppliers

• Flexible (multi-skilled) and involved work force

• Creates stress on workers (why?)

Problems of Product Proliferation

Product Variety

Process Variability
Increase Variability
Market Variability

Problems with JIT Cost

How do you, therefore, manage variety?

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 Toyota Case-Study
• What is the secret of Toyota’s success? The
incredible consistency of Toyota’s
performance is a direct result of
operational excellence. Toyota has
turned operational excellence into a
strategic weapon. This operational
excellence is based in part on tools and
quality improvement methods made famous
by Toyota in the manufacturing world, such
as just-in-time, kaizen, one-piece flow, jidoka,
and heijunka. These techniques helped spawn
the “lean manufacturing” revolution.
Source: The Toyota Way by Jeff Liker

Overview of TPS at Totota’s website

http://www.tssc.com/tps.asp

https://www.toyota-
global.com/company/vision_philosophy/toyota_productio
n_system/

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