Lean Systems

By: Dr. Rosa Hendijani

KRM Ch. 6
Lean Systems

 Lean systems affect a firm’s internal linkages between its

core and supporting processes and its external linkages
with its customers and suppliers.
 One of the most popular systems that incorporate the
generic elements of lean systems is the just-in-time (JIT)
system.
 The Japanese term for this approach is Kaizen. The key
to kaizen is the understanding that excess capacity or
inventory hides process problems.
 The goal is to eliminate the eight types of waste.
Eight Wastes

THE EIGHT TYPES OF WASTE OR MUDA

Waste Definition
1. Overproduction Manufacturing an item before it is needed.
2. Inappropriate Using expensive high precision equipment when simpler
Processing machines would suffice.
3. Waiting Wasteful time incurred when product is not being moved or
processed.
4. Transportation Excessive movement and material handling of product between
processes.
5. Motion Unnecessary effort related to the ergonomics of bending,
stretching, reaching, lifting, and walking.
6. Inventory Excess inventory hides problems on the shop floor, consumes
space, increases lead times, and inhibits communication.
7. Defects Quality defects result in rework and scrap, and add wasteful
costs to the system in the form of lost capacity, rescheduling
effort, increased inspection, and loss of customer good will.
8. Underutilization of Failure of the firm to learn from and capitalize on its employees’
Employees knowledge and creativity impedes long term efforts to eliminate
waste.
Expose Problems The more incidents,
the more inventory
required to keep afloat...

… but the more

inventory, the less
visible the incidents

Production

High W.I.P.

Poor
quality
Poor
Bad
Long maintenance
material
lead-time
 Lower Inventory  Increase Problem Visibility
Slowly lower the water to expose the rocks
Remove
the
obstacle

WIP reduced

Poor
quality Poor
Bad maintenance
material Long
lead-time
 Remove the
obstacle
again!

WIP reduced further

Poor
quality Poor
maintenance
Long
lead-time
 Voluntarily be in a risk
position

Thus, must eliminate

all problem causes

Poor
quality
Poor
maintenance
Supply Chain Considerations
 Close supplier ties
– Low levels of capacity slack or inventory
– Look for ways to improve efficiency and reduce inventories
throughout the supply chain
– In-plant representative
– Benefits to both buyers and suppliers

 Small lot sizes

– Reduce the average level of inventory
– Pass through system faster
– Create uniform workload and prevent overproduction
– Increase setup frequency
Process Considerations: Pull vs. Push

PUSH: Inputs availability triggers execution

Stage 1 Stage 2 Stage 3

inputs outputs

PULL: Outputs need triggers execution

Customer demand pulls product

Stage 1 Stage 2 Stage 3

inputs outputs
Process Considerations
in Lean Systems
 Quality at the Source
– Jidoka
 Automatically stopping the process when something is wrong and

then fixing the problems on the line itself as they occur.

– Poka-Yoke
 Mistake-proofing methods aimed at designing fail-safe systems
that minimize human error.
Process Considerations
in Lean Systems
 Uniform Workstation Loads
– Takt time
– Heijunka
– Mixed-model assembly
Takt Time
 Cycle time needed to match the rate of production to the rate
of sales or consumption
 Example: At Toyota, the production plan may call for 4,500
vehicles per week for the next month. That requires two full
shifts, 5 days per week, producing 900 vehicles each day, or
450 per shift.
 Three models are produced: Camry (C), Avalon (A), and
Solara (S). Suppose that Toyota needs 200 Camrys, 150
Avalons, and 100 Solaras per shift to satisfy market demand.
 To produce 450 units in one shift of 480 minutes, the line must
roll out a vehicle every 480/450 = 1.067 minutes. The 1.067
minutes, or 64 seconds represents the takt time of the process.
Heijunka
 Leveling of production load by both volume and
product mix.
– Mixed-model assembly: producing a mix of
models in smaller lots.
– One option: 4 Cs to 3 As to 2 Vs: The Toyota
planner can develop a production cycle consisting
of 9 units, accordingly.
– Second option: C-V-C-A-C-A-C-V-A repeated 50
times per shift.
Process Considerations

 Standardized components and work methods

 Flexible workforce

 Automation

 Five S (5S) practices

– Sort, Straighten, Shine, Standardize, Sustain

 Total Preventive Maintenance (TPM)

Five S Method

5S DEFINED
5S Term 5S Defined
1. Sort Separate needed from unneeded items (including tools, parts,
materials, and paperwork), and discard the unneeded.
2. Straighten Neatly arrange what is left, with a place for everything and everything
in its place. Organize the work area so that it is easy to find what is
needed.
3. Shine Clean and wash the work area and make it shine.
4. Standardize Establish schedules and methods of performing the cleaning and
sorting. Formalize the cleanliness that results from regularly doing
the first three S practices so that perpetual cleanliness and a state of
readiness are maintained.

5. Sustain Create discipline to perform the first four S practices, whereby

everyone understands, obeys, and practices the rules when in the
plant. Implement mechanisms to sustain the gains by involving
people and recognizing them via a performance measurement
system.
Toyota Production System

 All work must be completely specified as to content, sequence, timing, and

outcome.
 All customer-supplier connections should be direct and unambiguous.
 All pathways should be simple and direct.
 All improvements should be made under the guidance of a teacher using
the scientific method.
House of Toyota

Figure 6.3
Designing Lean System Layouts

 Line flows recommended

– Eliminate waste

 One worker, multiple machines (OWMM)

 Group technology: Group parts or products with similar characteristics

into families
One Worker Multiple Machines (OWMM) Cell
Group Technology: Process Flows Before the Use of GT Cells

Lathing Milling Drilling

L L M M D D

D D
L L M M

Grinding

L L M M
G G

L L Assembly
G G
A A

Receiving and A A G G
shipping

(a) Jumbled flows in a job shop without GT cells

Group Technology: Process Flows After the Use of GT Cells

L L M D G Assembly
area
Cell 1 Cell 2 A A

Receiving L M G G

Cell 3

L M D
Shipping

(b) Line flows in a job shop with three GT cells

What is a Value Stream Mapping?

Value Stream
Mapping

A widely used
qualitative lean tool
aimed at eliminating
waste or muda.

Figure 6.6
VSM Icons

Figure 6.7
VSM Metrics

 Takt Time
– Daily Availability/Daily Demand
 Cycle Time
 Setup Time
 Per Unit Processing Time
– Cycle Time + Setup Time
 Capacity
– Availability/Time at bottleneck
Example 6.1
 Jensen Bearings, Inc makes two types of retainers
that are packaged and shipped in returnable trays with
40 retainers in each tray. The operations data is on
the following slides.
a. Create a VSM for Jensen Bearings
b. What is the takt time?
c. What is the lead time at each cell?
d. What is the total processing time?
e. What is the capacity?
 Example 6.1

Table 6.3
Example 6.1

Table 6.3
Example 6.1
a.

Figure 6.8
Example 6.1

b. Daily Demand
[(1,000 + 2,200) pieces /week]/5 days =
640 pieces per day

Daily Availability
(7 hours/day) x (3,600 seconds per hour) =
25,200 seconds per day

Takt Time = Daily availability/Daily Demand =

25,200/640 =
39.375 seconds per piece
Example 6.1
c. Production Lead time = Inventory/Daily Demand

Raw Material Lead Time - 5 days

WIP between Press and Pierce/Form =
(2,250/640) = 3.5 days
WIP between Pierce/Form and Finish/Grind =
(3,350/640) = 5.2 days
WIP between Finish/Grind and Shipping=
(1,475/640) = 2.3 days
Total Production Lead Time =
(5 + 3.5 + 5.2 + 2.3) = 16 days

d. Total Processing Time = Sum of the Cycle Times

(12 + 34 + 35) = 81 seconds
Example 6.1

e.

Pierce and Form is the bottleneck

Capacity = 25,200/38.5 = 654 units/day

Application 6.1

 Gilman Inc. makes vending machines. The operations

data is on the following slides.

a. What is the cell’s current inventory level?

b. What is the takt time?
c. What is the lead time at each cell?
d. What is the total processing time?
e. What is the capacity?
Application 6.1

Overall Average demand: 200/day

Process Batch size: 20
Attributes Number of shifts per day: 2
Availability: 8 hours per shift with a 45-
minute break

Customer One shipment of 1,000 units each week

Shipments
Information All communications with the customer
Flow are electronic
There is a weekly order release to
Cutting
All material is pushed
Application 6.1

Processing Cut Cycle time = 160 seconds

Step 1 Setup time = 3 minutes
Up time = 100%
Operators = 1
WIP = 600 units (Before Cut)
Processing Grind Cycle time = 120 seconds
Step 2 Setup time = 1 minute
Up time = 99%
Operators = 1
WIP = 800 units (Before Grind)
Processing Bend Cycle time = 240 seconds
Step 3 Setup time = none
Up time = 100%
Operators = 1
WIP = 400 units (Before Bend)
WIP = 600 units (After Bend)
The Kanban System

Receiving post
Kanban card for Storage
product 1 area
Kanban card for
product 2

Empty containers

Assembly line 1

O2

Fabrication
cell
O1 O3
Assembly line 2

Full containers
O2

Single-Card Kanban System

The Kanban System

Receiving post
Kanban card for Storage
product 1 area
Kanban card for
product 2

Empty containers

Assembly line 1

O2

Fabrication
cell
O1 O3
Assembly line 2

Full containers
O2

Single-Card Kanban System

The Kanban System

Receiving post
Kanban card for Storage
product 1 area
Kanban card for
product 2

Empty containers

Assembly line 1

O2

Fabrication
cell
O1 O3
Assembly line 2

Full containers
O2

Single-Card Kanban System

The Kanban System

Receiving post
Kanban card for Storage
product 1 area
Kanban card for
product 2

Empty containers

Assembly line 1

O2

Fabrication
cell
O1 O3
Assembly line 2

Full containers
O2

Single-Card Kanban System

The Kanban System

Receiving post
Kanban card for Storage
product 1 area
Kanban card for
product 2

Empty containers

Assembly line 1

O2

Fabrication
cell
O1 O3
Assembly line 2

Full containers
O2

Single-Card Kanban System

The Kanban System

Receiving post
Kanban card for Storage
product 1 area
Kanban card for
product 2

Empty containers

Assembly line 1

O2

Fabrication
cell
O1 O3
Assembly line 2

Full containers
O2

Single-Card Kanban System

The Kanban System

Receiving post
Kanban card for Storage
product 1 area
Kanban card for
product 2

Empty containers

Assembly line 1

O2

Fabrication
cell
O1 O3
Assembly line 2

Full containers
O2

Single-Card Kanban System

The Kanban System

1. Each container must have a card KANBAN

2. Assembly always withdraws from
fabrication (pull system)
3. Containers cannot be moved without Part Number: 1234567Z
a kanban Location:
4. Containers should contain the same Aisle 5

number of parts Bin 47

5. Only good parts are passed along Lot Quantity: 6
6. Production should not exceed Supplier:
authorization WS 83

Customer:
WS 116
Number of Containers

 Two determinations
 Number of units to be held by each container
 Determines lot size
 Number of containers
 Estimate the average lead time needed to produce a
container of parts
 Little’s law
 Average work-in-process inventory equals the average
demand rate multiplied by the average time a unit
spends in the manufacturing process
Number of Containers

WIP = (average demand rate)

 (average time a container spends in the manufacturing process)
+ safety stock

WIP = kc

kc = d (w + p )(1 + α)

d (w + p )(1 + α)
k= c
where
k= number of containers
d= expected daily demand for the part
w= average waiting time
p= average processing time
c= number of units in each container
α= policy variable
Number of Containers

 Formula for the number of containers

Average demand during lead time + Safety stock

k=
Number of units per container

WIP = (average demand rate)(average time a container

spends in the manufacturing process) + safety stock
Determining the Appropriate Number of Containers

The Westerville Auto Parts Company produces rocker-arm assemblies. A

container of parts spends 0.02 day in processing and 0.08 day in materials
handling and waiting. Daily demand for the part is 2,000 units. Safety
stock equivalent of 10 percent of inventory

a. If each container contains 22 parts, how many containers should be

authorized?

b. Suppose that a proposal to revise the plant layout would cut materials
handling and waiting time per container to 0.06 day. How many
containers would be needed?
Operational Benefits and Implementation Issues

 Organizational considerations
– Human costs of lean systems
– Cooperation and trust
– Reward systems and labor classifications

 Process considerations

 Inventory and scheduling

 Schedule stability
 Setups
 Purchasing and logistics