Pull Manufacturing

Pull Manufacturing
Kanban, Just in Time, Demand Flow
Superfactory Excellence Program™

www.superfactory.com
© 2004 Superfactory™. All Rights Reserved. 1

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Outline
 Why Pull Manufacturing?

 The Problem of Inventory
 Just In Time
 Kanban
 One Piece Flow
 Demand / Pull
 Standard Work & Takt Time
 Production Smoothing

Why Pull Manufacturing?
Lean manufacturing is really about minimizing the

need for overhead
 which is about concentrating precisely on only what
is necessary
 which is about linking interdependent supply
system decisions, and actions
 which needs to be visual, responsive and simple to
manage

Push Vs. Pull Scheduling
 Push Scheduling
• traditional approach
• “move the job on when finished”
• problems - creates excessive inventory
 Pull scheduling
• coordinated production
• driven by demand (pulled through system)
• extensive use of visual triggers
(production/withdrawal kanbans)

Inventory: Root of all evil
If the meaning of production control is truly understood,

inventory control is unnecessary.
-- Taiichi Ohno

Inventory Hides Problems
Work in process inventory level

(hides problems)
Unreliable Capacity
Scrap
Vendors Imbalances

Lowering Inventory Reveals Problems
Accommodate lower inventory levels by:
•Reducing variability
•Eliminating waste
•Streamlining production and material flows
•Accurate information
Unreliable WIP Capacity

Scrap
Vendors Imbalances

What is Just-in-Time?
 Management philosophy of continuous and forced problem

solving (forced by driving inventory out of the production
system)
 Supplies and components are ‘pulled’ through system to
arrive where they are needed when they are needed
Goal: Achieve the minimal level of resources required to

add the necessary value in the production system.

Objective of JIT
To eliminate waste
by
Producing the needed item
at the right time
and the exact quantity

Objective of JIT
 Produce only the products the customer wants

 Produce products only at the rate that the customer
wants them
 Produce with perfect quality
 Produce with minimum lead time
 Produce products with only those features the customer
wants

Objectives
 Produce with no waste of labor, material or equipment --

every movement must have a purpose so that there is zero
idle inventory
 Produce with methods that allow for the development of
people

JIT Principles
 Create flow production
• one piece flow
• machines in order of processes
• small and inexpensive equipment
• U cell layout, counter clockwise
• multi-process handling workers
• easy moving/standing operations
• standard operations defined

JIT Principles
 Establish “TAKT” time

• rate at which the customer buys a product
 Build Pull Product
• use of kanban system

JIT Tactics
 Single Minute Exchange of  Visual control

Dies (SMED)  Flexible workers
 Statistical Process Control  Tools at the point of need
 Use of standard containers
 Product redesign
 Doable stable schedules with
adequate visibility  Group Technology
 TAKT-Time  Total Productive Maintenance
 5-S Program
 Kaizen Event

Just-in-Time Success Factors
Flexible/ Suppliers Flexible

Empowered Layouts and
Employees Processes
Small Lot
JIT
Quality Production/
Short Setup
Total
Demand/Pull
Productive
Scheduling
Maintenance

JIT Scheduling Tactics
 Build products to stock or order
 Plan level schedules (Constant rate of production)
 Produce in small lots/mixed model production (dictated by
set-up and thru put times)
 Demand initiates lower level production/supplier deliveries—
Use of kanbans
 Suppliers plan to forecast/build to demand

Quality enables JIT
 Processes are easy to understand—visible
 Quality issues are apparent immediately
 Scope of problems are limited because of lower
inventory levels
 TQM management methods are very important
Quality of execution typically determines how

low inventories can be reduced!

Characteristics of JIT Suppliers
 Few
 Nearby (if possible)
 Repeat business/Longer Term Agreements
 Analysis to enable desirable suppliers to become or stay
price competitive
 JIT Logistics:
 Frequent Deliveries/Smaller Quantities
 Exact Quantities
 Consumption initiates deliveries
 Deliveries directly to the point of use
 Perfect Parts
 Concurrent engineering design practices

Streamlined Production
Traditional Flow Production Process

(stream of water)
Suppliers
Customers
Inventory (stagnant
Flow with JIT ponds) Material
(water in
stream)
Suppliers
Customers
JIT Reduced Waste at Hewlett-Packard
Waste Reduction (%)

Setup Time 20%
Scrap 30%
Finished Goods 30%
Space 40%
Lead Time 50%
Raw Material 50%
Work-in-Process
82%
0% 20% 40% 60% 80% 100%

JIT production, AKA…
 ZIPS (Zero Inventory Production System) -- Omark industries
 MAN (Material As Needed) -- Harley Davidson (Also: “Quality Machine
Through Jelly-Beans,” where jelly beans refers to running one-piece
lots, or mixed models, in final motorcycle assembly)
 MIPS (Minimum Inventory Production System) -- Westinghouse
 Stockless Production -- Hewlett Packard, Greeley Div.
 Continuous Flow Manufacturing (CFM) -- IBM
 Kanban -- Many companies both in North America and Japan
 Toyota System -- Many companies in Japan
 Ohno System (after Taiichi Ohno, a Toyota vice president and master-
mind of the system) -- Many companies in Japan
 Just-In-Time (JIT) Production -- Most popular term both in North
America and Japan
 Lean Manufacturing -- The most recent term

JIT Logic in two simple formulas
 Formula 1: Little’s Law
Average
Average Throughput Production Lead
WIP = Rate X
Time
 Formula 2: Average Production Lead Time
C 
Average Average Measure of
Production
Lead Time
= Processing
Time
X System
Utilization
X
2
S C 2
A
Measure of variance in Measure of variance of

the processing times of interarrival times of
jobs customer orders
Effects of JIT production
(F)
Heightened (H)
awareness of Reduced buffer
Ideas for problems and inventories and/or
cutting lot problem causes workers
sizes (E) Deliberate
Ideas for Fast feedback withdrawal of
Ideas for
improving on defects buffer inventories
controlling
JIT delivery / workers
defects
performance
(G)
Lot size JIT (B)
Smoother
reductions production Scrap/quality
output rates
control
(I)
Less indirect cost for:
(A)
interest on idle inventory,
Less
space and equipment to
inventory
handle inventory, inventory (C) (D)
in the
accounting, physical Fewer rework Less material
system
inventory control labor hours waste
Less material, labor, and indirect inputs for the same of higher output = higher productivity
Less inventory in the system = faster market response, better forecasting, and less administration.
How to accomplish JIT production
1) Design Flow Process
7) Improve Product Design -Link operations
-Standard product configuration -Balance workstation
-Standardize and reduce capacities
number of parts -Re-layout for flow
-Process design with -Emphasize preventive 2) Total Quality Control
product design maintenance -Worker responsibility
-Quality expectations -Reduce lot size -Measure: SQC
-Reduce setup/changeover time -Enforce compliance
-Fail-safe methods
-Automatic inspection
6) Reduce Inventory More

-Look for other areas Concurrently
-Stores Solve Problems 3) Stabilize Schedule
-Transit -Root Cause -Level schedule
-Carousels -Solve permanently -Underutilize capacity
-Conveyors -Team approach -Establish freeze
-Line and specialist windows
responsibiity
-Continual education
5) Work with Vendors
-Reduce lead times
Measure Performance 4) Kanban Pull
-Frequent deliveries
-Emphasize -Demand pull
-Project usage
improvement -Backflush
requirements
-Track trends -Reduce lot sizes
-Quality expectations

Limitations of JIT
 Preconditions to JIT
• trust must be present
• labor/management
• suppliers/consumers
• recognition of processes
• familiarity with problem solving
• quality at the source
• agreement over value and waste

Limitations of JIT
 Right Settings
• applicable in growth to maturity phases of
Product Life Cycle
• standard product
• Steinway and JIT
• standard/fixed pay-rate
• problems with piece-rate scheme
 Universal agreement that change needed

Theoretical Benefits of JIT
 Unpleasant surprises  Less pressure on receiving docks and

eliminated incoming inspection areas
 Less computerization  Lower costs
• visual control  Change in attitude
 Improved quality • Defects are treasures
 WIP reduced
 Better communications

Dealing with Variance
 Four major stances:

• Buffer against it
• Ignore it
• Manage it
• Eliminate it
 All forms of variance create cost

JIT & Variance
 Variance a fact of life

 Comes from many sources
• internal
scheduling changes, scheduling practices,
manufacturing planning & control systems,
absenteeism, process variability
• external
changes in forecasts, actual demand, customer
requested changes, government, competition, vendors

Kanban
 Japanese word for card

 Authorizes production from downstream operations based
on physical consumption
 May be a card, flag, verbal signal etc.
 Used often with fixed-size containers
 Kanban quantities are a function of lead-time and
consumption rate of the item being replenished (min
qty=(demand during lead-time + safety stock)/ container
quantity)

Kanban Production Control Systems
Production Withdrawal
Kanban Kanban
Machine Center Assembly Line
Storage
© 2004 Superfactory™. All Rights Reserved.

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32
Kanban Squares
X X X
X
X X
Flow of work
Flow of information
Kanban Card
Unique Part #
46-281247p1 Description
27” Al Rim
Qty
Where to find
part when bin 23 Kanban Qty
is empty Where to return
Stock Loc: Line Loc: filled Kanban
RIP 1 Asm. 1
Quality at the Source
 For JIT & Kanban to work, quality must be high

 There can be no extra inventory to buffer against
the production or use of defective units
 Producing poor-quality items, and reworking or rejecting

them is wasteful
 The workers must be responsible for inspection &

production quality
 The philosophy is, “NEVER pass along defective item”

One Piece Flow
 A philosophy that rejects batch, lot or mass processing as

wasteful
 States that product should move (flow) from operation to

operation, only when it is needed, in the smallest
increment
 One piece is the ultimate (one-piece-flow)

Continuous Flow
• Line up all of the steps that truly create value so they occur
in a rapid sequence
• Require that every step in the process be:
• Capable – right every time (6 Sigma)
• Available – always able to run (TPM)
• Adequate – with capacity to avoid bottlenecks

(right-sized tools)

Continuous Flow
 Linking manual and machine operations into the most
efficient combinations to maximize value-added content
while minimizing waste
 Elimination of work stagnation in and between processes
 Ideal creation of one piece flow: making one part and

moving one part (in contrast to batch and queue material
handling)
 In order to really get and hold the benefits of flow

production the organization must transition from a
functional structure to a product-focused, cross-functional
structure

Pull Production
 Actual customer demand drives the manufacturing process
 It creates a system of cascading production and delivery

instructions from downstream demand to upstream production in
which nothing is produced by the upstream supplier until the
downstream customer signals a need
 The rate of production for each product is equal to the rate of

customer consumption

Pull Production
• Through lead time compression & correct value

specification, let customers get exactly what’s wanted
exactly when it’s wanted:
• For the short term: Smooth pull loops to reduce

inventory
• For the near term: Make-to-order with rapid response

time
• For the long term: Diagnostics and prognostics in a

stable relationship to take out the surprises for
consumers and producers

Pull System
Leveled assembly
instructions
Production A Fab Vendor
C
Schedule A
B Sub
A
Fab Vendor
Customers Final Assy
Sub Fab Vendor

Vendor
Fab Vendor
© 2004 Superfactory™. All Rights Reserved.

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41
Pull - The Continuing Need!
Batch
tote 20 20
Customer
Action B Action A X0X0
SHIPPING

Standardized Work
 Standardized work consists of three elements:
 Takt time
Matches the time to produce a part or finished product
with the rate of sales. It is the basis for determining
workforce size and work allocation
 Standard in-process inventory
The minimum number of parts, including units in
machines, required to keep a cell or process moving
 Standard work sequence
The order in which a worker performs tasks for various
processes
 Once a standard work is set, performance is measured and

continuously improved

Standardized Work
 Standardized work is the documentation and

application of the best practices of a manufacturing
process
 It may include photographs and/or drawings
 It ensures that production operations are performed

the same way each time
 It is developed with the process/production operators
 It is posted at each workstation

Standardization/Simplification
 Eliminate inherent sources of variance

 Eliminate opportunity for human discretion error
 Examples
• Container sizes
• MacDonalds with interaction with customers
 Consistent with Deming Wheel
• Standardize  expose problems  solve
problems  implement new methods

Work Balancing / TAKT Time
 Work balancing maximizes operator efficiency by matching

work content to TAKT time
 TAKT time is the rate at which customers require your

product
 TAKT time is calculated as follows:
Available work time per day

Daily required customer demand in parts per day

TAKT Time
 TAKT
• the beat
• (Net Available Operating Time) / Customer Requirements
• time periods must be consistent

TAKT Time Example
 Net Available Operating Time
• Time per shift 480´ (minutes)
• Breaks (2 @ 10´) - 20´
• Clean-up - 20’
• Lunch - 30’
• NAOT/shift 410´
 Customer Requirements
• Monthly 26,000 units/month
• No. Working Days 20 days/month
• CR/Day 1,300 units/day
 TAKT Time
• 410’ x 60” x 3 shifts (73,800) divided by 1,300
• 57.769 seconds per part or 57"

Production Smoothing / Leveling
 Averaging both the volume and the production sequence of

different model types on a mixed-model production line
 Example: Toyota Manufacturing

Toyota makes 3 car models - a convertible, hardtop, and
an SUV. Assume that customers are buying nine
convertibles, nine hardtops, and nine SUVs each day.
What is the most-efficient way to make those cars?

One solution would be for Toyota to make all nine convertibles in
the morning, all nine hardtops in the afternoon, and all nine SUVs
in the evening. That would allow people to concentrate on one
kind of work at a time.
However, the people who make parts for the convertibles would
. be busy in the morning, but they and their equipment would be idle
in the afternoon and evening. Similarly, the people and equipment
that make the parts for the hardtop and SUVs would be busy
sometimes and idle at other times.

In the staging lot, vehicles would pile up between the plant and the
dealers. Customers don't buy nine convertibles in the morning, nine
hardtops in the afternoon, and nine SUVs in the evening. They buy
different kinds of cars through the day and week.
Ideally, an automaker needs to make different types of vehicles at more
or less the same pace that customers buy them. Otherwise, they will
end up with a lot of extra inventory in the form of unsold cars.
Parts Factory Car Factory Dealer

Toyota solved the problem by production leveling.
If customers are buying nine convertibles, nine hardtops, and nine
SUVs each day, Toyota assembles three of each in the morning,
three of each in the afternoon, and three of each in the evening. It
also distributes the production of convertibles, hard tops, and SUVs
as evenly as possible through each shift: convertible, hard top,
SUV, convertible, hard top, SUV, and so on.

Leveling production also helps to avoid the problem of excess

inventory of finished vehicles. The vehicle plants make the
different types of cars at about the same pace that customers buy
those cars. They can adjust the pace of production as buying
patterns change.
As the result, dealers only need to maintain a minimal inventory of
cars to show and sell.
Parts Factory Car Factory Dealer

Wrap-up - Pull Manufacturing
Lean manufacturing is really about minimizing the

need for overhead
 which is about concentrating precisely on only what
is necessary
 which is about linking interdependent supply
system decisions, and actions
 which needs to be visual, responsive and simple to
manage

Pull Manufacturing

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Kanban, Just in Time, Demand Flow

Superfactory Excellence Program™

© 2004 Superfactory™. All Rights Reserved. 1

 Current contact information can be found at: www.superfactory.com

© 2004 Superfactory™. All Rights Reserved. 2

 Why Pull Manufacturing?

© 2004 Superfactory™. All Rights Reserved. 3

Lean manufacturing is really about minimizing the

© 2004 Superfactory™. All Rights Reserved. 4

© 2004 Superfactory™. All Rights Reserved. 5

If the meaning of production control is truly understood,

© 2004 Superfactory™. All Rights Reserved. 6

Work in process inventory level

© 2004 Superfactory™. All Rights Reserved. 7

Accommodate lower inventory levels by:

Unreliable WIP Capacity

© 2004 Superfactory™. All Rights Reserved. 8

 Management philosophy of continuous and forced problem

Goal: Achieve the minimal level of resources required to

© 2004 Superfactory™. All Rights Reserved. 9

© 2004 Superfactory™. All Rights Reserved. 10

 Produce only the products the customer wants

© 2004 Superfactory™. All Rights Reserved. 11

 Produce with no waste of labor, material or equipment --

© 2004 Superfactory™. All Rights Reserved. 12

© 2004 Superfactory™. All Rights Reserved. 13

 Establish “TAKT” time

© 2004 Superfactory™. All Rights Reserved. 14

 Single Minute Exchange of  Visual control

© 2004 Superfactory™. All Rights Reserved. 15

Flexible/ Suppliers Flexible

© 2004 Superfactory™. All Rights Reserved. 16

© 2004 Superfactory™. All Rights Reserved. 17

Quality of execution typically determines how

© 2004 Superfactory™. All Rights Reserved. 18

© 2004 Superfactory™. All Rights Reserved. 19

Traditional Flow Production Process

Waste Reduction (%)

© 2004 Superfactory™. All Rights Reserved. 21

© 2004 Superfactory™. All Rights Reserved. 22

 Formula 2: Average Production Lead Time

Measure of variance in Measure of variance of

6) Reduce Inventory More

© 2004 Superfactory™. All Rights Reserved. 25

© 2004 Superfactory™. All Rights Reserved. 26

© 2004 Superfactory™. All Rights Reserved. 27

 Unpleasant surprises  Less pressure on receiving docks and

© 2004 Superfactory™. All Rights Reserved. 28

 Four major stances:

© 2004 Superfactory™. All Rights Reserved. 29

 Variance a fact of life

© 2004 Superfactory™. All Rights Reserved. 30

 Japanese word for card

© 2004 Superfactory™. All Rights Reserved. 31

Machine Center Assembly Line

© 2004 Superfactory™. All Rights Reserved.

 For JIT & Kanban to work, quality must be high

 Producing poor-quality items, and reworking or rejecting

 The workers must be responsible for inspection &

 The philosophy is, “NEVER pass along defective item”

© 2004 Superfactory™. All Rights Reserved. 35

 A philosophy that rejects batch, lot or mass processing as