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Lecture 9

MBF2213 | Operations ManagementPrepared by Dr Khairul Anuar

L9: Lean synchronization

Design

Planning and control

Operations strategy

Improvement

Lean operations

The operation supplies…the delivery of products and services only when needed

The market requires…specified time, quantity and

quality of products and services

Lean operations

Lean synchronization – Slack et al. identify the following key questions:

• What is lean synchronization?

• How does lean synchronization eliminate waste?

• How does lean synchronization apply throughout the

supply network?

• How does lean synchronization compare with other

approaches?

Key operations questions

‘The key principle of lean operations is relatively

straightforward to understand, it means moving

towards the elimination of all waste in order to

develop an operation that is faster, more dependable,

produces higher quality products and services and,

above all, operates at low cost’.

Lean operations

Synonyms

Continuous flow manufacture

High value-added manufacture

Stockless production

Low-inventory production

Fast-throughput manufacturing

Lean manufacturing

Toyota production system

Short-cycle time manufacturing.

Lean operations (Continued)

Traditional approach

JIT approach

Stage A

Orders

Deliveries

Orders

Deliveries

JIT material flow

Buffer inventory

Stage B

Buffer inventory

Stage C

Stage A Stage CStage B

Lean operations (Continued)

Lean approach

Focus on producing only when needed

Lower-capacity utilization, but

No surplus production goes into inventory

Low inventory so problems are

exposed and solved

Traditional approach

Focus on high-capacity utilization

More production at each stage

Extra productiongoes into inventory

because of continuing stoppages at earlier stages

High inventory means less chance of

problems being exposed and solved

Lean operations (Continued)

More stoppages because of problems

Fewer stoppages

The lean philosophy of operations

Eliminate waste Involve everyone Continuous improvement

Lean as a set of techniques for managing operations

Basic working practices

Design for manufacture

Operations focus

Small, simple machines

Flow layout

TPM

Set-up reduction

Total people involvement

Visibility

JIT supply

Lean as a method of planning and control

Pull scheduling

Kanban control

Levelled scheduling

Mixed modelling

Synchronization

Lean operations (Continued)

Inventory

Of material

(queue of material)

Of information

(queue of information)

Of customers

(queue of people)

Cost Ties up working capital Less current information

and so worth less

Wastes customers’ time

Space Needs storage space Needs memory capacity Need waiting area

Quality Defects hidden, possible

damage

Defects hidden, possible

data corruption

Gives negative perception

Decoupling Makes stages

independent

Makes stages independent Promotes job

specialization/

fragmentation

Utilization Stages kept busy by

work-in-progress

Stages kept busy by work in

data queues

Servers kept busy by

waiting customers

Coordination Avoids need for

synchronization

Avoids need for straight-

through processing

Avoids having to match

supply and demand

Source: Adapted from Fitzsimmons, J.A.

Inventories of materials. Information or customers have similar characteristics

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.

Wastes

TABLE | THE EIGHT TYPES OF WASTE OR MUDA

Waste Definition

1. Overproduction Manufacturing an item before it is needed.

2. Inappropriate Processing

Using expensive high precision equipment when simpler 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 Employees

Failure of the firm to learn from and capitalize on its employees’ knowledge and creativity impedes long term efforts to eliminate waste.

Activities that consume time, resources and space, but do not contribute to satisfying customer needs.

Over-production

• Make more than is required by the customer, or to make

it earlier than required.

– Taking multiple copies of the document which are not

required.

Waiting time

• Any delay between when one process step/activity ends and

the next step/activity begins.

– Waiting for a manager to approve an application.

Waste (Continued)

Transport

• Movement of work between departments or

offices that do not add to the value of the product

or service.

– Multiple approvals across different departments.

Underwriting

Operations1

IT Operations2

LPC

(Over) Processing

• Adding more value to a service or product than

customers want or will pay for.

– Capturing extra information from the customer which is not used.

Waste (Continued)

Motion

• Needless movement of people.

• While ‘transportation’ refers to the movement of the

work, ‘motion’ involves movement of workers.

– Running to a printer on a different floor for a printout.

Inventory

• More materials or information on hand than is currently

required.

– 100 applications waiting together for data entry.

Waste (Continued)

Defects/Inspection

• Any aspect of the service that

does not conform to customer

needs.

– Incorrect customer details

captured in the system.

Waste (Continued)

• Making extra copies, just in case

• Document movement between departments

• Supervisory approval delays

• Files waiting to be worked on

• Multiple calls to the customer for same issue

• Incorrect customer address

• Cupboard full of office supplies

• Capturing additional fields in the system

• Running for photocopier to other floor on building

• Incorrect processing of salary

• Customer on hold

• Forms moving different locations

Some daily examples

Activity Waste Category

• Over-production

• Transport

• Waiting

• Inventory

• Over-production

• Defect

• Inventory

• Over-processing

• Motion

• Defect

• Waiting

• Transport.

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

JIT

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 method of work flow– Push method– Pull method

Process Considerations

• Standardized components and work methods

• Flexible workforce

• Automation

• Five S (5S) practices

• Total Preventive Maintenance (TPM)

Lean operations – The 5Ss

TABLE | 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.

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)

Figure – One-Worker, Multiple-Machines (OWMM) Cell

• ‘Value stream’ mapping focuses on value-adding activities and

distinguishes between value-adding and non-value - adding

activities. It is similar to process mapping but different in four

ways:

– It uses a broader range of information than most process maps.

– It is usually at a higher level (5–10 activities) than most process

maps.

– It often has a wider scope, frequently spanning the whole

supply chain.

– It can be used to identify where to focus future improvement

activities.

‘Value stream’ mapping

House of Toyota

Highest quality, lowest cost, shortest lead time by eliminating

wasted time and activity

Just in Time (JIT)

Takt time

One-piece flow

Pull system

Culture of Continuous

Improvement

Jidoka

Manual or automatic line stop

Separate operator and machine activities

Error-proofing

Visual control

Operational Stability

Heijunka Standard Work TPM Supply Chain

Figure – House of Toyota

• Product leveling/smoothing - technique for reducing the muda (waste)• Jidoka - automation with a human touch (eg machine stops when there is a problem)• Takt - German word Taktzeit, translated best as meter, sets the pace for industrial manufacturing lines so that

production cycle times can be matched to customer demand rate

House of Toyota

Highest quality, lowest cost, shortest lead time by eliminating

wasted time and activity

Just in Time (JIT)

Takt time

One-piece flow

Pull system

Culture of Continuous

Improvement

Jidoka

Manual or automatic line stop

Separate operator and machine activities

Error-proofing

Visual control

Operational Stability

Heijunka Standard Work TPM Supply Chain

Figure – House of Toyota

• Product leveling/smoothing - technique for reducing the muda (waste)• Jidoka - automation with a human touch (eg machine stops when there is a problem)• Takt - German word Taktzeit, translated best as meter, sets the pace for industrial manufacturing lines so that

production cycle times can be matched to customer demand rate• Heijunka is a technique for reducing the Mura (Unevenness) which in turn reduces muda (waste). It was vital to the

development of production efficiency in the Toyota Production System and lean manufacturing. The goal is to produce intermediate goods at a constant rate so that further processing may also be carried out at a constant and predictable rate. Also referred to as production leveling, and production smoothing

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

Waste is a large part of most processes

Actual value-add activity may only be 1 –10% of the total process time.

High-level process steps

Prepareapplication

Acquire the customer

Processapplication

Advise customer

Disbursefunds

Activities which add value to the customer: e.g. the credit decision

Activities which don’t add value to the customer but are required by regulation: e.g. Banking laws

Activities which neither add value nor are required by regulation: e.g. carrying files from one

desk to another

Step-by-step activity analysis for value-add to our customer

Mapping the Value Stream – Example

High-level process steps for a loan application process

Inventory levels

Delivering smaller quantities more often can reduceinventory levels

Inventory levels

WIP

Defective materials

ReworkScrap

Downtime

Productivity problems

WIP

Defective materials

ReworkScrap

Downtime

Productivity problems

Reduce the level of inventory (water) to reveal the operations’ problems

The problem with inventory

Small machines

Conventional Western approach is to purchase large machines to get ‘economies of scale’.

These often have long, complex set-ups, and make big batches quickly creating ‘waste’.

Changeovers

Inventory levels

Time

Using several small machines rather than one large one allows simultaneous processing, and is more robust and more flexible.

Small machines (Continued)

Inventory levels

Time

Flow principle

• A process consists of 3 steps – A, B and C.

• It takes one minute to finish each step of the process (A, B and C).

Batch Flow (units processed in batches of 10)

10 Minutes

• How much time will it take for 10 units to move through the process?

A B C

10 Minutes 10 Minutes+ += 30 Minutes

Flow Principle (Continued)

• A process consists of 3 steps – A, B and C.

• It takes one minute to finish each step of the process (A, B and C).

Continuous Flow (unit processed individually, that is, process one, move one)

1 Minute

• How much time will it take for 10 units to move through the process?

1 Minute 10 Minutes+ + = 12 Minutes

A B C

Single-piece flow

• Traffic lights – typical batch processing

• Roundabout – single-piece flow

– Flow of traffic in batches may cause uneven loads

of traffic – traffic may jam on one side while no

vehicle come from other directions.

– Traffic flows as soon as there is capacity in the roundabout

piece by piece.