Download Lean Supply Chains

Lean Supply Chains
Chapter 14
LO14–1: Explain what lean production is.
LO14–2: Illustrate how lean concepts can be
applied to supply chain processes.
LO14–3: Analyze supply chain processes using
value stream mapping.
LO14–4: Apply lean concepts to service processes.
08- 01
Lean-Focused Supply Chain
Components
Lean
suppliers
Lean
procurement
Lean
warehousing
Lean logistics
Optimized mode
selection and pooling
orders
Able to respond to
changes
Key is automation (eprocurement)
Lean
customers
Understand their
business needs
Combined multi-stop
truckloads
Optimized routing
Eliminate non-valueadded steps and waste
in storage process
Lower prices
Value speed and
flexibility
Cross docking
Higher quality
Suppliers must see into
the customers’
operations and
customers must see into
their suppliers’
operation
Import/export
transportation processes
Establish effective
partnerships with
suppliers
Backhaul minimization
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What is a Lean System?
Lean Systems
Operations systems that
maximize the value
added by each of a
company’s activities by
removing waste and
delays from them.
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Lean Logic
Lean is based on the logic that nothing
will be produced until it is needed.
A sale pulls a replacement from the
last position in the system.
This triggers an order to the factory
production line.
Each upstream station then pulls from
the next station further upstream.
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Toyota Production System
Elimination of Waste
1. Waste from
overproduction
2. Waste of waiting time
3. Transportation waste
4. Inventory waste
5. Processing waste
6. Waste of motion
7. Waste from product
defects
Respect for People
1. Lifetime employment for
permanent positions
2. Maintain level payrolls
even when business
conditions deteriorate
3. Company unions
4. Bonuses
5. View workers as assets
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Eight Types of Waste or Muda
1. Overproduction
5. Motion
2. Inappropriate
Processing
6. Inventory
3. Waiting
7. Defects
4. Transportation
8. Underutilization of
Employees
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08 - 06
Principles of Lean Supply Chain
Design
Lean
Layouts
Group technology
Quality at the source
JIT production
Lean
Production
Schedules
Uniform plant loading
Lean
Supply
Chains
Specialized plants
Kanban production control system
Work with suppliers
Building a lean supply chain
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Lean Concepts
• Plant layout is designed to ensure balanced
work flow with a minimum of WIP inventory
• Preventive maintenance is emphasized to
avoid downtime.
– Operators perform much of the maintenance to
keep equipment reliable.
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Lean Concepts
• Group technology: a philosophy in which
similar parts are grouped into families
– The processes required to make the parts are
arranged in a manufacturing cell.
– Eliminates movement and queue time between
operations, reduces inventory, and reduces
employees.
Instead of
specialized
workcenters
Group
technology
manufacturing
cells
14-9
Group Technology
Jumbled Flows
without GT.
Lines Flows with 3
GT cells
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08- 10
One-Worker, Multiple Machines
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08- 11
Quality at the Source
– Jidoka (line stop)
– Poka-Yoke (mistake proofing)
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Quality at the Source
• Quality at the source: do it right the first
time and if something goes wrong, stop the
process immediately
– Workers are personally responsible for the
quality of their output.
– Workers become their own inspectors.
– Workers are empowered to do their own
maintenance.
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Just-in-Time (JIT) Production
• JIT production: producing what is needed
when needed and nothing more
– Anything over the minimum is waste.
– Typically applied to repetitive manufacturing.
– Ideal lot size is one.
– Vendors ship several times a day.
– JIT exposes problems otherwise hidden by
inventory.
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Lean Production – Pull System
14-15
Inventory Hides Problems
14-16
Lean Concepts summary
Pull Method of
WorkflowCustomer demand activates
the production of the
service or item.
• Close Supplier Ties
• Small Lot Sizes
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Lean Concepts summary
• Flexible Workforce
• Automation
• 5S
• Total Preventative
Maintenance
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5S
08 - 19
What is a Value Stream Mapping?
Value Stream Mapping
a special type of flowcharting
tool used to analyze where value
is or is not being added as
material flows through a process
Requires a full understanding of
the business, including
production processes.
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VSM: A Two Part Process
 Value stream mapping is a two-part process:
 Depict the “current state” of the process (see Exhibit 14.8: next slide)
 Map of the same process with suggested improvements (Exhibit 14.10: see
two slides over)
 The “future state” map has been annotated using Kaizen bursts that
suggest the areas for improvement. Kaizen bursts identify specific shortterm projects that teams work on to implement changes to the process.
 Exhibit 14.10 is a totally redesigned process:
 The individual production operations have been combined into a workcell
operated by three employees.
 In addition, rather than “pushing” material through the system based on
weekly schedules generated by production control, the entire process is
converted to a pull system that is operated directly in response to customer
demand.
 Lead time in the new system is only 5 days, compared to the 34 days in the
old system.
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Manufacturing Process Map: Current
State of a Process (Exhibit 14.8)
14-22
Value Stream Mapping – Symbols
14-23
Manufacturing Process Map: Possible Future
State of a Process (Exhibit 14.10)
14-24
Example
a.
08- 25
What is a Kanban?
Kanban
A Japanese word
meaning “card” or
“visible record” that
refers to cards used to
control the flow of
production through a
factory
08- 26
Kanban Systems
Kanban
means
“sign” or
“instruction
card” in
Japanese
Cards or
containers
are used
Make up
the Kanban
pull system
Worker takes the first part A from a full container.
Worker takes the withdrawal Kanban from the container and takes the card to the machine
center storage area.
In machine center, worker finds a container of part A.
Worker removes the production Kanban and replaces it with the withdrawal Kanban.
The freed production Kanban is placed on a rack by the machine center, which authorizes
the production of another lot of material.
The cards on the rack become the dispatch list for the machine center.
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The Kanban System
1. Each container must have a card.
2. Assembly always withdraws from fabrication
(pull system).
3. Containers cannot be moved without a kanban.
4. Containers should contain the same number of
parts.
5. Only good parts are passed along.
6. Production should not exceed authorization.
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08 - 28
The Kanban System
Receiving post
Kanban card for
product 1
Kanban card for
product 2
Storage
area
Empty containers
Assembly line 1
O2
O1
Fabrication
cell
O2
O3
Assembly line 2
Full containers
08- 29
The Kanban System
Receiving post
Kanban card for
product 1
Storage
area
Kanban card for
product 2
Empty containers
Assembly line 1
O2
O1
Fabrication
cell
O2
O3
Assembly line 2
Full containers
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall
08- 30
The Kanban System
Receiving post
Kanban card for
product 1
Storage
area
Kanban card for
product 2
Empty containers
Assembly line 1
O2
O1
Fabrication
cell
O2
O3
Assembly line 2
Full containers
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall
08- 31
The Kanban System
Receiving post
Kanban card for
product 1
Storage
area
Kanban card for
product 2
Empty containers
Assembly line 1
O2
O1
Fabrication
cell
O2
O3
Assembly line 2
Full containers
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall
08- 32
The Kanban System
Receiving post
Kanban card for
product 1
Storage
area
Kanban card for
product 2
Empty containers
Assembly line 1
O2
O1
Fabrication
cell
O2
O3
Assembly line 2
Full containers
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall
08- 33
The Kanban System
Receiving post
Kanban card for
product 1
Storage
area
Kanban card for
product 2
Empty containers
Assembly line 1
O2
O1
Fabrication
cell
O2
O3
Assembly line 2
Full containers
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall
08- 34
The Kanban System
Receiving post
Kanban card for
product 1
Storage
area
Kanban card for
product 2
Empty containers
Assembly line 1
O2
O1
Fabrication
cell
O2
O3
Assembly line 2
Full containers
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall
08- 35
Determining the Number of Kanbans
Needed
 Setting up a Kanban
system requires
determining the number
of Kanbans cards (or
containers) needed.
 Each container represents
the minimum production
lot size.
 An accurate estimate of
the lead time required to
produce a container is key
to determining how many
Kanbans are required.
K = DL(1+S)/C
k = number of Kanban card sets
D = average number of units
demanded over a given time
period
L = lead time to replenish an
order (in same time units as
demand)
S = safety stock expressed as a
percentage of demand during
lead time
C = container size
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Example 14.1
Average number of
units demanded over
a given time period
(D ) = 8 per hour
Lead time to
replenish an order (L
) = 4 hours
Safety stock (S ) =
10%
Container size (C) =
10 units
Round up to 4 containers
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Problem 11
• Transmissions are delivered to the fabrication line 4 at a time. It takes 1
hour for transmissions to be delivered. Approx. 4 vehicles are produced
each hour, and 50% of expected demand should be maintained as safety
stock.
D = 4 transmissions per hour
L = 1 hour
S = .50
C = 4 transmissions
• K = DL(1+S)/C
• K = 4(1)(1+0.50) / 4 = 1.50  2 Kanban card sets
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall
8 - 38
Problem 12
•
•
•
•
•
D = 2,400 bottles every 2 hours
S= 0.1 of demand
L = 40 minutes
C= 120 bottles
Find K (number of Kanban cards needed)
• K = DL(1+S)/C
• D = 2,400 bottles/2 hours = 1200/60 minutes = 20 bottles per
minute
• K = 20(40)(1+0.10) / 120 = 7.33  8 Kanban cards
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall
8 - 39
Setup Times
Reductions in setup
and changeover
times are necessary
to achieve a smooth
flow.
Kanban significantly
reduces the setup
cost.
The organization will
strive for a lot size of
one.
14-40
Lean Supply Chains
Specialized
plants
Small specialized plants rather than large vertically
integrated manufacturing facilities
Can be constructed and operated more cheaply
Collaboration
with
suppliers
Important part of process
Share projections with suppliers
Link with suppliers online
14-41
Lean Supply Chains
Building
a Lean
Supply
Chain
Value must be defined jointly for each product family based on the
customer’s perception.
All firms along the value stream must make an adequate return on
their investments.
Firms must work together to eliminate waste (muda).
When cost targets are met, firms will conduct new analyses to
identify remaining waste and set new targets.
Every participating firm has the right to examine every activity
relevant to the value stream as part of the joint search for waste.
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Lean Services
Organize problem-solving groups
Upgrade housekeeping
Upgrade quality
Clarify process flows
Revise equipment and process technologies
Level the facility load
Eliminate unnecessary activities
Reorganize physical configuration
Introduce demand-pull scheduling
Develop supplier networks
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