Introduction to operations and supply chain management 3e bozarth chapter 13

 Discuss the Lean perspective on inventory and describe how a kanban system helps control inventory levels and synchronize the flow of goods and material across a supply chain..  Descr

JIT/Lean Production

Chapter 13

Chapter Objectives

Be able to:

 Describe JIT/Lean and differentiate between the Lean philosophy and kanban systems.

 Discuss the Lean perspective on waste and describe the eight major forms of

waste, or muda, in an organization

 Discuss the Lean perspective on inventory and describe how a kanban system helps control inventory levels and synchronize the flow of goods and material across a supply chain

 Describe how the concepts of the Lean supply chain and Lean Six Sigma

represent natural extensions of the Lean philosophy

 Explain how a two-card kanban system works

 Calculate the number of kanban cards needed in a simple production

environment

 Show how MRP and kanban can be linked together and illustrate the process using a numerical example

Just-in time/Lean

 Just-in-time – A philosophy of manufacturing,

applicable to manufacturing and services based on planned elimination of all waste and on continuous improvement of productivity

 Lean – A philosophy of production that emphasizes the minimization of the amount of all resources

(including time) used in the various activities of an enterprise It includes identifying and eliminating non-value-adding activities. © 2010 APICS Dictionary

Performance Advantage

of a Lean Plant Circa 1986

Kicked off the JIT/Lean Production Revolution

in the late 1980’s/early 1990’s

Figure 13.1

Lean Philosophy

 The Lean philosophy can be applied to a wide range

of production and service environments.

 Companies following the Lean philosophy can and

do use a wide range of planning and control

techniques, not just kanban.

 The Lean philosophy is consistent with business

process improvement, quality improvement, and supplier management initiatives

Lean Waste

value to the good or service in the eyes of the consumer.

 Called “muda” in Japanese

 Identification of lean wastes began with Taiichi

Ohno, a Toyota engineer.

© 2010 APICS Dictionary

Eight Lean Wastes

Lean Perspective on Inventory

 Triangles represent inventory between work centers A, B, and C

 The buildup of inventory hides problems (at a cost) that may occur.

Figure 13.2

Lean Perspective on Inventory

 After a Lean transformation, wasted movement and space are eliminated and work centers are moved closer together

 Inventory levels are reduced dramatically and work centers make only what is needed when it is needed.

Figure 13.3

Lean Perspective on Inventory

Process of reducing inventory leads to reduction

of the other “wastes” and exposes problems in order of severity (‘water and rocks’ analogy)

Figure 13.4

Recent Developments

in Lean Thinking

 Lean Six Sigma – A methodology that combines the organizational elements and tools of Six Sigma with Lean’s focus on waste reduction.

 Lean Supply Chain Management – An extension of the Lean philosophy to supply chain efforts beyond production Lean supply chain management seeks

to minimize the level of resources required to carry out all the supply chain activities.

Kanban System

 Kanban system – A production control approach that uses containers, cards, or visual cues to control the production and movement of goods through the supply chain.

 Key characteristics:

 Uses simple signaling mechanisms to indicate when specific items

should be produced or moved.

 Can be used to synchronize activities either within a plant or between different supply chain partners.

 Are not considered planning tools, but rather control mechanisms that are designed to pull parts or goods through the supply chain based on downstream demand.

Kanban System

control production and another card to

control movement of materials.

Kanban System for Two Work Centers

Figure 13.5

Release of Finished Materials

from Work Center B

Figure 13.6

Pulling of Raw Materials into Production at Work Center B

Figure 13.7

Removal of Finished Materials

from Work Center A

Figure 13.8

Two-card System Summary

material out of work center B.

production.

center B pulls finished material out of work center A.

Pull System

actual downstream demand sets off a chain

of events that pulls material through the

various process steps.

 A kanban system is also called a pull system.

Kanban System

 Single-card systems

 Color coding of containers

 Designated storage spaces

 Computerized bar-coding systems

Controlling Inventory Levels Using Kanbans

Kanban - Example 13.2

Determine the number of production cards needed using the following information:

Kanban - Example 13.2

Convert the number of kanbans into the number of

subassemblies and hours work:

Kanban - Example 13.3

improvements, were made:

 Production lead time has been cut from 2.6 hours

to a constant 1.6 hours.

 Demand from final assembly has been stabilized at

300 subassemblies per hour.

 Smaller, standardized containers that hold just 25 subassemblies are now being used.

Kanban - Example 13.3

Synchronizing the Supply Chain

Using Kanbans

 To synchronize the supply chain, there must be a smooth, consistent flow of material through the supply chain links.

Figure 13.9

Using MRP and Kanbans Together

Example 13.4

with the control capabilities of kanban.

Using MRP and Kanbans Together

Example 13.4

 There is no projected ending inventory

 Consistent with Lean philosophy of having no more

inventory in the system than is needed.

 Planned orders all occur in the same week as the planned receipts.

 Because planning lead time is just 1.6 hours, orders

released in a week should be completed in that week.

 Planned order quantities can be used to calculate the

demand rates and kanban cards for each week.

Using MRP and Kanbans Together

JIT/Lean Production

Case Study

Supply-Chain Challenges in

Post-Earthquake Japan

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