Lecture Operations and supply chain management: The Core (3/e) – Chapter 12: Lean supply chains

Lecture Operations and supply chain management - Chapter 12: Lean supply chains. After reading the material in this chapter, you should be able to: Explain what lean production is, describe how a pull production system works, understand toyota production system concepts, summarize important attributes of a lean supply chain,...

Lean Supply Chains

Chapter 12

Learning Objectives

1. Explain what Lean Production is

2. Describe how a pull production system works

3. Understand Toyota Production System concepts

4. Summarize important attributes of a lean supply

chain

5. Analyze a supply chain process using value

chain mapping

6. Learn the principles of lean supply chain design

7. Learn how a Kanban system works

8. Show examples of applying lean thinking to

service companies

Lean Production

Lean Logic

Toyota Production System

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

1. Lifetime employment

for permanent positions

2. Maintain level

payrolls even when business conditions deteriorate

3. Company unions

5. View workers as

assets

Lean Supply Chains

Lean Focused Supply Chain

Components

Principles of Lean Supply Chain

Design

Lean Concepts

 Plant layout 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

 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

 Eliminated movement and queue time between

operations, reduces inventory, and reduces

employees

Quality/J ust-in-Time

 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

 J IT production - producing what is needed when needed and nothing more

 Anything over the minimum is waste

 Typically applied to repetitive manufacturing

 Idea lot size is one

 Vendors ship several times a day

 J IT exposes problems otherwise hidden by inventory

Lean Production Schedules

Kanban Systems

 Kanban

means

“sign” or

“instruction

card” in

J apanese

 Cards or

containers

are used

 Make up

the Kanban

pull system

Determining the Number of

Kanbans Needed

system requires

determining the number

of Kanbans cards (or

containers) needed

represents the minimum

production lot size

the lead time required to

produce a container is

key to determining how

many Kanbans are

required

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 leadtime

Lean Supply Chains

Lean Supply Chains