10. Lean Operations: Process Synchronization and Improvement
Chapter 10
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Lean Operations: Process
Synchronization and
Improvement
10. Lean Operations: Process Synchronization and Improvement
Introduction
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Lean Operations:
– Perfected by Japanese automaker - Toyota
– A more efficient process
– Adopted in USA by the aerospace industry in 1990’s
– Some turnaround times were lowered by 30-50%
– Maintenance productivity improved by 25-50%
10. Lean Operations: Process Synchronization and Improvement
Introduction
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 Overall:
– Many industries have
adopted lean operations
Why??
Improved performance
including:
Cost
Quality
Response time
$
10. Lean Operations: Process Synchronization and Improvement
Introduction
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Quick review:
Responsiveness
A
B
Operations
Frontier
C
High
Low
Price
10. Lean Operations: Process Synchronization and Improvement
10.1
Processing Networks
5
Processing Networks: consists of information and
material flows of multiple products through a sequence of
interconnected processes.
Process 2
Process 4
Product A
Process 6
Process 1
Product B
Process 3
Process 5
10. Lean Operations: Process Synchronization and Improvement
10.1
Processing Networks
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 Plants & Supply Chains—
– Two different levels:
 Plants: any singly owned, independently
managed and operated facility (i.e.,
manufacturing site, service unit, storage
warehouse)
 Supply Chain: a network of interconnected
facilities
Diverse ownership
Flows of information and materials between
the facilities (i.e., raw materials suppliers,
finished goods producers, wholesalers,
distributors, retailers)
10. Lean Operations: Process Synchronization and Improvement
10.2 The Process Ideal: Synchronization & Efficiency
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What is an “Ideal
Process”?
A process that achieves synchronization at
the lowest possible cost
Process Synchronization
The ability of the process to meet
customer demand in terms of their
quantity, time, quality and location
requirements.
Process Efficiency
Measured in terms of the total
processing costs. Less cost, more
efficient!!.
10. Lean Operations: Process Synchronization and Improvement
10.2 The Process Ideal: Synchronization & Efficiency
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Perfectly Synchronized Process that is LEAN will
develop, produce and deliver these ONLY on
demand:
– Exactly what is needed (not wrong or defective
products)
– Exactly how much is needed (neither more or less)
– Exactly when it is needed (not before or after)
– Exactly where it is needed (not somewhere else)
10. Lean Operations: Process Synchronization and Improvement
10.2 The Process ideal: Synchronization & Efficiency
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Just-In-Time (JIT)
– When the four “just rights” come
together—
– Action is taken only when it
becomes necessary!!!
– In Manufacturing - production of
only necessary flow units in
necessary quantities at necessary
times!!!
10. Lean Operations: Process Synchronization and Improvement
10.2 The Process ideal: Synchronization & Efficiency
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Synchronized Networks:
– Outflow of one process is the inflow to
another process!!!!
– REQUIRES PRECISE MATCHING OF
SUPPLY & DEMAND
– All stages are required to be tightly linked
with flow of information and product
– Ideally – the processing stages are achieved
for lowest possible cost!!!!
10. Lean Operations: Process Synchronization and Improvement
10.3 Waste and Its Sources
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 ANYTHING LESS THAN IDEAL PERFORMANCE IS AN
OPPORTUNITY FOR IMPROVEMENT!!!
Low Efficiency = High Processing Costs
Lack of
Synchronization
Defective products, high
inventories, delays, stock outs
10. Lean Operations: Process Synchronization and Improvement
10.3 Waste and Its Sources
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Waste: producing inefficiently, producing wrong or defective products,
producing in quantities that are too small/large, delivering early/late
Sources of Waste:
–
Producing defective products
–
Producing too much product
–
Carrying inventory
–
Waiting due to unbalanced workloads
–
Unnecessary processing
–
Unnecessary worker movement
–
Transporting materials
10. Lean Operations: Process Synchronization and Improvement
10.3 Waste and Its Sources
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Waste Elimination:
– Short term strategies
include:
Cycle & Safety inventories
Safety capacity
Non-Value adding activities
(transportation, inspection,
rework, process control)
10. Lean Operations: Process Synchronization and Improvement
10.3 Waste and Its Sources
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Waste Elimination (cont’d):
– Long-Term Strategy
– Improve the overall processes
– Build in flexibility, predictability,
stability to eliminate temporary
fixes.
 i.e.→ Reduce setup costs to make
it more economical to produce
small batches.
10. Lean Operations: Process Synchronization and Improvement
10.3 Waste and Its Sources
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The River Analogy: The boat can sail in shallow water (lean operations)
if we are able to find ways to remove the imperfections on the river
bottom!!!
FM
FG
WIP
Defects
Defective Materials
Long Lead Times
Machine Breakdowns
Long Setups
Unsuitable Equipment
Uneven Schedules
Unreliable Suppliers
Absenteeism
Inefficient Layouts
Rigid Work Rules
10. Lean Operations: Process Synchronization and Improvement
10.4
Improving Flows in a Plant:
Basic Principles of Lean Operations
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Many buzz-words for
managing and achieving
efficiency within a plant:
– Lean operations
– Just-in-time production
– Zero inventory program
– Synchronous manufacturing
– Agile manufacturing
– Toyota Production System (TPS)
10. Lean Operations: Process Synchronization and Improvement
10.4
Improving Flows in a Plant:
Basic Principles of Lean Operations
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 LEAN OPERATIONS HAS FOUR OBJECTIVES:
1. To improve process flows
 Efficient plant layout and fast/accurate flow of materials and
information
2. To increase process flexibility
 Reducing equipment changeover times & cross-functional training
3. To decrease process variability
 Flow rates, processing times, and quality
4. To minimize processing costs
 Eliminate non-value adding activities (transportation, inspection,
rework)
10. Lean Operations: Process Synchronization and Improvement
10.4
Improving Flows in a Plant:
Basic Principles of Lean Operations
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WHY?????
– First three goals improve Process Synchronization
– Last goal improves Cost Efficiency
10. Lean Operations: Process Synchronization and Improvement
10.4
Improving Flows in a Plant:
Basic Principles of Lean Operations
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Classic Example:
– Efficiency/Synchronization for mass production:
Henry Ford’s Rouge, Michigan plant
– Totally integrated with – steel mill, glass factory,
machine tools, electrical systems, assembly line, welltrained (well-paid) workers
– Minimal low time & cost
– Everything in place except product variety!
10. Lean Operations: Process Synchronization and Improvement
10.4
Improving Flows in a Plant:
Basic Principles of Lean Operations
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Efficiency/Synchronization for Mass Production
Ford Motor Company 1910
Rouge, Michigan Plant
Source: <http://www.shadetreemechanic.com/ford_centennial_in_atlanta.htm
>
10. Lean Operations: Process Synchronization and Improvement
10.4.1 Improving Process Architecture: Cellular Layouts
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Process Architecture: the network of
activities and resources
One method:
FUNCTIONAL LAYOUTS
 Different product types follow different routings through
the resource pools…enabling each flow unit to be sent to
any available station in the pool.
10. Lean Operations: Process Synchronization and Improvement
10.4.1 Review of Process Architectures: Job Shop
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Functional Layout: Resources that perform the same
function are physically pooled together–
JOB SHOPS
Output
Product 1
Input
Product 2
A
C
B
D
10. Lean Operations: Process Synchronization and Improvement
10.4.1 Improving Process Architecture: Cellular Layouts
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 Alternate to Process-based Functional Layout:
CELLULAR LAYOUT
All workstations that perform successive
operations on a given product are grouped
together to form a “CELL”
10. Lean Operations: Process Synchronization and Improvement
10.4.1 Improving Process Architecture: Cellular Layouts
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Product 1
Input
A B C
Output
Example: Henry Ford’s Assembly Line for the Model T
10. Lean Operations: Process Synchronization and Improvement
10.4.1 Improving Process Architecture: Cellular Layouts
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+
ADVANTAGES
 Facilitates synchronous flow of
information and materials
between processing stations
+
 Improved communication
between stations
 Physical proximity of cells
reduce transportation of low
units
 Improves synchronization
where each station produces
parts only if the next station
needs them
 Moves small batches of flow
units quickly
 Easier to recognize and report
problems
 Encourages teamwork & cross
functional skill development
 Quicker ability to correct
defects
10. Lean Operations: Process Synchronization and Improvement
10.4.1 Improving Process Architecture: Cellular Layouts
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-
DISADVANTAGES
 Resources are dedicated to
specific cells
 Resources cannot be used by
other cells
 Lose advantage of resource
pooling
 Worker incentives must be
“team” oriented, not individual
performance based
-
 REMEDIES:
– Use flexible resources that
are cross functional
– Peer pressure to control
productivity of team
members
10. Lean Operations: Process Synchronization and Improvement
10.4.2 Improving Information & Material Flow: Demand Pull
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TWO APPROACHES
1. PUSH: Input availability triggers production where
emphasis is on “keeping busy” and maximize
resource utilization (as long as there is work)
 Planning Tool: MRP (Material Requirements
Planning)
 MRP: End-Product demand forecasts are “exploded”
backwards to determine parts requirements at each
station
10. Lean Operations: Process Synchronization and Improvement
10.4.2 Improving Information & Material Flow: Demand Pull
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 PUSH works well under these conditions if:
– All information is accurate
– Forecasts of finished goods are correct
– There is no variability in processing times
 If one of these conditions at any stages is not met will
DISTURB PLANNED FLOW AND DESTROY
SYNCHRONIZATION THROUGHOUT THE PROCESS!!
10. Lean Operations: Process Synchronization and Improvement
10.4.2 Improving Information & Material Flow: Demand Pull
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2. Demand-Pull:
Where demand from a customer station
triggers production.
 Consequences of Demand-Pull -- -- -- Each station produces only
on demand from its customer station
 The demand is actually “downstream”
Two requirements to make a pull system work:
1. Must have a well-defined customer with a well-defined
supplier process.
2. Must produce the quantity needed only when signaled to
do so by its customer
10. Lean Operations: Process Synchronization and Improvement
10.4.2 Improving Information & Material Flow: Demand Pull
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SUPPLY PUSH: Input availability triggers production
Supplier
Process
Inputs
Customer
Outputs
DEMAND PULL: Output need triggers production
Supplier
Process
Inputs
Information Flow:
Customer
Outputs
Material Flow:
10. Lean Operations: Process Synchronization and Improvement
10.4.2 Improving Information & Material Flow: Demand Pull
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 Demand Signaling: Customer needs a way to signal
(inform) the supplier of its need.
 Customer’s demand starts a chain reaction –
 For withdrawals and replenishments of intermediate parts
 EOQ-ROP system is a “Pull” system where ROP triggers
production at the supplier and EOQ determines the quantity
produced
10. Lean Operations: Process Synchronization and Improvement
10.4.2 Improving Information & Material Flow: Demand Pull
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 Synchronized Pull: When the delivery of parts are in
sequence
[Suppliers must have greater ability and capability to
achieve a synchronized pull effectively]
10. Lean Operations: Process Synchronization and Improvement
10.4.3 Improving Process Flexibility: Batch-Size Reduction
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Each station must know HOW MUCH TO PRODUCE AT A TIME
 Level Production: where small quantities are produced frequently
to mach customer demand
[i.e., if demand is 10000 sedans and 5000 SUVs, the production would call
for producing 2 sedans and then 1 SUV, and then repeat the sequence]
 Changeover Costs and Batch Reduction: Goal of level production
is reduction of changeover costs (fixed setup or transportation costs
of each batch)
 I.E. In auto production expensive parts like seats are produced in
batches of one, wipers in larger batches
 Study the Changeover process to: use special tools to speed it up,
customize some machines, keep some machines already set up.
 Consider “small-batch” production
10. Lean Operations: Process Synchronization and Improvement
10.4.4 Quality at Source: Defect Prevention & Early Detection
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Defective flow units increase average flow time and cost!!!
WHY?
 It necessitates inspection and rework!!!
 Anticipate and then Compensate for the problem:
– Hold extra safety inventory in the buffer
– This increases avg. flow time and cost
 Plan and control Quality:
1. Prevent defects for occurring in the first place
2. Detect and correct them as soon as they appear
10. Lean Operations: Process Synchronization and Improvement
10.4.4 Quality at Source: Defect Prevention & Early Detection
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Defect Prevention
– Careful design of both product and process
– Simplification & standardization
– Mistake-proofing (poka yoke)
 Parts are designed to halt automatically when defective units are fed
into them (parts are designed to minimize chances of incorrect
assembly)
Defect Visibility
– Early detection/corrections
economical
more effective &
10. Lean Operations: Process Synchronization and Improvement
10.4.4 Quality at Source: Defect Prevention & Early Detection
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 Defect visibility (cont’d)
– Early detection helps tracing to the source
– Contribution to better synchronization and lower costs
– Early detection requires constant vigilance and monitoring!!
 Decentralized Control
– Employees must be empowered
with authority and the means to
identify & correct problems at the local level
10. Lean Operations: Process Synchronization and Improvement
10.4.4 Quality at Source: Defect Prevention & Early Detection
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 Decentralized Control (cont’d)
– In typical plants, line workers don’t feel the
responsibility, motivation or security to point out
problems.
 BEST STRATEGIES OF LEAN OPERATIONS ARE:
1. Preventing problems through better planning
2. Highlighting problems as soon as they occur
3. Delegating problem solving to the local level
10. Lean Operations: Process Synchronization and Improvement
10.4.5 Reducing Processing Variability: Standardization of Work
Maintenance, and Safety Capacity
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 Reduce Variability:
– Standardize work at each stage and specify it clearly
 Advantages to Standardization:
– Reduces variability from changing personnel
– Reduces variability from one production cycle to the
next
– Makes it easier to identify sources of waste that can
be eliminated
10. Lean Operations: Process Synchronization and Improvement
10.4.5 Reducing Processing Variability: Standardization of Work
Maintenance, and Safety Capacity
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 Lean Operations try to:
– Minimize carrying safety inventory due to increased
flow time
– Maintain some safety capacity as production against
variability
 These could be extra machines, workers, overtime
These forms of safety capacity should be flexible so that it can
be used as needed!!
10. Lean Operations: Process Synchronization and Improvement
10.4.6 Visibility of Performance
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1. A company needs to “see” (measure) process
performance from the customer’s perspective
– I.E. Time per call
2. Measure Percentage of Customers that had a problem
resolved with one call
3. Actual performance (along with expectations) should be
visible at each work cell
4. Not for punishment, but to provide quick feedback for
corrective action
10. Lean Operations: Process Synchronization and Improvement
10.4.7 Managing Human Resources: Employee Involvement
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 SYNCHRONIZATION WITHIN A PLANT REQUIRES:
1. Cooperation
2. Contribution
3. Commitment
Elton Mayo’s “Hawthorne Experiments” at Western Electric
showed that:
Research has shown that workers involved in the decision-making
process are better motivated and productive
10. Lean Operations: Process Synchronization and Improvement
10.4.7 Managing Human Resources: Employee Involvement
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In Companies with Lean Operations:
• Workers are cross-trained to provide the company with
flexible workers.
• Workers are in work teams in cells and may perform
certain managerial duties such as material ordering,
hiring, scheduling
• Great importance on recruiting and training of workers
10. Lean Operations: Process Synchronization and Improvement
10.4.8 Supplier Management: Partnerships
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Outsourcing: Provides a flexible alternative to
producing in-house
 BUT- - - purchased materials account for a major portion
of product cost and are a major source of quality
problems!!
 Lean approach:
– Choose only a few capable suppliers
– Cultivate cooperative, long-term relationships
10. Lean Operations: Process Synchronization and Improvement
10.4.8 Supplier Management: Partnerships
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In Lean Operations:
– Suppliers are an extension of the plant
– Processing without inventories or quality inspection
– Synchronization requires defect-free material
– Frequent deliveries, small batches
– Supplier’s process be able to produce small quantities
on demand
10. Lean Operations: Process Synchronization and Improvement
10.4.8 Supplier Management: Partnerships
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YOU ARE TREATING THE SUPPLIERS AS
PARTNERS
10. Lean Operations: Process Synchronization and Improvement
10.4.1 – 10.4.8
SUMMARY
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 Lean Operations aim to sustain
continuous flow processing in an
economical manner:
1. Synchronize material and
information flows
2. Increase flexibility
3. Reduce variability
4. Decrease processing costs
10. Lean Operations: Process Synchronization and Improvement
Chapter 10
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Lean Operations:
Process Synchronization and Improvement
Questions??