Sri Devi
24/550671/PEK/30771
Lean Systems
Overview
just-in-time(JIT) system is a
key foundation of a lean
system, and represents a
collection of practices that
eliminate waste, or muda, by
cutting excess capacity or
inventory and removing non
value added activities. he
goals of a lean system are
thus to eliminate these eight
types of waste, produce
services and products only as
needed, and to continuously
improve
the
value-added
benefits of operations.
how lean systems
The Japanese term for this
approach to process improvement is
kaizen. The key to kaizen is the
understanding that excess capacity
or inventory hides underlying
problems with the processes that
produce a service or product. Lean
systems provide the mechanism for
management to reveal the problems
by
systematically
lowering
capacities or inventories until the
problems are exposed
JIT
systems
view
inventory as waste and
work to lower inventory
levels to expose and
correct the problems
(rocks)
that
cause
disruption. However, the
problems that arise must
be corrected quickly.
Otherwise, without the
decoupling inventory, the
process will flounder.
THE EIGHT TYPES OF WASTE, OR MUDA
1. Overproduction Manufacturing an item before it is needed, making it difficult to detect defects and
creating excessive lead times and inventory.
2. Inappropriate Processing Using expensive high-precision equipment when simpler machines would
suffice. It leads to overutilization of expensive capital assets. Investment in smaller flexible equipment,
immaculately maintained older machines, and combining process steps where appropriate reduce the
waste associated with inappropriate processing.
3. Waiting Unbalanced workstations make operators lose time, because if a process step takes longer than
the next, then the operators will either stand idly waiting, or they will be performing their tasks at a speed
that makes it appear that they have work to complete. Operators can also be waiting when a previous
process step breaks down, has quality issues, lacks certain parts or information, or has a long
changeover.
4. Transportation Excessive movement and material handling of product between processes, which can
cause damage and deterioration of product quality without adding any significant customer value.
5. Motion Unnecessary effort related to the ergonomics of bending, stretching, reaching, lifting, and walking.
Jobs with excessive motion should be redesigned.
6. Inventory Excess inventory hides problems on the shop floor, consumes space, increases lead times, and
inhibits communication. Work-in-process inventory is a direct result of overproduction and waiting.
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 goodwill.
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.
Lean systems are operations systems that
maximize the value added by each of a
company’s activities by removing waste and
delays from them. Lean systems affect a
firm’s internal linkages between its core and
supporting processes and its external
linkages with its customers and suppliers.
Core values of simplicity, consistency, and
corporate responsibility are closely tied to
the principles of lean production. Keep
costs down in all areas, provide customers
more value for their money, and remain
more competitive in a business
Identify lean systems
The philosophy of lean systems, applicable at
the process level, is also applicable at the
supply
chain
level.
the
two
salient
characteristics of lean systems that are related
to creating and managing material flows in a
supply chain: close supplier ties and small lot
sizes. Close Supplier Ties because lean
systems operate with low levels of capacity
slack or inventory, firms that use them need to
have a close relationship with their suppliers.
Supplies must be shipped frequently, have
short lead times, arrive on schedule, and be of
high quality.
Differences between one-worker, OWMM and GT
Line flows are recommended
in designing lean system
layouts
because
they
eliminate waste by reducing
the frequency of setups. If
volumes of specific products
are large enough, groups of
machines and workers can be
organized into a line-flow
layout to eliminate setups
entirely.
The one-worker, multiplemachines (OWMM) cell is a
workstation in which a worker
operates several different
machines simultaneously to
achieve a line flow. Having
one worker operate several
identical machines is not
unusual. However, with an
OWMM cell, several different
machines are in the line
The operator moves around the circle,
performing tasks (typically loading and
unloading) that have not been automated.
Different products or parts can be produced
in an OWMM cell by changing the machine
setups.
group technology (GT) An
option for achieving line-flow
layouts with low volume
processes; this technique
creates cells not limited to just
one worker and has a unique
way of selecting work to be
done by the cell
Compares process flows before and after creation
of GT cells.
a. a shop floor where machines are grouped
according to function: lathing, milling, drilling,
grinding, and assembly. After lathing, a part is
moved to one of the milling machines, where it
waits in line until it has a higher priority than any
other job competing for the machine’s capacity.
When the milling operation on the part has been
finished, the part is moved to a drilling machine,
and so on.
b. identified three product families that account for a
majority of the firm’s production. only the flows of
parts assigned to these three families are shown.
The remaining parts are produced at machines
outside the cells and still have jumbled routings.
Some equipment might have to be duplicated, as
when a machine is required for one or more cells
and for operations outside the cells.
Value Stream Mapping
value stream mapping (VSM) A qualitative lean tool for
eliminating waste, or muda, that involves a current state drawing,
a future state drawing, and an implementation plan.
Current State Map, The first step is to focus on one product
family for which mapping can be done. Information for drawing
the material and information flows can be gathered from the shop
floor, including the data related to each process: cycle time (C/T),
setup or changeover time (C/O), uptime (on-demand available
machine time expressed as a percentage), production batch
sizes, number of people required to operate the process, number
of product variations, pack size (for moving the product to the
next stage), working time (minus breaks), and scrap rate.
The future state drawing eliminates the sources of waste identified on the current state
drawing. The first step toward creating the future state is to determine if the process steps are
capable of producing according to the takt time. The second step is to identify where in the
value stream inventories can be totally eliminated by combining process steps. concept of
single-digit setup. The third step to create the future state map is to design pull systems to
manage the remaining inventories. The last step in value stream mapping is preparing and
actively using an implementation plan to achieve the future state. It may take only a couple of
days from the creation of a future state map to the point where implementation can begin for a
single product family. At this stage, the future state map becomes a blueprint for implementing
a lean system and is finetuned as implementation progresses. As the future state becomes
reality, a new future state map is drawn, thus denoting continuous improvement at the value
stream level
5S Practices
Characteristics of lean systems: pull
method of workflow, quality at the source,
uniform workstation loads, standardized
components and work methods, flexible
workforce, automation, Five S (5S)
practices, and total productive (or
preventive) maintenance (TPM).
Small Lot Sizes A lot is a quantity of items that are
processed together. Small lots have the advantage
of reducing the average level of inventory relative
to large lots. Small lots pass through the system
faster than large lots, since they do not keep
materials waiting. In addition, if any defective items
are discovered, large lots cause longer delays
because the entire lot must be examined to find all
the items that need rework. Single-digit setup
The goal of having a setup time of less than 10
minutes. Pull method A method in which customer
demand activates production of the service or item.
Push method A method in which production of the
item begins in advance of customer needs
the pull method, in which customer demand activates the
production of a good or service. In contrast, the push
method. which involves using forecasts of demand and
producing the item before the customer orders it. Quality at
Source, jidoka is automatically stopping the process when
something is wrong and then fixing the problems on the line
itself as they occur poka-yoke is Mistake-proofing methods
aimedat designing fail-safe systems that minimize human
error. Uniform Workstation Loads, Takt time is Cycle time
needed to match the rate of production to the rate of sales or
consumption. Heijunka is The leveling of production load by
both volume and product mix. Mixed-model assembly is A
type of assembly that produces a mix of models in smaller
lots. Standardized Components and Work Methods,
analyzing work methods and documenting the improvements
to use can gain great efficiencies. Flexible Workforce,
Workers in flexible workforces can be trained to perform
more than one job. Automation plays a big role in lean
systems and is a key to low-cost operations. Five S (5S) is a
methodology for organizing, cleaning, developing, and
sustaining a productive work environment. Total productive
maintenance (TPM), which is also sometimes referred to as
total preventive maintenance, can reduce the frequency and
duration of machine downtime.
Kanban Systems
One of the most publicized aspects of lean systems, and the TPS in particular, is the Kanban system
developed by Toyota. Kanban, meaning “card” or “visible record” in Japanese, refers to cards used to
control the flow of production through a factory. The goal of a Kanban system is to make sure that the
company has the minimum amount of inventory that is just enough to keep production running, and that
production is being pulled by customer demand. In the most basic Kanban system, a card is attached to
each container of items produced.
he operating rules for Kanban systems are simple and are designed to facilitate the flow of materials while
maintaining control of inventory levels.
A full container must always have a Kanban card.
The preceding process will never produce parts without a Kanban card.
The following process must post the Kanban card at the receiving post before beginning consumption
of the parts inside the containers
The containers should always contain the same number of good parts (the Kanban card describes the
number of parts per container).
Only non-defective parts should be put into inventory with the Kanban card to make the best use of
materials and worker’s time.
The number of containers flowing
back and forth between two stations
directly affects the quantities of workin-process inventory, which includes
any safety stock inventory to cover for
unexpected requirements.
WIP = (average demand rate)(average
time a container spends in the
manufacturing process) + safety stock
where
k = number of containers for a part
d = expected daily demand for the part, in units
v = average waiting time during the production process plus
materials handling time per container, in fractions of a day
r = average processing time per container, in fractions of a day
c = quantity in a standard container of the part
a = a policy variable that adds safety stock to cover for
unexpected circumstances (Toyota uses a value of no more
than 10 percent)
Implementation Issues
Lean systems can be an integral part of a corporate strategy based on speed because they cut
cycle times, improve inventory turnover, and increase labor productivity. Recent studies also
show that practices representing different components of lean systems such as JIT, TQM, Six
Sigma, total productive maintenance (TPM), and human resource management (HRM),
individually as well as cumulatively, improve the performance of manufacturing plants as well as
service facilities. Lean systems also involve a considerable amount of employee participation
through small-group interaction sessions, which have resulted in improvements in many
aspects of operations, not the least of which is service or product quality. There are 3 sector
which is implemented by lean system: Organizational Considerations, Process Considerations
and inventory and Scheduling.
Organizational Considerations, Implementing a lean system requires management to consider
issues of worker stress, cooperation and trust among workers and management, and reward systems
and labor classifications : The Human Costs of Lean Systems, Cooperation and Trust, Reward
Systems and Labor Classifications. Process Considerations, Firms using lean systems typically
have some dominant workflows. To take advantage of lean practices, firms might have to change
their existing layouts. Inventory and Scheduling, Manufacturing firms need to have stable master
production schedules, short setups, and frequent, reliable supplies of materials and components to
achieve the full potential of the lean systems concept with Schedule Stability, Setups,and Purchasing
and Logistics.
Sri Devi
24/550671/PEK/30771
QUALITY AND PERFORMANCE
The four major costs of quality
the basic principles of (TQM) and Six Sigma
Total quality management is A philosophy that stresses three principles for achieving high levels
of process performance and quality: customer satisfaction, employee involvement, continuous
improvement in performance. Customer Satisfaction Customers are the general term quality to
describe their level of satisfaction with a service or product. Five definitions : Conformance to
Specifications, Value, Fitness for Use, Support,
Psychological Impressions. Employee
Involvement, A program in employee involvement includes changing organizational culture,
quality at the source A philosophy whereby defects are caught and corrected where they were
createdand encouraging teamwork, Teams are Small groups of people who have a common
purpose, set their own performance goals and approaches, and hold themselves accountable for
success. Employee empowerment is An approach to teamwork that moves responsibility for
decisions further down the organizational chart—to the level of the employee actually doing the job.
Continuous improvement is The philosophy of continually seeking ways to improve processes
based on a Japanese concept called kaizen. Most firms actively engaged in continuous
improvement train their work teams to use the plan-do-check-act cycle for problem solving
Six Sigma is A comprehensive and flexible system
for achieving, sustaining, and maximizing business
success.by minimizing defects and variability in
processes. Six Sigma has a different focus than
TQM does: It is driven by a close understanding of
customer needs; the disciplined use of facts, data,
and statistical analysis; and diligent attention to
managing, improving, and reinventing business
processes. Six Sigma process improvement
specialists with black belts have been able to
mentor employees and successfully apply Six
Sigma to improve a host of service processes,
including financial services, human resource
processes, marketing processes, and health care
administrative processes
Defect is Any instance when a process
fails to satisfy its customer. Many
companies spend significant time, effort,
and expense on systems, training, and
organizational changes to improve the
quality
and
performance
of
their
processes. They believe that it is important
to be able to gauge current levels of
performance so that any process gaps can
be determined. Gaps reflect potential
dissatisfied customers and additional costs
for the firm. Most experts estimate that the
costs of quality range from 20 to 30
percent of gross sales. These costs can be
broken down into four major categories: (1)
prevention, (2) appraisal, (3) internal
failure, and (4) external failure.
Prevention costs are associated with preventing defects
before they happen. firms must invest additional time, effort,
and money. Some examples (1) product or service
requirements (2) quality planning (3) quality assurance, (4)
training. Appraisal costs are incurred when the firm assesses
the level of performance of its processes. Some examples (1)
verification (2) quality audits (3) supplier rating. Internal failure
costs result from defects that are discovered during the
production of a service or product. Three main categories: (1)
rework or rectification (2) scrap (3) waste. External failure
costs arise when a defect is discovered after the customer
receives the service or product. Some examples (1) repairs and
servicing (2) complaints (3) returns (4) warranty service and
litigation costs. Ethical failure costs are the societal and
monetary costs associated with deceptively passing defective
services or products to internal or external customers such that
it jeopardizes the well-being of stockholders,customers,
employees, partners, and creditors
Acceptance sampling and process performance
Acceptance
sampling,
which
is
the
application of statistical techniques to
determine if a quantity of material from a
supplier should be accepted or rejected based
on the inspection or test of one or more
samples, limits the buyer’s risk of rejecting
good-quality materials (and unnecessarily
delaying the production of goods or services)
or accepting bad-quality materials (and
incurring downtime due to defective materials
or passing bad products to customers).
Relative to the specifications for the material
the buyer is purchasing, the buyer specifies an
acceptable quality level (AQL)
The basic procedure is straightforward.
1. A random sample is taken from a large quantity
of items and tested or measured relative to the
specifications or quality measures of interest.
2. If the sample passes the test (low number of
defects), the entire quantity of items is accepted.
3. If the sample fails the test, either (a) the entire
quantity of items is subjected to 100 percent
inspection and all defective items repaired or
replaced, or (b) the entire quantity is returned to
the supplier.
The supplier’s internal processes
must be up to the task; TQM or Six
Sigma can help achieve the desired
performance. The buyer’s sampling
plan will provide a high probability
of accepting AQL (or better). Online
Supplement
G,
“Acceptance
Sampling Plans,” shows how to
design an acceptance sampling
plan that meets the level of risk
desired.
Measuring quality of a process and
monitoring its progress over time
can be a complex task that involves
a multitude of steps and decisions,
as
the
following
Managerial
Challenge demonstrates
How to construct process control charts
Statistical process control (SPC) is the application of statistical techniques to determine
whether a process is delivering what customers want. Minimize the variation in outputs iis
important because frequently variation is what the customer sees and feels. Performance
Measurements, Performance can be evaluated in two ways. One way is to measure
variables—that is, service or product characteristics, such as weight, length, volume, or time,
that can be measured and Attributes is Service or product characteristics that can be quickly
counted for acceptable performance. Sampling plan is A plan that specifies a sample size,
the time between successive samples, and decision rules that determine when action should
be taken. Sampling Distributions is relative to a performance measure, a process will
produce output that can be described by a process distribution, with a mean and variance that
will be known only with a complete inspection with 100 percent accuracy. Common causes of
variation is the purely random, unidentifiable sources of variation that are unavoidable with
the current process. Assignable causes of variation Any variation-causing factors that can
be identified and eliminated.
Figure below shows how the control limits relate
to the sampling distribution. A sample statistic
that falls between the UCL and the LCL indicates
that the process is exhibiting common causes of
variation. A statistic that falls outside the control
limits indicates that the process is exhibiting
assignablecauses of variation.
Control chart Is a time-ordered diagram
that is used to determine whether observed
variations are abnormal. A control chart has
a nominal value, or central line, which can
be the process’s historic average or a target
that managers would like the process to
achieve, and two control limits based on the
sampling distribution of the quality measure.
how to determine whether a process
Process capability refers to the ability of the process to meet the design
specifications for a service or product. Design specifications often are expressed as
a nominal value, or target, and a tolerance, or allowance above or below the
nominal value. Process capability index, Cpk is An index that measures the
potential for a process to generate defective outputs relative to either upper or lower
specifications. process capability ratio, Cp is the tolerance width divided by 6
standard deviations.
International Quality Documentation Standards
The International Organization for Standardization devised a
family of standards called ISO 9000 for companies doing
business in the European Union. ISO 9001:2015 is the latest
update of the ISO 9000 standards governing documentation of a
quality program. Baldrige Performance Excellence Program is
a program named for the late secretary of commerce Malcolm
Baldrige, who was a strong proponent of enhancing quality as a
means of reducing the trade deficit; organizations vie for an
award that promotes, recognizes, and publicizes quality
strategies and achievements
To determine the capability of a process to produce outputs within the tolerances,
use the following steps.
Step 1. Collect data on the process output, and calculate the mean and the standard
deviation of the process output distribution.
Step 2. Use the data from the process distribution to compute process control charts,
such as an x and an R-chart.
Step 3. Take a series of at least 20 consecutive random samples of size n from the
process and plot the results on the control charts.
Step 4. Calculate the process capability index.
The systems
Total Quality Management (TQM) focuses on meeting customer needs
through a culture of continuous improvement and active employee
involvement at all levels. There are four key pillars of TQM: (1) Continuous
improvement, (2) Employee involvement, (3) Management commitment and
leadership with a strong focus on quality, and (4) Analytical process thinking
using tools like acceptance sampling, process control, and process
capability. The intersections between these pillars require cultural changes,
such as employee empowerment, ongoing training in statistical tools, factbased management, and integrating quality into long-term planning.
An integrative view of Total
Quality Management
Failure to manage the intersections between TQM pillars is where many
companies fall short in achieving their quality goals. For example, neglecting
quality planning hinders the development of a culture of continuous improvement,
and cutting training programs during economic stress undermines quality
initiatives. Building a long-term quality culture requires consistency in purpose,
thinking, and action.