CHAPTER 10: PROCESS SYNCHRONIZATION AND IMPROVEMENT
10.1 Objective
This chapter concludes with a big picture involving flows of information and material between different
processes in a processing network with the objective of making products available to customers on time
and at low cost. The chapter covers three main themes: just-in-time operations within a plant, supply
chain management across plants, and process improvement. We start by defining continuous flow as the
ideal goal of any process, describe the just-in-time methodology of lean operations for approaching the
goal within a plant and then extend those principles to the entire supply chain connecting suppliers,
producers, distributors, wholesalers, and retailers. The third part on process improvement deals with the
process of bringing about a change in approaching the ideal performance through continuous
improvement, TQM, reengineering, benchmarking and managing organizational change. As an
alternative, we have also considered keeping the first two components of this chapter together as one
chapter on synchronizing flows, separated by process improvement as the final chapter.
Given the broad nature of this chapter, it can be used in a variety of ways to fit the instructor’s philosophy
and framework for the course. It is written as a natural concluding chapter that ties many concepts
covered earlier in detail and thus may be used as the last topic in the course. Thus, after describing any
process (plant or supply chain) as a network of connected subprocesses, we can summarize improving
each subprocess according to the principles indicated through chapters 3-9, and then streamlining flows of
information and material between these subprocesses.
Another approach is to use parts of this chapter earlier on as motivation for studying other chapters. For
example, one may use the first part of this chapter as motivation for managing operations within an
organization, as in chapters 4-9. and the second part of the chapter later on as managing a supply chain.
Thus, after chapters 1-5 on operations strategy and basic process analysis, we have used a “housebuilding simulation”, as a hands-on process improvement exercise in class. It demonstrates principles of
streamlining operations within a plant, including cellular layout and pull system. We then study the
Toyota Motor Manufacturing case to discuss the Toyota Production System, as in section 10.4, which is
then used as motivation for studying batch sizes, and effects of set up times, and variability, as in chapters
4-8. Inventories (chapters 6 and 7) are then used as part of supply chain management, concluding with
section 10.5. Finally, we use chapter 9 on quality which is combined with continuous improvement and
process reengineering.
10.2 Additional Suggested Readings
To discuss just-in-time operations, we have used an in class simulation where we divide the class into
teams of about ten students. Each team has to build houses from paper, using scissors, staplers, tapes.
We specify a functional layout where all cutters are in one location, all tapers in another, etc., with
material handlers moving the material between them. We measure total flow time, inventory, defective
houses, etc. under current configuration. We then let the teams brainstorm and come up with an improved
process with cellular layout and eliminated non-value adding activities like material handling. We
demonstrate the use of kanbans to implement the pull system. We show a short video on cellular layout
in a GM brake hose assembly to show how these principles are in fact employed in practice. Finally, we
assign the Toyota case for class discussion in the following class.
 “Toyota Motor manufacturing, U. S. A., Inc.” HBS case 1-693-019.
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In addition to the Zipkin’s article cited at the end of the chapter, we have assigned various one pagers on
just in time from Wall Street Journal, New York Times, Economist, etc.
For the supply chain management part of this chapter, we start by asking why inventories build up in the
house game. We develop economies of scale and variability in supply/demand as the reasons, leading to
EOQ and safety stocks, as in chapters 6 and 7 of the text. For this purpose we use the Palu Gear case
(developed by and available from J. A. Van Mieghem). Our colleague Professor Lariviere has developed
the CupCake Game which we now use to teach the newsvendor model.
In the past (but no longer), we followed the traditional way to consider supply chain dynamics is to use
the well known “beer distribution game,” the Benetton, Barilla, or HP cases.

“Benetton (A)”, HBS case 9-685-014.
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"Barilla Spa (A), HBS case 5-695-063.
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“Hewlett-Packard: DeskJet Printer Supply Chain (A)” Stanford case by L. Koczak and H. Lee.
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10.3 Test Questions
10.3.1. A supplier of Toyota is planning to implement Heijunka. Toyota has recommended that the supplier cut
the batch sizes from the current level of 50 down to 10. In order to achieve this, the supplier should
reduce setup costs by a factor of
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
5
25
5
Reducing setup costs has no relationship with batch size
Answer: To reduce EOQ by a factor of 5, we need to reduce set up cost by a factor of 25
10.3.2 Indicate which of the following statements is (are) correct
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A functional layout is preferred to a cell layout when a large variety of products is to be produced
with very uncertain demand for each product.
A cell layout is preferred to a functional layout when a large variety of products is to be produced
with very uncertain demand for each product.
A functional layout is preferred to a cell layout when a small variety of products is to be
produced with stable demand for each product.
A cell layout is always preferred to a functional layout.
A functional layout is always preferred to a cell layout.
10.3.3 Tower Automotive, a major manufacturer of auto parts based in Michigan, has just learnt about the
Toyota production system and wants to implement JIT. Traditionally there has been no control on
the amount of work in process inventory between stages (it has been known to exceed 500 parts
between some stages). Following Shonberger’s zero inventories advice, Tower Automotive is
considering as a first step to limit the amount of work in process inventory between stages to a
maximum of 5 parts. What, if any, impact will this have on the output rate from the factory in the
short term?
Arbitrarily reducing inventories may result in high changeover costs and/or equipment idleness due
to starvation. They should reduce inventories gradually, ironing out process imperfections. They
must work on reducing setup times and changeover costs (which will reduce EOQ) and reducing
variability (which will reduce the need for safety stocks). The goal is to improve the system, not just
reduce inventories for its own sake.
10.3.4 Company ABC manufactures widgets using a two--stage system in which there is one machine in the
first stage and 3 identical machines in the second stage. The machine in the first stage can produce at
an average rate of 5 jobs per shift. Each machine in the second stage can produce at an average rate
of 2.5 jobs per shift. Each product has to be first processed on the first machine and then on one of
the three second stage machines. The demand for widgets is 5 jobs/shift. Recently a Japanese
company entered the market and ABC faces severe competition. The CEO of ABC has heard about
the Japanese approach to operations and after visits to several facilities in Japan concludes that the
key to Japanese cost and time competitiveness is zero inventories. Based on the data supplied by the
accountant, the CEO acts as follows:
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He observes that there is excess capacity in the second stage. The first stage produces at 5
jobs/shift and the second stage at 7.5 jobs per shift. To reduce costs, he disposes off one
machine in the second stage.
He dictates that no inventories be carried in the shop floor.
You are hired as a consultant. Preliminary data collection shows that the first machine produces at
the rate of 8 jobs per shift 50% of the time and 2 jobs per shift the other 50%; similarly, each
machine in the second stage produces at 4 jobs/shift 50% of the time and 1 job/shift the other 50%.
What is the effect of CEO’s decisions on the output rate of widgets at ABC? Is it less than, equal to,
or greater than 5 jobs per shift? Why?
Stage 1 variability and no inventory will lead to starvation of stage 2 and lower throughput
How would you approach this problem and achieve the JIT ideal of zero inventories with existing
resources. You realize that you cannot make the machines completely reliable overnight.
Given variability in stages 1 and 2, we need buffer inventory or excess capacity. The solution is to
gradually reduce inventory to increase urgency to make machines more reliable.
10.3.5 The lock box operation at NBD bank involves three stages. Envelopes arrive from the post office
every half hour in batches of 30. In the first stage the envelopes are automatically opened at a rate of
60 per hour. In the second stage the contents (deposit slips) are scanned and printed. This optical
character recognition machine is capable of processing 60 deposit slips per hour. In the final third
stage, deposit confirmation records are inserted into envelopes at a rate of 60 records per hour, to be
mailed to customers. Between each stage the contents of envelopes are moved in batches of 30.
A suggested “process improvement” at NBD calls for movement between stages in batches of 15
rather than 30. As a result the cycle time taken to process each batch of 30 envelopes coming from
the post office is expected to
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Remain unchanged.
Decrease by 10 minutes.
Decrease by 15 minutes.
Decrease by 20 minutes.
Decrease by 30 minutes.
Another suggested “process improvement” calls for increasing the processing rate at each station
from 60/min to 90/min, leaving the rest as in the original process. What, if any, impact would you
expect on the time to process each batch of 30 from the post office?
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No change.
Decrease by 10 minutes.
Decrease by 15 minutes.
Decrease by 20 minutes.
Decrease by 30 minutes.
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10.3.6 The pop-group Hootie & The Operations Fish came out with a smash hit, singing about Lover’s
Beer. As a result, in two weeks customer demand for Lover’s Beer increased from 4 crates of
beer per week to 8 crates per week (and remained at 8 crates per week during the next 30 weeks).
Lead times in the supply chain are large and stages only communicate with each other through the
orders they place.
(a) What will be the main effect observed in the supply chain?
Small variability in customer demand is magnified and delayed upstream in the supply chain
leading to shortages and huge inventory excess.
(b) List two key actions that need to be taken in order to avoid this effect.
Action 1: Share end-customer order information and supply-chain inventory status. This cuts
information lead-times, coordinates each player to the same information set and allows each
station to figure out a reasonable estimate of lead-times given current, dynamic status of supplychain.
Action 2: Decrease material lead-times by cross-docking, fast transportation, decreasing the
number of middlemen.
10.3.7 In Reengineering Work—Don’t Automate, Obliterate, Michael Hammer advances “organize
around outcomes, not task” as a major `principle’ of reengineering.
What do they mean by this suggestion?
Have one person perform all the activities in a process. Thus, a person’s job should be designed
around an objective or outcome, not a single activity.
This is re-integration of industrial work.
Give two major benefits that result from this principle?
1.: accountability
2.: pooling of - resources which means less waiting and fewer hand-offs
- information
What is the major disadvantage of this principle?
Loss of specialization benefits
10.3.8 Kellogg’s admissions staff has embarked on a re-engineering project. Inspired by Hammer and
Champy’s Reengineering the Corporation, they are considering empowering each admissions
employee so that each employee will handle an entire application. That is, each employee will
receive the application package, enter all administrative data in the computer data base, read all
essays and make an application decision (accept, ask a second opinion, put on waiting list, reject).
This contrasts to the current process where employees are dedicated to either data entry or
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reading and deciding which are done sequentially. If this new process vision were implemented,
Kellogg can expect
(a) total theoretical cycle time to process an application to
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decrease
remain the same
increase
(b) total actual cycle time to process an application to
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
decrease
remain the same
increase
Answer: (a) Remain the same
(b) Decrease
10.3.9 List three causes of the bullwhip effect in a supply chain. For each cause identify one
countermeasure that can be used to dampen the bullwhip effect.
Three causes of the bullwhip effect are:
1. Large batch production
2. Large forward buying because of promotions
3. Large purchases because of quantity discounts
4. Barilla is forecasting based on orders and not end customer demand
Countermeasures are
1. Reduce changeover costs and times by improving flexibility
2. Stabilize prices or base promotions on sell-thru and not sell-in to reduce forward buying
3. Offer discounts on amount purchased of assortments rather than of single products or product
families
4. Increase information visibility in the supply chain so that there are common forecasts and
plans
10.3.10 Why do shortages lead to increased fluctuation in orders? What can a firm do to counter this
phenomenon?
During shortages, customers tend to over order hoping that will increase the amount they receive.
Manufacturers that only see orders often interpret these increases as true increases in demand and
plan for supply accordingly. Most of the demand disappears when adequate supply is available.
This leads to alternating boom and bust cycles. The best method to counter this phenomenon is to
delink the amount supplied from the actual order placed during a period of shortages. The amount
supplied to s customer should be based on past purchases. This eliminates any incentive they have
for inflating their orders.