15.1
Lean Operations
&
Just-In-Time
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.2
Chapter Coverage
• What are lean operations and JIT?
• Differences between traditional approach and
JIT
• Disadvantage of JIT
• Lean philosophy of operations
• JIT techniques
• JIT planning and control
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.3
Lean operations:
Is the philosophy of moving towards zero
order to develop an operation that is:
1)
2)
3)
4)
waste in
faster,
more dependable,
produces higher quality products and service, and
operates at low cost.
Founded on doing the simple things well, on gradually
doing them better and reducing waste every step of the
way.
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.4
Just In Time, JIT:
1) JIT is an approach of producing goods and services
exactly when they are needed.
2) Minimum inventory if not zero
3) Customers wait
4) Encourages efficiency
5) Quality not sacrificed
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.5
JIT definitions:
(textbook definitions)
•JIT aims to meet demand instantly, with perfect quality and no waste
more fully:
improved overall productivity and elimination of waste
•cost-effective production and delivery of only the necessary quantity
of parts at the right quality, at the right time and place, while using a
minimum amount of facilities, equipment, materials and human
resources
•JIT is dependent on the balance between the supplier’s flexibility and
the user’s flexibility
•it is accomplished through the application of elements which require
total employee involvement and team-work
•
•a key philosophy of JIT is simplification
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.6
Differences between traditional approach and JIT
Traditional approach vs. JIT
Traditional approach
JIT
1) Buffer inventory between each
stage act as insulation and gives
some degree of independence
from upstream stages.
2) More buffer better insulation.
3) Stage A experience breakdown,
Stage B can continue producing
for some time.
4) Stage C can continue for longer
time.
5) Problems in Stage A is not spread
throughout.
1) Parts are produced as they are
ordered – no buffer inventory.
2) Stage A experience breakdown,
immediately all stages will have
to stop.
3) Problems in Stage A is apparent
to all and becomes everybody's
responsibility.
4) Improves the chances of problem
being solved.
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Cont…
Operations Management, 4E: Chapter 15
15.7
Cont…
Traditional approach vs. JIT
Traditional approach
JIT
6)
5)
7)
Problems are confined within
the stage and go unnoticed for a
period of time.
Seek efficiency by protecting
each part of the operation from
disruption.
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Seek efficiency through
exposure of system problems,
making problems more evident
and change the ‘motivational
structure’ of the whole system
towards solving the problem.
Operations Management, 4E: Chapter 15
15.8
Traditional approach:
buffer
inventory
stage A
buffer
inventory
stage B
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
stage C
Operations Management, 4E: Chapter 15
15.9
JIT approach:
orders
stage A
orders
stage B
deliveries
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
stage C
deliveries
Operations Management, 4E: Chapter 15
15.10
Disadvantage of JIT:
•
•
The main sacrifice of JIT is low capital utilization
(see Fig 15.10).
Why is capital utilization in JIT systems low?
i.
ii.
•
Produce only when needed.
Any stoppage will affect the rest of the system
causing complete stoppage.
JIT argument - No point producing output just for
its own sake, it is counter productive because extra
inventory hides problems and hinders
improvement.
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.11
JIT APPROACH
focus on producing
only when needed
TRADITIONAL APPROACH
fewer stoppages
focus on high
capacity utilization
more production
at each stage
lower capacity
utilization, but
more stoppages
because of
problems
high inventory means
less chance of problems
being exposed and
solved
extra production
goes into inventory
because of continuing
stoppages at stages
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
low inventory so
problems are
exposed and solved
no surplus
production goes
into inventory
Disadvantage of JIT:
Low capacity
utilization
Operations Management, 4E: Chapter 15
15.12
The problem with inventory
productivity
problems
WIP
Defective
materials
Scrap
Rework
Downtime
Reduce the level of
inventory (water) to
reveal the operations’
problems
WIP
Defective
materials
productivity
problems
Scrap
Rework
Downtime
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.13
Lean philosophy of operations:
1. Eliminate waste
2. The involvement of everyone
3. Continuous improvement
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.14
Eliminate Waste:
•
•
•
Waste can be defined as an activity which does not add
value.
Identifying waste is the first step towards elimination.
The seven types of waste are:
1.
2.
3.
4.
Over production
Waiting time
Transport
Process
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
5. Inventory
6. Motion
7. Defective goods
Operations Management, 4E: Chapter 15
15.15
1. Over production – producing more than is
immediately needed by the next process in the
operation – greatest source of waste.
2. Waiting times – Machine and labour waiting time
are considered waste and they are measure in terms
of machine efficiency and labour efficiency.
3. Transport – Moving materials around the plant and
together with the double and triple handling of WIP,
does not add value. Layout changes which bring
processes closer together, improvement in transport
methods and workplace organization can reduce
waste.
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.16
4. Process – the process itself can be a source of
waste. For example, some operations may only
exist because of poor component design.
5. Inventory – all inventory should be a target for
elimination. However, it is only by tackling the
causes of inventory that it can be reduced.
6. Motion – an operator may look busy but sometimes
no value is being added by the work.
Simplification of work is a rich source of reduction
in the waste of motion.
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.17
7. Defective goods – quality waste is often very
significant in operation, even if actual measure of
quality are limited. Total cost of quality are much
greater than what meets the eye.
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.18
The involvement of everyone:
• Lean approach to people management is called
respect-for-humans system.
• It encourages:
– Team based problem solving
– Job enrichment – less monotonous, more responsibility,
rewarding
– Job rotation – change department, stage, function, cell
– Multi-tasking
• Its intention:
– High degree of personal responsibility leads to ownership
of job
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.19
Continuous improvement:
• Lean objectives are expressed in ideals such as
“to eliminate waste completely”
• Can never be fully achieved
• Require continuous improvement to move closer.
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.20
JIT techniques:
1) Adopt basic working practices:
Discipline – comply to work standards that are in place
for the safety of staff and the environment, and for the
quality of the product.
b. Flexibility – give more responsibility to those capable
even if it is beyond he’s grade.
c. Equality – discard unfair and divisive personnel policies
e.g. uniforms and pay structure
d. Autonomy – delegate decision making responsibilities
to personnel involve in direct activity
a.
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.21
Cont…
Development of personnel – staff training
Quality of working life – e.g. involvement in decision
making, security of employment, enjoyment and
working area facilities
g. Creativity – some enjoy not just doing a job
successfully by improving it for the next time.
h. Total people involvement – take part in selection of new
recruit, spending improvement budget, quality issues,
etc.
e.
f.
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.22
Cont…
2) Design for ease of processing:
–
–
–
Design determines 70% – 80% of production cost
Design improvement can reduce product cost and make
more efficient production process.
Example: reduce number of components, use better or
cheaper material.
3) Emphasize operations focus:
–
–
–
Concept of simplicity, repetition and experience breed
competence.
Focus processes on manageable sets of products,
technologies, volumes and markets
Structure operations objective so that they are consistent
and coherent
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.23
Cont…
4) Use small simple machines:
–
–
–
Use several small machines rather than one big one.
Can produce few different components at a given time
instead of batch by batch production.
More robust, mobile, layout flexibility and reduce
investment risk.
5) Layout for smooth flow:
–
–
Long process routes provide opportunity for delay,
inventory build up, adds no value to the product and
slow down cycle time
Workstations are close together, use U shaped line, use
cell layout.
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.24
6)
Cont…
Adopt Total Productive Maintenance (TPM):
Unreliable processes create waste, for
example, waiting time, delays in downstream
operations. In a JIT system:
operators taught
to care for
processes:
maintenance
personnel’s
role
changes:
emphasis:
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
operate correctly
detect problems
lubricate, clean, adjust
collect data
training operators
long-term planned maintenance
condition monitoring
operator involvement
care for equipment
ensuring total reliability
Operations Management, 4E: Chapter 15
15.25
Cont…
8) Reduce set-up times:
–
Set-up time is the time taken to changeover the process
from one activity to the next. During this time
operation seizes. It is reduced by cutting out:
•
•
•
time taken to search for tools and equipment,
Pre-preparation of tasks which delay changeover
and
Constant practice of set-up routines
9) Ensure visibility:
–
–
More transparent operation is easier for staff to share in
its management and improvement.
Problems are easily detected and information becomes
simple, fast and visual.
10) Adopt JIT through the supply chain:
–
Expand JIT culture to key suppliers
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.26
JIT planning and control
• JIT planning and control is based on the principle of
a ‘pull system’
• What are ‘push’ planning and control & ‘pull’
planning and control?
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.27
Push philosophies of
planning and control
PUSH CONTROL
CENTRAL OPS. PLANNING AND CONTROL SYSTEM
OR
Instruction on
what to make
and where to
send it
Work
centre
Work
centre
FORECAST
Work
centre
Work
centre
DEMAND
•
Signal ‘pushes’ work through the process
•
Activities are scheduled by means of a central system and completed in
line with central instructions
•
No consideration for succeeding stages’ requirements
•
High inventory
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.28
Pull philosophies of planning
and control
PULL CONTROL
Work
centre
Work
centre
Delivery
Request
Request
Request
Work
centre
Delivery
Request
Work
centre
Delivery
DEMAND
Delivery
•
Signal ‘pulls’ work only when required.
•
Only customer can trigger movement – sets the work pace.
•
Lesser chances of inventory build-up.
•
JIT favored.
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.29
Kanban control
•
•
•
•
It is a system used of JIT planning and control.
Based on the ‘pull’ planning and control.
Kanban is the Japanese word for card or signal.
Card or signal used by customer stage to instruct
supplier stage to send more materials.
Cont…
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.30
Cont…
Kanban control
•
Three types of Kanban:
1.
The move or conveyor kanban
–
2.
The production kanban
–
3.
Signals a previous stage that material can be withdrawn
from inventory.
Signals a production process to start producing a part to be
place in inventory.
The vendor kanban
–
Signals an external supplier to send material to a stage.
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.31
Cont…
Kanban control
•
•
•
•
Receipt of kanban triggers movement, production
or supply of one unit.
Two kanbans → two units
Kanban comes in different form – empty container,
verbal instruction, color tokens, etc…
Two kanban procedure:
–
–
Single-card system: either move or vendor kanban
Dual-card system: use move and production kanban
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.32
Work centre A
Work centre B
m
m
Stage A
m
m
m
Stage B
Output stock
Full standard container
m Move kanban
Kanban holding box
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
m
m
m
Output stock
Empty standard container
Flow path for standard containers
Flow path for move kanban
Operations Management, 4E: Chapter 15
15.33
• Each stage has a work center and an area for
holding inventory.
• Loop 1: Stage B requires more parts →
withdraw a container from output stock of
stage A → empty container is kanban and sent
to stage A work center → signal for stage A to
start production
• Loop 2: Move kanban taken from holding box
to output stock point → signal to move a full
container from stage A to stage B.
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.34
Kanban rules:
• Each container must have a kanban card indicating
part number and description, user and maker location,
and quantity.
• The parts are always pulled by the user or customer.
• No parts are started without a kanban.
• All containers contain exactly their number of parts.
• No defective parts may be sent to the user or
customer.
• The maker can only produce enough parts to make up
what has been withdrawn.
• The number of kanbans should be reduced.
• The time period should be made shorter
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.35
The End
© Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15