Ch 7.

Lean Thinking and Lean Systems

Manufacturing Logistics
 Evolution of Lean
• Toyota Production System (TPS)
✓Developed in Japan (limited resources)
✓Also known as Just-in-Time (JIT) manufacturing
• Came to U.S. in 1981 at Kawasaki motorcycle plant in Nebraska
✓Focused on inventory reduction, not the entire system
• Lean Production
✓Defined as systematically eliminating waste in all production processes by
providing exactly what the customer needs and no more
✓Term coined in late 1980s
✓Popularized in 1990s by Womack, Jones & Roos, “The Machine That Changed the
World: The Story of Lean Production”

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 Lean Principles
1. Value: Create product/service value from customer perspective
• Reduce waste (Muda)

2. Value Stream: Identify, study, improve the value stream

• Observe the process (Gemba)

3. Flow: Ensure constant flow

• Determine takt time

4. Pull: Produce only what is pulled by customer

• Use Kanbans

5. Perfection: Continuous improvement

• Use 5S, 5 Whys

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4
 7 Wastes
Overproduction: Producing more than the demand for customers, resulting in
unnecessary inventory, handling, paperwork, and warehouse space.
Waiting time: Operators and machines waiting for parts or work to arrive from
suppliers or other operations. Customers waiting in line.
Unnecessary transportation: Double or triple movement of materials due to
poor layouts, lack of coordination, and poor workplace organization.
Overprocessing: Poor design or inadequate maintenance or processes, requiring
additional labor or machine time.
Too much inventory: Excess inventory due to large lot sizes, obsolete items, poor
forecasts, or improper production planning.
Unnecessary motion: Wasted movements of people or extra walking to get
materials.
Defects: Use of material, labor, and capacity for production of defects, sorting out
bad parts, or warranty costs with customers.

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 Value Stream Mapping
• Value stream is all processing steps to complete production
• The goal in studying the value stream is to eliminate the non-value-adding
process steps and tasks
• Value stream mapping is a visual representation of a process
• The map shows the beginning and ending points of the process, the steps and
tasks between those points, and relevant performance information about the
process

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 Value Stream Mapping
[Healthcare value stream map]
• “Is this step or task
necessary in creating value
to the customer?”
• Processing steps and tasks
that are not necessary or
are non-value-adding, such
as waiting times
• Change and improve
process

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 5 Whys Technique
• This simple technique is for improving a production process
• Explores cause-and-effect relationships that underlie problems (root causes)
• Enables root causes to be identified/resolved

Example: Truck won’t start

• Why? Battery is dead.
• Why? Alternator not functioning.
• Why? Alternator belt is broken.
• Why? Truck was not maintained as
recommended.
• Why? Truck is old; no replacement parts
available.
• Solution? Find source for parts, or
purchase new truck.

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 5S Technique
• A workplace organization method for improving employee morale, safety, process
efficiency.
• Underlying the 5S technique is the belief that when a workspace is well organized,
time will not be wasted looking for “things.”

• Seiri to Sort (keep, toss)

• Seiton to Straighten or set in order
• Seiso to Shine, sweep, or clean
• Seiketsu to Standardize
• Shitsuke to Sustain (maintain)

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 Elements of Lean System
1. Stabilizing the master schedule
2. Controlling flow with Kanban system
3. Reducing setup time: Quick changeover
4. Small lot sizes: Lot size one
5. Efficient layout: Linear flow, low inventories
6. Preventive maintenance: Continuous maintenance during the shift change
7. Cross-training, rewarding workers
8. Quality and continuous improvement
9. Close relationships with suppliers: Frequent deliveries

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 Element 1. Stabilizing the Master Schedule
• Uniform load: to level workload across workers/machines, to level the amount
of production that is performed each period
• Production horizon must be set at least one week in advance and possibly one or
two months in advance, depending on production lead times, purchasing, and
capacity changes.
• Produce planned quantity each day - no more than demand
• Production schedule is repeated every day
Product A: 10,000 units/mon., Product B: 5,000 units, Product C: 5,000 units
• 1 month: 20 days
• Daily schedule calls for 1/20 of each product: 500A, 250B, 250C
• Production sequence: AABC → AABC → …..
• The sequence is repeated continually
• Takt time: time between successive units of production, Speed of output
• The takt time should be set equal to the average demand rate of the
market to match production with demand and thus minimize inventories

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Element 2. Controlling Flow with Kanban System
• Kanban (marker, card, sign) system is the system of production and
materials movement in the lean production system
• “Pull” production system, pulled by the customer
• The system is a simple and visual “parts withdrawal system” involving cards and
containers to pull parts from one work center to the next just in time

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 Element 2. Controlling Flow with Kanban
System
Determining the number of containers in the system:
N : Number of containers
D T D : Demand rate (at work center)
N=
C T : Time for container to complete circuit
C : Container capacity (# units)
• Demand at the receiving work center B is 2 parts per minute
• Container capacity is 20 parts
• 80 minutes of lead time for a container to make a complete circuit from A to B
and back to A
2  80
N= =8
20

Determining the maximum inventory

Max inventory = N  C = D  T

• Reason is that the most we can have is all containers filled

• Inventory can be decreased by reducing the size of containers, the number of
containers, or the circuit lead time

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 Elem 3, 4. Reducing Setup Time and Lot Sizes
• Reducing setup time: Press center in Toyota system
✓ increases available capacity 3 hours in 1945 → 3 minutes in 1971
✓ increases flexibility to meet schedule changes
✓ reduces inventory

Product: A B A C A B A C ….
Large setup time → Smooth production does not work.
• Setup types
✓ Internal setup: Perform tasks that take
place when the machine is stopped
(disruptive to the production process)
e.g., Press operation after removing a die
✓ External setup: Perform tasks that can be
completed while the machine is still running
e.g., Press operation while collecting the
necessary tools to remove a die

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 Elem 3, 4. Reducing Setup Time and Lot Sizes
• Method for setup reduction
1. Separate the internal setup from the external setup: Specify which tasks
should be done with the machine stopped
2. Convert as much as possible the internal setup to the external setup
e.g., a die can be preheated before installing it
3. Eliminate the adjustment process
e.g., use automatic jigs, fixtures, sensors to eliminate adjustment
4. Remove the setup itself

Press center in Toyota system

3 hours in 1945 → 3 minutes in 1971

• Lot size reduction: Goal is single-unit production

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Element 5. Efficient Layout

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 Element 7. Engaging Workers
• Multifunction, cross-trained workers (flexibility)
✓ Flexibility to move to busy work centers
✓ Keep multiple skills sharp
✓ Reduce boredom and fatigue on the part of the workers
✓ Foster an appreciation for the overall picture on the part of everyone
✓ Increase the potential for new idea generation
Worker rotation system: Workers are rotated through the various jobs in the
shop. (Once a sufficient number of workers are cross-trained, rotations on a daily
basis begins.)
• New pay system to reflect skills variety
• Workers contribute individually and collaboratively
✓ Perform own maintenance and inspection
✓ Teamwork: Problem solving
✓ Suggestion systems

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Elem 8. Quality Improvement in a Lean System
• Quality is essential input into lean system (The line stops if there are quality
problems due to JIT production.)
• System designed to expose errors; correct them at their source (so not repeated)

• Quality improvement process

✓ Process control Workers’ responsibility for quality
✓ Easy-to-see quality Put quality on display (e.g., display board, gauge, etc.)
✓ Insistence on compliance
✓ Line stop (jidoka) Quality first and output second
✓ Correcting one’s own errors
✓ 100 % check in principle (sometimes, sampling)
✓ Continuous improvement

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 Element 9. Close Supplier Relationships
• Viewed as the ‘external factory’
• Co-location: Frequent deliveries
• Fewer suppliers
• No inspection: High quality is assumed (required)
• Integrated supplier programs
✓ Early supplier selection Linking Work Centers and Suppliers with
✓ Family-of-parts sourcing a Kanban System
✓ Long-term strategic relationship
✓ Reduce paperwork and inspection

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