Pull-Push System and JIT and Lean

What is Inventory?
Inventory (n) - 1: an itemized list of current assets;

2: the quantity of goods or materials on hand:
STOCK
Merriam Websters Collegiate Dictionary, 10th ed.
Inventory - any of the materials used directly in the

manufacture of a finished product
Computer Integrated manufacturing Systems ENGR 4440
Types of Inventory
...
Work-In-Process
Finished
Goods
Raw
Materials
$ Invested
Flexibility
high
medium
low
Why Have Inventory?
Variability
- Customers
- Suppliers
- Competitors
- Mfg. Process
Large Inventories
- Just-In-Case
High Costs
Inventory Level
Why Have Inventory?
Work-In-Process
Managing Inventory
Two ways to attack the problem...
Reduce
Sources of
Variability
Implement
Inventory
Management
System
...best solution: Do Both!

Inventory Management: Variability Reduction
Identify
Rock
Form
Teams
Adjust Process
or System
Implement
Improvements
Enhanced
Performance
Receive
Training
Document/Analyze
Process
Inventory Management: System
Work-In-Process
Raw
Materials
...
Finished
Goods
A systematic method of purchasing, controlling, using,

and distributing the three classes of inventory:
- Raw Materials
- Work - In - Process (WIP)
- Finished Goods
Purpose of Inventory Management Systems

To build the right product,
at the right time,
in the right quantity
to meet customer demand
subject to
At the right cost
To meet company profitability goals
Inventory Management Philosophies

I. Push System: Manufacturing Resource Planning (MRP II)
Links demand for parts to demand for finished goods through
standard lead times and bills-of-material via computer
systems;Production is triggered by a schedule
II. Pull System: Just-In-Time (JIT)
Links demand for parts to demand for finished goods through
series of calculated buffers via simple visual cards/containers
known as kanban; Production is triggered by demand
Inventory Costs
Opportunity cost
Carrying costs
Obsolescence
Design changes
Operating costs
Excess inventory is the

root of all evil.
K. Suzaki, The New
Manufacturing Challenge
Handling
Space
People
Paperwork
Equipment
Damage
Key Inventory Measure
Annual
Annual
Turns
Turns
Inventory Turns: Harley Davidson

25
20
15
10
5
0
1
3 Year 4
Inventory Turns =
Gross Annual Sales

Avg. On-Hand Inventory
Key Inventory Measure

Company
Avg. U. S. manufacturer
Inventory Turns
7-8
Turn Days
45 - 52
Harley Davidson
21
17
Black & Decker
37
10
Avg. U. S. grocery store

Toyota
50
80-100
Southland (7-11 stores)
300+
7
3.7 - 4.7
~1
Push
Systems
customer
Product is pushed through the manufacturing

process in batches large enough to:
A. Meet present and future demand
B. Compensate for problems in process
Trigger: Schedule, based on Forecast &

Actual Customer Orders
Just build it, Theyll buy it!
Note: MRP II is a Push System
MRP II Strengths
Well suited for variable demand

Works in both Make-To-Stock and
Make-To-Order
Provides integrated manufacturing
management system
Handles large number of parts easily
Widely used & accepted
MRP II Weaknesses
Assumes infinite plant capacity

Requires accurate lead times
Requires accurate forecasts
No limit to WIP inventory
Lack of robustness (i.e., easily disturbed)
Requires accurate Bill-of-Materials
Pull Systems
customer
Product is pulled through the manufacturing process

at the rate of customer demand; Finished Goods are
replenished through a linked series of tactical buffers
(kanban) that offer control of Work-In-Process inventory.
Trigger: Customer Purchase of Goods
If they buy it, Well build it!
One Piece Flow - Pull System

One order at a time
Order in = Order out
First in - first out
Produce what you need - not what you can
Lot size reduction
Simplified scheduling
Cross Training and Load Leveling
Opens system constraints or bottle necks
Better utilizes all resources
Improves communication
IMPROVES productivity
Pull System
Kanban
A Trigger to Signal:
What to Build
When to Build
How Much to Build
Pull System Strengths
Continual visibility
Simple, low cost production scheduling tools
Controlled / Calculated buffers
Reduced dependence on specific
item forecast
Pull System Weaknesses
Requires relatively steady demand

Not Useful for Make-To-Order: FG
Relies on manufacturing process
Not as widely understood
Which System is Best?
There is no Silver Bullet!

You must find the appropriate system
for your business environment
Ch 26 Just-In-Time and
Lean Production
Sections:
1. Lean Production and Waste in Manufacturing
2. Just-in-time Production Systems
3. Autonomation
4. Worker Involvement
What is Lean Production?

Lean production means doing more work with fewer
resources
Adaptation of mass production in which work is
accomplished in less time, smaller space, with fewer
workers and less equipment
Based on the Toyota Production System
The term "lean production" was coined by researchers
at Massachusetts Institute of Technology
Structure of Lean Production System
Taiichi Ohno's
structure of the
Toyota Production
System
Activities in Manufacturing
1. Actual work - activities that add value to the product
2. Auxiliary work - activities that support the value-adding
activities
3. Muda (waste) - activities that neither add value nor
support the value-adding activities
Muda (Waste)
Taiichi Ohnos seven forms of waste:
1. Production of defective parts
2. Production of more parts than needed (overproduction)
3. Excessive inventories
4. Unnecessary processing steps
5. Unnecessary movement of people
6. Unnecessary handling of materials
7. Workers waiting
Keys to Eliminating Waste

1.
2.
3.
Just-in-time production
Autonomation (automation with a human touch)
Worker involvement
Just-In-Time Production
Production and delivery of exactly the required number
of each component to the downstream operation in the
manufacturing sequence just at the moment when the
component is needed
Minimizes:
Work-in-process
Manufacturing lead time
Requisites for JIT

1. A pull system of production control
2. Setup time reduction for smaller batch sizes
3. Stable and reliable production operations
Pull System of Production Control

A system in which the order to make and deliver parts at
each workstation in the production sequence comes from
the downstream station that uses those parts
JIT is based on a pull system of production control
Alternative is a push system in which parts are produced
at each station irrespective of the immediate need for
those parts at the downstream station
Kanban System
Toyotas way of implementing a pull system of

production control
Kanban means card in Japanese
Two types of kanbans:
1. Production kanban authorizes upstream station to
produce a batch of parts
2. Transport kanban authorizes transport of the
parts to the downstream station
Operation of a Kanban System
1. Station i + 1 removes next P-kanban from dispatching rack. This

P-kanban authorizes it to process a container of part b. A
material handling worker removes the T-kanban from incoming
container of part b and takes it back to station i.
1. At station i, the material handling worker finds the container of

part b, removes the P-kanban and replaces it with a T-kanban.
He then puts the P-kanban in the dispatching rack at station i.
1. The container of part b that was at station i is moved to station

i + 1 as authorized by the T-kanban. The P-kanban for part b at
station i authorizes station i to process a new container of part
b, but it must wait its turn in the dispatching rack. Scheduling of
work at each station is determined by the order of P-kanbans.
Setup Time Reduction
Starting point in setup time reduction is recognition that

the work elements in setup are of two types:
1. Internal elements can only be done while the
production machine is stopped
2. External elements do not require the machine to be
stopped
External Work Elements

Can be accomplished while previous job is still running
Strategy:
Design the setup tooling and plan the changeover
procedure to permit as much of the setup as
possible to consist of external elements
Examples:
Retrieve tooling for next job from tool crib
Assemble tools for next job
Reprogram machine for next job
Internal Work Elements

Use time & motion study and methods improvement to
minimize the sum of the internal work element times
Use two workers rather than one to accomplish the
changeover
Eliminate adjustments in the setup
Use quick-acting fasteners rather than bolts and nuts
Use U-shaped washers instead of O-shaped washers
Design modular fixtures consisting of a base plus insert
tooling that can be quickly changed for each new part style
Base part remains attached to production machine
Examples of Setup Reduction

Equipment type
Setup time
Before
After
1000 ton press

Transfer line
Punch press
Machine tool
45 ton press
4 hr
9.3 hr
2 hr
6 hr
50 min
3 min
9 min
3 min
10 min
2 min
Reduction
98.7%
98.4%
97.5%
97.2%
96.0%
Stable and Reliable

Production Operations
Production leveling - distribute changes in product mix and
quantity as evenly as possible over time
On-time delivery of components
Defect-free components and materials
Reliable production equipment
Workforce that is cooperative, committed, and crosstrained
Dependable supplier base
Autonomation
Automation with a human touch

Production machines operate autonomously as long as
they are functioning properly
When they do not function properly (e.g., they produce a
defect), they are designed to stop
Autonomation topics:
1. Stop the process
2. Error prevention
3. Total Productive Maintenance (TPM)
Stop the Process

Jidoka
Japanese word meaning machines that are designed to
stop automatically when something goes wrong
Stop the process when:
Defective parts are produced
Required production quantity has been completed
Avoids overproduction
Error Prevention
Poka-yoke
Japanese word meaning prevention of errors using low
cost devices to prevent or detect them
Common mistakes in manufacturing:
Omitting processing steps
Incorrectly locating a part in a fixture
Using the wrong tool
Neglecting to add a part in assembly
Poka-Yoke Functions
Performs 100% inspection for the following:
Workpart deviations
Processing and methods deviations
Counting and timing functions
Verification of steps during work cycle
When an error or other exception is identified, the pokayoke responses are either or both of the following:
Stops the process when an error or problem is detected
Provides an audible or visible warning to alert operator
and other workers
Total Productive Maintenance

Goal: zero breakdowns
TPM = integration of preventive and predictive
maintenance to avoid emergency maintenance
Emergency maintenance = repair equipment that
breaks down
Preventive maintenance = routine repairs to avoid
breakdowns
Predictive maintenance = anticipating malfunctions
before they occur
Equipment Availability Curve
Typical U-shaped availability curve for a piece of

equipment during its life
Overall Equipment Effectiveness

Measure that includes availability (reliability), equipment
utilization, yield of good product, and operating capability
OEE = A U Y ros
where OEE = overall equipment effectiveness
A = availability (proportion uptime)
U = equipment utilization (time equipment is used relative
to available time)
Y = yield of good product = 1 - q, where q = fraction defect
rate
ros = operating capability (actual speed / design speed)
Worker Involvement
Components:
Continuous improvement
Visual workplace
Standard work procedures
Total productive maintenance
Continuous Improvement
Kaizen
Japanese word meaning continuous improvement of
production operations
Usually implemented by worker teams, sometimes called
quality circles
Encourages worker sense of responsibility
Allows workers to gain recognition among colleagues
Improves workers technical skills
Visual Management and 5S

Principle: the status of the work situation should be evident
just by looking at it
Objects that obstruct the view are not allowed
Build-up of WIP is limited to a specific height
Andon boards located above the assembly line indicate
the status of the workstations
Worker training includes use of photos and diagrams to
document work instructions
Worker Involvement through 5S

Japanese word
Seiri
Seiton
Seiso
Seiketsu
Shitsuke
English equivalent
Sort
Set in order, simplify access
Shine, sweep, scrub
Standardize
Self-discipline, sustain
Standardized Work Procedures

Three components:
1. Cycle time actual time required
Takt time reciprocal of demand rate adjusted for
available shift time
2. Work sequence
Basically the same as a standard method
3. Standard work-in-process
Minimum number of parts to avoid waiting of
workers
Takt Time and Cycle Time

Takt time defined
Ttakt = EOT / Qdd
where Ttakt = takt time
EOT = effective daily operating time
Qdd = daily quantity demanded
In the Toyota Production System, the work must be
designed so that the operation cycle time is consistent with
the takt time
Standard Operations Routine Sheet

Shows the machines that must be visited by
the worker during each work cycle
U-shaped Work Cell

Allocation of work at nine machines between three workers
in a production work cell
Operations Routine Sheets
Allocation of
work at nine
machines for
three workers
in a production
work cell
Standard Work-In-Process Quantity

Defined as the minimum number of parts necessary to avoid
workers waiting
Factors that affect the standard WIP quantity:
If quality inspections must be performed as distinct
steps, then additional parts must be provided
If processing includes heating of parts, then additional
parts must be provided for heating and cooling time
If the worker's work sequence is in the opposite
direction of the part processing sequence, then at least
one workpart must be held between machines to avoid
waiting time
HW # 6
26.2, 26.3, 26.4, 26.12

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What is Inventory?

Inventory (n) - 1: an itemized list of current assets;

Inventory - any of the materials used directly in the

Computer Integrated manufacturing Systems ENGR 4440

Why Have Inventory?

Why Have Inventory?

Computer Integrated manufacturing Systems ENGR 4440

...best solution: Do Both!

Inventory Management: Variability Reduction

Inventory Management: System

A systematic method of purchasing, controlling, using,

Purpose of Inventory Management Systems

Inventory Management Philosophies

Computer Integrated manufacturing Systems ENGR 4440

Excess inventory is the

Key Inventory Measure

Inventory Turns: Harley Davidson

Gross Annual Sales

Computer Integrated manufacturing Systems ENGR 4440

Key Inventory Measure

Black & Decker

Avg. U. S. grocery store

Southland (7-11 stores)

Computer Integrated manufacturing Systems ENGR 4440

Product is pushed through the manufacturing

Trigger: Schedule, based on Forecast &

Well suited for variable demand

Assumes infinite plant capacity

Computer Integrated manufacturing Systems ENGR 4440

Product is pulled through the manufacturing process

One Piece Flow - Pull System

Cross Training and Load Leveling

Opens system constraints or bottle necks

Better utilizes all resources

Pull System Strengths

Pull System Weaknesses

Requires relatively steady demand

Computer Integrated manufacturing Systems ENGR 4440

Which System is Best?

There is no Silver Bullet!

Computer Integrated manufacturing Systems ENGR 4440

Computer Integrated manufacturing Systems ENGR 4440

What is Lean Production?

Computer Integrated manufacturing Systems ENGR 4440

Structure of Lean Production System

Computer Integrated manufacturing Systems ENGR 4440

Computer Integrated manufacturing Systems ENGR 4440

Computer Integrated manufacturing Systems ENGR 4440

Keys to Eliminating Waste

Computer Integrated manufacturing Systems ENGR 4440

Computer Integrated manufacturing Systems ENGR 4440

Requisites for JIT

Computer Integrated manufacturing Systems ENGR 4440

Pull System of Production Control

Computer Integrated manufacturing Systems ENGR 4440

Toyotas way of implementing a pull system of

Computer Integrated manufacturing Systems ENGR 4440

Operation of a Kanban System

1. Station i + 1 removes next P-kanban from dispatching rack. This