Chapter 11. Lean synchronization

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1 Chapter 11 Lean synchronization

2 Slack et al s model of operations management Direct Design Operations Management Deliver Develop Supply network management Capacity management Inventory management Planning and control Lean synchronisation

3 Key operations questions In Chapter 11 - Lean synchronisation Slack et. al. identify the following key questions. What is lean synchronisation? How does lean synchronisation eliminate waste? How does lean synchronisation apply throughout the supply network?

4 Lean operations The key principle of lean operations is relatively straightforward to understand, it means moving towards the elimination of all waste in order to develop an operation that is faster, more dependable, produces higher quality products and services and, above all, operates at low cost.

5 Lean operations Synonyms continuous flow manufacture high value-added manufacture stockless production low-inventory production fast-throughput manufacturing lean manufacturing Toyota production system short cycle time manufacturing

6 Lean operations JIT material flow Traditional approach: stage A buffer inventory stage B buffer inventory stage C JIT approach: orders orders stage A stage B stage C deliveries deliveries

7 Lean operations Traditional approach more production at each stage focus on high capacity utilisation extra production goes into inventory because of continuing stoppages at stages more stoppages because of problems high inventory means less chance of problems being exposed and solved Lean approach lower capacity utilisation, but focus on producing only when needed no surplus production goes into inventory fewer stoppages low inventory so problems are exposed and solved

8 Inventories of materials. Information or customers have similar characteristics Inventory Of information (Queue of information) Of material (Queue of material) Cost Ties up working capital Less current information and so worth less Of customers (Queue of people) Wastes customer s time Space Needs storage space Needs memory capacity Need waiting area Quality Defects hidden, possible Defects hidden, possible Gives negative perception damage data corruption Decoupling Makes stages independent Makes stages independent Promotes job specialization / fragmentation Utilization Stages kept busy by work in progress Coordination Avoids need for synchronisation Stages kept busy by work in data queues Avoids need for straight through processing Servers kept busy by waiting customers Avoids having to match supply and demand Source: Adapted from Fitzsimmons, J.A.

9 Value stream mapping Value stream mapping focuses on value-adding activities and distinguishes between value-adding and non-value-adding activities. It.is similar to process mapping but different in four ways: It uses a broader range of information than most process maps. It is usually at a higher level (5-10 activities) than most process maps. It often has a wider scope, frequently spanning the whole supply chain. It can be used to identify where to focus future improvement activities.

10 Waste is a large part of most processes Mapping The Value Stream - Example High-level process steps for a loan application process High-level process steps Acquire the customer Prepare application Process application Advise customer Disburse funds Step by step activity analysis for value-add to our customer Activities which add value to the customer: e.g. the credit decision Activities which don t add value to the customer but are required by regulation: e.g. KYC Activities which neither add value nor are required by regulation: e.g. carrying files from one desk to another Actual value-add activity may only be 1-10% of the total process time 10

11 Value Stream Map for an industrial air conditioning installation service T/T = Task time TTT = Total throughput time V-A T = Value-added time C/T = Cycle time Sales office Forecasts Operations planning Invoice status Cash management Job tracking confirmations Completion confirmation Survey Order Assemble Frame Install T/T = 0.5 Avail = 100% C/T= mins. Wait in branch 58 hrs. T/T = 0.5 Avail = 100% C/T= mins. Wait for assembly 96 hrs. T/T = 5.0 Avail = 100% C/T= hrs. Ship to branch and wait 48 hrs. T/T = 0.75 Avail = 100% C/T= mins. Wait for installers 48 hrs. T/T = 0.75 Avail = 100% C/T= mins. TTT = 258 hrs V-AT = 8 hrs

12 Delivering smaller quantities more often can reduce inventory levels Inventory levels Inventory levels

13 Waste (muda) Which of these symbols signify non-value adding activities? Activities: operation movement inspection delay storage Types of waste: over production waiting time transport process inventory motion defective goods influencing the throughput efficiency

14 The problem with inventory productivity problems Scrap Downtime WIP Defective materials Rework Reduce the level of inventory (water) to reveal the operations problems productivity problems Scrap Downtime WIP Defective materials Rework

15 Small machines Conventional Western approach is to purchase large machines to get economies of scale. These often have long, complex set-ups, and make big batches quickly creating waste. Changeovers Inventory levels Time

16 Small machines Using several small machines rather than one large one allows simultaneous processing, is more robust and is more flexible... Inventory levels Time

17 Flow Principle A process consists of 3 steps - A, B and C. It takes one minute to finish each step of the process. (A, B and C) Batch Flow (units processed in batches of 10) How much time will it take for 10 units to move through the process? A B C 10 Minutes + 10 Minutes + 10 Minutes = 30 Minutes

18 Flow Principle A process consists of 3 steps - A, B and C. It takes one minute to finish each step of the process. (A, B and C) Continuous Flow (unit processed individually, that is, process one, move one) How much time will it take for 10 units to move through the process? A B C 1 Minute + 1 Minute + 10 Minutes = 12 Minutes

19 Levelled scheduling equalizes the mix of products made each day Over an eight day period, need to make of A 400 of B 400 of C Scheduling in large batches, where batch size A = 600, B = 200, C = A 250 A 100 A 250 A 250 A 100 A C C 600 A 200 B 200 C 600 A 200 B 200 C Every day, the schedule needs to be calculated. Each day can be different

20 Levelled scheduling equalizes the mix of products made each day Over an eight day period, need to make of A 400 of B 400 of C With levelled scheduling, where batch size A = 150, B = 50, C = 50 Every day is the same. Easy to notice if falling behind schedule

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