2011 Pearson Education, Inc. publishing as Prentice Hall

Transcription

1 16 JIT and Lean Operations SCM 352

2 Outline Global Company Profile: Toyota Motor Corp. Good production systems: Eliminate waste, reduce variability, and improve throughput JIT and competitive advantage JIT inventory Kanban Building a lean organization

3 Toyota Motor Corporation Largest vehicle manufacturer in the world with annual sales of over 9 million vehicles Success due to two techniques, JIT and TPS Continuous improvement Eliminating excess inventory makes problems immediately evident Respect for people is fundamental Empowering employees and cross training for greater flexibility

4 Good Production Systems Good production systems require that managers address three issues that are pervasive and fundamental to operations management: eliminate waste, remove variability, and improve throughput

5 Eliminate Waste Waste is anything that does not add value from the customer point of view Storage, inspection, delay, waiting in queues, and defective products do not add value and are 100% waste Ohno s 7 wastes: Overproduction, Queues, Transportation, Inventory, Motion, Overprocessing, Defective products

6 Remove Variability JIT systems require managers to reduce both internal and external variability Variability is any deviation from the optimum Inventory hides variability Less variability results in less waste Poor production processes result in incorrect quantities, late, or non-conforming units Unknown customer demands Incomplete or inaccurate drawings or specifications

7 Improve Throughput The time it takes to move an order from receipt to delivery The time between the arrival of raw materials and the shipping of the finished order is called manufacturing cycle time A pull system increases throughput By pulling material in small lots, inventory cushions are removed, exposing problems and emphasizing continual improvement Manufacturing cycle time is reduced

8 Just-In-Time (JIT) Powerful strategy for improving operations Materials arrive where they are needed when they are needed Identifying problems and driving out waste reduces costs and variability and improves throughput Requires a meaningful buyer-supplier relationship

9 JIT and Quality (DQ 6, page 639) JIT cuts the cost of obtaining good quality products JIT enable systems to be built that help employees produce a perfect part every time With JIT, organizations develop partnerships with vendors that enable the supply of quality parts JIT improves quality and better quality means fewer buffers and therefore a better, easier-touse JIT system

10 JIT and Competitive Advantage JIT RESULTS IN: Figure 16.1

11 High Inventory Hides Problems Inventory level Scrap Setup time Quality problems Process downtime Late deliveries Figure 16.3

12 Low Inventory Exposes Problems Inventory level Scrap Setup time Process downtime Quality problems Late deliveries Figure 16.3

13 Reduce Lot Sizes Ideal scenario is to produce in lot size of 1 Reducing lot size will reduce inventory Inventory Q 1 When average order size = 200 average inventory is 100 Q 2 When average order size = 100 average inventory is 50 Time Figure 16.4

14 Lot Size Example (Problem 16.8) D = Annual demand = 31,200 units d = Daily demand = 120 units per day p = Daily production rate = 960 units Q = EOQ desired = 120 units H = Holding cost = $12 per unit S = Setup cost (to be determined) Setup labor cost is $20 per hour Q = 2DS H(1 - d/p) Q 2 = 2DS H(1 - d/p) (Q S = 2 )(H)(1 - d/p) (120 = 2 )(12){1 (120/960)} = $2.42 2D 2x31,200 Setup time = $2.42/($20/hour) = hour = 7.26 minutes

15 Kanban Kanban is the Japanese word for card The card is an authorization for the next container of material to be produced A sequence of kanbans pulls material through the process Many different sorts of signals are used, but the system is still called a kanban

16 Kanban Material/Parts Supplier Final assembly Finished goods Customer order Work cell Kanban Kanban Kanban Figure 16.9

17 No. of Kanban or Containers Need to know the lead time needed to produce a container of parts Need to know the amount of safety stock needed Number of kanbans (containers) = Demand during Safety lead time + stock Size of container

18 Example: Problem 16.2, p. 640 Daily demand = 250 units Production lead time = 1/2 day Safety stock = 1/4 day Kanban (container) size = 50 units Solution Demand during lead time (1/2 day) = 250/2 = 125 units Safety stock = 1/4 day =250/4 = 62.5 units Maximum inventory level = = units Number of kanbans (containers) Number of kanbans = = Demand during Safety lead time + stock Size of container = 3.75 = 4 (round up)

19 Building a Lean Organization A lean producer is a company that adopts a philosophy of minimizing waste, striving for perfection through continuous learning, creativity, and teamwork. (Discussion question 16.2) Use JIT techniques Build systems that help employees produce perfect parts Reduce space requirements Develop partnerships with suppliers Educate suppliers Eliminate non value-added activities Train and empower employees Make jobs challenging Build worker flexibility

20 Thank You Questions??