LEAN PRODUCTION

Ron Lembke
Operations Management
Waste
Waste is anything other than the minimum amount
of equipment, materials, parts, space, and
workers time which are absolutely essential to
add value to the product.
--Shoichiro Toyoda, Chairman, Toyota Motor Co.,
1992-99
If you put your mind to it, you can squeeze water
from a dry towel.
-- Eiji Toyoda, President 1967-1982
Just-in-Time
Downstream processes take parts from
upstream as they need.
Like an American Supermarket:
Get what you want
when you want it
in the quantity you want.
7 Types of Waste (Ohno 1988)
Overproduction
Time on Hand (waiting time)
Transportation
Stock on Hand - Inventory
Waste of Processing itself
Movement
Making Defective Products
Seven Elements to Eliminate
Waste
1. Focused Factories
2. Group Technology
3. Quality at the Source
4. JIT production
5. Uniform Plant Loading
6. Kanban production control system
7. Minimized setup times
1. Focused Factories
Small, specialized plants
No huge, vertically integrated plants
Small plants easier, cheaper to build
Tom Peters, The Pursuit of Wow.
Group size of 150
Know everyone else in the group
2. Group Technology
Products grouped into families
Work cell can produce whole family
Cellular layout, not functional
Benefits
Much less inventory sitting around
Less material movement
Fewer workers
Cross-training
Keep skills sharp (managers too)
Reduce boredom & fatigue
Understand overall picture, more new ideas

3. Quality at the Source
Do it right the first time
Stop process, correct errors immediately
Not a lot of parts to sift through to find a good
one
Cant afford high defect rates
Since low WIP, get quick feedback on errors
Lowering Inventory Reduces
Waste
WIP hides problems
Lowering Inventory Reduces
Waste
WIP hides problems
Lowering Inventory Reduces
Waste
Reducing WIP makes
problem very visible
STOP
Lowering Inventory Reduces
Waste
Remove problem, run
With less WIP
Lowering Inventory Reduces
Waste
Reduce WIP again to find
new problems
Performance and WIP Level
Less WIP means products go through system
faster
reducing the WIP makes you more sensitive to
problems, helps you find problems faster
Stream and Rocks analogy:
Inventory (WIP) is like water in a stream
It hides the rocks
Rocks force you to keep a lot of water (WIP) in the
stream
4. Just In Time-- What is It?
Just-in-Time: produce the right parts, at the
right time, in the right quantity
Requires repetitive, not big volume
Batch size of one
Short transit times, keep 0.1 days of supply
5. Uniform Plant Loading
(heijunka)
Any changes to final assembly are magnified
throughout production process
Sequencing:
If mix is 50% A, 25% B, 25% C, produce
A-B-A-C-A-B-A-C
Takt Time
Takt time:
Beat or cycle
Master production schedule: 10,000
/mo.
500 day, 250 a shift
480 minutes means 1 every 1.92
minutes

6. Kanban
Japanese for signboard
Method for implementing JIT
In order to produce, you need both:
material to work on, and
an available kanban.
Each work station has a fixed # kanbans.
6. Kanban
Worker 2 finishes a part, outbound moves over
2 has a brown triangle tag available, so 2 gets
another part to work on:
2 takes off 1s blue circle tag giving it back to 1, and
puts on her brown triangle tag and moves it into
position.
Flow of work
3 2 1
6. Kanban
When 3 finishes a part,
Finished parts move over one spot
He has to have a yellow square tag to put on,
He gets a part from 2s outbound pile,
And gives the brown triangle back to 2
Flow of work
3
2 1
6. Kanban Pull Production
When 3 finishes a part,
Finished parts move over one spot
He has to have a yellow square tag available to put on,
He gets a part from 2s outbound pile,
And gives the brown triangle back to 2
3s production will be taken by 4, offstage right.
Tag goes back into 3s bin
End customers pull products through the factory
Flow of work
3
2 1
6. Kanban Blocking
Worker #3 finishes his part next.




But customers havent freed up any of the yellow
square kanbans, so there is nothing for 3 to work on
now.
3 could maintain his machine, or see anyone needs
help
3
2
3
2
How is this Different?
Processes can become idled (blocked) or
starved
Starved: authorization (kanban card) but no
material to work on
Blocked: material to work on, but no authorization
This makes you painfully aware of problems in
your system.
Material moves through the system so quickly
no in-process recordkeeping is needed.
Importance of Flow
Ohno was very clear about this:
Kanban is a tool for realizing just-in-time. For this
tool to work fairly well, the process must be managed
to flow as much as possible. This is really the basic
condition. Other important conditions are leveling the
product as much as possible, and always working in
accordance with standard work methods.
-- Ohno, 1988, p. 3
7. Setup Reduction
Cant afford to do huge runs
Have to produce in small batches
Toyota Die Change: 3 hours down to 3
SMED: Single Minute Exchange of Dies
under ten minutes
Techniques
Make internal setups into External
Eliminate Adjustments
Eliminate the Setup
Continuous Process Improvement, anyone?

Lexus -- the early years
First two Toyotas imported to U.S. 1957
Toyopet Crowns
Eiji Toyodas Ambitious Plans
Post-WWII Japanese industry in ruins
Early 1950s toured Rouge plant
2,500 cars in 13 years. Ford: 8,000 per day
Catch up to Americans in 4 years!
Toyoda made delivery trucks and motorcycles,
and not many of either

Elimination of Waste
Knew they wouldnt beat U.S. with product
innovation, concentrated on licensing patents,
and producing more efficiently
Costs prevented mass-production, volume
strategy of American firms.
Find ways to reduce waste, cost
Shigeo Shingo (at right)
& Taiichi Ohno, pioneers
Couldnt Emulate GM
GM huge batches in huge factories
Japans area is 10% less than California and
70% agricultural.
Put entire population of CA into 30% of state,
then add 6 times as many people. (and you
thought LA was crowded).
Land extremely expensive
Sprawling factories not an option
Small Batches
GMs large batches require large amounts of
storage space.
GM produces in large batches because of
significant setup costs.
If Toyota had the same large setup costs, it
could never afford small batches.
Reduce setup cost to reduce batch size.
GM didnt think of doing this.
A contrasting opinion
Inventory is not the root of all evil, inventory is
the flower of all evil.

- Robert Inman,
General Motors
Ask Why 5 Times
5W = 1H
1. Why did the machine stop? Overload and fuse blew
2. Why the overload? Not lubricated
3. Why not lubricated? Oil pump not pumping?
4. Why not pumping? Pump shaft worn out.
5. Why worn out? No screen, scrap got in
Preventative Maintenance
Unexpected loss of production is fatal to
system and must be prevented
Additional maintenance can prevent downtime,
or minimize length of interruptions, when they
do occur
Capacity Buffers
System is inflexible, no inventory buffers, so to
respond, need excess capacity
Schedule less than 24 hours per day
Two-Shifting 4-8-4-8
Cross Training
Characteristics of JIT
Partnershps
Few, nearby suppliers
Supplier just like in-house upstream process
Long-term contract agreements
Steady supply rate
Frequent deliveries in small lots
Buyer helps suppliers meet quality
Suppliers use process control charts
Buyer schedules inbound freight
Supplier Relationships
American model:
keep your nose out of my plant.
Gain info to force price cuts
Lack of trust between suppliers
Firm encourages suppliers to share knowledge,
because they dont worry about competing
Firm helps supplier increase quality, reduce
costs
Lessons Learned from JIT
The environment can be a control - dont take
setups for granted
Operational details are very important (Ford,
Carnegie)
Controlling WIP is important
Flexibility is an asset
Quality can come first
Continual improvement is necessary for
survival