CH 16

Chapter 16
Lean Systems
Russell and Taylor
Operations Management, 8th Edition
Lecture Outline
Basic Elements of Lean Production Slide 4

Implementing Lean Systems Slide 47
Lean Six Sigma Slide 49
Value Stream Mapping Slide 50
Lean and the Environment Slide 54
Lean Services Slide 56
2014 John Wiley & Sons, Inc. - Russell and Taylor 8e
16-2
Learning Objectives
Explain how the basic elements of lean eliminate waste,
create flow and continuously improve operations
Assess the benefits of lean, as well as the difficulties in
implementing lean systems
Explain how the complementary concepts of lean and six
sigma work together for process improvement
Construct and interpret a value stream map
Create strategies for implementing lean in service
industries
Use lean concepts and techniques to enhance
environmental initiatives
16-3
Basic Elements of Lean Production

Doing more with less inventory, fewer workers,
less space
Just-in-time (JIT)
smoothing the flow of material to arrive just as it is

needed
JIT and Lean Production are used interchangeably
Muda
waste, anything other than that which adds value to

product or service
16-4
Waste in Operations
16-5
Waste in Operations
16-6
Waste in Operations
16-7
Elements of Lean Production

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Flexible resources
Cellular layouts
Pull system
Kanbans
Small lots
Quick setups
Uniform production levels
Quality at the source
Total productive
maintenance
Supplier networks
16-8
Flexible Resources
Multifunctional workers
perform more than one job
General-purpose machines perform several

basic functions
Cycle time
time required for the worker to complete one pass

through the operations assigned
Takt time
paces production to customer demand
16-9
Standard Operating Routine

for a Worker
16-10
Cellular Layouts
Manufacturing cells
comprised of dissimilar machines brought together to
manufacture a family of parts
Cycle time is adjusted to match takt time by

changing worker paths
16-11
Cells With Worker Routes
16-12
Worker Routes Lengthen

as Volume Decreases
16-13
Pull System
Material is pulled through the system when
needed
Reversal of traditional push system where material
is pushed according to a schedule
Forces cooperation
Prevent over and underproduction
While push systems rely on a predetermined
schedule, pull systems rely on customer requests
16-14
Kanbans
Card which indicates standard quantity of
production
Derived from two-bin inventory system
Maintain discipline of pull production
Authorize production and movement of goods
16-15
Sample Kanban
16-16
Origin of Kanban
16-17
Types of Kanban
Production kanban
authorizes production of
goods
Withdrawal kanban
authorizes movement of
goods
Kanban square
Signal kanban
triangular kanban to
signal production at the
previous workstation
Material kanban
to order material in
advance of a process
a marked area designated Supplier kanban

to hold items
rotates between the
factory and suppliers
16-18
Dual Kanban System
16-19
Other Kanbans
16-20
Other Kanbans
16-21
Determining Number of Kanbans

No. of Kanbans =
average demand during lead time + safety stock

container size
dL + S
N =
C
where
N
d
L
S
C
= number of kanbans or containers

= average demand over some time period
= lead time to replenish an order
= safety stock
= container size
16-22

d
L
S
C
N=
= 150 bottles per hour

= 30 minutes = 0.5 hours
= 0.10 (150 x 0.5) = 7.5
= 25 bottles
dL + S
=
C
16-23

d
L
S
C
= 150 bottles per hour

= 30 minutes = 0.5 hours
= 0.10 (150 x 0.5) = 7.5
= 25 bottles
(150 x 0.5) + 7.5

dL + S
N=
=
25
C
75 + 7.5
=
= 3.3 kanbans or containers
25
Round up to 4 (to allow some slack) or
down to 3 (to force improvement)
16-24
Small Lots
Require less space and capital investment

Move processes closer together
Make quality problems easier to detect
Make processes more dependent on each other
16-25
Inventory Hides Problems
16-26
Less Inventory Exposes Problems
16-27
Components of Lead Time

Processing time
Reduce number of items or improve efficiency
Move time
Reduce distances, simplify movements, standardize
routings
Waiting time
Better scheduling, sufficient capacity
Setup time
Generally the biggest bottleneck
16-28
Quick Setups
Internal setup
Can be performed only
when a process is
stopped
External setup
Can be performed in
advance
SMED Principles
Separate internal setup
from external setup
Convert internal setup
to external setup
Streamline all aspects
of setup
Perform setup activities
in parallel or eliminate
them entirely
16-29
Techniques for Reducing Setup Time
16-30
Uniform Production Levels

Result from smoothing production requirements
on final assembly line
Kanban systems can handle +/- 10% demand
changes
Reduce variability with more accurate forecasts
Smooth demand across planning horizon
Mixed-model assembly steadies component
production
16-31
Mixed-Model Sequencing
16-32
Quality at the Source

Visual control
makes problems visible
Poka-yokes
prevent defects from
occurring
Kaizen
a system of continuous
improvement; change for
the good of all
Jidoka
authority to stop the
production line
Andons
call lights that signal quality
problems
Under-capacity
scheduling
leaves time for planning,
problem solving, and
maintenance
16-33
Examples of Visual Control
16-34
16-35
16-36
5 Whys
A key part in an effective Kaizen is finding the
root cause of a problem and eliminating it
A practice of asking why? repeatedly until the
underlying cause is identified (usually requiring
five questions)
Simple, yet powerful technique for finding the
root cause of a problem
16-37
Total Productive Maintenance (TPM)

Breakdown maintenance
Repairs to make failed machine operational
Preventive maintenance
System of periodic inspection and maintenance to
keep machines operating
TPM combines preventive maintenance and

total quality concepts
16-38
TPM Requirements
Design products that can be easily produced on
existing machines
Design machines for easier operation,
changeover, maintenance
Train and retrain workers to operate machines
Purchase machines that maximize productive
potential
Design preventive maintenance plan spanning
life of machine
16-39
5S Workplace Scan
5S Scan
Goal
Eliminate or Correct
Seiri
(sort)
Keep only what you

need
Unneeded equipment, tools, furniture;

unneeded items on walls, bulletins; items
blocking aisles or stacked in corners;
unneeded inventory, supplies, parts; safety
hazards
Seiton
(set in order)
A place for
everything and
everything in its
place
Items not in their correct places; correct places

not obvious; aisles, workstations, & equipment
locations not indicated; items not put away
immediately after use
Seisou
(shine)
Cleaning, and
looking for ways to
keep clean and
organized
Floors, walls, stairs, equipment, & surfaces not

clean; cleaning materials not easily accessible;
lines, labels, signs broken or unclean; other
cleaning problems
16-40
5S Workplace Scan
5S Scan
Seiketsu
(standardize)
Shisuke
(sustain)
Goal
Eliminate or Correct
Maintaining and
monitoring the first
three categories
Necessary information not visible; standards

not known; checklists missing; quantities and
limits not easily recognizable; items cant be
located within 30 seconds
Sticking to the rules
Number of workers without 5S training; number

of daily 5S inspections not performed; number
of personal items not stored; number of times
job aids not available or up-to-date
16-41
Supplier Networks
Long-term supplier contracts

Synchronized production
Supplier certification
Mixed loads and frequent deliveries
Precise delivery schedules
Standardized, sequenced delivery
Locating in close proximity to the customer
16-42
Benefits of Lean Production
Reduced inventory
Improved quality
Lower costs
Reduced space requirements
Shorter lead time
Increased productivity
16-43
Benefits of Lean Production
Greater flexibility
Better relations with suppliers
Simplified scheduling and control activities
Increased capacity
Better use of human resources
More product variety
16-44
Implementing Lean Systems

Use lean production to finely tune an operating
system
Somewhat different in USA than Japan
Lean production is still evolving
Lean production is not for everyone
16-45
Drawbacks of Lean Production
Highly variable demand

Large variety of low-volume products
Custom engineered products
Mass production parts
Unexpected changes in demand or supply
16-46
Lean Six Sigma

Lean and Six Sigma are natural partners for
process improvement
Lean
Eliminates waste and creates flow
More continuous improvement
Six Sigma
Reduces variability and enhances process capabilities
Requires breakthrough improvements
16-47
Value Stream Mapping (VSM)

A tool for analyzing process flows and
eliminating waste
Specialized icons related to
lean production
material and information flows
aha Kaizen bursts
16-48
VSM Shapes
16-49
VSM for Milling & Welding
16-50
VSM for Emergency Room
16-51
Lean and the Environment

Identify environmental waste along with other
forms
These can indicate poor process design
Reduce costs of
material
energy
regulatory compliance
Reduce worker health and safety risks
16-52
US EPA Recommendations
Commit to eliminate environmental waste
Involve staff with environmental expertise in
planning for & implementing lean events
Find & drive out environmental waste in specific
processes by using lean tools
Empower & enable workers to eliminate
environmental waste in their work areas
Use environmental, health & safety icons in VSM
16-53
Lean Services
Basic elements of lean production apply equally
to services
Most prevalent applications
lean retailing
lean banking
lean health care
supply chain
16-54
Leaning the Supply Chain

pulling a smooth flow of material through a
series of suppliers to support frequent
replenishment orders and changes in customer
demand
Firms need to share information and coordinate
demand forecasts, production planning, and
inventory replenishment with suppliers and
suppliers suppliers throughout supply chain
16-55
Leaning the Supply Chain

Pull a smooth flow of material through the
system
Build a highly collaborative business
environment
Adopt the technology to support your system
Consider near shoring
16-56
Copyright 2014 John Wiley & Sons, Inc.

All rights reserved. Reproduction or translation of this
work beyond that permitted in section 117 of the 1976
United States Copyright Act without express permission
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information should be addressed to the Permission
Department, John Wiley & Sons, Inc. The purchaser
may make back-up copies for his/her own use only and
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information herein.
16-57

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CH 16

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Chapter 16

Basic Elements of Lean Production Slide 4

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Basic Elements of Lean Production

smoothing the flow of material to arrive just as it is

waste, anything other than that which adds value to

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Elements of Lean Production

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

perform more than one job

General-purpose machines perform several

time required for the worker to complete one pass

paces production to customer demand

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Standard Operating Routine

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Cycle time is adjusted to match takt time by

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Cells With Worker Routes

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Worker Routes Lengthen

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

a marked area designated Supplier kanban

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Dual Kanban System

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Determining Number of Kanbans

average demand during lead time + safety stock

= number of kanbans or containers

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Determining Number of Kanbans

= 150 bottles per hour

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Determining Number of Kanbans

= 150 bottles per hour

(150 x 0.5) + 7.5

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Require less space and capital investment

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Inventory Hides Problems

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Less Inventory Exposes Problems

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Components of Lead Time

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Techniques for Reducing Setup Time

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Uniform Production Levels

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Quality at the Source

2014 John Wiley & Sons, Inc. - Russell and Taylor 8e

Examples of Visual Control