Operations as a managerial integration function Evaluation and Improvement Course is structured to answer: 1. What is an improvement? Strategic

Operations as a managerial integration function Evaluation and Improvement

Course is structured to answer:

1. What is an improvement? Strategic role of ops

2. Where target improvements? Identify metrics by linking process flows with financial flows

3. How improve? Improve each metric

Course: Goals and Overview

1Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

House Building Game

The transition to Lean Ops

The Paradigm of Lean Operations: The ideal

Basic philosophy of Lean Ops

Lean tools for synchronization & waste reduction

Towards a system of continuous improvement

Approaching the ideal with Product Variety: TPS

Managing variety & flexibiltiy

Toyota Production System (TPS)

Managing Business Process Flows: Ch 10

Lean Operations


Paradigm of Lean Operations:In Search for the Holy Grail

The ideal Process = – Synchronization of all flows

• 1 x 1

• production on demand

• defect free

– At lowest possible cost

Waste = Gap between ideal and actual

How do we sync at lowest cost? > Lean Tools How do we set up a system to continually reduce waste ?


Improvement as a process

The Ideal Operation

• perfectly synchronized with demand• at lowest cost

The Actual Operation

= deviation from ideal

= waste, variability, inflexibility= opportunity for improvement

Reduce • Root cause analysis & problem solving

mindset• Waste reduction (Lean tools)• Variability reduction (Six Sigma, TQM)

Increase visibility of • Andon pulls, workplace organization• Exploratory stress• Process measurement, visual

management

ContinuousImprovementProcess


The architect behind Lean Operations:Toyota’s Taiichi Ohno and waste elimination

Taiichi Ohno: “Toyota Production System: Beyond Large-Scale Production”

Sources of waste at Toyota:

1. Overproduction

2. Waiting

3. Inessential handling

4. Non-value adding processing

5. Inventory in excess of immediate needs

6. Inessential motion

7. Correction necessitated by defects

Lean operations has been defined as “a business system for organizing and managing product development, operations, suppliers, and customer relations that requires less human effort, less space, less capital, and less time to make products with fewer defects to precise customer desires, compared with the previous system of mass production.”


Is lean dead?

The just-in-time approach to manufacturing, which has swept the world's factories over the past two decades, has made a virtue out of keeping inventories lean. But some manufacturers think it has gone too far, and that having a little extra padding might be a healthier option.

– Wall Street Journal (Apr 29, 2011). http://operationsroom.wordpress.com/


Lean Tool #1: cut batch sizesAn illustrative example

Consider the following 4-step process:

What is:– The bottleneck:– The process capacity or maximal R:

– The theoretical flow time Tth

– The minimal amount of inventory needed to run at capacity: Ith

– Call this scenario 1, the best. Let’s now consider what happens if we have (transfer) batches

A

1 min/jobResource 1

B

1 min/jobResource 2

C

1 min/jobResource 3

D

1 min/jobResource 4


Lean Tool #1: cut batch sizeABCD example continued

Batch Shop (Batchsize = 4)

A B C D

0

Ela

psed

Tim

e 2

1

4

3

2

1

4

3

2

1

4

3

2

1

4

3

T

T = I = R = 8

7

0

9

Flow Shop (Batchsize = 1)

A B C D

0

Ela

psed

Tim

e

1

T

1

1

1

2

2

2

2

3

3

3

3

4

4

4

4

5

T = I = R = = scenario ?

6

5

8

7

6

5

8

7

6

5

8

7

0

9

2

1

4

3

6

5

0

9

2

1


Lean Tool #2: process on demand = pullJust-In-Time operations

JIT = have exactly what is needed, in the quantity it is needed, when it is needed, where it is needed.

“hand-to-mouth” material flow needed by whom?


Lean Tool #2: Synchronization with demand: customer demand pulls product

Supplierinputs outputs

Process Customer

PUSH: Inputs availability triggers execution

Supplierinputs outputs

Process Customer

PULL: Outputs need triggers execution


Lean Tool #2: how make pull system in house game?

Productioncontrol

Roofcut

Basecut

FABase

assembly


Lean Tool #2: Pull Implementation: Kanban Production Control Systems

Kanban

Processing center i

Processing center i + 1

WIP

Job

http://www.toyota.co.jp/en/vision/production_system/video.html




Lean Tool #3: Quality at the Source

Defects Found at:

Own Station Next Station End of Line Final Inspection

End User’s Hand

$ $ $ $ $

Impact to the Company

Very Minor

Minor Delay

Rework Resched.

of work

Significant Rework

Delay in Delivery

Additional Inspection

Warranty costs

Administrative costs

Reputation Loss of

Market Share


Reducing Waste:Quality at the Source

Fool-proof/Fail-safe design (Poka-Yoke) Inspection

– Self

– Automated (Jidoka)

Line-stopping empowerment (Andon)

Trouble!

Approach for operators• Preventative• If trouble, STOP!• If defective don't pass

Line-stopping empowerment

Approach for machines• A mistake-proofing system prevents errors and defects• Stop line when defects are detected or machine breaks

down

Poka Yoke and Jidoka


Lean Tool #4: Flexible Resources & Standardized Work

Cross training of workforce allows resource pooling

Use of IT in services


16

WORKPLACE ORGANIZATION – 5S

Maintenance ofimproved condition

Waste identification and elimination

• Check what is needed and get rid of what is not used

• Place each item in its optimal position in the workplace and employ visual management

• Keep the area and equipment always clean. Set a cleaning program

• Improve and maint-ain the first 3 "S" by improving the en-vironment: – visual controls– standard machine

improvements– standard procedures

for all similar areas

• Employ systems to monitor 5S and ensure that it is constantly maintained

Organize the workplace with the aim to• Identify and eliminate waste• Maintain and continuously improve the workplace/equipment• Improve morale and increase worker involvement

Objectives

SortSet in order

Shine SustainStandardize

5S is a structured approach to systematically clean and organize the workplace to support a lean working environment

Copyright © 2013 Pearson Education Inc. publishing as Prentice Hall

17

Workplace Organization – 5S Hospital ExampleFrom a messy patient waiting area ...

1

... to an improved area for patients and staff

2

Re-floored and repainted with bright lighting

3


Lean Tool #5: Heijunka Mixed Level/Balanced Production

Batch Production Schedule Mixed Production Schedule(AAAABBBB..) (ABAB...)

Product April 1.................15...........................30 April 1....................15.......................30

A

B

time

FGI

time

FGI





SILS: shipping in line sequenceBusiness Mall adjacent to Russelsheim’s LeanField


Smartville, Hambach, France:Integrating suppliers directly

Suppliers

Inflow

Outflow

Suppliers

Suppliers Suppliers


Lean Tool #6: From Functional Layout to Product Cell organization

ProductionControl

RoofCut

BaseCut

FABaseAssy

ProductionControl

ProductionControl

ProductionControl

RoofCut

RoofCut

RoofCut

BaseCut

BaseCut

BaseCut

BaseAssy

BaseAssy

BaseAssy

FA FA FA

Department 1

Department 2 Department 2

Department 2Department 2

Cell 1

ProductionControl

RoofCut

BaseCut

FABaseAssy

Cell 3

ProductionControl

RoofCut

BaseCut

FABaseAssy

Cell 2


What is the theoretical throughput (long-run average) of each kid? R = What is the theoretical throughput (long-run average) of the process? What is the actual throughput of the process?

– Key drivers of actual throughput:

The impact of inventory and variability: The match game in The Goal

OutputBuffer

InputBuffer

PlayGame


E:\MyTeach\430\Analysis\the goal match game.xls

Towards a system of continuous improvement: Decrease variability and Cap inventory

135

145

155

165

175

185

195

0 5 10 15 20 25

Starting Inventory in each Buffer

Ou

tpu

t af

ter

50 R

un

s

Series1

Series2

Series3

Series4

Series5

Average

6-face die (=1.9)

2-face die (=0.7)


Scrap &Rework

Missed Due DatesToo Much Space

Late Deliveries

Poor Quality

Machine Downtime

Engineering Change Orders

Long queues

Too much paperwork

100% inspection

Inve

ntor

y

Towards a system of continuous improvement: Increase Problem Visibility– River Analogy



Sears (SHC) does actually have a whole social media team who handles their Twitter and Facebook accounts. They are VERY pro-active on those accounts. SHC contracts out to Viewpoints, which is the company I work for. We run the MySears, MyKmart and Craftsman Community platforms for them, and handle customer service in a pro-active way on those accounts

Along with the senior customer service reps, and folks at corporate, MySears is very fortunate to have a handful of associates or call center employees who pop on to assist, as well. They are not paid, but are influencers who receive an "Advisor" recognition badge for their help. We wish we had more folks like these, as their contributions are most helpful.

Here are a few threads that we would consider "wins" for SHC, as the site helped solve an issue or complaint for a particular customer:

– This member was all over the board complaining about the Sears "Lifetime Warranty" on Tools. He ended up connecting with the VP of Tools through the site, something that would be impossible without utilizing social media: http://www.mysears.com/Tools--7018/topics/WARRANTY-ISSUES/posts

– Someone who visited having issues with their washer: http://www.mysears.com/Appliances/topics/Kenmore-3-1-CU-FT-IEC-High-Efficiency-Front-Load-Washer-model-42052/posts?page=1

– One of the above mentioned "Advisor" that help. This member who offered his suggestion is actually a retired service techinician who hangs out a bunch on the site: http://www.mysears.com/Dishwashers--3933/topics/Washer-model-number-665-17033402/posts?page=1#post_199551


http://www.mysears.com/Tools--7018/topics/WARRANTY-ISSUES/posts

http://www.mysears.com/Appliances/topics/Kenmore-3-1-CU-FT-IEC-High-Efficiency-Front-Load-Washer-model-42052/posts?page=1

http://www.mysears.com/Appliances/topics/Kenmore-3-1-CU-FT-IEC-High-Efficiency-Front-Load-Washer-model-42052/posts?page=1

http://www.mysears.com/Dishwashers--3933/topics/Washer-model-number-665-17033402/posts?page=1

http://www.mysears.com/Dishwashers--3933/topics/Washer-model-number-665-17033402/posts?page=1

Visibility: Time plays the role of Inventory in Lean Service Operations

TIME


Towards a system of continuous improvement: Kaizen Tools

Reduce variability– Standard operating procedures

Increase visibility of waste and quality at source– Line-stopping empowerment (Andon)

– Quality inspection: Self & Automated (Jidoka)– Fool-proof/Fail-safe design (Poka-Yoke)

Targeted improvements: root cause analysis (6 Why’s)– Active worker involvement– Time for experimentation– Supplier involvement

Exploratory stress

Human infrastructure & process measurement and review (visual management)


Learning ObjectivesLean Operations

Paradigm of Lean Operations: Strive for the ideal by eliminating waste This is a total business management system

Synchronization Tools1. Reduced batch sizes2. Pull production control systems (vs. push)—JIT & Kanban control3. Quality at the source4. Resource pooling5. Level loading (Heijunka)6. Layout: Cellular operations

Set up a System for Continuous Improvement1. Reduce variability (standard operating procedures)2. Increase visibility (river analogy)3. Improve human infrastructure


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Operations as a managerial integration function Evaluation and Improvement Course is structured to answer: 1. What is an improvement? Strategic