BUSI70228

Operations
Jiankun Sun

Session 7
Lean Operations
Outline

- Toyota Production System (TPS)

• Philosophy
• Practices & Principles
• Tools

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Toyota Production System (TPS)

- Developed by Taiichi Ohno, Toyota’s chief of production in the

post-WW II period, and finely tuned over generations

- MIT researchers coined the term lean production to indicate this

radically different approach to production in 1990s

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TPS: Goals and Philosophy

- Philosophy: eliminate waste

Price ➖ Cost = Profit

Non-value-added Value-added
(wastes)

• Sources of wastes: overproduction, waiting, transport, overprocessing,

inventory, rework, motion, …

- Goals: reduce cost, improve quality, improve timeliness

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TPS: Two Principles

Just-In-Time (JIT) Jidoka

Make and deliver products just Enable operations to detect when
what is needed, just when needed, an abnormal condition occurs and
and just in the amount needed. immediately stop work.

Zero inventory Zero defect

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Why JIT?

- What would a worker do if s/he finds a defect part in the buffer?

Workstation 1 Workstation 2

- Inventory has benefits, but it can also hide problems.

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Reducing Inventory: Increase Problem Visibility

Missed Due Dates

Late
Deliveries
Engineering
Inventory

Too much paperwork

Change Orders
Scrap &
Rework

Machine
Poor Capacity Imbalance Long queues Downtime
Quality

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Reducing Inventory: Increase Problem Visibility

- Reducing inventory helps reveal the real problems so they can be

targeted and solved.

Engineering
Too much paperwork
Change Orders
Scrap &
Rework
Inventory

Machine
Poor Capacity Imbalance Long queues Downtime
Quality

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JIT Practice 1: Continuous Flow
A B C D A B C D
0 1
0 1
2 2 1
3 3 2 1
4 4 3 2 1
T
5 1 5 4 3 2
6 2 4 3
Elapsed Time

Elapsed Time
7 3 4
8 4
9 5 1
0 6 2
1 7 3
2 8 4
3 9 5 1
4 0 6 2
5 1 7 3
6 2 8 4
T 7
8
9
0

Batch Shop (Batch Size = 4) Flow Shop (Batch Size = 1)

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JIT Practice 1: Continuous Flow

- Producing and moving one item at a time (or a small and

consistent batch of items) through a series of processing steps

- Benefits:
• Reduce work-in-progress inventory
• Reduce waiting time

- Requirements:
• Reduce setup times
• Create a layout that reduces transport

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JIT Practice 2: Takt Time

- Produce at a rate in line with demand

• Takt time = Total production time / Customer demand

- Benefits: reduce finished goods inventory

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Kanban: Implementation of a Pull System
Take kanban to Return kanban to
start production authorize production

Kanban
Kanban
Kanban

Kanban area

Send container with Transport materials

Storage area
kanban to storage area and remove kanban

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JIT Practice 3: Pull System

- Push System: Material is “pushed” to downstream workstation

Workstation 1 Workstation 2 Workstation 3

Material Flow Information Flow (via Production Schedule)

- Pull System: Material is “pulled” to a workstation given the downstream

demand signal

Workstation 1 Workstation 2 Workstation 3

Material Flow Information Flow (via Kanban System)

- Benefits of a pull system: reduce work-in-progress inventory

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Heijunka

Batch Production Schedule Mixed Production Schedule

(AAAABBBB…) (ABAB...)

Product Apr/12.............15..........................30 Apr/12.............15..........................30

FGI FGI

time time

* FGI means finished goods inventory

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Heijunka

- Level production by mixed product variants in small batches in

sequencing

- Benefits:
• Smoothed production schedule
• Reduce inventory
• Synchronization with customer demand
• Smoothed demand on the upstream processes and suppliers
• Balance use of labor and machines

- Requirements:
• Short setup and changeover time

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Why Jidoka?

- What are the potential problems with the following process?

Assembly Line Quality Control

Repair & Rework

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Jidoka Practice 1: Quality at the Source

- Inspect quality during the production process

- Never pass on defective units to the next process

Defects Own Next End of Final End User’s

Found at: Process Process Line Inspection Hand
$ $ $ $ $

Impact to • Very Minor • Minor • Rework • Significant • Warranty

the Delay • Reschedule rework costs
Company of work • Delay in • Administrative
Delivery costs
• Additional • Reputation
inspection • Loss of
market share

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Andon

- A system that displays and alert operators and managers of real

time status and problems of a process or product quality

Andon board Andon cord

- Costs and benefits of stopping a line:

• Benefit: lower risk of snowballing waste due to defects
• Cost: depend on the duration of line stop

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Poka-yoke

- "mistake-proofing" in Japanese
- A simple and low-cost method that prevents defects from being
made or highlights a defect to the operator

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Jidoka Practice 2: Human-Machine Separation

- Design and execute the work with different timelines for the people
and machines involved
• If the machines are fully automated, people can do other work before
returning to the machine and collect outputs

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Kaizen

- Engage every employee to continuously improve the process

• Five Whys: find the root cause of a problem
• PDCA Cycle (Deming Cycle)

1. Plan a change aimed 2. Execute the change

at improvement

Plan Do

Act Check
4. Institutionalize the
3. Collect data and
change or abandon or
evaluate results
do it again

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TPS House

Goal: Highest Quality, Lowest Costs, Shortest Lead Time

Just-in-Time Jidoka

Continuous Flow Quality at Source

• Andon
Takt Time • Poka-yoke

Pull System Human-machine

• Kanban Separation

Heijunka Standardization Kaizen

Stability

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What Is Successful Implementation of Lean Operations?

- TPS is an integrated and interlinked system with many

requirements.
• Reduction in inventory requires reduction in defects
• Takt time and pull system coordinate with Heijunka
• A pull system requires close relationship with suppliers
• Heijunka requires short setup times
• …

- Implementation of lean operations may require systematic

changes and adaptions to different contexts.

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Summary

- Philosophy of TPS: reduce waste

- Two pillars of TPS: Just-in-Time (JIT) and Jidoka

• JIT: continuous flow, takt time, pull system
• Jidoka: quality at source, person-machine separation

- Foundations of TPS: Heijunka and Kaizen

• Heijunka: smoothing production
• Kaizen: continuous improvement

- “Lean” problem solving attitude: find the root cause of the problem

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