Lean Production for Competitive Advantage - Nicholas - 2010 - Summary

Chapter 1. Introduction

In many companies the production capability is the key to competitiveness. Winners often differentiate with regard to quality, price, time and response to change. These areas are included in four manufacturing strategies of traditional manufactures:

• Making things better: focus on quality through a computer-aided design. The similarities with Lean are the focus on the statistical process control, defect reduction programs and vendor quality programs.

• Making things cheaper: reduce costs by job enlargement programs, automation and robotics.

• Making things faster: focus on robotics and flexible manufacturing systems. Lean companies are also empathizing on the continuous reduction of lead times and setup times.

• Being more agile: Companies have to be able to introduce new products and response quickly to a changing environment.

Lean production is management that focuses the organization on continuously identifying and removing sources of waste so that processes are continuously improved. Also total quality management is focusing on continuous attention to products and process improvements, but it emphasizes on knowing the needs and wants of customers and on building capabilities to fulfill those needs and wants.

There are two features which distinguish lean organizations from other organizations who are seeking to identify and eliminate obstructions. First, lean organizations greatly increase the number of people involved in identifying and eliminating obstructions. Everyone in the organizations is busy trying to diagnose and solve problems. The second difference is in the process employed to identify and prioritize problems and sources of waste. The primary focus is on reduction of inventory.

The subjects which will be covered are:

• Reduced setup times

• Small lot production and one-piece flow

• Employee involvement and empowerment

• Quality at the source

• Equipment maintenance

• Pull production

• Standard work

Chapter 2. Fundamentals of Continuous Improvement

Continuous improvement is measured in terms of producing things better, faster, cheaper and being more agile. To improve products it is necessary to go beyond the products and services and to improve the materials and basic processes. Therefore continuous improvement is the same as continuous process improvement. To accomplish continuous improvement, the organization has to be able to identify the portions of the system that contribute most to increasing product quality and meeting customer requirements. This is necessary since processes and products can’t be improved without limits.

A S-curve is representing an incremental improvement, which is the process of making something better through the accumulation of small, piecemeal improvements, one at time. This idea is according the concepts of Kaizen, who states that employees throughout the organization patiently work to continually improve the processes in which they are engaged. As the S-curve shows, an incremental improvement can lead to substantial improvement, although there will always come a point when the improvement will slow. In an innovative approach, the S curve is changed into two S-curves, in which the approach is represented by the jump from one to the next. The big leap is standing for the change to the new technologies. The time between crossing over from the old to the new way, is called the discontinuity.

The system wide improvements of a process can be showed by the cumulative effort which improvements of the components occur. Reverse engineering is the process whereby one company takes apart another’s invention, analyzes it, copies it and improves it.

Finding and implementing improvements are described in several methodologies. One of them is the PDCA cycle, which stands for plan-do-check-act. The steps in PDCA:

• Plan steps: make a plan to accomplish improvements. This can be categorized into four substeps: the first one is collecting data to understand the current situation. Thereafter, the problem has to be defined. Third is stating the goal and the last step is solving the problem.

• Do step: the implementation of the plan.

• Check step: data are collected following implementation and analyzed to assess the results and to see to what extent goals are being accomplished.

• Act step: actions are taken based upon results from the check step.

The Five-Why Process can be used by analyzing a problem. This method could lead to come to the real problem.

A Value Analysis can be used for assessing the value content of the elements of a product or process. Value is what people are willing to pay for something. Value analyses usually refer to ongoing improvement, whereas value engineering refers to first-time design and engineering of a product.

The value analysis procedure:

1. Information gathering

2. Analysis

3. Creation

4. Evaluation

5. Implementation

Process Reengineering is defined as the fundamental rethinking and redesign of business processes to achieve dramatic improvement in critical contemporary measures of performance such as cost, quality, service and speed. The difference with Kaizen is that reengineering never uses the existing process as the basis for improvement. Reengineering focuses on simplification and the elimination of nonvalue-added steps. Fundamentals of this approach are that several jobs are combined into one, steps in the process are performed in natural, linear sequence and workers in the process make decisions as part of their jobs.

There are seven basic problem-solving tools:

1. Check sheet: a sheet where data from observations are recorded.

2. Histogram: shows graphically the frequency distribution of a variable.

3. Pareto analysis: is a diagram, in which the bars are ordered starting on the left with the bar representing the greatest frequency.

4. Scatter diagram: gives an overview of the possible relationships between variables.

5. Process Flow Chart: a chart which shows the steps in a process and which are useful for analyzing a process to pinpoint sources of problems.

6. Cause-and-effect analysis: diagram which gives a visual overview of all possible causes to a specific effect.

7. Run diagram: shows the results of observations taken at prescribed intervals. These overreactions are plotted versus time to reveal any excessive results.

Value stream mapping is another method to analyze the processes in an organization. It uses standard icons and diagramming principles to visually display the steps in the process and the material and information flowing through it.

Nemawashi refers to the process of circulating a plan or proposal among all the people affected by it or who must approve it. This technique can be used in many situations.

Consensus building is another technique, in which a problem solver seeks consensus from everyone involved or affected by the plan.

Problem Solving by an A3 report, is analyzing with the help of a standardized page, which reports everything important about the situation, analysis and conclusions.

Chapter 3. Value Added and Waste Elimination

The Lean Principles are all based on the elimination of waste:

1. Simplification: the elimination of nonessentials. Given multiple ways to achieve the identical result, simpler is better. Simplification can be reached by simplifying the product, process or procedure.

2. Cleanliness and organization: thoroughness and attention to detail. A clean, organized workplace promotes a disciplined attitude about work and products, reduces waste and helps pinpoint incipient problems.

3. Visibility: Frontline workers have the right information and stay informed through simple observation. Visible information available to everyone who needs it enables people to do their jobs better, motivates them to do the right thing and eliminates non-value added activities.

4. Cycle timing: production output should be uniform and closely coincide with demand. Regularity and recurrence of workplace patterns reduces uncertainty, increases learning and permits better planning and action toward meeting customer demand.

5. Agility: Manufacturer’s ability to switch over products and processes as customer and markets dictate. Changing customer demand is a fact of life: companies must be able to quickly adapt to such changes without relying on inventory and other wasteful means.

6. Measurement: get insight into the results. Improvement and waste elimination efforts at any level of the company depend on people using data to assess where they are now, where they should be going and how well they are doing.

7. Variability reduction: reduce process variation. Reducing the variability by which a process deviates from standards, goals, or expectations results in less process waste and improved process performance.

With a value-added focus, every activity and element of a system should add value to the output of the system. The difference between necessary and unnecessary activities can be hard to make, because sometimes non-value added activities seems very necessary. A production organization makes the product or provides the service, a support organization supports the production organization bus does little that added value to the product. Support activities can be eliminated by simplifying products and processes, improve the product design and production planning. Employee involvement is important for a company complying to the Lean Principles.

Toyota designed a strategy to eliminate waste, where waste is defined as anything other than the minimum amount of materials, equipment, parts, space or time.

Toyota’s seven wastes:

1. Waste from producing defects: the costs include warranty or reparation, aggravation of costumers and loss of existing and potential customers.

2. Waste in transportation: two factors determine the distance of transport in a process: the layout of the facility and the routing sequence of operations.

3. Waste from inventory: inventory can cover the problems in an organization. By decreasing the inventory, these problems arise and they should be solved to optimize the whole production process.

4. Waste from overproduction

5. Waste of waiting time: is easy to identify.

6. Waste in processing

7. Waste of motion: being in motion and working are two different concepts. Work is considered as a particular kind of motion that either adds value or is necessary to add value.

Canon also identified nine wastes: waste caused by work-in-process, waste caused by defects, waste in equipment, waste in expense, waste in indirect labor, waste in planning, waste in human resources, waste in operations, waste in startup.

Lean to Green programs are focusing on reducing both production-related wastes and the environmental and consumption wastes to which they are related. Total waste reduction is the reduction of all the waste which a product life-cycle contains.

Concurrent engineering is the concept of a multifunctional team designing and developing a product while also thinking about how it will be made and designing the process to manufacture the product.

Variation exists always in an organization, and the requirements of this variation are often defined in terms of a tolerance range, with a target value in the middle and an upper and lower limit. As long as the variation remains in the range, the performance is acceptable. A tolerance stackup occurs in situations in which two components have both different extremes in tolerating the variance.

Implementation barriers are not desirable by implementing the Lean Principles. These barriers are caused by:

• Attitudes: Workers in Lean Organizations have responsibilities for continuous improvement and often these employees are not used to handle with these responsibilities.

  Furthermore, Lean is a team-oriented philosophy, which affects every area in the organization. Employees could have problems by dealing with these changes.

• Time Commitment: Lean programs need time to show benefits, and sometimes organizations are not able or not willing to wait for the results.

• Quality Commitment: quality must be designed into the product and the production process, and that requires adopting a new product/process design.

Chapter 4. Customer-focused Quality

To achieve a high quality level, a company must adopt a total quality management approach. One of the principles of total quality management is that any definition of quality must start with the customer’s perspective: this is the customer-focused quality and indicates the way customers view to or feel about a product. The fitness for use is how well the product compares to what the customer expects from it.

Eight dimensions of quality, identified by Garvin:

1. Performance: operation characteristics

2. Features: extras

3. Reliability: will the product perform as expected?

4. Conformance: customer satisfaction

5. Durability: length of time or extent of use before the product deteriorates.

6. Serviceability: service

7. Aesthetics: look, feel taste, sound or smell

8. Perceived value: subjective opinions about the product

Two aspects of the producer’s perspective are quality of design and quality of conformance. Quality of design is the ability of a product as designed to satisfy or exceed customer requirements. Quality of conformance is the term used to connote that the manufactured product consistently upholds the requirements as set in the product design. Defect detection and defect prevention are mechanism to control the amount of defects. Defect detection refers to inspection, test and analysis of products, whereas defect prevention includes monitoring and controlling process variation.

Total quality management focuses on all functions and levels of an organization and tries to improve them continuously. Continuous quality improvement is essential to surviving and thriving in a changing, competitive world, because the competition is not sitting still, customer expectations are continuously increasing and the level of quality can be sustained on its own.

The quality of performance/service can be shown in a TQM framework. In this schedule, an overview of the relations between the different departments is given. These departments are:

• Marketing, Sales and Finance

• Product Design and Manufacturing Design

• Purchasing and Suppliers

• Production Management and Frontline Workers

• Customer Service

Six Sigma is a program which includes becoming more competitive, exceeding customer requirements and being certified to supply customers. Sigma refers to standard deviation. Although the output of every process is variable, this variation should be reduced as much as possible. In a Six Sigma quality process, the unacceptable items are located 6 standard deviations away from the mean.

The DMAIC Improvement Process is part of the Six Sigma philosophy, and is represented by five following steps. First, Define, in which the problem is defined with his critical-to-quality attributes. Second, Measure, in which the process that influences the critical to quality is measured. Third, Analyze, in which the causes of problems or poor performance in the process are determined. Fourth, Improve, in which the impact of the key factors on the CTQ’s are confirmed. And finally, Control, in which methods to ensure that the process stays within the acceptable range are employed.

When an employee has a green belt, it is trained in data collection and analysis tools and in Six Sigma methodology. A black belt means that an employee promotes to assume full-time responsibility for leading and consulting with improvements teams throughout the organization. Master Black Belts are promoting to take on responsibility for setting qualities strategies and deployment methods. Last, Champions are leaders trained in Six Sigma tools and responsible for promoting and leading the company wide Six Sigma program.

A control chart is a tool used to monitor a process for potential change. It consists of a center line and an upper and lower control limit, in which the values of periodic samples are the process output are plotted.

Process stability is needed to determine the mean and standard deviation of a process. A stable process is one where fundamental features of the process are repetitive and unchanging. In an unstable process, the mean and standard deviation of the process are constantly changing. Besides process stability, process capability is also influencing the total quality of the process. A capable process implies a process with rare exceptions that procures output that conforms to specification requirements. Process capability is specified by a capability index, which indicates how well the process fits within the product specification limits.

Total Quality Management emphasizes the role of the employee by increasing the frontline worker responsibility. Besides this responsibility, it is continuously focused on process orientation.

Just-in-time style training is training and education that can be applied immediately and on the job.

Implementing Total Quality Management:

1. Top management sets a company vision or broad fundamental objective.

2. The vision is broken into narrower, more focused, and shorter range objectives and plans at every level of the organization.

3. The vision and objectives are set high and focus largely on the external customer.

4. Objectives are developed by teams at every level so to involve most of the employee motivation.

The two main reasons for failing a successful implementation of TQM are lack of long-term management commitment and leadership and lack of empowerment of frontline workers. According to literature, this is caused by:

• Misdirected focus on the trivial many problems rather than the critical few problems.

• Emphasis on internal processes to the neglect of external results.

• Emphasis on quick fixes and low-level reforms.

• Training that is largely irrelevant and lacks focus.

• Lack of cross-disciplinary efforts.

Lean Six Sigma is the combination of the Lean production principles with Total Quality Management and Six Sigma methodologies. This is very often the case in organizations.

Chapter 5. Small Lot Production

A Lot is a batch of something. Determining the right lot size is called lot sizing. Costs that are associated with lots:

• Setup costs: the costs of preparing to make a batch or of ordering a batch.

• Order costs: set up costs are replaced by order costs, when it is about purchasing.

• Holding costs: the costs of holding a unit in inventory for a given time period.

The Lean production system is focused on small batch production and delivery and emphasizes the setup reduction.

There are some different lots: a production or process batch is a lot that is the quantity of items manufactured as the result of a single setup. A purchase or order quantity is the quantity of material purchased from a supplier. A transfer batch is a lot moved or transferred from one operation or workstation to another. The last type of lot is a lot shipped between supplier and customer and this is called a delivery quantity.

Four traditional lot-sizing approaches:

1. Lot-for-Lot: the size of the lot or batch corresponds exactly to the amount required during a particular time period.

2. Periodic Order Quantity: reduces the number of setups or orders by restricting the frequency of orders. The order frequency is how often orders are placed.

3. Economic Order Quantity: gives the lot size that most economically satisfies demand for a given time period. Minimizing the sum of setup costs and carrying costs over a specified time period. (Formula and examples, page 115)

4. Economic Manufacturing Quantity: has the same assumptions as the EOQ-model, except from the fact that the entire lot is delivered all at one time. The inventory grows gradually as each completed nit is moved into inventory.

Large batches have the problems that it takes a long time to produce. This ties up the machine or operation and prevent it from doing other jobs. Finally this causes Work-In-Progress inventory, which increases the time other jobs must wait at the operation. Smaller transfer batches can be useful in these situations. Products that are finished are splitted and don’t have to wait till the complete lot is produced.

Some general conclusions about the effect of smaller process lot size are listed below:

• Lead time: the smaller the size of a job, the less time the job ties up an operation and the less other jobs at the same operation have to wait to be processed.

• Carrying cost: The longer items are at an operation or in the system, whether in process, in transit, or waiting, the greater the accrued costs of carrying those items.

• Setup and handling cost: if process and transfer lot sizes are to be reduced, the time and cost associated with setups and material handling must also be reduced to make small lot production practical and economically feasible.

• Quality

• Flexibility

Chapter 6. Set-up Time Reduction

The traditional approach of set-up times includes keeping the number of setups to a minimum, because a setup operation takes time, costs money and produces nothing. Set up time is the time spent in preparation to do a job. Companies can reduce the number and types of setups by making products that are largely the same, because the smaller the difference between products, the smaller the difference in the processes and operations. In case of different jobs, the number of setups can be reduced by scheduling the jobs in sequence so that all jobs with similar or identical setups are produced after each other.

Simplifying setup time procedures gives the following benefits:

1. Quality: people make fewer mistakes when they have to do a simpler procedure.

2. Costs: when setup times are shorter, batches can be smaller, which can eliminate the WIP.

3. Flexibility: manufacturing gets more flexibility.

4. Worker utilization: simple setups can be done by the equipment operator, which reduces their idle time.

5. Capacity and lead times: shorter setup times increase production capacity.

6. Process variability: standardized setup procedures reduce setup variability and process variability.

These benefits are neglected for a long time until the Lean Production was designed. Reasons for neglecting the benefits were the fact that work floor employees were not asked for their opinion. Also managers prefer to buy new equipment rather than focusing on improvements of the existing equipment. Besides that, setup reductions require skills of machinist and toolmakers and because the improvements were often very complex, this could not be achieved.

Shigeo Shingo developed the SMED methodology, which stands for single-minute exchange of dies. This is a four-stage methodology, which helps to achieve setup time reduction. The four steps are:

1. Identify internal and external steps: an internal step must be performed while the machine or operation is stopped and so it is downtime. An external step can be done while the machine or operation is running. The primary focus in setup time reduction is on the internal step and the secondary focus on reducing the total setup time and labor hours. In many companies the distinction between internal and external is not made and everything is treated as an internal step.

2. Convert internal steps to external: The more setup steps and decisions can be done on external time, the better. The internal setup steps should be analyzed and determine if any of them could be done while the machine is running.

3. Improve all aspects of the Setup Operation: Changing internal steps to external steps often caused not enough setup time reduction and it also does not reduce the labor or material costs of setups. After changing, the company must focus on all the aspects which are influencing the setup time. The OTED stands for one-touch exchange of dies, and means that a setup should take less than 10 minutes and involve no more than a single touch procedure.

4. Abolish setup: To eliminate setups, a company can reduce or eliminate differences between parts, which can be done by changing the design for manufacture, make multiple kinds of parts in one production step or dedicate machines to making just one item.

A machine is defined as the piece of equipment that is fundamental to the operation. A fixture is a device attached to the machine to adapt the machine to a particular purpose. A tool is a device for adjusting fixtures and machines.

Separate internal and external activities can be done by a checklist, which provides all necessary information about the setup and standardizes the process. Furthermore, equipment checks and repairs have to be done in the external times and these checks should help to eliminating idle time. Setup schedules could help to schedule the checks, repairs and procedures, to make sure that everything is done in time and that the tools are available.

Improve internal setups can be done by:

• Parallel setup tasks: Using multiple workers to do setup tasks simultaneously can reduce the internal setup. But using multiple workers, should be considered as a temporary solution, because needing multiple workers is a source of delay for the workers. Finally the setup should be designed that it requires only one worker.

• Attachment devices: Any attachment method that requires more than one tool, person or motion is a target for improvement. the number of bolts should be minimized and all bolts should be the same size, so that one tool is needed for them all. Standardizing reduces the setup times a lot, because the setup person doesn’t have to figure out which tool to use, search for it and pick out the tool. Clamps can be used for securing the item to be machined. It remains affixed to the machine while the fixture or part is inserted or removed.

• Eliminate adjustments: There are three kinds of adjustments: mounting parts and fixtures on a machine, setting the parts and fixtures in the correct position and setting the right combination of speed, pressure, feed rate and temperature so a part meets specifications.

Improve external setups can be done by:

• Storage: everything needed for a setup should be stored as close as possible to the place where the setup is done. Storage should be arranged so everything can be found and moved easily and products should be grouped together.

• Setup kits and cards: gathering all the items needed for a specific setup procedure and putting them in a setup kit. This kit is kept near the machine or workstation which will need the items.

• Material handling: equipment for transporting tools and fixtures should be dedicated for that purpose it is needed and not for other tasks in the organization.

To eliminate the setup, the differences between products should be reduced. Also group technology and production by part families can reduce the setup times, because products and machines can use the same settings. Also producing multiple kinds of things with each operation can reduce the setup time.

Projects for reducing setup times are expensive. The goal of setup-reduction is to reduce individual setup times so that small lot size production is possible. To accomplish this, a project should have a scope, in which an individual setup-reduction is related to the context of a lager, ongoing setup-reduction program, because a single setup improvement has little effect. Setup reduction has the most impact at the bottleneck and near-bottleneck operations.

By starting a product, the company should consider if the machine of improvement is a product with a future; it will stay important in the future.

Not every idea can be implemented and therefore a company can use the biggest-bang-for-buck approach (Pareto). Ideas that provide the greatest ratio of internal setup time savings to the costs of implementation are considered first.

A company could continuously be busy with setup reduction, because a factory has many machines and they all can minimize their setup times. Setup reduction projects should not just result in a cost-effective procedure to reduce setup time, but in a procedure that workers readily follow without supervision. This is one of the reasons why setup reduction is also enabling companies to increase frontline workers’ participation in problem solving and decision making.

Chapter 7. Equipment Maintenance

Equipment maintenance is a key element of lean production and is fundamental to competitive manufacturing. Breakdown repair is the practice of caring for equipment when it breaks. It is the worst kind of maintenance, because it immediately contributes to waste, such as waiting, inventory and product defects. When equipment problems occur, it directly affects the production cost, quality and schedules. Preventive maintenance is the practice of tending to equipment so it will not break down and will operate according to requirements.

Total productive Maintenance is squeezing the ultimate potential from equipment, which is depending on its unique function and operating environment. Total Productive Maintenance is trying to upgrade equipment so it performs better and requires less maintenance then when it is new. Total Productive Maintenance has benefits in productivity, quality, cost, delivery, morale, safety and environment.

Equipment Effectiveness: the multitude of ways equipment influences productivity, costs and quality.

Six big losses categorized by Nakajima:

1. Downtime from equipment

2. Downtime from sporadic or chronic equipment breakdowns

3. Idling and minor stoppages

4. Reduced speed of operation

5. Defects caused by variability in equipment performance

6. Reduced yield caused by nonoptimal operation

Maintainability is the effort and cost of performing maintenance. Mean time to repair is the average time a machine is down. (Formula: see page 165)

Reliability is the probability that equipment will perform properly under normal operating circumstances.

The Failure pattern gives the likelihood of equipment failing. The more reliable equipment is, the less likely it will fail. There are three possible patterns: a function of age, a bathtub shape(early burn-in period) and a constant uniform failure potential.

Mean time between failure represents the average time between failures. (Formulas: see page 167) For machines that can’t be repaired, the mean time between failure is the average time to the first failure.

Availability is the proportion of time that equipment is actually available to perform work out of the time it should be available. The formulas for Availability and Downtime for Repair, Availability and All Downtime, and Repair Downtime Variability are given on pages 168 and 169.

Efficiency measures how well a machine performs while it is running. The Rate efficiency and speed efficiency are given on page 171.

The Quality rate is an index of the equipment’s ability to produce output that is nondefective or conforms to requirements. The overall equipment effectiveness is the measurement of equipment effectiveness that incorporates availability, performance efficiency and quality rate.

Equipment problems are caused by:

• Deterioration: parts wear out.

• Equipment ill-suited for the purpose: the equipment is utilized for purpose other than those for which it was designed.

• Failure to maintain equipment requirements.

• Failure to maintain correct operating conditions.

• Lack of skills of operators, maintenance crew or setup people.

To address these problems, Preventive Maintenance emphasizes the need to:

• Maintain normal operating conditions

• Maintain equipment requirements

• Keep equipment and facilities clean and organized

• Monitor equipment daily

• Schedule preventive maintenance

• Manage maintenance information

• Use predictive maintenance

Maintain normal operation conditions

Companies are often operating on maximum conditions of their equipment.

Preventive Maintenance is identifying the normal conditions and this should lead to normal operating conditions. Derating the equipment reduces the deterioration and extends the equipment’s useful life.

Maintain equipment requirements

The physical needs of a machine are listed in manuals or have to be determined by operational experience. Also the bolts and fasteners are influencing the lifecycle of equipment. The last equipment requirement is the use of proper tools and fixtures in machine setup, because machines malfunction when they are incorrectly configured or adjusting during steps.

Keep equipment and facilities clean and organized

A clean and organized workplace is essential in preventive maintenance. Calibrations and settings on a clean machine are readily visible and make it easier to see when the machine needs resetting.

Monitor equipment daily

Equipment must be monitored daily or in an ideal situation, in real time so that early signs of problems are directly detected and fixed. A quick detection of an emergent problem allows a simple solution, whereas without detection, the problem would grow into an expensive proposition.

Schedules preventive maintenance

The time scheduled for preventive maintenance can be based on:

• Clock or calendar time intervals

• Cycles of usage: a fixed amount of hours

• Periodic inspection: Schedule PM whenever a periodic inspection indicates impending or possible malfunction or failure.

The estimated useful life is ending at the point at which the probability of the opponent failing greatly increases.

Manage maintenance Information

The information about performance and breakdown history of equipment must be managed in preventive maintenance. Effective PM requires a good system for tracking equipment performance, breakdowns, repairs and related costs. This tracking system should be a part of a larger computerized maintenance system, which registers all equipment.

The type of machine, serial number, date put in service, manufacturer, dates of upgrade or changes, location in plant and location of manuals is information that must be compiled in the register.

Use predictive maintenance

Predictive maintenance gives a warning about potential failures and is also called condition-based maintenance. A warning indicates that a replacement or overhaul is necessary. It bases their warnings on measurements in vibration, speed, temperature, and other physical phenomena.

Total productive Maintenance is a commitment to machine usage and upkeep that goes beyond preventive and predictive maintenance. It has the following similarities with total quality management:

• All employees are involved in satisfying customer needs. For TPM this means providing maximum support and service.

• A machine breakdown is seen as a form of defect

• TPM is a further aspect of continuous improvement.

Total productive maintenance is seeking for zero machine malfunctions and breakdowns. According to Nakajima, there are some steps that help to eliminate the causes of equipment problems: First, perform TPM preventive maintenance. Second, develop in-house capability to restore and redesign equipment. According to Nakajima, equipment usage, design and upkeep cannot be treated independently and companies should not outsource their maintenance, because this reduces the insight in the process. The last step is eliminating human error in operation and maintenance. This can be done by education and training, foolproofing and improved maintenance procedures. An example of foolproofing is a pokayoka, which prevent to make faults.

By implementing Total productive maintenance, a steering committee is composed to formulate TPM policies and strategies and gives advice. The TPM program team is actual coordinating and implementing the policies. A feasibility study must gather baseline data for planning the program and assessing the program’s likely costs and benefits.

Target areas are particular departments or process in the factory and by implementing total productive maintenance, the first target area will serve as a pilot for trying out TPM ideas and demonstrating the concept and results to other areas. By implementing TPM in each target area, the TMP program team and the target area committee are planning jointly the implementation.

They tasks involves determining for every machine how much improvement is needed, decide which PM and repair tasks can be transferred to operators, train operators and determine equipment that requires predictive maintenance.

TPM cannot provide without the support of management and without the commitment of the employees. Decentralization removes interdepartmental barriers. But even with a decentralized company, a central maintenance function is necessary to oversee the required maintenance issues in the process.

Chapter 8. Pull Production Systems

Production control is getting the right quantity to the right place at the right time. A production system can be a pull or a push production. A push production system the schedule of producing is based on the time when a job order is expected to arrive at an operation, plus the time when the operation is expected to complete any preexisting job and be available. A central staff is responsible for scheduling all operations for all job orders.

A push production processes materials at each workstation in batches according to a schedule and then moved downstream to the next work station. The materials must usually wait until the workstation completes earlier jobs, changes over, and is ready to process them. Schedules for every job order at every workstation are centrally prepared by a material requirements planning system.

A pull production is a production system, which is led by the needs of the customers. They pull material through the system with their needs. A pull system is effective and simple. With relatively little inventory and only minimal information, the system keeps material flowing to meet demands. The consumer initiates the process at the downstream location and withdraws whatever material is needed from stock. When the amount in stock reaches some level, a signal for the producer at the upstream location is sent, to replenish it.

Upstream is towards the supplier and downstream is towards the customer. The order signal information goes upstream, where the actual material flow goes downstream. In a pull system, the production is based on a signal coming from a downstream operation.

Pull production is also called stockless production or just-in-time production. Although, it is possible to work with little inventory, some inventory must be held in the buffers. If you don’t have buffers, every operation must wait for the operations upstream, to provide material. Using a buffer would make it possible to start as soon as an order is received.

The differences between pull (Kanban) and push production (MRP):

• Timing: Push production systems specify order releases of production schedules using lead times and factory-wide information from the master schedule. In pull systems an order release occurs when the level of inventory at the downstream buffer is lower than a prespecified minimum.

• Batch size: In push production, batch sizes are determined by a central planning staff using lot-sizing rules and master schedule requirements. Batch sizes in Kanban are determined at the shop-floor level according to the demand and carrying inventory.

• Priorities: In push systems, the priority is based on rules and finally on the status of work at each workstation.

• Interference: In push systems, decisions about unanticipated orders rest with upstream workstations, whereas a pull system conforms the daily quotas using somewhat-stable schedules for the final operation.

A pull production process uses standard containers and cards throughout all the process. All the buffers use the same-sized containers and are all provided with the same information card. The information card describes the contents of the containers and delimits the amount of inventory of the system. Containers can only be filled when they have a card.

Rules for Pull Production:

1. Downstream operations withdraw only the quantity of items they need from upstream operations. This quantity is controlled by the number of cards.

2. Each operation produces items in the quantity and sequence indicated by the cards.

3. A card must always be attached to a container. No withdrawal or production is permitted without a Kanban.

4. Only nondefective items are sent downstream. Defective items are withheld and the process stopped until the source of defectives is remedied.

5. The production process is smoothed to achieve level production. Small demand variations are accommodated in the system by adjusting the number of cards.

6. The number of cards is gradually reduced to decrease work-in-progress and expose areas that are wasteful and in need of improvement.

The pull system is a simple reorder-point system, where a replenishment order is placed when inventory falls to a critical level, the reorder point. Safety stock is the stock to deal with variability in demand and lead time. It is a two-bin system: when the first bin is empty, a demand for another full bin is done. In the meantime, the second bin is needed to satisfy demand.

Production time is the total time to produce the quantity ordered, included setup time, processing time and any planned waiting time. Conveyance time is the time to convey the order to the upstream operation that will fill it, plus the time to move the materials to the downstream operation that initiated the order.

The standard-sized containers for holding and moving parts are often small, they should hold 10% of the daily demand. An outbound buffer holds the material after the workstation, an inbound buffer hold the material for the workstation.

Different kind of Kanban cards (formulas and examples of the Kanban systems, see page 218-225):

• Conveyance Kanbans: A conveyance Kanban is an authorization to move a container from an upstream, outbound buffer to a downstream, inbound buffer. No container can be withdrawn from an outbound buffer unless a C-kanban has been issued. A single-card Kanban system uses only one card, the C-kanban. The conveyance cycle time is the time from when workers at the inbound buffer remove a C-kanban from a full container, to when remove a C-kanban from the next full container.

• Production Kanbans: A production Kanban is used to authorize production of parts or assemblies. Only the final operation in the process uses a production schedule, the other processes use only the P-kanban authorizations. A system that uses both C-kanbans and P-kanbans is called a two-card pull system. The number of C-kanbans specifies the maximum number of full containers at an inbound buffer, the number of P-kanbans specifies the maximum number of full containers at an outbound buffer. A safety factor can be included, to deal with the minor fluctuations in demand.

• Signal Kanban: there are two kinds of signal Kanban. Production-signal kanban(SP-kanban) is for ordering production of large batches or quantities in excess of one container. Large batch production is necessary when the changeover time between product is time consuming enough. The second type is material signal kanban(SM-kanban) and it is used to authorize movements of materials, in conjunction with an SP-kanban to authorize the transfer of materials needed to produce the batch.

Besides Kanban cards, there are a lot of different mechanisms for signal and control. Wheeled carts are lined up in lanes painted on the floor. Each item has a separate lane, which gives an clear view if replenishment is needed. Kanban Squares is a space to place things and an empty square authorizes production or conveyance for the number of units that will fill the square. ‘Golf balls’ is a mechanism, which uses a golf ball that rolls upstream. An arriving golf ball is a signal for the station to produce or move something. A Kanban Sequence board enables operators to sequence jobs when a backlog of cards accumulates. The cards of several different jobs are placed on one board, with an mark of importance and urgency.

A pull production should constantly improve their process, by reducing the number of buffers, which are used in the process. Furthermore, planning and control responsibilities must reside in the hands of frontline supervisors and worker teams.

The production emphasis must be on producing to meet demand of customers, and not overproducing. Inventory must be kept as low as possible. Preventive maintenance should help to eliminate breakdowns, even as quality assurance must be aimed at preventing defects from happening. Setup times must be small, plant layout must facilitate linking of all operations in one process and the production schedules must be uniform.

A pull production system is most desirable in a production in which the demand is stable and continuous. A repetitive production is a production of standardized items on a continuous basis. A product family is a way to produce multiple products in a single process.

There are some factors, which make it impossible to implement a pull production system. The final product has to be provided in a steady demand for upstream operations. Also, when the product is made in so many options for which the demand is small and unstable, a pull system does not work. Furthermore, a high defect rate or though quality control are factors that are complicating the implementation of a pull system.

A pull production is often used in combination with a push production: some processes in the same plant use push, others use pull. This is depending on the product/process conditions. When products are modularized, they are built as a collection of standardized options and subassemblies. Then, you can produce repetitively in a pull system, even though the final assembled product must be produced with a traditional push system schedule.

Chapter 9. Focused Factories and Group Technologies

Many companies have to deal with diversity in their production processes. Therefore, a company must be able to change quickly to make each product. Although, diversity can lead to problems in a company and therefore many organizations are trying to delimit and manage the diversity. This can be done by outsourcing some products or by using group technology.

Group technology is used to identify similarities among different products and group them accordingly, and then produce each group in a single place with the same workers and equipment (focused factory).

A project is a unique, large-scale work effort directed at one or a few end items, which all are tailored to fit unique requirements. Cross-functional activities are often needed to fulfil the tasks of a project.

A job is a small-volume, small-scale work effort where the output is one or a few identical items, custom made to fit an order. A small-scale project done in a small plant or shop is called a job shop. When a job involves producing several or many identical end items, the items can be produced in batches.

Repetitive and continuous operations produce similar or identical items in high volume. These are called flow shops, because material moves through them smoothly and with few interruptions. Products made in a repetitive operation are discrete units, in which the equipment often is designed for single-purpose, high-efficiency operation and the workers are narrowly trained to perform one or a few tasks each. In continuous operations products actually flow through the process. Products are produced in large volume and the product seldom changes. Changing from a job production to a continuous or repetitive production takes time and is not always the best solution. An organization should consider the variety-efficiency trade-off to determine which production method fits the organization.

Types of facility layouts:

• Fixed-position layout: the end item remains in a stationary position while it is being produced. This layout is often used in projects in which the end item is large and difficult to move.

• Process layout: similar types of operations are clustered into functional work areas or departments and each job is routed through the areas according to its routing sequence of operations.

Advantage of process layout is that it can produce any product that requires work in any departments, no matter the production volume or routing sequence of the product. Process layouts are flexible and can accommodate a variety of products, regardless of differences in demand or processing steps. Disadvantage of a process layout is that it is wasteful in terms of time, material handling, defects and inventory.

• Product layout: layout that consists of all the necessary operations for producing a product arranged in a sequence on a line. They are often used in a repetitive or continuous process. The biggest disadvantage of product layout, is that the process is dedicated to produce just one kind of thing and the capital investment in a product layout can be large.

Group technology states that simpler is better; if products can be reduced in number and made more standardized, and if the process to make them can also be reduced in number, the production waste will be reduced and the efficiency will be increased. Group technology tries to reduce variety in the kinds of products reduced by the manufacturer instead of the kind of products offered to the customer.

Organisations use product coding to specify the design categories or classify the products into groups. There are three basic systems for coding products:

1. Hierarchical structure (monocode): The code for each product is a sequence of digits created by starting at the top of the hierarchy, then moving downward through whatever branches fit the product. The code exists of 0 or 1, depending on the product’s dimensional features.

2. Chain structure (polycode): each digit’s position in the sequence always represents the same attribute or future of a part. A code is created by stringing together appropriate digits as established from the reference table, in which the values are given.

3. Hybrid structure: consists of subgroupings of digits that each follows either a monocode or polycode.

A product family consists of products that follow similar manufacturing processes as identified by Group Technology coding. All of the items in a products family are generally made from the same material, have similar overall dimensions and require similar machines or tools. A focused factory can be set up by a sufficient combined demand for the products in a family. The difference between a focused factory and a product layout is that a focused factory can produce every item in the family and not just one product.

A focused factory is also called a plant within a plant, in which each focused factory is a portion of a plant devoted to making a product family of somewhat-similar products. A focused factory can take different forms. A focused flow line is similar to a product layout, except that it can produce all the parts in a part family. This form is useful when every item in the family follows the same sequence of operations and requires about the same processing time on each. A workcell can be unidirectional or omnidirectional. In a unidirectional workcell, a conveyor or simple gravity-chute system connects the operations. In an omnidirectional flow, materials moving between stations are hand or cart carried A focused workcenter is similar to a process layout, because machines are clustered into areas by functional type. The difference is that in a focused workcenter certain machines in each functional area are dedicated to producing only certain part families.

The decision for which type of focused factory depends on the demand, commonality of products and processes, required or available speed and capacity of the operations. Each focused factory should be flexible, temporary arranged, so that it can be changed to meet new requirements.

Product lines should be curved and in a small assembly process the line can be U-shaped, so that workers can move quickly between several machines. For a process that has many workstations, a s-shaped line is more appropriated. This minimizes space requirements and the average distance between workers. The length of the line can de the flexing of the line helps to make the assembly process more flexible. The actual position of machines and workstations in a focused factory is often determined by trial and error.

Two things are involved when forming a focused factory; first, forming a cluster or group of products or parts that are similar in terms of processing requirements and second, forming a cluster or group of operations, machines, workers and tools. There are two approaches to configure the groups: parts coding/classification and cluster analysis.

Coding and classification can help to classify products into groups if the product codes include information about the production process. A cluster analysis looks also for similarities in product features and production requirements to form homogeneous groups of product, but cluster analysis does not require codes and uses information that is readily available.

Production flow analysis is another methodology for forming groups of part families and machines. Production flow analysis techniques use information about process operations to simultaneously form product and machine groupings.

Production flow analysis techniques often start with a process matrix, in which the product-machine information is represented. Each column in the process matrix represents a product or part, each row a machine or operation. The binary ordering algorithm is a procedure for transforming any N-column, M-row, and binary matrix into this form. On page 262-265 the procedure of binary ordering algorithm is explained.

A focused factory requires less capital investment, are significantly more flexible and less wasteful. Implementing a focused factory, gives reductions in lead times, WIP inventory, material handling and quality problems. A disadvantage of focused factory is the potential for low machine utilization since any machine has his own dedicated use. Furthermore, plants from a process layout lose their flexibility when they are shifted to focused factories. For managers, the advantage of focused factories is the required effort and expenses associated with designing and implementing the focused factory.

Chapter 10. Workcells and Cellular Manufacturing

Cellular Manufacturing is the concept of performing all of the operations necessary to make a part, component, or finished product in a workcell. Cellular Manufacturing is often used in combination with pull production. Every workcell can produce a variety of parts and components, which makes it possible for the overall production system to produce a variety of products.

A workcell consists of:

• Workstations: place where operations are performed.

• Workers: people who are performing the tasks in a workcell.

• Machines: can replace the tasks of workers. In that case, workers are responsible for set up and monitor machines, turn machines on and off, load and unload parts and inspect parts.

• Holding and transferring items.

The number of employees working in a workcell, is influencing the output rate of a workcell.

Typical workcell End Items are one- or few-pieced end items and products that are complex and involve numerous operations. The number of workstations needed to complete the products also determines if a product is suitable for workcell production. In a large cell, teamwork is needed to be able to produce. The numerous operations are first divided into several workcells and thereafter these workcells are linked to each other. Workcells can be linked piece by piece with conveyors or mechanical feeders or by material handlers. The communication between the workcells is arranged by signals, which can be done by fixed containers and cards.

There are two kinds of workcells; assembly cells and machining cells. In assembly cells the work tasks are entirely or mostly manual, because the tasks are difficult or costly to automate. Mechanic cells consist of work tasks that are usually simpler, more easily automated and largely or no manual assembly.

In a workcell, the central concept is the cycle time, which is the time between when units are completed in a process. The production rate is the inverse of the cycle time, and indicates how many products are produced per time unit.

The required cycle time or takt time is the production target rate of a process or operation. The actual cycle time represents the actual production capability of a process or operation.

Assembly workcells

The actual cycle time of an assembly cell is entirely a function of the cell manual time. Cell manual time is the time required for workers to perform their tasks and move between workstations. An example of the cycle time is given on page 282.

Besides dividing the cell in different departments, another way to add workers is by using a rabbit chase scheme. In a rabbit chase scheme, every worker carrier, slides and chart the work piece or item from station to station.

Machining workcells

The differences between machining workcells and assembly workcells are; first, machines do virtually all operations in machining workcells, with one or a few machines located at every workstation. These machines are often automatic single-cycle machines that stop after the machining operation has been completed. Decouplers allow machines in a sequence to operate somewhat independently, by connecting stations and machines. The actual cycle time of a machining cell is based upon the cycle time of the machines in the cell and the cycle time of the workers. Machine cycle time is the time per unit to set up the machine and to perform its operation. The worker cycle time is the time for the worker to complete a trip around the cell. An example of the cycle time in a machining workcell is given on page 286.

To determine the number of workers, which are required to fulfil the required cycle time, is difficult. It is impossible to cover all eventually problems and events. Two ways to deal with this uncertainty are backup workcells and planned-in excess utilization. A backup cell is normally used for other purposes, but in case of unexpected problems, it can be changed to another product family. The second option, planned-in excess utilization, is scheduling work so that in case of normal production, it falls well within a cell’s capacity and some time can be used to solve problems.

Changing the number of worker has effect on the costs of a cell. The cost-capacity trade off analysis can be used to determine the desirable number of workers. One of the advantages of a workcell is that it can produce any batch size, even a size of one.

Changing a cell can be done by stopping the whole cell and then change everything at once. Less disruptive is changing by integrating the changeover into the cell’s sequence of operations.

Andons are colored lights above each station to indicate the work status. If the problem is severe and the process must be stopped to solve the problem, the light becomes red. The entire cell stops until the problem is solved.

Using cross-trained workers can help to create the same cycle time for all the workstations, namely the cycle time of the worker who takes the longest time. This is because cross-trained workers are working on more than one workcell and therefore the different workcells are dependent of each other.

Equipment issues:

• Machine sharing: machines can be shared if the same kind of machines is required, there are not enough machines to go around and when procurement of additional machines is cost prohibitive.

  A shared machine can be mobile and switched through the processes and it can be immobile, which means that it is located elsewhere and treated as a special operation.

• Machine acquisition: the criteria for machine acquisition consider the trade-off between a machine’s production rate or multipurpose capability and its cost.

• Special operations: Sometimes special operations in a process are required. A way to include these operations in a workcell process is by building the workcell around the operation. This is useful when most of the items in a product group require the same special operation. If the special operations work with batches, a buffer can help to build up the quantity.

A flexible manufacturing system is a manufacturing cell or system of linked cells that is completely automated by virtue of robots and computer control. This system can help to produce in an economical way a variety of different products. Cells with flexible manufacturing systems are often less flexible than cells with greater manual labor content. Furthermore, robots are limited in the range of tasks they can be programmed to.

Three broad issues associated with implementing cellular manufacturing:

1. Planning and control: To implement cellular manufacturing, ways must be found to adapt the central planning and control system of the organization to the control procedures of the workcell. The unit of focus is thereby difficult to distinguish.

2. Organizational issues: The most evident change of implementing cellular manufacturing, is the change of the frontline shop worker. Workers must be empowered, by making them not only responsible for assembly and machine operations, but also for performing tasks previously done by staff workers.

The increase of the workers’ responsibilities shifts the primary function of staff professionals to supporting the workers. A workcell requires teamwork and this requires a different rewarding system than individual tasks. Pay for skill is a way to pay, which increases the wages for each new skill they learn. Gain sharing plans provide team members bonuses for improvements in team performance. Time standards are often based on individual tasks and therefore often useless in workcells. The last organizational issue is team education and training, since training is essential to perform an expected wide range of tasks in a workcell.

3. Attitudinal issues: implementing cellular manufacturing will give workers the feeling that they are reduced in their power. Shop-floor workers and supervisors will probably be sceptical towards the implementation. People are concerned about what they have to do and for the additional work of the implementation.

Chapter 11. Standard Operations

Standard operations are a group of standards that completely define all aspects of a task, operation or process. Standard operations are also called standard operating procedures. Standard operations must be adapted in every different situation and with every change. The difference between standard operations and standards for product requirements is that the standards for product requirements are developed by engineers and used in products design and quality assurance. Standard operations are work procedures, tasks and times prescribed for the shop floor to produce a unit of output.

The involvement of the shop-floor can be increased by putting responsibility for standards development and implementation at the shop level. The standards will be more accurate and accepted by workers. Also, the standards can lead to process improvements, which were not remarked by the staff specialists. Floor workers have to be trained before they are able to develop good standards.

Four aspects of standard operations:

1. Takt time: is the starting point of setting standard operations. When output goal is set, the frequency an item should be produced can be determined. A takt time should not include time to solve problems or waste. When takt time includes allowance for waste, the sources of waste are never addressed or eliminated.

2. Completion Time per Unit: the actual time required to process one unit. There is made a difference between a task and an operation: a task is an elemental unit of work, whereas an operation refers to a group of tasks. Performance rating indicates the level of skill of the worker. 100% performance rating means an average level of skill. The allowance factor takes into account delays that are unavoidable but cannot be eliminated. Production capacity gives the number of units that can be produced in the available production time. In batch production, the lot size and setup time are also important. A way to compute the production capacity is given on page 316.

3. Standard operations routine: this is the standard sequence in which tasks will be performed. There are three kinds of standard operations routine; SOR for a single repeated operation, SOR for multiple repeated operations and SOR for multiple nonrepeated operations. SOR sheets determine the standard operations routine: a solid line represents the time a worker spends doing manual tasks, a dashed line meandering downward represent the run time of the machine after the worker turns it on. The process routing sequence is the order in which operations must happen to make a part or products.

4. Standard quantity of WIP: this is the minimum in-process inventory necessary for the process to function.

The standard operations sheet is providing information about the completion time per unit, the SOR, and the standard WIP combined and displayed in one place. It is an important tool, because it serves as a guide to inform workers about the SOR and other important aspects of the operation, it helps the supervisor assess whether the operations are being done according to standards and it serves as a tool to evaluate performance and improvement.

There are six conditions for successful development and use of standard operations:

• Focus on the worker

• Job security: guaranty that no jobs will be lost.

• Repetitive work: operations work best if their work sequences are repeated.

• Level production: you cannot constantly change. The production must be kept at a constant level for some period.

• Multiskilled operators: workers must be able to work multiple, different machines in a workcell.

• Team effort

Chapter 12. Quality at the Source and Mistake-Proofing

In this chapter the four concepts for eliminating defects are discussed. By analysing these concepts, the statistical process control is taken into consideration. Limitations of the statistical process control are that it can miss occasional problems from sources that are ephemeral and some defects can only be detected through human sensory inspection.

100% inspection

100% inspection is needed to minimize the chance of overlooking defects or of missing random problems that have fleeting causes. The frontline workers are most desirable for inspecting the tasks, because it minimizes the time between the moment a problem occurs and when it is remedied. This inspection can be done by self-checks and successive checks.

Self-checks: after a worker performs a task, he checks the result.

Successive checks: the next worker in the process inspects the previous worker’s output. When a worker detects a problem, he passes the item back to the responsible worker. A specialized check is necessary if inspection needs particular knowledge, skills or judgments.

The requirements for self-checks and successive checks include setting targets, enabling quick feedback and action, and management showing consideration and providing support to workers. Andons and status boards help workers to achieve their targets. Implementing self-checks will increase the cycle time. But this growth if often small and will be compensated by the reduction of errors.

Jidoka

Jidoka is a term that refers to automation in the usual way, and which also refers to automatic control of defects. This process has built-in mechanisms that prevent it from proceeding whenever a defect or abnormality is detected.

Autonomation is the automatic shutdown of a process. A form of autonomation is line stop, which refers to a worker’s responsibility for stopping a process when a problem is discovered. This can be done in manual processes and in automated, mechanical processes.

Source inspection

Source inspection is based on the conviction that the only way to eliminate defects is to discover the conditions that give rise to defects or process changes and eliminate them.

Problems often occur in the following situations:

• Inappropriate work processes or operating procedures

• Excessive variation in operations

• Damaged or defective raw materials

• Inadvertent errors by workers or machines

Pokayoke

Pokayoke is a term that is equivalent to error proofing or mistake proofing. Any kind of system or mechanism that prevents defects from happening can be called a pokayoke. A pokayoke has two main functions: regulatory and setting.

Regulatory pokayokes are devices that either control a process or give warning about it. A control pokayoke shuts down an operation whenever it detects an abnormality. A warning pokayoke lights or buzzers as only signal if an abnormality occurs.

Setting pokayokes are devices that check for or ensure proper settings or counts in a process.

Chapter 13. Uniform Flow and Mixed-Model Scheduling

Production Leveling is a way to prepare production plans. It holds the frequency and size of changes in production schedules to a minimum. Batch sizes and batch intervals are used to match production levels with a changing demand. The demand levels vary because of sales fluctuations, promotions, end-of-month quotas.

Ways to deal with uncertainty:

• Buffers: A way for the upstream stages of the production-distribution chain is to absorb this variation by carrying a buffer stock of raw material or in-process material. Buffer stocks provide some degree of certainty and during periods of slack demand they keep materials flowing and work centers productive. Disadvantages of this tactic are the high inventories.

• Level the production schedule: Establish a master production schedule and plan the production on a regular basis and in a fixed batch size, so the batch size and batch interval for a given product are constant. Level scheduling gives workers more time to identify areas of the process that need improvement.

To determine if production leveling is practical, three requirements are necessary:

1. Continuous, stable demand: A company has to deal with the demand in a particular environment. A buffer is not desirable in a quick changing environment, because this can lead to unsold products. Recommending inventory is a contradiction to the Lean principles. A company can use a segregation of customers into tiers, where the first tier a high volume and common process is, a second tier a substantial volume is and a third tier a low volume with sporadic orders. During peak performance, a company should focus on satisfying first-tier and second-tier customers.

2. Short setup times: the time to change over a process from one product to another must be short.

3. Production = demand: The goal of each production run should be to achieve the scheduled output quantity and not to maximize output. If there are different products included, an aggregate demand should be made, in which the total demand for all products in a product group are accumulated.

The leveling focus of an organization should be on leveling the schedules for the highest-volume products (tier 1 and tier 2). Product-quantity analyses are useful to decide which product has the highest volume and which schedules should be leveled.

By leveling on one product group it is desirable to keep the production level fixed for as long as possible, although occasionally the level must be changed.

The level of production chosen should account for preexisting stock and should be able to satisfy periods of peak demand. Leveling multiple products should be produces on a similar way. In a daily leveled schedule, the production volume for each product is set at 1/20^th the monthly requirement.

Level scheduling in different pull productions:

• Final Assembly Schedule: Pull production systems function well only when demand for materials at every stage is smooth and steady. A pull production system utilizes only one schedule, only for the last stages of the process.

• Mixed-model production: production of multiple kinds of products on a repetitive basis, in a mixed fashion on a single line. It is necessary to mix different products in sequence like this results in smooth, steady demand for upstream operations.

• Batch size: The batch size of the final assembly must be as small as possible, given that this size dictates the size of batches everywhere in the production. Smoothing the production schedule results in smoother flow of orders going upstream and everywhere else in the process.

Theoretically the ideal batch size is one, and you produce every product in a repeated equal quantity, which is called an MMP schedule. But mixing the production is also dependable on the takt time and changeover times. The requirements for MMP are that there should be a continuous demand, small setup times and demand-driven production. Furthermore there should be flexible workers, an effective quality assurance to detect defect products and small-lot material supply.

Advantages of MMP:

• Low variation in production schedules

• Low WIP inventory

• Reduced lead times

• Elimination of losses due to line changeover: with MMP an entire line is rarely shut down for changeover.

• Process improvement: workers rotating through a variety of tasks and operations in MMP are more aware of problems and motivated to eliminate them.

• Balanced work loads: even allocation of work.

• Fewer losses from material shortages: work continues in other models, and more of those models are produced until the material arrives.

A company can chose for several production philosophies. The first one is the Make to Stock, in which companies make products in anticipation of demand.

These products go into finished goods stock before begin withdrawn to fill customer orders. Assembly to order companies produce subassemblies according to forecasts and then combine the subassemblies into unique combinations as requested by customers.

A large variety of different products can be produced by combining different combinations of relatively few kinds of subassemblies. Make to order companies produce products in response to actual customer orders, and produce these products in small quantity.

Assemble to order

Assemble to order makes use of modular bills, which is the Bill of Material which is maintained for each subassembly r component option, but not for individual final products. An modular bill shows all the possible options, but not particular combinations of them. After making this modular bill, the modularization procedure starts. In this procedure, the components are clustered into categories that have something in common. When the number of possible final products is very large, a type of modular bill called a planning bill, is used for production scheduling. These bills simplify production scheduling and improve the ability of production schedules based on forecasts to satisfy actual customer demand. A planning bill does not specify the exact amount of each product to produce, but it does specify the amount of materials and subassemblies needed to fill actual orders.

Make to order

A make-to-order production is desirable in situations with a sporadic demand. Level production is then impossible. The only way to level production in case of a highly variable demand, is to maintain a backlog of orders. Marketing enters an order into the backlog and after a week, the marketing confirmed all orders in de backlog. These orders are produced. The size of the time buckets at different stages should be reduced, which will reduce the time customers have to wait.

Minimizing scheduling problems can be done by:

• Simplifying the Bill of Materials

• Use group technology and standard parts

• Make only what is needed

• Produce in lot sizes that are small and easy to count

• Use simple visual control systems

• Do not overload the shop or particular operations.

Back scheduling is the procedure of scheduling the start of an activity backward from the time when the activity must be completed. The bill of activities is the list of steps which are done in a process.

Chapter 14. Synchronizing and Balancing the Process

Synchronization is the process of aligning the production rates and sequences off all upstream workcenters so that everything arrives as needed at the final stage. In make to stock and portions of assemble to order, processes should be synchronized such that every upstream operation produces at the rate required to satisfy demand. The demand rate is determined by the production schedule of the final assembly.

Synchronization can be achieved by setting cycle times at every upstream operation according to the cycle time at the final assembly. In a pull system, only the last station has a daily schedule and therefore it influences the complete process. The cycle time is different from the production rate and more important in the synchronization process. Hen every operation produces according to the same required cycle time, material flows smoothly and there is minimal WIP build-ups and no material shortages along the way.

Bottleneck scheduling is scheduling a process based upon the bottleneck constraint. When the bottleneck constrains process throughput, efforts to increase throughput must start at the bottleneck. To increase bottleneck throughput, the setup time must be reduces or the size of the process batch must be increased. To minimize the lead time when the process batch is large, the transfer batches from the bottleneck should be small.

The following principles are involved by synchronizing a production process by managing the bottleneck:

• Throughput pace: it is useful to set the pace of the process according to the capacity of the bottleneck.

• Buffer stock: a buffer of jobs should be maintained ahead of the bottleneck, because time lost at the bottleneck is time lost everywhere in the system.

• Process scheduling: The timing of jobs released into the process should be predicated on the bottleneck’s capacity to process those jobs.

• Drum-buffer-robe: setting a drumbeat for the process based on the bottleneck, establishing buffer stock ahead of the bottleneck and pulling material into the process from the bottleneck.

Balancing refers to the procedure of adjusting the times at workcenter to conform as much as possible to the required cycle time. A balanced process is one where the actual cycle times at all stages are equal.

This is only appropriate in processes that are paced, which means that material moves on a conveyor or chain at a constant speed past workstations. Line balancing refers to assigning tasks to a workstation or operations sequence such that the cycle time of the combined sequence of workstations satisfied the required cycle time, the tasks are assigned in the right order and the assignment is as efficient as possible. An example of line balancing is given on page 395.

In MMP, more than one products is being produces, so for each product the time for a given tasks might be different. Therefore, MMP balancing must consider simultaneous production of multiple products. MMP balancing requires assigning tasks to a sequence of a workstation, such that the cycle time for each product at each workstation satisfied the required products cycle time and that the assignment for all products is as efficient as possible. One way to achieve this, is using the weighted average time rule, which uses the average amount of time required at the workstation to perform tasks. Formula is given on page 398.

Besides the weighted average time rule, there are other ways to achieve balance:

• Dynamic balance: if the balance is dynamic, the mix of tasks can be changed with each product.

• Parallel line: splitting the line into two or more parallel lines, can help to meet the required cycle time.

Balancing is a matter of continuous improvement and worker reallocation, which is a process that consists of three steps. Frist, eliminate the wasteful tasks. Second, reallocate tasks. Third, reduce the workforce and then return to step 1.

Balancing through worker reassignment allocates the tasks among workers. Preferable is the situation in which as many workers have no idle time. This is preferable, because all the focus can be focused on improving the tasks of the worker with the idle time, so that his tasks can be reallocated among the other workers.

Chapter 15. Planning and Control in Pull Production

The Production planning and control framework has centralized and decentralized components.

The Centralized part has to accumulate demand information and formulate production plans and schedules. Components of a centralized system are the yearly production plan, tough capacity plan, monthly MPS, Material Procurement forecasts and Daily schedules.

Centralized planning and control systems:

• Monthly planning: centralized systems prepare monthly demand forecasts for each product, product group or other item. This monthly planning is used for planning MPSs for future periods. Also the MPSs for Shop Floor Planning are made, which gives an estimation of the number of workers needed, equipment requirements and the length of workdays necessary to meet the level MPS.

• Daily Scheduling: The MPS for the current month is broken down into weekly schedules, then into daily schedules. Components of daily scheduling are integrating recent demand information, daily order alterations (alterations include new orders, canceled orders and changes to orders), material procurement forecast, Kanban supplier link and MRP supplier link. Supplier Kanban systems work like internal pull systems except the upstream operations to which orders and empty containers are sent are external suppliers. Not all pull production companies work with Kanban, it is also possible to use a centralized MRP system.

The role of the decentralized part of the system is to oblige the production requirements as specified in the MPS and daily schedules. This is mainly a shop-floor based system. The biggest difference between pull systems and traditional push systems is that in pull systems the functions of detailed planning, scheduling and control are decentralized, whereas in push systems they are centralized.

Decentralized planning and control systems:

• Detailed capacity planning: consists of initial capacity planning, in which the production output of a cell might have to be altered to meet changes in the monthly MPS, and Capacity Fine-tuning, which included the continue adjustments when more recent information becomes available.

• Shop-floor control: In lean companies the purpose of data collection is also to provide frontline workers with information for scheduling and controlling their work. Visual Management systems play an important role in it. These are systems in which people know the status of the system and what to do by looking at the Kanban cards.

The role of worker teams is to track performance measures such as production rates, CT’s, lead times and product quality.

A company, who want to become a pull production company, has to implement the following characteristics:

• Simplified Bills of Material: According to the Lean Principles, an organization should reduce the number of steps in a process. Also in the scheduling process, a company should eliminate steps that involve administrative procedures. The Bill of Material should be kept as flat as possible. Flattening the BOM is eliminating the records that are unnecessary. This could be done by creating work cells. Another way to remove records is to transform them into phantom records. These records represent a material that never actually goes into storage, but is in a momentary transitional state and is en route to the next stage of the process. Sometimes, a BOM can include only two levels of records: the raw material and the final products.

• Stock areas and point of use: a stock area is a physical location where material is held for use by a workcenter, workcell or workstation. To minimize the handling time and cost, the stock area is ideally located at the place where the material is used: point of use. When material is needed on more places, the use of reserve stock locations is desirable.

• Postdeduct and deduct lists: In pull productions it is also necessary to keep track of the quantities of completed end items and of procured parts. Postdeduct is tracking and updating this information. For every completed item, the balances for all parts in the product are reduced by the number of parts used in the product.

• Rate-Based Master Schedules: pull productions requires only daily schedules and only for the end-item.

Successful implementation of pull production involves matters beyond the shop floor, beyond the PPC system and even beyond the company. Suppliers too must subscribe to lean philosophy and become partners in the lean process. Steps to implement Pull Production:

1. Create a logical flow and improve material handling.

2. Introduce the pull system.

3. Create a new layout and reduce the reliance on MRP.

4. Continuous improve the process.

Chapter 16. Lean Production in the Supply Chain

In the supply chain, every company is constrained by the other companies in the chain. Potential cost and lead-time savings and quality improvements at a company can be easily outweighed by the cos, lead time and defect increases of its suppliers and distributors. Logistics management manages the movement of materials from suppliers to customers and at distribution points between them.

There is always a trade-off between producing or buying parts, products and services. Purchased materials are a major source of variability in the cost, quality and delivery of finished products. A manufacturer cannot provide its customers with high quality, low cost and a quick delivery if his supplier is not doing the same. But on the contrary, trying to produce everything requires huge resources and few companies can muster the expertise and resources necessary to produce everything well.

By determining which processes have to be outsourced, a company must be careful not to outsource its own core competency. Focus is important in an organization: the more focused an organisation is, the better job it is doing into the area of focus. Knowing the difference between what to focus on and what to let others focus on is the crucial issue.

First-tier suppliers are suppliers that provide materials and information directly to the final manufacturing customer. Every tier depend on the performance of suppliers at the tier below them. Supply chain management is coordinating the activities of suppliers in the supply chain, to meet the requirements of the customers above them.

The two key features to a lean supply chain:

• Every company in the chain recognizes that it is processes, not isolated functions that create value in products and services. Each supplier is an external factory whose processes must be coordinated with its customer’s processes.

• Every company in the chain is customer focused, which means it understands the wants and needs of its customers.

Customer-supplier relationships can help to acquire the best purchased items. Working together with suppliers means especially joint problem solving, practicing quality at the source and exchanging information. In joint problem solving, the customer works with the supplier to help the supplier resolve cost or quality problems and find better ways to meet the requirements. Quality at the source starts with quality at the suppliers.

When the supplier gives 100% guarantee of the quality of incoming materials, the customer can eliminate inspection of arriving materials.

Partnership relations

In the traditional system of production, customers were distrusted and detached from suppliers. The single purchase criterion was lowest price. Suppliers and customers were adversaries and suppliers feel no obligation to provide anything beyond the minimal required quality and service.

Partnership is the opposite of the traditional way of collaboration.

The differences:

• Purchas criteria: in traditional relations the lowest bid was the mainly reason to purchase. In a partnership, factors as competency, ability, capacity, willingness to work with customer to improve price, quality and delivery are taken into consideration.

• Design resource: in traditional relations, the production design was designed by the customer, the supplier merely has to produce them to specification. In a partnership, suppliers are included in concurrent engineering team to capture their ideas during early product development.

• Number of suppliers: in traditional relations, several suppliers were producing an individual item. With a partnership, one or few suppliers for each item or commodity group.

• Type of agreement: traditional purchase agreements are short term, apply to a single order and are limited to definition of price, specifications, quantity and delivery date. In partnership agreements customer and supplier mutually agree on aspects of the relationship. There is a contract plus an agreement about working relationship.

• Terms of agreement: The mainly differences of the agreement are about duration, price/costs, quality, shipping, ordering and vendor-managed inventory. Duration means that partnership agreements are long-term, for at least 1 year. The prices are negotiated, savings are shared with customers. The supplier guarantees 100% quality. In a partnership, the supplier makes frequent, small shipments to conform to the customer’s immediate needs. Vendor managed inventory is the concept of the supplier managing its customer’s inventory.

• Customer-supplier interaction: In traditional purchase agreements there is formal information exchange, limited to customer requirements. There is no teamwork and supplier services are limited to minimal requirements. In a partnership, there is a frequent formal and informal exchange of plans schedules and problems. Teamwork and mutual commitment is based on trust. There is cooperation to resolve problems and improve supplier’s products and processes.

Many companies are sceptical about relationships between customers and suppliers. Suppliers must be willing to develop measures to meet customer requirements and the customer must be willing to assist suppliers and adjust requirements occasionally until the supplier can meet them.

Also, for a small company it is more difficult to influence their suppliers. There are two strategies for increasing the chances that suppliers will be willing to meet their lean requirements. First, use suppliers that advocate and practice Lean and TQM.

These suppliers will be more sensitive and responsive to a customer that is trying to do the same. Second, maintain long-standing relationships with all suppliers.

Supplier selection

Suppliers are selected upon two broad measures: product design and manufacturing process. Certification can also play a role into the selection process. Certification is the procedure for assessing a supplier’s capability to meet delivery, quality, cost and flexibility criteria. Certification can be done by customer and by industry standard or award. A customer team reviews a supplier’s past performance on the same or similar products using information from buyer organizations and industry, trade and consumer groups. With industry certification, the assessment is performed by a third party, not a customer, and all suppliers are meeting the assessment criteria appear on a published list.

Evaluation

Companies periodically evaluate their suppliers and provide them with feedback about performance, problems, opportunities and areas needing improvement. Evaluations that use quantitative ratings are the best, because they specify customer expectations in ways that are easily communicated and measurable.

Purchasing

Purchasing is processing and purchasing orders and requisitions, reconcile information about incoming items, solicit and evaluate bids and prepare contracts. In the partnership agreements, this role includes dealing with problems and complaints about unmet needs from internal and external customers.

In Lean companies, the primary role of the purchasing function lies in three areas: specifying requirements, selecting suppliers and managing supplier relationships.

Transport

The non-value adding activities in the supply chain are eliminated, which simplifies the supply chain. The process should only consist of a supplier and his last step of the process, transport and finally the customer with his point of use. Activities such as storing, packaging, unpacking, and inspecting should be eliminated. There should be a form of teamwork between supplier and customer. Truck drivers should not only bring the materials to the customer, but in the time he would normally wait, he should help load and unload the items. In shipping, the most wasteful phenomenon is the problem of backhaul, which means that the vehicle must return to its point of origin, which doubles the one-way time and costs of everyday delivery. This problem can be caused, when the vehicle carries a billable load on the return trip.

Preventive maintenance

Preventive maintenance makes it possible to eliminate breakdowns of vehicles in the supply chain.

Bullwhip effect: the increasing distortion of order information and resulting production schedules at successive tiers of the supply chain.