You work in the marketing department of a firm that sells mountain bicycles and related gear. Its manufacturing division has decided to wholeheartedly adopt the lean systems philosophy. Will this affect your ability to delight your customers? Make a list of your potential pluses and minuses of this lean systems decisions. (200 – 250 words)

No Ai

Use the PPTX attachment as your source ONLY.

Due: Tuesday 0ct 1

Swink_MOAS_4e_Ch08_PPT.pdf

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Chapter 8

Lean Systems

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Learning Objective 8-1

Learning Objectives

8-1 Explain how the lean system approach improves value for internal operations and across the supply chain.

8-2 Describe the cultural changes, tools, and techniques needed to implement a lean approach.

8-3 Recognize the strengths and limitations of lean systems.

8-4 Apply the concept of lean systems to product design.

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“Leaning” Our Way Toward Better Healthcare

• Wasted high-demand/high-cost capacity • Long changeovers between surgical changeovers

Learning Objective 8-1

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Learning Objective 8-1

Lean Systems Defined

• Just-in-Time (JIT): an older name for lean systems

• Toyota Production System (TPS): another name for lean systems, specifically as implemented at Toyota

• Lean Systems Approach: a philosophy of minimizing the resources needed for processes

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Learning Objective 8-1

Lean Systems Origins

• 1937

– Taiichi Ohno compares Japanese versus American production

– Learns from Henry Ford’s mass production system

• 1950s

– Japanese and American American management experts interact

– JIT is born

• 1980s

– Lean thinking flourishes in Japan, with very visible performance superiority over competitors

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Learning Objective 8-1

Cost Structure Changes

Figure 8-3 Changes in Cost Structure under Lean Systems

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Learning Objective 8-1

Lean Systems Objectives, Culture, and Guiding Principles

1. Only the products that customers want,

2. Only as quickly as customers want them,

3. With only features that customers want, and no others,

4. With perfect quality,

5. In the minimum possible lead times,

6. With no waste of labor, materials, or equipment, and

7. Using methods that reinforce the occupational development of

workers.

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Learning Objective 8-1

Seven Basic Types of Waste

• Overproduction: processing more units than needed

• Waiting: resources wasted waiting for work • Transportation: units being unnecessarily moved • Processing: excessive or unnecessary operations • Inventory: units waiting to be processes or

delivered • Motion: unnecessary or excessive resource

activity • Product defects: waste due to unnecessary

scrap, rework, or correction

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Learning Objective 8-1

Lean Principles

Principle 1: Precisely specify value for each specific product

Principle 2: Identify the value stream for each product

Principle 3: Make value flow without interruptions

Principle 4: Let the customer pull value from the producer

Principle 5: Pursue perfection

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Learning Objective 8-1

Principle 1: Specify Value

• Customers determine value

• Suppliers must provide products/services that customers desire

– Outcomes

– Product features

– Functionality

– Capabilities

Anything that doesn’t add value is waste!

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Learning Objective 8-1

Principle 2: Identify Value Stream

A firm must link together activities of product development. Identify value-adding and non–value-adding steps, categorizing waste into these seven categories:

1. Overproduction: processing more than needed

2. Waiting: resources waiting for work/materials

3. Transportation: units moved unnecessarily

4. Processing: excessive or unnecessary steps

5. Inventory: units waiting for processing or delivery

6. Motion: unnecessary or excessive resource activity

7. Defects: scrap, rework, or correction

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Learning Objective 8-1

Principle 3: Make Value Flow

Inventory hides problems and slows flow

Figure 8-4 Inventory Hides Operating Problems

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Learning Objective 8-1

Principle 4: Customers Pull Value

• Pull System: processes are activated by actual, not forecasted, demand

• Customers get

– what they want

– when they want

– where they want

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Learning Objective 8-1

Principle 5: Pursue Perfection

Lean System Culture: places a high value on respect for people

• Acceptance: agree to goals, veterans teach new employees

• Flexibility: responsive pull systems

• Teams: cross-functional and cross-organizational

• Employee empowerment: employees work to attack waste

• Manage with data: objective over subjective

• Waste is a symptom: attack root cause

• Goals are met: set realistic, achievable goals

• Standardization: reduces variation, simplifies problem solving

• Process orientation: process change for outcome change

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Learning Objective 8-1

Lean System Philosophy—Employee: A Critical Resource

• Employee

– Acceptance

– Source of flexibility

– Working in teams

– Power in their hands

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Learning Objective 8-1

Lean System Culture—Shared Values and Beliefs

• Shared Values and Beliefs

– Manage with data

– Waste is a symptom

– Goals are to be met

– Standardization is fundamental

– Process orientation

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Learning Objective 8-2

Lean Systems Tools and Techniques

Area of Primary Impact

Development of

Facilities and Resources

Operational Scheduling

and Control

Continuous Process

Improvement

Total productive maintenance TAKT time flow balancing Quality at the source

Group technology Kanban (pull) scheduling Kaizen Events

Focused factories Mixed model scheduling Process analysis/Value stream

mapping

Setup reduction Poka-yoke

(fail-safing/mistake-proofing)

Statistical process control 5-S program

Visual control Simplification/Standardization

Digital Lean Digital Lean Digital Lean

Table 8-2 Lean Systems Tools and Techniques

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Learning Objective 8-2

Lean Tools and Techniques: Facilities and Resources

• Total Productive Maintenance (TPM): prevention of breakdowns

• Group Technology: bring together resources to process a family of items

• Focused Factories: processes designed to satisfy specific customer segment

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Learning Objective 8-2

Lean Tools and Techniques: Scheduling and Control

• Takt Time: synchronizing output rate with demand rate

• Kanban (Pull) Scheduling: output generated in response to actual demand

• Push Scheduling: products are moved according to schedule, irrespective of whether or not there is demand

• Mixed Model (Heijunka) Scheduling: build smaller quantities more frequently

• Setup Reduction: shorter, easier changeover leads to smaller batches

• Statistical Process Control (SPC): use of statistical tools to monitor processes

• Visual Control: performance and problems easily, immediately visible

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Learning Objective 8-2

Lean Tools and Techniques: Continuous Improvement

• Quality at the Source: eliminating defects at their origination points

• Kaizen Events: short-term, cross-functional, intense process improvement

• Process Analysis/Value Stream Mapping: graphical analysis of the flow through a process

• Poka-Yoke: redesign so mistakes are impossible or immediately detectable

• 5-S: effective housekeeping (sort, straighten, scrub, systematize, standardize)

• Simplification/Standardization: removing non– value-adding steps, making processes exactly repeatable

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Learning Objective 8-2

Setup Reduction: Single Minute Exchange of Dies (SMED)

Setup Reduction

• Stage 1: Separate internal and external setups

• Stage 2: Convert internal setups to external setups

• Stage 3: Streamline all activities in a setup

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Learning Objective 8-2

Quality at the Source (Q@S)

• Jidoka

• Stop and Fix

• Andons

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Learning Objective 8-2

Process Analysis/Value Stream Mapping

Figure 8-5 Value Stream Mapping: An Example of a Current State Map

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Learning Objective 8-2

5-S Program

Table 8-3 Major Activities of the 5-S Program (and Its Variants)

5-S Elements (Japanese)

5-S Elements (English)

The 5-C Campaign

Intent

Seiri Sort Clear out Red tag suspected unnecessary items. After a monitoring period, throw out unnecessary items.

Seiton Straighten Configure Put everything in an orderly fashion so that it can be located—“a place for everything and everything in its place.” This is frequently done using “footprinting,” which creates a painted outline for each item.

Seiso Scrub Clean and check

Clean everything and eliminate the sources of dirt.

Seiketsu Systematize Conform Make cleaning and checking routine. Set the standard, train, and maintain.

Shitsuke Standardize Custom and practice

Standardize the previous four steps into one process and continuously improve it. Use visual control through performance boards, checklists, and graphs.

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Learning Objective 8-2

The Extent of Lean Systems Applications

Table 8-4 The Extent of Lean Systems Applications

Operational Setting Level of Lean Systems Application

In manufacturing Heavy adoption

In services Growing adoption

Within firms Heavy adoption and application

Across supply chains Growing application

In execution activities Mature application

In design activities Early application

In stable business environments Optimal application

In moderately dynamic business environments Application with some buffers

In turbulent business environments Very limited application

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Learning Objective 8-2

Applying Lean Systems to Services

• Service wastes:

– Delay

– Duplication

– Unnecessary movement

– Unclear communication

– Incorrect inventory

– Opportunity lost to retain or win customers

– Errors in service transactions

– Service quality errors

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Learning Objective 8-2

Student Activity

Review a transaction that you recently had involving a service. What, if any, of the various service wastes did you encounter? What factors contributed to these wastes? How did the company deal with these wastes? What was your reaction (and why)?

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Learning Objectives 8-3 and 8-4

Application of Lean

• Across the Supply Chain

– Purchase for lowest total cost (not lowest unit price)

– Geographically close partners

– Fewer suppliers

– Focus on root cause

– Work with, not against, suppliers

• Product Innovation (Lean Design)

– Exactly meet customer needs

– Support corporate strategy

– Reduce opportunities of waste

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Learning Objective 8-3

Application of Lean Systems Across the Supply Chain: What Could Go Wrong?

• Types of events causing problems for lean supply chains

– Operational/Technological

– Social

– Natural/Hazard

– Economy/Competition

– Legal/Political

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Learning Objective 8-4

Reducing the Opportunity for Product Design Waste

Seven wastes in product design:

• Complexity: few, simple processes

• Precision: capability to attain specifications

• Variability: attainable specifications

• Sensitivity: not easily damaged

• Immaturity: tested technology

• Danger: customers and environment are safe

• High skill: high degrees of training and experience

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Lean Systems Summary

1. Lean is a corporatewide approach to identify, control, and eliminate waste, within firm and across supply chain.

2. Lean principles are guided by seven major objectives.

3. There are multiple lean tools that work together synergistically.

4. Lean should be expanded across firm functions and with partners across the supply chain.

5. Lean is applicable to both manufacturing AND services.

6. Lean is not universally applicable.

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