This document discusses the principles of lean production. It defines lean production as using minimal inventory to achieve high-volume production while eliminating waste. Key aspects of lean production discussed include the Toyota Production System, which is based on eliminating waste and respecting people. The chapter also outlines the requirements for implementing lean principles, such as designing flow processes, implementing total quality control, stabilizing schedules, and using pull systems. Lastly, it provides examples of how lean principles can be applied in services.

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McGraw-Hill/Irwin
Chapter 12
Lean Production

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 Lean Production Defined
 The Toyota Production System
 Lean Implementation
Requirements
 Lean Services
OBJECTIVES

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Lean Production
 Lean Production can be defined as an
integrated set of activities designed to
achieve high-volume production using
minimal inventories (raw materials, work
in process, and finished goods)
 Lean Production also involves the
elimination of waste in production effort
 Lean Production also involves the timing
of production resources (i.e., parts arrive
at the next workstation “just in time”)

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Pull System
Customers
Sub
Sub
Fab
Fab
Fab
Fab
Vendor
Vendor
Vendor
Vendor
Final
Assembly
Here the customer starts
the process, pulling an
inventory item from
Final Assembly…
Then sub-
assembly work is
pulled forward by
that demand…
The process continues
throughout the entire
production process and
supply chain

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Features of Lean Production
• Management philosophy
• “Pull” system though the plant
WHAT IT IS
• Employee participation
• Industrial engineering/basics
• Continuing improvement
• Total quality control
• Small lot sizes
WHAT IT REQUIRES
• Attacks waste
• Exposes problems and bottlenecks
• Achieves streamlined production
WHAT IT DOES
• Stable environment
WHAT IT ASSUMES

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The Toyota Production System
 Based on two philosophies:
– 1. Elimination of waste
– 2. Respect for people

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Elimination of Waste
1. Focused factory networks
2. Group technology
3. Quality at the source
4. JIT production
5. Uniform plant loading
6. Kanban production control
system
7. Minimized setup times

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Minimizing Waste:
Focused Factory
Networks
Coordination
System Integration
These are small specialized
plants that limit the range
of products produced
(sometimes only one type of
product for an entire
facility)
Some plants in
Japan have as
few as 30 and as
many as 1000
employees

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Minimizing Waste: Group Technology (Part 1)
 Using Departmental Specialization for plant layout can cause a
lot of unnecessary material movement
Saw Saw
Lathe Press
Press
Grinder
Lathe
Lathe
Saw
Press
Heat Treat
Grinder
Note how the flow lines are going back and forth

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Minimizing Waste:
Group Technology (Part 2)
 Revising by using Group Technology Cells can reduce movement
and improve product flow
Press
Lathe
Grinder
Grinder
A
2
B
Saw
Heat Treat
Lathe
Saw Lathe
Press
Lathe
1

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Minimizing Waste:
Uniform Plant Loading (heijunka)
Not uniform Jan. Units Feb. Units Mar. Units Total
1,200 3,500 4,300 9,000
Uniform Jan. Units Feb. Units Mar. Units Total
3,000 3,000 3,000 9,000
Suppose we operate a production plant that produces a single
product. The schedule of production for this product could be
accomplished using either of the two plant loading schedules
below.
How does the uniform loading help save labor costs?
or

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Minimizing Waste: Inventory
Hides Problems
Work in
process
queues
(banks)
Change
orders
Engineering design
redundancies
Vendor
delinquencies
Scrap
Design
backlogs
Machine
downtime
Decision
backlogs
Inspection
backlogs
Paperwork
backlog
Example: By
identifying defective
items from a vendor
early in the
production process
the downstream work
is saved
Example: By
identifying defective
work by employees
upstream, the
downstream work is
saved

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Minimizing Waste: Kanban Production
Control Systems
Storage
Part A
Storage
Part A
Machine
Center
Assembly
Line
Material Flow
Card (signal) Flow
Withdrawal
kanban
Once the Production kanban is
received, the Machine Center
produces a unit to replace the
one taken by the Assembly Line
people in the first place
This puts the
system back
were it was
before the item
was pulled
The process begins by the Assembly Line
people pulling Part A from Storage
Production kanban

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Determining the Number of
Kanbans Needed
 Setting up a kanban system requires
determining the number of kanbans
cards (or containers) needed
 Each container represents the minimum
production lot size
 An accurate estimate of the lead time
required to produce a container is key
to determining how many kanbans are
required

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The Number of Kanban Card Sets
C
S
DL
k
)
(1
container
the
of
Size
stock
Safety
time
lead
during
demand
Expected




k = Number of kanban card sets (a set is a card)
D = Average number of units demanded over some time
period
L = lead time to replenish an order (same units of time as
demand)
S = Safety stock expressed as a percentage of demand
during leadtime
C = Container size

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Example of Kanban Card
Determination: Problem Data
 A switch assembly is assembled in batches of
4 units from an “upstream” assembly area
and delivered in a special container to a
“downstream” control-panel assembly
operation
 The control-panel assembly area requires 5
switch assemblies per hour
 The switch assembly area can produce a
container of switch assemblies in 2 hours
 Safety stock has been set at 10% of needed
inventory

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Example of Kanban Card
Determination: Calculations
3
or
,
75
.
2
4
5(2)(1.1)
)
(1
container
the
of
Size
stock
Safety
time
lead
during
demand
Expected






C
S
DL
k
Always round up!

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Respect for People
 Level payrolls
 Cooperative employee unions
 Subcontractor networks
 Bottom-round management style
 Quality circles (Small Group
Involvement Activities or SGIA’s)

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Toyota Production System’s Four
Rules
1. All work shall be highly specified as to content,
sequence, timing, and outcome
2. Every customer-supplier connection must be
direct, and there must be an unambiguous yes-
or-no way to send requests and receive
responses
3. The pathway for every product and service must
be simple and direct
4. Any improvement must be made in accordance
with the scientific method, under the guidance
of a teacher, at the lowest possible level in the
organization

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Lean Implementation Requirements:
Design Flow Process
 Link operations
 Balance workstation capacities
 Redesign layout for flow
 Emphasize preventive maintenance
 Reduce lot sizes
 Reduce setup/changeover time

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Lean Implementation Requirements:
Total Quality Control
 Worker responsibility
 Measure SQC
 Enforce compliance
 Fail-safe methods
 Automatic inspection

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Lean Implementation Requirements:
Stabilize Schedule
 Level schedule
 Underutilize capacity
 Establish freeze windows

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Lean Implementation
Requirements: Kanban-Pull
 Demand pull
 Backflush
 Reduce lot sizes

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Lean Implementation Requirements:
Work with Vendors
 Reduce lead times
 Frequent deliveries
 Project usage requirements
 Quality expectations

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Lean Implementation Requirements:
Reduce Inventory More
 Look for other areas
 Stores
 Transit
 Carousels
 Conveyors

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Lean Implementation Requirements:
Improve Product Design
 Standard product configuration
 Standardize and reduce number of
parts
 Process design with product design
 Quality expectations

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Lean Implementation Requirements:
Concurrently Solve Problems
 Root cause
 Solve permanently
 Team approach
 Line and specialist responsibility
 Continual education

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Lean Implementation Requirements:
Measure Performance
Emphasize improvement
Track trends

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Lean in Services (Examples)
 Organize Problem-Solving Groups
 Upgrade Housekeeping
 Upgrade Quality
 Clarify Process Flows
 Revise Equipment and Process
Technologies

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Lean in Services (Examples)
 Level the Facility Load
 Eliminate Unnecessary Activities
 Reorganize Physical Configuration
 Introduce Demand-Pull Scheduling
 Develop Supplier Networks

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End of Chapter 12