BUAD306

Lean Operations

Lean Operations

A flexible system of operation that uses considerably less resources than a traditional systemTend to achieve

• Greater productivity• Lower costs• Shorter cycle times• Higher quality

Lean Operations

Three basic elements are present in a lean operating environment:Demand drivenWaste reductionCulture dedicated to continuous

improvement

Lean Operations Goals

Ultimate Goal: A balanced system that achieves a smooth, rapid flow of materials through the system to match supply to customer demand

Supporting Goals:Eliminate disruptionsMake system flexibleEliminate waste

Sources of Waste

Inventory Waste from overproduction Waiting time Unnecessary transport Processing waste Product defects/rework Inefficient work methods Underutilization of employees

Lean Operations Building Blocks

Product design Process design Personnel/organizational elements Manufacturing planning and control

Lean Ops – Product Design

Standard parts Modular design Highly capable production systems Concurrent engineering

Announcements

QuizzesLast 2 – Pick up from meAll Others: Outside office

Extra Credits – Due Weds Exam Breakdown – Tomorrow Course Evals – this week Professionalism

Lean Ops – Process Design

Small lot sizes Set up time reduction Manufacturing cells Efficiencies Limited WIP Inventory Quality Improvement Production flexibility – reduced

bottlenecks Little inventory storage

Small-Lot Production

Ideal size = 1 Requires less space (lower inventory costs) &

capital investment Moves processes closer together (increased

efficiency) Allows for greater flexibility in scheduling Makes quality problems easier to detect Makes processes more dependent on each

other (increases responsibility and quality) Requires set-up time reduction!

Inventory Considerations

Inventory Hides ProblemsBad designPoor qualityMachine breakdownsUnreliable supplierInefficient layout

Decrease inventory to expose problems

Process Design: Fail-Safe Methods

Building safeguards into a process to reduce or eliminate the potential for errors during a process

ExamplesElectric breakersSeatbelt fastener warningsATMs that signal if a card is let in a

machine

Lean Ops – Personnel/ Organizational Elements

Workers as assets Cross-trained workers Continuous improvement Cost accounting Leadership/project management

Lean Ops – Manufacturing Planning & Control

Level loading (smooth production) Pull systems – work moves in response to

demand from next step Visual systems (Kanban) Close vendor relationships Reduced transaction processing Preventive maintenance, etc.

Converting to Lean Ops

Get top management commitment Decide which parts need most effort by

studying the current process and identifying bottlenecks

Obtain support of workers Start by trying to reduce setup times Gradually convert operations Convert suppliers to JIT Prepare for obstacles*

Read Text

Obstacles to Conversion

Workers/management may not be cooperative – education is essential

Suppliers may resist the demands of a lean system

Management may not be committed Entails a change to the corporate

culture– not easy to achieve

Read Text

Lean Service Industries

Focus is on the time needed to perform the service

Speed is often order winner for services

Examples:Domino’s Pizza, Fed-X, Jiffy Lube,

911, JIT publishing, etc.

Read Text

Course Summary

Key take-aways:Mathematical-based decision makingEfficiency focus / cost containmentImportance of forecastingAnalysis = keyNever be satisfied with the status quo