4. Minimize inventory. 5. Eliminate waste.
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PRODUCTION AND OPERATIONSMANAGEMENTChelliah SriskandarajahUniversity of Texas at DallasJUST-IN-TIME PRODUCTION SYSTEMSRepetitive production system in which process-ing and movement of materials and goods occur just as they are needed,usually in small batches.Goal is to design a balanced system that achieves a smooth,rapidflow of materials through the system.Main goal:Cost reduction1.Eliminate disruptions.2.Make the systemflexible.3.Reduce setup times and lead times.4.Minimize inventory.5.Eliminate waste.Basic idea:It completely eliminates unnecessary elements (waste)in the production system for the pur-pose of cost reduction.To produce the kind of units needed,at the time needed,and in the quantities needed.With the realization of this concept unneces-sary intermediate andfinished product invento-ries would be eliminated.Main goal:Cost reductionOverproduction is waste:1.Excessive production resources.2.Overproduction.3.Excessive inventory.4.Unnecessary capital investment.Sub goals:1.Quantity control,which enables the system to adapt to daily and monthlyfluctuations in demand in terms of quantities and variety.2.Quality assurance,which assures that each process will supply only good units to subse-quent processes.3.Respect-for-humanity which must be culti-vated while the system utilizes the human re-source to attain its cost objectives.A continuousflow of production or adapting to demand changes in quantities and variety is cre-ated by achieving two key concepts:Just-in-timeAutonomationJust-in-time basically means to produce the nec-essary units in the necessary quantities at the necessary time.Autonomation(Jidoka)may be loosely inter-preted as autonomous defects control.Production system includeFlexible Workforce:this means varying the number of workers to demand changes. Creative Thinking or Inventive Ideas: this is to capitalizing on worker suggestions.To realize these four concepts,Toyota has es-tablished the following systems and method:1.Kanban system to maintain Just-in-time production.2.Production smoothing method to adapt to demand changes.3.Shortening of setup time for reducing the production lead time.4.Standardization of operations to at-tain line balancing.5.Machine layout and the multi-function worker for theflexible work force concept.6.Improvement activities by small groups and the suggestion system to reduce the work force and increase the worker’s morale.7.Visual control system to achieve the Autonomation concept.8.Functional management system to promote company-wide quality control.Kanban System is the way to manage the Just-in-Time production method.i.e.,the Kan-ban System is an information system to har-moniously control the production quantities in every process.In order to realize Just-in-time production sys-tem,various prerequisites of this system need to be implemented perfectly(i.e.,design of pro-cesses,standardization of operations and smooth-ing of production,etc.).A Kanban is usually a tag-like card.Two kinds are mainly used:1.Withdrawal Kanban.2.Production-ordering Kanban.Steps involved in using the two Kanbans.A withdrawal Kanban details the quantity which the subsequent process should withdraw.A production ordering Kanban shows the quan-tity which the preceding process must produce.Little’s Law:W IP=P roduction Rate×T hroughput T ime P roduction Rate=XT hroughput T ime=TW IP=N=XT123...NN+101X 2X3XN−1XT=NX-X per time-X per timeFigure1:Measuring KanbanTwo ways to measure the performance of a man-ufacturing process:1.Flow-through-time(or Throughput Time)is the amount of time it takes one unit to pass through the entire process,from start to finish(on average).2.Work-in-process(WIP)Example:A Kanban system uses20work stations and a lot size of5.The average WIP is nearly100units.If the cycle time is2minutes per unit,the through-put time will be around200minutes.Example:The process for making component Z for a company involvesfive work stations. The cycle time is3minutes per unit for ev-ery work station.This means that a kanban card will be returned from any particular work station to the previous work station every(3×lot size)minutes(on average).Case1:Lotsize=10,Average W IP= 5×10=50unitsT hroughput T ime=5×10×3=150minutes Case2:Lotsize=2,Average W IP= 5×2=10unitsT hroughput T ime=5×2×3=30minutesFine-tuning ProductionLet’s consider thefine-tuning of production by using a Kanban.An engine manufacturing process must produce 100engines per day.The subsequent process requests5engine/one-time by lot withdrawal Kanban.These lots are then picked up20times per day.If the need occurs to decrease all process by10% as afine-tuning procedure of production plan-ning,thefinal process in this example has lo withdraw engines18times per day.(i.e.,90 units/day)the remaining hours for10units of production will be rested by stopping this pro-cess.if the need occurs to increase production quan-tities by10%:Thefinal process must withdraw the engines22 times per day with the Kanban.Then the preceding process has to produce110 units,and the additional10units would be cov-ered by overtime.Smoothing of ProductionPurpose:To minimize slack time in regards to manpower,equipment and works in process.Production rule:withdraw the necessary goods at the necessary time in the necessary quantities.Under such rule,if the subsequent process with-draws parts in afluctuating manner in regards to time or quantity,then the preceding processes should prepare as much inventory,equipment, and manpower as needed to adapt to the peak; in the variance of quantities demanded.The variance of the quantities withdrawn by each subsequent process may become larger fur-ther back to preceding processes.ln order to prevent such large variance in all production lines,including the external subcon-tracted companies,an effort must be made to minimize thefluctuation of production in thefi-nal assembly line.Idea of production smoothing:Produce products in Minimum lot sizes(small lot sizes) to minimizes the variance in the consumption of various quantities of raw materials,parts,sub-assemblies in the production system.That is to maintain a constant rate of consumption.To promote smoothed production correspond-ing to such a variety of products,it is necessary to have general-purpose or“flexible”machines.An advantage of smoothed production respond-ing to product variety is that the system can adapt smoothly to the variations in customer demand by gradually changing the frequency of lots without altering the lot size in each process, orfine-tuning of production by Kanban.The reduction in lead time will require the short-ening of setup time for minimizing the lot size.MULTIPLE PRODUCTSMinimal product set(MPS):Daily production of three type Cars,A,B,C 300cars of type A250cars of type B200cars of type CThe smallest ratio that satisfies the demand: 6cars of type A5cars of type B4cars of type CThe possible sequences:AAAAAAAA BBBBBBBBB CCCCCCCCC..... ABCBACABACABACB.........Example1:Demand:10,000Coronas per month 20working days per month Working hours:8hours per day. Monthly Demand of Car Type: 5000Sedans2500Hardtops2500WagonsDaily Demand:250Sedans per day125Hardtops per day125Wagon per dayOne day:one8hrs shift=480mins. Production rate:500units per480mins.Unit cycle time=480/500=0.96min=57.5 seconds.Cycle time for Sedans=480/250=1min55 sec.Cycle time for Hardtops=480/125=3min 50sec.Cycle time for Wagon=480/125=3min50 sec.Considering,options,colors,etc.,3,000to4,000 kinds of Coronas are actually being produced.Monthly Demand Daily Demand Cycle TimeA Car48002402B Car24001204C Car1200608D Car6003016E Car600301696004801Table1:Example2Method of Smoothing Production Example2:Setup Time ReductionSetup time at pressing department,Toy-ota:1945to1954:2or3hrs1955-1964:15mins1970:3mins.In order to shorten the setup time.it is impor-tant to neatly prepare in advance the necessary jigs,tools,the next die and materials,and re-move the detached die and jigs after the new die is settled and the machine begins to operate. Convert Internal setup to External set-up.Inventory Theory and Lot Sizing:D=demand rate(units per year)S=setup cost(dollars per setup)C=unit cost(dollars per unit)r=inventory carrying charge(dollars per dollar of inventory per year)H=rC inventory carrying charge(dollars per unit of inventory per year)Lot size=QQ= 2DS HQ= 2DS H p p−up=production rate(units per year)Design of process:Layout:Cellular LayoutsMulti-process holding:one operator han-dles several processes in a cell.Multi function worker:cell environment require workers with multiple skills.Standardization of jobs:Necessary output per day=Necessary output per month operating days per monthcycle time=operating hours per day necessary output per dayKanban is not the only information to be givento each process.A Kanban is a type of production dispatching information during the months in question,whereas the daily quantity and cycle time information are given in advance to prepare the master pro-duction schedule through out the factory. Standard operations routine indicates the se-quence of operations that should be taken by a worker in multiple processes of the department.Autonomation:Andon electric light boardVisual control systemYellow light on the Andon——delay in a work-stationRed light on Andon——–some problem in a workstation or machine(Autonomous check re-veals something unusual in a process).Improvement Activities:QC-CircleEach worker has the chance to make suggestions and propose improvements via a small group called a QC circle.Such a suggestion-making process allows for im-provement in quality control by adapting stan-dard operations routine to changes in cycle time; in quality assurance,by preventing recurrence of defective works and machines;and,lastly in respect-for-humanity,by allowing each worker to participate in the production process.Today Toyota produces well over200,000units per month.ln1952,it took ten employees one month to produce one truck.In1961,Toyota’s monthly production was10,000 units.(10,000employees,it meant that every month one employee produced one passenger car.)In the last couple of years.the monthly pro-duction ranged from230,000to250,000units (employees,45,000).This means that each em-ployee is credited with makingfive passenger cars each month.For many years,they have thought about and improved their manufacturing method.that is what they call today the Toyota Production Sys-tem.Summary:The basic purpose of the JIT system is to in-crease profits by reducing costs.That is-by completely eliminating waste suchas excessive stocks,workforce.To achieve cost reduction,production must promptly andflexibly adapt to changes in market demand without having wasteful slacks(such an ideal can be accomplished by the concept of Just-in-time.Summary:Production must be smoothed to level the quan-tities and variety in the withdrawals of parts by thefinal assembly line.Such smoothing will require the reduction of the production lead time,since various parts must be produced promptly each day(small lot).Continuous improvement-Kaizen Total employee involvementIn one year,Canon employee generated over 900,000suggestions.78suggestions/employeeCanon-13th RankIn Toyota,5million suggestions.Over100suggestions/employeeRank1.$1improvement per suggestion per year.ReferenceProduction/Operations Management by William J.Steven-son,Seventh Edition,Irwin/McGraw-Hill,2002.Toyota Production System by Monden,Yasuhiro,Indus-trial Engineering and Management Press,Norcross,GA, 1984.。
