Lean Production for Competitive Advantage: A Comprehensive Guide to Lean Methods and Management Practices, 2nd Edition by John Nicholas

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Lean Production for Competitive Advantage: A Comprehensive Guide to Lean Methods and Management Practices, 2nd Edition
By John Nicholas
Lean Production for Competitive Advantage: A Comprehensive Guide to Lean Methods and Management Practices

Contents
Foreword................................................................................................xxv
Preface......................................................................................................xxix
Acknowledgements............................................................................xxxiii
About the Author............................................................................. xxxv
1 Race without a Finish Line............................................................................................1
Competitive Advantage: Better, Cheaper, Faster, More Agile.............................................. 2
Lean Production and Total Quality Management.............................................................. 3
Lean Production and the Production Pipeline.................................................................... 3
The Lean Difference........................................................................................................... 4
Evolution of Manufacturing............................................................................................... 5
The Machine that Changed the World........................................................................... 5
Craftsmanship Yields to Industrialization...................................................................... 5
Craft Production of Automobiles................................................................................... 6
Ford’s Mass Production System...................................................................................... 6
Emergence of Modern Mass Production........................................................................ 7
Mass Production Around the World............................................................................... 8
Toyoda and Ohno.......................................................................................................... 8
Toyota Production System—Prototype for Lean Production.............................................. 9
Reduced Setup Times.................................................................................................... 9
Small Batch Production and One-Piece Flow................................................................. 9
Quality at the Source....................................................................................................10
Equipment Maintenance...............................................................................................10
Pull Production.............................................................................................................11
Standard Work..............................................................................................................11
Supplier Partnerships.................................................................................................... 12
Employee Involvement and Empowerment.................................................................. 12
Continuous Improvement ........................................................................................... 12
Training within Industry...................................................................................................13
America’s Fall from Manufacturing Grace.........................................................................14
Climbing Back..............................................................................................................15
Modern Developments..................................................................................................15
The Imperative...................................................................................................................17
Organization of the Book..................................................................................................17
Questions...........................................................................................................................18
Research Questions............................................................................................................19
Suggested Reading.............................................................................................................19
Notes................................................................................................................................ 20
Section I _CONTIN UOUS IMPROVEMENT , WASTE ELIMIN ATION ,
CUSTO MER-FOCUSED QUALIT Y
2 Fundamentals of Continuous Improvement................................................................23
Continuous Improvement as Tactics and Strategy............................................................ 24
Incremental Improvement: Kaizen............................................................................... 24
Innovation Improvement...............................................................................................25
Making the Leap.......................................................................................................... 26
Improvement as Strategy.............................................................................................. 28
Lean Production: Innovative and Breakthrough Improvement..................................... 30
Finding and Implementing Improvements........................................................................ 30
PDCA Improvement Cycle........................................................................................... 30
Plan Step..................................................................................................................31
Do Step................................................................................................................... 32
Check Step.............................................................................................................. 32
Act Step................................................................................................................... 32
Go See..................................................................................................................... 32
Five-Why Process..........................................................................................................33
Value Analysis/Value Engineering................................................................................ 34
Value Analysis Procedure......................................................................................... 34
Employee-Driven Kaizen............................................................................................. 36
Kaizen Events............................................................................................................... 37
Basic Problem-Solving and Analysis Tools................................................................... 39
Check Sheet............................................................................................................. 39
Histogram............................................................................................................... 40
Pareto Analysis........................................................................................................ 42
Scatter Diagram....................................................................................................... 42
Process Flowchart.................................................................................................... 43
Cause-and-Effect Analysis....................................................................................... 44
Run Diagram...........................................................................................................45
Value Stream Mapping..................................................................................................47
Consensus Building.......................................................................................................... 50
Nemawashi.................................................................................................................. 50
A3 Report.................................................................................................................... 50
A3 Format and Purpose............................................................................................51
A3 Process................................................................................................................51
Problem-Solving A3..................................................................................................52
Summary.......................................................................................................................... 54
Questions.......................................................................................................................... 54
Problems............................................................................................................................55
Suggested Reading............................................................................................................ 58
Notes................................................................................................................................ 58
3 Value Added and Waste Elimination...........................................................................61
Value-Added Focus........................................................................................................... 62
Necessary and Unnecessary Activities.......................................................................... 62
Support Organization.................................................................................................. 63
Employee Involvement................................................................................................. 63
Historical Note: Gilbreths and the One Best Way........................................................ 64
Sources of Waste............................................................................................................... 64
Toyota’s Seven Wastes + 1............................................................................................. 64
Producing Defects....................................................................................................65
Overproduction........................................................................................................65
Waiting.....................................................................................................................65
Nonutilized Human Talent .................................................................................... 66
Transportation and Material Handling................................................................... 66
Inventory..................................................................................................................67
Motion.................................................................................................................... 68
Extra Processing...................................................................................................... 69
Canon’s Nine Wastes.................................................................................................... 69
Muda, Muri, and Mura................................................................................................ 70
Lean to Green.............................................................................................................. 70
Lean Principles................................................................................................................. 71
Simplification............................................................................................................... 71
Product, Process, and Procedure Simplification....................................................... 72
Concurrent Engineering...........................................................................................74
Cleanliness and Organization.......................................................................................74
Improvement Kickoff............................................................................................... 75
Five-S....................................................................................................................... 75
Benefits.................................................................................................................... 78
Visibility....................................................................................................................... 80
Data Collection and Measurement............................................................................... 82
Grassroots Measurement.......................................................................................... 82
Visual Management................................................................................................. 82
Bottom Line............................................................................................................ 83
Cycle Timing............................................................................................................... 83
Agility...........................................................................................................................85
Variability Reduction....................................................................................................85
Standardization............................................................................................................ 86
Lean Principles beyond Manufacturing........................................................................ 87
The Meaning of Lean Production..................................................................................... 87
Implementation Barriers............................................................................................... 89
Attitudes.................................................................................................................. 89
Time Commitment................................................................................................. 89
Quality Commitment.............................................................................................. 90
Misunderstanding Lean Production............................................................................. 90
Social Impact of Lean................................................................................................... 90
First Things First...........................................................................................................91
Learn as You Go............................................................................................................91
Summary.......................................................................................................................... 92
Questions.......................................................................................................................... 93
Problems........................................................................................................................... 94
Suggested Reading............................................................................................................ 94
Notes................................................................................................................................ 94
4 Customer-Focused Quality..........................................................................................97
Quality Defined................................................................................................................ 97
Customer’s Perspective................................................................................................. 98
Voice of the Customer.................................................................................................. 98
Producer’s Perspective................................................................................................... 99
Quality of Design and Kano Model............................................................................. 99
Quality of Conformance............................................................................................ 100
Total Quality Management............................................................................................ 100
TQM Integrative Framework......................................................................................101
Marketing, Sales, and Finance................................................................................102
Product Design and Manufacturing Process Design...............................................102
Purchasing and Suppliers........................................................................................103
Production Management and Frontline Workers....................................................104
Customer Service....................................................................................................104
Six Sigma.........................................................................................................................104
Statistical Interpretation..............................................................................................105
Define, Measure, Analyze, Improve, Control Improvement Process............................106
Belts and Certification................................................................................................107
Statistical Process Control, SPC.......................................................................................107
Control Chart.............................................................................................................107
Process Stability..........................................................................................................109
Process Capability.......................................................................................................110
Nonstatistical Process Control.................................................................................... 111
Employee Involvement and Quality Ownership..............................................................112
Frontline Worker Responsibility..................................................................................112
Process Orientation.....................................................................................................112
Quality Training and Education.................................................................................113
Implementing TQM........................................................................................................113
Barriers to Successful TQM........................................................................................114
TQM and Lean Production.............................................................................................114
Summary......................................................................................................................... 115
Questions.........................................................................................................................116
Suggested Reading...........................................................................................................116
Notes...............................................................................................................................117
Section II E LEMENT S OF LEAN PRODUCTION
5 Small Lot Production................................................................................................121
Lot-Size Basics.................................................................................................................121
Dollar Costs Associated with Lots.............................................................................. 122
Lot Sizing and Setup Reduction................................................................................. 122
Kind of Lots............................................................................................................... 123
Lot Sizing....................................................................................................................... 123
Process and Purchase Batches..................................................................................... 123
Lot-for-Lot............................................................................................................. 123
Period Order Quantity.......................................................................................... 124
Economic Order Quantity......................................................................................125
Economic Manufacturing Quantity...................................................................... 126
EOQ-Based Methods: Discussion.............................................................................. 127
Transfer Batches......................................................................................................... 128
Lot-Size Reduction..........................................................................................................129
Effect of Lot-Size Reduction on Competitive Criteria.................................................129
Lead Time............................................................................................................. 130
Inventory................................................................................................................131
Setup and Handling Cost.......................................................................................132
Quality...................................................................................................................132
Flexibility...............................................................................................................133
Batch Size One = One-Piece Flow............................................................................... 134
Case for Larger Process Batches.................................................................................. 136
Minimal Lot Size........................................................................................................137
Buffer Stock................................................................................................................138
Demand Variability................................................................................................138
Lead Time Variability.............................................................................................139
Facilitating Small Lot Sizes..............................................................................................139
Process Batches............................................................................................................139
Purchase Quantities....................................................................................................139
Transfer Batches..........................................................................................................140
Delivery and Shipping Batches....................................................................................140
Continuous Improvement................................................................................................141
Summary.........................................................................................................................141
Questions.........................................................................................................................142
Problems..........................................................................................................................142
Notes...............................................................................................................................145
6 Setup-Time Reduction...............................................................................................147
Improve Setups? Why Bother?.........................................................................................147
Traditional Approaches...............................................................................................147
Find Another Way.......................................................................................................148
Benefits of Simplified Setups.......................................................................................149
Setup: A Case in Neglect.............................................................................................150
Setup-Reduction Methodology........................................................................................150
Shingo and Single-Minute Exchange of Dies..............................................................150
SMED Methodology for Setup Reduction.................................................................. 151
Stage 1: Identify Internal and External Steps.......................................................... 151
Stage 2: Convert Internal Steps to External............................................................152
Stage 3: Improve All Aspects of the Setup Operation.............................................153
Stage 4: Abolish Setup............................................................................................154
Minimum Setup Time.....................................................................................................155
Techniques for Setup Reduction......................................................................................155
Separate Internal and External Steps...........................................................................156
Checklists...............................................................................................................156
Equipment Checks and Repairs..............................................................................156
Setup Schedules......................................................................................................157
Improve Internal Setups..............................................................................................157
Parallel Setup Tasks................................................................................................157
Attachment Devices................................................................................................158
Eliminate Adjustments...........................................................................................160
Improve External Setups.............................................................................................162
Storage....................................................................................................................162
Setup Kits and Carts..............................................................................................162
Material Handling..................................................................................................163
Abolish Setup..............................................................................................................164
Setup-Reduction Projects.................................................................................................165
Scope of Project...........................................................................................................165
Setup-Reduction Team................................................................................................166
Ready, Get Set, Shoot!.................................................................................................166
Video Recording Analysis...........................................................................................167
Generating and Selecting Ideas...................................................................................167
Continuous Improvement...........................................................................................169
Setups Everywhere...........................................................................................................169
Summary.........................................................................................................................169
Questions.........................................................................................................................170
Problems..........................................................................................................................170
Suggested Reading...........................................................................................................172
Notes...............................................................................................................................172
7 Maintaining and Improving Equipment...................................................................173
Equipment Maintenance.................................................................................................173
Breakdown Repair.......................................................................................................174
Equipment Problems and Competitiveness.................................................................174
Preventive Maintenance..............................................................................................175
Total Productive Maintenance....................................................................................175
TPM Benefits.........................................................................................................175
Equipment Effectiveness..................................................................................................176
Equipment Losses.......................................................................................................176
Maintainability...........................................................................................................177
Reliability....................................................................................................................177
Failure Pattern........................................................................................................177
Mean Time between Failure...................................................................................179
Availability..................................................................................................................180
Availability and Downtime for Repair....................................................................180
Availability and All Downtime...............................................................................181
Repair Downtime Variability..................................................................................181
Efficiency....................................................................................................................182
Rate Efficiency........................................................................................................182
Speed Efficiency......................................................................................................183
Quality Rate...............................................................................................................183
Overall Equipment Effectiveness.................................................................................184
Preventive Maintenance Program....................................................................................184
Causes of Equipment Problems...................................................................................184
Maintain Normal Operating Conditions....................................................................185
Maintain Equipment Requirements............................................................................185
Keep Equipment and Facilities Clean and Organized.................................................186
Monitor Equipment Daily...........................................................................................186
Schedule Preventive Maintenance...............................................................................187
Ways to Schedule PM.............................................................................................187
Scheduled PM and Failure Pattern.........................................................................187
Manage Maintenance Information..............................................................................190
Use Predictive Maintenance........................................................................................192
Role of Operators........................................................................................................193
Total Productive Maintenance.........................................................................................194
TPM Preventive Maintenance.....................................................................................194
In-House Capability to Restore and Redesign Equipment..........................................196
Human Error in Operation and Maintenance.............................................................196
Education and Training..........................................................................................197
Mistake-Proofing....................................................................................................197
Maintenance Procedures.........................................................................................197
Implementing TPM.........................................................................................................201
Program Feasibility.....................................................................................................201
Program Objectives and Master Plan......................................................................... 202
Target Areas............................................................................................................... 202
Target Area Committees............................................................................................ 202
Plantwide Issues......................................................................................................... 203
Management Support................................................................................................. 204
Maintenance Organization........................................................................................ 204
Decentralization.................................................................................................... 204
Central Maintenance............................................................................................. 204
Summary........................................................................................................................ 205
Questions........................................................................................................................ 206
Problems......................................................................................................................... 206
Suggested Reading.......................................................................................................... 208
Notes.............................................................................................................................. 208
8 Pull Production Systems...........................................................................................211
Production Control Systems............................................................................................212
Pull Systems and Push Systems........................................................................................212
Pull Production Process...............................................................................................213
Why Pull Production Cannot be Stockless..................................................................214
Push Production Process.............................................................................................216
Pull and Push Contrasted............................................................................................218
Containers and Cards..................................................................................................219
Rules for Pull Production........................................................................................... 220
How to Achieve Pull Production.....................................................................................221
Pull System as a Fixed-Quantity/Reorder-Point System..............................................221
Containers in a Buffer..................................................................................................... 223
Container Size............................................................................................................ 224
Material Handling..................................................................................................... 224
Outbound and Inbound Buffers................................................................................. 225
Conveyance Kanbans...................................................................................................... 225
Production Kanbans....................................................................................................... 227
Single P-Card System................................................................................................. 229
Safety Factor.............................................................................................................. 230
Signal Kanbans............................................................................................................... 230
What, More Cards?.........................................................................................................235
Express Card...............................................................................................................235
Temporary Card..........................................................................................................235
Odd-Number Card.....................................................................................................235
Other Mechanisms for Signal and Control..................................................................... 236
Wheeled Carts........................................................................................................... 236
Kanban Squares......................................................................................................... 236
Golf Balls................................................................................................................... 237
Electronic Kanban..................................................................................................... 238
Clothespin Clips......................................................................................................... 238
Milk Run................................................................................................................... 238
Kanban Sequence Board............................................................................................ 238
Continuous Improvement............................................................................................... 240
Practical Matters............................................................................................................. 242
Necessary Conditions for Pull Production................................................................. 242
Pull Production and Repetitive Production................................................................ 244
When Pull Does Not Work........................................................................................ 244
Pull and Push Systems, Both at Once.........................................................................245
Getting Started...........................................................................................................245
Summary........................................................................................................................ 246
Questions.........................................................................................................................247
Problems..........................................................................................................................247
Suggested Reading...........................................................................................................251
Notes...............................................................................................................................251
9 Focused Factories and Group Technology................................................................253
Ways of Doing Work...................................................................................................... 254
Variety–Efficiency Tradeoff.........................................................................................255
Facilities Layout...............................................................................................................255
Fixed-Position Layout..................................................................................................255
Process Layout.............................................................................................................256
Product Layout............................................................................................................257
Variety–Volume Tradeoff............................................................................................258
Group Technology...........................................................................................................259
Product Coding and Classification Schemes...............................................................259
Hierarchical (Monocode) Structure........................................................................259
Chain (Polycode) Structure................................................................................... 260
Hybrid Structure....................................................................................................261
Product Families and Focused Factories......................................................................261
GT and Product Design..............................................................................................261
To Code or Not to Code............................................................................................ 262
Focused Factory.............................................................................................................. 262
On What to Focus..................................................................................................... 263
Microdesign Issues..................................................................................................... 266
Flexible Flow Lines.................................................................................................267
Flexible U-Lines and S-Lines..................................................................................267
Working Out the Final Layout.............................................................................. 268
Product-Quantity Analysis............................................................................................. 269
Establishing Product–Machine Groups.......................................................................... 269
Coding and Classification...........................................................................................270
Visual Cluster Analysis Using Routings......................................................................270
Production Flow Analysis............................................................................................271
Binary Ordering Algorithm................................................................................... 272
Dense Blocks, Then What?..........................................................................................274
Advantages and Disadvantages of Focused Factories........................................................276
Summary........................................................................................................................ 278
Questions........................................................................................................................ 279
Problems......................................................................................................................... 279
Suggested Reading...........................................................................................................281
Notes.............................................................................................................................. 282
10 Workcells and Cellular Manufacturing....................................................................283
Workcell Concepts.......................................................................................................... 284
Workstations, Workers, and Machines....................................................................... 284
Workcell Output and Number of Workers................................................................. 284
Workcell Applications..................................................................................................... 285
Typical Workcell End Items....................................................................................... 285
Linked Workcells and Subcells................................................................................... 285
Workcell Design............................................................................................................. 288
Digression: Cycle Time ............................................................................................. 288
Assembly Workcells.................................................................................................... 289
Machining Workcells..................................................................................................293
Workcell Capacity...................................................................................................... 296
Cost–Capacity Tradeoff Analysis............................................................................... 297
Batch Size = 1.............................................................................................................. 298
Sequential Changeover Tasks..................................................................................... 299
Productivity Improvement......................................................................................... 300
Quality Control..........................................................................................................301
Workcells beyond Manufacturing....................................................................................301
Workers in Cells............................................................................................................. 302
Staffing a Workcell..................................................................................................... 302
Simultaneous Staffing of Multiple Cells..................................................................... 302
Equipment Issues............................................................................................................ 303
Machine Sharing........................................................................................................ 304
Machine Acquisition.................................................................................................. 304
Special Operations..................................................................................................... 305
Cell Automation............................................................................................................. 306
Implementing Cellular Manufacturing........................................................................... 307
Planning and Control................................................................................................ 307
Organizational Issues................................................................................................. 308
Roles and Responsibilities...................................................................................... 308
Incentive Plans....................................................................................................... 308
Time and Rate Standards...................................................................................... 309
Team Education and Training................................................................................310
Attitudinal Issues........................................................................................................311
Shop-Floor Workers................................................................................................311
Supervisors.............................................................................................................311
Management...........................................................................................................312
Getting Started................................................................................................................312
Summary.........................................................................................................................313
Questions.........................................................................................................................314
Problems..........................................................................................................................314
Suggested Reading...........................................................................................................317
Notes...............................................................................................................................317
11 Standard Work..........................................................................................................319
Standard Work................................................................................................................319
Shop-Floor Relevancy................................................................................................ 320
Shop-Floor Involvement............................................................................................. 320
Benefits.......................................................................................................................321
Takt Time........................................................................................................................321
Completion Time Per Unit............................................................................................. 322
Standard Time for a Task........................................................................................... 322
Completion Time for a Unit...................................................................................... 323
Production Capacity....................................................................................................324
Standard Operations Routine..........................................................................................325
Kinds of SORs............................................................................................................325
SOR Sheet.................................................................................................................. 326
Operations Routine and Process Routing Sequence....................................................329
Idle Time....................................................................................................................329
Standard Quantity WIP................................................................................................. 330
Standard Operations Sheet............................................................................................. 330
Standard Work and Continuous Improvement................................................................332
Conditions for Successful Standard Work........................................................................335
Standard Work in the Service Sector............................................................................... 336
Leader Standard Work.....................................................................................................337
Summary.........................................................................................................................337
Questions.........................................................................................................................339
Problems..........................................................................................................................339
Suggested Reading.......................................................................................................... 340
Notes.............................................................................................................................. 340
12 Quality at the Source and Mistake-Proofing........................................................... 343
SPC Limitations............................................................................................................. 343
100% Inspection (Screening).......................................................................................... 344
Self-Checks and Successive-Checks............................................................................ 344
Successive-Checks.................................................................................................. 344
Requirements for Self-Checks and Successive-Checks............................................345
Check Targets.........................................................................................................345
Feedback and Action..............................................................................................345
Consideration and Support for Workers................................................................ 346
Automation................................................................................................................ 346
Cycle Time................................................................................................................. 347
Pursuit of Perfection: Limits of Inspection................................................................. 347
Jidoka.............................................................................................................................. 347
Autonomation............................................................................................................ 348
Andons....................................................................................................................... 348
Source Inspection and Pokayoke..................................................................................... 348
Source Inspection....................................................................................................... 349
Pokayoke Functions....................................................................................................351
Regulatory Pokayokes.............................................................................................351
Setting Pokayokes...................................................................................................352
Pokayoke Ideas............................................................................................................354
Continuous Improvement...........................................................................................355
Summary.........................................................................................................................355
Questions.........................................................................................................................356
Problems..........................................................................................................................357
Suggested Reading...........................................................................................................357
Notes...............................................................................................................................357
13 Production Preparation Process, 3P..........................................................................359
Breakthrough Redesign.................................................................................................. 360
Product Development Approaches.................................................................................. 360
Traditional................................................................................................................. 360
Integrated....................................................................................................................361
3P: Integrated Rapid-Learning.........................................................................................361
Common Themes....................................................................................................... 363
3P Events ....................................................................................................................... 364
Purpose: Product versus Process................................................................................. 364
Team Roles................................................................................................................. 364
Event Activities ..........................................................................................................365
Phases of 3P ................................................................................................................... 366
Information Gathering............................................................................................... 366
Innovating: Develop Alternatives............................................................................... 366
Prototyping and Redesign ......................................................................................... 369
Optimizing................................................................................................................ 369
Project Planning......................................................................................................... 369
Case in Point: Redesigning the Emergency Department..................................................370
Overview.....................................................................................................................370
Information Gathering: VSM and 5S..........................................................................370
Event 1: Redesigning the Overall ED .........................................................................371
Innovate: Develop Alternatives...............................................................................372
Prototype and Selecting Best Design......................................................................373
Event 2: Redesign Trauma Area..................................................................................374
Event 3: Redesign Staff Support Areas........................................................................375
Event 4: Redesign Triage and Patient Bays..................................................................376
Project Planning..........................................................................................................376
Results.........................................................................................................................376
3P Necessary Conditions................................................................................................ 377
Do It Early in the Design Process.............................................................................. 377
Use an Experienced Team.......................................................................................... 377
Be Committed............................................................................................................378
Practice Project Management......................................................................................378
3P Benefits.......................................................................................................................378
Summary.........................................................................................................................378
Questions.........................................................................................................................379
Suggested Reading.......................................................................................................... 380
Notes.............................................................................................................................. 380
Section III _LEAN PRODUCTION PLANNIN G,
CONT ROL, AND SUPPLY CHAIN S
14 Uniform Flow and Mixed-Model Scheduling............................................................385
Leveling Production ....................................................................................................... 386
Leveling with Buffer Stocks........................................................................................ 386
Leveling with Uniform Schedules.............................................................................. 387
Requirements for Level Production Schedules............................................................ 388
Continuous, Stable Demand.................................................................................. 388
Short Setup Times................................................................................................. 389
Production = Demand............................................................................................ 389
Leveling Focus........................................................................................................... 389
Leveling the Master Production Schedule.................................................................. 390
Leveling One Product Group................................................................................ 390
Leveling Multiple Products.....................................................................................391
Leveled Schedules: A Cooperative Effort.................................................................... 394
Mixed-Model Production: Heijunka................................................................................395
Final Assembly Schedule.............................................................................................395
Heijunka.....................................................................................................................395
Batch Size.............................................................................................................. 396
MMP and Production Smoothing......................................................................... 396
MMP Schedule.......................................................................................................... 397
Maintaining MMP.................................................................................................... 398
Requirements for MMP............................................................................................. 399
Flexible Workers.................................................................................................... 399
Quality Assurance................................................................................................. 400
Small-Lot Material Supply..................................................................................... 400
MMP Advantages ..................................................................................................... 400
Elimination of Losses Due to Line Changeover..................................................... 400
Balanced Work Loads............................................................................................ 400
Fewer Losses from Material Shortages................................................................... 400
Continuous Process Improvement..........................................................................401
Production Planning and Scheduling in Different Circumstances...................................401
Production Philosophy................................................................................................401
Make to Stock........................................................................................................401
Assemble to Order................................................................................................. 402
Make to Order....................................................................................................... 402
Final Assembly Scheduling versus Master Production Scheduling.................................. 403
MTS: Uniform (Level) Production Schedule.............................................................. 404
Assemble to Order...................................................................................................... 406
Modular Bills......................................................................................................... 406
Modularization Procedure..................................................................................... 407
Planning Bills........................................................................................................ 408
Alternative to Planning Bills...................................................................................410
Role of Concurrent Engineering.............................................................................410
Make to Order............................................................................................................411
Scheduling with Backlogs.......................................................................................411
Minimizing Scheduling Problems...........................................................................411
Hybrid Systems...........................................................................................................414
Summary.........................................................................................................................415
Questions.........................................................................................................................416
Problems..........................................................................................................................417
Suggested Reading...........................................................................................................421
Notes...............................................................................................................................421
15 Synchronizing and Balancing the Process................................................................423
Synchronization.............................................................................................................. 423
Synchronized Cycle Times......................................................................................... 424
The Essence of Cycle Time......................................................................................... 426
Bottleneck Scheduling.................................................................................................... 427
Principles.................................................................................................................... 427
Throughput Pace................................................................................................... 427
Buffer Stock........................................................................................................... 427
Process Scheduling................................................................................................ 427
Drum–Buffer–Rope.............................................................................................. 428
Pull from Bottleneck.................................................................................................. 428
Balancing........................................................................................................................ 428
Line Balancing........................................................................................................... 429
Balancing for MMP....................................................................................................431
Other Ways to Achieve Balance................................................................................. 434
Dynamic Balance.................................................................................................. 434
Parallel Line........................................................................................................... 434
Balancing for Synchronous Flow.................................................................................435
Balancing through Worker Reassignment.................................................................. 436
Maintaining Synchronization..................................................................................... 437
Adapting to Schedule Changes....................................................................................... 438
Alter Production Workday......................................................................................... 438
Alter Cycle Time........................................................................................................ 439
In Practice: Adjusting to Schedule Changes............................................................... 439
Summary........................................................................................................................ 440
Questions........................................................................................................................ 441
Problems......................................................................................................................... 441
Suggested Reading.......................................................................................................... 443
Notes.............................................................................................................................. 443
16 Planning and Control in Pull Production................................................................ 445
The Whole Enchilada..................................................................................................... 446
Centralized System..................................................................................................... 446
Decentralized System................................................................................................. 447
Centralized Planning and Control System...................................................................... 448
Monthly Planning...................................................................................................... 448
Preparing MPSs for Future Periods........................................................................ 448
Preparing MPSs for Shop Floor Planning.............................................................. 449
Daily Scheduling........................................................................................................ 449
Incorporating Recent Demand Information.......................................................... 449
Daily Order Alterations..........................................................................................450
Materials Procurement Forecast..............................................................................451
Local and MRP Supplier Links..............................................................................452
Supplier Kanban Link............................................................................................452
Order Sequencing...................................................................................................452
Decentralized Planning and Control System...................................................................453
Initial Capacity Planning............................................................................................453
Capacity Fine-Tuning..................................................................................................453
Shop Floor Control..........................................................................................................454
Visual Management, Again.........................................................................................454
Role of Worker Teams.................................................................................................454
Adapting MRP-Based PPC Systems to Pull Production...................................................454
Simplified Bills of Materials........................................................................................454
Flat BOMs..............................................................................................................456
Phantom Records...................................................................................................458
Stock Areas and Points of Use.....................................................................................459
Postdeduct and Deduct Lists...................................................................................... 460
Rate-Based Master Schedules......................................................................................461
Implementing Pull Production with MRP PPC......................................................... 462
Step 1: Create a Logical Flow and Improve Material Handling............................. 463
Step 2: Introduce the Pull System.......................................................................... 464
Step 3: Create a New Layout and Reduce Reliance on MRP................................. 464
Step 4: Continuously Improve the Process............................................................. 464
Summary.........................................................................................................................465
Questions.........................................................................................................................465
Problems......................................................................................................................... 466
Suggested Reading.......................................................................................................... 469
Notes...............................................................................................................................470
17 Lean Production in the Supply Chain.......................................................................471
Produce versus Buy..........................................................................................................471
Relying on Suppliers........................................................................................................472
Core Competency.......................................................................................................472
Supply Chain Management.............................................................................................473
Process and Customer Focus.......................................................................................474
Customer–Supplier Relationships....................................................................................474
Long-Term .................................................................................................................475
Competency and Capability........................................................................................475
Joint Problem-Solving.................................................................................................475
Quality at the Source..................................................................................................475
Information Sharing....................................................................................................475
Partnership Relationships............................................................................................... 477
Purchase Criteria........................................................................................................ 477
Design and Engineering Source................................................................................. 477
Number of Suppliers...................................................................................................479
Type of Agreement..................................................................................................... 480
Terms of Agreement................................................................................................... 480
Duration................................................................................................................ 480
Price/Cost ............................................................................................................. 480
Quality ..................................................................................................................481
Shipping ................................................................................................................481
Ordering and Vendor-Managed Inventory .............................................................481
Customer–Supplier Interaction...................................................................................481
It Doesn’t Come Easy................................................................................................. 483
Small-Customer, Big-Supplier Partnership................................................................. 484
Supplier Selection........................................................................................................... 484
Certification............................................................................................................... 485
Certification by Customer..................................................................................... 485
Certification by Industry Standard or Award......................................................... 486
Evaluation.................................................................................................................. 486
Purchasing...................................................................................................................... 487
Evolution of Purchasing............................................................................................. 487
Purchasing Role in Lean Production.......................................................................... 487
Lean in the Supply Chain............................................................................................... 488
Facilities Layout......................................................................................................... 488
Teamwork.................................................................................................................. 490
Small-Batch Shipping................................................................................................. 490
Logistics Network.......................................................................................................493
Kanban...................................................................................................................... 494
Communication and Scheduling................................................................................ 497
Sharing Plans and Schedules.................................................................................. 497
Production Leveling and Uniform Schedules......................................................... 497
Point-to-Point Communication..............................................................................498
Preventive Maintenance............................................................................................. 500
Standard Work........................................................................................................... 500
Getting Started: Begin at Home..................................................................................501
Summary.........................................................................................................................501
Appendix: Supplier Kanban............................................................................................ 502
Questions........................................................................................................................ 504
Problems......................................................................................................................... 504
Suggested Reading.......................................................................................................... 505
Notes.............................................................................................................................. 506
Section IV LEAN MANAGEMENT SYSTE M
18 Daily Management....................................................................................................509
Sustaining Gains............................................................................................................ 509
Lean Culture ..................................................................................................................510
Lean Transformation = Management/Leadership Transformation...................................512
Lean Leadership..........................................................................................................512
Leaders vis-a-vis Managers..........................................................................................513
Focus on Process.....................................................................................................513
Daily Management: Maintain Process Stability and Improvement..................................514
Tiers of Standardized Reviews and Accountability.......................................................... 515
Level 1. Supervisor Meets with Team Leads or Operators...........................................516
Level 2. Department Manager Meets with Supervisors and Support Staff..................517
Levels 3 and 4. Director Meets with Department Managers; VP Meets with
Directors ....................................................................................................................517
Performance Measurement and PDCA............................................................................517
Tiered Accountability versus Micromanagement ........................................................518
Leader Standard Work ....................................................................................................518
Routine Tasks..............................................................................................................518
Leader Standard Work Check Sheet............................................................................521
Training and Learning................................................................................................522
Leader Standard Work versus the Great Man..............................................................523
Resistance....................................................................................................................523
Visual Management.........................................................................................................523
Tools for Management and Control............................................................................523
KPI Board...................................................................................................................526
Leader Discipline and Information Accuracy..............................................................528
Electronic Information................................................................................................528
Daily Huddles ................................................................................................................529
Gemba Walks and Audits................................................................................................530
Daily Readiness...............................................................................................................530
Rapid Response and Escalation........................................................................................531
Continuous Improvement and New Standard Work........................................................532
Implementing Daily Management...................................................................................533
Summary........................................................................................................................ 534
Questions.........................................................................................................................535
Suggested Reading...........................................................................................................536
Notes...............................................................................................................................536
19 Strategy Deployment.................................................................................................539
Improvements Tied to Strategies; Strategies Tied to Vision..............................................539
In a Nutshell.............................................................................................................. 540
Origins........................................................................................................................... 540
Common Practices and Themes.......................................................................................541
I. Vision, Strategy, and Long- and Medium–Term Goals: Steps 1–4.......................... 542
II. Cascade Objectives and Plans: Steps 3–5............................................................... 543
III. Catchball and Cross-Functional Management: Steps 3–5.................................... 543
IV. Goals, Actions, and Targets: Steps 6–7................................................................. 543
V. Objectives Linked to Daily Management: Steps 5–8............................................. 543
VI. Review and Control: Steps 7–9............................................................................ 544
VII. PDCA (All Steps)............................................................................................... 544
Strategic Planning Preparation........................................................................................ 546
Develop a Future Vision................................................................................................. 546
Develop High-Level Objectives and Strategies................................................................ 546
Breakthrough Objectives............................................................................................ 546
High-Level Strategies................................................................................................. 547
Develop Annual Plan for High-Level Strategies.............................................................. 547
X-Matrix.................................................................................................................... 548
A3 Format.................................................................................................................. 549
Deploy Strategies and Plans.............................................................................................551
Deploy First Level Strategies.......................................................................................551
Deploy Second- and Next-Level Strategies..................................................................552
Roll-Up and Check Consistency.................................................................................554
Implement Plans .............................................................................................................554
Daily Management......................................................................................................554
Project Management...................................................................................................554
Review Progress...............................................................................................................555
Daily/Weekly Review..................................................................................................555
Monthly Review..........................................................................................................555
Annual Review............................................................................................................555
Standardize Processes and Work Tasks........................................................................555
Control Departments.......................................................................................................556
Strategy Deployment Calendar........................................................................................556
Top Management Initiation.............................................................................................558
Benefits and Limitations..................................................................................................558
Summary.........................................................................................................................559
Questions........................................................................................................................ 560
Suggested Reading...........................................................................................................561
Notes.............................................................................................................................. 562
Index.................................................................................563


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