Chapter 11: Lean Systems Strategy for Operations

Question 1

Why does lean production occur

Answer 1

It occurs due to the increase in competition.

Question 2

How can a lean status be achieved

Answer 2

This can be done through the elimination of waste from every sphere in the organization. This result in improved processes, quality, productivity, inventory levels and employee participation.

The principle result is a reduction in the cost of production and managing the organization

Question 3

Lean was initially developed by _____

Answer 3

Toyota Motor Company in Japan

Question 4

Which five lean principles are still in use today

Answer 4

• distinguish value starting with the customers viewpoint and then distinguish value added operations and waste. Value is anything a customer would compensate the manufacturer for, but waste is not intended for payment by a customer. It is essential that it is eradicated
• categorize and chart the value stream used for individual products/services offered by the organization
• create a continuous product flow
• create pool motivation, that is comma initiate pool among any stages for which continuous flow is impractical
• practice continuous improvement and excellence through initiating little and continuous improvements to remove non-value added operations

Question 5

What are the positives that can be gained from implementing lean production

Answer 5

• the first positive is the participation of employees in the effort of continuous improvement. Respect for employees is in indispensable companies of lean values
• the second positive is that employees will be more than willing to participate in problem solving. Improvements will be achieved through job enlargement and cross training

Question 6

What are the differences that can be made between JIT, lean production and TPS

Answer 6

• just in time (JIT) places the emphasis on continuous improvement
• lean production emphasizes the need of an organization to understand the customer
• total production system (TPS) places an emphasis on employee empowerment as well as employee learning

Question 7

Name the eight most common wastes (pg 288)

Answer 7

1. Waiting time waste
2. Transportation
3. Process waste
4. Inventory waste
5. Unnecessary motion waste
6. Product defect waste
7. Overproduction waste
8. Skills waste

Question 8

What are the cost incurred as a result of waste

Answer 8

• carrying costs also known as the cost of delay or holding costs, this occurs when inventory is held idle. This cost can be divided into raw materials, finished goods, and work in progress costs
• ordering costs occur when placing and receiving orders from a vendor they include shipping, invoice preparation, and inspection costs for both received and dispatched goods
• shortage cost also known as stock out costs, occur when demand for a product exceeds the supply due to uncertainty of demand or when the organization runs out of inventory
• actual purchasing costs are incurred when an organization purchases in bulk to claim quantity discounts, resulting in higher holding costs
• idleness cost occur as a result of any delay and it can be difficult to determine. a common cause is non-receipt of products ordered from a supplier
• obvious cost also known as capital costs, tie up working capital in holding inventory.
• semi-obvious costs include material obsolescence, incorrect inventory management and indirect management of inventory by employees who are not physically involved in handling and managing inventory. Obsolescence cost occur when inventory cannot be used to due to being superseded by improved material it usually occurs after materials have been in a warehouse for many years
• hidden cost accumulate from carrying costs and other related costs.

Question 9

Name and explain the lean techniques

Answer 9

1. Standard times - labor requires known standard times to produce effectively and efficiently
2. Kaizen - a systematic approach that includes all operations within the organization and aims to improve the quality of products and components that are delivered to customers
3. Matching demand and production - with a lean production system there is no build up of work in progress inventory. Customer demand is used to pace work through the process in order to achieve a smooth production rate
4. Kanban - means visible record or signal and is a communication system used to enable customers to indicate when and in what quantities they require their materials to be replenished
5. Standardization - disseminated the belief that an organization should settle for fewer rather than many sizes models, or format of products to produce. The most optimal use of standardization is to manufacture a wide range of items from a small number of standard components and materials
6. U-Shaped product lines - the entrance and the exit to the processes are situated across from each other. therefore both goods receiving and goods delivered take place at the origin of product
7. Involvement of employees - employees must participate in the process in its totality to guarantee that lean status is achieved. Not only must all components be produced by employees end of high quality, but they must also be produced at the right time in the right quantities
8. 5S methodology - is an unauthoritative technique that is a fundamental part of the six-sigma methodology (a quality manufacturing method that uses data analysis to eliminate defects in manufacturing)

Question 10

What are the barriers to lean implementation (pg 307)