Lean system and Innovation Flashcards
MOTOR - WI
What are the seven types of Waste that Lean management is trying to Build on?
- Overproduction: Producing ahead of demand
- Inventory: Having more inventory than, what is minimally required at any point in the process,
including end-product. - Waiting: Waiting includes products waiting on the next production step.
- Motion: People or equipment moving or walking more than, what is required to perform the
process. - Transportation: Moving products that is not actually required to perform the process.
- Rework from defects: Non-right first time.
- Over-Processing: Unnecessary work elements (non-value added activities).
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What are the brief characteristics of lean manufacturing?
- Zero waiting time
▪ Zero inventory
▪ Pull processing
▪ Continuous flow of production
▪ Continuous finding ways of reducing process time.
What is the CIMA definition for Just in time?
Just-in-time (JIT): System whose objective is to produce or to procure products or components as they are required by a customer or for use, rather than for stock. just-in-time system Pull system, which responds to demand, in contrast to a push system, in which stocks act as buffers between the different elements of the system such as purchasing, production and sales”.
What are the basic steps for implementing a just in time system? and what are some additional steps required in the implementation of the JIT system? Part 1
- shorten the setup times for concern’s machinery -under JIT system a different approach to the setup issue is followed which focuses on making a video tape of a typical set up, instead of reducing the length of equipment setups and thereby eliminating the need for long production runs to reduce per unit costs.
- It is not sufficient to reduce machine setup times because there are still problems with machines not being coordinated properly so that there is a smooth, streamlined flow of parts from machine to machine. This is what we saw in the theory of constraints in the form of Non bottleneck and Bottleneck machines which are very costly when we pile up WIP inventories in front of the bottleneck machine.
- There are two ways to resolve both problems - Kanban card - notification card that a downstream machine sends to each machine that feeds it parts, authorizing the production of just enough components to fulfill the production requirements being authorized in turn by the next machine further downstream. This is also known as a “pull” system, since kanbans are initiated at the end of the production process.
- group machines into working cells - A working cell is a small cluster of machines which can be run by a single machine operator. This individual machine operator takes each output part from machine to machine within the cell; and thus there is no way for work-in-process to build up between machines. Also, this operator can immediately identify defective output which otherwise is difficult for each machine of the cell.
- Both kanbans and machine cells should be used together—they are not mutually exclusive. By doing so a company can achieve extremely low product defect rates, as well as vanishingly small investments in work-in-process inventory.
What are the basic steps for implementing a just in time system? and what are some additional steps required in the implementation of the JIT system? - Part 2
- it becomes apparent that a major change must also be made in the work force. The traditional approach is to have one employee maintaining one machine, which is so monotonous that workers quickly lapse into apathy and develop a complete disregard for the quality of their work. Now, with full responsibility for a number of machines, as well as product quality, workers become much more interested in what they are doing.
- A major result of having an empowered workforce is that employees are allowed to stop their machines when they see a problem, and either fix it on the spot or immediately call in a repair team. the quick response capabilities of a JIT system allows the management accountant to omit a large amount of the variance reporting that was previously an important central job function.
- Finally, the massive changes caused by a JIT system also requires several alterations in the supporting accounting systems. Because of the large number of daily supplier shipments, the accounting staff faces the prospect of going through a large pile of accounts payable paperwork. To make the problem worse there is no receiving paperwork, because the suppliers deliver parts directly to the production operation, so there is no way to determine if deliveries have been made.
- To avoid the first problem, accountants can switch to making a single consolidated monthly payment to each supplier. The second problem requires a more advanced solution. To prove that a supplier has delivered the part quantities which it claims it has, the accounting system that can determine the amount of finished products created during the period and then multiply these quantities by the parts listed on the bill of materials for each product, obtaining a total quantity for each part used. The accountants then pay suppliers based on this theoretical production quantity, which is also adjusted for scrap during the production process (otherwise suppliers—unfairly—will not be paid for their parts that are scrapped during the company’s production process).
What are the ultimate main five features of Just in time system?
- Material – handling cost are reduced - Due to cellular manufacturing system.
- labour idle time gets reduced - Due to the labour upskilling of their capabilities.
- JIT creates urgency for eliminating defects as quickly as possible - since customer order is on the line.
- company can respond to customer demand faster - By producing in smaller batches, the set up time can be reduced.
- Carefully selected suppliers capable of delivering high quality materials in a timely manner directly at the shop – floor, reducing the material receipt time.
What are the impact of Just in time system on costs?
What is the meaning and benefits of back flush costing system?
Back-flushing requires no data entry of any kind until a finished product is completed. At that time the total amount finished is entered into the computer system, which multiplies it by all the components listed in the bill of materials for each item produced. This yields a lengthy list of components that should have been used in the production process and which are subtracted from the beginning inventory balance to arrive at the amount of inventory that should now be left on hand. Given the large transaction volumes associated with JIT, this is an ideal solution to the problem.
What is the meaning and benefits of back flush costing system?
Back-flushing requires no data entry of any kind until a finished product is completed. At that time the total amount finished is entered into the computer system, which multiplies it by all the components listed in the bill of materials for each item produced. This yields a lengthy list of components that should have been used in the production process and which are subtracted from the beginning inventory balance to arrive at the amount of inventory that should now be left on hand. Given the large transaction volumes associated with JIT, this is an ideal solution to the problem.
What are the problems or drawbacks in the system of backflush costing?
- Production reporting
- Scrap reporting
- Lot tracing
- Inventory accuracy
- Of all the issues noted here, the worst is a situation where the production staff is clearly incapable of providing sufficiently accurate scrap or production reporting for the back-flushing system.
- It may even be possible to have an experienced shift supervisor to collect this information. However, where this is not possible for whatever reason, computer system users experience back-flushing garbage in, garbage out (GIGO)—entering inaccurate information rapidly eliminates any degree of accuracy in the inventory records, requiring many physical inventory counts to correct the problem
What is the philosophy of Kaizen costing in terms of what it is trying to achieve?
- This philosophy implies that small, incremental changes routinely applied and sustained over a long period result in significant improvements.
- Thus, kaizen costing is really designed to repeat many of the value engineering steps for as long as a product is produced, constantly refining the process and thereby stripping out extra costs.
- The cost reductions resulting from kaizen costing are much smaller than those achieved with value engineering but are still worth the effort since competitive pressures are likely to force down the price of a product over time
What are the important principles of Kaizen Costing?
- The system seeks gradual improvements in the existing situation, at an acceptable cost.
- It encourages collective decision making and application of knowledge.
- There are no limits to the level of improvements that can be implemented.
- Kaizen involves setting standards and then continually improving these standards to achieve long-term sustainable improvements.
- The focus is on eliminating waste, improving systems, and improving productivity.
- Involves all employees and all areas of the business.
What is the recommendation to a manufacturing company that uses standard costing to set its budgets and are set semi annually by the finance department after the approval of the Board of Directors at MIL. and where various reports regarding variance analysis are produced each month and discussed with top management! what are some profound changes which Kaizen costing could bring?
What is the concept of 5S and what are it’s various components?
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Sort (Seiri) - Make work easier by eliminating obstacles and evaluate necessary items with regard to cost or other factors.
▪ Reduce chances of being disturbed with unnecessary items.
▪ Prevent accumulation of unnecessary items -
Set In Order (Seiton) - Arrange all necessary items into their most efficient and accessible arrangements so that they can be easily selected for use and make workflow smooth and easy.
▪ Ensure first-in-first-out FIFO basis, so that it is easy to find and pick up necessary items.
▪ Place components according to their uses, with the frequently used components being neared to the work. -
Shine (Seiso) - Clean your workplace on daily basis completely or set cleaning frequency.
▪ Keep workplace safe, easy to work, clean and pleasing to work in.
▪ In an unfamiliar environment, people must be able to detect any problems within 50 feet. -
Standardize (Seiketsu) - Standardize the best practices in the work area.
▪ Maintain high standards, orderliness, everything in order and according to its standard.
▪ Every process has a standard. -
Sustain (Shitsuke) - Not harmful to anyone, training and discipline, to maintain proper order.
▪ Also translates as “do without being told”.
▪ Training is goal-oriented process. Its resulting feedback is necessary on monthly basis.
In a case scenario where we have a CA’s office where tons of paperwork are handled everyday, how 5S principles be integrated into the working?
Read the case study very carefully. There are certain points provided which are not even part of the full fledged theory
What are the eight pillars of Total productive maintenance(TPM) and what are the techniques employed in relation to each such pillars?
What is overall equipment effectiveness(OEE) in relation to total productive maintenance?
The calculation of OEE measure requires the identification of “six big losses”
- Equipment Failure/ Breakdown - availability of equipment
- Set-up/ Adjustments - availability of equipment
- Idling and Minor Stoppages - performance efficiency of equipment
- Reduced Speed - performance efficiency of equipment
- Reduced Yield and- quality losses
- Quality Defects and Rework - quality losses
What is the formula for computing Availability ratio, performance ratio and quality ratio?
See the illustration in relation to this to gain better clarity with respect to numbers in this regard.
What is the DMAIC methodology for implementing six sigma?
This method is very robust. It is used to improve existing business process. To produce dramatic improvement in business process, many entities have used it successfully. It has five phases: See image
DMAIC is used under the following circumstances:
▪ A product or process exists.
▪ The project is part of ongoing continuous improvement process.
▪ Only a single process needs to be altered.
▪ Competitor’s actions are stable.
▪ Customer’s behaviour is unchanging.
▪ Technology is stable.
What is DMADV methodology in relation to Six sigma and how is it different from DMAIC methodology?
- Similarities between DMAIC and DMADV - Both based on defect per million opportunities and use the same kind of SS management tools.
- Importance for quality and customer needs priority is the basic parameter for both six sigma methods.
- Both DMADV and DMAIC are fundamental six sigma methodologies for improving quality of product/process. Broadly, DMAIC deals with improving some existing process to make it align with customer’s needs while DMADV deals with new design or redesign.
What are the various quality management tools that are used in the six sigma methodology?
What are the limitation of the six sigma process?
- Six Sigma focuses on quality only
- Six Sigma does not work well with intangible results.
- Substantial infrastructure investment is required.
- Six Sigma is complicated for some tasks.
- Not all products need to meet Six Sigma standards.
- Six Sigma focuses on specific type of process only.
- There are lot to real time barriers which needs to be resolved while translating the theoretical concepts into practical applications
What is the meaning of process Innovation? name certain solutions involved in process innovation? and who are some successful companies implemented these techniques efficiently?
What are some important steps in Business process reengineering and what each of these represents in relation to the business process that is being reengineered?
What are the main principles of BPR that needs to be followed?
Also see Page 3.39 for detailed explanations if necessary.
What is the meaning of Takt time in Just in time system?
- Takt Time is the maximum available time to meet the demands of the customer; this will help to decide the speed of/ at manufacturing facility.
- Takt time is the average time between the start of production of one unit and the start of
production of the next unit, when these production starts are set to match the rate of
customer demand.
When we are given with the time taken both under the old process and the estimated time under the new process and we are asked to check whether we can shift to JIT or not, what is the measure which we can compute to get the answer to this aforesaid question?
Hint: Process cycle efficiency
