Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

6.6 Summary

Lean/JIT aims to reduce the 3Ms (“muri,” “mura,” “muda”) and the lead time and, at the same time, to minimize stored and in-process inventory. The most significant measure to reduce lead time is setup time reduction. A significant reduction in setup time allows — with keeping utilization constant — reduction of lot size, thus operation time, and, finally, lead time as well. Concepts for setup time reduction can be grouped under the term SMED (single-minute exchange of die), but also under the terms setup-friendly production facilities, cyclic planning, or modularization.

Further concepts for lead time reduction are production or manufacturing segmentation, cellular manufacturing, complete processing, and structuring of the assembly process. Harmonizing the product range and work contents helps, in addition, to achieve repetitive processes and a balanced flow of goods in production. This increases the degree of automation and reduces wait times. Additional Lean/JIT concepts ensure high-quality as well as rapid administrative connections between feeder and user operations, for example, combined with blanket order processing. And, there is also the availability of resources: over­capacity of machines and tools as well as flexible personnel. Further elements of the Japanese way of thinking include group thinking, elimination of waste, kaizenpoka-yokero, order, and cleanliness. Lean/JIT concepts improve the quality of all techniques of resource management. Shorter lead times allow the (customer) order penetration point (OPP) to be set lower in the product structure, thus increasing the potential for use of deterministic methods in requirements planning. Through smaller batch sizes, or even “make to order,” inexact forecasts of requirements upstream from or at the (customer) order penetration point (OPP) lead to fewer long-term materials planning errors.

Simple techniques of planning & control are possible with production or procurement with frequent order repetition. The best-known technique is Kanban. Between each user operation and supplier operation, a certain number of Kanbans pass back and forth. Each Kanban refers to a container that stands at the user operation in a clearly marked location. It is managed visually and sent back to the supplier operation as soon as it is empty. It is important to follow the Kanban rules of use. The number of Kanban cards must be determined on the basis of medium- or long-term planning according to the MRP II concept. The cumulative production figures principle represents another simple technique of materials and scheduling management. Work progress is recorded at set count points.

Special considerations are necessary where different techniques coexist. Kanban is similar to the order point system, with the difference that control, in particular order release, is always decentralized. This allows for significantly more orders than with centralized control. The Kanban cycles generally are composed of fewer operations at a product level than the order point system, which tends to result in less (buffer) inventory.


Course sections and their intended learning outcomes

  • Course 6 – The Lean / Just-in-Time Concept and Repetitive Manufacturing

    Intended learning outcomes: Produce an overview on lean / just-in-time and repetitive manufacturing. Explain the lean / just-in-time concept in detail. Describe the Kanban technique. Identify the cumulative production figures principle. Disclose an implementing procedure and a comparison of techniques.

  • 6.1 Characterizing Lean / Just-in-Time and Repetitive Manufacturing

    Intended learning outcomes: Explain Just-in-Time and Jidoka: Increasing productivity through reduction of overburdening, unevenness, and useless effort, or waste. Describe characteristic features for simple and effective planning & control techniques of repetitive manufacturing.

  • 6.2 The Lean Concept / Just-in-Time Concept

    Intended learning outcomes: Explain lead time reduction through setup time reduction and batch size reduction as well as further concepts. Describe line balancing through harmonizing the content of work. Disclose Just-in-Time Logistics. Present generally valid advantages of the lean / Just-in-Time concept for materials management and for capacity management.

  • 6.3 The Kanban Technique

    Intended learning outcomes: Explain Kanban as a technique of execution and control of operations as well as a technique of materials management. Disclose the adequate long- and medium-term planning for Kanban.

  • 6.8 Scenarios and Exercises

    Intended learning outcomes: Operation time versus operation cost: disclose the effect of varying setup time and batch size. Calculate the effect of cellular manufacturing on lead-time reduction. Perform line balancing through harmonizing the content of work. Determine the number of Kanban cards.

  • 6.9 References

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  • Case [Course 6]

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