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Chapter 14 Lecture and textbook notes. Excellent for studying for the tests and for following the lectures.

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Global Management Studies
GMS 401
Wally Whistance- Smith

Chapter 14 : Just In Time Manufacturing and Lean Manufacturing Just –in-time: production system in which processing and movement of materials and goods occur just as they are needed, usually in small batches, characteristic of lean production systems, traditionally they have lower processing costs, fewer defects, greater flexibility, and are able to bring new or improved products to the markets more quickly. – Processing and movement of materials occur just as needed, thus in small batches. – It was developed by the Toyota Motor Company in Japan Key elements to just in time – High quality levels – Production smoothing – Low inventories, Small lot sizes – Quick low -cost setups – Simple layout – Preventive maintenance – Multifunctional workers, Cooperative spirit – Few, reliable suppliers – Pull System of moving goods – Problem solving – Continual improvement High quality levels: Involves three part approach: 1. Designing quality into the product and process 2. Insist vendors provide high-quality materials 3. Make workers responsible for producing goods of high quality Production Smoothing: Activity must be carefully coordinated because there is very little slack, to achieve a meshing of the different operations and the movement of goods and materials from the supplier to the final output Low Inventories: 1. Saving of space- warehouse space and space in work areas 2. Inventories are buffers that tend to cover up recurring problems that are never resolved 3. Major problems must have already been resolved, it is necessary to be able to deal quickly with problems when they do occur Small Lot Sizes: When problems with quality occur, inspection and rework costs are less because there are fewer items in al lot to inspect and rework. Small lots also permit greater flexibility in scheduling. This flexibility enable JIT systems to respond more quickly to demand for output. Quick, Low-Cost Setups: Small lots and changing product mixes require frequent setups. Workers are trained to do their own setups. Setup tools and equipment and setup procedures must be simple and standardized. Layout: JIT systems use layouts based on product requirements. Equipment is arranged to handle streams of similar products with similar processing or assembly requirement. This avoids having to move large lots of parts around the work area; parts pass in small lots from one work center to the next with little or no waiting. Preventative Maintenance: Minimize breakdowns, companies use preventative maintenance, which emphasize maintaining equipment in good operating condition and replacing parts that have a tendency to fail before they actually fail. Maintaining critical spare parts, and making provisions. Multifunctional Workers: Workers are trained to operate machinery, handle setups, and perform maintenance and minor repairs. Workers are responsible for checking the quality of their own work and monitoring the quality of the work they receive as input to their stations. Workers expected to participate in problem solving. Training costs and time increase. Cooperative Spirit: JIT systems require a cooperative spirit among workers, managers and vendors. Requires an appreciation of the importance of cooperation and a tenacious effort by management to instill and maintain that spirit. Pull versus Push: Push System: when work is finished at a workstation, the output is pushed to the next station, or in the case of the final operation, it is pushed on to final inventory Pull System: system for moving work where a workstation pulls output from the preceding station as it is needed. Work is moved in response to demand from the next stage in the process. Each workstation produces just enough to meet demand of the next station, this done through KANBAN cards. Problem Solving: Problems that occur during production must be dealt with quickly. Teams may use brainstorming to generate possible solutions, They may use various statistical tools and quality control techniques (sampling, control charts etc). Management at all levels must actively support and become involved. Continual Improvement: Central theme is to work toward continual improvement of the system-reducing inventories, setup cost and time, improving quality, output waste, and cutting waste and inefficiency. MRP versus KANBAN Kanban: card or other device that communicates demand for work or materials to the preceding station. Kanban systems generally involve very small lot sizes, short lead times, and high-quality output and they exemplify teamwork. It is essentially a two-bin type of inventory, supplies are replenished semi-automatically when they reach a certain level. MRP systems is more concerned with projecting requirements and with planning and leveling capacity via the computer ability to handle complex planning and scheduling quickly and efficiently. Benefits of JIT Systems: 1. Reduced levels of in-process inventories, purchased goods, and finished goods. 2. Reduced space requirements. 3. Increased product quality and reduced scrap and rework. 4. Reduced lead times. 5. Greater flexibility. 6. Smooth production flow. 7. Increased productivity levels. 8. Worker participation. Obstacles to Conversio
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