Fundamentals of Industrial Plants Prof. Andrea Sianesi academical year 2011/2012

1. Fundamentals of Industrial Plants Prof. Andrea Sianesiacademical year 2011/2012 Just in time

2. Perspectives Jit as global managerial phylosophy Jit as a set of methodologies for the operations Jit as a production planning technique Andrea Sianesi

3. JIT as global managerialphylosophy • Veryclose to Total QualityMangement • Building blocks (3C): • Customerorientation • Continuousimprovement • Cooperation Andrea Sianesi

4. Basic approach Long termperspective Production in flow Pull Loadbalancing (heijunka) Stop in case of problem (jidoka) Standard work Visual control Reliability Cudden the leader Teamwork Cooperation with suppliers Deeplyanalyseeveryprocess (genchigenbutsu) Quickdecision Continuousimprovement (kaizen) Andrea Sianesi

5. From the phylosophy to the practices • Seek the simplicity: • to simplify complex problems ids more effective and efficient rather then to build complex solutions to solve them • Seek the stability • Seek repetitiveness • Seek cooperation • Waste reduction • Muri, Muda, Mura (... sometimes nicknamed as “tora, tora, tora”) • Muri = excess, e.g. the EOQ approach, since EOQ = 1 • Muda = waste, e.g. sampling quality control, since defective units must be prevented (a priori) rather than detected (a posteriori) • Mura = unevenness, e.g. safety stocks since buffers are to be removed to expose the variability and correct the underlying causes Andrea Sianesi

6. Waste: The seven capital sins (Taiichi Ohno, Toyota Motors Company) The waste of making too many units 2. The waste of waiting time at a machine 3. The waste of transporting units 4. The waste of processing waste 5. The waste of inventory 6. The waste of motion 7. The waste of making defective units Andrea Sianesi

7. Stock as a waste • Foreword: • Inventories are required wherever two consecutive steps (i.e. a supplier and a customer) within a supply chain do not share (the same) objectives • Inventories cover (hide) the problems of supply chains as water in the sea hides the rocks • Investing in fixed capital (machinery, equipment) is better than investing in operative working capital. Andrea Sianesi

8. Stock as a wastethathides the problems Andrea Sianesi

9. Where and how to fight the wastes Andrea Sianesi

10. Where and how to fight the wastes Andrea Sianesi

11. How to reduce stock • Kanban approach is useful to reduce (to zero) the inventory level • It is a pull management technique • It allows the visual production management, through simple rules • It allows the supply chain to be self-regulated when facing small environmental sources of variance Andrea Sianesi

12. Kanbantechnique • Daily production levelling (molthly production divided for the number of days in a month) • Seuqencing of the finalassembly line • Kanban to drive the production befor the finalassembly line Andrea Sianesi

13. JIT Kanban management Succeeding stage address Number of kanban issued Preceding stage address Part number and description Product family (group) Container type Container capacity • Kanban lay-out • Literal meaning of kanban is signboard (signal card, sign, badge, visible record, visible plate, billboard or something like these)

14. JIT Kanban management Kanban mailbox Supplier area Storage area Customer area Customer area Supplier area 1 Line 1 2 4 3 Line 2 Conveyance (withdrawal) kanbans Storage area Conveyance kanbans flow Production kanbans flow Empty containers Production kanbans Full containers

15. JIT Kanban management Kanban mailbox Customer area Supplier area 1 Line 1 2 4 3 Line 2 An empty container (with the corresponding conveyance kanban attached) is sent to the storage area for replenishment Storage area Empty containers Full containers • According to the “pull” nature of kanban approach, replenishment is triggered by downstream consumption

16. JIT Kanban management Kanban mailbox Customer area Supplier area 1 Line 1 2 4 3 Line 2 Storage area Empty containers Production kanban is removed Full containers • Within the storage area, the conveyance kanban is switched with a corresponding (i.e. referred to the same part number) production kanban

17. JIT Kanban management Kanban mailbox Customer area Supplier area 1 Line 1 2 4 3 Line 2 Storage area Empty containers Full containers • The full container (with the corresponding conveyance kanban attached) is sent to the customer area. In this way replenishment takes place

18. JIT Kanban management Kanban mailbox Customer area Supplier area 1 Line 1 2 4 3 Line 2 Storage area Empty containers Full containers • The (removed) production kanban is sent to the kanban mailbox (supplier area) to point out (i.e. to signal) that “something” originated downstream consumption

19. JIT Kanban management Kanban mailbox Customer area Supplier area 1 Line 1 2 4 3 Line 2 Storage area As a result, a (new) full container (with the corresponding production kanban attached) is ready Empty containers Full containers • Production kanban is attached to an empty container withdrawn from the storage area and it is sent to the supplier area for processing

20. JIT Kanban management Kanban mailbox Customer area Supplier area 1 Line 1 2 4 3 Line 2 Storage area The inventory level is again the same as before downstream consumption took place Empty containers Full containers • The full container is sent to the storage area

21. JIT Kanban management Kanban mailbox Customer area Supplier area 1 Line 1 2 4 3 Line 2 Storage area 2 4 4 2 5 1 Empty containers 3 6 7 3 Full containers • Summary

22. The kanban board Product “A” Product “B” Product “C” Customer area Supplier area 1 Line 1 2 Storage area 4 3 2 4 4 Line 2 2 5 1 Empty containers 3 6 7 Full containers 3 How can the supplier workcentre manager prioritize kanbans (of different part numbers) to select the next lot to be processed (i.e. for dispatching purposes) ? Instead of using the kanban mailbox, the kanban board has to be introduced • When the supplier workcentre is able to produce more than one product (i.e. very often) a problem arises:

23. The kanban board Product “A” Product “B” Product “C” Green zone Area of idleness and peacefulness. “Do not produce anything ” White zone Area of planning. “Produce to minimize set-ups etc.” Red zone Area of urgency and hurry. “Produce as son as you can, to avoid downstream stock-out” • To give priorities to kanbans of different products, the board is (traditionally) divided into 3 zones

24. JIT Kanban management • The Kanban rules • No parts may be made upstream (in the supplier area) unless there is a production kanban authorizing it. Supplier comes to halt rather than making parts not yet asked for • Workers may do maintenance or work on improvement projects when there are no production kanban in the mailbox / on the board • There are precisely one conveyance kanbanand one production kanban for each container • The number of containers (with kanban) per part number is a carefully considered management decision • Only standard containers may be used, and they always are filled with the prescribed (small) quantity – no more, no less • With such careful control of quantities per container, as well as the number of containers per part number, inventory control is simple