Chapter
6
Lean Systems
DISCUSSION QUESTIONS
1. a. Many students buy into lean systems as a philosophy until they are faced with the
prospect of having their own work evaluated on the basis of performance of a group
2. Aspects of lean systems that have proven troublesome for some U.S. users are
realignment of managerial reward systems, restrictive labor contracts, plant layouts,
3. A lean system requires a low level of capacity slack and increasingly smaller levels
of inventory. In order to reap the waste-reduction benefits of lean uniformly across
the supply chain, all members of the supply chain must participate. Otherwise, one
4. The answer here will vary. Most students will draw a simple process they are very
familiar with. For example ordering an item at a fast food restaurant: Receive order
– gather materials (buns, meat, cheese, condiments) – assemble materials – serve
order.
• PART 1 • Managing Processes
6-2
PROBLEMS
Strategic Characteristics of Lean Systems
1. 1. Swenson Saws
a. The greatest common divisor given the ratios of demand is 2. Thus:
Bow Saw = 1
Frame Saw = 1
2. Harvey Motorcycles
a. What is the cycle time for the assembly line?
cr
= = =
=
1 7 00555
333
hours
126 motorcycles hours
motorcycle
minutes
motorcycle
.
.
b. If Harvey uses small-lot mixed model production, what is the batch size of each
model before the production cycle is repeated? The greatest common divisor of
the production requirements for each motorcycle is 6. Therefore,
Tiger = 5
c. G L G L T G L G L G L T G L G T G L T G T—other sequences are possible.
d. Now the greatest common divisor is 13. Therefore,
Golden = 4
3. Farm-4-Less
a. Each cycle contains 4SM, 2GC and 2 LT. In total each cycle produces 8
b. Per cycle= 4 SM, 2 GC and 2 LT are produced. If there are 480 minutes
Lean Systems
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CHAPTER 6
6-3
The Kanban System
4. Spradleys’ Sprockets
5. LeWin
a. Solving for implied policy variable,
k =
( ) ( )
1,800 1.05 0.003 300 1
12 300
a++


=
( ) ( )
( )
12 300
1 1.0256
1,800 1.05 0.003 300
a+ = =
+


1.0256 1 0.0256
= − =
b. Reduction in waiting time
( )( )
1,800 0.90 1.0256 1,846 1,661.47
11 300 300
ww
+

+

==
1,846 3,300 1,661.47w=−
0.888 daysw=
The reduction in waiting time is:
105 0888
105 1543%
. .
..
−
( ) =
6. Gadjits and Widjits
a. Containers for gadjits
k =
)09.01)(06.009.0)(3(800 ++
b. Containers for widjits
k =
• PART 1 • Managing Processes
6-4
)08.01)(20.014.0)(2(800 ++
7. Gestalt, Inc.
)60)(60(8
)30(150
=
=0.156
20.0
8
6.1 ==w
days
k =
8 =
30
)1.1)(15625.020.0( +d
== )1.1(35625.0
240
d
612.44 or 612
8. Jittery USPS
)60)(60(8
375
=
= 0.01302 days
0521.0
)60(8
25 ==w
days
c
375
9. January’s container needs
k =
k =
200
)15.01)(10.016.0)(4(200,1 ++
= 7.16 or 8 containers
10. Jitsmart
11 days(lead time plus processing time)
36 units(demand) + [0.25(safety stock
variable)
396] = 396 units + 99 units = 495 units
Lean Systems
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CHAPTER 6
6-5
11. Markland First National Bank
a. Processing time = 24 min/day
Waiting time = 120 min/day
Total processing and waiting = 144 min/day
b. Waiting time is muda and therefore, if eliminated, would leave only 24 mins of
Value Stream Mapping
12. Jensen Bearings Inc.
a. The plant now holds 1 day of raw material.
b. There are [(1050+1200)/2500] = 0.9 weeks or [0.9*5] = 4.5 days of work in
• PART 1 • Managing Processes
6-6
13. Anguilla Manufacturing
a. The average processing time per unit and the capacity at each step is calculated as
follows:
i. Batch size = 10
Saw processing time in seconds per part = 20 seconds + (3 minutes x 60
seconds)/10 parts = 38 seconds per part. Capacity in parts per shift
= (436 minutes/shift x 60 seconds/minute)/38 seconds per part
=688 parts per shift.
Batch Size = 10
Saw
Sand
Drill
Assemble
Mark
Cycle time in seconds/part
20
15
30
25
10
Setup time in seconds/part
18
24
0
18
48
Processing time in
seconds/part
38
39
30
43
58
Capacity in parts per shift
688
670
872
608
451
ii. Batch size = 20
Calculations are performed similarly but with a batch size of 20.
Batch Size = 20
Saw
Sand
Drill
Assemble
Mark
Cycle time in seconds/part
20
15
30
25
10
Setup time in seconds/part
9
12
0
9
24
Processing time in
seconds/part
29
27
30
34
34
Capacity in parts per shift
902
968
872
769
769
iii. Batch size = 30
Calculations are performed similarly but with a batch size of 30.
Lean Systems
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CHAPTER 6
6-7
Batch Size = 30
Saw
Sand
Drill
Assemble
Mark
Cycle time in seconds/part
20
15
30
25
10
Setup time in seconds/part
6
8
0
6
16
Processing time in
seconds/part
26
23
30
31
26
Capacity in parts per shift
1006
1137
872
843
1006
iv. Batch size = 40
Calculations are performed similarly but with a batch size of 40.
Batch Size = 40
Saw
Sand
Drill
Assemble
Mark
Cycle time in seconds/part
20
15
30
25
10
Setup time in seconds/part
4.5
6
0
4.5
12
Processing time in
seconds/part
24.5
21
30
29.5
22
Capacity in parts per shift
1067
1245
872
886
1189
b. The bottleneck operation and line’s processing capacity for each batch size listed in
part a follows:
Batch size = 10: Mark is the bottleneck and the line can process 451 units per shift
c. Batch sizes beyond 40 units will not increase the line’s processing capacity further
as Drill, the bottleneck at a 40 unit batch size, does not require a set up time.
14. Ormonde Inc.
a. The cell’s current inventory level is [400+500+200+1000] = 2100 units
b. The cell’s takt time is 2.37 minutes per unit.
• 1305mins/550units of demand per day = 2.37 minutes per unit.
c. The cell’s production lead time is: .73+.91+.36+1.82 = 3.82 days
• Raw Material lead time = [400/550]= .73 days
d. The cell’s processing time is [120+100+140] = 360 seconds.
e. The cell’s capacity is 559.3 units per day (slightly larger than current demand
level). • Punching is the bottleneck
• PART 1 • Managing Processes
6-8
CASE: COPPER KETTLE CATERING *
A. Synopsis
Copper Kettle Catering, owned by Wayne and Janet Williams, is a full-service
catering business with services ranging from the delivery of box lunches to the
serving of dinner for weddings and large office parties. The case describes the two
primary market segments, “deliver only” and “deliver and serve.” Information that
details these market segment characteristics along with descriptions of the
operations and CKC’s competitive priorities is provided. The business is feeling
competitive pressures in the form of shorter lead times to respond to customer
demands, increased flexibility of product/service offerings, and increased focus by
customers on the value received for their catering dollar. A major issue proposed to
the students is whether the concepts of lean systems are applicable to this service
business.
B. Purpose
The major purpose of this case is twofold:
1. To provide a framework within which the concepts underlying the lean systems
approach to the management of material flows can be discussed.
2. To lead students to the understanding that lean system concepts are applicable to
service operations as well as to manufacturing.
Specific issues that students need to address include:
❑
Process management considerations
—Repetitive nature of the tasks
—Well-defined material flows
—Close proximity of work-centers layout
❑
Inventory management
—Lot sizes
—Aggregate levels to maintain
—Space/spoilage considerations
❑
Scheduling of orders and workers
—Level of stability in the schedule
—HRM issues, including reward and recognition, skills required,
cross training
—Interaction with suppliers
* This case was prepared by Dr. Brooke Saladin, Wake Forest University, as a basis for classroom
discussion.
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CHAPTER 6
6-9
C. Analysis
For an effective discussion of the case issues, following the assignment questions at
the end of the case works best.
Question 1
There is a wide range of operations that are conducive to the use of lean systems
concepts, including service operations. In general, the focus of lean systems
includes high quality with respect to both inputs and outputs of the processes;
reduction of waste; quick response times by the reduction of setup times and the
simplification of processes; and a reduction in costs by lowering inventory-level
requirements and maintaining quality. All of these are consistent with the objectives
and improvements the Williams’ desire for CKC.
The processes at CKC have several characteristics that support the implementation
of lean systems. They include:
❑
Having a demand pull system where orders placed by the customer cause
materials to be “pulled” through the system. “Deliver only” orders are more
reactive, having a relatively short lead time in which to respond. The “deliver
and serve” orders are booked much farther in advance, and firm planned
schedules can be established on a weekly basis.
❑
Workers are very flexible and, for the most part, interchangeable, except maybe
for the cooks.
❑
The menu is still relatively simple, with limited variety allowing for some
standardization.
❑
The processes seem to be “visible,” in that workers can see the entire operation
and track the flow of materials easily.
❑
The processes are repeatable and conducive to standardization.
❑
Lot sizes would seem to be small and setup times relatively short.
❑
The overall load on the system, that is, orders, is relatively uniform.
❑
Quality of materials and output is at a high level.
Question 2
There are a number of possible barriers that CKC may face if the concept of lean
systems is pursued.
❑
It was mentioned that the facilities were set up in a job process configuration
that may be less suitable for lean systems than a line flow configuration.
❑
Overall demand is indicated to be stable; however, the variability in each order
may inhibit standardization. In some respects this operation may be thought of
as a “custom–job shop.”
❑
Supplier relationships will be extremely important to maintain both quality and
quick response. Some suppliers now require CKC to pick up their orders.
❑
The two types of markets, deliver only and deliver and serve, really require two
different types of operating systems to focus on different customer
requirements. The relative importance of menu variety and response time differ
noticeably in each market.
• PART 1 • Managing Processes
6-10
Question 3
There are a number of recommendations students may present that take advantage
of the use of lean systems concepts and principles. Some of the ones to expect
include:
❑
If possible, split the operations to focus independently on the two market
segments: deliver only and deliver and serve. Lay out the processes in a flow
pattern where the entire process for each market segment is visible to the
workers. Also, lay out the necessary tasks and equipment so that cycle times can
be reduced to shorten lead times.
❑
CKC can begin to employ lean systems signaling techniques for the movement
of materials such as color-coded, standard-sized trays.
❑
Begin a cross-training program to enhance the flexibility of the workers so they
can be assigned where needed.
❑
Continue to build supplier relationships by developing supplier alliances,
reducing the total number of suppliers, and sharing information on demand
patterns and material needs.
❑
Try to limit the menu selection, especially for deliver-only orders where
response time is more important. This will also help reduce inventory levels.
❑
Maintain good housekeeping policies, not only for quality and health safety
reasons but also for enhancing visibility within the processes and ensuring the
prompt availability of needed tools and materials. It also helps in the
development of the proper attitudes about work and the workplace.
These are but a few of the possible recommendations. The students will have many
more. The focus of their recommendations usually revolves around these primary
areas: process management issue and inventory management.
D. Teaching Suggestions
As mentioned in the analysis section, an effective way to discuss this case is to
follow the three case questions. The case is designed to be used as a “cold–call” in–
class exercise. It is short enough to read in 10 minutes. Given that the students read
the lean systems chapter prior to coming to class, they should be able to discuss the
three questions posed at the end of the case. The intent is to have the students
discuss the major concepts of lean systems and to recognize appropriate
applications.
The case should take no more than 30 minutes to explore fully. Spend the first 10
minutes discussing factors concerning CKC’s operations that are conducive to lean
systems. Put these on the left side of the board. Then list the possible barriers to
lean systems implementation on the right side of the board. This should take
another 10 minutes. Finally, ask for recommendations and put these in the center of
the board. You can then quickly relate each recommendation to the implementation
factors both pro and con to the left and right. Recommendations should build on the
strengths and address the barriers. Exhibit TN.1 shows the layout of the board.
Lean Systems
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CHAPTER 6
6-11
EXHIBIT TN.1
Sample Board Plan Layout
Barriers to the
Factors Supporting Lean
Systems
Recommended Actions
Implementation of Lean
Systems