BUS606: Operations and Supply Chain Management

Think of a maintenance department as serving internal customers: the various departments and workers in the company.

Lean is different from the traditional western, mass production model that relies on economies of scale to create profits. The more you make the cheaper the product will become, the greater the potential profit margin. It is based on predictions of customer needs, or creating customer needs. It has difficulty dealing with unusual changes in demand.

Lean production responds to proven customer demand. Pull processing – the customer pulls production. In a mass system the producer pushes product onto the market, push processing.

Building a long-term culture that focuses on improvement.

Respect for workers better trained and educated, more flexible

Lean is a philosophy that focuses on the following:

1. Meeting customer needs
2. Continuous, gradual improvement
3. Making continuously better products
4. Valuing the input of workers
5. Taking the long term view
6. Eliminating mistakes
7. Eliminating waste

Wastes: using too many resources (materials, time, energy, space, money, human resources, poor instructions)
Wastes:

1. Overproduction
2. Defects
3. Unnecessary processing
4. Waiting (wasting time)
5. Wasting human time and talent
6. Too many steps or moving aroundExcessive transportation
7. Excessive inventory

Lean production includes working with suppliers, sub contractors, and sellers to stream line the whole process.

The goal is that production would flow smoothly avoiding costly starts and stops.

The idea is called just in time "produce only what is needed, when it is needed, and only in the quantity needed." Production process must be flexible and fast.

Inventory = just what you need

In mass production = just in case. Extra supplies and products are stored just in case they are needed.

Terminology:

Process simplification –  a process outside of the flow of production

Defects – the mass production system does inspection at the end of production to catch defects before they are shipped. The problem is that the resources have already been "spent" to make the waste product" Try to prevent problems immediately, as they happen, then prevent them. Inspection during production, at each stage of production.

Safety – hurt time is waste time

Information – need the right information at the right time (too much, too little, too late)

Principles:

Poka-yoke – mistake proof determining the cause of problems and then removing the cause to prevent further errors

Judgment errors – finding problems after the process

Informative inspections – analyzing data from inspections during the process

Source inspections – inspection before the process begins to prevent errors.