Synchronous Management or Synchronous Manufacturing Chapter 5 or 7

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Synchronous Management or Synchronous
ManufacturingChapter 5 or 7

• Kevin Walker
• Harold Price
• Chad Bachman and Jeff Denney

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Evolution of Synchronous Manufacturing

• Concept of Waste
• What is waste?
• Book Definition Any activity in an organization
  that does not contribute to the common
  companywide goal of making money
• Waste elimination is a PRIME OBJECTIVE
• Everything that is above and beyond what a
  company needs to be successful

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Henry Ford

• Definition from Today and Tomorrow
• Having a stock of raw materials or finished goods
  in excess of requirements
• Actually included all categories of inventory
  stock
• Component parts, subassemblies, finished goods,
  materials

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Lessons From History

• THE FORD SYSTEM VS.
• JAPANESE JUST-IN-TIME

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Lessons From History

• Fords Philosophy on Management and Productivity
• Fully Integrated Manufacturing System
• Eliminated lost motion
• Large companies stay within a certain size or it
  will be uncontrollable-a large plant is not
  economical!

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Fords System

• Maintaining a Product Flow
• Work to the worker not worker to the work
• People shouldnt leave their worksite
• Machines do not break down because workers are
  constantly cleaning and making repairs

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Fords System

• Necessity of Good Material Control
• New System-planned a date for changeover
• Planned use exact amount of materials to that
  day-changeover would not cause stop in production
• Time Waste VS. Material Waste
• You cant have time salvage
• Find the balance of material and time needed

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Fords System

• Role of Quality and Inspection
• Key to production is Inspection
• It simplifies management
• Every part at every stage is inspected-eliminates
  chance of faulty parts getting into assembly

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Fords System

• Role of Labor
• System of Management NOT a system
• Is method of planning of what should be done
• All workers should follow the plans that are laid
  out for them
• In summary Ford employed Just-In-Time

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Japanese Just-In-Time

• Led by Toyota
• Used Fords methods with some minor improvements
• Concept of waste elimination fit well with
  Japan-has limited resources
• JIT Philosophy guided the reduction of scrap,
  rework, and inventory

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Japanese Just-In-Time

• Major development in JIT Philosophy
• Larger role and responsibility for the worker
• Must maintain equipment
• Develop new ways to process
• Be a problem solver

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What went wrong?

• Why has U.S. fallen behind in International
  competition?
• No competition meant
• Wasteful practices and unsound policies
• Meet demand at any cost
• Worldwide competition occurs
• U.S. companies focused on cost
• Lost sight of Fords lessons of synchronized
  production flows

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Time and Product Value

• According to Ford
• Time starts when the raw material comes from the
  Earth to the moment the customer gets the
  finished product
• More time used for production and sales means
  less value the product has

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The Product Mix

• How did Ford achieve efficiency?
• They can have it (car) in any color they want,
  as long as its black
• Continuous Product Flow
• Most efficient form of production
• Identical products in batch

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Philosophy of Sync. Manuf.

• Book Definition
• An all-encompassing manufacturing management
  philosophy that includes a consistent set of
  principles, procedures, and techniques where
  every action is evaluated in terms of the common
  global goal of the organization

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How Do We Implement It?

• 3 Steps
• Define the common goal so that it is
  understandable and meaningful to everyone
• Develop what will cause individual actions to
  relate to the common goal
• Manage the various actions to achieve the
  greatest benefit

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A River Analogy

• The flow of the river
• The water is never stagnant
• Water depth is the same as inventory
• Boulders and trees impede the flow of material

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The Flow of the River (cont.)

• Periods of floods and droughts act as flow
  problems for the river
• Lower water levels keep the stagnant pools
  smaller. High levels keep the obstacles out of
  the way

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The Flow of the River (cont.)

• In rivers, trees visible above the water level
  can easily be avoided. In a factory, visible
  bottlenecks can be used efficiently.
• The problem comes when you have a tree hiding
  just under the surface of the water.
• In a factory, bottlenecks can very easily be
  hidden or just unrecognized.

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The Traditional Approach

• Keep Just in Case inventory
• Used to not solve but to cover up problems
• Gives managers a feeling of security
• Just in Case contradicts Just in Time

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Traditional Batch Size

• Total Setup Costs
• Large batch sizes allows less setups
• Total Carrying Costs
• Small batch sizes allows less work in progress
• Economic Order Quantity (EOQ)
• The optimum batch size to minimize Total Costs

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EOQ Batch Size
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Understanding Batch Sizes

• Distinction of Resources
• Non-Bottlenecks
• Extra capacity allows for small batch sizes
• Bottlenecks
• Time is money and larger batch sizes saves time
  and money
• Single Batch Size Concept
• on an assembly line, Batch sizes are BOTH very
  large and one at a time

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Process and Transfer Batches

• Process Batch
• The quantity of a product processed at a resource
  before that resource changes over to produce a
  different product
• Transfer Batch
• The quantity of units that are moved at the same
  time from one resource to the next

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Synchronous Manufacturing Principles

• 1 - Do not focus on balancing capacities, focus
  on synchronizing the flow
• 2 - The marginal value of time at a bottleneck
  resource is equal to the throughput rate of the
  products processed by the bottleneck
• 3 - The marginal value of time at a
  non-bottleneck resource is negligible
• 4 - The level of utilization of a non-bottleneck
  resource is controlled by other constraints
  within the system
• 5 - Resources must be utilized, not simply
  activated
• 6 - The transfer batch need not, and many times
  should not, equal the process batch
• 7 - A process batch may be variable both along
  its route and over time

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Just-In-Time Systems

• Japanese success due to implementation of
  just-in-time systems
• Concept of Just-in-time systems
  - Finished good should be
  produced just in time to be sold, subassemblies
  should be completed just in time to go into
  subassemblies, and purchased materials should
  arrive just in time to be transformed into
  fabricated parts.

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Kanban Systems

• Logistical ropes connect the various work
  stations and drive their JIT systems.
• Set up MPS which is determined by market demand.
• The projected daily demand for each product is
  the amount that is scheduled to be produced for
  that day.

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Kanban Systems, cont.

• The smoothed production schedule is then set for
  a fixed period of time-normally one month.
• Then final assembly is scheduled in order to meet
  the daily production requirements.

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Kanban Systems, cont.

• Toyota, which uses a dual-card kanban system, has
  its own inbound and outbound material storage
  areas. inbound stock area-
  holds material that is ready for processing at
  the work station.
  outbound stock area- material that
  has been processed and is stored until needed at
  the next downstream station.

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Kanban Systems, Cont.

• Conveyance kanban- a card that identifies needed
  material, the feeding workstation, and the
  receiving workstation.
• Production kanban- Is the signal and authority
  for the work station operators to replenish the
  materials just forwarded to the from the outbound
  stock area.

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Why Kanban systems work

• Applies the basic principles of synchronous
  management.
• Principal 1 Do not focus on balancing
  capacities, focus on synchronizing the flow.
• Principle 4 The level of utilization of a
  non-bottleneck resource is controlled by other
  constraints within the system.
• Principle 5 Resources must be utilized, not
  simply activated.

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Why Kanbans work, cont.

• Principle 6 A transfer batch may not, and many
  times should not, be equal to the process batch.
• Principle 7 A process batch should be variable
  both along its route and over time.

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Limitations of the JIT Approach

• The number of processes to which JIT logistical
  systems such as kanban may be successfully
  applied is limited.
• The effects of disruptions to the product flow
  under a kanban system can be disastrous to
  current throughput.

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Limitations of the JIT Approach

• The implementation period required for JIT/kanban
  systems is often lengthy and difficult.
• The process of continuous improvement inherent in
  the JIT approach is system wide and therefore
  does not focus on the critical constraints.

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Graph for Chad if he wants
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Chapter 7