MGT530 M11-Discussion Forum: Lean Operations and Scheduling

Maintenance

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14s-1

You should be able to:
LO 14s.1 Explain the importance of maintenance in production systems
LO 14s.2 Describe the range of maintenance activities
LO 14s.3 Discuss preventive maintenance and the key issues associated
with it
LO 14s.4 Explain breakdown maintenance and name the key issues
associated with it
LO 14s.5 State how the Pareto phenomenon pertains to maintenance
decisions

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 Maintenance
 All activities that maintain facilities and equipment in

good working order so that a system can perform as
intended
 Maintenance activity categories:
 Buildings and grounds
 Equipment maintenance

LO 14s.1

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 Reactive:
 Breakdown maintenance
 Dealing with breakdowns or problems when they occur

 Proactive:
 Preventive maintenance
 Reducing breakdowns through a program of lubrication,
adjustment, cleaning, inspection, and replacement of worn
parts

LO 14s.2

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LO 14s.2

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 The goal of preventive maintenance is to reduce the

incidence of breakdown or failures in the plant or
equipment to avoid the associated costs
 Loss of output
 Idle workers
 Schedule disruption
 Injuries
 Damage to other equipment, products, or facilities
 Repairs
 Inventories of spare parts
 Repair tools and equipment
 Repair specialists

LO 14s.3

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 The goal is to strike a balance between the cost of

preventive maintenance and the cost of breakdown
 The amount of preventive maintenance, therefore, is a
function of the expected frequency of breakdown, the
cost of breakdown, and the cost of preventive
maintenance

LO 14s.3

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 The frequency of breakdown of a machine per month is shown in the

table. The cost of a breakdown is $1,000 and the cost of preventive
maintenance is $1,250 per month. If preventive maintenance is
performed, the probability of a machine breakdown is negligible.
Should the manager use preventive maintenance, or would it be
cheaper to repair the machine when it breaks down?

LO 14s.3

Number of breakdowns

0

1

2

3

Frequency of occurrences

.20

.30

.40

.10

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Number of breakdowns

0

1

2

3

Frequency of occurrences

.20

.30

.40

.10

Expected number
= 0(.20) + 1(.30) + 2(.40) + 3(.10) = 1.4
of breakdowns

Expected benefit of
preventive maintenanc e

=

Expected cost of
breakdown

−

Cost of preventive
maintenanc e

= 1.4($1,000 ) – $1,250
= $150

LO 14s.3

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 Suppose the average time before breakdown is normally distributed

with a mean of 3 weeks and a standard deviation of .60 weeks. If
breakdown cost averages $1,000 and preventive maintenance costs $250,
what is the optimal maintenance interval?

Preventive cost
$250
=
= .25
Breakdown cost $1,000
 Find the number of standard deviations from the mean represented by

an area under the normal curve of .25
 Using the standard normal table, it is −0.67
 Use this value to determine the maintenance interval

Mean + z (standard deviation) = 3 + (-.67)(.60) = 2.598 weeks
LO 14s.3

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 Predictive maintenance
 An attempt to determine when best to perform preventive
maintenance activities
 Ideally, preventive maintenance will be performed just prior to a
breakdown or failure because this will result in the longest
possible use of facilities or equipment without a breakdown
 Total productive maintenance
 JIT approach where workers perform preventive maintenance on the
machines they operate

LO 14s.3

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 Maintenance problems are sometimes designed

into systems:
 Poor design
 Designer have accorded other aspects of design greater

importance
 Cost
 Appearance is more important than maintenance activities

LO 14s.3

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 Approaches to dealing with breakdowns:
 Use of standby or backup equipment
 Inventories of spare parts are maintained
 Use operators who are able to perform at least minor

repairs on the equipment they operate
 Have repair people who are well trained and readily
available to diagnose and correct problems

LO 14s.4

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 When breakdowns become frequent and/or

costly:
 What is the cost of replacement compared to continued

maintenance?
 Issues:
 Predicting breakdowns
 Technological change
 System disruptions
 Training employees on the use of new equipment

 Forecast of future demand

LO 14s.4

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 Breakdown programs are most effective when they

take into account the degree of importance of a piece
of equipment has in the operations system, and the
ability of the system to do without it for a period of
time.
 The Pareto phenomenon exists in such situations:
 Few pieces of equipment will be extremely important to the

functioning of the system
 These justify considerable effort and/or expense
 Some will require moderate effort and/or expense
 Many will justify minimal effort and/or expense

LO 14s.5

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JIT and Lean
Operations

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written consent of McGraw-Hill Education.

14-1

You should be able to:
LO 14.1
LO 14.2
LO 14.3
LO 14.4
LO 14.5
LO 14.6

Explain the terms lean operations and JIT
Describe the main characteristics of lean systems
List the five principles of the way lean systems function
List some of the benefits and some of the risks of lean operation
Describe the Toyota Production System (TPS)
List the three goals of a lean system and explain the importance of
each
LO 14.7 List the eight wastes according to lean philosophy
LO 14.8 Identify and briefly discuss the four building blocks of a lean
production system
LO 14.9 Describe key lean improvement tools
LO 14.10 Outline considerations for successful conversion from a traditional
system to a lean system
LO 14.11 Describe some of the obstacles to lean success
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14-2

 Lean operation
 A flexible system of operation that uses considerably

less resources than a traditional system
 Tend to achieve
 Greater productivity

 Lower costs
 Shorter cycle times
 Higher quality

 Just-in-Time
 A highly coordinated processing system in which goods

move through the system, and services are performed,
just as they are needed
LO 14.1

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14-3

 A number of characteristics are commonly found in

lean systems:
 Waste reduction
 Continuous improvement
 Use of teams
 Work cells
 Visual controls
 High quality
 Minimal inventory
 Output only to match demand
 Quick changeovers
 Small lot sizes
 Lean culture
LO 14.2

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14-4

 Five principles embody the way lean systems

function:
1.
2.
3.
4.
5.

LO 14.3

Identify customer values
Focus on processes that create value
Eliminate waste to create “flow”
Produce only according to customer demand
Strive for perfection

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14-5

 Key benefits
 Reduced waste
 Lower costs
 Increased quality
 Reduced cycle time
 Increased flexibility
 Increased productivity

 Critical risks
 Increased stress on workers
 Fewer resources available if problems occur
 Supply chain disruptions can halt operations

LO 14.4

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14-6

 Lean operations began as lean manufacturing, also known

as JIT, in the mid-1900s
 Developed by Taiichi Ohno and Shigeo Ohno of Toyota
 Focus was on eliminating all waste from every aspect of the process
 Waste is viewed as anything that interferes with, or does not add

value to, the process of producing automobiles
 Many terms used by Toyota, such as Kanban, Kaizen, and Muda, are
commonly used industry wide.

LO 14.5

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14-7

 The ultimate goal:
 Achieve a balanced system–
 One that achieves a smooth, rapid flow of materials and/or
work through the system

LO 14.6

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14-8

 The degree to which lean’s ultimate goal is achieved

depends upon how well its supporting goals are
achieved:
Eliminate disruptions
2. Make the system flexible
3. Eliminate waste, especially excess inventory
1.

LO 14.6

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14-9

 Waste
 Represents unproductive resources
 Eight sources of waste in lean systems:
1. Excess inventory
2. Overproduction
3. Waiting time
4. Unnecessary transporting
5. Processing waste
6. Inefficient work methods
7. Product defects
8. Underused people

LO 14.7

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14-10

 The kaizen philosophy for attacking waste is based upon these ideas:
1. Waste is the enemy, and to eliminate waste it is necessary to get the hands dirty
2. Improvement should be done gradually and continuously; the goal is not big
improvements done intermittently
3. Everyone should be involved
4. Kaizen is built on a cheap strategy, and it does not require spending great sums on
technology or consultants
5. It can be applied everywhere
6. It is supported by a visual system
7. It focuses attention where value is created
8. It is process oriented
9. It stresses that the main effort for improvement should come from new thinking and
a new work style
10. The essence of organizational learning is to learn while doing

LO 14.7

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14-11

 Product design
 Process design
 Personnel/organizational elements
 Manufacturing planning and control

LO 14.8

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14-12

 Four elements of product design important for lean

systems:
Standard parts
2. Modular design
3. Highly capable systems with quality built in
4. Concurrent engineering
1.

LO 14.8

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14-13

 Eight aspects of process design that are important for

lean systems:
1.
2.
3.
4.
5.
6.
7.
8.

LO 14.8

Small lot sizes
Setup time reduction
Manufacturing cells
Quality improvement
Production flexibility
A balanced system
Little inventory storage
Fail-safe methods

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14-14

 In the lean philosophy, the ideal lot size is one
 Benefits of small lot size
 Reduced in-process inventory
 Lower carrying costs
 Less storage space is necessary
 Inspection and rework costs are less when problems with quality do
occur
 Permits greater flexibility in scheduling
 Less inventory to ‘work off’ before implementing product
improvements
 Increased visibility of problems
 Increased ease of balancing operations

LO 14.8

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14-15

 Small lot sizes and changing product mixes require frequent

setups
 Unless these are quick and relatively inexpensive, they can be
prohibitive
 Setup time reduction requires deliberate improvement efforts
 Single-minute exchange of die (SMED)

 A system for reducing changeover time
 Group technology may be used to reduce setup time by capitalizing on

similarities in recurring operations

LO 14.8

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14-16

 One characteristic of lean production systems is

multiple manufacturing cells
 Benefits include
 Reduced changeover times

 High equipment utilization
 Ease of cross-training workers

LO 14.8

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14-17

 Quality defects during the process can disrupt the

orderly flow of work
 Autonomation (jidoka)
 Automatic detection of defects during production
 Two mechanisms are employed
1.
2.

LO 14.8

One for detecting defects when they occur
Another for stopping production to correct the cause of the
defects

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14-18

 Guidelines for increasing flexibility
1.
2.
3.
4.
5.
6.

LO 14.8

Reduce downtime due to changeovers by reducing changeover time
Use preventive maintenance on key equipment to reduce breakdowns and
downtime
Cross-train workers so they can help when bottlenecks occur or other
workers are absent
Use many small units of capacity; many small cells make it easier to shift
capacity temporarily and to add or subtract capacity
Use off-line buffers. Store infrequently used safety stock away from the
production area
Reserve capacity for important customers

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14-19

 Takt time
 The cycle time needed to match customer demand for final product
 Sometimes referred to as the heartbeat of a lean system
 Takt time is often set for a work shift
 Procedure:
1.
2.
3.

LO 14.8

Determine the net time available per shift
If there is more than one shift per day, multiply the net time by
the number of shifts
Compute the takt time by dividing the net available time by
demand

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14-20

Given the following information, compute the takt time: Total time per shift is
480 minutes per day, and there are two shifts per day. There are two 20-minute
rest breaks and a 30-minute lunch break per shift. Daily demand is 80 units.
1. Compute net time available per shift:
Total time
480 minutes
Rest breaks
−40 minutes
Lunch
−30 minutes
= 410 minutes per shift
2. Compute the net time available per day:
= 410 minutes per shift × 2shifts/day = 820 minutes per day
3. Compute the takt time:
Takt time = Net time available per day / Daily demand
= 820 / 80
= 10.25 minutes per cycle
LO 14.8

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14-21

 Lean systems are designed to minimize inventory

storage
 Inventories are buffers that tend to cover up recurring problems

that are never resolved
 Partly because they are not obvious
 Partly because the presence of inventory makes them seem less
serious

LO 14.8

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14-22

 Poka-yoke (Fail-safing)
 Building safeguards into a process to reduce or eliminate

the potential for errors during a process
 Examples:
 Electric breakers

 Seatbelt fastener warnings
 ATMs that signal if a card is left in a machine
 Designing parts that can only be assembled in the correct

position
 Electrical fuses and circuit breakers that interrupt electrical
supply if a circuit is overloaded
 Detectors at department stores that signal if a monitoring tag
hasn’t been removed from an item
LO 14.8

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14-23

 Five personnel/organizational elements that are

important for lean systems:
1.
2.
3.
4.
5.

LO 14.8

Workers as assets
Cross-trained workers
Continuous improvement
Cost accounting
Leadership/project management

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14-24

 Workers as assets
 Well-trained and motivated workers are the heart of the

lean system
 They are given greater authority to make decisions, but more

is expected of them

LO 14.8

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14-25

 Cross-trained workers
 Workers are trained to perform several parts of a process

and operate a variety of machines
 Facilitates flexibility
 Helps in line balancing

LO 14.8

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14-26

 Continuous improvement
 Workers in lean systems have greater responsibility for

quality, and they are expected to be involved in problem
solving and continuous improvement
 Lean workers receive training in
 Statistical process control
 Quality improvement
 Problem solving

LO 14.8

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14-27

 Cost accounting
 Activity-based costing
 Allocation of overhead to specific jobs based on their
percentage of activities

LO 14.8

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14-28

 Leadership/project management
 Managers are expected to be leaders and facilitators, not

order givers
 Lean systems encourage two-way communication
between workers and managers

LO 14.8

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14-29

 Seven elements of manufacturing planning and

control (MPC) are particularly important for lean
system:
1.
2.
3.
4.
5.
6.
7.

LO 14.8

Level loading
Pull systems
Visual systems
Limited work-in-process (WIP)
Close vendor relationships
Reduced transaction processing
Preventive maintenance and housekeeping

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14-30

 Lean systems place a strong emphasis on

achieving stable, level daily mix schedules
 MPS – developed to provide level capacity loading
 Mixed model scheduling
 Three issues need to be resolved
 What is the appropriate product sequence to use?
 How many times should the sequence be repeated daily?
 How many units of each model should be produced in each

cycle?

LO 14.8

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14-31

 Push system
 Work is pushed to the next station as it is completed

 Pull system
 A workstation pulls output from the preceding

workstation as it is needed
 Output of the final operation is pulled by customer
demand or the master schedule
 Pull systems are not appropriate for all operations
 Large variations in volume, product mix, or product design

will undermine the system

LO 14.8

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14-32

 Kanban
 Card or other device that communicates demand for work or

materials from the preceding station
 Kanban is the Japanese word meaning “signal” or “visible record”

 Paperless production control system
 Authority to pull, or produce, comes from a downstream

process
 Two main types of kanbans:

LO 14.8

1.

Production kanban (p-kanban): signals the need to produce parts

2.

Conveyance kanban (c-kanban): signals the need to deliver parts
to the next work center

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14-33

 Benefits of lower WIP
 Lower carrying costs
 Increased flexibility
 Aids scheduling
 Saves costs of scrap and rework if there are design

changes
 Lower cycle-time variability

LO 14.8

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14-34

 Lean systems typically have close relationships

with vendors
 They are expected to provide frequent, small deliveries

of high-quality goods
 A key feature of many lean systems is the

relatively small number of suppliers used

LO 14.8

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14-35

 Lean systems seek to reduce costs associated with

the ‘hidden factory’:
 Logistical transactions
 Balancing transactions
 Quality transactions
 Change transactions

LO 14.8

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14-36

 Preventive maintenance
 Maintaining equipment in good operating condition

and replacing parts that have a tendency to fail before
they actually do fail
 Housekeeping
 Maintaining a workplace that is clean and free of

unnecessary materials. It involves the following 5
behaviors to make the workplace effective
1.
2.
3.
4.
5.
LO 14.8

Sort
Straighten
Sweep
Standardize
Self-discipline

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14-37

 Value stream mapping
 A visual tool to systematically examine the flows of

materials and information
 Its purpose is to help identify waste and opportunities for

improvement
 Data collected:
 Times
 Distances traveled
 Mistakes
 Inefficient work methods

 Waiting times
 Information flows

LO 14.9

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14-38

 5W2H
 A method of asking questions about a process that

includes what, why, where, when, who, how, and how
much
 Lean and Six Sigma
 Lean and Six Sigma can be viewed as two

complementary approaches to process improvement
 Lean focuses on eliminating non-value-added activity to

maximize process velocity
 Six Sigma seeks to eliminate process variation
 Together the two approaches can achieve process flow and
quality

LO 14.9

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14-39

1.

Make sure top management is committed and that they know what
will be required

2.

Decide which parts will need the most effort to convert

3.

Obtain support and cooperation of workers

4.

Begin by trying to reduce setup times while maintaining the current
system

5.

Gradually convert operations, begin at the end and work backwards

6.

Convert suppliers to JIT

7.

Prepare for obstacles

LO 14.10

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14-40

1.

Management may not be fully committed or willing to
devote the necessary resources to conversion

2.

Workers/management may not be cooperative

3.

It can be difficult to change the organizational culture to
one consistent with the lean philosophy

4. Suppliers may resist

LO 14.11

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14-41

Name

Discussion 25

Description

25 points

Rubric Detail
Levels of Achievement
Criteria

Exceeds
Expectations

Meets
Expectation

Some
Expectations

Unsatisfactory

Quantity

5 to 6 points

3 to 4 points

1 to 2 points

0 to 0 points

Initial post and
two other posts
of substance.

Initial post and
one other post
of substance.

Initial post only.

Did not
participate.

5 to 6 points

3 to 4 points

1 to 2 points

0 to 0 points

Demonstrates
excellent
knowledge of
concepts, skills,
and theories
relevant to the
topic.

Demonstrates
knowledge of
concepts, skills,
and theories.

Demonstrates
satisfactory
knowledge of
concepts, skills,
and theories.

Did not
participate.

5 to 6 points

3 to 4 points

1 to 2 points

0 to 0 points

Discussion
post(s) exceed
expectations in
terms of support
provided and
extend the
discussion.

Discussion
post(s) meet
expectations in
terms of
support
provided.

Statements are
satisfactory in
terms of
support
provided.

Did not
participate.

6 to 7 points

4 to 5 points

1 to 2 points

0 to 0 points

Writing is well
organized, clear,
concise, and
focused; no
errors.

Some significant
but not major
errors or
omissions in
writing
organization,
focus, and
clarity.

Numerous
significant
errors or
omissions in
writing
organization,
focus, and
clarity.

Did not
participate.

Content

Support

Writing

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