CP-OM-17-BB - IDS 302 - Chapter 17: LEAN OPERATING SYSTEMS...

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C. Probett/Spring 2009 17-1 IDS 302 - Chapter 17: LEAN OPERATING SYSTEMS
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C. Probett/Spring 2009 17-2 Chapter 17 Learning Outcomes: LO1 Explain the four principles of lean operating systems LO2 Describe the basic lean tools and approaches LO3 Explain how lean principles are used in manufacturing and service organizations LO4 Describe the concepts and philosophy of just-in-time operating systems
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C. Probett/Spring 2009 17-3 Lean Operating Systems Lean enterprise refers to approaches that focus on the elimination of waste in all forms, and smooth, efficient flow of materials and information throughout the value chain to obtain faster customer response, higher quality, and lower costs Manufacturing and service operations that apply these principles are often called lean operating systems Lean concepts were initially developed and implemented by the Toyota Motor Corporation Lean Philosophy - Lean represents a philosophy that encompasses every aspect of the process (from design to after the sale of the product): To pursue a system that functions well with minimal levels of inventories, minimal waste, minimal space and minimal transactions (hence, a ‘lean’ system)
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C. Probett/Spring 2009 17-4 Four Basic Lean Principles Elimination of Waste : Eliminate any activities that do not add value in an organization. Includes overproduction, waiting time, processing, inventory, and motion Increased Speed and Response : Better process designs allow efficient responses to customers’ needs and the competitive environment Improved Quality : Poor quality creates waste, so improving quality is essential to the lean environment Reduced Cost : Simplifying processes and improving efficiency translates to reduced costs
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C. Probett/Spring 2009 17-5 Sources of Waste Inventory – an idle resource that takes up space and adds cost to the system Overproduction – involves excessive use of manufacturing resources Waiting time – requires space, add no value Unnecessary transportation – increases handling, increases work-in-process inventory Processing waste – makes unnecessary production steps, scrap Inefficient work methods – reduces productivity, increase scrap, increase work-in-process inventory Product defects – require rework costs and possible lost sales due to customer dissatisfaction
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C. Probett/Spring 2009 17-6 A Water-Level Analogy of Waste
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17-7 Personnel/Organizational Elements Workers as assets
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CP-OM-17-BB - IDS 302 - Chapter 17: LEAN OPERATING SYSTEMS...

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