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Operations Management - Lecture notes, lectures 1 - 11
Operations Management

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Chapter 1: Operations management:
3 core functions:
Marketing function (communicating)
Product/service development function (creating)
Operations function (fulfilling)
Support functions:
The accounting and finance function
The human resources function
Inputs to the process:
Transformed resources:
Materials (shape, composition)
Information
Customers (hairdressers)
Transforming resources:
Facilities
Staff
(Description of difference between services and products)
Facilitating services: Services that are produced by an operation to support its products
...

‘’All operations are service providers
...

Internal supplier: Processes or individuals within an operation that supply products or
services to other processes or individuals within the operation
...

Hierarchy of operations: The idea that all operations processes are made up of smaller
operations process
...

Business process reengineering: The philosophy that recommends the redesign of processes
to fulfill defined external customer needs
...

Variety: Standardization, flexible
Variation: variation in demand

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Visibility: process exposure
Front office: The high visibility part of an operation
Back office: The low visibility part of an operation
Activities that apply to all types of operation:
Understanding the operation’s strategic objectives
Developing an operations strategy for the organization
Designing an operations strategy for the organization
Planning and controlling the operation
Improving the performance of the operation
The broad responsibilities of operations management
Why is operations management important?
Reduce costs
Increase revenue
Reduce the amount of investment
Provide the basis for future innovation
 More profitability!
Operations management:
Operations strategy
Improvement
Planning and control
Design
Operations strategy:
The operation’s strategic objectives
The operation’s competitive role and position
Improvement
Operations strategy
Summary page 25,

Chapter 2: The strategic role and objectives of operations
‘’Operations management can ‘make or break’ any business’’
‘’Operations should implement, support and drive strategy’’
Four stages of operations contribution:
1
...
External neutrality (trying to implement ‘best practice’)
3
...
Externally supportive (innovative, creative and proactive, one step ahead competitors)
Five basic ‘performance objectives’: (can be added value)
Quality
Speed (time between requesting and receiving)
Dependability
Flexibility

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Cost (advantage)
Quality is a major influence on customer satisfaction or dissatisfaction
 Quality reduces costs
 Quality increases dependability
 Speed reduces inventories
 Speeds reduces risks
 Dependability saves time
 Dependability saves money
 Dependability gives stability
 Agility: the ability to respond quickly and at low cost as market requirements change
...

‘Operations’ are the resources that create products and services
...

Difference between operations strategy and operations
management

e
...
capacity decisions

1 - 12 months

Micro

Operations strategy
Long-term

D em and

Timescale

D em and

Operations management
Short-term

1 - 10 years

Macro

Level of analysis
Concerned with the macro
operation (level of the firm)

Level of aggregation
Concerned with resources at an
aggregated level

Level of abstraction
Concerned with the
conceptual

Detailed
“Can we produce and deliver
the products within one
month?”

Concrete
“How do we improve our
purchasing procedures?”

Aggregated
“What is overall business
advice capability compared
with other capabilities?”

Philosophical
“Should we develop strategic
alliances with suppliers?”

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Perspectives of operations strategy:
Top-down: The influence of the corporate or business strategy on operations decisions (what
the business wants operations to do)
...

Business strategy: The strategic positioning of a business in relation to its customers,
markets and competitors; a subset of corporate strategy
...

Bottom-up: The influence of operational experience on operations decision (What day-to-day
experience suggests operations should do)
...

Market requirements: The performance objectives that inflect the market position of an
operation’s products or services, also a perspective on operations strategy (What the market
position requires operations to do)
...
that define customers’ requirements
...
(The factors with which you can win
new customers)
Qualifying factors: Aspects of competitiveness where the operation’s performance
has to be above a particular level to be considered by the customer
...

Resource-based view (RBV): The perspective on strategy that stresses the
importance of capabilities (sometimes known as core competences) in determining
sustainable competitive advantage
...
Purpose: duidelijkheid
2
...
Process
4
...
Participation
The process of operations strategy guides the trade-offs between performance
objectives:
The strategy should address the relative priority of the operation’s performance
objectives
...

 variety against cost efficiency!
An operations strategy should be:
Appropriate
Comprehensive

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Coherent
Consistent over time
...

Process design should reflect process objectives
...

Process of products:
Project processes: Processes that deal with discrete, usually highly customized, products
...

Batch processes: Processes that treat batches of products together, and where each batch has
its own process route
...

Continuous processes: Processes that are high volume and low variety; usually products
made on continuous process are produced in an endless flow, such as petrochemicals or
electricity
...

Service shops: Service processes that are positioned between professional services and mass
services, usually with medium levels of volume and customization
...

Process mapping/blueprinting/analysis: Describing processes in terms of how the activities
within the process relate to each other
...

Throughput rate (flow rate): is the rate at which units emerge from the process, i
...

the number of units passing through the process per unit of time
...
The number of units in the process is an average over a period of time
...

Work content: The total amount of work required to produce a unit of output, usually
measured in standard times
...

Benefits:
90% of growing businesses say design is important, but only 26% of static businesses
say design is important
...

Effective users of design had financial performances 200% better than average
...

‘’The design activity is one of the most important operations processes’’
The stages of design:
Concept generation: A stage in the product and service design process that formalizes
the underlying idea behind a product or service
...

Acceptability (do we want to do it?): The attractiveness to the operation of a process,
product or service
...

Design funnel: A model that depicts the design process as the progressive reduction of design
options from many alternatives down to the final design
...
Creativity is important in product/service
design
...

o Commonality: The degree to which a range of products or services incorporate
identical components (also called parts commonality)
o Modularization: The use of standardized sub-components of a product or
service that can be put together in different ways to create a high degree of
variety
...
With whats: customer requirements and hows: design characteristics
Value engineering: An approach to cost reduction in product design that examines the
purpose of a product or service, its basic functions and its secondary functions
...

Prototyping and final design:
Virtual prototype: A computer-based model of a product, process or service that can
be tested for its characteristics before the actual process, product or service is
produced
...

The benefits of interactive design:
Interactive design: The idea that the design of products and services on one hand, and
the processes that create them on the other, should be integrated
...

Simultaneous development:
o Sequential approach to design
o Simultaneous or concurrent approach to design
o Simultaneous (or concurrent) engineering: Overlapping these stages in the
design process so that one stage in the design activity can start before the
preceding stage is finished, the intention being to shorten time to market and
save design cost (also called simultaneous engineering or concurrent
engineering)
...

Project-based organization structures: (spreek allemaal voor zich)

Chapter 6: Supply network design
The supply network perspective:
A supply network perspective means setting an operation in the context of all the other
operations with which it interacts, some of which are its suppliers and it customers
...


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Supply side: The chains of suppliers, suppliers’ suppliers, etc
...

Demand side: The chains of customers, customers’ customers etc
...

First-tier: The description applied to suppliers and customers who are in immediate
relationships with an operation with no intermediary operations
...

Immediate supply network: The suppliers and customers who have direct contact
with an operation
Total supply network: All the suppliers and customers who are involved in supply
chains that ‘pass through’ an operation
...
It helps an understanding of competitiveness
2
...
Its helps focus on long-term issues
...

Vertical integration: The extent to which an operation chooses to own the network of
processes that produce a product or service, the term is often associated with the ‘do or
buy’ decision
...

Long-term capacity management: The set of decisions that determine the level of
physical capacity of an operation in whatever the operation considers to be long-term;
this will vary between industries, but is usually in excess of one year
...

Co-opetition: four types of players: Suppliers, customers, competitors and
complementors
...

The location of capacity:
Reasons for location decisions:
o Changes in demand
o Changes in supply
The objectives of the location decision:
o The spatially variable costs of the operation: The costs that are significant in
the location decision that vary with geographical position;
o The service the operation is able to provide to its customers;
o The revenue potential of the operation
...
g
...

o Centre-of-gravity method: A technique that uses the physical analogy of
balance to determine the geographical location that balances the weighted
importance of the other operation with which the one being located has a direct
relationship
...

o Economies of scale: The manner in which the costs of running an operation
decrease as it gets larger
...

Scale of capacity and the demand-capacity balance
Balance capacity
The timing of capacity change
o Capacity leading: The strategy of planning capacity levels such that they are
always greater or equal to forecast demand
...

o Smoothing with inventory
Break-even analysis of capacity expansion: Fixed-cost breaks are important in
determining break-even points
...

The layout decision is relatively infrequent but important
...

The basic layout types:
Fixed-position layout: Locating the position of a product or service such that it
remains largely stationary, while transforming resources are moved to and from it
...

Functional layout (toegespitst op dezelfde functies)
o E
...
: hospital, supermarket
...
, together in close proximity (a cell)
...
g
...

o Shop-within-a-shop: An operations layout that groups facilities that have a
common purpose together: the term was originally used in retail operations but
is now sometimes used in other industries, very similar to the idea of a cell
layout
...

o Line layout: A more descriptive term for what is technically a product layout
...

Detailed design in functional layout:
Combinatorial complexity (functional layout): The idea that many different ways of
processing products and services at many different locations or points in time combine to
result in an exceptionally large number of feasible options; the term is often used in facilities
layout and scheduling to justify non-optimal solutions (because there are too many options to
explore)
...

o Relationship chart: A diagram used in layout to summarize the relative
desirability of facilities to be close to each other
...

o CRAFT: Computerized Relative Allocation of Facilities Technique, a
heuristic technique for developing good, but non-optimal, solutions
...

Which resources to allocate to which cells
...

o Production flow analysis (PFA): A technique that examines product
requirements and process grouping simultaneously to allocate tasks and
machines to cells in cell layout
...

Detailed design in product layout:
What cycle time is needed?
How many stages are needed?
o Total work content: The total amount of work required to produce a unit of
output, usually measured in standard times
...

 Balancing loss: The quantification of the lack of balance in a
production line, defined as the percentage of time not used for
productive purposed with the total time invested in making a product
...

 Short fat: Processes designed with relatively few sequential stages,
each of which performs a relatively large part of the total task, the
opposite of long thin processes
...

Indirect process technology: Technology that assists in the management of processes
rather than directly contributes to the creation of products and services, for example,
information technology that schedules activities
...

o Electronic point of sale (EPOS): Technology that record sales and payment
transactions as and when they happen
...

Materials-processing technology:
Computer numerically controlled machine tools (CNC): Machines that use a computer to
control their activities, as opposed to those controlled directly through human intervention
...

Automated guided vehicles (AGVs): Small, independently powered vehicles that move
material to and from value-adding operations
...

Computer-integrated manufacturing (CIM): A term used to describe the integration of
computer-based monitoring and control of all aspects of a manufacturing process, often using
a common database and communicating via some form of computer network
...

Centralized and decentralized information processing:
o Distributed processing: A term used in information technology to indicate the
use of smaller computers distributed around an operation and linked together
so that they can communicate with each other, the opposite of centralized
information processing
...

o Ethernet: A technology that facilitates local area network that allows any
device attached to a single cable to communicate with any other devices
attached to the same cable; also now used for wireless communication that
allows mobile devices to connect to a local area network
...


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o Extranets: Computer networks that link organizations together and connect
with each organization’s internal network
...

o E-commerce: The use of the internet to facilitate buying and selling activities
o Advantages: Increased reach and richness
...

Management information systems (MISs): Information systems that manipulate
information so that it can be used in managing an organization
...

Expert systems (ES): Computer-based problem-solving systems that, to some degree,
mimic human problem-solving logic
...

o Radio Frequency Identification (RFID)
Customer-processing technology:
Technology involving customer interaction
o Active interaction technology: Customer processing technology with which a
customer interacts directly, for example, cash machines
...

o Hidden technologies
Interaction with technology through an intermediary
o E
...
: check in at the airport: airline staff
Customer training: factors:
o The complexity of the service
o Repetition of the service
o Low variety of focus
Process technology should reflect volume and variety:
Technology should reflect the volume-variety requirements of the operation
...

Choice of technology:
Market requirements evaluation:
o Quality
o Speed
o Dependability

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o Flexibility
o Cost
Operations resource evaluation:
o Constraints
o Capabilities
Financial evaluation:
o Time value of money (NPV)

Chapter 9: Job design and work organization
What is job design?
Job design: The way in which we structure the content and environment of individual staff
member’s jobs within the workplace and the interface with the technology or facilities that
they use
...

There must be a fit between people and the jobs they do
...

Ergonomic environmental design
o Occupational health and safety legislation
...

Anthropometric aspects:
o Anthropometric data: Data that relates to peoples’ size, shape and other
physical abilities, used in the design of jobs and physical facilities
Designing task allocation – the division of labour:
Division of labour: An approach to job design that involves dividing a task down into
relatively small parts, each of which is accomplished by a single person
...

Method study: The analytical study of methods of doing jobs with the aim of finding the
´best´ or an improved job method
...

Step 4: Develop the most practical, economic and effective method
Install the new method
Maintain the method by periodically checking it in use
Principles of motion economy: A checklist used to develop new methods in work
study that is intended to eliminate elements of the job, combine elements together,
simplify the activity or change the sequence of events so as to improve efficiency
...

Work study: The term generally used to encompass method study and work measurement,
derives from the scientific management school
...

Defined level of performance: Specified job
Standard performance: Term used in work measurement to indicate the rate of
output that qualified workers will achieve without over exertion as an average over the
working day provided they are motivated to apply themselves, now generally accepted
as a very vague concept
...

Time study: A term used in work measurement to indicate the process of timing
(usually with a stopwatch) and rating jobs, it involves observing times, adjusting or
normalizing each observed time (rating) and averaging the adjusted times
...

Allowances: Term used in work study to indicate the extra time allowed for rest,
relaxation and personal needs
...

o Predetermined motion-time systems (PMTS): A work measurement
technique were standard elemental times obtained from published tables are
used to construct a time estimate for a whole job
...

o Activity sampling: is a technique in which a large number of instantaneous
observations is made over a period of time of a group of machines, processes
or workers
...

Designing for job commitment – behavioural approaches to job design:
Job rotation: The practice of encouraging the movement of individuals between
different aspects of a job in order to increase motivation
...

Job enrichment: A term used in job design to indicate increasing the variety and
number of tasks within an individual’s job, this may include increased decision
making and autonomy
...

Team working: Team-based work organization
...

o Time flexibility:
 Flexi-time working: Increasing the possibility of individuals varying
the time during which they work
 Annual hours: A type of flexitime working that controls the amount of
time worked by individuals on an annual rather than a shorter basis
...

Occasional telecommuting
‘Hotelling’
Home working
Fully mobile

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Control versus commitment: Job design is about trying to strike a balance between control and
commitment
...

Planning concerns what should happen in the future: The formalization of what is
intended to happen at some time in the future
...

Long-term planning and control:
o Uses aggregated demand forecasts
o Determines resources in aggregated form
o Objectives set in largely financial terms
Medium-term planning and control
o Uses partially disaggregated demand forecasts
o Determines resources and contingencies
o Objectives set in both financial and operations terms
Short-term planning and control
o Uses totally disaggregated forecasts or actual demand
o Makes interventions to resources to correct deviations from plans
o Ad hoc consideration of operations objectives
The nature of supply and demand:
Uncertainty in supply and demand
Dependent and independent demand
o Dependent demand: Demand that is relatively predictable because it is
derived from some other known factor
...

Responding to demand
o Resource-to-order: Operations that buy-in resources and produce only when
they are demanded by specific customers
...

o Make-to-stock: Operations that produce products prior to their being
demanded by specific customers
...

o P and D times depend on the operation
o P:D ratios indicate the degree of speculation
Planning and control activities
Loading: The amount of work that is allocated to a work centre
...

Finite loading: An approach to planning and control that only allocates work to a
work centre up to a set limit (usually its useful capacity)
...

Sequencing: The activity within planning and control that decides on the order in
which work is to be performed
...
(and
so forth)
...

o Forward scheduling: Loading work onto work centres as soon as it is
practical to do so, as opposed to backward scheduling
...

o Scheduling work patterns:
 Rostering: A term used in planning and control, usually to indicate
staff scheduling, the allocation of working times to individuals so as to
adjust the capacity of an operation
...

o Pull control: A term used in planning and control to indicate that a
workstation requests work from the previous station only when it is required,
one of the fundamental principles of just-in-time planning and control
...

o Theory of constraints (TOC): Philosophy of operations management that
focused attention on capacity constraints or bottleneck parts of an operation;
uses software known as optimized production technology (OPT)
...
There are capacity constraints
...

Medium-term capacity planning and control: This usually involves an assessment
of the demand forecasts over a period of 2-18 months ahead, during which time
planned output can be varied
...

Aggregated planning and control: A term used to indicate medium-term capacity
planning that aggregates different products and services together in order to get a
broad view of demand and capacity
...

Forecasting demand fluctuations:
o Seasonality of demand:
 Demand seasonality
 Supply seasonality
o Weekly and daily demand fluctuations
...

o Effective capacity: The useful capacity of a process or operation after
maintenance, changeover and other stoppages and loading has been accounted
for
...

o Efficiency: The ratio of the actual output from a process or facility to its
effective capacity
...

 The time that equipment is available to operate
...

 The speed, or throughput rate, of the equipment
...

o Met: p=performance rate= net operating time / total
operating time
...

The alternative capacity plans:

Chapter 12: Inventory planning and control:
Inventory: Also known as stock, the stored accumulation of transformed resources in a
process; usually applies to material resources but may also be used for inventories of
information; inventories of customers or customers of customers are usually queues
...

Types of inventory:
Buffer inventory: An inventory that compensates in supply and demand, can also be called
safety inventory
...

De-coupling inventory: The inventory that is used to allow work centres or processes to
operate relatively independently
...

Pipeline inventory: The inventory that exists because material cannot be transported
instantaneously
...
Cost of placing the order
2
...
Stock-out costs
4
...
Storage costs
6
...
Operating inefficiency costs
Consignment stock: This means that suppliers deliver large quantities of inventory to their
customers to store but will charge for the goods only as and when they are used
...

Generally, holding costs are taken into account by including:
Working capital costs;
Storage costs;
Obsolescence risk costs;
Cost of placing the order;
Price discount costs
...

Rearranging this expression gives:
Qo = EOQ =
When using the EOQ:
Time between orders = EOQ/D
Order frequency = D/EOQ
Economic batch quantity (EBQ): The amount of items to be produced by a machine or
process that supposedly minimizes the costs associated with production and inventory
holding
...

Re-order level: The level of inventory at which more items are ordered, usually calculated to
ensure that inventory does not run out before the next batch of inventory arrives
...

Continuous review: An approach to managing inventory that makes inventory-related
decisions when inventory reaches a particular level, as opposed to period review
...

The simple two-bin-system involves storing the re-order point quantity plus the safety
inventory quantity in the second bin and using parts from the first bin
...
Sometimes the safety inventory
is stored in a third bin (the three-bin-system), so it is clear when demand is exceeding that
which was expected
...

Pareto law: A general law found to operate in many situations that indicates that 20 per cent
of something causes 80 per cent of something else, often used in inventory management (20
per cent of products produce 80 per cent of sales value) and improvement activities (20 per
cent of types of problems produce 80 per cent of disruption)
...

Class A items are those 20 per cent or so of high-usage value items which account for
around 80 per cent of the total usage value
...

Class C items are those low-usage value items which, although comprising around 50
per cent of the total types of items stocked, probably account for only around 10
percent of the total usage value of the operation
...
This is sometimes called the number of weeks’ (or days’,
months’, years’ etc
...
The second method is to calculate how often the stock
is used up in a period, usually one year
...

Inventory information systems:
Updating stock records

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Generating orders
Generating inventory reports
Forecasting
Common problems with inventory systems:
Perpetual inventory principle: A principle used in inventory control that inventory records
should be automatically updated every time items are received or taken out of stock
...


Chapter 13: Supply chain planning and control
A supply network is all the operations linked together to provide goods and services: The
network of supplier and customer operations that have relationships with an operation
...

Supply chain pipeline: A linkage or strand of operations that provides goods and services
through to end customers; within a supply network several supply chains will cross through
an individual operation
...

Single-sourcing: The practice of obtaining all of one type of input product, component, or
service from a single supplier, as opposed to multi-sourcing
...


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E-procurement: The use of the internet to organize purchasing, this may include indentifying
potential suppliers and auctions as well as the administrative tasks of issuing orders etc
...

Global sourcing: The expansion in the proportion of products and (occasionally) services
which businesses are willing to source from outside their home country
...

Logistics: A term in supply chain management broadly analogous to physical distribution
management
...

Back-loading
Order fulfillment: All the activities involved in supplying a customer’s order, often used in
e-retailing but now also used in other types of operation
...

Types of relationships in supply chains:
Virtual operation: An operation performs few, if any, value-adding activities itself, rather it
organizes a network of supplier operations, seen as the ultimate in outsourcing
...

Partnerships are close relationships, the degree of which is influenced by a number of factors,
as follows:
Sharing success
Long-term expectations
Multiple points of contact
Joint learning
Few relationships
Joint coordination of activities
Information transparency
Joint problem solving
Thrust
Customer relationship management (CRM): It helps to sell products and services more
effectively and increase revenues by:
Providing services and products that are exactly what your customers want;
Retaining existing customers and discovering new ones;
Offering better customer service;
Cross selling products more effectively
...


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Supply chain behavior:
Efficient supply chain
Responsive supply chain
The bullwhip effect: The tendency of supply chains to amplify relatively small changes at
the demand side of a supply chain such that the disruption at the supply end of the chain is
much greater
...

Channel alignment helps improve supply chain performance
...

Operational efficiency helps improve supply chain performance
Supply chain time compression: This means speeding up the flow of materials down the
chain and the flow of information back up the chain
...


Chapter 14: Enterprise resource planning (ERP)
What is ERP?
Enterprise resource planning (ERP): The integration of all significant resource planning
systems in an organization that, in an operations context, integrates planning and control with
the other functions of the business
...

ERP:
Product information:
Bill of material (BOM): A list of the component parts required to make up the total
package for a product or service together with information regarding their level in the
product or component structure and the quantities of each component required
...

Expansion:
Manufacturing resource planning (MRP II): An expansion of material
requirements planning to include greater integration with information in other parts of
the organization and often greater sophistication in scheduling calculations
...

Materials requirements planning (MRP):
Demand management:
Customer orders
Forecast demand
Combining orders and forecasts
Master production schedule:
Sources of information for the MPS
o Known orders
o Key capacity constraints
o Inventory levels
o Spares demand
o Safety stock requirements
o Exhibition/promotion requirements
o R&D demand
o Sister plant demand
o Forecast demand
Chase or level master production schedules
Available to promise (ATP)
The bill of materials:
Levels of assembly
The ‘shape’ of the component structure:
Component structure (product structure) shape: Diagram that shows the
constituent component parts of a product or service package and the order in which the
component parts are brought together (often called components structure)
o A-shape product structures: the business has only a limited product range to
offer the customer
...

o V-shape product structures: Similar to T-shape, but less standardization
...
These standard modules are represented by the cross of the
X
...
Automotive manufacturers typically
use this X-shape product structure
...


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Single-level and indented bills of materials
Inventory records:
Item master file: contains the unique standard identification code for each part or
component
...
This means the transaction file is updated at the time a receipt or
issue occurs
...
Some operations have fixed
locations so that a particular part can always be found at a particular location
...
This
requires careful control, as the same item may be kept in several different locations at
any one time
...

Back-scheduling
MRP capacity checks:
Resource requirements plan (RRPs) involve looking forward in the long term to
predict the requirements for large structural parts of the operation, such as the
numbers, locations and sizes of new plants;
Rough-cut capacity plans (RCCPs) are used in the medium to short term to check the
master production schedules against known capacity bottlenecks, in case capacity
constraints are broken
...

Manufacturing resource planning (MRP II)
Enterprise resource planning (ERP):
The benefits of ERP:
Because software communicates across all functions, there is absolute visibility of
what is happening in all parts of the business
...

There is better ‘sense of control’ of operations that will form the basis for continuous
improvement (albeit within the confines of the common process structures)
...

It is capable of integrating whole supply chains including suppliers’ suppliers and
customers’ customers
...

It can include decision-support facilities which enable operations decision makers to
include the latest company information
...

Often, ERP systems are able to operate on most common platforms such as Windows
or UNIX or Linux
...

Web-integrated ERP: Enterprise resource planning that is extended to include the ERP type
systems of other organizations such as customers and suppliers
...

Optimized Production Technology (OPT): Software and concept originated by Eliyahu
Goldratt to exploit his theory of constraints (TOC)
...


Chapter 15: Lean operations and JIT
Lean operations: It means moving towards the elimination of all waste in order to develop an
operation that is faster, more dependable, produces higher-quality products and services, and,
above all, operates at low cost
...

Insulation of the stages from one another
JIT sees inventory as a blanket of obscurity
...

JIT and capacity utilization:
No high capacity utilization
...

Elimination of waste
...

The drive for continuous improvement
...
Sort: Eliminate what is not needed and keep what is needed
...
Straighten: Position things in such a way that they can be easily reached whenever
they are needed
...
Shine: Keep things clean and tidy; no refuse or dirt in the work area
4
...
Sustain: Develop a commitment and pride in keeping to standards
...
It visually maps a product or services ‘production’ path from start
to finish
...

The involvement of everyone
Respect-for-humans
Continuous improvement: Kaizen
...

Use small, simple machines
Layout for smooth flow

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Adopt total productive maintenance
Reduce setup times:
Setup reduction: The process of reducing the time taken to changeover a process
from one activity to the next; also called single minute exchange of dies (SMED) after
its origins in the metal pressing industry
...
Preferably, all adjustment should be
carried out externally, so that the internal setup is an assembly operation only;
o Attach the different tools to a standard fixture
...
Again, this enables the
internal setup to consist of a simple and standardized assembly operation;
o Facilitate the loading and unloading of new tools, for example by using simple
devices such as roller conveyors
...

Adopt JIT through the supply chain
JIT planning and control:
Kanban control:
Kanban: Japanese term for card or signal: it is a simple controlling device that is used
to authorize the release of materials in pull control systems such as those used in JIT
...

Synchronization:
o Runners are products or parts which are produced frequently, such as every
week
...

o Strangers are products or parts which are produced at irregular and possibly
unpredictable time intervals
...
It means that ultimately processes can
be made so flexible that they achieve the JIT ideal of a ‘batch size of one’
...
So, for example,
rather than produce 200 As, 120Bs and 80 Cs, a steady mixed stream in the same ratio
is produced (AABABCABCA)
Levelled delivery schedules: levelled scheduling applied to transportation processes
...
Inventory is driven through each process in
response to detailed, time-phased plans, calculated by part number
...
Therefore,
achievement against schedule is key control monitor
...
This can make the needs of the
customer appear remote to staff whose responsibilities lie two or three levels down the
organization structure
...

MRP systems assume a fixed operations environment, with fixed lead times which are
used to calculate when materials should arrive at the next operation
...
MRP
systems find it extremely difficult to cope with variable lead times
...

The control of the pull between stages is accomplished by using simple cards, tokens
or empty squares to trigger movements and production
...

Decision making for operations control is largely decentralized; tactical decisions do
not rely on computer-based information processing
...

JIT assumes ( and encourages) resource flexibility and minimized lead times
...

Separate systems for different products
MRP for overall control and JIT for internal control



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