Job Shop LeanAn Industrial Engineering Approach to Implementing Lean in High-Mix Low-Volume Production Systems

Shahrukh A. Irani

ft RoutledgeTaylor & Francis Group

A PRODUCTIVITY PRESS BOOK

Contents

Foreword....................................................................................................... xixTestimonial................................................................................................... xxiAcknowledgments.................................................................................... xxiiiAuthor...........................................................................................................xxv

1 About This Book......................................................................................1The Genesis of Job Shop Lean........................................................................1The Toyota Production System (and Lean) Gave GT/CM a New Lease of Life.......................................................................................................2What This Book Teaches................................................................................. 8Reading Plan for This Book........................................................................... 10Appendices for Select Chapters in This Book............................................ 15Supplementary Reading for Select Chapters in This Book........................17What’s Next?.....................................................................................................19Software to Implement Job Shop Lean........................................................19What This Book Does Not Teach...................................................................21Management-Oriented Books on Lean .......................................................21Appendices.......................................................................................................22References........................................................................................................22

2 Introduction to Job Shop Lean..........................................................25Lean Is Necessary for Every Manufacturer but...........................................25... Lean Is Also Insufficient for Many Manufacturers................................25How a Job Shop Differs from an Assembly Line.........................................27An Assembly Line Is Inflexible Compared to a Job Shop........................ 28High-Mix Low-Volume Manufacturers with Job Shop-LikeManufacturing Facilities................................................................................28Primary Focus of Job Shop Lean.................................................................29A Standard Process for Implementing Lean................................................ 35

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Adapting the Lean Thinking Process to Implement Job Shop Lean.......3VA Comprehensive Approach for Implementing Job Shop Lean...............39Illustration of the Comprehensive Approach for Implementing JobShop Lean....................................................................................................... 41Appendices.....................................................................................................46References......................................................................................................47

3 Is Job Shop Lean Right for You?....................................................... 494 Design For Flow (DFF): The Essential Foundation for Job

Shop Lean.............................................................................................57A Tribute to Manufacturing Pioneers of the Past....................................... 57Flow: The Essential Foundation for Job Shop Lean.................................... 62Flow Delays and the Seven Types of Waste...............................................65Quick-and-Dirty Estimation of the Monetary Value of Any Waste and/or Flow Delay........................................................................................ 69Design for Flow: Principles for Factory Layout Design to Achieve Flow....72 Role of Product Design and Manufacturing Engineering.........................77How to Assess If a Factory Layout Is Designed for Flow.........................80An Approach for Designing a Factory Layout to Achieve Flow...............80How to Achieve Flow If the Factory Layout Cannot Be Changed.......... 80Conclusion......................................................................................................87Appendices.....................................................................................................87References......................................................................................................87

5 Overview of Production Flow Analysis (PFA)................................89Production Flow Analysis (PFA)..................................................................90Stages for Implementing Production Flow Analysis..................................90Software to Implement PFA..........................................................................98Data Needed to Implement PFA..................................................................98Conclusion....................................................................................................100References....................................................................................................100

6 Overview of Production Flow Analysis and SimplificationToolkit (PFAST).................................................................................101

7 Functional, Cellular, and Hybrid Cellular Layouts for AnyJob Shop.............................................................................................. 107Functional Layout vs. Cellular Layout.........................................................107A Cellular Layout Is Not a Panacea!...........................................................108Design of Flexible and Lean (FLean) Layouts for Job Shops.................109

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Hybrid Cellular Layouts..............................................................................109Conclusion....................................................................................................115

8 Designing Functional, Cellular, and Hybrid Cellular Layoutsfor Any Job Shop Using PFAST......................................................117Background..................................................................................................117Is the Functional Layout Really the Best Layout for a Job Shop?......... 118Fundamental Challenge of Designing a “Best Fit” Layout for Any Job Shop.......................................................................................................118Designing Alternative Layouts for Any Job Shop Using PFAST............119Input Data................................................................................................... 120Product-Quantity Analysis (PQ Analysis).................................................121How to Do PQ Analysis ...........................................................................122How to Use PQ Analysis...........................................................................123Product-Quantity-Revenue Analysis (PQ$ Analysis)............................... 123How to Do PQ$ Analysis .........................................................................124How to Use PQ$ Analysis.........................................................................125From-To Chart.............................................................................................127How to Create a From-To Chart ...............................................................127How to Use the From-To Chart.................................................................128Product-Routing Analysis Type I (PR-I Analysis) andProduct-Routing Analysis Type II (PR-II Analysis)....................................130How to Do PR-I Analysis...........................................................................130How to Do PR-II Analysis..........................................................................132How to Use PR-I Analysis and PR-II Analysis..........................................135Product-Routing Analysis Type IV (PR-IV Analysis)............................... 136How to Do PR-IV Analysis .......................................................................139How to Use PR-IV Analysis.......................................................................140Product-Routing Analysis Type III (PR-III Analysis)..............................142How to Do PR-III Analysis .......................................................................143How to Use PR-III Analysis.......................................................................144Conclusion................................................................................................... 146Supplementary Reading............................................................................. 146References................................................................................................... 147

9 How Data Mining Guides Various Production FlowSimplification Strategies.................................................................149Variety of Flow Simplification Strategies Enabled by PFAST..................150Management Actions Based on LAT-Aided Recommendations.............151

Contents

Appendices....................................................................................................153Supplementary Reading...............................................................................153

10 Improving Flow at Any Level in a Factory....................................155Introduction...................................................................................................155Examples of Factory Flow Analysis............................................................157Examples of Line Analysis.......................................................................... 161Examples of Tooling Analysis....................................................................167Conclusion.................................................................................................... 172

11 Industry Applications of Production Flow Analysis by IEStudents............................................................................................. 173A Tribute to My Students............................................................................173IE Tools Ought to Replace the Lean Tools...............................................173Replacing “Textbook IE” with “Toyota IE”................................................174Courses That Merged the Classroom and the Factory Floor...................174Programs for an IE Department to Engage with Industry.....................180Appendices...................................................................................................180Supplementary Reading..............................................................................181

12 Production Flow Analysis Using Metrics-Aided VisualAssessment of Material Flow Diagrams....................................... 185A Different Strategy to Reduce Both Waste and Lead Time..................185Assembly Line vs. Job Shop Layouts.........................................................187Bad Facility Layouts Automatically Produce Waste.................................187Production Flow Analysis of Any Material Flow System UsingSpaghetti Diagrams.....................................................................................190Motivation.....................................................................................................191How Does a Spaghetti Diagram Expose Poor Material Flow in Any Facility Layout?............................................................................................ 194Case #1 Usefulness of Manually Drawn Spaghetti Diagrams: Facility Re-Layout......................................................................................................197Case #2 Usefulness of Manually Drawn Spaghetti Diagrams: Patient Care Cell.......................................................................................................197Instances of Waste Produced (Not Eliminated!) by Manually Drawn Spaghetti Diagrams....................................................................................200Major Challenges of Generating Flow Diagrams by Hand.....................204There Is No Reason for Spaghetti Diagrams to Be Hand-Drawn in the 21st Century!........................................................................................ 207Case Study: Design of a Lean Hospital Layout....................................... 208

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Comparison of Alternative Hospital Layouts Using Sgetti......................211Advantages of Material Flow Mapping with Sgetti..................................215Conclusion................................................................................................... 217Appendices.................................................................................................. 217Supplementary Reading..............................................................................217Bibliography................................................................................................225

13 Product Mix Segmentation...........................................................227Acknowledgment........................................................................................227Author’s Note...............................................................................................227Part 1 of 5: Analyzing Products, Demand, Margins, and Routings...... 227Defining Product Mix................................................................................228Benefits of PQR$T Analysis.......................................................................229Part 2 of 5: Analyzing Product Mix and Volumes - Useful butInsufficient...................................................................................................230The PQ Analysis Curve..............................................................................231Sample Analysis..........................................................................................232Putting PQ Analysis to Work.....................................................................235Limitations of PQ Analysis........................................................................235Part 3 of 5: PQ$ Analysis - Why Revenue Matters in Product MixSegmentation...............................................................................................236The Whole Is Greater Than the Parts......................................................238Putting the PQ$ Analysis to Work............................................................244

Market Diversification............................................................................244Operating (Two) Factories within a Factory (Virtual Cells)................ 244Supplier Management.............................................................................245Purchasing Management........................................................................245

Part 4 of 5: Minding Your P’s, Q’s, R’s, and Revenue Too....................... 247Analyzing Product Mix Using Quantities and Routings...........................248PQR$ Analysis............................................................................................ 248Narrowing the Analysis.............................................................................252Analyzing the Sample................................................................................254Identifying Product Families......................................................................257The Payoff...................................................................................................260Putting the PQR$ Analysis to Work.........................................................260

Limit the “Grunt Work” to Collect Data for CI Kaizens........................260Split the Facility.......................................................................................261Absorb Low-Volume Products into High-Volume Product Families...261Cull the Product Mix.............................................................................. 261

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Employ Water Spiders to Support Physical or Virtual Cells............... 262Co-Opetition between Job Shops...........................................................262

Part 5 of 5: Why a Timeline Analysis of Order History Matters...........263Time Matters..................................................................................................264Coefficient of Variation as a Metrie for Demand Variability...................266Putting the PQT Analysis to Work............................................................267

Important Role of the Sales Department...............................................267Operate an Idle Cell Like a Shared Resource......................................268Beware of the Effects of the Learning Curve! ....................................268Be Flexible in Assessing Each Cell’s Performance..............................269Design Cells with Flexibility to Adapt to Mix and Volume Changes.... 269 Analyze Operations Using Industrial Engineering Tools.....................271

Success Story: History Shows that Cells Can Be Implemented inJob Shops!.......................................................................................................272Supplementary Reading................................................................................274Conclusion.......................................................................................................274References.......................................................................................................275

14 Determining the Correct Layout Shape for a High-MixMachining Cell.....................................................................................277Origin of Manufacturing Cells.....................................................................277The First Enterprise-Wide Implementation of Cells.................................279Role of Production Flow Analysis in the Design of a Cell Layout........280Principles to Guide Planning for Effective Flow in a Cell........................281Impact of Travel Distance between Workstations in a Cell.................. 283Characteristics of a Good Cell Layout........................................................283Basic Flow Patterns in a Cell.......................................................................284Using the Roman Alphabet to Determine the Correct Shape for a Cell Layout......................................................................................................285Motivation.......................................................................................................286Input Data File for Production Flow Analysis...........................................287Design of a Cell Layout.................................................................................287Linear Layout..................................................................................................290Curvilinear Layout..........................................................................................291Are Layout Shapes for Assembly Lines at All Suitable for JobShop Cells?.....................................................................................................294Designing a Cell Layout without Using a From-To Chart......................... 295Your Assignment............................................................................................300

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Potential Solution for Your Assignment....................................................... 300Conclusion..........................................................................................................300Appendices.........................................................................................................300

15 Lessons Learned from Implementing the Lean Principles in a Single High-Mix Low-Volume Make-To-Order CompressorParts Machining Cell........................................................................... 301Acknowledgment..............................................................................................301Motivation...........................................................................................................302Background........................................................................................................302Lean Assembly Cell vs. FLean (Flexible and Lean) Machining Cell......303A Manufacturing Cell Is a Value Stream!....................................................303Case Study: Design and Implementation of a High-Mix Low-Volume Machining Cell..................................................................................................305Design of the Manual Packings Cell (MPC) Layout.................................. 306Lessons Learned from Implementing the Cell...........................................308Conclusion......................................................................................................... 323Appendices.........................................................................................................323Bibliography...................................................................................................... 323

16 How Cell Formation Drives the Implementation of Job ShopLean..........................................................................................................325Implementing Lean in Job Shops..................................................................325Flow: The Essential Foundation for Job Shop Lean.................................. 328Cells: The Essential Foundation for Achieving Flow................................ 328Cells: The Foundation for a Comprehensive Approach toImplementing Job Shop Lean........................................................................ 331Cells: A Driver for Implementing a Continuous ImprovementProgram (CIP)....................................................................................................332A Portfolio of CI Projects to Implement Job Shop Lean...........................335Group Technology: An Alternative to Product-Process MatrixAnalysis..............................................................................................................339Conclusion......................................................................................................... 342Appendices........................................................................................................ 342References..........................................................................................................342

17 How to Make a Machine Shop Lean and Flexible........................343Acknowledgment............................................................................................. 343Purpose of This Chapter.................................................................................343

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A Machine Shop Does Not Operate Like Toyota.....................................344How a Job Shop Differs from an Assembly Line.....................................345Why Lean Offers Limited Benefit to Machine Shops..............................346Lean Tools That Are Unsuitable for Any Machine Shop.........................346Group Technology: A Precursor to Lean?..................................................347A Toolkit to Implement Job Shop Lean in the 21st-Century CNCMachine Shop................................................................................................349Before Implementing Job Shop Lean, a Machine Shop Must HaveThese Ducks in a Row................................................................................ 380Flexibility: What a Lean Machine Shop Lacks..........................................388How to Use the Job Shop Lean Toolkit.....................................................389Conclusion.......................................................................................................391Appendices......................................................................................................392Bibliography...................................................................................................392

18 How to Make a Custom Fabrication Shop Lean and Flexible... 393Acknowledgment...........................................................................................393Is Any Toyota Assembly Plant Really Lean?..............................................394Waste Elimination Is Not a Custom Fabricator’s Top Priority............... 394Minimizing Flow Times Is a Custom Fabricator’s Top Priority...............395Many Lean Tools Will Not Help Custom Fabricators Improve Their OTD Performance......................................................................................... 395Assembly Line vs. Job Shop: A Case of Totally Different Production Systems............................................................................................................396How Can Custom Fabricators Improve OTD Performance?...................397Why Lean Principles Are Hard for Custom Fabricators to Implement...398 Job Shop Lean: How to Implement the Lean Principles in Job Shops.... 402 Design for Flow: The Foundation of Job Shop Lean...............................402Prerequisites for Any Custom Fabricator Seeking to Implement the Principles of Lean.........................................................................................403Strategies to Improve OTD Performance Using Lean Principle #1.......411Strategies to Improve OTD Performance Using Lean Principle *2.......427Strategies to Improve OTD Performance Using Lean Principle #3.......429Strategies to Improve OTD Performance Using Lean Principle #4.......435Strategies to Improve OTD Performance Using Lean Principle *5.......445The Way Forward for Custom Fabricators................................................446Bibliography.................................................................................................. 446

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19 Introduction to Operations Scheduling for High-MixLow-Volume Manufacturers...............................................................449Acknowledgments............................................................................................ 449Scheduling Is the Weakness of ERP Systems and Lean...........................450LEKIN: A General Job Shop Scheduling System........................................ 452Manufacturing Systems That Can Be Scheduled by LEKIN....................452Scheduling a Machining Cell Using LEKIN.................................................454Input Overall Size of the Job Shop.............................................................. 455Input Work Center Data...................................................................................455Input Job Data................................................................................................... 457Scheduling the Job Shop................................................................................458Gantt Charts...................................................................................................... 459Performance Measures.....................................................................................467Charts for Visual Comparison of Performance Measures........................468How Scheduling Extends Lean in High-Mix Low-Volume (HMLV)Facilities..............................................................................................................469Conclusion..........................................................................................................473Appendices.........................................................................................................473Supplementary Reading..................................................................................473Bibliography...................................................................................................... 475

20 Finite Capacity Scheduling of a Flexible and Lean (FLean)Machining Cell.......................................................................................479Acknowledgment............................................................................................. 479Background....................................................................................................... 479What Follows the Layout Design of an FLean Cell.................................. 481Scheduling a Single High-Mix Low-Volume Cell.......................................481Why Schedlyzer Lite Was Chosen over Preactor.......................................483How FCS Facilitates Waste Elimination.......................................................487Ensuring the Success of an FCS Implementation.....................................488Conclusion......................................................................................................... 489About the Co-Author........................................................................................490Bibliography......................................................................................................490

21 Classroom Tutorial on the Design of a CellularManufacturing System........................................................................ 491Acknowledgment............................................................................................. 491Background for This Tutorial......................................................................... 492Lessons on Factory Layout and Scheduling from Over100 Years Ago...................................................................................................492

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Introduction.....................................................................................................495Teaching Objectives of This Tutorial in 1999............................................ 496Teaching Objectives of This Tutorial in 2019............................................496A Tutorial on Implementing the Principles of Lean in a Job Shop.......500Input File for PFAST and Sgetti....................................................................502Part Family Formation and Machine Grouping for Cell Design..............504Cell and Shop Layout......................................................................................511Cell and Shop Scheduling..............................................................................520What About Lean Principle #5?....................................................................544Conclusion........................................................................................................545Contributed Section....................................................................................... 546

Analysis of Machine Duplication Decisions in Hybrid Cellular Layouts Using Sgetti...................................................................................546

Bibliography.....................................................................................................556

22 Teaming Industrial Engineers with Employees to Improve aShipping Department.........................................................................557Acknowledgment...........................................................................................557Right-Sizing the Expertise of Problem-Solving Teams............................. 557“Team Shipping”.............................................................................................558Industrial Engineering (IE) Students Who Helped “Team Shipping”.... 558 A Project That Involved the Entire Team................................................... 559A One-Employee Project................................................................................561A Project That Involved the IE Graduate Students.................................564A Project That Teamed the In-House IE with the IE Intern...................565A Project That Involved a Key Supplier’s Rep........................................570Challenging Projects Undertaken by the Industrial EngineeringStudents...........................................................................................................571A Tribute to Team Shipping......................................................................... 574Lessons Learned............................................................................................ 575

23 Implementation of Job Shop Lean in a Forge Shop..................... 577About Ulven Forging.....................................................................................577Data Collection and Preliminary Machine-Part Matrix Analysis............578Product Mix Segmentation........................................................................... 600Machine-Part Matrix Clustering...................................................................606Design of Modular Layout............................................................................610Evaluation of the Proposed Layout.............................................................610Implementation and Results.........................................................................617Conclusion.......................................................................................................619

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24 Implementation of Job Shop Lean in a CNC Machine Shop.....621Acknowledgment....................................................................................... 621Background.................................................................................................621The Journey of a 1,000 Miles.................................................................... 622The Job Shop Difference...........................................................................623Mapping Job Shop DNA............................................................................625Reaching an Epiphany...............................................................................626Decrypting the Product Mix......................................................................627Focusing on Value...................................................................................... 628A Different Kind of Cell.............................................................................630Quoting Intelligently..................................................................................632Beyond Flow.............................................................................................. 633Appendices................................................................................................. 634Supplementary Reading............................................................................ 634

25 Implementation of Job Shop Lean Using aOne-Cell-at-a-Time Approach..........................................................635Acknowledgment.......................................................................................635Background................................................................................................ 635Initial Composition of the Tiger Team.....................................................636Schedule of Activities.................................................................................637The Tiger Team’s First Project................................................................... 637Ground Rules for the Tiger Team.............................................................638What We Did in the Team’s Weekly Meetings........................................ 638Improvement Projects Done by the Team.............................................. 640Lessons Learned.........................................................................................647The Next Cell That the Tiger Team Worked On....................................649Appendices................................................................................................. 650

26 Educational and Training Resources for Job Shop Lean..........651Background................................................................................................ 651Learning Lean from Other Manufacturers................................................651Learning Lean from Videos...................................................................... 652Learning Lean from Doing Facility Walkthroughs.................................. 652Lean Assessment of an Operational Cell.................................................655Videos That Provide More In-Depth Training........................................ 659Do Not Ignore The Goal Video!............................................................... 661Advanced Workshops on Lean/Job Shop Lean...................................... 661Conclusion.................................................................................................. 662Supplementary Reading.............................................................................662

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27 Introduction to Value Network Mapping...................................... 669Introduction.....................................................................................................669High-Mix Low-Volume Manufacturers Are Different from Toyota........ 670Value Stream Mapping Is Ill-Suited for HMLV Manufacturers................ 670Theoretical Foundations of Value Network Mapping..............................672Comparison of Value Stream Mapping and Value Network Mapping... 674 Example: Developing a Value Network Map for a Fabricated Product... 676Online Lecture on Value Network Mapping..............................................680Supplementary Reading................................................................................ 680Current Status of VNM...................................................................................685Appendices......................................................................................................685Bibliography....................................................................................................685

28 Starter Advice for Implementing Job Shop Lean......................... 687Learn about the Toyota Production System...............................................687Will Company Leaders Lead Your Transformation?..................................688To-Do’s for Executives Who Want to Implement Job Shop Lean.........689Engage All Departments............................................................................... 690Get the Employees Involved!.......................................................................691Focus on Workplace Safety and Ergonomics.............................................691Hire a Lean-Savvy Plant Manager Who Cares about Profitsand People......................................................................................................692Besides Kaizens, Do “Big Bang” Improvement Projects Also................692Hire Industrial Engineers.............................................................................693Get Going with the Quick-Start Approach for Job Shop Lean...............694Do Not Ignore Six Sigma.............................................................................695Put Your ERP Vendor’s “Feet to the Fire”..................................................696Determine How Many Businesses You Are Trying to Manage............. 696Explore the Role of Group Technology.....................................................697Is Your Facility Layout Able to Support Flow?.......................................... 697Do Not Ignore “Naturally UnLean” Processes - Think Right-SizedEquipment!......................................................................................................697Invest in Employee Training and Development....................................... 698Appendices......................................................................................................699

Index 701