Understand lean concepts and terminology
The 10 basic lean terms that are used throughout the Lean manufacturing module in Supply Chain Management are:
- Value stream - The value stream is represented by one or multiple production flows. It can also be modeled as an operating unit for costing purposes.
- Kaizen - Japanese for "continuous improvement," kaizen is a management philosophy that emphasizes employee participation, where every process is continuously evaluated and reevaluated to eliminate waste.
- Work cell - A work cell is a resource group, where resources are grouped to run a process flow. The work cell represents the effective capability of all resources that are assigned to the cell. The internal structure of the cell is not documented in the system.
- Cycle time - The average cycle times for each activity of a production flow are determined at the validation of a production flow version based on the takt requirement of a production flow version. The actual cycle times are calculated for a defined period and compared to the average through the cycle time performance control.
- Takt time - The takt requirements are defined on a production flow version. For production flows that feed into other flows, the takt requirements can be calculated based on the target cycle times of the consuming activities.
- Supermarket - A supermarket is a central storage location where (raw) materials are stored near their point-of-use so customers (or consumers) can pull them as needed. Supermarkets are used to:
- Minimize transaction costs.
- Facilitate visual management.
- Establish the framework for a point-of-use kanban system (pull).
- Production flow - A production flow is linked to an operating unit that plays the role of the value stream. The flow of material and products throughout work cells and locations for a specific production or supply scenario can be described as a sequence or small network of process or transfer activities, called a production flow.
- Backflush costing - Backflush costing omits recording some or all of the journal entries that relate to the stages from the purchase of direct materials to the sale of finished goods. Because some stages are omitted, the journal entries for a subsequent stage use normal or standard costs to work backward to "flush out" the costs in the cycle for which journal entries were not made.
- Kanban - Japanese for "visible record," kanbans have been adopted by many industries as a method of controlling production and internal supply. A kanban can apply to a paper ticket or a physical container. A kanban is a pull signal that represents demand and triggers process and transfer activities for a unit of a specific item or item family.
- Heijunka leveling - A production leveling technique using either volume or product mix. In Supply Chain Management, the kanban schedule board is used as a heijunka board to level production load on a cell.
Cell and line design is a hierarchical process, from factory layout to detailed workstation ergonomics, that includes several processes and activities that come into play in lean manufacturing, such as the following:
- Product family or value stream identification
- Value stream mapping
- Strategy and subcontract issues
- Plant layout and location of supermarkets
- Activity timings and sampling
- Takt and sales cycle time calculation
- Constraint identification
- Paper kaizen
- Theoretical minimum activity times
- Theoretical minimum operators
- Cell reference costs and savings calculation
- Cardboard simulation
- Cell layout design
- Operator balancing
- Workstation ergonomics
- Pull system design