UNIT 5: Just-In-Time and Lean • Lean 55

Systems "5S" is a method of workplace organization

that consists of five words.
Just-in-time (JIT) is a management Phase 1: Sort
philosophy that originated in the 1970s. Phase 2: Straighten
Taiichi Ohno is credited with developing Phase 3: Shine
Phase 4: Standardize
 JIT and perfected it for Toyota's Phase 5: Sustain
manufacturing plants in Japan.
 The main goal of JIT is to eliminate Kaizen (Continuous Improvement) is a
anything that does not add value from the strategy where employees at all levels of
customer's perspective. company work together proactively to achieve
 Non-value-added activities are referred to improvements to the manufacturing process.
as "waste" in JIT.
Dual nature of KAIZEN
There are three essential elements that
contribute to the successful practice of JIT: PHILOSOPHY
Developing a culture where all employees are
1.) JIT Manufacturing Principles actively engaged in improving the company.
 1. Inventory reduction to expose waste ACTION PLAN
 2. Use of a "demand-pull" production Organizing events focused on improving
system specific areas within the company
 3. Quick setups to reduce lot of Sizes
 4. Uniform plant loading Kaizen identifies three main aspects of the
 5. Flexible resources workplace:
 6. Cellular flow layouts. MUDA (Wastes)
2.) Total Quality Management MURA (Inconsistency)
(TOM) • MURI (Strains on people and machines)
 Quality is a major source of uncertainty
and non-value-added activities in an The Kaizen philosophy aims at cutting
organization with poor quality practices. business wastes, minimize inconsistencies,
3. Employee Empowerment and prevent burdens on people and
 Front line employees play a critical role in machines through improving quality,
successful JIT practice. increasing efficiency, reducing
overproduction and unnecessary activities.
Several ways in which front-line employees
contribute to JIT success: The concept of "plan, do, check, act," or
- Employees work together. PDCA is a cyclical process that walks an
- Employees are responsible for understanding entire company or small team through the four
the quality measures of their work. steps of improvement.
- Each employee is empowered to take action  By continuing to cycle through these
to correct problems. steps, improvement is always being
worked on and evaluated.
"Lean Operations" captures the true essence
and power of how culture built around • Lean Manufacturing
continuous improvement and the pursuit of Lean is a philosophy that focuses on the
value-added activities. following:
Meeting customer's needs
Lean systems require the elimination of Eliminating mistakes
sources of potential disruption to the even flow Eliminating waste
of work. High quality is essential because
problems with quality can disrupt the process.
8 wastes of manufacturing Kanban literally means "visual card",
1. Defects "signboard", or "billboard"
2. Waiting KANBAN CARDS - limit excess work
3. Transportation
4. Motion UNIT 6 CAPACITY PLANNING AND
5. Excessive Processing FACILITY LAYOUT
6. Overproduction
7. Non-Utilized Talent FORECASTING
8. Inventory - method to predict the future
- process of making predictions based on past
Lean Manufacturing principles and present data
Poka Yoke - determine the cause of problems
and then remove the cause to prevent further Sales Forecast
errors. - the estimate of how much the company will
actually sell.
Informative Inspections - analyzes data from
inspections during the Accuracy is important when it comes to
process forecasts. If executives overestimate the
demand for a product, the company could end
Source Inspections - inspect before the up spending money on manufacturing,
process begins to prevent errors. distribution, and servicing activities it won't
need.
"NO KANBAN CARD, NO PRODUCTION
OR MOVEMENT OF MATERIAL" Sales potential
- maximum total revenue it hopes to generate
-Kanban system is a means to achieve from a product or the number of units the
Just-in-Time (JIT) production. company can hope to sell.

Reliability-centered maintenance STEPS IN FORECASTING PROCESS

-is a system for designing a cost-effective 1. Identify the Problem
maintenance program. 2.Collect Information
3. Perform Preliminary Analysis
Equipment is studied in the context of where 4. Choose the Forecasting Model
when and how it is used. 5. Verify Model Performance

All maintenance actions can be classified into Qualitative Forecasting

one of the following categories: - based solely on judgment and no actual data.
Corrective Maintenance - Restore lost or Information must come from judgments made
degraded function. by the experts in the area.
Preventive Maintenance - Minimize the Example methods:
opportunity for function to fail . Market Research
Alternative Maintenance - Eliminate •Delphi Method
unsatisfactory conditions by changing a
system's design or use. Quantitative Forecasting
- If sufficient data is available, the human
Within the category of preventive maintenance, factor can be removed from the equation and a
all tasks belong to one of five (5) major raw data analysis can be performed to predict
categories: future values.
• Condition-Directed
Time Directed Example methods:
Failure Finding •Exponential Smoothing Method
Servicing •Box-Jenkins ARIMA Models
• Lubrication
• Kanban
FORECASTING METHODS capacity over time to meet demand.
1. Judgment and Survey Techniques
- technique that relies more on people's Capacity refers to a system's potential for
opinions or estimates producing goods or delivering services over a
•Customer and Channel Survevs specified time interval. It involves long-term
Sales Force Composite and short term considerations.
•Executive Opinion Long-term considerations relate to the overall
•Expert Opinion level of capacity;
2. Time Series Techniques Short-term considerations relate to variations
- examine sales patterns in the past in order to in capacity requirements due to seasonal,
predict sales in the future. random, and irregular fluctuations in demand.
3. Correlates and Other Models Excess Capacity - arises when actual
- form of trend analvsis that estimates sales production is less than what is achievable or
based on the trends of other variables. optimal for a firm.
4. Response Models
- based on how customers have responded in Capacity can be broken down in two
the past to marketing strategies. categories:
5. Market Tests • Design Capacity - maximum designed
- an experiment in which the company service capacity or output rate.
launches a new offering in a limited market in • Effective Capacity - design capacity minus
order to gain real-world knowledge of how the personal and other allowances
market will react to the product.
Facilities
BUILDING BETTER FORECASTS - size and provision for expansion are key in
1. Pick the right method(s) for your business the design of facilities.
and your decision . Product and Service Factors
2. Use multiple Methods •Process Factors
3. Use many variables Human Factors
4. Use scenario-based forecasts •Policy Factors
5. Track actual results and adjust •External Factors

FORECASTING DEMAND Inadequate planning can be a major limiting

- to predict what customer demand will be for determining of effective capacity.
a product or service, with varying levels of
specificity. The most important parts of effective capacity
•People in Similar Business are process and human factors.
• Potential Customers
•Published Industry Data Process factors must be efficient and must
operate smoothly, if not the rate of output will
CAPACITY PLANNING FOR dramatically decrease.
PRODUCTS AND SERVICES
- overall objective is to reach an optimal level Human factors must be trained well and have
where production capabilities meet demand. experience, they must be motivated and have a
Capacity needs include equipment, space, and low absenteeism and labor turnover.
employee skills.
LOCATION CHOICE AND SITE
Common Strategies PLANNING
• Leading capacity - where capacity is Facility - physical means or contrivances to
increased to meet expected demand make something (especially a service) possible;
• Following capacity - where companies wait the required equipment, infrastructure, location
for demand increases before expanding etc.
capabilities.
• Tracking capacity - which adds incremental Key Factors:
•Proximity to sources of supply
•Proximity to customers Job design- is the allocation of specific work
Community Factors tasks to individuals and groups. Allocating
. Labor Factors jobs and tasks means specifying the contents,
Other Factors method, and relationships of jobs to satisfy
technological and organizational requirements,
FACILITIES DESIGN AND LAYOUT as well as the personal needs of jobholders.
- Aims to allow for the most efficient
workflow without disruption. Job design factors :
- Available space needs to be assessed with 1. Technical feasibility- job must be doable
workstations, equipment, storage, and other physically & mentally
amenities need to be arranged 2. Economic feasibility- cost of focusing the
- Workplace that has carefully arranged its job is less than the value it adds
layout will allow for a more effective and 3. Behavioral feasibility- degree to which the
efficient workflow job is intrinsically satisfying to the employee
There are three types of workflow layouts that
managers can choose from: Design of work system
• Process layout: arranged in departments • Specialization
• Product lavout: production line • Behavioral approaches to job
•Fixed-position layout: building a large item • Teams
• Methods analysis
Are the Facilities for an Office or a Factory? • Motion studies
Factories move materials from point A to point • Working conditions
B to produce final products.
Job specialization - is a process in which
- Minimizing transportation costs may be employees develop specific skills, experience
one of the criteria of planning the layout of and knowledge in a particular area in order to
a factory. gain the expertise required to perform certain
Offices, on the other hand, produce aspects of a job.
information.
- Office facility layout is harder to quantify Js can:
than factory facilities layout, but the goal -reduce the employees scope of expertise
should be to minimize communication costs -increase the employees scope of expertise
and maximize productivity. -work satisfaction vs employee boredom

UNIT 7 WORK SYSTEM DESIGN Behavioral approaches to job- this approach

considers behavioral factors in job design.
Work system -deals with the systematic
examination of the methods of doing work Employee needs in terms of autonomy, variety,
with an aim of finding the means of effective task identify, task significance, and feedback
and efficient use of resources and setting up of are considered.
standards of performance for the work being
carried out. The methods are:
A. Job enrichment- it is concerned with the
The systematic examination of work involves process of putting specialized tasks together so
•What is done? that the individual who is assigned with the
•And how it is done? task is responsible to perform the whole task.
•What is the standard time to do the work? B. Job characteristics: this method states that
job characteristics affect the job designing
3 parts of work system process. It focuses on job redesign, work
1. Job design structuring, job enrichment, and so on to
2. Work measurement improve organizational productivity and
3. Worker compensation quality of work life of employees.
c. Autonomous team: it is a group of workers
in which they solve problems, implement the
solution and take full responsibility for • Temperature, ventilation noise, color, safety,
outcomes. They are self-directed and cause of accidents, work breaks, lighting
self-managed work groups who perform • Congress passed OSHA in 1970 to mandate
related or interdependent tasks. specific safety conditions that must be met.

D. Modified work schedule: it is a technique Work System includes:

of job design through which the working 1. Job Design
schedules, timing, work week etc. Are 2. Work Measurement
rescheduled as per the convenience of the 3. Worker Compensation
workers.
1. Job Design - also referred to as work/task
Teams- design, is a core function of human resource
Benefit of teams - higher quality, productivity management and it is related to the
& greater worker satisfaction specification of contents, methods, and
relationship of jobs in order to satisfy
Kinds of teams technological and organizational requirements
a. Problem solving teams as well as the social and personal requirements
-small groups, trained in problem-solving of the job holder or the employee.
techniques.
Used to identify, analyze & propose solutions Job Design Success:
to workplace problems • Carried out by experienced personnel with
b. Special purpose- task forces the necessary training & background.
-highly-focused, short term teams with a • Consistent with the goals of the organization
focused agenda (often cross functional) • In written form
C. Self directed/ self managed teams • Understood & agreed to by both
-team members work through consensus plan, management and employees
manage and control their assigned workflow.
Methods analysis- a detailed step by step Key Elements of Job Design
analysis of how a given job is performed Task - a piece of assigned work expected to be
• Can distinguish between value-added and performed within a certain time. Job designers
non va steps must strictly and thoroughly identify tasks that
need completion
Operation: Motivation - describes forces within the
1. Analysis can revise the procedure to individual that account for the level, direction,
improve productivity and persistence of effort expended at work.
2. After improvement, must revise the new Individuals need to be compelled, excited, and
standard operating procedure passionate to do their work. Managers should
3. Follow up to insure that changes actually design jobs that motivate employees.
improve the operation Resource Allocation - Appropriate resource
allocation allows large organizations to foster
Method analysis consists of: and develop innovation in their workforce and
• Identify the operation to be analyzed underscores strategy through distribution.
• Gather all relevant information Reward Systems - Reward systems include
• Talk with employees who use the operation compensation, bonuses, raises, job security,
benefits, and various other reward methods for
Chart the operation employees. An outline or description of reward
• Evaluate each step packages should be established when
• Revise the existing or new operation as constructing jobs.
needed
• Put the revised or new operation into effect The aim of a job design is to improve job
• Follow up on the changes of the new satisfaction.
operation -to improve job satisfaction
Working Conditions -to improve through-put;
-to improve quality and;
-to reduce employee problems (e.g., • wide variety of dissimilar work is performed,
grievances, absenteeism). or
• process control elements constitute a part of
Core Job Dimensions the cycle.
a. Task identity - This dimension measures
the degree to which the job requires Taylor and his colleagues placed emphasis on
completion of a whole and identifiable piece of the content of a fair day's work, and sought to
work. maximize productivity irrespective of the
b. Skill variety - This refers to the range of physiological cost to the worker.
skills and activities necessary to complete the
job. A Comprehensive Time Study consists of:
c. Task significance - Jobs are more satisfying
if people believe that they make a difference,
and are adding real value to colleagues, the
organization, or the larger community
d. Autonomy - This describes the amount of
individual choice and discretion involved in a B. Motion Study
job. More autonomy leads to more satisfaction. Motion study was developed by Frank B.
e. Feedback - This dimension measures the Gilbreth and Lillian
amount of information an employee receives M. Gilbreth and consists of a wide variety of
about his or her performance, and the extent to procedures for the description, systematic
which he or she can see the impact of the analysis, and means of improving work
work. methods.
The main aim of motion study is to find the
Critical Psychological States scheme of least wastage of labour.
a. Experienced meaningfulness of the work - Subsequently, the scope of Motion Study was
The extent to which people believe that their enlarged and it was named as Method Study.
job is meaningful, and that their work is valued
and appreciated Motion Study Techniques:
b. Experienced responsibility for the
outcomes of work - The extent to which
people feel accountable for the results of their
work, and for the outcomes they have
produced.
c. Knowledge of the actual results of the Balance Scorecard - helps managers define
work activity - The extent to which people the performance categories that relate to the
know how well they are doing. company's strategy. The managers then
translate those categories into metrics and track
2. Work Measurement performance on those metrics.
Time and Study Motion - a business
efficiency technique combining the Time 3. Work Compensation
Study work of Frederick Winslow Taylor Compensation systems are typically based
with the Motion Study work of Frank and either on time spent working or on output
Lillian Gilbreth. generated. Time-based systems compensate
the employee according to the number of hours
A. Time Study worked during the pay period. Compensation
is a direct and continuous observation of a task, is not linked to employee performance but to
using a timekeeping device (e.g., decimal employee presence at the workplace. Output
minute stopwatch, computer-assisted based or incentive systems link employee pay
electronic stopwatch, and videotape camera) to to performance.
record the time taken to accomplish a task and
it is often used when:
• there are repetitive work cycles of short to
long duration,
Types of Compensation: Profit Sharing- It is a collaborative incentive
-Time based compensation system program in which you pay a share of your
-Output based compensation system company's overall earnings to your employees.
-Group incentive plans A profit-sharing plan is a retirement plan that
-Profit sharing & gain sharing gives employees a share in the profits of a
company.
Form of Incentive Plan: A profit-sharing plan gives employees a
-Accurate share in their company's profits based on its
-Easy to Apply -Consistent quarterly or annual earnings.
-Easy to understand
-Fair It is up to the company to decide how much of
its profits it wishes to share.
The compensation system of an organization
includes anything that an employee may Gainsharing involves offering employees
value and desire and that the employee is financial shares of the business gains from
willing and able to offer. improved performance in order to motivate
them to perform better.
Compensation system involves the total
rewards that are given to the employees for the A Gainsharing system is very specific in
labor and services they provide to the telling people what needs to happen, both
organization. overall and in their specific area, if we are
going to hit the targeted performance level.
compensation includes direct monetarv
benefits as well as indirect monetarv
benefits.

The indirect monetary benefits include paid

absences and other leave benefits, retirement
plans, employee insurance schemes, health
plans, education benefits and
other such benefits

Time- based compensation system

Time-based pay is a system where payment is
related to the time you spend at work rather
than the number or things that you do or
produce.

Output-based compensation system

The financial compensation is based on how
individual employees, departments, the
company, or the company's stock price
performs during a specific time frame and in
accordance with predetermined goals set by
the organization.
These programs may also be called
Pay-For-Performance systems

Group Incentive Plans

An incentive plan is a strategy to motivate
individual or group performance. In short,
incentives can be said as a strategy or the
organization to encourage the employees to
work better.