Chapter

Lean Systems

DISCUSSION QUESTIONS
1.

Many students buy into lean systems as a philosophy until they are faced with the
prospect of having their own work evaluated on the basis of performance of a group
rather than as an individual. This discussion will probably uncover any conflicts
between the culture the students have been raised in and and lean systems
philosophy. The discussion might be turned to look for compromises or ways lean
systems could be modified to work with their culture.

2.

Aspects of lean systems that have proven troublesome for some U.S. users are
realignment of managerial reward systems, restrictive labor contracts, plant layouts,
and adversarial supplier relationships. Our culture focuses on individuals rather than
groups, and our legal system contains hurdles to forming partnerships that restrict
competition. Many firms have already overcome these obstacles.

3.

A lean system requires a low level of capacity slack and increasingly smaller levels
of inventory. In order to reap the waste-reduction benefits of lean uniformly across
the supply chain, all members of the supply chain must participate. Otherwise, one
tier of the supply chain may be holding increasing levels of inventory to decouple
them from their more efficient supply chain partners. This leads to higher costs and
greater inefficiency for the entire supply chain. Thus, it is vital to create close,
collaborative relationships with supply chain partners to ensure that information
planning and problems are shared along the supply chain.
Thus, the pressures of participating in a lean supply chain come from enforcing a
discipline of (1) small lots, (2) frequent shipping, (3) short lead times, (4) accurate
shipping schedules, and (5) high quality from inbound logistics through operations
and outbound logistics. Significant problems within this environment, such as
inventory shortages or labor stoppages, will ripple across the supply chain. If not
corrected quickly, these problems can shut down the entire supply chain.

4.

The answer here will vary. Most students will draw a simple process they are very
familiar with. For example ordering an item at a fast food restaurant: Receive order
gather materials (buns, meat, cheese, condiments) assemble materials serve
order.

8-1
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8-2

PART 2 Managing Processes

PROBLEMS
1.

Harvey Motorcycles
a. What is the cycle time for the assembly line?
1
7 hours
hours
c
0.0555
r 126 motorcycles
motorcycle
minutes
333
.
motorcycle
b. If Harvey uses small-lot mixed model production, what is the batch size of each
model before the production cycle is repeated? The greatest common divisor of
the production requirements for each motorcycle is 6. Therefore,
Golden = 9
LX 2000 = 7
Tiger = 5
c. G L G L T G L G L G L T G L G T G L T G Tother sequences are possible.
d. Now the greatest common divisor is 13. Therefore,
Golden = 4
LX 2000 = 3
Tiger = 2
Cheetah = 1
Unless the setup time is reduced, there may be too much loss of capacity in
performing additional setups per day. There may also be a shift in demand from
the original three motorcycles to the new one, changing the mixed-model
required.

2.

Spradleys Sprockets
k=
k=

d ( w )(1 )
c

500(0.20 1.80)(1 0.05)

20

k = 52.5
3.

LeWin
a. Solving for implied policy variable,
k=

12

d ( w )(1 )
c

1,800 1.05 0.003 300 1 a

1 a

300
12 300

1,800 1.05 0.003 300

1.0256

1.0256 1 0.0256

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Lean Systems

CHAPTER 8

b. Reduction in waiting time

1,800 w 0.90 1.0256
1,846 w 1, 661.47
11

300
300
1,846 w 3,300 1, 661.47
w 0.888 days
The reduction in waiting time is:
105
. 0.888
1543%
.
105
.
4.

Gadjits and Widjits

a. Containers for gadjits
k=
k=

d ( w )(1 )
c

800(3)(0.09 0.06)(1 0.09)

= 4.905
80

k=5
b. Containers for widjits
k=
k=

d ( w )(1 )
c

800(2)(0.14 0.20)(1 0.08)

= 11.750
50

k = 12
5.

Gestalt, Inc.
150(30)
=0.156
8(60)(60)
1 .6
w
0.20 days
8
d ( w )(1 )
k=
c
d (0.20 0.15625)(1.1)
8=
30
240
d
612.44 or 612
0.35625(1.1)

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8-4

6.

PART 2 Managing Processes

Jittery USPS
375
= 0.01302 days
8(60)(60)
25
w
0.0521 days
8(60)

k=
k=
7.

d ( w )(1 )
c

90,000(0.0521 0.01302)(1.18)
= 18.44 or 19 containers
375

Januarys container needs

k=
k=

d ( w )(1 )
c

1,200( 4)(0.16 0.10)(1 0.15)

= 7.16 or 8 containers
200

Februarys container needs

k=

d ( w )(1 )
c

k = (900*4) (0.16+0.125)(1+0.15)
200
k = 5.8995 or 6 containers per day
8.

Jitsmart
11 days(lead time plus processing time) 36 units(demand) + [0.25(safety stock
variable) 396] = 396 units + 99 units = 495 units
36(11)(1.25)/48 = 10.31 containers for 495 units. Rounding up to 11 containers
would allow for the small inventory on the lower shelf.

9.

Markland First National Bank

a. Processing time = 24 min/day
Waiting time = 120 min/day
Total processing and waiting = 144 min/day
Total minutes per day = 24*60= 1440
Total processing and waiting in portions of a day = 144/1440 = 0.10
Let d be the daily demand of checks
[d(.1)1.25] = 20
50
0.125d = 20
50
0.125d=1000
d=8000
Daily demand=8000 checks

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Lean Systems

CHAPTER 8

8-5

b. Waiting time is muda and therefore, if eliminated, would leave only 24 mins of
processing time. When expressed as portions of a day, 24 min = 0 .017 days.
(8000)(0.017)(1.25) = 3.4 or 4 containers
50
10. Farm-4-Less
a. Each cycle contains 4SM, 2GC and 2 LT. In total each cycle produces 8
machines. Since Farm-4-Less completes a machine every 2 minutes (takt time),
it takes: 8*2= 16 minutes to complete the entire cycle sequence.
b. Per cycle= 4 SM, 2 GC and 2 LT are produced. If there are 480 minutes
available, then there are (480/16) = 30 cycles per shift. Thus, a total of = (30x4)
= 120 SM, (30x2) = 60 GC and (30x2) = 60 LT are produced each shift.
11. Jensen Bearings Inc.
a. The plant now holds 1 day of raw material.
b. There are [(1050+1200)/2500] = 0.9 weeks or [0.9*5] = 4.5 days of work in
process inventory is held between Press and Pierce & Form.
c. There are [(250+1500)/2500] = 0.7 weeks or [0.7*5] = 3.5 days of work in
process inventory is held between Pierce & Form and Finish Grind.
d. There are [(500+1200)/2500] = 0.68 weeks or [0.68*5] = 3.4 days of work in
process inventory is held between Finish Grind and Shipping.
e. The value steams production lead time now equals [1.0+4.5+3.5+3.4] = 12.4
days
f. The value streams processing time is 60 seconds [3 + 22 + 35].
12. Ormonde Inc.
a. The cells current inventory level is [400+500+200+1000] = 2100 units
b. The cells takt time is 2.37 minutes per unit.
(8hrs*60mins-45mins) 3shifts = 1305 minutes available per day
for production.
1305mins/550units of demand per day = 2.37 minutes per unit.
c. The cells production lead time is: .73+.91+.36+1.82 = 3.82 days
Raw Material lead time = [400/550]= .73 days
WIP lead time between Cutting and Bend = [500/550] = .91 days
WIP lead time between Bend and Punch = [200/550] = .36 days
Finished Goods lead time after Punch = [1000/550] = 1.82
d. The cells processing time is [120+250+140] = 510 seconds.
e. The cells capacity is 554.5 units per day (slightly larger than current demand
level).
Given 99% uptime, bending is the bottleneck
Availability at bending = 1305 mins*.99 = 1291.95 mins/day
Time at bottleneck (with setup)
125secs+300sec/20units=140sec/unit or 2.33min/unit
Availability/Time at bottleneck = 1291.95/2.33 = 554.5 units

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8-6

PART 2 Managing Processes

CASE: COPPER KETTLE CATERING

A.

Synopsis
Copper Kettle Catering, owned by Wayne and Janet Williams, is a full-service
catering business with services ranging from the delivery of box lunches to the
serving of dinner for weddings and large office parties. The case describes the two
primary market segments, deliver only and deliver and serve. Information that
details these market segment characteristics along with descriptions of the
operations and CKCs competitive priorities is provided. The business is feeling
competitive pressures in the form of shorter lead times to respond to customer
demands, increased flexibility of product/service offerings, and increased focus by
customers on the value received for their catering dollar. A major issue proposed to
the students is whether the concepts of lean systems are applicable to this service
business.

B.

Purpose
The major purpose of this case is twofold:
1. To provide a framework within which the concepts underlying the lean systems
approach to the management of material flows can be discussed.
2. To lead students to the understanding that lean system concepts are applicable to
service operations as well as to manufacturing.
Specific issues that students need to address include:
q
Process management considerations
Repetitive nature of the tasks
Well-defined material flows
Close proximity of work-centers layout
q
Inventory management
Lot sizes
Aggregate levels to maintain
Space/spoilage considerations
q
Scheduling of orders and workers
Level of stability in the schedule
HRM issues, including reward and recognition, skills required,
cross training
Interaction with suppliers

C.

Analysis
For an effective discussion of the case issues, following the assignment questions at
the end of the case works best.

This case was prepared by Dr. Brooke Saladin, Wake Forest University, as a basis for classroom
discussion.
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Lean Systems

CHAPTER 8

8-7

Question 1
There is a wide range of operations that are conducive to the use of lean systems
concepts, including service operations. In general, the focus of lean systems
includes high quality with respect to both inputs and outputs of the processes;
reduction of waste; quick response times by the reduction of setup times and the
simplification of processes; and a reduction in costs by lowering inventory-level
requirements and maintaining quality. All of these are consistent with the objectives
and improvements the Williams desire for CKC.
The processes at CKC have several characteristics that support the implementation
of lean systems. They include:
q Having a demand pull system where orders placed by the customer cause
materials to be pulled through the system. Deliver only orders are more
reactive, having a relatively short lead time in which to respond. The deliver
and serve orders are booked much farther in advance, and firm planned
schedules can be established on a weekly basis.
q Workers are very flexible and, for the most part, interchangeable, except maybe
for the cooks.
q The menu is still relatively simple, with limited variety allowing for some
standardization.
q The processes seem to be visible, in that workers can see the entire operation
and track the flow of materials easily.
q The processes are repeatable and conducive to standardization.
q Lot sizes would seem to be small and setup times relatively short.
q The overall load on the system, that is, orders, is relatively uniform.
q Quality of materials and output is at a high level.
Question 2
There are a number of possible barriers that CKC may face if the concept of lean
systems is pursued.
q It was mentioned that the facilities were set up in a job process configuration
that may be less suitable for lean systems than a line flow configuration.
q Overall demand is indicated to be stable; however, the variability in each order
may inhibit standardization. In some respects this operation may be thought of
as a custom-job shop.
q Supplier relationships will be extremely important to maintain both quality and
quick response. Some suppliers now require CKC to pick up their orders.
q The two types of markets, deliver only and deliver and serve, really require two
different types of operating systems to focus on different customer
requirements. The relative importance of menu variety and response time differ
noticeably in each market.

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8-8

PART 2 Managing Processes

Question 3
There are a number of recommendations students may present that take advantage
of the use of lean systems concepts and principles. Some of the ones to expect
include:
If possible, split the operations to focus independently on the two market
segments: deliver only and deliver and serve. Lay out the processes in a flow
pattern where the entire process for each market segment is visible to the
workers. Also, lay out the necessary tasks and equipment so that cycle times can
be reduced to shorten lead times.
q CKC can begin to employ lean systems signaling techniques for the movement
of materials such as color-coded, standard-sized trays.
q Begin a cross-training program to enhance the flexibility of the workers so they
can be assigned where needed.
q Continue to build supplier relationships by developing supplier alliances,
reducing the total number of suppliers, and sharing information on demand
patterns and material needs.
q Try to limit the menu selection, especially for deliver-only orders where
response time is more important. This will also help reduce inventory levels.
q Maintain good housekeeping policies, not only for quality and health safety
reasons but also for enhancing visibility within the processes and ensuring the
prompt availability of needed tools and materials. It also helps in the
development of the proper attitudes about work and the workplace.
These are but a few of the possible recommendations. The students will have many
more. The focus of their recommendations usually revolves around these primary
areas: process management issue and inventory management.
q

D.

Teaching Suggestions
As mentioned in the analysis section, an effective way to discuss this case is to
follow the three case questions. The case is designed to be used as a cold-call inclass exercise. It is short enough to read in 10 minutes. Given that the students read
the lean systems chapter prior to coming to class, they should be able to discuss the
three questions posed at the end of the case. The intent is to have the students
discuss the major concepts of lean systems and to recognize appropriate
applications.
The case should take no more than 30 minutes to explore fully. Spend the first 10
minutes discussing factors concerning CKCs operations that are conducive to lean
systems. Put these on the left side of the board. Then list the possible barriers to
lean systems implementation on the right side of the board. This should take another
10 minutes. Finally, ask for recommendations and put these in the center of the
board. You can then quickly relate each recommendation to the implementation
factors both pro and con to the left and right. Recommendations should build on the
strengths and address the barriers. Exhibit TN.1 shows the layout of the board.

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Lean Systems

EXHIBIT TN.1

CHAPTER 8

8-9

Sample Board Plan Layout

Factors Supporting Lean

Systems

Recommended Actions

Barriers to the
Implementation of Lean
Systems

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