Just-in-time Enterprise Institute | Methodologies

Plant Systems Improvements

Functional Area	Conventional Manufacturing	Lean Manufacturing	Value Added

Production Operations	Focused on machine capacity	Focused on process capacity Focused on indirect interfaces	Cheaper machines required Indirect costs reduced
	Production status obscure	Production status visible	Progress indicators visual Process on Autopilot

Inventory	Work-in-progress not controlled	WIP capped	Lower inventory costs
	WIP encouraged	WIP discouraged	Prevents Batches of defects
	WIP added as necessary	WIP reduction as a goal	Reduces space requirements

Sales Activities	Sell everything you can	Sell what makes sense to produce	Lower product costs Higher customer satisfaction
	On-time delivery irregular	On-time delivery assured	Higher customer confidence

Marketing Activities	Planned mass production	High variety / Low volumes	Produce exactly what you sell
	High prodcut variability	Reduced product variability	Reduced variability = fewer set-ups & change-overs
	Long unpredictable lead times	Short predictable lead times	Less finished product inventories

Marketing Actvities	Planned mass production	High variety / Low volumes	Produce exactly what you sell
	High product variability	Reduced product variability	Reduced variability = fewer set-ups & change-overs
	Long unpredictable lead times	Short predictable lead times	Less finished product

Management Focus	Functional expertise and department responsibilities	Product & system perspectives and responsibilities	Broader management perspective Entire product responsibility Flatter organizational structures
	Added on due to structure	Built in due to delegation of responsibilities	Much less production control requirements

Product Variety	Product similarities rarely considered	Products grouped into families	Reduced set-up & change-overs Increased production flexibility
	High product variability	Reduced product variability	Reduced parts & WIP inventories

Lead Times	Weeks or months	Hours or days	Increased throughput & flow
	Low throughput rate	High throughput rate	Reliable period production

Factory Layout	By functional machine type	By process flow in lines or cells	Much less material handling Much less inventory
	Stand-alone departments	Stand-alone product factories or cells	Can easily turn on & off to match demand

Inventory	Considered as an asset	Considered as a liability	Inventory costs reduced
	WIP & parts queued at each operation	WIP & Parts capped throughout processes	Prevents overproduction

Push-Pull	Shop orders & materials pushed by MRP/ERP	Pulled from previous process only as required	Prevents overproduction
	Shop orders not synchronized	Shop orders only to the pacing process	Simplifies production control

Equipment Availability	Not critical to success [compensate with larger inventories]	Critical to success [Failures will halt processes]	Forces effective preventative maintenance (PM)