The Seven Deadly Wastes

Transcription

1 The Seven Deadly Wastes Workbook Excess inventory can conceal other wastes. Learn how to calculate cycle stock, buffer stock, and safety stock in this module. A workbook intended to accompany the Facilitator s Guides for this course. This guide includes the Key Points from the video, discussion items, quiz questions, and helpful tips. Using Gemba Academy s online learning content, any participant can use this workbook to facilitate learning in all courses. June 2017

2 Review What is Inventory Waste? The waste of inventory is any material or work on hand other than what is needed to satisfy customer demand. This includes work in progress, finished products, excess supplies, extra documentation, and even sitting in our inboxes. Inventory is often excused because we got such a great deal or we don t want to run out. Inventory is also directly related to : if your company is converting inventory into healthy profits, times are likely good from a cash flow perspective. If you have inventory which you ve already paid for sitting around, your cash flow situation could probably be better. What are the Main Types of Inventory? Stock: inventory needed to cover normal demand. It can be calculated by multiplying the average daily demand by the lead time needed to replenish. The main contributing factors to cycle stock are the average daily and the replenishment lead-time. Stock: inventory needed to cover sudden demand surges during periods between replenishment. It can be calculated by taking the standard deviation as a percentage of the cycle stock. The main contributing factors to buffer stock are errors, demand swings, and MRP whips. Stock: inventory needed to cover internal losses. 1

3 It can be calculated as a percentage of the total of the cycle stock and buffer stock together. The main contributing factors to safety stock are poor, downtime,, reworks, etc. What Does Inventory Waste Cost Us? Most organizations vastly the costs of inventory since it s much more than just the interest paid on the money to buy the material. The costs of inventory waste include costs, obsolescence, price, and the cost of making products that sit in storage instead of making products that could be sold. The greatest cost of inventory, however, is the false sense of it leaves people with. When we have inventory buffers, our problems are often buried below the surface; when our inventory levels are, problems which have gone unnoticed for a long time become exposed. What Causes Inventory Waste? Here are some of the most common causes of inventory waste: Inventory waste can be caused by companies producing in case of scrap; in other words, they use inventory to mask things like problems or careless mistakes in their workplace. Employees being measured and rewarded solely for the of units they produce, regardless of whether they make more than the customer is willing to buy, can also result in inventory waste. or production schedules often make it very difficult to maintain consistent and healthy inventory levels. Companies attempting to build to forecast can produce problems for themselves, since the forecasts (no matter the industry) usually have one thing in common: they re. 2

4 Lean Tools to Combat Inventory Waste Single Minute Exchange of Dies (SMED), or, means doing as much of the setup as possible while a machine is still running, so that when it does stop, we can quickly get it ready to produce another part. One-Piece Flow (or ) is a system where each worker in a process uses one piece and moves it to the next step in the process only when that piece is needed. The work is balanced to takt time and the operator is familiar with both the and processes. A system is another powerful way to reduce the amount of work in process in any operation. This pull system schedules one process (such as assembly), which triggers a series of pull signals to other processes before it (such as paint, assembly, etc.). 3

5 Quiz 1. The waste of inventory is any kind of material or work on hand other than what is needed right now to satisfy customer demand. True False 2. Inventory and cash flow are closely linked to one another. True False 3. The three inventory types are cycle stock, buffer stock, and. Please fill in the blank. 4. Given an average demand per day of 525 pieces, a lead-time to replenish this stock of 4 days, 2 standard deviations of demand history at 20%, and the max shortfall due to internal inefficiencies is 10%, how much safety stock is needed? 904 pieces 394 pieces 195 pieces 252 pieces 5. Generally speaking, what do most production forecasts have in common? They re usually wrong They re correct 6. SMED stands for Single Minute Exchange of. Dies Demand Direct Labor Degrees 4

6 Reflection How has the waste of Inventory impacted you personally, in your workplace or daily life? What can you do to combat it? 5