LGSC 6007 Production Management Topic 9

Topic 9:
Lean Synchronization
Lean synchronization is an important activity for many organizations in today’s world where
every effort must be made to streamline flows and reduce inventories. The five primary
objectives of operations performance are: quality, speed, dependability, flexibility and cost.
Inevitably, these are constantly under review by companies focusing on improving
competitive performance. Every company needs to improve output relative to costs and
resources, maintain or improve quality and reduce operations and product or service cost. In
The long run, lean synchronization aims to reduce unnecessary cost throughout an operating
system, and in so doing, improve the other performance factors.

To understand what lean synchronization is about and how it can be used to improve
operations performance, we will discuss:

1. Introduction to lean synchronization

2. Just-in-time (JIT) in lean operations
3. Barriers to lean synchronization
4. Is lean synchronization applied throughout the supply network?
5. Practical issues in lean synchronization

Readings

Chapter 15 of the textbook: Slack, N & Brandon-Jones, A, Johnston, 2019, Operations

Management, 9th edn, Pearson Education Limited

Articles:
Julien, DM and Tjahjono, B 2009, ‘Lean thinking implementation at a Safari Park’, Business
Process Management Journal, Vol. 15 No. 3. [An academic article researching the adoption of
lean thinking in a service environment]

Salaiz, C 2003, ‘Lean Operations at Delphi’, Manufacturing Engineering, September, Vol. 131
No. 3. [A practical article about lean manufacturing written by an operations manager]

Key terms and concepts Just in time (JIT) inventory

Kanban
Lean synchronization Continuous improvement
Barriers to lean synchronization Lean service
Lean operations Lean supply
Waste elimination Lean and agile

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1. Introduction to lean synchronization

What is lean synchronization?

We have seen in previous topics that wherever there is uncertainty or variation in the
operations systems, there is usually a build up of work-in-process inventory or waiting time
for people and equipment. Lean synchronization looks to reduce these consequences of
variability and has two fundamental process objectives: 1) the smoothing or synchronization
of process flows and consequent reduction in their variability, and 2) the reduction of cost.
The textbook explains that lean synchronization aims to meet demand instantaneously, with
perfect quality and no waste.

The means of accomplishing lean synchronization is by the elimination of all waste, the
involvement of all concerned and continuous improvement. This is clearly illustrated in the
diagram at the end of this section of the text. Continuous improvement will be covered in the
next topic, so here we concern ourselves with waste elimination and the lean synchronization
that results in just-in-time (JIT) process flows.

Activity 1

Browse the Internet and try to discover what two companies are doing in terms of lean
synchronization or lean thinking. Note how different the organizations are and whether this
might affect how lean practices are applied. How do the companies define their approach?
Are the definitions the same? If not, in your opinion, why not?

2: Just-in-time (JIT) in lean operations

Lean synchronization is about the philosophy and practise of just-in-time (JIT) processing. Lean
flow requires a JIT approach and in turn, JIT depends on flow synchronization in order to
minimize inventory. The textbook discusses JIT in several places, so, to obtain a clearer picture
of just what JIT is about we focus on it directly in this part.

What is JIT?

JIT is a philosophy that attempts to minimise waste in the form of inventory and time. It is
most frequently applied to inventory management in process flow systems. JIT was first
developed at Toyota in Japan in the 1970s and is now applied throughout the world. JIT is
founded on the idea of eliminating waste, which is defined as anything that does not add value
to the product.

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Kiyoshi Suzaki (1987) defined seven process wastes:

1. Overproduction – excess production results in waste inventory

2. Waiting time – unnecessary delays
3. Transportation – unnecessary movement of materials
4. Processing time – unnecessary process time from poor or badly
maintained equipment
5. Inventory – unnecessary or obsolete stock from poor planning, etc.
6. Motion – unnecessary motion or movement in people or equipment e.g.
workers
walking to get materials (in a restaurant for example)
7. Defects – cost of producing products that are defective

Push-pull systems

How does JIT work? In traditional process systems, batches of products were produced at
different tasks in the process. Operators usually worked at the task until the entire batch was
complete and then pushed the batch on to the next task in the process. If that next task had
broken down for some reason (equipment failure for example), the inventory continued to
accumulate and sit waiting for the next task to begin. In JIT systems, inventory is pulled
through the system as only needed.

In the following diagram, the supplier delivers to the company’s raw material store, Task A
retrieves stock from the raw material store, processes it and hands it on to Task B which
processes the output from Task A and then hands it on. If a serious fault develops at Task B,
then under a traditional system, the supplier keeps ‘pushing’ supplies into the raw materials
store, Task A keeps producing and pushing WIP on to Task B, and the problems at Task B are
hidden from them.

'Pull' request
Purchase
order

Raw
material
WIP
store
Supplier Task A Task B

Product flow & traditional

'push' direction

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For example, if the batch quantity is 100 units, that quantity will flow from the supplier
through to the raw material store, then to Task A. If Task B has completed 10 units before
breakdown, eventually 90 units will be sitting in WIP prior to Task B. Furthermore, tasks
downstream from Task B will now be kept waiting. One view purported by JIT proponents is
that inventory hides problems.

In JIT, control of the process flow starts in reverse order with downstream tasks requesting
stock only as needed. If this had happened in the diagram above, the operator of Task A would
have stopped receiving requests for inventory from Task B after only 10 units had been
processed, and would have then stopped pulling more raw materials from the store. In turn,
this pull process would affect the purchase of supplies. In the ‘push’ case, as batches of
inventory are pushed through the system, the supplier would hold 100 units, the raw material
store 100 units, Task A 100 units, with 90 WIP inventory at Task B = 390 units. In the pull
system, there would be no units at Task B, 10 units at Task A, 10 units in store, with the supplier
holding 10 units ready to deliver = 30 units, a considerable reduction.

The inventory objective of JIT is to reduce the request quantity (or lot size) to one, so that
there is no WIP between tasks in a process. Note also that an ideal lot size of one does not
necessarily mean one unit. Where there is some unavoidable uncertainty in demand through
the process, the lot size can be set at one small batch of units.

Notice that in this process, once the breakdown occurs the whole process knows and is
involved in some way in overcoming the problem. The operator of Task A can go on to other
work temporarily and reduce waste processing time. Because the whole process is affected,
serious attention is focussed on the problem to prevent it happening again. A fundamental
feature of JIT is the need for communication between tasks in a process; often done with the
use of a ‘kanban’.

Kanban (Japanese)

Kanban means ‘marker’. They provide a visual approach to authorizing the pull request for
materials. Some companies use Kanban ‘squares’, areas on a bench or the floor where the
requested stock is placed. When the squares are visible, it is the signal that authorizes the
supply of more materials.

Part 3: Barriers to lean synchronization

The textbook mentions that the main barriers to lean synchronization are a failure to eliminate
waste, failure to involve people, and failure to achieve continuous improvement. This part
discusses the most important barrier – the elimination of waste.

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Key issues in eliminating waste

Waste is defined in the textbook as any activity that does not add value. The specific types of
wastes described in the textbook are waste from: irregular flow, inexact supply, inflexibility,
and variability. Note that each of these sources of waste are introduced in the section on
barriers to lean synchronization, and then discussed separately in more detail under the
headings ‘Is flow streamlined?’, ‘Does supply exactly match demand?’, ‘Are processes
flexible?’, and ‘Is variability minimised?’.

Failure to eliminate waste is considered by the textbook to be a barrier to the achievement of

lean synchronization. An important point here about lean synchronization is that its effect
through JIT begins to filter through the supply chain system, making the supply chain lean in
turn. As each company adopts a lean approach, suppliers must fit in or suffer wastefulness in
their operation. In turn the suppliers’ suppliers are also affected. Lean synchronization has the
potential to deliver significant competitive advantages for the whole supply network.

Streamlining flow through processes requires attention to flow analysis and layout, as well as
good communication and visibility. Supply problems can be tackled with a JIT approach.
Process flexibility means being able to change a process quickly as circumstances demand. In
a high volume motor vehicle assembly line, setting the line up for a different vehicle is usually
a major task. A lean approach tries to reduce the setup time and also to break the work down
into smaller cells where setup tasks can be managed more easily and flexibly.

Finally, variability is concerned with variation throughout the process. This variation might be
present in terms of flow quantities; the quality of raw materials, WIP or finished goods; or
variability in the capabilities of human operators. Levelling out the variability is an important
goal, and such levelling can be applied to the process flow as well as deliveries into the process.
The process diagram about JIT discussed earlier in Part 2 shows how a ‘pull’ strategy assists in
the adoption of smaller batches of product going through the system thus cutting the
variability in inventory and supply.

Part 4: Is lean synchronization applied throughout the supply network?

One question we might have as managers is where in the operations system should lean
synchronization be applied? For example, can it be applied throughout the supply chain or is
it limited to minimizing inventories and waste within each single organization? In this part, the
textbook sheds light on the impact of lean synchronization on the complete supply system. It
is illustrated most clearly by considering the application of just-in-time (JIT) within an
organization. When a company implements a JIT system, the success of the system relies
heavily on inventory being ‘pulled’ through the operational processes that use that inventory.
If we work backwards from the finished goods, to the work-in-process inventory and then to

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the raw materials required, our internal JIT processes fail if the company’s suppliers cannot
deliver supplies on a JIT basis. Consequently, a business will need to form relationships with
suppliers that help them to adopt JIT technology in their processing system. Taken further, it
is obvious that lean synchronization cannot adequately deliver its full potential unless the
supply chain is fully synchronized.

The textbook also discusses the important point of agility as well as leanness. An agile
organization or an agile supply system is one that can change quickly and adapt to new
circumstances. You can appreciate the importance of agility as a means of supporting lean
synchronization when you examine the way a non-agile company accumulates obsolete
inventory as a result of failure to change quickly with changes in new product technologies.
This is further illustrated in the diagram in the textbook that discusses how product complexity
and demand uncertainty influences supply chain agility and leanness.
Finally, it is worth looking closely at the potential for lean synchronization in services. (There
is a good chance that lean synchronization in services will be the subject of an exam question
on a regular basis, given the importance of services.) To temper your learning, be sure to note
the three main points mentioned about the application of lean synchronization to services,
i.e. 1) services are a long way behind manufacturing (but nonetheless are still relevant), 2) not
all lean ideas from manufacturing will be useful in services, and 3) lean principles have the
power to change the way a company learns and responds to change (which would be equally
beneficial to services).

One clearly applicable lean concept for services is the reduction in waste. Services are often
very time intensive and many public governmental services are characterised by “inventories”
of wasted time as users queue for service. In addition, passengers of an airline are like process
inventory. How could passenger flows be minimised and synchronised? In a way this has
already started with passengers now able to use the Internet to buy tickets online and avoid
queuing at airport ticketing desks. But more can be done. Checking in at the airport is still a
human inventory-intensive process, as is baggage collection at the end of the flight. In
summary, services are a productive breeding ground for the application of relevant lean
synchronization concepts.

Part 5: Practical issues in lean synchronization.

In the early days of JIT (and noted in many operations management books today), much
attention was placed on achieving the ideal lot size of one unit of product. While this does
work for many companies with relevant products, in cases where some process variability is
unavoidable a lot size of one can be a source of risk. In addition, the idea has sometimes been
promoted that it is better for workers to be idle than to accumulate inventory (waiting for a
request for another lot of inventory usually meant that the worker sat idle for a time).

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So how can we separate out these issues and know better when to apply JIT in all its glory and
when to be cautious? And what might be considered relevant products and services? There is
no doubt that JIT and lean approaches work much better for products with fairly stable
demand. So demand variability is one warning signal. In addition, in a stable situation think of
the lot size as an order quantity from the next task in the process. What are the conditions
required to obtain an EOQ of 1? The two inventory cost components are holding and ordering
cost. If we look at the total cost curve graph used to illustrate the economic order quantity, it
is obvious that as holding costs increase, the most economic order quantity decreases. What
increases the holding costs? Holding cost reflects the value of the product and the costs of
storing it. For example, if you were handling gold bars what WIP level would be best? (Hint:
none?) Alternatively, you might be holding frogs in cryogenic stasis – low cost of goods but
very high storage costs. In addition, to get to an order quantity of 1, the order costs must
decrease as well. In a Kanban system, the preceding operator only needs to get the visual
signal to receive the order. Order costs are almost zero.

So relatively expensive products with minimal order costs should be well suited to JIT based
lean strategies, but other products with high labour costs may need a different approach.
Consequently, some products might not be well suited to the absolute JIT approach but
perhaps to some variation of it that minimises costs as best as can be accomplished. Some
years ago Hewlett Packard, in promoting JIT in their plant, mentioned that their printers’
manufacturing cost structure consisted of around 2% labour and 98% materials. Under these
circumstances, some idle labour in the system is nothing compared with the cost of material
inventory. For this type of product, inventory minimisation is a must and JIT works very well.

Ultimately, you must be able to make a ‘professional’ decision about issues such as the value
of achieving lean operations and not just accept off-the-shelf solutions without working
through the issues. Lean thinking is unavoidable nowadays and JIT is a conventional solution
for many processes. Blending the theoretical solutions with managerial judgement is how
these and other improvement techniques (ERP etc) have found great use in industry.

Activity 3

Browse the Internet about lean synchronization.

You are likely to find various definitions and approaches to lean synchronization. The term
‘lean synchronization’ is relatively new, so there will be other terms such as lean operations,
lean thinking, lean distribution and lean supply chain management in evidence. Companies
will vary in how they apply lean techniques; largely for the reasons discussed in this topic –
type and value of product, unstable demand, large versus small processes, process stability
and so on.

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Activity 4

Think about the following:

▪ The movement of parts

▪ Heijunka
▪ Kanban
▪ Fail-safeing
▪ Who can stop the process?
▪ Transparency
▪ Kaizen
▪ Standardization

How are operations objectives (quality, speed, dependability, flexibility, cost) influenced by
the practices which Toyota adopts? Continuous improvement increases the performance of
all the performance objectives and also improves the interplay between them.

Activity 5

Of the thousands of results you get by entering ‘kanban’ into a search engine, many will be
consultants selling services. Do not dismiss these. Several of their sites can be very useful in
terms of classifying kanbans and giving a brief description of how they are used.

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