CMA Intermediate · Operations Management and Strategic Management

Lean Operations and JIT: formula sheet

Full chapter guide

Key formulas

Five principles of lean (order): Value → Value stream → Flow → Pull → Perfection; Learn them in this order. Examiners often ask you to list or explain them.
Lean idea in one line: Lean = maximise customer value + minimise waste; Use this as your opening definition.
Classification of activities: Value-adding | Necessary non-value-adding | Non-value-adding (waste); This is how value stream mapping labels each step.
TIMWOODS memory aid: T = Transport, I = Inventory, M = Motion, W = Waiting, O = Overproduction, O = Over-processing, D = Defects, S = Skills (unused talent); Eight letters, eight wastes. Write the full name of each waste, not just the letter, in answers.
Value-added test: Value-adding activity = changes the product, the customer wants it, and it is done right the first time; If any of the three conditions fails, the activity is waste or at best necessary non-value-adding.
Muda, Mura, Muri: Muda = waste; Mura = unevenness; Muri = overburden; Keep the three terms distinct. Mura and muri are causes that lead to muda.
Waste to remedy pairing: Overproduction → pull/Kanban; Waiting → line balancing, preventive maintenance; Transport → better layout; Over-processing → standard work, value analysis; Inventory → JIT; Motion → 5S, ergonomics; Defects → Poka-Yoke, quality at source; Unused talent → training, suggestion schemes; These are typical pairings, not the only valid ones. A reasoned alternative earns marks.
Number of kanbans (containers): N = D × L × (1 + S) ÷ C; D = demand per unit time, L = lead time (same time unit as D) to replenish a container, S = safety factor as a fraction, C = quantity per container. Round N up to a whole number.
Demand during lead time: D × L; Parts consumed while a container is being replenished. Use it to check the formula in steps.
Rule: no defective parts passed on: Only good parts go to the next process; A defect must be stopped at source, otherwise the pull chain breaks.
Rule: downstream pulls: Later process withdraws only what it needs, when it needs it; Upstream never pushes extra parts.
Rule: upstream produces only what was withdrawn: Produce quantity = quantity withdrawn; Production never exceeds the number of cards received.
Rule: smooth production and fewer cards: Level the schedule and reduce the number of kanbans over time; Fewer cards means less stock and shows hidden problems.
5S in order: Seiri → Seiton → Seiso → Seiketsu → Shitsuke = Sort → Set in order → Shine → Standardise → Sustain; Learn the order. Standardise comes after Shine, and Sustain is last.
Process cycle efficiency: Process cycle efficiency = Value-adding time ÷ Total lead time × 100; Used with VSM to show how much of the lead time adds value. Use the same time unit for both.
Total lead time: Total lead time = Sum of process times + Sum of waiting (inventory) times; Read from the timeline at the bottom of a value stream map.
Tool-to-purpose match: 5S = workplace order; Kaizen = continuous improvement; Poka-Yoke = error prevention; Jidoka = stop on defect; Andon = signal; TPM = equipment reliability; VSM = flow and waste; Most short questions test this matching.
Lean implementation sequence: Specify value → Map value stream → Create flow → Establish pull → Seek perfection; The five lean principles. Use this order as the skeleton of any implementation answer.
Lean vs Six Sigma focus: Lean = remove waste and delay; Six Sigma = reduce variation and defects; Lean Six Sigma combines both. State the difference in one line each.
Inventory saving: Saving in carrying cost = Reduction in average inventory × Carrying cost rate; Use it when a question gives stock reduction and a carrying cost percentage.

Quick revision

Lean means maximising customer value while minimising waste.
Value is defined by the customer, not by the producer.
Lean thinking moves through value, value stream, flow, pull and continuous improvement.
Muda is the Japanese word for waste, meaning any activity that uses resources but adds no value.
Learn all eight wastes by name and give one example for each.
JIT means producing or buying only what is needed, in the quantity needed, when it is needed.
JIT aims to reduce inventory, lead time and holding cost.
Kanban is a visual signal that triggers production or replenishment in a pull system.
Pull production starts from customer demand; push production starts from a forecast or schedule.
5S is a workplace organisation method for a clean, orderly and efficient workplace.
Kaizen means small, continuous improvement involving all employees.
Poka-Yoke is mistake-proofing that prevents or flags errors at the source.

Common mistakes

Writing the principles in the wrong order or mixing in tools like 5S and kanban. Fix: Remember principles are the five ideas. Kanban and 5S are tools that support them. Kaizen is the practice that delivers the principle of perfection, so write perfection as the principle and name kaizen as the tool that pursues it.
Defining value from the company's point of view. Fix: Value is defined by the customer: what the customer is willing to pay for.
Confusing transport with motion. Fix: Transport is movement of materials or products. Motion is movement of people or operators.
Calling inventory a necessary asset and not a waste. Fix: In lean, excess stock is waste because it ties up cash, needs space and hides problems such as defects and poor scheduling. Say 'excess' inventory.
Saying JIT means zero inventory exactly. Fix: Say JIT aims at minimum inventory, with the ideal of eliminating it. Small work-in-process between stages still exists.
Treating JIT and Kanban as the same thing. Fix: Write that JIT is the philosophy and Kanban is one signalling tool used to run pull production.
Calling kanban itself the pull system, or the same as JIT. Fix: Say: JIT is the philosophy, pull is the way of controlling flow, and kanban is the card tool that carries the pull signal.
Mixing up production kanban and withdrawal kanban. Fix: Production kanban = authority to make. Withdrawal kanban = authority to move. Think: make versus move.
Writing the 5S steps in the wrong order or giving wrong English words. Fix: Remember Sort, Set in order, Shine, Standardise, Sustain, and link each to its Japanese word.
Treating kaizen and kaizen blitz as the same. Fix: Kaizen is continuous and long-term; a blitz is a short, intensive event focused on one area.

Exam tips

Learn the five principles in order and write them as headings. This earns easy marks in both short notes and long answers.
In MCQs, watch for options that change a principle's meaning, such as value defined by the producer instead of the customer.
For case questions, name the principle that is violated first, then give the remedy.
Mention Toyota Production System whenever the question asks about origin or concept.
Keep principles separate from tools. If a question asks for tools, use 5S, kaizen, kanban and similar. Remember that kaizen is the tool that supports the principle of perfection, not the principle itself.
Learn all eight wastes with one example each. Questions often give a short scenario and ask you to name the waste.
In MCQs, watch for look-alike pairs: transport and motion, overproduction and inventory, defects and over-processing.
For 14-mark answers, structure each waste as meaning, example, cause and remedy, and finish with Kaizen and the muda, mura and muri link.