Just in Time

Operations Operations ManagementManagement

Just-in-Time SystemsJust-in-Time SystemsSupplement 12Supplement 12

Waste is ‘anything other than the minimum amount of equipment, materials, parts, space, and worker’s time, which are absolutely essential to add value to the product.’

— Shoichiro Toyoda President, Toyota

© 1995 Corel Corp.

Introductory QuotationIntroductory Quotation

Management philosophy of continuous and forced problem solving

Supplies and components are ‘pulled’ through system to arrive where they are needed when they are needed.

What is Just-in-Time?What is Just-in-Time?

Attacks waste Anything not adding value to the product

From the customer’s perspective

Exposes problems and bottlenecks caused by variability Deviation from optimum

Achieves streamlined production By reducing inventory

What Does Just-in-Time Do?What Does Just-in-Time Do?

Overproduction Waiting Transportation Inefficient processing Inventory Unnecessary motion Product defects

© 1995 Corel Corp.

Types of WasteTypes of Waste

Variability Occurs BecauseVariability Occurs Because

Employees, machines, and suppliers produce units that do not conform to standards, are late, or are not the proper quantity

Engineering drawings or specifications are inaccurate

Production personnel try to produce before drawings or specifications are complete

Customer demands are unknown

Push versus PullPush versus Pull

Push system: material is pushed into downstream workstations regardless of whether resources are available

Pull system: material is pulled to a workstation just as it is needed

Suppliers reduced number of vendors supportive supplier relationships quality deliveries on time

Layout work-cell layouts with testing at each step of the process group technology movable, changeable, flexible machinery high level of workplace organization and neatness reduced space for inventory delivery direct to work areas

JIT Contribution to Competitive JIT Contribution to Competitive Advantage - continuedAdvantage - continued

Inventory small lot sizes low setup times specialized bins for holding set number of parts

Scheduling zero deviation from schedules level schedules suppliers informed of schedules Kanban techniques

JIT Contribution to Competitive JIT Contribution to Competitive Advantage - continuedAdvantage - continued

JIT Contribution to Competitive JIT Contribution to Competitive Advantage - continuedAdvantage - continued

Preventive Maintenance scheduled daily routine operator involvement

Quality Production statistical process control quality by suppliers quality within firm

JIT Contribution to Competitive JIT Contribution to Competitive Advantage - continuedAdvantage - continued

Employee Empowerment empowered and cross-trained employees few job classifications to ensure flexibility of

employees training support

Commitment support of management, employees, and suppliers

ResultsResults Queue and delay reduction, speeds throughput, frees

assets, and wins orders Quality improvement, reduces waste and wins orders Cost reductions, increases margin or reduces selling

price Variability reductions in the workplace, reduces

waste and wins orders Rework reduction, reduces waste and wins orders

YieldingYielding

Faster response to the customer and higher quality

A competitive advantage!

SuppliersSuppliers

Preventive Preventive MaintenanceMaintenance

LayoutLayout

InventoryInventory

SchedulingScheduling

QualityQuality

Employee Employee EmpowermentEmpowerment

JIT

Just-in-TimeJust-in-TimeSuccess FactorsSuccess Factors

Incoming material and finished goods involve waste

Buyer and supplier form JIT partnerships JIT partnerships eliminate

Unnecessary activities In-plant inventory In-transit inventory Poor suppliers

SuppliersSuppliers

Goals of JIT partnershipsGoals of JIT partnerships

Elimination of unnecessary activitiesElimination of in-plant inventoryElimination of in-transit inventoryElimination of poor suppliers

Streamlined ProductionStreamlined Production

Flow with JIT

Traditional Flow

CustomersSuppliers

Customers

Suppliers

Production Process (stream of water)

Inventory (stagnant ponds) Material

(water in stream)

JIT objective: Reduce movement of people and material Movement is waste!

JIT requires Work cells for product families Moveable or changeable machines Short distances Little space for inventory Delivery directly to work areas

LayoutLayout

Traditional: inventory exists in case problems arise

JIT objective: Eliminate inventory JIT requires

Small lot sizes Low setup time Containers for fixed number of parts

JIT inventory: Minimum inventory to keep system running

InventoryInventory

Involves timing of operations JIT requires

Communicating schedules to suppliers Level schedules Freezing part of schedule nearest due date Small lots Kanban techniques

SchedulingScheduling

Japanese word for card Pronounced ‘kahn-bahn’ (not ‘can-ban’)

Authorizes production from downstream operations ‘Pulls’ material through plant

May be a card, flag, verbal signal etc. Used often with fixed-size containers

Add or remove containers to change production rate

KanbanKanban

Figure S12.5Figure S12.5

JIT: A Pull SystemJIT: A Pull System

In a push system, such as an MRP system, we look at the schedule to determine what to produce next.

In a pull system, such as JIT, we look only at the next stage of production and determine what is needed there, and then we produce only that.

As Robert Hall states, “You don’t never make nothin’ and send it no place. Somebody has got to come and get it”.

Kanban Production ControlKanban Production Control

At the core of JIT manufacturing at Toyota is Kanban, an amazingly simple system of planning and controlling production.

Kanban, in Japanese, means card or marquee. Kanban is the means of signaling to the

upstream workstation that the downstream workstation is ready for the upstream workstation to produce another batch of parts.

Kanbans and Other SignalsKanbans and Other Signals

There are two types of Kanban cards: a conveyance card (C-Kanban) a production card (P-Kanban)

Signals come in many forms other than cards, including: an empty crate an empty designated location on the floor

Conveyance KanbanConveyance Kanban

Conveyance Kanban CardConveyance Kanban Card

Part number to produce: Part number to produce: M471-36M471-36 Part description: Part description: Valve HousingValve Housing

Lot size needed: Lot size needed: 4040 Container type: Container type: RED CrateRED Crate

Card number: Card number: 2 of 52 of 5 Retrieval storage location: Retrieval storage location: NW53DNW53D

From work center: From work center: 2222 To work center: To work center: 3535

Production KanbanProduction Kanban

Production Kanban CardProduction Kanban Card

Part number to produce: Part number to produce: M471-36M471-36 Part description: Part description: Valve HousingValve Housing

Lot size needed: Lot size needed: 4040 Container type: Container type: RED crateRED crate

Card number: Card number: 4 of 54 of 5 Completed storage location: Completed storage location: NW53DNW53D

From work center: From work center: 2222 To work center: To work center: 3535

Materials required:Materials required:Material no. Material no. 744B744B Storage location: Storage location: NW48CNW48CPart no. Part no. B238-5B238-5 Storage location: Storage location: NW47BNW47B

How Kanban OperatesHow Kanban Operates

When a worker at downstream Work Center #2 needs a

container of parts, she does the following: She takes the C-Kanban from the container she just

emptied. She finds a full container of the needed part in storage. She places the C-Kanban in the full container and removes

the P-Kanban from the full container and places it on a post at Work Center #1.

She takes the full container of parts with its C-Kanban back to Work Center #2.

Containers in a Kanban SystemContainers in a Kanban System Kanban is based on the simple idea of replacement of

containers of parts, one at a time. Containers are reserved for specific parts, are purposely kept

small, and always contain the same standard number of parts for each part number.

At Toyota the containers must not hold more than about 10% of a day’s requirements.

There is a minimum of two containers for each part number, one at the upstream “producing” work center and one at the downstream “using” work center.

Photo S12.4Photo S12.4

JIT exposes quality problems by reducing inventory

JIT limits number defects with small lots JIT requires TQM

Statistical process control Worker involvement

Inspect own work Quality circles

Immediate feedback

QualityQuality

Getting employees involved in product & process improvements Employees know job best!

JIT requires Empowerment Cross-training Training support Few job classifications

© 1995 Corel Corp.

Employee EmpowermentEmployee Empowerment

JIT in ServicesJIT in Services

All the techniques used in

manufacturing are used in services

SuppliersSuppliers

LayoutsLayouts

InventoryInventory

SchedulingScheduling

Benefits of JITBenefits of JIT

Inventory levels are drastically reduced: frees up working capital for other projects less space is needed customer responsiveness increases

Total product cycle time drops Product quality is improved Scrap and rework costs go down Forces managers to fix problems and eliminate

waste .... or it won’t work!