just in time + apply in toyota

GROUP 10

Nguyen Thi My Linh-BA070093Hoang Thi Thanh Huyen-BA070081Nguyen Nu Phuong Hanh-BA070072Dao Manh Linh-BA070092Tran Thi Dieu Nguyen-BA070112

JUST-IN-TIME

OUTLINE

- Key concepts

- Case of Toyota

- JIT in Vietnam

- Conclusion

I. Key concepts

+ Just-in-time (JIT): Continuous and forced problem solving via a focus on throughput and reduced inventory

+ Toyota Production System (TPS): Focus on continuous improvement, respect for people, and standard work practices

+ Lean operations: eliminate waste through a focus on exactly what the customer wants

I. Key concepts

GOOD PRODUCTION SYSTEM

REQUIRES

Eliminatewaste

Removevariability

Improve throughput+ +

Eliminate waste

- 7 wastes: Overproduction; Queues; Transportation; Inventory; Motion; Over-processing; Defective product.

- 5Ss: A lean production checklist: Sort; Simplify; Shine; Standardize; Sustain

I. Key concepts

I. Key concepts

Remove variability:

Some sources of variability:

+ Incomplete or inaccurate drawings or specifications

+ Poor production process

+ Unknown customer demands

I. Key concepts

Improve throughput:

Throughput: the time required to move orders through the production process, from receipt to delivery.

Pull system- technique for increasing throughput- pulls a unit to where it is needed just as it is needed

I. Key concepts

When goods do not arrive just as needed problems identified problems solved drive out waste & delay cut cost, variability, and improve throughput improve operation competitive advantages

JIT : materials arrive where they are needed

only when they needed

I. Key concepts

JIT Techniques:

+ Suppliers

+ Layout

+ Inventory

+ Scheduling

+ Preventive maintenance

+ Quality production

+ Employee empowerment

+ Commitment

II. Case of Toyota

JIT partnerships:

• Partnerships of suppliers and purchasers that remove waste and drive down costs for mutual benefits

Definition :

• Elimination of unnecessary activities

• Elimination of in-plant inventory

• Elimination of in-transit inventory

• Elimination of poor supplier

JIT partnerships:Goals of JIT partnerships

JIT partnerships:Characteristics :

• Basic Principles of Purchasing :+Fair competition based on an open door policy + Mutual benefit based on mutual trust +Contribution to local economies, good corporate citizenship

JIT partnerships:Apply in Toyota

Every step in making Toyotas, from development to production, consists of joint work with suppliers ! (Atsushi Niimi- Chief Purchasing Officer)

• Helping Suppliers Compete

+Annual Purchasing Policy

+Supplier Support System

JIT partnerships:Apply in Toyota

• Desire for diversification

• Poor customer scheduling

• Engineering changes

• Quality assurance

• Small lot sizes

• Proximity

JIT partnerships:Challenges in building JIT partnerships

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

Use assembly line

JIT layout

Benefits of Layout in JIP

•Distance reduction

•Increased flexibility

•Impact on employees

•Reduced space and inventory

**Large lots and long production lines with single-purpose Large lots and long production lines with single-purpose machinery are being replaced by smaller flexible cellsmachinery are being replaced by smaller flexible cells

Toyota

U-shaped cells•Maximum visibility•Shorter paths•Flexible in number of workers•Facilitates monitoring of work entering and leaving cell•Workers can conveniently cooperate to smooth flow and address problems•Improved communicated

Inbound Stock Outbound Stock

*Build work cells based on group technology codeshelp identify components with similar characteristicsgroup them into families

-Cells designed to be rearranged as -Cells designed to be rearranged as volume or designs changevolume or designs change

-Applicable in office environments as -Applicable in office environments as well as production settingswell as production settings

-Facilitates both product and process -Facilitates both product and process improvementimprovement

Increased FlexibilityIncreased Flexibility

- Employees are cross trained for flexibility and efficiency- Employees are cross trained for flexibility and efficiency

Toyota use unskilled workers,preferring to train them itselfToyota use unskilled workers,preferring to train them itself

--Improved communications facilitate the passing on of Improved communications facilitate the passing on of important information about the process.important information about the process.

Toyota designed the Valenciennes factory to be 30 percent Toyota designed the Valenciennes factory to be 30 percent more compact than other factories with similar output, to more compact than other factories with similar output, to curb building and operating costs and enhance curb building and operating costs and enhance communication.communication.( www.nytimes.com )

--Each Toyota employees has right to stop production line Each Toyota employees has right to stop production line when defect occur when defect occur

Impact on EmployeesImpact on Employees

- NO executive dining room. Managers dine in the same cafeteria as other employees do, but on a later shift.( www.nytimes.com )

reduce space

Just in time Inventory: the minimum Just in time Inventory: the minimum inventory necessary to keep a perfect inventory necessary to keep a perfect system running.system running.

““Inventory is evil” Shigo Shingo Inventory is evil” Shigo Shingo • Holding costHolding cost

• Hide problems in the production systemHide problems in the production system

JIT Inventory & scheduling:

Hide problems in the production Hide problems in the production systemsystem

JIT tactics of Toyota

• Use pull system to move inventory

• Reduce setup time

• Reduce lot size

Use pull system to move inventory

• Toyota use a kanban system (pull‑system) to pull parts to the next production stage only when they are needed

• A kanban is a card that is attached to a storage and transport container

• A sequence of kanbans pulls material A sequence of kanbans pulls material through the processthrough the process

Kanban

Work Work cellcell

Raw Raw Material Material SupplierSupplier

KanbanKanban

Purchased Purchased Parts Parts

SupplierSupplier

Sub-Sub-assemblyassembly

ShipShip

KanbanKanban

KanbanKanban

KanbanKanban

KanbanKanban

Finished Finished goodsgoods

Customer Customer orderorder

Final Final assemblyassembly

KanbanKanban

Reduce setup time

More frequently orders require reducing setup costs, otherwise, inventory costs will rise.

Setup cost is highly correlated with setup time.

• organizing procedures• using carts• training workers to do their own setups

Toyota managed to slash setup times from months to hours and sometimes even minutes

Reduce lot size

With close cooperation with its suppliers and the implementation of Kaiban system

Lot sizes are reduced significantly.

Hood and Fender press comparison:Hood and Fender press comparison:

Toyota USA Sweden Germany

Setup time 10 minutes 6 hours 4 hours 4 hours

Lot size (inventory)

1 day* 10 days 1 month -

*Measured in days of usage

III. JIT in Vietnam

Some companies in Vietnam have applied jit such as: Pin acquy Mien Nam, My Duc ceramics…

NOT very SUCCESSFUL

+ Lack of knowledge, experiences of jit of both management and employees

+ Limitation in technology in Vietnam

+ Trouble in transportation

+ Difficulties in buying materials ( My Duc ceramics)

JIT Advantages-Shortened lead time -Reduced time spent on non-process work -Reduced inventory -Better balance between different processes -Problem clarification -Reduced operating costs -Greater performance and throughput -Higher quality -Improved delivery -Increased flexibility and innovativeness

IV. CONCLUSION

IV. CONCLUSION

Pitfalls:

- Production process strongly depends on the suppliers.

- There are no substitute products in order to respond to unpredicted events.