Just in Time (JIT) Strategy

Just-in-time (JIT) strategy

Submitted To : Dr, Dina Fadaly

By : Jit Team

1 -Ahmed Agamy 2- Marwa Farouk

3- Medhat Saad 4 Mohamed Farouk

5- Mona Galal 6- Samer Samy

7- Samir Hassanein 8- Sherif Shawky

Just-in-time (JIT)

is an inventory strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs

Just In Time ( JIT )

is an optimal material requirement planning system for a manufacturing

process in which there is little or no

manufacturing material inventory on hand

at the manufacturing site and little or no

incoming inspection.

History Kiichiro Toyoda, son of Sakichi and founder of the Toyota automobile business, developed the concept of Just-in-Time in the 1930s. He decreed that Toyota operations would contain no excess inventory and that Toyota would strive to work in partnership with suppliers to level production. Taiichi Ohno, Toyota's chief of production in the post-WWII period. He was THE main developer of Toyota Production System (TPS).

History ( cont. )

Toyota Production System (TPS) drew wide attention from the industrial community because Toyota was a profitable car company in Japan during and after the oil embargo in 1970s.

History ( cont. )

Outside Japan, dissemination began in earnest with the creation of the Toyota-

General Motors joint venture-NUMMI

(New United Motor Manufacturing Inc.) in

California in 1984.

History ( cont. )

Widespread recognition of TPS as the model production system grew rapidly with the publication in 1990 of The Machine That Changed the World: The Story of Lean Production, the result of five years of research led by the Massachusetts Institute of Technology.

History ( cont. )

The MIT researchers found that TPS was so much more effective and efficient than traditional, mass production that it represented a completely new paradigm and coined the term lean production to indicate this radically different approach to production.

Toyotas philosophy Selling price Cost = Profit

Customers decide the selling price.

Profit is what remains after subtracting the cost from it.

The main way to increase profit is to reduce cost.

Consequently, cost reduction through waste elimination should have the highest priority.

Toyotas paradox: Reducing cost (waste), will reduce lead time while increasing quality and customer satisfaction.

Introductory Quotation

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

Shoichiro Toyoda President, Toyota

1995 Corel Corp.

Sources of Waste

Waste form overproduction

Waste of waiting time

Transportation waste

Inventory waste

Processing waste

Waste of motion

Waste from product defects

Minimizing Waste: JIT Production

Produce...

...what is needed...

...when its needed...

...NOTHING MORE!

Just-In-Time Production

Management philosophy

Pull system though the plant

WHAT IT IS

Employee participation

Industrial engineering/basics

Continuing improvement

Total quality control

Small lot sizes

WHAT IT REQUIRES

Attacks waste

Exposes problems and bottlenecks

Achieves streamlined production

WHAT IT DOES

Stable environment

WHAT IT ASSUMES

What Does Just-in-Time Do?

Attacks waste Anything not adding value to the product

From the customers perspective

Exposes problems and bottlenecks caused by variability

Deviation from optimum

Achieves streamlined production By reducing inventory

The primary objective of JIT is getting a balanced system, with a regular and quick

flow of products throughout a supply chain.

This is accomplished by:

Eliminating disruptions

Implementing a flexible system

Decreasing set-up times

Decrasing stock levels to a minimum

Eliminating waste and rejects

Benefits of JIT Systems

Reduced inventory levels

High quality

Flexibility

Reduced lead times

Increased productivity

Increased equipment utilization

Reduced scrap and rework

Reduced space requirements

Pressure for good vendor relationships

Reduced need for indirect labor

Nigel Slack and Michael Lewis 2003

Operations Strategy

Operations

Resources Market

Requirements OPERATIONS

STRATEGY

Strategic

Reconciliation

Operations strategy reconciles the

requirements of the market with the

capabilities of operations resources

Nigel Slack and Michael Lewis 2003

Operations Strategy

Performance

Objectives

Market

Positioning

Customer

Needs

Competitors Actions

Required

performance

Understanding

markets

The Market Perspective on Operations Strategy

Nigel Slack and Michael Lewis 2003

Operations

Strategy

Decision Areas

Tangible and

Intangible

Resources

Operations

Capabilities

Operations

Processes

Understanding

resources and

processes

Strategic

decisions

The Operations Resource Perspective on Operations Strategy

Nigel Slack and Michael Lewis 2003

Operations strategy is the strategic reconciliation

of market requirements with operations resources

Performance

Objectives

Market

Positioning

Customer

Needs

Competitors Actions

Required

performance

Understanding

markets

Operations

Strategy

Decision Areas

Tangible and

Intangible

Resources

Operations

Capabilities

Operations

Processes

Understanding

resources and

processes

Strategic

decisions

Strategic Reconciliation

Nigel Slack and Michael Lewis 2003

Strategic Reconciliation Market Requirements

Understanding

Markets

Operations Resources

Understanding

Resources and

Processes

Capacity

Supply networks

Process technology

Development and organization

Quality

Speed

Dependability

Flexibility

Cost

Operations

Processes

Operations

Resources

Operations

Competences

Market

Positioning

Market

Segmentation

Competitor

Activity

Strategic

Decisions

Operations

Strategy

Decisions

Required

Performance

Performance

Objectives

Nigel Slack and Michael Lewis 2003

Strategic Reconciliation

Variability 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

Continuous Flow

Producing and moving one item at a time (or a small and consistent batch of items) through

a series of processing steps as continuously

as possible, with each step making just what

is requested by the next step.

It is also called the one-piece flow, single-

piece flow, and make one, move one.

Continuous Flow Production

Flow with JIT

Traditional Flow

Customers Suppliers

Customers

Suppliers

Production Process (stream of water)

Inventory (stagnant ponds)

Material

(water in

stream)

Push 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

JIT Purchasing--Requirements

Reduced lot sizes

Frequent and reliable delivery schedules

Reduced and highly reliable lead times

Consistently high quality levels for purchased materials

JIT Purchasing--Suppliers

Fewer, nearby suppliers

Repeat business

Support suppliers competitiveness

Clusters of remote suppliers

Limit competitive bidding to new parts

Resist vertical integration

Encourage suppliers to implement JIT purchasing

JIT Purchasing--Quantities

Little or no permissible overage or underage of receipts

Suppliers encouraged to package in exact quantities

Suppliers encouraged to reduce their production lot sizes (or store unreleased material)

JIT Purchasing--Quality Minimal product specifications

imposed on supplier

Help suppliers to meet quality requirements

Close relationships between buyers' and suppliers' quality assurance people

Suppliers encouraged to use process control charts instead of lot sampling inspection

JIT Requirements:

Design Flow Process

Link operations

Balance workstation capacities

Re-layout for flow

Emphasize preventive maintenance

Reduce lot sizes

Reduce setup/changeover time

JIT Requirements: Total Quality Control

Worker responsibility

Measure SQC

Enforce compliance

Fail-safe methods

Automatic inspection

JIT Requirements: Stabilize Schedule

Level schedule

Underutilize capacity

Establish freeze windows

Attributes of Lean Producers - they

use JIT to eliminate inventory

build systems to help employees product a perfect part every time

reduce space requirements

develop close relationships with suppliers

educate suppliers

eliminate all but value-added activities

develop the workforce

make jobs more challenging

reduce the number of job classes and build worker flexibility

apply Total Productive Maintenance (TPM)

Thank You