MBA.782.J.I.T.CAJ9.10.1 Operations Management Just-In-Time J.I.T. Philosophy Characteristics of J.I.T. J.I.T. in Services J.I.T. Implementation Issues.

MBA.782.J.I.T. CAJ9.10.1

Operations Management

Just-In-Time

• J.I.T. Philosophy

• Characteristics of J.I.T.

• J.I.T. in Services

• J.I.T. Implementation Issues

• Benefits of J.I.T.

MBA.782.J.I.T. CAJ9.10.2

• Goal of full employment in post-WW II period

• Government (MITI) supported improvement of targeted industries

• Imported technologies

• Efforts concentrated on factory floor

• Leads to success in ________ markets

• U.S. industry _______ ___

Just-In-Time

Japanese Approach to Productivity

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• “Big JIT” (Lean Production System)

– is primarily a ________________ of management that stresses three fundamental concepts:

1. The Elimination of ________ 2. Continuous Improvement

3. Respect for ________• “Little JIT”

– Focuses more _____________ on scheduling goods inventories and providing service resources where and when needed ....

Just-In-Time

JIT: Part Philosophy-Part Technique

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Just-In-Time

Elimination of Waste

• Short Definition:

– Waste is anything that does not add

________ to the product

• Value means satisfying the customer’s needs,

both actual and perceived,

at a price the customer can afford and

feels is reasonable.

• Adding value does not mean _________ costs .

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(1) Waste from overproduction

(2) Waste of waiting time

(3) Transportation waste

(4) _____________ waste

(5) Processing waste

(6) Waste of __________

(7) Waste from product defects ....

Just-In-Time

Toyota’s Seven Categories of Waste

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• Group Technology

• JIT Production

• Kanban Production Control Systems

• Reducing Setup Times

• Uniform Plant Loading

• JIT Inventory

Just-In-Time

Methods of Attacking Waste

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Just-In-Time

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• Movement is waste

• Group Technology and work cells to ________ distance to move people and materials

• Flexible or movable equipment to increase flexibility

• Design _________ space for inventory

Attacking Waste

Group Technology

MBA.782.J.I.T. CAJ9.10.9

• Departmental Specialization

Saw Saw

Lathe PressPress

Grinder

LatheLathe

Saw

Press

Heat Treat

Grinder

Attacking Waste

Group Technology

MBA.782.J.I.T. CAJ9.10.10 9

• Group technology cells

Press

Lathe

Grinder

Grinder

A

2

BSaw

Heat Treat

LatheSaw Lathe

PressLathe

1

Attacking Waste

Group Technology

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• Management philosophy• _____ 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• ________ problems and bottlenecks• Achieves streamlined production

WHAT IT DOES

• Stable environment

WHAT IT ASSUMES

Attacking Waste

Just-In-Time Production

MBA.782.J.I.T. CAJ9.10.12

Traditional Push System

• Material is “_________” onto downstream workstations regardless of whether the resources are available.

• Production begins in __________ of customer needs

• Emphasis on production; production first

• “_______” ahead of next unit

– good selection from which to build efficient schedules and improve utilization

Just-In-Time Production

Push vs. Pull

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J.I.T. Pull System

• Customer _________ activates production so it produces only when it is needed

• Material is “__________” to a workstation just as it is needed.

• Supplies and components are pulled through the

system to arrive ______ they are needed _______ they are needed.

Just-In-Time Production

Push vs. Pull

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• Kanban is Japanese for ______, or “instruction card”

• It is a simple _________ pull system for controlling inventory in the production system based on a standardized container or lot size.

• Toyota uses two types of kanbans;

– production kanban - authorizes ____________ of a given number of parts

– withdrawal kanban - authorizes the ___________ of a given number of parts.

Attacking Waste

Kanban Production Control Systems

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The final assemblyschedule drives thewhole process.

A

B

Storage

Machine Center Assembly Line

ProductionKanban

WithdrawalKanban

Attacking Waste

Kanban Production Control Systems

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To Lower Cycle Inventory, _________ Lot Size...

Average cycle inventory

Lot size = 100

Lot size = 50

On-

hand

inve

ntor

y

5 10 15 20 25 30Time (hours)

100 –

75 –

50 –

25 –

0 –

Attacking Waste

Reducing Setup Times

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Lot size = 5Lot 1 Lot 2

Lot size = 2

Lot 1 Lot 2 Lot 3 Lot 4 Lot 5

However, reducing lot sizes __________ the number of lots...

Minimizing Setup Times

Small Lot Sizes

Lot size = 10

Lot 1

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Just-In-Time

Small Lot Sizes

...which ___________ Inventory Costs...

-

100

200

300

400

500

600

700

800

900

1,000

0 50 100 150 200 250

Quantity

Tota

l Ann

ual C

ost

Total Cost

Holding Cost

Setup Cost

MBA.782.J.I.T. CAJ9.10.19

Just-In-Time

Small Lot Sizes...unless Setup Costs are _________ ...

-

100

200

300

400

500

600

700

800

900

1,000

0 50 100 150 200 250

Quantity

Tota

l Ann

ual C

ost

Total Cost

Holding Cost

Setup Cost

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• Does not mean building a single product

• Make _______ materials use schedules

• Distribute production quantities ________ over time (firm monthly schedules)

• Build the ______ mix of products every day

– using smaller lot sizes

Attacking Waste

Uniform Plant Loading

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A A B B B C

JIT Small Lots

Time

A A B B B C

A

Large-Lot Approach

Time

A A A B B B B B B C C

• J.I.T. produces the same amount in the same time ____ setup times (costs) are lowered.• Small lots also increase flexibility to meet customer demands.

Attacking Waste

Uniform Plant Loading

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• __________ the number of suppliers

• Buyer and supplier form _______________ to reduce waste

• _______________ supplier relationships to

– improve the on-time delivery

– minimize paperwork

– make frequent deliveries in small lot sizes

– reduce in-plant and in-transit inventories

Just-In-Time

Suppliers

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• Employee _______________ in product and process improvements

• Requires

– Employee empowerment

– Cross-trained employees

– fewer job classifications to ensure flexibility of employees.

– training support

– quality at the source

Just-In-Time

Flexible Workforce

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Just-In-Time

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Continuous Improvement

J.I.T. Inventory

• Traditional View:

– inventory exists “just-in-______” problems arise.

• J.I.T. Tactics

– substantially reduce, if not eliminate, inventory

– inventory is the “root of all ______”

– only the minimum inventory necessary to keep the system running.

– inventory reduction ___________ the problems and provides opportunities for improvement

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ScrapUnreliable

VendorsCapacity

Imbalances

J.I.T. Inventory

Lowering Inventory Reduces Waste

W.I.P. inventory level(hides problems)

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ScrapUnreliable

VendorsCapacity

Imbalances

J.I.T. Inventory

Lowering Inventory Reduces Waste

Reducing inventory _________problems so they can be solved.

W.I.P.

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Scrap

Reducing inventory further reveals_______ problems to be solved.

Unreliable Vendors

Capacity Imbalances

W.I.P.

J.I.T. Inventory

Lowering Inventory Reduces Waste

MBA.782.J.I.T. CAJ9.10.29

All the J.I.T. techniques used in manufacturing

are used in services:

Suppliers - food delivery to restaurants Layouts - baggage claim area at airport Inventory - pharmeceuticals networks Scheduling - personnel schedules rather

than production / inventory

Just-In-Time

J.I.T. in Services

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Just-In-Time

Implementation Issues

• Requires time, trust, and changing _____________

• Putting a new philosophy into action

– allowing utilization to ______– reduction in buffer inventory

– allowing workers to ______ the line

– trusting vendors and customers

– committing resources to train workers

– gaining worker ______

MBA.782.J.I.T. CAJ9.10.31

Reduced _____________ investment Reduced _________ requirements Reduced manufacturing lead times

Increased labor ______________ Simplier planning systems Work force participation Increased product quality

Just-In-Time

Benefits of J.I.T.

MBA.782.J.I.T. CAJ9.10.32

Read Chapter 10

Concepts / Terminology

Review Lecture Notes

Just-In-Time

Chapter Wrap-Up