jit and pull production. “we cannot solve today’s problems with the thinking that caused...
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JIT and Pull ProductionJIT and Pull Production
““We cannot solve today’s We cannot solve today’s problems with the problems with the thinking that caused thinking that caused them.”them.”
--Einstein--Einstein
Organizational Example?Organizational Example?
Toyota Production SystemToyota Production SystemVery Systemic…more than a production system, Very Systemic…more than a production system,
an approach to organizational management.an approach to organizational management.Pull production.Pull production.Paced at the rate necessary to meet customer Paced at the rate necessary to meet customer
demand.demand.Customer-facing processes set pace for Customer-facing processes set pace for
production.production.
Pull ProductionPull Production
Source: Toyota Motor Corporation—OM Consulting Div.
Eliminate WasteEliminate Waste
Waste ofCorrectionWaste of
Correction
Waste ofOver-
Production
Waste ofOver-
Production
Waste ofProcessingWaste of
Processing
Waste ofConveyance
Waste ofConveyance
Waste ofInventoryWaste ofInventory
Waste ofMotion
Waste ofMotion
Waste ofWaiting
Waste ofWaiting
Types of
Waste
Types of
Waste
Source: Toyota Motor Corporation—OM Consulting Div.
Beer RulesBeer Rules
R etailer(Goal=12 C ase
Inventory)
Brewery
Distributor
S tartB rew ing
Tw o W eeks
Four W eeks
Four W eeks
Cu
sto
mer
De
man
d
W eek (32 W eeks)
4 Cases — > 8 Cases
(Goal=12 C aseInventory)
(Goal=12 C aseInventory)
Brewery Inventory
Distributor Inventory
Retailer Inventory
Cumulative Beer Sold
Brewing Schedule
Transit from Brewery
Transit from Distributor
Distributor Ordering Rule
Retailer Ordering Rule
Customer Demand
Sales
Brewing
To Brewing
Deliver to Retailer
Deliver to Distributor
Deliver to Brew Stock
Selected Results
Brew Inv Out
Dist Inv Out
The Beer Game, After Senge, 1990.Run 1, Default Rules (From Text).
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10
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Initia
l 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
Week
Inve
ntor
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Sol
d (C
umul
ativ
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Beer Sold
Brewery
Retailer
Distributor
Default Rules
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l 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
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ntor
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d (C
umul
ativ
e)
Beer Sold
Brewery
Retailer
Distributor
Distribute Information
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l 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
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Inve
ntor
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Sol
d (C
umul
ativ
e)
Beer Sold
Brewery
RetailerDistributor
Reduce Inventory
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Initia
l 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
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Inve
ntor
y
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Sol
d (C
umul
ativ
e)
Beer Sold
Brewery
Retailer
Distributor
Reduce Delay (Transit Time)
0
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l 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
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Inve
ntor
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Sol
d (C
umul
ativ
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Beer Sold
BreweryRetailer
Distributor
Reduce Delay, Reduce Inventory
Start With the PurposeStart With the Purpose
Focus on value.Focus on value.Provides a focus for alignment.Provides a focus for alignment.Extend it into the future…create a vision.Extend it into the future…create a vision.
Value of a shared vision.Value of a shared vision.
Create a cybernetic system.Create a cybernetic system.
SCM…Horizontal & Vertical SCM…Horizontal & Vertical IntegrationIntegration
Horizontal integration.Horizontal integration.Multiple divisions…multiple organizations.Multiple divisions…multiple organizations.
Seek synergy from buy-in.Seek synergy from buy-in.
Vertical Integration.Vertical Integration.Pull.Pull.
Seek alignment to customer requirements.Seek alignment to customer requirements.
InformationInformation
Key to integration.Key to integration.Timely.Timely.Accurate.Accurate.MeaningfulMeaningfulBest when united with flow of work.Best when united with flow of work.
Kanban.Kanban.
Technology…RulesTechnology…Rules
If it is mindful of and promotes/enhances If it is mindful of and promotes/enhances critical relationships…seriously consider it!critical relationships…seriously consider it!
If it is imposed upon or is destructive to If it is imposed upon or is destructive to critical relationships…reconsider it!critical relationships…reconsider it!
It’s about relationships, the foundation of It’s about relationships, the foundation of value creation!!value creation!!
Role of the CustomerRole of the Customer
Should focus on the relationship with the Should focus on the relationship with the ultimate customer.ultimate customer.
A chain of customers.A chain of customers.Who are the customers of purchasing; of Who are the customers of purchasing; of
SCM efforts?SCM efforts?
StrategyStrategy
Enhance relationship with the ultimate Enhance relationship with the ultimate customer.customer.
Create demand upstream by educating Create demand upstream by educating your suppliers, and their suppliers.your suppliers, and their suppliers.
Information and honesty are the currency Information and honesty are the currency of effective relationships.of effective relationships.
JIT foundations provide basis for JIT foundations provide basis for identifying strategic disconnects.identifying strategic disconnects.
AdvantagesAdvantages
JIT
Rel
atio
nshi
psJI
T R
elat
ions
hips
““You Don’t Have to Do This. You Don’t Have to Do This. Survival is Not Compulsory”Survival is Not Compulsory”
--W. Edwards Deming--W. Edwards Deming
Questions and Thoughts?Questions and Thoughts?
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