JIT Planning and Control

Lessons 6

JIT Planning and Control There are many approaches to the planning

and control of products through a process. The main issue is to ensure inventory timing is

predictable. (parts arrive on time) without excessive build up of inventory

The following methods will be considered: ‘Push’ and ‘Pull’ systems – the two main approaches

to planning and control. (Chapter 10 – p347 (309)gives a useful account of these two systems).

Will also consider the elements of ‘Theory of constraints’ proposed by Eli Goldratt (1984)

Levelled scheduling

Push philosophy of planning and control

CENTRAL OPS. PLANNING AND CONTROL SYSTEM

Work centre

DEMANDWork centre

Work centre

Work centre

Instruction on what to make and where to

send it

FORECAST

OR

PUSH CONTROL

• Activities are scheduled centrally

•There are always errors in the forecast – Why?

• Each work-centre produces work irrespective of whether the next centre needs it or not

• This inevitably leads to queues and inventory build up

Operation

Intervention

Plans

Compare / replan

Monitor

Input Output

Alternative ‘systems’ approach to control of the Operation

• To apply control to specific parts of the process

• To ensure that production plans are happening

• A simple view of control might be adopted

Drum, Buffer, Rope Concept

•Eli Goldratt (1984) uses this idea in his book ‘The Goal’

• He suggests that the control should be placed around the ‘bottleneck’

• Remember the bottleneck ‘constrains’ the whole process so therefore it is important to keep this part of the process running

• The bottleneck is known as the ‘drum’ or the heartbeat of the process .

• Because it does not have sufficient capacity Goldratt suggests it should always have a ‘buffer’ of stock in front of it

Drum, Buffer, Rope Concept

• It is not necessary for processes before the bottleneck to run at full capacity

• Some form of feedback is necessary from the bottleneck to the input of the process to ensure earlier activities do not overproduce

•This is called the ‘rope’.

• The whole system can be represented in a diagram as follows

The drum, buffer, rope, concept

Activity A Activity B Activity C Activity D Activity E

Buffer of inventory

Bottleneck drum sets the beat

Communication rope controls prior activities

PULL CONTROL

Work centre

Work centre

Work centre

Work centre DEMAND

Request Request Request Request

Delivery Delivery Delivery Delivery

Pull philosophy of planning and control

• The customer determines what is produced at what frequency

• The customer’s request pulls work through the system.

• Can be used to link both suppliers and customers into an organisation’s control system.

• Less likely to allow inventory build-up.

•JIT uses the pull system

JIT Planning and Control Kanban Control

A key method used to implement a pull-based planning and control system.

Kanban – Japanese word for card or signal

Card used by customer to inform supplier to send more material or product.

There are different types:

Move – the signal to transfer inventory to a specific destination. Production – the signal to a process that it can start producing

a part. Vendor – signal to external suppliers to send material

JIT Planning and Control Kanban Control

Principle is the same irrespective of what type is used – ‘Receipt of a kanban triggers the movement, Receipt of a kanban triggers the movement,

production or supply of one unit or a production or supply of one unit or a standard container of units’.standard container of units’.

Kanban squares can also be used to trigger production.

Example -Single Card Kanban Key benefits are:

Simple method to control production based upon demand.

Limits the amount of inventory.

Inventory reduced by reducing the number of kanbans.

Single Card Kanban

‘Move’ Kanban loop keeps materials circulating between stages

When ‘B’ requires parts it takes a standard container from the output stock

‘Container’ loop circulates the containers - full from A to B and `empty from B to A

When work is complete ‘move’ kanban is placed in holding area

Empty container sent back to AThis signals to A to

start producing another box

The move Kanban is taken from the holding box to the output stock of stage A

This authorises another box to be moved from the output stock to B

The process repeats

Levelled Scheduling

Attempts to ensure mix and volume are even over time.

Plans regular runs of the full range of components, i.e. every day rather than once/month.

Requires the batch sizes, to be reduced and therefore set-up times must be reduced also ----why?

Levelled Scheduling

30 changeovers

60 changeovers

Levelled Scheduling Issues are:

The shorter the run length the more changeovers

As changeovers are increased: potentially impacts product yieldi.e. >scrap as percentage of finished product i.e.

startup and shutdown Impacts capacity – less time to produce

Hence, there is a need to reduce changeover times to allow levelled scheduling to occur

Levelled Scheduling Key benefits are:

Allows batches of all products to be produced each day.

Provides basis for good material flow, i.e. smaller batches.

WIP reduced Regular production runs so easier Planning &

Control. Customers benefit from predictable supply. Can be applied to supplier delivery schedules.

Tutorial Exercise

The case exercise on page 547 (490) relates to a joinery company who manufacture a range of wooden products.

Working in groups of 4 answer the six questions outlined at the bottom of the case study box.

Each group prepare a short powerpoint presentation for next weeks lecture

Will be asked to explain one of the questions

Tutorial Exercise

Question 1

Tutorial Exercise - Boys & Boden

Most students will be familiar with the general appearance and design of a typical staircase. The main components are:

Strings (the two long sides of the flight) Treads (what you stand on) Risers (blank off the back of the treads) Newels (the posts that hold the handrails) Handrails (what you hold on to) Spindles (fill in the sides between the handrail and

the strings) Other small parts such as wedges, joining blocks,

infill pieces.

Boys & Boden - Issues B&B produced staircases in a general-purpose jobbing

process Staircases are usually large and cumbersome, getting in

the way of the flow of other smaller products (the case refers to ‘… joiners almost climbing over each other to do their work’).

Although every qualified joiner (carpenter) had been trained to make a wide range of products, in practice, the less experienced ones were slow with unfamiliar work, simply because of the lack of repetition, and often failed to complete their work within the estimated times.

In contrast, Dean (the General Manager) had already found that the ‘door expert’ who specialized in special doors, kept to the estimated times. So it seems that the learning curve applies even in a jobbing environment.

Boys & Boden

1. To what extent could Dean expect to apply the philosophies and techniques of JIT to the running of the staircase cell.

Staircases: the product structure is really only a simple three level BOM (timber, component, final assembly). The routing is standard for all stairs as described in the case. - suitable for ‘pull control.

The high product variety ensures that batch production would not be feasible, so the existing jobbing process is conducted one order at a time, akin to “batch of one”. Because volumes are low, there has been little need for the division of labour; each joiner completes a whole staircase, but using the general-purpose machines (process layout) which are also needed for all other products.

Thus, although this is an unusual context for the application of JIT and cellular manufacturing, it does have many of the suggested pre-requisites.

Boys & Boden

“JIT aims to meet demand instantaneously, with perfect quality and no waste” The fuller definition includes:

• Improving productivity • Eliminating waste • Delivery of the parts at the right quality, right time, right

place • Minimum use of facilities, equipment, materials, human

resources • Employee involvement • Team work • Simplification

These elements of the philosophy of JIT are generally consistent with Dean’s requirements for the new system.

Boys & Boden The JIT Techniques Applicability to Staircase Cell

Basic working practices All elements can be applied

Design for manufacture Limited opportunity as customer designs

Operations focus Very relevant

Small, simple machines Yes, can be used as a concept when allocating machines to the cell

Layout and flow Main basis of the development: cell-based layout

Total productive maintenance Important, but not yet considered

Set-up reduction Important, but not yet considered

Total people involvement Important element linked to the philosophy

Visibility All very relevant and applicable

JIT supply External suppliers not considered at this stage

• Most of the pre-requisites for implementation of JIT apply to the staircase cell

• Approach to be - team-based operation with some division of labour, and with dedicated machinery and facilities.

• Feasibility will be dependent on gaining sufficient extra volume • Achieved by customers being increasingly satisfied with the price, quality and

delivery performance of B&B’s staircase operation

Boys & Boden2. Main cost/benefit categories (financial and non-financial) associated with

establishing new cell.

The case does not provide any actual costs or forecasts related to this development. The benefits are all potential ones, dependent on the successful management of the implementation.

COSTS BENEFITS FINANCIAL • moving of equipment

• duplicated equipment • training • dedicated support infrastructure

• increased productivity • reduced waste (rework, scrap) • increased orders / capacity • better flow for other products

NON- FINANCIAL

• disruption during change • managers distracted • reduced employee flexibility • personal (Dean) risk of failure

• vehicle for change • employee development • better identify market potential • continuous improvement

Boys & Boden3. At what stage should Dean sell his idea to the joinery manager and

the workers.

One view is that it is best for Dean to have a fully worked-out and costed plan, which he would announce to the manager and workers sequentially on the same day, just prior to implementation. This would signal that no dissent was welcomed, and that the change was non-negotiable. It would only directly affect a few of the joiners, and those would be asked to volunteer for positions in the new cell.

Another view would argue that this could provoke negative reactions from the manager and staff alike. Most would conclude that the manager should be involved in the feasibility analysis from quite early on. At the very least, there will be technical issues requiring early resolution (e.g. what type of machines should be used and/or purchased?). In addition, there are also similar advantages in involving the joiners from an early stage too, and this can help break down any resistance to change.

Boys & Boden It is quite apparent that the introduction of the staircase cell will

radically alter employees’ working life and individual job designs. It is natural (and hence should be anticipated) that people will exaggerate the negative aspects, and underestimate the positive aspects. If these are not addressed, the cell is virtually destined to fail.

In the end, Dean will have to use the very best of his interpersonal and analytical skills to win support at all levels. Early success in implementation will be vital.

Boys & Boden4. How different would the work cell be from that in

the main joinery department.

NOW: The main Joinery Department is a jobbing process, employing about ten

skilled “jobbers”, who have extremely wide skills, and a very high degree of autonomy to plan and control their work.

They usually work independently, and are fully accountable for the quality of their outputs. Because they share key equipment and work space, they have to be adept at working out of sequence when certain machines are already in use.

They experience an enormous variety of products, materials and finishes. The link to estimating appears to be weak, since many jobs exceed their estimated times and costs

Boys & BodenSTAIRCASE CELL would employ a smaller number of joiners, working as a team. Their skills and experience

could vary, since the potential division of labour would make it possible for at least one to concentrate on assembly and any other lower-skill tasks.

The team (rather than the individual) would have responsibility and relative autonomy to plan and control their work.

There would be a fixed working sequence, fixed quality control procedures, and ample (excess) capacity at each work station. Material would flow in a fixed sequence, eliminating the need for many of the ‘long carries’.

Task variety would be much lower, and the differences between orders often being simply variations in some dimensions and/or the type of timber.

Estimated times would be closely linked to actual times, putting pressure on the team to improve output speed and productivity. Waste would be tightly controlled.

This does not mean that the staircase cell would be unattractive to all the joiners. Some might see it as an advantage in terms of:

• Working in a team • Good learning environment • Developing deeper, specialised skills • Existing work too complex and demanding

Boys & Boden5. Should Dean differentiate the cell workers and equipment?

Need to recognise the symbolism of such approaches, and may feel that this will contribute to team identity and the clear formation of a separate identity. Many companies have found benefits in this way.

It is important that Dean ensures that the attitudes of all the joiners are favorable. It is quite common for new groups formed by management to be perceived as “management’s pets”, leading to tribal-style behavior. This can include ostracising members of the tribe, name-calling, and even sabotage! The consequences can range from unhappiness to complete disruption.

If the whole workforce has “bought-in” to the change, these effects are less likely, and the use of symbolism may assist in the smooth operation of the cell.

Boys & Boden6 . Risks associated with the proposal

Many of the risks are outlined in the cost/benefit question. Not handling the change well and not getting ‘buy in’ from the team Perhaps the greatest risk is the failure to achieve the volume growth necessary

to sustain a specialised, sizable cell.

Next Week Read Lesson 6 of study guide Next lecture 4th December