Just-In-Time

Chapter 3

JIT Overview

JIT is both a management philosophy and

a set of operational techniques.

• An element of the Toyota’s Production System

(VBW, Figure 3.17)

The philosophy is based on:

• Planned elimination of all waste

• Continuous improvement of productivity

Sources of Waste

Overproduction (inventory) Defects Personnel Equipment Space Time (inefficiency) Utilities

Major Elements of JIT

Carry inventory only when needed Improve quality to zero defects Reduce setup times and lot sizes. Focus on continual improvement. Make efforts to involve workers and use

their knowledge to a greater extent. Achieve improvement at minimum cost

JIT in Manufacturing

JIT makes major changes in the actual

practice of manufacturing by reducing:

• Complexity of detailed material planning.

• Need for shop-floor tracking.

• Work-in-process inventories.

• Transactions associated with shop-floor and

purchasing systems.

JIT in Services

Synchronize and balance information and

workflow

Increase process visibility

Continuously improve processes

Eliminate all waste (including paperwork)

Increase resource flexibility

JIT and MPC: the System(VBW, figure 3.1)

Resourceplanning

Productionplanning

Demandmanagement

Master productionscheduling

Detailed capacityplanning

Detailed materialplanning

Material andcapacity plans

Shop-floorsystems

Vendor systems

Front end

Engine

Back end

JIT and MPC

Front end:• Level capacity loading

Engine:• Reduce number of part numbers planned.

• Reduce number of levels in the BOM.

Back end:• Focus on simplicity—shop-floor and purchasing.

• Backflushing.

JIT and MPC Building Blocks (Table 3.1, VBW, p. 77)

Product design

• Standard parts, product simplification, modular design, robust design, scheduled design changes, design quality

Process design

• Band width—surge capacity to accommodate product mix and demand variations.

• Process flexibility

• Setup time reduction

• Cellular system

JIT and MPC Building Blocks (Table 3.1, VBW, p. 77)

Human/organizational elements

• Whole person concept—continual learning and improvement.

• Cross-training

• Motivation and empowerment

Manufacturing planning/control

• Pull system

• Visibility

• Simplified planning and control

JIT Example—Muth Pots

Leveling the production Pull system introduction

• Material movements and production authorized by signal of need from a “downstream” work center.

• Schedule must be “frozen” for a period of time.

• Determine the container size/capacity/number. Product design Process design Bill of materials implications

JIT Applications

Single-card kanban system (Figure 3.16, p. 90) Two-card kanban system (Toyota)

• Transport, or conveyance, card.

• Production card.

Two-bin or three-bin system Kanban cards replace all work orders and move

tickets. Kanban cards may be used with suppliers.

Calculating Number of Kanbans

a

DLy

1 Y=no. of kanbans D=demand/unit of time [800/day] L=lead time [2 hours=0.25 days] a=container capacity [20] =safety stock [25%]

cards135.12

20

25.125.0*800

Control Through Signaling

Simplicity Use different methods – kanban, container,

tennis balls, computerized display board (Andon board), etc.

Planning to schedule/producing to pull signal

• Make or move only with an authorized signal

• First-in, first-out

Workplace Organization

Is referred to as housekeeping Is a means to identify and maintain an

orderly environment Is a prerequisite for inventory management Prevents errors and contamination Basic concepts: simplification, organization,

discipline, cleanliness, participation

Six (6) S’s

Seiri – organization

Seiton –tidiness

Seiso –purity

Seiketsu – cleanliness

Shitsuke – discipline

Shikkari-yarou – let’s try hard

Setup Time

Internal versus external setup time (setup time when the machine is not running)

Reduce the setup time by studying:

• The machine itself

• Attachments

• Tools

• Workplace organization

• Transfer of internal setup to external setup

Maintenance

Focus on preventive maintenance Develop a total productive maintenance

system (TPM) Train and assign workers to carry out

preventive maintenance on their machines Provide technical assistance for workers Develop a set of measurements for

improving the maintenance system

Flexibility

Mobility

Variable output rate

Multipurpose

Flexible capability

Simplicity

Surge capacity

Transportation Strategies

Repetitive schedules

Mixed loads

Milk run

Freight consolidation

Local warehouses

Local suppliers

Implication of JIT in Repetitive Systems

Use production rates instead of work orders Gross-only explosions for MRP No lead-time offset is required Cumulative MRP format may be used No need for due dates on individual lots Planning buckets are usually in days or

weeks

Implications of JIT in Job Shop

Visual control of queues The level of BOM is reduced Manage the total load of the shop Use rate-based scheduling Use mixed-model scheduling Use cellular layout Emphasis part standardization

JIT in Purchasing

Basics:• Scheduling system producing reasonably certain

requirements.

• Achieving a stable schedule.

• Pursuing all JIT objectives and building blocks.

• Pruning the number of vendors.

• Controlling the cost of transportation. Lessons

• Don’t shift inventory-holding from the company to the vendor.

• Effectively manage vendor relationships.

Implication of JIT in Human Resources Management

Employee involvement and empowerment Motivation Suggestion systems Intra- and inter-functional teams Job design Compensation and rewards Education and training Relationships with unions

Changing Roles and Responsibilities - Management

Culture change – from maintain status quo to improvement

Supervisors as coaches Treat employees fairly Sharing information Provide support and motivation Provide extra time for improvement

Changing Roles and Responsibilities - Employees

Make decisions and solve problems

Help make improvement

Work with colleagues closely

Expanded job responsibilities

Responsibility at the source

Use scientific techniques

Concluding Principles

Stabilizing and in some cases leveling the production schedules are prerequisites to effective JIT systems.

Achieving very short lead times supports better customer service and responsiveness.

Reducing hidden factory costs can be at least as important as reducing costs more usually attributed to factory operations.

Implementing the whole person concept reduces distinctions between white- and blue-collar workers and taps all persons’ skills for improving performance.

Concluding Principles

Cost accounting and performance measurements need to reflect the shift in emphasis away from direct labor as the primary source of value added.

To achieve JIT’s benefits in nonrepetitive applications, some basic features of repetitive-based JIT must be modified.

JIT is not incompatible with MRP-based systems. Firms can evolve toward JIT from MRP-based systems, adopting JIT as much as or little as they want, with an incremental approach.

Homework Assignment

Problem 3.2 and 3.12

Due Tuesday, December 3