JUST IN TIME

Group No : 11 Anand G ( 21 ) Keerthi P ( 66 ) Bhal Chandra ( 40 ) Avik Ghosh ( 39 ) Amit Ahlawat (19 ) 8/6/12

Just-in-Time

JIT philosophy requires getting the right quantity

of goods at the right place and the right time

JIT exceeds the concept of inventory reduction JIT is an all-encompassing philosophy founded on

eliminating waste
Waste is anything that does not add value A broad JIT view is one that encompasses the

entire organization
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Philosophy of Just-in-Time

First adopted in Toyota manufacturing plants;

pioneered by Taiichi Ohno.

JIT originated in Japan, post WWII Driven by a need to survive after the devastation

caused by the war

JIT gained worldwide prominence in the 1970s

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The Philosophy of JIT - continued

Often termed Lean Systems All waste must be eliminated- non value items Broad view that entire organization must focus on

the same goal - serving customers JIT is built on simplicity- the simpler the better Focuses on improving every operation- Continuous improvement - Kaizen Visibility all problems must be visible to be identified and solved Flexibility to produce different models/features
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JIT Partnerships
A JIT partner ship exists when a supplier and a

purchaser work together with a open communication and a goal of removing waste and driving down cost JIT

Close relation ship and trust are critical to success of Successful JIT partnerships ensure that production

parts are available only when they are needed

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Goals of JIT Partnerships

Removal of unnecessary activities , Such as

receiving, incoming inspection, paperwork and invoicing

Removal of In plant inventory Removal of In transit Inventory

Consignment inventory

Improved quality and reliability

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Concerns of suppliers
Diversification

Suppliers may not want to tie themselves to long term contracts

Scheduling

Little faith in purchasers ability

Changes

Engineering changes can play havoc with JIT

Quality

Capital, process and technology limitations

Lot Size

8/6/12 Suppliers may not want frequent delivery in small lots

Pull Scheduling System: why?

Whats wrong with Push Scheduling System? Assumptions: ng i

ad Le is e R im T

Click to edit Master subtitle style

Busin ess Circle

Our business by Pull system: Single Solution provided 8/6/12 processes are

Lead Time = WIP/Rate

Pull Scheduling System: why?

Tell me how you measure me and Ill tell you how Ill behave. -Goldratt Lead-Time = Cost -Henery Ford

Assumption:

WIP is not costing the company anything.

Fact:
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Cost of Capital Cost of Space

Pull Scheduling System: Types

Single Schedule Point:
Customer/Last Process Supermarket Replenishment Capped FIFO Lanes

Ordering Method: Two-Bin

system, KANBAN card, Light signal.

Drum Buffer Rope

Choices are required and / or customer

desired LT demands a stocking point

WIP Cap

Least preferred Pull System.

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Pull Scheduling System: Types

Single Schedule Point: Process Constraint: Slowest Process after
Super Market Drum Buffer Rope Supermarket Replenishment Capped FIFO Lanes

immediately after the last Supermarket

Used when Customer does not need

Choices, and to Control WIP in high volume repetitive manufacturing

WIP Cap

FIFO Lane caps at each process.

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Pull Scheduling System: Types

Single Schedule Point: Process immediately after the last Supermarket Constraint: Slowest Process after Super Market, called DRUM
To control WIP where Constraint is

Supermarket Replenishment Capped FIFO Lanes

Drum Buffer Rope

known and in a fixed location

WIP Cap

ROPE cap: overall cap between the

Single Schedule Point and the Constraint .

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Pull Scheduling System: Types

Single Schedule Point: Process immediately after the last Supermarket
To control WIP where Constraint is

Supermarket Replenishment Capped FIFO Lanes

known and in a fixed location

WIP cap: overall cap between the

Single Schedule Point and the last process.

Drum Buffer Rope

WIP Cap

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Pull Scheduling System: Overview

Start small

Reducing/Stabiliz ing Lead Time Single Point Scheduling WIP Caps

Set initial Inventory

limits conservatively (high)

Have a support team

ready.

Determine in advance Combination what people should do Pull Systems

when they run out of work

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Toyota Production System

The operational excellence is

on the quality improvement tools and methods developed by Toyota (under the TPS): such as JIT, kaizen, one-piece-flow, jidoka, and heijunka! manufacturing sector.

15 15 based

These technique triggered a lean revolution in the Toyota Way 14 principles which constitute this philosophy.

4P model Philosophy (Long-term thinking) Process (eliminate waste) People and partners (Respect, Challenge them to achieve more, Grow leaders) Problem-solving (Continuous improvement and learning)
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What is Toyota lean?

End result of applying the TPS to all areas of business. A five-step process:
Defining customer value Defining value stream Making it flow Pulling from the customer and back Striving for excellence.
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Taiichi Ohno (founder of TPS) All we are doing is looking at the time line from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the non-value-added waste.
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14 Toyota-Way Principles
Section I Long-term philosophy Principle 1: Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals. Section II The Right processes will produce the right results Principle 2: Create continuous process flow to bring problem to the surface. Principle 3: Use pull system to avoid overproduction. Principle 4: Level out the workload (heijunka). (work like a tortoise not the hare.) Principle 5: Build the culture of stopping to fix problems to get quality right the first time.
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14 Toyota-Way Principles
Principle 6: Standardize tasks are the foundation for continuous
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improvement and employee empowerment.

Principle 7: Use visual control so no problems are hidden. Principle 8: Use only reliable, thoroughly tested technology that

serves your people and processes.

Section III Add value to the organization by developing your people and partners
Principle 9: Grow leaders who thoroughly understand the work,

live the philosophy, and teach it to others.

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14 Toyota-Way Principles
Principle 10: Develop exceptional people and teams who follow
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your companys philosophy.

Principle 11: Respect your extended network of partners and

suppliers by challenging them and helping them improve.

Section IV Continuously solving root problem drives organizational learning

Principle 12: Go and see for yourself to thoroughly understand the

situation (genchi genbutsu).

Principle 13: Make decisions slowly by consensus, thoroughly

considering all options, implement decisions rapidly.

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14 Toyota-Way Principles
Principle 14: Become a learning organization through relentless
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reflection (hensei) and continuous improvement (kaizen).

So we see that the JIT, Lean, 5S etc. are just tools that enable

quality and productivity. TPS is much more than that!

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The TPS house diagram

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Just-in-Time Production The Dell Way

DELL Manages Profitability Not Inventory

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Michael Dell If I have got 11 days of inventory and my competitor has 80 and Intel comes out with a new chip , that means I am going to get to market 69 days sooner In the computer industry , inventory can be a pretty massive risk because if the cost of materials is going down 50% a year, and you have a 2 or 3 months of inventory versus 11 days, you have got a big cost disadvantage . And you are vulnerable to 8/6/12 product transitions, when you can get stuck with

JIT Snapshot of DELL

Has no warehouses Assembles 80,000 computers every 24 hours Cellular Layout of factories Carries no more than 2 hours of inventory in its

factories

Negative cash to cash cycle VMI and long term supplier contracts Direct shipping , no middleman or reseller
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Cellular Layout

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