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DELIVERING CUSTOMER VALUE

Just-in-time (JIT)

Introductory Quotation
Waste is anything other than the minimum amount of equipment, materials, parts, space, and workers time, which are absolutely essential to add value to the product. Shoichiro Toyoda President, Toyota
1995 Corel Corp.

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Supplier Production Distribution System


Supplier Distribution Inventories Productions Inventories
Raw Material Inventory
Work-in-process Inventory Factory Finished Goods Inventory

Customer Distribution Inventories


Retailer Inventory

Raw material in-transit


Component Inventory

Orders

Sub-assembly parts in-transit


Orders

Warehouse Inventory MRO Inventory

Maintenance, repair, and ordering supplies in-transit

Purchasing

Production and Inventory Control

Shipping and Traffic

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What is Just-in-Time?
Management philosophy of continuous and forced problem solving Supplies and components are pulled through system to arrive where they are needed when they are needed.

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What Does Just-in-Time Do?


Attacks waste
Anything not adding value to the product
From the customers perspective

Exposes problems and bottlenecks caused by variability


Deviation from optimum

Achieves streamlined production


By reducing inventory

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Types of Waste
Overproduction Waiting Transportation Inefficient processing Inventory Unnecessary motion Product defects
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1995 Corel Corp.


2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

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JIT Reduced Waste at Hewlett-Packard


Waste Reduction (%)
Setup Time Scrap

20% 30% 30% 40%

Finished Goods Inventory Space Lead Time


Raw Material Inventory Work-in-Process Inventory

50%
50%

82%
20% 40%
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0%
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60%

80%

100%

2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Variability Occurs Because


Employees, machines, and suppliers produce units that do not conform to standards, are late, or are not the proper quantity Engineering drawings or specifications are inaccurate Production personnel try to produce before drawings or specifications are complete Customer demands are unknown
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Push versus Pull


Push system: material is pushed into downstream workstations regardless of whether resources are available

Pull system: material is pulled to a workstation just as it is needed

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Just-in-Time Success Factors


Suppliers Employee Empowerment Layout

Quality

JIT

Inventory

Preventive Maintenance

Scheduling

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Suppliers
Incoming material and finished goods involve waste Buyer and supplier form JIT partnerships JIT partnerships eliminate

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Unnecessary activities In-plant inventory In-transit inventory Poor suppliers


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Streamlined Production
Traditional Flow
Suppliers Production Process (stream of water) Customers Inventory (stagnant ponds)

Flow with JIT


Suppliers

Material (water in stream)


Customers

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Layout
JIT objective: Reduce movement of people and material
Movement is waste!

JIT requires
Work cells for product families Moveable or changeable machines Short distances Little space for inventory Delivery directly to work areas

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Work Cell versus Process Layout


Process Layout
Lathe Lathe 5 4

Work Cell
2 Saw Lathe Grinder Press Lathe

Saw Saw

2 Heat Treat 3

Press

Grinder Grinder
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6
Press
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Heat Treat

Layout Tactics
Build work cells for families of products

Minimize distance
Design little space for inventory Improve employee communication Use poka-yoke devices Build flexible or movable equipment Cross train workers to add flexibility

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Inventory
Traditional: inventory exists in case problems arise JIT objective: Eliminate inventory JIT requires
Small lot sizes Low setup time Containers for fixed number of parts

JIT inventory: Minimum inventory to keep system running


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JIT Inventory Tactics


Use a pull system to move inventory Reduce lot size Reduce setup time Develop Just-in-Time delivery systems with suppliers Deliver directly to point of use Perform-to-schedule Reduce setup time Use group technology
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Lowering Inventory Reduces Waste

Work in process inventory level (hides problems) Unreliable Vendors


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Scrap

Capacity Imbalances

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Lowering Inventory Reduces Waste


Reducing inventory reveals problems so they can be solved.

Unreliable Vendors
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WIP Scrap

Capacity Imbalances

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Lowering Inventory Reduces Waste


Reducing inventory reveals problems so they can be solved.

Unreliable Vendors
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Scrap

WIP

Capacity Imbalances

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Reducing Lot Sizes Increases the Number of Lots


Customer orders 10 Lot size = 5 Lot 2 Lot 1

Lot size = 2 Lot 1 Lot 2 Lot 3 Lot 4 Lot 5

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Scheduling
Involves timing of operations JIT requires
Communicating schedules to suppliers Level schedules Freezing part of schedule nearest due date Small lots Kanban techniques

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JIT Scheduling Tactics


Communicate the schedule to suppliers Make level schedules Freeze part of the schedule Perform to schedule Seek one-piece-make and one-piece-move Eliminate waste Produce in small lots Use kanbans Make each operation produce a perfect part
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Level Schedules
Reduce ripple effect of small variations in schedules (e.g., final assembly) Production quantities evenly distributed over time (e.g., 7/day) Build same mix of products every day
Results in many small lots Item Monthly Quantity A 40 B
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Daily Quantity 2 3

60
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Small versus Large Lots


JIT Small Lots
A A B B B C A
JIT produces same amount in same time if setup times are lowered A

Time
Small lots also increase flexibility to meet customer demands

Large-Lot Approach
A A A A B B B

Time
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Kanban
Japanese word for card
Pronounced kahn-bahn (not can-ban)

Authorizes production from downstream operations


Pulls material through plant

May be a card, flag, verbal signal etc. Used often with fixed-size containers
Add or remove containers to change production rate
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Figure S12.5

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Preventive Maintenance (PM)


All activities involved in keeping equipment in working order Done to prevent failure JIT requires
Scheduled & daily PM Operator performs PM
Knows machines Responsible for product quality

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Quality
JIT exposes quality problems by reducing inventory JIT limits number defects with small lots JIT requires TQM
Statistical process control Worker involvement
Inspect own work Quality circles

Immediate feedback

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JIT Quality Tactics


Use statistical process control Empower employees Build failsafe methods (poka-yoke, checklists, etc.) Provide immediate feedback

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Employee Empowerment
Getting employees involved in product & process improvements
Employees know job best!

JIT requires
Empowerment Cross-training Training support Few job classifications

1995 Corel Corp.

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Results
Queue and delay reduction, speeds throughput, frees assets, and wins orders Quality improvement, reduces waste and wins orders Cost reductions, increases margin or reduces selling price Variability reductions in the workplace, reduces waste and wins orders Rework reduction, reduces waste and wins orders S12-32
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2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

PowerPoint presentation to accompany Operations

Yielding
Faster response to the customer and higher quality

A competitive advantage!
S12-33
Module Code and Module Title Title of Slides 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 PowerPoint presentation to accompany Operations

Attributes of Lean Producers


use JIT to eliminate virtually all inventory build systems to help employees product a perfect part every time reduce space requirements develop close relationships with suppliers educate suppliers eliminate all but value-added activities develop the workforce make jobs more challenging reduce the number of job classes and build worker flexibility
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