Just-In-Time Manufacturing A PowerPoint Presentation By Stephen D. Spangler This PowerPoint presentation focuses on Just-in time manufacturing and its use and implementation in the manufacturing world.

A Brief Overview Central Themes Prerequisites for Implementation Just-In-Time Techniques A Brainstorming Exercise A Competitive Edge Major Misconceptions of JIT These are topics that will be covered in the upcoming slides.

A Brief Overview (cont’d.) Goals of Just-In-Time Manufacturing Advantages of Just-In-Time Manufacturing How JIT Works A Real World Example An Exercise Summary A continuation of the topics that will be covered in the upcoming slides.

Just-In-Time Manufacturing: A Definition Uses a systems approach to develop and operate a manufacturing system Organizes the production process so that parts are available when they are needed A method for optimizing processes that involves continual reduction of waste Just-In-Time manufacturing was originally developed in the far east and so far they have been the most successful in implementing it into their production processes. Its much more than just another way to control inventory, it’s a way to eliminate it completely. During production parts and subassemblies are to be available on the shop floor exactly when they are needed. Any part of the production process that does not add value to the product should be eliminated.

Central Themes Surrounding Just-In-Time Simplicity Quality Elimination of Waste Waste is defined as “any activity that increases cost but does not add value to the product. The end result should be a manufacturing process with no wasteful actions. The goal of JIT manufacturing is to identify the perfect process, making the process as simple and efficient as possible. Quality is one of the main

Prerequisites for JIT Implementation A Reason for Changing Executive Commitment Strategic Manufacturing Plan Commitment to Action In order for JIT implementation to be successful a company must follow these guidelines and not try to implement JIT just for the sake of change. Most of the company’s that change to JIT manufacturing are doing it because of their competitors, mainly those in the far east, because they are producing far more rapidly and effectively. JIT changes almost every aspect of the company so it does not fall on the shoulders of a single segment of the firm but instead a firm-wide commitment is needed. The executives have to be the leaders involved in JIT, they must be the guiding light for the rest of the firm. Strategic planning runs deep in the commitment to JIT, the entire corporation must be involved in planning, from the executives all the way down to the production workers on the floor. Success In JIT needs to see a commitment to action in all facets of the corporation. Getting everyone involved and committed is the first step to successful implementation of JIT and the first step to an increase in continuous improvement.

Just-In-Time Techniques Inventory Reduction as a Tool for Improvement Supplier Relationships Inventory “Pull” Uniform Plant Loading Inventory reduction as a tool for improvements, means that if you reduce inventory many good things can happen along with it. Costs are reduced greatly if inventory is reduced, also a large inventory usually does not get rid of problems it just hides them. Supplier relationships is a big part of the JIT process, the main goal is to have suppliers deliver raw materials and components exactly when they are needed on the shop floor, skipping inspection and storage. This requires a great deal of trust between the supplier and the customer, this can be achieved through sole-sourcing, and long term contracts to promote loyalty. Inventory pull is the opposite of the traditional technique, inventory push. Inventory pull means that each manufacturing center pulls the the work from the previous site as space becomes available. This keeps the WIP low because there is no build up of work at any specific work station. The only WIP needed is the work on the floor being currently manufactured. Uniform plant loading refers to the fact that the plant should be making today what the customer ordered for delivery today. An aspect of JIT is to have a uniform, level schedule of production that can also be very flexible depending on the demand for the product. There should be level flow of work passing through each work station throughout the day.

Just-In-Time Techniques(cont’d) Reduced Setup Times Shop-Floor Layout and Production Cells Total Quality Assurance Preventive Maintenance Reduced setup times are achieved in JIT by keeping batch sizes as small as possible, the ideal batch size is said to be one. Companies spend a lot of time in setup time reduction, with the implementation of JIT setup time are usually reduced thirty or fifty percent. In a Just-In-Time manufacturing company the plant floors are laid out so that there is a minimal movement of goods during the production process, this reduces a great deal of waste. Product quality is extremely important in a JIT situation, all aspects of the product and the manufacturing process must be carefully scrutinized for optimum quality. Every member of the production process must be trained in production quality and should use techniques to assure quality. Techniques such as Statistical process control is a very good way to ensure quality during production. Preventive maintenance is needed to reduce variation in the process and also to keep a high level of quality. This requires a comprehensive examination of all machines on a regular basis.

Brainstorming Exercise: How can Just-In-Time Manufacturing be Effective in your Business? Just-In-Time manufacturing has been one of the major reasons for Japanese success in business. If JIT is implemented correctly in your business it could be a total success. If JIT is implemented correctly it can be successful no matter what your business is, its goals provide all the ingredients for success. The goals for JIT are; Design for optimum quality, cost and ease of manufacturing, minimize resources needed to produce a product, responsiveness to the customer, develop trust relationships with the customer and supplier, and total commitment within the corporation to improve the total manufacturing system. These goals are lofty but they are the backbone to creating an extremely successful company. There are a few basic tactics that should be followed when using JIT. First you should have design acceptance based on production goals and on production performance, you should also begin to minimize the costs of labor materials and equipment in the production process. Then you should eliminate redundancy in production, remove all types of “gate inspections” and set goals for continuous improvements. After this you should begin to eliminate all unnecessary inventory, monitor customer satisfaction. Next is to secure your supplier base, also give the employees freedom on the production floor to do what they feel necessary to ensure a quality product, finally you must be able to deliver a quality product when and where it is needed.

A Competitive Edge Integrating and Optimizing Improve Continuously Understanding the Customer When a company is using JIT as a manufacturing tool they secure a competitive edge on a few of the key elements in the manufacturing world. By integrating and optimizing a company can very quickly improve its financial status, this means that they should cut all unnecessary overhead costs and steps in the production process. Some of the unnecessary functions that should be eliminated are inspection, rework loops, and inventory. Improving continuously means that the company should develop goals and internal systems that advocate continuous improvement highly. This should be included in the design for new products, and also in the development of employee participation in all aspects of the company’s procedures. Finally the edge in understanding the customer and reducing the customers internal costs. If a company can realize the customer internal costs and do everything they can to reduce them they will definitely have the competitive edge.

The Major Misconceptions of JIT JIT is Only an Inventory Control System It is a Method to “Push” Inventory Back to the Supplier JIT is a Quality Control Program With the implementation of Just-In-Time techniques inventory will become more controlled but it is hardly the major function. The “pull” system that JIT uses does not allow inventory to be in abundance, and materials cannot be ordered until needed. If JIT was implemented as an inventory control alone it could never be effective. The second major misconception about JIT is that a company pushes the suppliers inventory back into their shop thus, leaving the supplier with the heavy inventory load. A business with an effective JIT process should never have an abundance of inventory no matter where it is stored, whether the inventory is still at the suppliers or the customer has it is irrelevant, it is still costing to hold it. The final misconception is that JIT systems are only quality control programs, this is the biggest misconception because JIT is an operating philosophy not a program for a single facet of operation.

Goals of Just-In-Time Systems Design for Optimum Quality and Cost Minimize resources needed for Design and Manufacturing Be Responsive to the Customers Needs Design of a product is one of the most important phases of a products development because it integrates the quality and cost immediately. Designing a product with high manufacturability is an important step because it shows the efficiency at which a product can be manufactured. To minimize the resources that go into a product is just good business practices, however, it is a key to success in JIT systems. Capital, equipment , and labor are the key elements of a product and the reduction of these will minimize cost and time in the production process, but the important thing is that the product remains at a high level of quality. Being responsive to the customers needs is also very important in JIT systems because you must be able to understand how your customers internal systems and requirements. Being responsive to the customer can include; producing various sizes of lots, reducing manufacturing costs, reducing lead time, reducing the customers internal costs, working with the customers management on future products.

Goals of Just-In-Time Systems(cont’d) Develop Trust and Open Relationships with Suppliers and Customers Develop a Commitment to Improve the Total Manufacturing System Trust and open relationships are very important in a JIT atmosphere because the customer and the supplier must set long-term goals and very precise shipment and delivery dates. When working in a JIT system it is not about yourself its about teamwork and helping each be as effective as possible. The last goal is to have a firm-wide commitment to continuous improvement. The management must encourage and support continuous improvement for JIT to be effective.

Advantages of JIT Manufacturing Materials Cost Savings Manufacturing Cost Savings Sales Cost Savings Materials cost savings is basically the reduction of costs incorporated with purchasing, receiving, inspection, and stockroom costs. Manufacturing cost savings identifies saving in the engineering, production, and the quality control activities. A major part of manufacturing cost savings I keeping a high level of quality, quality reduces cost and increases revenue. Sales cost saving comes in the form of reducing overlap between the supplier and the customer, which is inspection and testing. The most effective situation that the sales department can establish is finding customers that also use JIT systems.

Elements in Materials Cost Saving Reduction of Suppliers Long-term Contracts Reduce Order Scheduling Simplify Receiving Systems Eliminate unpacking Eliminate Inspection Eliminate inventory Stocking Eliminate Excess Material These are a few of the main ways to reduce materials related costs in a JIT system.

How Just-In-Time Systems Work Requirements for JIT Manufacturing Firm-wide Commitment Knowledgeable Management There are many requirements for JIT systems that will be covered in the upcoming slides but the main requirements are organizational commitment to the company’s internal structures related to JIT techniques, and customer and supplier support systems. Firm-wide commitment and knowledgeable management run hand in hand because first you need knowledgeable management to have firm-wide commitment. The management must be able to teach the employees about JIT and support the effort completely. They must know everything about JIT so that they can inform everyone of what is going on at all times.

Requirements for JIT Respond to Customer Requirements Integrate all Processes in the Manufacturing System Employee Participation in Meeting Commitments Company wide Commitment to education Eliminate redundancy Reduce all Inventory Establish Continuous Improvement Goals This is a list of the requirements that a company needs to utilize in order for Just-In-Time to be successful, all of these requirements need to be incorporated by the entire firm not just the management.

Requirements for JIT(cont’d) Use a pull Production System Design products for Manufacturing Develop Controllable Production Processes Have a Defect Prevention Program Reduce Setup Times Build Products to Specification A continuation of the requirements needed for JIT implementation to be successful.

A Real World Example The Toyota Production System The Toyota production system has been called the “kanban system” and the “Toyota System”, but they are just other labels referring to the Just-In-Time system. Toyota has gone through an evolution of sorts, They have evolved into a comprehensive system that is a single unit with n o separate parts. The Toyota system first attracted attention in 1973 when Japan was going through an oil crisis and it companies had to manage to do well with less. They began to closely scrutinize the relentless pursuit of total elimination of waste that Toyota swore by. Many people criticized this method but they could have just been making excuses because it is a very difficult and time consuming process to implement such a serious change in an organization. The times are changing from “if we make it, we can sell it” to a time where society views quality and value as the most important aspects of a product. Toyota implemented JIT in a time where most people had never even heard of it, and they did it with near perfection.

A JIT Exercise Q: What are the three central themes surrounding Just-In-Time Manufacturing and why are they important? A: The three themes surrounding JIT are Simplicity, Quality, and the elimination of waste. All three of these are extremely important because each one is needed for the the whole system to operate effectively.

Summary A review of Just-In-Time Manufacturing Systems Just-In-Time manufacturing systems are a great way for a company to become more successful than their current state, it gives a firm an absolute competitive advantage over others in the same market. However, it is a very complex system and there are many requirements and prerequisites that need to be followed in order for this system to be effective. It requires a firm-wide commitment that is not seen in any other type of system in production or manufacturing, it also closes the gap between the different departments in a firm and makes the entire firm work and communicate as one single unit. This is one of the main points that all of the theorists in quality management preached, and this system forces that upon a firm. The advantages of JIT are abundant and if implemented correctly it can only do great things.

Bibliography Mito, Setsuo and Ohno, Taiichi. Just-In-Time For Today And Tomorrow. Cambridge: Productivity Press, Inc., 1986. Lubben, Richard T.. Just-In-Time Manufacturing. New York: McGraw-Hill Book Co., 1988. Maskell, Brian H.. Just In Time. Carol Stream: Hitchcock Publishing Co., 1989. Bibliography