Just-in-time

— Shoichiro Toyoda President, Toyota Waste is ‘anything other than the minimum amount of equipment, materials, parts, space, and worker’s time, which are absolutely essential to add value to the product.’ — Shoichiro Toyoda President, Toyota © 1995 Corel Corp.

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. It is good at this point to emphasize the notion that JIT is a philosophy not simply delivery of small lots at specific times. It is also helpful to emphasize that JIT requires an ongoing effort.

THE APPLICABILITY OF JIT System characteristics for a good fit: demand is reasonably stable high-volume repetitive systems making standardized product-service bundles Requires cooperation and coordination of employees and suppliers Continuous improvement and employee involvement are core aspects Cellular manufacturing arrangement is ideal characteristic of JIT suppliers

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

Streamlined Production Customers Material (water in stream) Traditional Flow Suppliers Production Process (stream of water) Inventory (stagnant ponds) Customers Flow with JIT Suppliers

Just-in-Time Success Factors Suppliers Preventive Maintenance Layout Inventory Scheduling Quality Employee Empowerment JIT This side outlines the essential features, more detail is provided in subsequent slides.

JIT Contribution to Competitive Advantage Suppliers reduced number of vendors supportive supplier relationships quality deliveries on time

JIT Contribution to Competitive Advantage - continued Inventory small lot sizes low setup times specialized bins for holding set number of parts Scheduling zero deviation from schedules level schedules suppliers informed of schedules Kanban techniques

To Lower Inventory, Reduce Lot Sizes Inventory Level Average inventory = 40 Lot Size 200 Average inventory = 100 Lot Size 80 The next several slides look at the process and consequences of reducing inventory. Average inventory = (Lot size)/2 Time

Reducing Lot Sizes Increases the Number of Lots Customer orders 10 Lot size = 5 Lot 1 Lot 2 Lot size = 2 Lot 1 Lot 2 Lot 3 Lot 4 Lot 5

…Which Increases Inventory Costs Total Cost Holding Cost Setup Cost Smaller Lot Size Optimal Lot Size Lot Size

…Need to reduce setup cost Total Cost Holding Cost Setup Cost New optimal Lot Size Optimal Lot Size Lot Size

…Need to reduce setup cost New Total Cost Total Cost Holding Cost Setup Cost New optimal Lot Size Optimal Lot Size Lot Size

Steps to Reduce Setup Time 90 min Initial Setup Time Separate setup into preparation, and actual setup, doing as much as possible while the machine/process is running (save 30 minutes) Step 1 60 min Move material closer and improve material handling (save 20 minutes) Step 2 45 min Standardize and improve tooling (save 15 minutes) Step 3 Use one-touch system to eliminate adjustments (save 10 minutes) 25 min Training operators and standardizing work procedures (save 2 minutes) Step 4 15 min 13 min Step 5

Small versus Large Lots JIT produces same amount in same time if setup times are lowered JIT Small Lots A A B B B C A A B B B C Time Small lots also increase flexibility to meet customer demands Large-Lot Approach In discussing this slide, it is helpful to stress the caveat that JIT works given that other problems are solved. JIT not only requires the solution of other problems, it also helps in diagnosis. A A A A B B B B B B C C Time

JIT Contribution to Competitive Advantage - continued Preventive Maintenance scheduled daily routine operator involvement Quality Production statistical process control quality by suppliers quality within firm

JIT Contribution to Competitive Advantage - continued Employee Empowerment empowered and cross-trained employees few job classifications to ensure flexibility of employees training support Commitment support of management, employees, and suppliers

Single-Card Kanban System Assembly always withdraws from fabrication (pull system) Containers cannot be moved without a kanban Containers should contain the same number of parts Only good parts are passed along Production should not exceed authorization Part Number: 1234567Z Location: Aisle 5 Bin 47 Lot Quantity: 6 Supplier: WS 83 Customer: WS 116 KANBAN This slide presents the general operating rules for a single card system as presented in the text.

How many Kanban containers?

How many Kanban containers? Lead time – time between placement of an order and receipt of an order. Lead time demand – the demand that occurs during the lead time Safety stock – extra stock to allow for uneven demand.

Westerville Auto Parts Company Westerville Auto Parts produces rocker-arm assemblies for use in the steering and suspension systems of 4-WD trucks. The daily expected demand is 2000. A Kanban container holds 22 assemblies. The lead time to produce a container of parts is 0.08 days. The safety stock is 16 assemblies. How many Kanbans are required? The next series of slides presents Example 16.1. The series builds in steps to the conclusion of the Example showing the development of key equations along the way. This slide advances automatically.

Number of Containers Westerville Auto Parts Demand = 2000 units/day Safety stock = 16 Lead time = 0.08 days Container Size = 22

Number of Containers Westerville Auto Parts Demand = 2000 units/day Safety stock = 16 Lead time = 0.08 days Container Size = 22

Number of Containers Westerville Auto Parts Demand = 2000 units/day Safety stock = 16 Lead time = 0.08 days Container Size = 22 This slide advances automatically.

Number of Containers Westerville Auto Parts Demand = 2000 units/day Safety stock = 200 Lead time = 0.8 days Container Size = 22 This slide advances automatically.

Lean manufacturing Just-in-time manufacturing with Kanban approach Production smoothing in the schedule Reduce set-up time Line balance by standardizing operations Machine layout and multi-functional workers for flexible production Continuous improvement/employee involvement Quality

Can Boeing Make Lean Manufacturing Fly? http://www.boeing.com/news/releases/2006/q4/061107b1_pr.html

Can Boeing Make Lean Manufacturing Fly? How has lean manufacturing affected the line-workers? Explain the statement: “Provided it [Boeing] can sell the philosophy to its workers.” What has Boeing implemented on the Long Beach assembly line besides the ‘moving’ plane? How has the supplier behavior changed? What is the role of the ‘water-spiders’?