McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. JIT and Lean Operations

15-2 JIT/Lean Production  Just-in-time (JIT): A highly coordinated processing system in which goods move through the system, and services are performed, just as they are needed,  JIT   lean production  JIT  pull (demand) system  JIT operates with very little “fat”

15-3 Goal of JIT The ultimate goal of JIT is a balanced system. Achieves a smooth, rapid flow of materials through the system

15-4 Summary JIT Goals and Building Blocks Figure 15.1 Product Design Process Design Personnel Elements Manufactur- ing Planning Eliminate disruptions Make the system flexible Eliminate waste A balanced rapid flow Ultimate Goal Supporting Goals Building Blocks

15-5 Supporting Goals  Eliminate disruptions  Make system flexible  Eliminate waste, especially excess inventory

15-6 Sources of Waste  Overproduction  Waiting time  Unnecessary transportation  Processing waste  Inefficient work methods  Product defects

15-7 Kaizen Philosophy  Waste is the enemy  Improvement should be done gradually and continuously  Everyone should be involved  Built on a cheap strategy  Can be applied anywhere

15-8 Kaizen Philosophy (cont’d)  Supported by a visual system  Focuses attention where value is created  Process orienteted  Stresses main effort of improvement should come from new thinking and work style  The essence of organizational learning is to learn while doing

15-9  Big JIT – broad focus  Vendor relations  Human relations  Technology management  Materials and inventory management  Little JIT – narrow focus  Scheduling materials  Scheduling services of production Big vs. Little JIT

15-10 JIT Building Blocks  Product design  Process design  Personnel/organizational elements  Manufacturing planning and control

15-11 Product Design  Standard parts  Modular design  Highly capable production systems  Concurrent engineering

15-12 Process Design  Small lot sizes  Setup time reduction  Manufacturing cells  Limited work in process  Quality improvement  Production flexibility  Balanced system  Little inventory storage

15-13 Quality Improvement  Autonomation  Automatic detection of defects during production  Jidoka  Japanese term for autonomation

15-14 Pull/Push Systems  Pull system: System for moving work where a workstation pulls output from the preceding station as needed. (e.g. Kanban)  Push system: System for moving work where output is pushed to the next station as it is completed

15-15 Kanban Production Control System  Kanban : Card or other device that communicates demand for work or materials from the preceding station  Kanban is the Japanese word meaning “signal” or “visible record”  Paperless production control system  Authority to pull, or produce comes from a downstream process.

15-16 Kanban Formula N= DT(1+X) C N = Total number of containers D = Planned usage rate of using work center T = Average waiting time for replenishment of parts plus average production time for a container of parts X = Policy variable set by management - possible inefficiency in the system C = Capacity of a standard container

15-17 Limited Work in Process  Benefits  Lower carrying costs  Increased flexibility  Aids scheduling  Saves cost of rework and scrap  Two general approaches  Kanban – focuses on individual work stations  Constant work in process (CONWIP) – focuses on the system as a whole

15-18 Traditional Supplier Network Buyer Supplier Figure 15.4a

15-19 Tiered Supplier Network Figure 15.4b Supplier Buyer Supplier First Tier Supplier Second Tier Supplier Third Tier Supplier

15-20 Preventive Maintenance and Housekeeping  Preventative maintenance: Maintaining equipment in good condition and replacing parts that have a tendency to fail before they actually fail.  Housekeeping: Maintaining a workplace that is clean and free of unnecessary materials.

15-21 Housekeeping Five S’s 1.Sort 2.Straighten 3.Sweep 4.Standardize 5.Self-discipline

15-22 Comparison of JIT and Traditional FactorTraditionalJIT Inventory Much to offset forecast errors, late deliveries Minimal necessary to operate Deliveries Few, largeMany, small Lot sizes LargeSmall Setup; runs Few, long runsMany, short runs Vendors Long-term relationships are unusual Partners Workers Necessary to do the workAssets Table 15.3

15-23 Transitioning to a JIT System  Get top management commitment  Decide which parts need most effort  Obtain support of workers  Start by trying to reduce setup times  Gradually convert operations  Convert suppliers to JIT  Prepare for obstacles

15-24 Obstacles to Conversion  Management may not be committed  Workers/management may not be cooperative  Difficult to change company culture  Suppliers may resist  Why?