Introduction To Just In Time (JIT) No support files or supplies required.

The Breakthrough Strategy Process Check 1. Select Output Characteristic 2. Define Performance Standards 3. Validate Measurement System 4. Establish Baseline Process Capability 5. Define Performance Objectives 6. Identify Variation Sources Screen Potential Causes Discover Variable Relationships Establish Operating Tolerances – Implement Improvements 10. Validate Measurement System 11. Determine Final Process Capability 12. Implement Process Controls Just In Time (JIT) concepts help us implement our process improvements JIT applies in other steps as well, especially in Steps 6 and 8

Module Objectives By the end of this module, the participant will be able to: Define what is a Just In Time System (JIT) Discuss the benefits of JIT Explain the importance of pacing operations to “Takt” Describe the concept of “Flow” Define “Pull” production 1 2 3 4 5 6 7 8 9 10 11 12 D M A C I

Lean Enterprise Model What is a JIT System? It’s a system which produces: What the customer wants In the quantity the customer wants When the customer wants it While using the minimum: Raw materials Equipment Labor Space The key to this slide is “minimum resources”. JIT can be accomplished with inventory, but at a great cost. True lean systems achieve JIT while using minimum resources.

JIT Principles Pace to “Takt” time Create “Flow” processes Incorporate “Pull” system Don’t discuss detail here. Just note that the order of application maters. Define Takt Then create Flow Enables Pull

JIT Relies On Many Factors MATERIAL MANAGEMENT SUPPLIER MANAGEMENT PRODUCT AND PROCESS DESIGN STANDARD PROCESSES TOTAL PRODUCTIVE MAINTENANCE PROCESS CAPABILITY MULTI-FUNCTION ORGANIZATION PLANT LAYOUT COMPLETION WITHIN TAKT TIME PULL PROCESS JIT systems don’t like variability. These are some of the areas that can cause problems. Most are covered in other modules. Once a JIT system is turned on, expect some of these liabilities to surface. This should be viewed and an opportunity for continuous improvement. QUICK PROCESS CHANGEOVER

Supports the focus on quality, cost, and delivery. JIT Benefits A system intolerant of production abnormalities Reduced documentation and processing steps Reduces Lead Time Improves On-Time-Delivery Operation Flexibility “Pull” vs. “Push” Processes Stop the Line Authority: Fix The Problems Reduces Inventory 5S+1 (Visual Management) Layout Efficiency Supports the focus on quality, cost, and delivery.

Adding Value And Eliminating Waste Inventory Hides Problems Inventory Level Suppliers’ issues Quality problems Machine downtime Inventory is like a river; when water level is lowered, boulders have to be dealt with. Long set ups Productivity Problems Scrap Processes not capable Maintenance issues Imbalanced lines Machine downtime Lack of teamwork This slide also works as a warning. Lean efforts always attack inventory which is a safety net. Teams need to be aware that JIT will expose problems, the process can and will stop. These occurrences need to be viewed as opportunities to remove variation. Reducing inventory levels brings problems to the surface and forces their resolution.

Takt Time “Takt” – German; refers to the tempo set by the conductor of an orchestra with his baton Used in JIT to set production rate equal to the customer demand rate Since Takt time is demand driven, in reality, the customer determines the Takt Time Companies that can’t digest the concept of operating to Takt struggle to realize benefits of lean. Without the pace setting concept processes are still able to make more than is needed, before it’s needed, of stuff that’s not needed (also know as “Just In Case” manufacturing.)

Customer Demand per day Takt Time The rate of production required to meet customer demand. Available Time in a day Takt Time = Customer Demand per day Detail on calculating Takt will be covered in Standard Operations Module The time is usually expressed in seconds per piece, by using seconds in our time we can measure even the smallest improvement.

Takt Time vs. Cycle Time Do not confuse Takt Time with Cycle Time! It’s not uncommon to here people use these terms interchangeably. Emphasize; Takt is set by customer demand and only changes when the customer adjusts their consumption. Cycle times represent the process and can be improved with Sigma Lean tools.

Producing To Takt Benefits Aligns true customer demand to the process Reduces excess inventory Eliminates missed deliveries Increased productivity by matching operator Cycle Times to Takt Time Operating at Takt has many benefits. All companies would see improvements in lead time and inventory by simply producing to true customer demand at the pace they are consuming it.

Concept Of Flow Flow in a Transactional Environment In order to eliminate and reduce NVA (Non-Value-Added) activities, the flow of information should be smooth and un-interrupted. A stop-start flow implies waiting, reviews, excessive hand-offs, and over processing Once information has started on its process route, it should complete it in one single flow The analogy for information flow is that of water in a river – The best flow is through clear, wide, well-defined channels that go directly to the required destination Emphasize the concept of “line if sight”. Ideally we would like to be able to stand at one end of the process and see finished product coming out the other side. This implies connected processes, no vision blocking monuments, and visuals communicating the health of the process.

Batch Fake Flow 1pc. Flow The Journey… Bath – Data moves in piles between corporate, the factory, eventually to the line. Fake Flow – People are relocated closer to each other, but data inventory still exists between process steps. 1pc. Flow – This example a meeting is held where all functional groups can sign off on a proposal. 1pc. Flow

Batch Processing Example Product requires three processes that take one minute each.

Batch Processing Example Product requires three processes that take one minute each.

Batch Processing Example Product requires three processes that take one minute each. The math is the same whether the process is manufacturing or transactional. Someone may point out the amount of work done to each part is the same so where’s the real savings. While it’s true that the value add portion of the process didn’t change, the improvements come in that parts are not waiting in line for each process step. The savings are reduced inventory in the pipeline, and shorter lead-times. Complete processing of first batch of five takes 15 minutes First good part out takes 11 minutes (plus transport time) There are at least 11 parts in-process

Continuous Flow Processing Example Product requires three processes that take one minute each. First part out in three minutes Five completed in seven minutes Only two sub-assemblies in process at a time

Benefits Of Creating Flow A. Quality: Work is passed directly to next Process with no defects. B. Productivity: Minimize wasted movement, warehouses, and double handling. C. Productivity: Problems are identified and solved real time. D. Lead Time: Shortest supply chain, highest flexibility to satisfy customer demand. E. Team Member Morale: Value of work is more visible, recognized. F. Cost: Reduced Inventory Levels Source: Toyota

Flow Production Benefits Eliminates excess WIP (Work In Process) Eliminates defective batches Reduces lead times Quality control by minimizing transportation, handling damage, and excess motion Increases production flexibility Processes located in process order Small and inexpensive equipment (no monuments) Flow is a fairly simple concept. For many companies it’s obvious to connect processes for logistical reasons. Don’t be surprised if students state that some amount of flow exists. The next module “Pull production” is the true test to see if processes are operating at the leanest level.

Pull Systems Definition: In a pull system, replenishment is based on what is consumed by the customer. The customer pulls what they need from the producer. The producer must then pull from their supplier to replace what was consumed. Traditional System When process A completes it’s work, it hands the information off to process B, where it is stored until needed. Pull System Process B is responsible for getting information and supplies from process A as they are needed. There is no intermediate storage. Pull systems are difficult because they require discipline. It’s difficult for people to adjust their production (sometimes slowing down) to match customer demand (Takt). In the past we’ve always rewarded being busy, producing as much product as possible. We as consumers naturally pull from suppliers. Suppliers tend to push production because their economic models measure/reward earned hours, and of course inventory is a asset on the balance sheet.

Worker and Equipment Capacity Planning The Basic Laws Of JIT Production Pull Scheduling Supermarket Production Internal Suppliers Customers Assembly Worker and Equipment Capacity Planning 12 Week Rolling Forecast Estimate of Future Requirements Forecast Kanban Loop Supermarket Finished goods Kanban Loop Kanban Loop Kanban Loop External Suppliers Kanban Loop Don’t get into too much detail, material concepts are covered in Material module. Focus on the concept of how each customer pulls from their supplier, who then pulls from their supplier etc.

Pull Transactional Example In this value stream C is the slowest process, followed by B, then A Should A keep pushing work to B, and B keep pushing to C? Does A pushing work to B increase the amount of work B can produce? What will C have to do to meet demand? What’s the root cause of work piling up? Process C In Out Process B In Out Process A In Out Focus on concept that; working faster than the next process will only pile up work. Piles of inventory are symptoms and should be investigated. Push Push

Pull Transactional Solution To create the pull discipline Define Takt Time, what’s the demand, what’s the pace Even once balanced we may have a capacity constraint Create flow, line of sight, visual controls Standard work for pull discipline How does it work? Customer pulls from C Outbox C pulls from B Outbox B refills Outbox B pulls from A Outbox A refills A Outbox A pulls from A Inbox What do we gain? Predictable Flow Predictable WIP Predictable Lead Time Visual controls Process intolerant of variation Out Process B Out Process C Out Pull Walk through the example slow. Make sure students understand that no work is to be performed until the next operation pulls it from them. Refer back to the previous slide and ask what happens if the pull discipline is not followed. In

Pull Manufacturing Example In this value stream operation 3 is the slowest Should 1 keep pushing work to 2, and 2 keep pushing to 3? Does 2 pushing work to 3 increase the amount of work 3 can produce? What will 3 have to do to meet demand? What’s the root cause of work piling up? What about Takt, are we meeting it? Are we beating it? 1 2 3 4 In manufacturing operations, performance metrics often drive this kind of problem. If we reward operators for their output, as opposed to the system’s output, we will see inventory pile up at slower operations. Earned hours will also drive shops to overproduce to meet goals. Remind students not to be fooled by “busy”. A “busy” shop is not always a productive, efficient shop. Push Push Push

Pull Manufacturing Solution To create the pull discipline – Same as Transactional example Define Takt Time Create flow, line of sight, balanced work, visual controls Layout is even more critical in manufacturing world Standard work for pull discipline How does it work? Customer pulls operation 4 Finish Goods (FG) 4 processes and refills 4 (FG) 4 pulls from 3 completed 3 processes and refills 3 completed 3 pulls from 2 completed 2 processes and refills 2 completed And so on through operation 1 What do we gain Predictable Flow Predictable WIP Predictable Lead Time Visual controls Process intolerant of variation 2 3 This example works the same as the transactional solution. If the subsequent process is not ready for another part, the operator should not produce one. This is a very difficult concept for most people. We are taught to stay busy, and waiting for a pull signal seems counterintuitive. Refer back to the JIT definition; we product what the customer wants, when they want it, in the quantity the want, and not before. 1 4 Pull FG

Pull Production Benefits Better work balance Constant flow Have control to make what we need Provides a method to keep score Can change quickly to meet the customers’ demands Visual WIP control Pull discipline is enables is to maximize the concepts of Takt and Flow.

Additional JIT Benefits Create environment for Standard Operations Allows for multi-process- handling workers Makes material management more visual Creates capacity and the opportunity to redeploy workers for business growth

Critical Success Factors For JIT Management leadership Management-Labor cooperation Multi-functional/multi-skilled employees Focus on flow of production/process Quick Changeovers Quality at the source Team Approach Operator Maintenance Visual Controls Constancy of Purpose

Key Learning Points Try to draw the following points out of the participants: Pace production to “Takt” Make Value “Flow” “Pull” at the demand of the customer Eliminate waste

Objectives Review The participant should now be able to: Define what is a Just In Time System (JIT) Discuss the benefits of JIT Explain the importance of pacing operations to “Takt” Describe the concept of “Flow” Define “Pull” production

Trademarks And Service Marks Trademarks of Six Sigma Academy: Breakthrough Design Breakthrough Software Design Breakthrough Diagnosis Breakthrough Execution Breakthrough Lean® Breakthrough Sigma Lean Breakthrough Six Sigma Breakthrough Strategy® Breakthrough Value Services® FASTART INTELLEQ METREQ WE WEAVE EXCELLENCE INTO THE FABRIC OF BUSINESS Six Sigma is a federally registered trademark of Motorola, Inc. SigmaFlow is a trademark of Compass Partners, Inc. MINITAB is a trademark of Minitab, Inc. VarTran is a trademark of Taylor Enterprises

International Tel: +44-1403-783456 International Fax: +44-1403-218788 Six Sigma Academy www.6-sigma.com US Tel: (480) 515-9501 US Fax: (480) 515-9507 International Tel: +44-1403-783456 International Fax: +44-1403-218788 8876 E. Pinnacle Peak Road, Suite 100 Scottsdale, AZ 85255