MBA.782.J.I.T.CAJ Operations Management Just-In-Time J.I.T. Philosophy Characteristics of J.I.T. J.I.T. in Services J.I.T. Implementation Issues Benefits of J.I.T.

MBA.782.J.I.T.CAJ Goal of full employment in post-WW II period Government (MITI) supported improvement of targeted industries Imported technologies Efforts concentrated on factory floor Leads to success in ________ markets U.S. industry _______ ___ Just-In-Time Japanese Approach to Productivity

MBA.782.J.I.T.CAJ “Big JIT” (Lean Production System) –is primarily a ________________ of management that stresses three fundamental concepts: 1.The Elimination of ________ 2.Continuous Improvement 3.Respect for ________ “Little JIT” –Focuses more _____________ on scheduling goods inventories and providing service resources where and when needed.... Just-In-Time JIT: Part Philosophy-Part Technique

MBA.782.J.I.T.CAJ Just-In-Time Elimination of Waste Short Definition: –Waste is anything that does not add ________ to the product Value means satisfying the customer’s needs, both actual and perceived, at a price the customer can afford and feels is reasonable. Adding value does not mean _________ costs.

MBA.782.J.I.T.CAJ (1) Waste from overproduction (2) Waste of waiting time (3) Transportation waste (4) _____________ waste (5) Processing waste (6) Waste of __________ (7) Waste from product defects.... Just-In-Time Toyota’s Seven Categories of Waste

MBA.782.J.I.T.CAJ Group Technology JIT Production Kanban Production Control Systems Reducing Setup Times Uniform Plant Loading JIT Inventory Just-In-Time Methods of Attacking Waste

MBA.782.J.I.T.CAJ Just-In-Time

MBA.782.J.I.T.CAJ Movement is waste Group Technology and work cells to ________ distance to move people and materials Flexible or movable equipment to increase flexibility Design _________ space for inventory Attacking Waste Group Technology

MBA.782.J.I.T.CAJ Departmental Specialization Saw LathePress Grinder Lathe Saw Press Heat Treat Grinder Attacking Waste Group Technology

MBA.782.J.I.T.CAJ Group technology cells Press Lathe Grinder A 2 B Saw Heat Treat LatheSaw Lathe Press Lathe 1 Attacking Waste Group Technology

MBA.782.J.I.T.CAJ Management philosophy _____ system though the plant WHAT IT IS Employee participation Industrial engineering/basics Continuing improvement Total quality control Small lot sizes WHAT IT REQUIRES Attacks waste ________ problems and bottlenecks Achieves streamlined production WHAT IT DOES Stable environment WHAT IT ASSUMES Attacking Waste Just-In-Time Production

MBA.782.J.I.T.CAJ Traditional Push System Material is “ _________ ” onto downstream workstations regardless of whether the resources are available. Production begins in __________ of customer needs Emphasis on production; production first “ _______ ” ahead of next unit –good selection from which to build efficient schedules and improve utilization Just-In-Time Production Push vs. Pull

MBA.782.J.I.T.CAJ J.I.T. Pull System Customer _________ activates production so it produces only when it is needed Material is “ __________ ” to a workstation just as it is needed. Supplies and components are pulled through the system to arrive ______ they are needed _______ they are needed. Just-In-Time Production Push vs. Pull

MBA.782.J.I.T.CAJ Kanban is Japanese for ______, or “instruction card” It is a simple _________ pull system for controlling inventory in the production system based on a standardized container or lot size. Toyota uses two types of kanbans; –production kanban - authorizes ____________ of a given number of parts –withdrawal kanban - authorizes the ___________ of a given number of parts. Attacking Waste Kanban Production Control Systems

MBA.782.J.I.T.CAJ Attacking Waste Kanban Production Control Systems

MBA.782.J.I.T.CAJ To Lower Cycle Inventory, _________ Lot Size... Average cycle inventory Lot size = 100 Lot size = 50 On-hand inventory Time (hours) 100 – 75 – 50 – 25 – 0 – Attacking Waste Reducing Setup Times

MBA.782.J.I.T.CAJ Lot size = 5 Lot 1 Lot 2 Lot size = 2 Lot 1Lot 2Lot 3Lot 4Lot 5 However, reducing lot sizes __________ the number of lots... Minimizing Setup Times Small Lot Sizes Lot size = 10 Lot 1

MBA.782.J.I.T.CAJ Just-In-Time Small Lot Sizes...which ___________ Inventory Costs...

MBA.782.J.I.T.CAJ Just-In-Time Small Lot Sizes...unless Setup Costs are _________...

MBA.782.J.I.T.CAJ Does not mean building a single product Make _______ materials use schedules Distribute production quantities ________ over time (firm monthly schedules) Build the ______ mix of products every day –using smaller lot sizes Attacking Waste Uniform Plant Loading

MBA.782.J.I.T.CAJ AABBBC JIT Small Lots Time A A BB B C A Large-Lot Approach Time AAABBB B BB C C J.I.T. produces the same amount in the same time ____ setup times (costs) are lowered. Small lots also increase flexibility to meet customer demands. Attacking Waste Uniform Plant Loading

MBA.782.J.I.T.CAJ __________ the number of suppliers Buyer and supplier form _______________ to reduce waste _______________ supplier relationships to –improve the on-time delivery –minimize paperwork –make frequent deliveries in small lot sizes –reduce in-plant and in-transit inventories Just-In-Time Suppliers

MBA.782.J.I.T.CAJ Employee _______________ in product and process improvements Requires –Employee empowerment –Cross-trained employees –fewer job classifications to ensure flexibility of employees. –training support –quality at the source Just-In-Time Flexible Workforce

MBA.782.J.I.T.CAJ Just-In-Time

MBA.782.J.I.T.CAJ Continuous Improvement J.I.T. Inventory Traditional View: –inventory exists “just-in- ______ ” problems arise. J.I.T. Tactics –substantially reduce, if not eliminate, inventory –inventory is the “root of all ______ ” –only the minimum inventory necessary to keep the system running. –inventory reduction ___________ the problems and provides opportunities for improvement

MBA.782.J.I.T.CAJ Scrap Unreliable Vendors Capacity Imbalances J.I.T. Inventory Lowering Inventory Reduces Waste W.I.P. inventory level (hides problems)

MBA.782.J.I.T.CAJ Scrap Unreliable Vendors Capacity Imbalances J.I.T. Inventory Lowering Inventory Reduces Waste Reducing inventory _________ problems so they can be solved. W.I.P.

MBA.782.J.I.T.CAJ Scrap Reducing inventory further reveals _______ problems to be solved. Unreliable Vendors Capacity Imbalances W.I.P. J.I.T. Inventory Lowering Inventory Reduces Waste

MBA.782.J.I.T.CAJ All the J.I.T. techniques used in manufacturing are used in services:  Suppliers - food delivery to restaurants  Layouts - baggage claim area at airport  Inventory - pharmeceuticals networks  Scheduling - personnel schedules rather than production / inventory Just-In-Time J.I.T. in Services

MBA.782.J.I.T.CAJ Just-In-Time Implementation Issues Requires time, trust, and changing _____________ Putting a new philosophy into action –allowing utilization to ______ –reduction in buffer inventory –allowing workers to ______ the line –trusting vendors and customers –committing resources to train workers –gaining worker ______

MBA.782.J.I.T.CAJ  Reduced _____________ investment  Reduced _________ requirements  Reduced manufacturing lead times  Increased labor ______________  Simplier planning systems  Work force participation  Increased product quality Just-In-Time Benefits of J.I.T.

MBA.782.J.I.T.CAJ  Read Chapter 10  Concepts / Terminology  Review Lecture Notes Just-In-Time Chapter Wrap-Up