Bus 2411 Production Operations Management Just-In-Time Manufacturing U. Akinc Just-In-Time Manufacturing U. Akinc

Bus 2412 Just-in-Time (JIT) l Just in time is a philosophy of management that transcends inventory management, indeed manufacturing management l Predicated on eliminating all waste from manufacturing l Waste to be eliminated includes anything that does not add value to the product or service l Just in time is a philosophy of management that transcends inventory management, indeed manufacturing management l Predicated on eliminating all waste from manufacturing l Waste to be eliminated includes anything that does not add value to the product or service

Bus 2413 Examples of Waste l Inventory l Inspection l Set-up Time l Data Processing l Most Indirect Labor l Rework l Scrap l Customer Returns l Inventory l Inspection l Set-up Time l Data Processing l Most Indirect Labor l Rework l Scrap l Customer Returns

Bus 2414 JIT & Competitive Priorities l Reduces costs via waste elimination l Increases conformance quality l Improves flexibility due to small inventory l Improves delivery performance due to shorter lead times l Reduces costs via waste elimination l Increases conformance quality l Improves flexibility due to small inventory l Improves delivery performance due to shorter lead times

Bus 2415 JIT makes problems Visible

Bus 2416 Functions of Inventories Revisited l Safety Stocks l Lot Size Inventories l Anticipation Stocks l De-coupling l Transit l Speculation l Safety Stocks l Lot Size Inventories l Anticipation Stocks l De-coupling l Transit l Speculation

Bus 2417 Pillars of JIT l Set-up Time reduction l Total Quality Management l Vendor Relations l Flexible Resources l Employee Involvement l Meticulous Maintenance l Pull vs. Push System of Scheduling l KANBAN l Set-up Time reduction l Total Quality Management l Vendor Relations l Flexible Resources l Employee Involvement l Meticulous Maintenance l Pull vs. Push System of Scheduling l KANBAN

Bus 2418 JIT works best with... l Uniform production rate l Flexible workforce l Limited product variety l Uniform production rate l Flexible workforce l Limited product variety

Bus 2419 A KANBAN

Bus Two-card Kanban

Bus Typical Benefits of JIT l 5 Companies Surveyed: l Lead time down by 90% l Inventory down by 35-73% l Set up time down by 75-95% l Material costs down by 6-11% l Quality costs down by 26-63% l Harley Davidson l Inventory turns 7 to 20 l Direct labor prod. up 50% l Rework reduction 80% l Warranty costs down by 90%’ l 5 Companies Surveyed: l Lead time down by 90% l Inventory down by 35-73% l Set up time down by 75-95% l Material costs down by 6-11% l Quality costs down by 26-63% l Harley Davidson l Inventory turns 7 to 20 l Direct labor prod. up 50% l Rework reduction 80% l Warranty costs down by 90%’