EMBA-2, BUP EO Just-in-Time / Lean Production

EMBA-2, BUP EO Just-In-Time (JIT) JIT involves controlling the flow of materials and manpower so that adequate resources are on hand when needed. It ensures an organization produces and delivers the right items, at the right time, in the right amounts The overriding principle of JIT is that a cache of excess inventory and materials do not contribute to the improvement of an organization's profitability. The fundamental component of JIT, is the elimination of waste while adding value.

EMBA-2, BUP EO JIT and Lean Management Little JIT focuses more narrowly on scheduling goods inventory and providing service resources where and when needed Big JIT is a philosophy of operations management that seeks to eliminate waste in all aspects of a firm’s production activities: human, vendor, technology, and the management of materials, scheduling and inventory – which is also called Lean Manufacturing / Production While JIT focuses more on inventory management, Lean’s focus is on manufacturing and operations management.

EMBA-2, BUP EO Features of Lean Production Management philosophy “Pull” 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 Exposes problems and bottlenecks Achieves streamlined production WHAT IT DOES Stable environment WHAT IT ASSUMES

EMBA-2, BUP EO The Toyota’s Lean Production System Based on two philosophies: Elimination of waste Respect for people Fujio Chao identified 7 types of Waste in Operations  Waste from overproduction  Waste of waiting time  Transportation waste  Inventory waste  Processing waste  Waste of motion  Waste from product defects

EMBA-2, BUP EO Minimizing Waste Group Technology Uniform Plant Loading (heijunka) Just-In-Time Production Reduce Inventory: Look for Stores, Transit, Conveyors Carousel, etc Small lot size In lean production system Ideal Lot size is ONE in JIT ???

EMBA-2, BUP EO Benefits of small lot size Reduces inventory Less space require to store Less rework if defect occurs Less inventory to work off for defects Increases production flexibility Easier to balance operations The two methodologies share some tools, for instance, Kanban (pull systems), and a.2-bin inventory system b.2 card System, kanban squares, kanban flag etc Poka-yoke (error-proofing)

EMBA-2, BUP EO bin inventory system

EMBA-2, BUP EO bin inventory system

EMBA-2, BUP EO Kanban Production Control Systems Storage Part A Machine Center Assembly Line Material Flow Card (signal) Flow Withdrawal kanban Once the Production kanban is received, the Machine Center produces a unit to replace the one taken by the Assembly Line people in the first place This puts the system back were it was before the item was pulled The process begins by the Assembly Line people pulling Part A from Storage Production kanban

EMBA-2, BUP EO Comparison of JIT and Traditional FactorTraditionalJIT Inventory Asset, Much to offset forecast errors, late deliveries Liability, 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 Quality Tolerate some scrapZero defects Workers Necessary to do the workAssets