1. Chapter 7 Just-in-Time and Lean Systems
Operations Management by
R. Dan Reid & Nada R. Sander s
2nd Edition © Wiley 2005
PowerPoint Presentation by R.B. Clough - UNH

2. Learning Objectives Explain the core beliefs of the JIT philosophy
Describe the meaning of waste in JIT
Explain the differences between “push” and “pull” systems
Explain the key elements of JIT manufacturing
Explain TQM’s role in JIT manufacturing
Describe the role of people in JIT
Understand impact of JIT on service and manufacturing
Understand functional impact of JIT on all areas

3. The Philosophy of JIT
JIT means getting the right quantity of goods at the right place and the right time
Often termed “Lean Systems”
All waste must be eliminated- non value items
Broad view that entire organization must focus on serving customers
JIT is built on simplicity- the simpler the better
Focuses on improving every operation- Kaizen
Install simple visible control systems
Flexibility to produce different models/features

4. Three Elements of JIT

5. Elements of JIT Manufacturing
JIT Manufacturing is a philosophy of value-added manufacturing
Achieved by
Inventory reduction - exposes problems
Kanbans & pull production systems
Small lots & quick setups
Uniform plant loading
Flexible resources
Efficient facility layouts

6. Role of Inventory Reduction
Inventory = Lead Time (less is better)
Inventory hides problems

7. The Pull System

8. Number of Kanbans Required
N = number of containers
D = demand rate at the withdraw station
T = lead time from supply station
C = container size
S = safety stock

9. Computing the Number of Kanbans: an aspirin manufacturer has converted to JIT manufacturing using kanban containers. They wish to determine the number of containers at the bottle filling operation which fills at a rate of 200 per hour. Each container holds 25 bottles, it takes 30 minutes to receive more bottles, safety stock is 10% of demand during LT.

10. Small Lot Sizes & Quick Setups
Small lots mean less average inventory and shorten manufacturing lead time
Small lots with shorter setup times increase flexibility to respond to demand changes
Strive for single digit setups- < 10 minutes
Setup reduction process is well-documented
External tasks- do as much preparation while present job is still running
Internal tasks- simplify, eliminate, shorten steps involved with location, clamping, & adjustments
Ultimate goal is single unit lot sizes

11. Uniform Plant Loading
A “level” schedule is developed so that the same mix of products is made every day in small quantities
Leveling the schedule can have big impact along whole supply chain
Monday
Tuesday
Wednesday
Thursday
Friday
AAAAA
BBBBB
CCCCC
EEEEE
DDDDD
AABBBB
CDEE
5 units
10 units
Weekly Production Required
Traditional Production Plan
JIT Plan with Level Scheduling A B C D E
20 units

12. Flexible Resources Moveable, general purpose equipment:
Portable equipment with plug in power/air
E.g.: drills, lathes, printer-fax-copiers, etc.
Capable of being setup to do many different things with minimal setup time
Multifunctional workers:
Workers assume considerable responsibility
Cross-trained to perform several different duties
Trained to also be problem solvers

13. Effective Facility Layouts
Workstations in close physical proximity to reduce transport & movement
Streamlined flow of material
Often use:
Cellular Manufacturing (instead of process focus)
U-shaped lines: (allows material handler to quickly drop off materials & pick up finished work)

14. Traditional Process Focused Layout
Jumbled flows, long cycles, difficult to schedule

15. JIT Cellular Manufacturing
Product focused cells, flexible equipment, high visibility, easy to schedule, short cycles

16. Group Technology

17. JIT and TQM- Partners Build quality into all processes
Focus on continuous improvement - Kaizen
Quality at the source- sequential inspection
Jidoka (authority to stop line)
Poka-yoke (fail-safe all processes)
Preventive maintenance- scheduled
Work environment- everything in its place, a place for everything

18. Respect for People: The Role of Employees
Genuine and meaningful respect for associates
Willingness to develop cross-functional skills
Actively engage in problem-solving (quality circles)
Everyone is empowered
Everyone is responsible for quality: understand both internal and external customer needs
Associates gather performance data
Team approaches used for problem-solving
Decisions made from bottom-up
Everyone is responsible for preventive maintenance

19. The Role of Management Responsible for culture of mutual trust
Serve as coaches & facilitators
Support culture with appropriate incentive system including non-monetary
Responsible for developing workers
Provide multi-functional training
Facilitate teamwork

20. Supplier Relationships and JIT
Use single-source suppliers when possible
Build long-term relationships
Work together to certify processes
Co-locate facilities to reduce transport if possible
Stabilize delivery schedules
Share cost & other information
Early involvement during new product designs

21. Benefits of JIT Smaller inventories Shorter lead times
Improved quality
Reduced space requirements
Lower production costs
Increased productivity
Greater flexibility

22. Expected Results of JIT
General
50-90% reduction in throughput times
50-90% reduction in WIP
60-80% reduction in scrap and rework
50-90% reduction in setup times
30-60% reduction in space requirements
X improvement in quality specifics
In three to seven years
5-10X improvement in overall quality
4-10X improvement in inventory turns
improvements in return on assets

23. Implementing JIT Implementation needs a designated “Champion”
Make quality improvements- all processes O-P
Reorganize workplace
Remove clutter & minimize storage
Reduce setup times
Reduce lot sizes & lead times
Implement layout changes
Cellular manufacturing & close proximity
Switch to pull production
Extend methods to suppliers

24. JIT in Services
Most of the JIT concepts apply equally to Service companies
Cellular layouts, product focused, & flexible employees shorten response times
Service inventory, “paperwork”, should be eliminated, simplified, examined for “waste”
“Fail-safe” all processes from Orders-Payment
Team based organizations

25. Lean Thinking
Muda (waste): any activity that uses resources but creates no value.
Principles:
Specify value by specific product.
Identify the value stream for each product.
Make value flow without interruption.
Let the customer pull value from the producer.
Pursue perfection.
Womack and Jones, 1996.

26. Lean Thinking: Value Defined by ultimate customer (end user).
Must be expressed in terms in terms of a specific product and/or service which meets the customer’s needs at a specific price at a specific time.
Created by the producer.

27. Lean Thinking: Value Stream
APICS Dictionary (10th Edition):
“the process of creating, producing, and delivering a good or service to the market…
For a service, the value stream consists of suppliers, support personnel and technology, the service ‘producer’ and the distribution channel.
The value stream may be controlled by a single business or a network of several businesses.”
Systems analysis is needed to maximize value in the value stream—the focus needs to be on the whole stream, and not just on individual activities within the stream.

28. Lean Thinking: Flow
A service being provided for a customer needs to move through the system without interruption.
Womack and Jones: find “ways to line up all of the essential steps needed to get a job done into a steady, continuous flow, with no wasted motions, no interruptions, no batches, and no queues.”
Waiting adds no value—it’s a waste.
Flow versus batch-and-queue in the traditional mode of functions and departments.
Must be achieved in small-lot production as well as high-volume assembly line operations.

29. Lean Thinking: Pull Jack: “We don’t make it until you order it.”
Most services can’t be created for inventory—so it is necessary to reduce lead times and excess inventories of support materials to eliminate waste and add value.
Let the customer pull products from you as needed rather than pushing products, often unwanted, onto the customer.
Deal with orders rather than forecasts and inventory.

30. Lean Thinking: Perfection
Interactive results from implementing the first four concepts.
Transparency: in a lean system, everyone can see everything, so it’s easy to discover ways to create value.
Feedback from employees spurs continuous improvement.
Seek perfection in product/service, flow, and pull processes.
This concept focuses on continuous improvement.
Measurements change (PPT, PPM, PPB,……)
Services may delight a customer—but it is always possible to make changes that will delight them even more.

31. Chapter 7 Highlights
JIT manufacturing has become the standard for many industries; concept incorporates TQM and respect for people.
JIT views waste as anything that does not add value.
JIT converts traditional “push” systems to a “pull” production system.
Key elements of JIT are “pull”, kanbans, small lots, quick setups, uniform plant loading, flexibility, and work cells.

32. Chapter 7 Highlights (Continued)
TQM concepts must be incorporated JIT manufacturing.
Team based work systems, empowerment, cross-functional flexibility, with appropriate reward systems are all part of JIT.
Most of the JIT concepts are equally applicable to “Service Organizations.”
JIT requires changes to be made in all functional areas and examination of all processes for waste.

33. Chapter 7 Homework Hints
7.4:
(a) Time must be consistent (e.g.; everything in minutes or hours or days). Safety stock is omitted if not stated. Number of containers must be a whole number—round up, not down.
(b) Ignore demand changes, just think about the affect on the formula if the system were improved.