1. Just-in-Time and Lean Operations

2. What is JIT ?
Producing only what is needed, when it is needed (not early, not late; not less, not more)
Achieving high volume production using minimal inventories
An integrated but simplified system
JIT’s mandate: Elimination of all waste in production effort

3. Just-in-Time
Just-in-time (JIT): A highly coordinated processing system in which goods move through the system, and services are performed, just as they are needed
Supplies and components are ‘pulled’ through the system to arrive where they are needed when they are needed (just-in-time)
A management philosophy of continuous and forced problem solving by attacking the root causes

4. Lean Production JIT   lean production
Lean Production system is a flexible one that supplies customers high quality goods and services (exactly what the customer wants, when the customer wants), with minimal resources (without waste), through continuous improvement
Lean systems are:
Demand driven
Focused on waste reduction
Have a culture that is dedicated to excellence and continuous improvement

5. What Does Just-in-Time Do?
Attacks waste (anything not adding value to the product)
Achieves streamlined production by reducing inventory
Exposes problems and bottlenecks caused by variability

6. Goal of JIT The ultimate goal of JIT is a balanced system.
Achieves a smooth, rapid flow of materials through the system

7. Summary:JIT Goals and Building Blocks
Eliminate disruptions
Make the system flexible
Eliminate waste A
balanced
rapid flow
Ultimate
Goal
Supporting
Goals
Building
Blocks

8. Quotation by Shoichiro Toyoda
Waste is ‘anything other than the minimum amount of equipment, materials, parts, space, and worker’s time, which are absolutely essential to add value to the product.’
— Shoichiro Toyoda President, Toyota
© 1995 Corel Corp.

9. Sources of Waste Overproduction Waiting Unnecessary transportation
Inventory
Inefficient work methods
Inefficient processing
Unnecessary motions
Product defects

10. Waste in Operations (1 of 3)

11. Waste in Operations (2 of 3)

12. Waste in Operations (3 of 3)

13. Minimizing Waste: Focused Factory Networks
These are small specialized plants that limit the range of products produced (sometimes only one type of product for an entire facility)
Minimizing Waste: Focused Factory Networks
Some plants in Japan have as few as 30 and as many as 1000 employees
Coordination
System Integration

14. JIT Reduced Waste at Hewlett-Packard
Waste Reduction (%)
82%
50%
30%
20%
40% 0%
60%
80%
100%
Work-in-Process Inventory
Raw Material Inventory
Lead Time
Space
Finished Goods Inventory
Scrap
Setup Time

15. JIT Building Blocks
In order to achieve competitive advantage through JIT, the necessary building blocks should be installed
The building blocks can also be regarded as JIT success factors or the basic elements of JIT

16. JIT Building Blocks Product Design Principles Flexible Resources
Cellular Layouts
Pull Production System
Kanban Control System
Small Lot Production
Quick Setups
Uniform Production Levels

17. JIT Building Blocks Reduced Inventories
Supplier Relationships (Supplier Networks)
Level Scheduling
Employee Empowerment
Quality (at the source)
Continuous improvement
Preventive Maintenance (Total Productive Maintenance)
Commitment

18. 1. Product & Process Design Principles
Process design with product design
Standard product configuration and standart parts
Reduced number of parts
Modular design
Concurrent engineering
Highly capable production systems

19. 2. Flexible Resources Multifunctional workers General purpose machines
Study operators & improve operations

20. Standard Operating Routine for a Worker
Sheet 1
Worker: Russell
Cycle Time: 2 min
Order of Operations time
Operations :10 :20 :30 :40 :50 1:00 1:10 1:20 1:30 1:40 1:50 2:00
Pick up material
Unload/
load machine 1
load machine 2
load machine 3
Inspect/
pack

21. 3. Layout JIT objective: Reduce movement of people and material
Movement is waste!
JIT requires
work-cells for product families (group technology)
movable, changeable, flexible machinery
short distances
high level of workplace organization and neatness
reduced space for inventory
delivery directly to work areas
balanced workstation capacities

22. Cellular Layouts
Group dissimilar machines in manufacturing cell to produce family of parts
Work flows in one direction through cell
Cycle time adjusted by changing worker paths

23. Work Cell versus Process Layout
Saw
Lathe
Grinder
Heat
Treat
Press 1 2 3 4 5 6
Using work cells can reduce unnecessary material movement

24. Manufacturing Cell with Worker Routes3
Cell 1

25. Worker Routes Lengthened as Volume Decreases
Cell 5
Worker 2
Cell 2
Worker 1
Cell 1
Worker 3
Cell 3
Cell 4

26. Layout Tactics Build work cells for families of products
Minimize distance
Design little space for inventory
Improve employee communication
Use poka-yoke devices
Build flexible or movable equipment
Cross train workers to add flexibility to layout

27. 4. The Pull System Material is pulled through the system when needed
Reversal of traditional push system where material is pushed according to a schedule
Forces cooperation
Prevent over and underproduction

28. Pull System & Kanban Control
Pull system: System for moving work where a workstation pulls output from the preceding station just as it is needed. (e.g. Kanban)
vs.
Push system: System for moving work where output is pushed to the next station as it is completed

29. 5. Kanban Production Control System (1 of 2)
Kanban: Japanese word for card, or may be a flag, ball etc.
Paperless production control system
Card or other device that communicates demand for work or materials from the preceding station
Kanban card indicates standard quantity of production
Used often with fixed sized container

30. 5. Kanban Production Control System (2 of 2)
The kanban cards provide direct control (limit) on the amount of work-in-process between cells.
Derived from two-bin inventory system
Maintains discipline of pull production
Production kanban authorizes production
Withdrawal kanban authorizes movement of goods

31. A Sample Kanban

32. The Origin of Kanban
a) Two-bin inventory system b) Kanban inventory system
Reorder
card
Bin 1
Bin 2
Q - R
Kanban R
Q = order quantity
R = reorder point - demand during lead time

33. Determining the Number of Kanbans
No. of Kanbans =
average demand during lead time + safety stock
container size
N =
dL + S C
where
N = number of kanbans or containers
d = average demand over some time period
L = lead time to replenish an order
S = safety stock
C = container size

34. Determining the Number of Kanbans
d = 150 bottles per hour
L = 30 minutes = 0.5 hours
S = 0.10(150 x 0.5) = 7.5
C = 25 bottles
N = =
= = 3.3 kanbans or containers
dL + S C
(150 x 0.5) + 7.5 25
Round up to 4 (to allow some slack) or down to 3 (to force improvement)

35. Here the customer starts the process, pulling an inventory item from Final Assembly…
JIT Demand-Pull Logic
Customers
Sub
Fab
Vendor
Final
Assembly
Then sub-assembly work is pulled forward by that demand…
The process continues throughout the entire production process and supply chain

36. Kanban Signals “Pull” Material Through the Process
This puts the system back were it was before the item was pulled
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
Withdrawal
kanban
Storage Part A
Storage Part A
Machine Center
Assembly Line
Production kanban
Material Flow
Card (signal) Flow
The process begins by the Assembly Line people pulling Part A from Storage

37. Determination of the Number of Kanbans Needed
Setting up a kanban system requires determining the number of kanbans (or containers) needed.
Each container represents the minimum production lot size
An accurate estimate of lead time required to produce a container is key to determining how many kanbans are required

38. 6. Small-Lot Production Requires less space & capital investment
Moves processes closer together
Makes quality problems easier to detect
Makes processes more dependent on each other

39. Benefits of Small Lot Sizes
Reduces inventory
Less storage space
Less rework
Problems are more apparent
Increases flexibility
Easier to balance operations

40. To Lower Inventory, Reduce Lot Sizes
Time
Inventory Level
Lot Size 200
Lot Size 80
Average inventory = 100
Average inventory = 40
Average inventory = (Lot size)/2

41. Reducing Lot Sizes Increases the Number of Lots
Customer orders 10
Lot size = 5
Lot 1
Lot 2
Lot size = 2
Lot 1
Lot 2
Lot 3
Lot 4
Lot 5

42. …Which Increases Inventory Costs
Total Cost
Holding Cost
Setup Cost
Smaller Lot Size
Optimal Lot Size
Lot Size

43. Unless Setup Costs are Reduced
Lot Size
Cost
Holding Cost
Total Cost
Setup Cost
Original optimal lot size
New optimal lot size

44. Frequent Orders can Reduce Average Inventory
Time
Inventory
100
200
Q1 When average order size = 200, average inventory is 100
Q2 When average order size = 100, average inventory is 50

45. Lower Total Cost Requires Small Lot Sizes and Lower Setup Costs
Sum of ordering and holding cost T1 T2 S2 S1
Cost

46. 7. Quick Setups: Steps to Reduce Setup Time
90 min
Separate setup into preparation, and actual setup, doing as much as possible while the machine/process is running (save 30 minutes)
Step 1
Initial Setup Time
60 min
Move material closer and improve material handling (save 20 minutes)
Step 2
45 min
Standardize and improve tooling (save 15 minutes)
Step 3
25 min
Use one-touch system to eliminate adjustments (save 10 minutes)
Training operators and standardizing work procedures (save 2 minutes)
Step 4
15 min
13 min
Step 5

47. SMED Principles Separate internal setup from external setup
Convert internal setup to external setup
Streamline all aspects of setup
Perform setup activities in parallel or eliminate them entirely

48. Common Techniques for Reducing Setup Time

49. Common Techniques for Reducing Setup Time

50. Common Techniques for Reducing Setup Time

51. 8. Uniform Production Results from smoothing production requirements
Kanban systems can handle +/- 10% demand changes
Smooths demand across planning horizon
Mixed-model assembly steadies component production

52. 9. Inventories Small lot sizes & low setup times
Limited work-in-process
Little inventory storage
Specialized bins for
holding previously set number of parts

53. Inventory Traditional: inventory exists in case problems arise
JIT objective: eliminate inventory
JIT requires
Small lot sizes
Low setup time
Containers for fixed number of parts
JIT inventory: Minimum inventory to keep the system running

54. JIT Inventory Tactics Use a pull system to move inventory
Reduce lot size
Reduce setup time
Develop Just-in-Time delivery systems with suppliers
Deliver directly to point of use
Perform-to-schedule
Use group technology

55. Inventory Hides Problems Just as Water in a Lake Hides Rocks
Inventory level
Scrap
Setup time
Late deliveries
Quality problems
Process downtime
Unreliable supplier
Setup time
Late deliveries
Quality problems
Process downtime
Inventory level
İnefficient layout
Bad design
Machine breakdown

56. Lowering Inventory Reduces Waste
Scrap
Work in process inventory level (hides problems)
Unreliable Vendors
Capacity Imbalances

57. Lowering Inventory Reduces Waste
Scrap
Reducing inventory exposes problems so they can be solved.
Unreliable Vendors
Capacity Imbalances
WIP

58. Lowering Inventory Reduces Waste
Scrap
Reducing inventory reveals problems so they can be solved.
Unreliable Vendors
Capacity Imbalances
WIP

59. 10. Supplier Relationships
Reduced number of vendors
Supportive supplier relationships
Quality deliveries on time
Frequent deliveries in small lot quantities
Reduced lead times

60. Suppliers JIT partnerships are formed JIT partnerships eliminate:
Some unnecessary activities
In-plant inventory
In-transit inventory
Poor suppliers

61. Characteristics of JIT Partnerships Suppliers
Few
Nearby
Long-term relationships
Analysis and support to enable desirable suppliers to become or stay price competitive
Buyer resists vertical integration and subsequent wipeout of supplier business
Suppliers encouraged to extend JIT to their suppliers (2nd and 3rd tier suppliers)

62. Characteristics of JIT Partnerships Quantities
Steady output rate
Frequent deliveries in small-lot quantities
Long-term contract agreements
Minimal or no paperwork (use EDI or internet)
Delivery quantities fixed for whole contract term
Little or no permissible overage or underage
Suppliers package in exact quantities
Suppliers also reduce their production lot sizes

63. Characteristics of JIT Partnerships
Quality
Minimal product specifications imposed on suppliers
Help suppliers meet quality requirements
Close relationship between buyers’ and suppliers quality assurance people
Suppliers use poka-yoke and process control charts instead of lot-sampling techniques

64. Goals of JIT Partnerships
Elimination of unnecessary activities
Elimination of in-plant inventory
Elimination of in-transit inventory
Elimination of poor suppliers

65. Supplier Policies Locate near to the customer
Use small, side loaded trucks and ship mixed loads
Consider establishing small warehouses near to the customer or consolidating warehouses with other suppliers
Use standardized containers and make deliveries according to a precise delivery schedule
Become a certified supplier and accept payment at regular intervals rather than upon delivery

66. Concerns of Suppliers Diversification Poor customer scheduling
Frequent engineering changes
Quality assurance
Small lot sizes
Physical proximity

67. 11. Scheduling Involves timing of operations
Scheduling in JIT requires
Level loading (level schedules)
Zero deviation from schedules
Suppliers informed about schedules
Small lots
Kanban techniques

68. JIT Scheduling Tactics
Scheduling in JIT requires (1 of 2):
Communicating the schedule to suppliers
Making level schedules
Freezing part of the schedule
Performing to schedule
Seeking one-piece-make and one-piece-move

69. JIT Scheduling Tactics
Scheduling in JIT requires (2 of 2):
Elimination ofwaste
Producing in small lots
Using kanbans
Making each operation produce a perfect part
Zero deviation from schedules

70. Level Schedules
Reduce ripple effect of small variations in schedules (e.g., final assembly)
Production quantities evenly distributed over time (e.g., 7/day)
Build same mix of products every day
Results in many small lots
Item Monthly Quantity Daily Quantity A B 60 3

71. Small versus Large Lots
JIT produces same amount in same time if setup times are lowered
JIT Small Lots A A B B B C A A B B B C
Time
Small lots also increase flexibility to meet customer demands
Large-Lot Approach A A A A B B B B B B C C
Time

72. Comparison of Level and Large Lot Material-use Approaches

73. Mixed-Model Sequencing

74. 12. Employee Empowerment Employee empowerment
Workers are assets
Employee empowerment
Empowered and cross-trained employees (to help clear bottlenecks)
Get employees involved in product & process (employees know the job best!)
Few job classifications to ensure flexibility of employees
Training support

75. 13. Quality Production
JIT exposes quality problems by reducing inventory
JIT eliminates number defects with small lots
JIT requires quality by suppliers
Team approach and continuous improvement are important for ensuring quality
Quality is maintained by the following procedure:
Find the root cause of the problem, solve permanently and use team approach in solving the problems

76. Quality Production JIT requires TQM Statistical process control
Continuous improvement
Worker involvement & empowered employees
Inspect own work
Quality circles
Immediate feedback
Failsafe methods such as poka-yoke
Quality at the source

77. Quality Production JIT requires 1) Quality within the firm
Autonomation (jidoka): automatic detection of defects during production
2) Quality by suppliers

78. Quality at the Source Jidoka is authority to stop production line
Andon lights signal quality problems
Undercapacity scheduling allows for planning, problem solving & maintenance
Visual control makes problems visible
Poka-yoke prevents defects

79. Visual Control

80. Visual Control

81. Visual Control

82. Kaizen Continuous improvement Requires total employment involvement
Essence of JIT is willingness of workers to
Spot quality problems
Halt production when necessary
Generate ideas for improvement
Analyze problems
Perform different functions

83. 14. Preventive Maintenance
All activities involved in keeping equipment in working order
Done to prevent failure
JIT requires
Scheduled & daily PM
Operator involvement in PM
Knows machines
Responsible for product quality

84. Total Productive Maintenance (TPM)
Breakdown maintenance
Repairs to make failed machine operational
Preventive maintenance
System of periodic inspection & maintenance to keep machines operating
TPM combines preventive maintenance & total quality concepts

85. TPM Requires Management to:
Design products that can be easily produced on existing machines
Design machines for easier operation, changeover, maintenance
Train & retrain workers to operate machines
Purchase machines that maximize productive potential
Design preventive maintenance plan spanning life of machine

86. 15. Bottom-round Management Style & Commitment
Support of management, employees and suppliers
Any improvement must be made in accordance with the scientific method, under the quidance of a teacher, at the lowest possible level in the organization (Toyota Production System’s work rule)

87. Streamlined Production
Flow with JIT
Traditional Flow
Customers
Suppliers
Production Process (stream of water)
Inventory (stagnant ponds)
Material (water in stream)

88. Results
Queue and delay reduction, speedier throughput, freed assets, and winning orders
Quality improvement, reduces waste and wins orders
Cost reduction increases margin or reduces selling price
Variability reductions in the workplace reduces waste and wins orders
Rework reduction, reduces waste and wins orders

89. Faster response to the customer at lower cost and higher quality
Yielding
Faster response to the customer at lower cost and higher quality
A competitive advantage!

90. Summary: Just-In-Time Production
Management philosophy
“Pull” system though the plant
WHAT IT IS
Attacks waste
Exposes problems and bottlenecks
Achieves streamlined production
WHAT IT DOES
Employee participation
Industrial engineering/basics
Continuing improvement
Total quality control
Small lot sizes
WHAT IT REQUIRES
Stable environment
WHAT IT ASSUMES

91. Comparison of JIT and Traditional Systems
Factor
Traditional
JIT
Inventory
Much to offset forecast errors, late deliveries
Minimal necessary to operate
Deliveries
Few, large
Many, small
Lot sizes
Large
Small
Setup; runs
Few, long runs
Many, short runs
Vendors
Long-term relationships are unusual
Partners
Workers
Necessary to do the work
Assets

92. Transitioning to a JIT System
Get top management commitment
Decide which parts need most effort
Obtain support of workers
Start by trying to reduce setup times
Gradually convert operations
Convert suppliers to JIT
Prepare for obstacles

93. Obstacles to Conversion
Management may not be committed
Workers/management may not be cooperative
Suppliers may resist
Why?

94. Benefits of JIT Reduced inventory Better relations with suppliers
Improved quality
Lower costs
Reduced space requirements
Shorter lead time
Increased productivity
Greater flexibility
Reduced scrap and rework
Better relations with suppliers
Simplified scheduling and control activities
Increased capacity
Increased equipment utilization
Better use of human resources
More product variety

95. JIT in Services (1 of 3)
The basic goal of the demand flow technology in the service organization is to provide optimum response to the customer with the highest quality service and lowest possible cost.

96. JIT in Services (2 of 3)
All the techniques used in manufacturing are used in services
Level the facility load & eliminate disruptions and unnecessary activities
Reorganize physical configuration
Introduce demand-pull scheduling
Develop supplier networks

97. JIT in Services (3 of 3) .
All the techniques used in manufacturing are used in services
Make the system flexible
Eliminate waste
Simplify the process
Organize problem solving groups
Upgrade quality

98. JIT Implementation Use JIT to finely tune an operating system
Somewhat different in USA than Japan
JIT is still evolving
JIT isn’t for everyone

99. Attributes of Lean Producers - They
use JIT to eliminate virtually all inventory
build systems to help employees produce a perfect part every time
reduce space requirements
develop close relationships with suppliers
educate suppliers

100. Attributes of Lean Producers - They
eliminate all but value-added activities
develop the workforce
make jobs more challenging
reduce the number of job classes and build worker flexibility