1. McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. 15 JIT and Lean Operations

2. 15-2 Learning Objectives  Explain what is meant by the term lean operations system.  List each of the goals of JIT and explain its importance.  List and briefly describe the building blocks of JIT.  List the benefits of the JIT system.

3. 15-3 JIT/Lean Production  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,  JIT   lean production  JIT  pull (demand) system  JIT operates with very little “fat”

4. 15-4 Goal of JIT The ultimate goal of JIT is a balanced system. Achieves a smooth, rapid flow of materials through the system

5. 15-5 Summary JIT Goals and Building Blocks Figure 15.1 Product Design Process Design Personnel Elements Manufactur- ing Planning Eliminate disruptions Make the system flexible Eliminate waste A balanced rapid flow Ultimate Goal Supporting Goals Building Blocks

6. 15-6 Supporting Goals  Eliminate disruptions  Poor quality  Equipment breakdowns  Schedule changes  Late deliveries  Make system flexible  Handle product mix  Smoothly handle volume changes  Eliminate waste, especially excess inventory

7. 15-7 Sources of Waste  Overproduction  Waiting time (material should “flow”)  Unnecessary transportation  Processing waste (scrap)  Inefficient work methods  Product defects (rework)

8. 15-8 Kaizen Philosophy  Waste is the enemy  Improvement should be done gradually and continuously  Everyone should be involved  Built on a cheap strategy  Can be applied anywhere

9. 15-9 Kaizen Philosophy (cont’d)  Supported by a visual system  Focuses attention where value is created  Value stream mapping  Process oriented  Stresses main effort of improvement should come from new thinking and work style  The essence of organizational learning is to learn while doing

10. 15-10  Big JIT – broad focus  Vendor relations  Human relations  Technology management  Materials and inventory management  Little JIT – narrow focus  Scheduling materials  Scheduling services of production Big vs. Little JIT

11. 15-11 JIT Building Blocks  Product design  Process design  Personnel/organizational elements  Manufacturing planning and control

12. 15-12 Product Design  Standard parts  Modular design  Highly capable production systems  Concurrent engineering

13. 15-13 Process Design  Small lot sizes  Setup time reduction  Manufacturing cells  Limited work in process  Quality improvement  Production flexibility  Balanced system  Little inventory storage

14. 15-14 Benefits of Small Lot Sizes Reduces inventory Less storage space Less rework Problems are more apparent Increases product flexibility Easier to balance operations

15. 15-15 Single-Minute Exchange  Single-minute exchange of die (SMED): A system for reducing changeover time  Categorize changeover activities  Internal – activities that can only be done while machine is stopped  External – activities that do not require stopping the machine

16. 15-16 Production Flexibility  Reduce downtime by reducing changeover time  Use preventive maintenance to reduce breakdowns  Cross-train workers to help clear bottlenecks

17. 15-17 Production Flexibility (cont’d)  Use many small units of capacity  Use off-line buffers  Reserve capacity for important customers

18. 15-18 Quality Improvement  Autonomation  Automatic detection of defects during production (not at the end of the line by a QC inspector)  Jidoka  Japanese term for autonomation

19. 15-19 Production Flexibility  Balance system: Distributing the workload evenly among work stations  Work assigned to each work station must be less than or equal to the cycle time  Cycle time is set equal to the takt time  Takt time is the cycle time needed to match customer demand for final product

20. 15-20 Personnel/Organizational Elements  Workers as assets  Cross-trained workers  Continuous improvement  Cost accounting  Activity-based costing  Leadership/project management

21. 15-21 Manufacturing Planning and Control  Level loading  Pull systems  Visual systems  Close vendor relationships  Reduced transaction processing  Preventive maintenance

22. 15-22 Pull/Push Systems  Pull system: System for moving work where a workstation pulls output from the preceding station as needed. (e.g. Kanban)  Push system: System for moving work where output is pushed to the next station as it is completed

23. 15-23 Kanban Production Control System  Kanban : Card or other device that communicates demand for work or materials from the preceding station  Kanban is the Japanese word meaning “signal” or “visible record”  Paperless production control system  Authority to pull, or produce comes from a downstream process.

24. 15-24 Limited Work in Process  Benefits  Lower carrying costs  Increased flexibility  Aids scheduling  Saves cost of rework and scrap  Two general approaches  Kanban – focuses on individual work stations  Constant work in process (CONWIP) – focuses on the system as a whole

25. 15-25 Traditional Supplier Network Buyer Supplier Figure 15.4a

26. 15-26 Tiered Supplier Network Figure 15.4b Supplier Buyer Supplier First Tier Supplier Second Tier Supplier Third Tier Supplier

27. 15-27 Preventive Maintenance and Housekeeping  Preventative maintenance: Maintaining equipment in good condition and replacing parts that have a tendency to fail before they actually fail.  Housekeeping: Maintaining a workplace that is clean and free of unnecessary materials.

28. 15-28 Housekeeping Five S’s 1.Sort 2.Straighten 3.Sweep 4.Standardize 5.Self-discipline 6.Safety (US)

29. 15-29 Comparison of JIT and Traditional FactorTraditionalJIT Inventory Much to offset forecast errors, late deliveries 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 Workers Necessary to do the workAssets Table 15.3

30. 15-30 Benefits of JIT Systems  Reduced inventory levels  High quality  Flexibility  Reduced lead times  Increased productivity

31. 15-31 Benefits of JIT Systems (cont’d)  Increased equipment utilization  Reduced scrap and rework  Reduced space requirements  Pressure for good vendor relationships  Reduced need for indirect labor

32. 15-32  Smooth flow of work (the ultimate goal)  Elimination of waste  Continuous improvement  Eliminating anything that does not add value  Simple systems that are easy to manage  Use of product layouts to minimize moving materials and parts  Quality at the source Elements of JIT Table 15.4

33. 15-33  Poka-yoke – fail safe tools and methods  Preventative maintenance  Good housekeeping  Set-up time reduction  Cross-trained employees  A pull system Elements of JIT (cont’d) Table 15.4