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Aniket Balaram Tambadkar

MBA FINANCE

Submitted To:-

Prof.Rajupadhey sir

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Chapter 16

Just-In-TimeSystems

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JIT/Lean Production

Just-in-time: Repetitive production system inwhich processing and movement of materials

and goods occur just as they are needed,

usually in small batches

JIT is characteristic of lean production

systems

JIT operates with very little fat

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JIT Goals

Eliminate disruptions

Make system flexible by reduce

setup and lead times

Eliminate waste, especially excessinventory

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Sources of Waste

Overproduction

Waiting time

Unnecessary transportation Processing waste

Inefficient work methods

Product defects

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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

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JIT Building Blocks

1. Product design

2. Process design

3. Personnel/organizational

elements 4. Manufacturing

planning and control

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1. Product Design

Standard parts

Modular design

Highly capable production systems

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2. Process Design

Small lot sizes

Setup time reduction

Manufacturing cells

Limited work in process

Quality improvement

Production flexibility Little inventory storage

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Benefits of Small Lot Sizes

Reduces inventory

Less storage space

Less rework

Problems are more apparent

Increases product flexibility

Easier to balance operations

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Production Flexibility

Reduce downtime by reducingchangeover time

Use preventive maintenance to

reduce breakdowns

Cross-train workers to help clearbottlenecks

Reserve capacity for importantcustomers

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3. Personnel/Organizational Elements

Workers as assets

Cross-trained workers

Continuousimprovement

Cost accounting

Leadership/projectmanagement

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4. Manufacturing Planning and Control

Level loading

Pull systems

Visual systems

Close vendor relationships

Reduced transaction processing

Preventive maintenance

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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

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Kanban Production Control System

Kanban: Card or other device thatcommunicates demand for work or materialsfrom the preceding station

Kanban is the Japanese word meaningsignal or visible record

Paperless production control system

Authority to pull, or produce comesfrom a downstream process.

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Traditional Supplier Network

Buyer

SupplierSupplier Supplier Suppiler

Supplier

Supplier

Supplier

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Tiered Supplier Network

Supplier

Supplier

Supplier

SupplierSupplier Supplier

Buyer

SupplierFirst Tier Supplier

Second Tier Supplier

Third Tier Supplier

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Summary JIT Goals and Building Blocks

ProductDesign

ProcessDesign

PersonnelElements

Manufactur-ing Planning

Eliminate disruptions

Make the system flexible

Reduce setupand lead times

Eliminate waste

Minimize inventories

Abalanced

rapid flow

UltimateGoal

SupportingGoals

BuildingBlocks

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Converting 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

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Obstacles to Conversion

Management may not be committed

Workers/management may not becooperative

Suppliers mayresist

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JIT in Service

The basic goal of the demand flowtechnology in the service organization is toprovide optimum response to the customerwith the highest quality service andlowest possible cost. Eliminate disruptions

Make system flexible

Reduce setup and lead times Eliminate waste

Minimize WIP

Simplify the process

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New challenges

Meeting manufacturing requirements

Changing from traditional thinking and practices

frequent on-time delivery of small quantities

Long term relationships with suppliers as

partners

JIT Purchasing

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JIT II: the practice of allowing vendorsto manage some aspects of buying their

products or services for the buyer

JIT II

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Benefits of JIT Systems

Reduced inventory levels

High quality

Flexibility

Reduced lead times

Increased productivity

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Benefits of JIT Systems (contd)

Increased equipment utilization

Reduced scrap and rework

Reduced space requirements

Pressure for good vendor relationships

Reduced need for indirect labor

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Smooth flow of work (the ultimate goal) Elimination of waste

Continuous improvement

Eliminating anything that does not addvalue

Simple systems that are easy to manage

Use of product layouts to minimize

moving materials and parts Quality at the source

Elements of JIT

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Preventative maintenance

Set-up time reduction

Cross-trained employees

Elements of JIT (contd)