Just in Time and Lean Manufacturing
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Transcript of Just in Time and Lean Manufacturing
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Presented By:-Muhammad Shahroze IlyasDaniyal MujahidMubeen Abdul ShakoorShahid MushtaqAneeqa Ashraf
Just In Time And Lean Manufacturing
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A corporate system designed to produce output within the minimum lead time and at the lowest total cost by continuously identifying and eliminating all forms of corporate waste and variance.
What is JIT?
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JIT originated in Japan, post WWIIDriven by a need survive after the devastation
caused by the warJIT gained worldwide prominence in the 1970sToyota Motor Co. developed JIT
Looking Back
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Largest vehicle manufacturer Techniques of JIT, TPS and Lean OperationIntroduced by Taiichi Ohno
Toyota Motor Corp.
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JIT - continuous and forced problem solving via a focus on throughput and reduced inventory
TPS -continuous improvement, respect for people, and standard work practices
Lean operations - supplies the customer with exact wants when the customer wants it without waste
Just-In-Time, TPS, andLean Operations
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Eliminate Waste
• Waste is anything that does not add value from the customer point of view
• Storage, inspection, delay, waiting in queues, and defective products do not add value and are 100% waste
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Shigeo Shingo
The most dangerous kind of waste is the waste we do not recognize
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Ohno’s Seven Wastes• Overproduction• Queues• Transportation• Inventory• Motion• Over processing• Defective
products
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Layout (distance)Long setup timeIncapable processesPoor maintenancePoor work methodsLack of training
Common Causes of Waste
• Inconsistent performance measures• Ineffective production
planning • Lack of workplace
organization• Poor supply
quality/reliability
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Eliminate Waste
• Efficient, sustainable production minimizes inputs, reduces waste
• Traditional “housekeeping” has been expanded to the 5 Ss
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Sort/segregate – when in doubt, throw it out
Simplify/straighten – methods analysis tools
Shine/sweep – clean dailyStandardize – remove variations from
processesSustain/self-discipline – review work and
recognize progress
The 5 Ss
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Safety- build in good practices
Support Maintenance- reduce variability and unplanned downtime
Two additional Ss
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JIT and Competitive Advantage
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JIT and Competitive Advantage
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JIT Partnerships• JIT partnerships exist when a
supplier and purchaser work together to remove waste and drive down costs
• Four goals of JIT partnerships are:• Removal of unnecessary activities• Removal of in-plant inventory• Removal of in-transit inventory• Improved quality and reliability
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JIT Partnerships
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Concerns of Suppliers• Diversification – ties to only one
customer increases risk• Scheduling – don’t believe customers
can create a smooth schedule• Changes – short lead times mean
engineering or specification changes can create problems
• Quality – limited by capital budgets, processes, or technology
• Lot sizes – small lot sizes may transfer costs to suppliers
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Just in time inventory is the minimum inventory necessary to keep a perfect system running.Exact time of goods arrives at the moment it is needed.
JIT Inventory
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Inventory is Evil
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•JIT Inventory Tactics•Four tactics
JIT Inventory
• Reduce Inventory
• Reduce Lot Size
•Reduce Variability
• Reduce Setup Costs
4 123
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variability is any deviation from the optimum process that delivers perfect product on time, every time.
JIT systems require managers to reduce variability caused by both internal and external factors.
Inventory hides variability.
Less variability results in less waste.
Remove variability
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1. Incomplete or inaccurate drawings or specifications
2. Poor production processes resulting in incorrect quantities, late, or non-conforming units
3. Unknown customer demands
Sources of variability
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•Inventory hides variability & problems•Analogy with the lake full of rocks
Inventory level
Process downti
meScrap
Setup timeLate deliveries
Quality proble
ms
Water:Inventory
Flow
Rocks:Proble
ms
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•Uncovering of the “rocks”•Reveals problems, variability•Management clears the lakeInventor
y level
Process downtim
eScrapSetup time
Late deliveries
Quality problem
sProblems revealed
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No problems
No inventory
Inventory level
Process downtim
e removed
No scrapSetup time
reduced Late
deliveries
Quality problem
s removed
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•Key to JIT:“Good product in small lot sizes”•Reduces Inventory Costs
Lowering the order size Increases the Order size Decreases Inventory
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•Improve Material Handling•Reduce Setup time
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Lot Size Example: Crate Furniture Inc.D= Annual demand = 400,000 unitsd= Daily demand = 400,000/250 = 1,600 per dayp= Daily production rate = 4,000 unitsQ= EOQ desired = 400H= Holding cost = $20 per unitS= Setup cost (to be determined)
Q = 2DSH(1 - d/p) Q2 = 2DS
H(1 - d/p)
S = = = $2.40(Q2)(H)(1 - d/p)
2D(3,200,000)(0.6)
800,000
Setup time = $2.40/($30/hour) = 0.08 hr = 4.8 minutes
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• High setup costs encourage large lot sizes
Ultimate Solution: Reducing setup costs
Reduces lot size & average inventory
Reduces Optimum order size
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Better SchedulingJIT Scheduling
Organization Supplier
sEffective
Scheduling• Supports JIT1
• Improves ability to meet customer orders
2
• Drives down inventory3
• Allows smaller lot sizes4
• Reduces work-in-process5
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JIT Scheduling: Example Ford Motor Company
Ford communicates its schedules to bumper Polycon
Industries
Schedule describes: Style and color of the
bumper for each vehicle
It transmits the information to
Polycon Warehouse personnel
PW Personnel load the bumpers onto
conveyors leading to the loading dock
Bumpers are then trucked to ford
plant
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JIT Scheduling: Two major tools
Level Schedules
Kanban
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Technique processes frequent small batchesMany “always changing” small lots
1. Level Schedules: Jelly Bean Scheduling
A B CA AAB B B B B C
JIT Level Material-Use Approach
A CA AA B B B B B C CB B B BA A
Large-Lot Approach
Time
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“Kanban”-Japanese word for “card”Technique that uses “pull” systemMatch or nearly match the processing timeCard=an authorization for the next container of
material to be produced• Empty containers• Lights• Flag or rag• Colored golf balls
2. Kanban:Only when ready
Signaling devices to control the
flow of material
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Work cell
Raw Materi
al Supplie
r
Kanban
Purchased Parts
Supplier
Sub-assembl
y
Ship
Kanban
Kanban
Kanban
Kanban
Finished goods
Customer order
Final assembly
Kanban
Kanban
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1st – Set the size of each containerNeed to know the lead time needed to produce
a container of partsNeed to know the amount of Safety Stock
needed2nd – Calculate no of Kanbans
Number of Kanban Cards or Containers
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Daily Demand =500 cakesProduction Lead Time =2 daysSafety Stock =0.5 daysContainer size =250 cakesNow, Demand during lead time =2 days x 500
cakes = 1,000
Example: No of Kanban: Hobbs Bakery
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Quality
JIT cuts the cost of obtaining good quality
JIT improves quality
Better quality means fewer
buffers=Easier-to use JIT
system
•Strong Relationship between JIT & Quality
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JIT Quality TacticsUse statistical process controlEmpower employeesBuild fail-safe methods (poka-yoke, checklists, etc.)Expose poor quality with small lot JITProvide immediate feedback
Table 16.4
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JIT in ServicesThe JIT techniques used in manufacturing are used in services
• Suppliers• Layouts• Inventory• Scheduling
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High holding costs are the nature of the fast food industries
WastageTime
In McDonald’s
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JIT system wherein McDonald's doesn't begin to cook its orders until a customer has placed a specific order.
In McDonald’s
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sophisticated burger-making technology (including a record-breaking bun toaster)
McDonald's is able to make food fast enough to wait until it's been ordered.
Reduction in wastage
Implementation of JIT
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Improved Quality – The burgers are prepared freshly and hence the quality has improved.
Customer service – As the burger is made only after the order is placed, making special orders is not an issue.
Cost Reduction – Due to significant reduction in wastage as uncooked material has a higher shelf life.
Reduction in waiting – Customer’s waiting time reduce 11 min. to just 1 and half min
Benefits
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• Continuous improvement• Build an organizational culture and value
system that stresses improvement of all processes
• Part of everyone’s job• Respect for people
• People are treated as knowledge workers
• Engage mental and physical capabilities
• Empower employees
Toyota Production System
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• Standard work practice• Work shall be completely specified as
to content, sequence, timing, and outcome
• Internal and external customer-supplier connection are direct
• Product and service flows must be simple and direct
• Any improvement must be made in accordance with the scientific method at the lowest possible level of the organization
Toyota Production System
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Lean Operations
• Different from JIT in that it is externally focused on the customer
• Starts with understanding what the customer wants
• Optimize the entire process from the customer’s perspective
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Building a Lean Organization
• Transitioning to a lean system can be difficult
• Lean systems tend to have the following attributes• Use JIT techniques• Build systems that help
employees produce perfect parts• Reduce space requirements
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Building a Lean Organization• Develop partnerships with
suppliers• Educate suppliers• Eliminate all but value-added
activities• Develop employees• Make jobs challenging• Build worker flexibility
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Lean operations apply to other services just as they do in other sectors.
Suppliers:every restaurant deals with its supplier on JIT basis. Those do not are usually unsuccessful. The waste is too evident– food spoils and customers complain or get sick.Layouts:Lean layouts are required in restaurant kitchen, where cold food must be serve cold and hot food hot.
Lean operations in services
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Scheduling:At air-line ticket counters, the focus of the customers is on adjusting to customer demand. Through elaborate scheduling, ticket counter personnel show up just in time to cover peaks in customer demand.
At McDonald’s , scheduling of personnel is down to 15 minute increments, based on precise forecasting demand.
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To deliver goods and services to customers under continuously changing demand, suppliers need to reliable, inventories lean, cycle times short, and schedules nimble. A lean focus engages and empowers employees to create and deliver the customers perception of value, eliminating whatever does not contribute to this goal. Lean operations are currently being developed with great success in many firms, regardless of their products. Lean techniques are widely used in both goods-producing and service producing firms; they just look different.
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Thank you