Just-in-Time and Lean Systems

Operations Managementby

P. Kalyanasundaram

s2nd Edition © Wiley 2005

PowerPoint Presentation by R.B. Clough - UNH

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

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

Three Elements of JIT

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

Role of Inventory Reduction

Inventory = Lead Time (less is better) Inventory hides problems

The Pull System

Number of Kanbans Required

N = number of containersD = demand rate at the withdraw stationT = lead time from supply station C = container sizeS = safety stock

C

SDT N

up) (round containers kanban 5 N

containers kanban 4.425

10(200)(.5)

C

SDTN

bottles 10.5)0.10(200)(d)(T)0.10(deman S

container per bottles 25C

hour .5minutes 30T

hour per bottles 200D

:Solution

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.

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

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 FridayAAAAA BBBBB BBBBB CCCCC EEEEEAAAAA BBBBB BBBBB DDDDD EEEEE

Monday Tuesday Wednesday Thursday FridayAABBBB AABBBB AABBBB AABBBB AABBBBCDEE CDEE CDEE CDEE CDEE

5 units5 units10 units

Weekly Production Required

Traditional Production Plan

JIT Plan with Level Scheduling

ABCDE

10 units20 units

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

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)

Traditional Process Focused Layout

Jumbled flows, long cycles, difficult to schedule

JIT Cellular Manufacturing Product focused cells, flexible equipment, high

visibility, easy to schedule, short cycles

Group Technology

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

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

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

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

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

Expected Results of JIT General

50-90% reduction in WIP 60-80% reduction in scrap and rework 50-90% reduction in setup times 30-60% reduction in space requirements 10-1000X 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

Implementing JIT Implementation needs a designated

“Champion” Make quality improvements- all processes 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

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

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.

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.

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.

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.

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.

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.

Chapter 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.

Chapter 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.