14-1 JIT and Lean Operations

Operations Management

William J. Stevenson

8th edition
 14-2 JIT and Lean Operations

CHAPTER
14

JIT and
Lean Operations

Operations Management, Eighth Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
14-3 JIT and Lean Operations

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”
14-4 JIT and Lean Operations

Goal of JIT

The ultimate goal of JIT is a balanced

system.

Achieves a smooth, rapid flow of materials

through the system
14-5 JIT and Lean Operations

Summary JIT Goals and Building Blocks

Figure 14.1

Ultimate A
Goal balanced
rapid flow

Supporting
Goals Eliminate disruptions
Make the system flexible Eliminate waste

Product Process Personnel Manufactur- Building

Design Design Elements ing Planning Blocks
14-6 JIT and Lean Operations

Supporting Goals

 Eliminate disruptions
 Make system flexible
 Eliminate waste, especially excess
inventory
14-7 JIT and Lean Operations

Sources of Waste

 Overproduction
 Waiting time
 Unnecessary transportation
 Processing waste
 Inefficient work methods
 Product defects
14-8 JIT and Lean Operations

Big vs. Little JIT

 Big JIT – broad focus

 Vendor relations
 Human relations
 Technology management
 Materials and inventory management
 Little JIT – narrow focus
 Scheduling materials
 Scheduling services of production
14-9 JIT and Lean Operations

JIT Building Blocks

 Product design
 Process design
 Personnel/organizational
elements
 Manufacturing
planning and control
14-10 JIT and Lean Operations

Product Design

 Standard parts
 Modular design
 Highly capable production systems
 Concurrent
engineering
14-11 JIT and Lean Operations

Process Design

 Small lot sizes

 Setup time reduction
 Manufacturing cells
 Limited work in process
 Quality improvement
 Production flexibility
 Little inventory storage
14-12 JIT and Lean Operations

Benefits of Small Lot Sizes

Reduces inventory
Less rework
Less storage space
Problems are more apparent
Increases product flexibility
Easier to balance operations
14-13 JIT and Lean Operations

Production Flexibility

 Reduce downtime by reducing

changeover time
 Use preventive maintenance to reduce
breakdowns
 Cross-train workers to help clear
bottlenecks
14-14 JIT and Lean Operations

Production Flexibility (cont’d)

 Use many small units of capacity

 Use off-line buffers

 Reserve capacity for important customers

14-15 JIT and Lean Operations

Quality Improvement

 Autonomation
 Automatic detection of defects during
production
 Jidoka
 Japanese term for autonomation
14-16 JIT and Lean Operations

Personnel/Organizational Elements

 Workers as assets
 Cross-trained workers
 Continuous
improvement
 Cost accounting
 Leadership/project
management
14-17 JIT and Lean Operations

Manufacturing Planning and Control

 Level loading
 Pull systems
 Visual systems
 Close vendor relationships
 Reduced transaction
processing
 Preventive maintenance
14-18 JIT and Lean Operations

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
14-19 JIT and Lean Operations

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.
14-20 JIT and Lean Operations

Kanban Formula

DT(1+X)
N =
C
N = Total number of containers
D = Planned usage rate of using work center
T = Average waiting time for replenishment of parts
plus average production time for a
container of parts
X = Policy variable set by management
- possible inefficiency in the system
C = Capacity of a standard container
14-21 JIT and Lean Operations

Traditional Supplier Network

Figure 14.4a

Buyer
Buyer
Supplier
Supplier Supplier
Supplier
Supplier
Supplier

Supplier
Supplier Supplier
Supplier Supplier
Supplier Supplier
Supplier
14-22 JIT and Lean Operations

Tiered Supplier Network

Figure 14.4b
Buyer
Buyer

First Tier Supplier Supplier

Supplier

Second Tier Supplier Supplier

Supplier Supplier
Supplier

Third Tier Supplier Supplier

Supplier Supplier
Supplier Supplier
Supplier Supplier
Supplier
14-23 JIT and Lean Operations

Comparison of JIT and Traditional

Table 14.3

Factor Traditional JIT

Inventory Much to offset forecast Minimal necessary to operate
errors, late deliveries
Deliveries Few, large Many, small

Lot sizes Large Small

Setup; runs Few, long runs Many, short runs

Vendors Long-term relationships Partners

are unusual
Workers Necessary to do the Assets
work
14-24 JIT and Lean Operations

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
14-25 JIT and Lean Operations

Obstacles to Conversion

 Management may not be committed

 Workers/management may not be
cooperative
 Suppliers may
resist
 Why?
14-26 JIT and Lean Operations

JIT in Services

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.
 Eliminate disruptions
 Make system flexible
 Reduce setup and lead times
 Eliminate waste
 Minimize WIP
 Simplify the process
14-27 JIT and Lean Operations

JIT II

 JIT II: a supplier representative works right

in the company’s plant, making sure there is
an appropriate supply on hand.
14-28 JIT and Lean Operations

Benefits of JIT Systems

 Reduced inventory levels

 High quality
 Flexibility
 Reduced lead times
 Increased productivity
14-29 JIT and Lean Operations

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
14-30 JIT and Lean Operations

Elements of JIT
Table 14.4
 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
14-31 JIT and Lean Operations

Elements of JIT (cont’d)

Table 14.4
 Poka-yoke – fail safe tools and methods
 Preventative maintenance

 Good housekeeping

 Set-up time reduction

 Cross-trained employees
 A pull system
 14-32 JIT and Lean Operations

CHAPTER
14
Additional PowerPoint slides
contributed by
Geoff Willis,
University of Central Oklahoma.
14-33 JIT and Lean Operations

Kanbans

Parts’ movement authorization

N= # cards
D= usage
T = wait + process time DT(1  X)
X = efficiency rating N
C = bin capacity C
14-34 JIT and Lean Operations

Gortrac Manufacturing

GTE3
Layout/Lean Improvements/Examples
14-35 JIT and Lean Operations

Order System Overview at McDonald’s

JTM5
Order System: Demand/Order Overview at McDonald’s