The Problem of Manufacturing…

• Getting the right material and physical resources

together at the right place and at the right time to
meet the customer’s requirements.

Just-in-Time and • Desired features, On time delivery, High Quality,

Lean Operations at the best price…

Economic Order Quantity and Reorder Point

Breaking down the problem… Planning Model
“saw tooth pattern”
• Getting the material
needed…
I demand
• Having enough n
v ROP
E
(constant rate)
e
inventory of material to n
O
Q
t
support production o
r
lead
y
• Not having too much time time

inventory and extra

costs…
A very limited
model…

What is JIT ?
Just-in-Time

Producing only what is needed, when it is needed (not
early, not late; not less, not more) Just-in-time (JIT): A highly coordinated processing

Achieving high volume production using minimal system in which goods move through the system, and
inventories services are performed, just as they are needed

An integrated but simplified system

JIT’s mandate: Supplies and components are ‘pulled’ through the

Elimination of all waste In production effort system to arrive where they are needed when they are
needed (just-in-time)

A management philosophy of continuous and forced

problem solving by attacking the root causes
 Goal of JIT
What Does Just-in-Time Do?
The ultimate goal of JIT is a balanced system. (Achieves
 Attacks waste (anything not adding value to the product) a smooth, rapid flow of materials through the system).

 Achieves streamlined production by reducing inventory

The supporting goals are:

 Exposes problems and bottlenecks caused by variability
 Eliminate disruptions
 Make the system flexible
 Eliminate waste, especially excess inventory
Reduce the setup time and lead time.

Quotation by Shoichiro Toyoda Sources of Waste

Overproduction
Waste is ‘anything other than
the minimum amount of Waiting
equipment, materials, parts, Unnecessary transportation
space, and worker’s time,
Inventory
which are absolutely essential
to add value to the product.’ Inefficient work methods
— Shoichiro Toyoda Inefficient processing
President, Toyota Unnecessary motions
© 1995 Corel Corp.

Product defects

Waste in Operations (1 of 3) Waste in Operations (2 of 3)

 JIT Reduced Waste
Waste in Operations (3 of 3) at Hewlett-Packard
Waste Reduction (%)
Setup Time 20%
Scrap 30%
Finished Goods
Inventory 30%
Space 40%
Lead Time 50%
Raw Material
Inventory 50%
Work-in-Process
Inventory
82%
0% 20% 40% 60% 80% 100%

Big vs. Little JIT Summary:JIT Goals and Building Blocks

Big JIT – broad focus Ultimate A
Goal balanced
Vendor relations rapid flow
Human relations
Supporting
Technology management Goals Eliminate disruptions Eliminate waste
Materials and inventory management
Make the system flexible Reduce the setup/lead time

Little JIT – narrow focus

Product Process Personnel Manufactur- Building
Scheduling materials Design Design Elements ing Planning Blocks
Scheduling services for production

JIT Building Blocks

JIT Building Blocks
1. Product design
• The design and operation of a lean system provide the 2. Process design
foundation for accomplishing the aforementioned goals.
3. Personnel/organizational
• In order to achieve competitive advantage through JIT and to elements
achieve the ultimate goal, the necessary building blocks should 4. Manufacturing
be installed. planning and control
5. Supplier relationships
(supplier networks)
6. Preventive maintenance
 JIT Building Blocks: 1. Product Design
JIT Building Blocks: 2. Process Design
• Small lot sizes
Standard product configuration and standart parts • Setup time reduction
Reduced number of parts • Cellular layout (Manufacturing cells)
Modular design • Reduced Inventories (Limited WIP)
Highly capable production systems with quality • Continuous quality improvement
built in. • Production flexibility (multifunctional workers, general purpose
Concurrent engineering machines)
• Balanced system
• Fail-safe methods

Small-Lot Production Small versus Large Lots

JIT produces same amount
in same time if setup times
JIT Small Lots are lowered
• Small lots moving through the system, in-process inventory is
considerably less than it is with large lots. A A B B B C A A B B B C

• Requires less space & capital investment Time

Small lots also increase flexibility to meet
• Moves processes closer together customer demands
• Makes quality problems easier to detect Large-Lot Approach

A A A A B B B B B B C C

Time

Comparison of Level and Large Lot Benefits of Small Lot Sizes

Material-use Approaches Reduces inventory
Less rework
Less storage space
Problems are more apparent
Increases flexibility
Easier to balance operations
 Single-Minute Exchange Setup Time Reduction
• Small lots and changing product mixes require frequent setups. • Setup tools and equipment and setup procedures must be simple
and standardized.
• Single-minute exchange of die (SMED): A system for reducing
changeover time • Multipurpose equipment or attachments can help to reduce setup
time.
• Categorize changeover activities • For instance, a machine with multiple spindles that can easily be
• Internal – activities that can only be done while machine is rotated into place for different job requirements can drastically
stopped reduce job changeover time.
• External – activities that do not require stopping the machine • group technology may be used to reduce setup cost and time by
capitalizing on similarities in recurring operations.
• A simple approach to achieving quick changeovers is to convert as
• For instance, parts that are similar in shape, materials, and so on,
many internal activities as possible to external activities and then
may require very similar setups.
streamline the remaining internal activities.
• Processing them in sequence on the same equipment can reduce
Note:- The potential benefits that can be achieved using the SMED system were impressively illustrated in
•
1982 at Toyota, when the changeover time for a machine was reduced from 100 minutes to 3 minutes! The
the need to completely change a setup; only minor adjustment
principles of the SMED system can be applied to any changeover operation may be necessary.

Layout
JIT objective: Reduce movement of people and material Cellular Layouts
• Movement is waste!
• JIT requires work-cells for product families (group technology) • Group dissimilar machines in manufacturing cell to
• movable, changeable, flexible machinery produce family of parts
• short distances
• Work flows in one direction through cell
• high level of workplace organization and neatness
• Cycle time adjusted by changing worker paths
• reduced space for inventory
• delivery directly to work areas • Decreasing set-up times
• balanced workstation capacities so WIP is reduced

Worker Routes Lengthened as Volume Layout Tactics

Decreases
Cell 1 Cell 2 • Build work cells for families of products
• Minimize distance
Worker Worker
1 2 • Design little space for inventory
• Improve employee communication
• Use poka-yoke devices
• Build flexible or movable equipment
Worker
• Cross train workers to add flexibility to layout
3

Cell 3 Cell 4 Cell 5

14-36 JIT and Lean Operations

Quality Improvement (1 of 3)
• JIT exposes quality problems by reducing inventory
• JIT eliminates number of defects with small lots
• Team approach and continuous improvement are important for
ensuring quality

• JIT requires Quality within the firm and quality by suppliers

• Autonomation (jidoka): automatic detection of defects
during production

• Quality is maintained by the following procedure:

• Find the root cause of the problem, solve permanently and
use team approach in solving the problems

Quality Improvement (2 of 3)
JIT requires TQM
Quality Improvement (3 of 3)
Continuous improvement
Worker involvement & empowered employees  Jidoka assures quality at the source
Inspect own work  Andon lights signal quality problems
Quality circles  Visual control makes problems visible
Immediate feedback
Failsafe methods such as poka-yoke (prevents defectives)

Andon lights signal

Visual Control (1 of 3)

The Andon board in the GM Powertrain Engine facility

 Visual Control (2 of 3) Visual Control (3 of 3)

A Balanced System
Line balancing of production lines (i.e., distributing the workload evenly
Production Flexibility •
among workstations) helps to achieve a rapid flow of work through the
system.
• Overall objective is to achieve the ability to process a mix of
products in a smooth flow. • Work assigned to each work station must be less than or equal to the
• One potential obstacle to this goal is bottlenecks that occur cycle time
when portions of the system become overloaded.
• Cycle time is set equal to the takt time

• Eliminate bottlenecks • Takt time is the cycle time needed to match the pace of production to
• Reduce downtime by reducing changeover time customer demand for final product.
• Use preventive maintenance to reduce breakdowns • The procedure for obtaining the takt time is:
• Cross-train workers to help clear bottlenecks • Determine the net time available per shift by subtracting any nonproductive
time from total shift time.
• Use many small units of capacity
• If there is more than one shift per day, multiply the net time per shift by the
• Use off-line buffers storage number of shifts to obtain the net available time per day.
• Reserve capacity for important customers • Compute takt time by dividing the net available time by demand.

• Given the following information, compute the takt time: Total time per shift is
480 minutes per day, and there are two shifts per day. There are two 20- Streamlined Production
minute rest breaks and a 30-minute lunch break per shift. Daily demand is 80
units.
Traditional Flow Production Process
(stream of water)

Suppliers
Customers
Inventory (stagnant
Flow with JIT ponds) Material
(water in
stream)
Suppliers

Customers
 Inventories Inventories causes
• Inventories are buffers that tend to cover up recurring problems that are
 Traditional: inventory exists in case problems arise never resolved, partly because they aren’t obvious and partly because
the presence of inventory makes them seem less serious.
 JIT objective: eliminate inventory
 JIT requires • When a machine breaks down, it won’t disrupt the system if there is a
sufficient inventory of the machine’s output to feed into the next
 Small lot sizes
workstation.
 Low setup time
 Containers for fixed number of parts • The use of inventory as the “solution” can lead to increasing amounts of
inventory if breakdowns increase.
• A better solution is to investigate the causes of machine breakdowns and
 JIT inventory: Minimum inventory (raw material, WIP and focus on eliminating them.
finished goods) to keep the system running • Similar problems with quality, unreliable vendors, and scheduling also
 Specialized bins for holding previously set number of parts can be solved by having ample inventories to fall back on. However,
carrying all that extra inventory creates a tremendous burden in cost and
space and allows problems to go unresolved.

Inventory Hides Problems Just as Water in a Lowering Inventory

Lake Hides Rocks Reduces Waste
Inventory level

Inventory level

İnefficient
layout Process
Work in process inventory level
Unreliable Process Scrap
supplier downtime downtime (hides problems)
Setup Setup Quality
Quality time
time problems problems
Bad Machine Late
Late Unreliable Capacity
design breakdown deliveries
deliveries Scrap
Vendors Imbalances

Lowering Inventory Lowering Inventory

Reduces Waste Reduces Waste
Reducing inventory exposes Reducing inventory reveals
problems so they can be solved. problems so they can be solved.

WIP
Unreliable Capacity Unreliable WIP Capacity
Scrap Scrap
Vendors Imbalances Vendors Imbalances
 JIT Inventory Tactics Limited Work in Process
• Benefits
 Use a pull system to move inventory • Lower carrying costs

 Reduce lot size • Less space

• Increased flexibility
 Reduce setup time
• Aids scheduling
 Develop Just-in-Time delivery systems with suppliers
• Saves cost of rework and scrap
 Deliver directly to point of use
 Perform-to-schedule • Two general approaches
 Use group technology • Kanban – focuses on individual work stations

• Constant work in process (CONWIP) – focuses on the system

as a whole

JIT Building Blocks: Leadership/Project Management

3. Personnel/Organizational Elements
• Managers are expected to be leaders and facilitators,
• Workers as assets
not order givers.
• Cross-trained workers • Lean encourages two-way communication between
• Continuous improvement workers and managers.
• Cost accounting
• Leadership/project
management

JIT Building Blocks:

Employee Empowerment 4. Manufacturing Planning and Control
Employee empowerment
• Empowered and cross-trained employees (to help clear • Level loading (level schedules)
bottlenecks)
• Get employees involved in product & process (employees know
• Pull systems
the job best!) • Visual systems
• Few job classifications to ensure flexibility of employees

• Training support
• Reduced transaction
processing
 Level Schedules Mixed-Model Sequencing
• Reduce ripple effect of small variations in schedules (e.g., final
assembly)
• Production quantities evenly distributed over time (e.g., 7/day)
• Build same mix of products every day
• Results in many small lots
• Item Monthly Quantity Daily Quantity
A 40 2
B 60 3

JIT Scheduling Tactics Pull/Push Systems

Involves timing of operations Pull system: System for moving work where a workstation pulls
Scheduling in JIT requires output from the preceding station just as it is needed. (e.g.
• Level loading (level schedules) Kanban)
• Zero deviation from schedules (performing to schedules)
vs.
• Suppliers informed about schedules
• Small lots (seeking one-piece-make and one-piece move)
Push system: System for moving work where output is pushed
to the next station as it is completed
• Making each operation produce a perfect part
• Kanban techniques

Kanban Production Control System (1 of 2)

The Pull System

Kanban: Card or other device that communicates demand for

Material is pulled through the system when needed work or materials from the preceding station

Reversal of traditional push system where material is
Japanese word meaning “signal” or “visible record” may be a
pushed according to a schedule card, or may be a flag, ball etc.

Forces cooperation
Paperless production control system

Prevent over and underproduction

Kanban card indicates standard quantity of production

Used often with fixed sized container
Kanban Production Control System (2 of 2)
A Sample Kanban

The kanban cards provide direct control (limit) on the amount
of work-in-process between cells.

Derived from two-bin inventory system

Maintains discipline of pull production

Signifies an authority to pull or produce which comes from a
downstream process

Production kanban authorizes production

Withdrawal kanban authorizes movement of goods

Here the customer starts Kanban Signals “Pull” Material

the process, pulling an JIT Demand-Pull Logic Through the Process
inventory item from
Final Assembly… Once the Production kanban is This puts the
received, the Machine Center Withdrawal system back
Then sub- produces a unit to replace the kanban where it was
assembly work is Fab Vendor one taken by the Assembly Line before the item
people in the first place was pulled
pulled forward by
that demand… Sub
Fab Vendor Storage Storage
Customers
Final Machine Part A Part A
Assembly
Assembly Center
Line

The process continues Sub Fab Vendor

throughout the entire
production process and Production kanban
Material Flow
supply chain Fab The process begins by the Assembly Line
Vendor people pulling Part A from Storage Card (signal) Flow

Determination of the Number of Kanbans

Needed
Setting up a kanban system requires determining the number of
kanbans (or containers) needed.
Each container represents the minimum production lot size
An accurate estimate of lead time required to produce a
container is key to determining how many kanbans are required
 Determination of the Number of Kanbans- • Ex. Usage at a work center is 300 parts per day, and a standard
container holds 25 parts. It takes an average of .12 day for a
Kanban Formula container to complete a circuit from the time a kanban card is
received until the container is returned empty. Compute the
DT(1+X) number of kanban cards (containers) needed if X = .20.
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 that reflects the
possible inefficiency in the system(the closer to 0,
the more efficient the system) Note: Rounding up will cause the system to be looser, and rounding
C = Capacity of a standard container down will cause it to be tighter. Usually, rounding up is used.

JIT Building Blocks: Suppliers

5. Supplier Relationships
JIT partnerships are formed
 Reduced number of vendors JIT partnerships eliminate:
 Supportive supplier relationships
 Quality deliveries on time
Some unnecessary activities
 Frequent deliveries in small lot quantities In-plant inventory
 Reduced lead times In-transit inventory
 Reduced transaction processing
 Certified vendors
Poor suppliers

Characteristics of JIT Partnerships Traditional Supplier Network

Suppliers
 Few
 Nearby Buyer
 Long-term relationships
Supplier Supplier
 Analysis and support to enable desirable suppliers to become or
stay price competitive Supplier

 Buyer resists vertical integration and subsequent wipeout of Supplier Supplier

supplier business Supplier Supplier

 Suppliers encouraged to extend JIT to their suppliers (2nd and 3rd

tier suppliers)
 Tiered Supplier Network JIT Building Blocks:
6. Preventive Maintenance
Buyer
All activities involved in keeping equipment in working
order
Maintaining equipment in good condition and replacing
First Tier Supplier Supplier parts that have a tendency to fail before they actually fail
Done to prevent failure
Second Tier Supplier Supplier Supplier
JIT requires
Scheduled & daily PM
Third Tier Supplier Supplier Supplier Supplier Supplier Operator involvement in PM
Knows machines
Responsible for product quality

Yielding
Total Productive Maintenance (TPM)

Breakdown maintenance Faster response to the customer at lower cost

Repairs to make failed machine operational and higher quality

Preventive maintenance

System of periodic inspection & maintenance to keep
machines operating

TPM combines preventive maintenance & total quality
concepts A competitive advantage!

Summary: Just-In-Time Production Comparison of JIT and Traditional Systems

WHAT IT IS WHAT IT DOES Factor Traditional JIT
Inventory Much to offset forecast Minimal necessary to operate
• Management philosophy • Attacks waste
errors, late deliveries
• Exposes problems and bottlenecks
• “Pull” system though the plant Few, large Many, small
• Achieves streamlined production Deliveries
Lot sizes Large Small

Setup; runs Few, long runs Many, short runs

WHAT IT REQUIRES WHAT IT ASSUMES
Vendors Long-term relationships Partners
• Employee participation are unusual
• Industrial engineering/basics • Stable environment
• Continuing improvement Workers Necessary to do the Assets
• Total quality control work
• Small lot sizes
 Transitioning to a JIT System Obstacles to Conversion
Get top management commitment
Management may not be committed
Decide which parts need most effort Workers/management may not be
Obtain support of workers cooperative
May be difficult to change
Start by trying to reduce setup times
company culture
Gradually convert operations Suppliers may
Convert suppliers to JIT resist
 Why?
Prepare for obstacles

Suppliers May Resist JIT Benefits of JIT

Unwilling to commit resources 1. Reduced inventory 8. Better relations with
Uneasy about long-term commitments 2. Improved quality suppliers
3. Lower costs 9. Simplified scheduling
Frequent, small deliveries may be difficult 4. Reduced space and control activities
Burden of quality control shifts to supplier requirements 10. Increased capacity
5. Reduced lead times 11. Increased equipment
Frequent engineering changes may cause JIT
6. Increased utilization
changes productivity 12. Better use of human
7. Greater flexibility resources
8. Reduced scrap and 13. More product variety
rework 14. Reduced need for
indirect labor