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F O U R T H E D I T I O N Just-in-Time Systems © The McGraw-Hill Companies, Inc., 2003 chapter 14 DAVIS AQUILANO CHASE PowerPoint Presentation by Charlie.

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Presentation on theme: "F O U R T H E D I T I O N Just-in-Time Systems © The McGraw-Hill Companies, Inc., 2003 chapter 14 DAVIS AQUILANO CHASE PowerPoint Presentation by Charlie."— Presentation transcript:

1 F O U R T H E D I T I O N Just-in-Time Systems © The McGraw-Hill Companies, Inc., 2003 chapter 14 DAVIS AQUILANO CHASE PowerPoint Presentation by Charlie Cook

2 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –2 Chapter Objectives Introduce the underlying concepts of JIT and there Japanese approach to improving productivity. Identify the differences between Japanese and U.S. companies with respect to implementing JIT, and explore why these differences exist. Identify the various elements that need to be included to successfully implement JIT within an organization. Illustrate how many JIT concepts have been implemented in services.

3 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –3 Managerial Issues Using JIT as a tool for controlling the flow of materials, identifying sources of error, and minimizing inventories. Developing the strong supplier relationships on which successful implementation of JIT depends. Achieving production linearity in manufacturing and service operations.

4 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –4 JIT Logic JIT (just-in-time) –A coordinated approach that continuously reduces inventory while also improving quality. –Seeks to achieve high volume production using minimal inventories of raw material, work in process, and finished goods. –“Big” JIT (lean production) Seeks to eliminate all forms of waste in production activities. –“Little” JIT Focuses on scheduling goods inventories and providing service resources.

5 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –5 Pull System Exhibit 14.1

6 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –6 The Japanese Approach To Productivity Fundamental National Goal –Full employment through industrialization Target Industries for Market Dominance –Electronics, vehicles, shipbuilding –Competitive tactics: Imported technology rather than take R&D risks. Focused engineering on the shop floor to achieve high productivity and low cost. Improved quality beyond that of competitors. Eliminated waste in all forms. Have great respect for people.

7 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –7 Quasar Plant Productivity Exhibit 14.2 *2 years later. † Same people

8 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –8 The Japanese Approach to Productivity Elimination of Waste Focused Factory Networks Group Technology Jidoka (quality at the source) Just-in-Time Production Uniform Plant Loading Kanban Minimized Setup Times

9 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –9 Group Technology versus Departmental Specialty Exhibit 14.3

10 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –10 Just-In-TimeJust-In-Time Exhibit 14.4 Source: Adapted from Chris Gopal (of Price Waterhouse), “Notes on JIT.”

11 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –11 Inventory Hides Problems Exhibit 14.5

12 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –12 Toyota Example of Mixed-Model Production Cycle in a Japanese Assembly Plant Exhibit 14.6

13 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –13 Flow of Two Kanbans Kanban Pull System –A manual, self-regulating system for controlling the flow of material. Workers produce only when the Kanban ahead of them is empty, thereby creating a “pull” system through the factory. Exhibit 14.7

14 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –14 Minimizing Setup Time—Hood and Fender Press Comparison (800 ton press) Exhibit 14.8 *For low-demand items (less that 1,000 per month), as large as seven days.

15 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –15 Setup Reduction Results at JKC Exhibit 14.9

16 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –16 Respect for People Lifetime Employment Company Unions Attitude toward Workers Automation/Robotics Bottom-Round Management Subcontractor Networks Quality Circles

17 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –17 JIT in the United States Problems with Implementing JIT –Geographic distances –Supplier-customer relationships –“Jumbo-Inventory-Transfer” –MRP systems

18 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –18 Implementing JIT Production JIT Layouts/Design Flow Process –Design must ensure balanced continuous workflow with minimum of work in process and delays. –Internal and external logistics must be considered. –Preventive maintenance is emphasized. –Process orientation encourages the use of simple machines. –Goal is a economic production lot size of one.

19 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –19 How to Accomplish Just-in-Time Production Exhibit Source: This diagram is modeled after the one used by Hewlett-Packard’s Boise plant to accomplish its JIT program.

20 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –20 The Impact of JIT on Lot Size Exhibit 14.11

21 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –21 Implementing JIT Production JIT in a Line Flow or Product Layout –No work done until product has been pulled from the end of the line. –Completed work stays at the workstation until remove by a downstream station. Exhibit 14.12

22 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –22 Relationship between JIT and Quality Exhibit Source: Richard J. Schonberger, “Some Observations on the Advantages and Implementation Issues of Just-in-Time Productions Systems,” Journal of Operations Management 3, no. 1 (November 1982), p. 5.

23 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –23 Total Quality Control Stabilize Schedule Kanban Pull Work with Vendors Continuous Inventory Reduction Improve Product Design Concurrently Solve Problems and Measure Performance

24 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –24 Diagram of Outbound Stockpoint with Warning Signal Marker Exhibit Source: Robert Hall, Zero Inventories (Homewood, IL: Dow Jones-Irwin, 1983), p. 51.

25 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –25 Company Experiences with JIT JIT/TQC benefits –Average inventory reduction of about 50 percent –Reduction of throughput time of 50 to 70 percent –Reduction in setup times of as much as 50 percent without major investment in plant or equipment

26 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –26 JIT in Services Application of JIT to Services –Synchronization and balance of information and workflow –Total visibility of all components and processes –Continuous improvement of the process –Holistic approach to the elimination of waste –Flexibility in the use of resources –Respect for people

27 Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., –27 Gizmo Production Flow Case Exhibit 14.1


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