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Just-In-Time and Lean Systems

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1 Just-In-Time and Lean Systems
Lesson 19 Just-In-Time and Lean Systems repetitive production system in which processing and movement of materials and goods occur just as they are needed, usually in small batches developed by Taiichi Ohno at Toyota

2 What Is JIT . Management philosophy (produce . Pull system What Is JIT
only what is needed when it is needed) . Pull system What Is JIT Raw materials, parts & sub assemblies are pulled through the manufacturing process when they are needed. JIT is a manufacturing philosophy involving an integrated set of procedures/activities designed to achieve a high volume of production using minimal inventories (raw materials, work-in-process, and finished goods). Simply put, JIT is a philosophy of “make what is needed … when it is needed”.

3 What Is JIT Ultimate Goal A balanced rapid flow Supporting Goals
Eliminate disruptions Eliminate waste Make the system flexible Product Design Process Design Personnel Elements Manufacturing Planning Building Blocks

4 Comparison Of JIT & MRP JIT Repetitive production
Minimal shop floor control Simpler Relies on visual or audible signals to trigger production and inventory (e.g. auto carpets) Lower inventories related to need “at the time” MRP Lot size or batch production Extensive shop floor control More complex Relies on computer system to trigger production and order inventory Inventories related to batch or lot sizes

5 What JIT Does Makes the manufacturing delivery system flexible or more robust … allowing it to handle a variety of products and changes in the level of output while still maintaining balance and throughput speed. What JIT Does . Attacks waste . Exposes problems & bottlenecks . Achieves streamlined production Eliminate disruptions in production … caused by poor quality, equipment breakdowns, schedule changes, late deliveries Eliminates waste Reduces setup and delivery times

6 Waste Waste includes any operation, movement, inventory, processing, reporting, etc. which does not add value to the resulting product. Areas of waste include, but are not limited to: . Overproduction Processing waste . Waiting time Inefficient work methods . Excess Inventory Unnecessary movement Product defects … rework Setup time Excess motion Machine breakdown

7 Strategies For Minimizing Waste
We have already discussed many strategies for minimizing waste. Some of these include: Assembly Lathe Mill Drill Heat Grind Cellular Layouts Focused Factories Group Technology Layouts

8 Strategies For Eliminating Waste
Considerations in Job Design aimed at improving worker productivity and skill levels. Specialization Multi-functional workers Behavioral Approaches to Job Design Teams Methods Analysis Motion Study Working conditions Incentive pay plans

9 Strategies For Eliminating Waste
Manufacturing in smaller lot sizes reduces excess inventory Average cycle inventory Lot size = 100 Lot size = 50 On-hand inventory Time (hours) 100 – 75 – 50 – 25 – 0 – 100 – 75 – 50 – 25 – 0 – Average cycle inventory Lot size = 100 On-hand inventory Time (hours)

10 Strategies For Eliminating Waste
Work in process queues (banks) Change orders Engineering design redundancies Vendor delinquencies Scrap Design backlogs Machine downtime Decision Inspection Paperwork backlog Reducing inventory levels allows the problems to be uncovered … thus creating opportunities for manufacturing process improvement. Work in process queues (banks) Change orders Engineering design redundancies Vendor delinquencies Scrap Design backlogs Machine downtime Decision Inspection Paperwork backlog Excess inventory hides problems in the manufacturing process

11 Strategies For Eliminating Waste
Setting-up a machine to perform a task is very time consuming. Efforts toward improving product flow, having the right equipment at the right place at the right time, and simple techniques can be used to minimize product change set-up waste. Some simple techniques include: Presetting operational settings Using quick fasteners & quick change tools Using locator pins Preventing misalignments Making movements easier Multi-functional machines Scheduling product flow to minimize changeover (e.g. ice cream)

12 What JIT Requires Product/Process Design - standard parts, modular design, quality, setup time reduction, production flexibility, etc. . Product Design . Process Design . Employee participation . Industrial engineering/basics . Continuing improvement . Total quality control . Small lot sizes . Vendor relations What JIT Requires Manufacturing planning and control - level loading, small lots, pull systems, visual systems, close vendor relationships, reduced transaction processing Personnel/Organizational elements - regard workers as assets, cross trained workers, continual improvement, cost accounting, leadership and project management

13 What JIT Requires Standardization of product design refers to the absence of variety in products/services . interchangeable parts, modular design (fewer items) . reduced time for training workers . may require less effort (purchasing, facilities, inventory management)

14 What JIT Requires Design Simplification Original design Revised design
Final design

15 What JIT Requires Concurrent Engineering brings all interested parties together early in the design process to deal with issues associated with design, marketing, manufacturing, quality, supply, etc. Manufacturing can identify production capabilities, capacities, materials, and design alternatives to assist in efficient manufacturability. Identifies early opportunities for special tooling, equipment, training, etc. some of which have long lead times. Early consideration of technical feasibility of a design Can shorten overall “time to market”

16 What JIT Requires Design a facilities layout & process flow of work that allows for Linked operations Balanced workstation capacities Flow efficiency Small lot sizes Reduced setup/changeover time

17 What JIT Requires Small lot production requires Less space
Less capital investment Less inventory Moves processes closer together Makes quality problems easier to detect Makes processes more dependent on each other

18 What JIT Requires Uniform production . Smooth production requirements
. Smooth demand across planning horizon . Use mixed-model assembly to steady component production . Use visual system to manage product movement . Can handle up to 10% change in demand 407 409 410 412 408 411

19 What JIT Requires Visual Systems
. A card or other device that communicates demand for work or materials from the preceding work station … sometimes referred to as a kanban system . Work can not move from one station to the next unless authorized by the kanban card . Work is actually “pulled” through the process in this system in containers of parts/subassemblies from one station to the next … a “push” system moves work from one work station to the next as it is produced whether the next station is ready or not.

20 What JIT Requires Implement a system of Total Productive Maintenance (TPM) designed to improve . Breakdown maintenance (quickly repair machines that have failed) . Preventative maintenance (periodic inspection & maintenance aimed at keeping machines operational and in “tip-top shape)

21 What JIT Requires Considerations need to be given to respect for personnel issues of . Pay . Management issues (feeling threatened of losing control) . People issues (getting along with each other) . Continuous Improvement . Total employee involvement . Empowerment .. ability to make changes in their work environment .. spot quality problems .. halt production when necessary .. generate ideas for improvement .. analyze problems .. learn multi-function tasks

22 What JIT Requires Evaluation and selection of vendor (suppliers) network to develop a tiered supplier network – reducing the number of primary suppliers. Buyer Suppler Traditional Supplier Network Suppler Buyer Tiered Supplier Network

23 What JIT Requires The criteria usually used to evaluate a vendor network include . Reduced & highly reliable lead times . Flexibility & smaller lot sizes . Frequency & reliability of delivery . Reliability (variability) of delivery . Consistently high quality . Willingness to work together Commitment (“pig not a chicken”) Future development Product improvements Exchange of Information (forecasts, sales)

24 What JIT Requires Contractual Issues need to be worked out to protect both the customer & vendor. Some of these include: . Long term contracts with minimal paperwork establishing the purchase quantities with the ability to ship variable quantities through out the term. . Accuracy requirements in both shipment quantities & quality standards . Cost issues (who pays for storage costs on un-released materials, re-tooling, containers, etc.). While it may seem that some of these issues flow from customer down through the supplier network, the nature of the relationship (private label vendor) may allow for negotiation.

25 What JIT Requires Quality Issues need to be worked out to protect both the customer & vendor. Some of these include: . Quality levels (AQL, LTPD, etc) . Working relationship between customer & vendor Quality Control personnel . Suppliers encouraged to use Statistical Process Control during the manufacturing process Acceptance Sampling prior to shipping may be reduced/eliminated depending on customer satisfaction with SPC results . Conflict resolution guidelines

26 What JIT Requires Some recent trends in vendor requirements are
. Willingness to locate near customer . Use of smaller side loaded trucks . Shipments of mixed loads . Consolidation of warehouses with other suppliers . Use of standardized containers . Make deliveries according to a precise delivery schedule . Become a certified supplier . Accept payments on a regular interval rather than upon delivery

27 JIT Benefits Improved vendor relations JIT Benefits
Simplified scheduling & control Increased capacity Better utilization of personnel More product variety Increased equipment utilization Reduced paperwork Valid production priorities Work force participation . Many JIT Benefits Reduced Inventory Improved quality Lower costs Reduced space requirements Shorter lead-time Increased productivity Greater flexibility

28 JIT … Not For Everyone JIT concepts work best when goods can be produced in response to consumer demand; thereby, eliminating the need for large build-ups of inventory (e.g. automobiles, motorcycles). This is referred to as a make to order environment. JIT is less effective and is less likely to be used for the production of standardized consumer goods (e.g. basic clothing, food, soft drinks, toasters, etc.) This is referred to as a make to stock environment. However, there are cases where JIT concepts apply to sub-processes of a make to stock environment. Consider a computer manufacturer (e.g. Dell). Computers can be configured at the time of a customer order where, generic disk drives may be made to stock.

29 Planning A Successful JIT Implementation
Planning a successful JIT implementation requires . Top management commitment . Assessing operational conversion difficulty & prioritizing conversion sequence . Getting support of the work force … training programs, cross training plans,problem solving procedures, pay plans . Begin by trying to reduce the setup times while maintaining the current system … involve work force in problems . Gradually convert operations … begin at end … work toward beginning . Convert suppliers to JIT in a cooperative spirit

30 Obstacles To Conversion
Obstacles to Conversion must be addressed. . Management . Workers - may not want more responsibility or stress . Suppliers - why should we?, other customers don’t require this, can not get their management to commit, smaller quantities may not be feasible

31 Level Loading … Mixed Model Production
Suppose a department produces 3 models with daily quantities shown here. There are 3 issues that need to be resolved: Which sequence to produce? C-B-A, A-B-C, B-A-C How many times (cycles) the sequence should repeat? How many units to produce in each cycle?

32 Level Loading … Mixed Model Production
Which sequence to produce? C-B-A, A-B-C, B-A-C Involves many factors. Usually the most important is the setup time or cost involved. This may vary depending on the sequence used. For example, if the process for A and C are similar and require little change from one product to the other and the changes to product B require extensive changes then the the sequences A - C - B or C - A - B, would be more efficient and less costly than the sequence A - B - C or C - B - A. as shown in the next schematic.

33 Level Loading … Mixed Model Production
Which sequence to produce? C-B-A, A-B-C, B-A-C A - C - B Little change Major change C - A - B Major change Little change A - B - C Major change C - B - A Little change

34 Level Loading … Mixed Model Production
How many times (cycles) the sequence should repeat? The steps involved are: . Determine the number of cycles = the smallest integer that can be evenly divided into the daily production quantities . Determine the units to be produced for each cycle = daily quantity divided by the number of cycles . Determine the load level for each cycle

35 Level Loading … Mixed Model Production
. Example 1b: A JIT production manager wants to plan production (as level as possible) for these three models using the manufacturing sequence A-B-C. . First, determine the number of cycles = the smallest integer that can be evenly divided into the daily production quantities Since there is no integer that will divide all 3 numbers, we will choose the minimum daily quantity of 5 as the number of cycles.

36 Level Loading … Mixed Model Production
Next, determine the units to be produced for each cycle = daily quantity divided by the number of cycles

37 Level Loading … Mixed Model Production
Next, determine the load level for each cycle A perfectly level loaded production plan would look like this; but we are short 3-A’s and 1-B.

38 Level Loading … Mixed Model Production
Depending on the JIT production manager’s choice the final loading schedule might look like this. There is no correct answer to this problem. The objective is to level production as much as possible given the costs of setup and change over. The manager just as easily have considered the following production plan with exactly the same costs as the previous one.

39 Visual Kanban System Setting up a visual (Kanban) system
. requires determining the number of containers (kanbans) needed . each container represents the minimum production lot size . an accurate estimate of the lead time required to produce a container is key to determining how many kanbans are required. . The number of kanbans needed to support the operation is calculated by the following formula:

40 How Many Kanbans?

41 How Many Kanbans? Example 2: 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 container to complete a circuit from the time a kanban card is received until the container is returned empty. Compute the number of containers needed to support the operation if the policy variable is .20. Therefore, it will take 2 kanban containers to meet the process requirements

42 Homework Read and understand all material in the chapter.
Discussion and Review Questions Recreate and understand all classroom examples Exercises on chapter web page

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