JIT and Lean Operations

MRP (push) and JIT (pull) system PULL SYSTEM PUSH SYSTEM A PUSH system where material is moved on to the next stage as soon as it has been processed A PULL system where material is moved only when the next stage wants it

 Based on two philosophies: 1. Elimination of waste 2. Respect for people Originated in Japan JUST IN TIME [JIT]

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”

JIT Building Blocks  Product design [Standard parts, Modular design, Highly capable production, systems, Concurrent engineering]  Process design  Personnel/organizational elements  Manufacturing planning and control

Process Design  Small lot sizes  Setup time reduction  Limited work in process  Quality improvement  Production flexibility  Little inventory storage Reduces inventory Less storage space Less rework Problems are more apparent Increases product flexibility Easier to balance operations

Personnel/Organizational Elements  Workers as assets  Cross-trained workers  Continuous improvement  Cost accounting  Leadership/project management

Manufacturing Planning and Control  Level loading  Pull systems  Visual systems  Close vendor relationships  Reduced transaction processing  Preventive maintenance

Minimizing Waste: Focused Factory Networks Coordination System Integration These are small specialized plants that limit the range of products produced (sometimes only one type of product for an entire facility) Some plants in Japan have as few as 30 and as many as 1000 employees

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.

ZERO INVENTORY The 7 zeros of JIT ZERO BREAKDOWNS ZERO LEAD TIMES ZERO DEFECTS ZERO HANDLING ZERO SURGING ZERO LOT SIZES

Quality Improvement  Autonomation  Automatic detection of defects during production  Jidoka  Japanese term for autonomation

Comparison of JIT and Traditional FactorTraditionalJIT InventoryMuch to offset forecast errors, late deliveries Minimal necessary to operate DeliveriesFew, largeMany, small Lot sizesLargeSmall Setup; runsFew, long runsMany, short runs VendorsLong-term relationships are unusual Partners WorkersNecessary to do the work Assets

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

 Good housekeeping  Set-up time reduction  Cross-trained employees  A pull system Elements of JIT (cont’d)

JIT Disadvantages  Not everybody operates within JIT parameters  Not all suppliers comply with another company’s JIT requirements  Labor organizations have problems with JIT’s flexible, broadly defined jobs  Does not work well with global trade

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

Minimizing Waste: Just-In-Time Production Management philosophy “Pull” system though the plant WHAT IT IS Employee participation Industrial engineering/basics Continuing improvement Total quality control Small lot sizes WHAT IT REQUIRES Attacks waste Exposes problems and bottlenecks Achieves streamlined production WHAT IT DOES Stable environment WHAT IT ASSUMES