Just-in-time Prof. Jiang Zhibin Dept. of IE, SJTU

Tools of Lean Manufacturing Pull Systems / Kanban A Tool for Implementing Pull Systems Lean Production Through Waste Elimination Operational Stability JIT Quality at the Source People

JIT Goals Zero defects Zero excess lot size or lot size of one Zero setups Zero breakdowns Zero handling Zero lead time Zero Surging Level production plan and uniform product mix

Need to Reduce Cost Traditional Method (Push) Seller Driven Modern Method (Pull) Customer Driven SellingPrice Profit = Cost+ (SELLER) SellingPrice - Cost = PROFIT (MARKET)

Just in Time History - Japan 1980s conclusion Japanese industry worked “ smart ” - JIT Think of JIT as minimum stock production Type of relationship: close & intimate? JIT internal JIT - in client-server stream external JIT

Japanese Experience Waste in operations from overproduction waiting time transportation inventory waste processing motion/movement product defects  concentrate effort on shop floor  CQI focus  staff ownership of problems

Minimizing Waste: Inventory Hides Problems Work in process queues (banks) Change orders Engineering design redundancies Vendor delinquencies Scrap Design backlogs Machine downtime Decision backlogs Inspection backlogs Paperwork backlog identify defects from a supplier early in the process saves the downstream work identify defective work from upstream stations, saves the downstream work

Forecast random orders Master production schedule (MPS) MRP1 Design changes Bill of material Stock movements Inventory record Reports 8 Aggregate Plan (product groups) Firm orders From Aggregate to MPS to MRP1 Time-phased plan how many + when we will build each end item. MRP2 JIT

Just-In-Time (JIT) a system for high-volume production with minimal inventory (raw materials, WIP, finished goods). involves timed workstation JIT reduced ‘ buffer ’ stocks no waste in production system a “ Pull ” system thru the plant a management philosophy expose problems & bottlenecks Take away ‘ security blanket ” streamlined production factory & warehouse networks participation industrial engineering/basics continuing improvement TQM reducing set up times smaller lot/order sizes sizes stable environment supply partnership Requires

JIT Requirements 1 Kanban Pull Demand pull Back flush Reduce batch/lot sizes Work with suppliers  Reduce lead times  Frequent deliveries  Project usage requirements  Quality expectations Reduce inventory in  Stores  Transit  Conveyors  calculation from MRP & EOQs

JIT Requirements 2 Quality  Worker responsibility  SQC  Enforce compliance  Error proffing  Automatic inspection Stabilise Schedule  Level schedule  Under utilize capacity Operations Design  Link operations  Balance workstation capacities  Review layout for flow  Stress preventive maintenance  Reduce lot sizes  Reduce setup/changeover time People Focus pay harmonisation supportive unions subcontractor networks hands-on manager style quality commitment & group involvement

JIT Requirements 3 Product Design Improvement DFM & process design Modules & fewer parts Quality standards upgrade housekeeping clarify process flows revise equipment & process technologies Problem-solving  Root problem  Long-term solution  Team contribution  Line-specialist cooperation  Learning  Measure performance  CQI  Monitor & report Problem-solving  Root problem  Long-term solution  Team contribution  Line-specialist cooperation  Learning  Measure performance  CQI  Monitor & report

JIT and Demand-Pull Customer Supplier Final Assembly Fabric Subass Call (Kanban) & Pull

Client Server Streaming Avoid too much material stocks & WIP Increase materials coordination & movement Bin Saw Supplier's local warehouse Finished Goods Warehouse Grinder Lathe Bin Call for more Materials warehouse Bin Customer JIT deliveries Call for more

What is Kanban? developed at Toyota 1950s to manage line material flows. Kanban ( Kan=card, Ban= signal ) simple movement system “ cards ” to signal & communicate reorder information boxes/containers to take “ lots ” of parts from one work station to another (client-server). Server only delivers components to client work station as & when needed (called/pulled). minimise storage in the production area. Workstations only produce/deliver components when called (they receive card + empty container). The work-station produces enough to fill the container Kanban = an authorization to produce more inventory We thus limit the amount of inventory in process.

Benefits of Kanban An information network used to control production quantities A communication process that controls the movement of material A cost reduction (waste elimination) tool that prevents over production A quality control enforcer because it limits lot quantities to small amounts, thereby allowing defects to be identified early in the manufacturing process

Benefits of Kanban (cont.) Manages just-in-time production Gives specific part number, quantity, location, and time demands to lower work centers Identify excess in plant inventory levels Identify potential inventory shortages (low stock indicators) Limits quality rejects by reducing lot size produced

Kanban Pre-conditions There are four pre-conditions for the successful implementation of Kanban Point of use inclusion (all parts on the assembly line) Level production Stabilized processes Quick Changeover procedures

Kanban Market Address > Kanban Number > Line-Side Address > Part Number > Route > Part Description > Bar Code Area Dock Code > Supplier Code > Quantity > Serial Number Comment: >

What Does a Kanban Card Look Like? Kanban No part No: 66789X description 16ga. Copper Wire units Ft. reorder/lot qty 20 store location Row 12, Bin 6 supplier BICC supplier tel supplier part RT45502 routing process Name/location of next proces Name/location of preceding process container type & capacity number of containers released accurate data: correct part nos, quantities & measure'tsaccurate data: correct part nos, quantities & measure'ts visible - chart if material ordered & whenvisible - chart if material ordered & when fool proof for no stockoutsfool proof for no stockouts minimum inventoryminimum inventory clear & complete info. to suppliersclear & complete info. to suppliers link inventory directly to demandlink inventory directly to demand Tie in with POP: issuing orders, receiving & authorising accounts payableTie in with POP: issuing orders, receiving & authorising accounts payable accurate data: correct part nos, quantities & measure'tsaccurate data: correct part nos, quantities & measure'ts visible - chart if material ordered & whenvisible - chart if material ordered & when fool proof for no stockoutsfool proof for no stockouts minimum inventoryminimum inventory clear & complete info. to suppliersclear & complete info. to suppliers link inventory directly to demandlink inventory directly to demand Tie in with POP: issuing orders, receiving & authorising accounts payableTie in with POP: issuing orders, receiving & authorising accounts payable

Function of Kanban Helps to reduce passage of defects from one area to another by identifying preceding processes. Provides pick-up and/or transportation information, which includes “where from” and “where to” locations. It can also, in some cases, indicate schedule times for pick-up. Communicates production information. It tells what to produce and how many are required. Function No. 3 also states Kanban must be produced in the order received. Prevents overproduction and excessive transportation by restricting in-bound raw material and the production quantity of a process to specific pre-determined lot quantity indicated on the Kanban. It allows ordering of multiple lot quantities only to the extent of Kanban available to be replenished Serves as a work order indicating what has been produced and identifies the physical product Reveals existing production problems and maintains inventory control

Rules of Kanban Never send defective products to downstream processes The downstream process draws only what is required by the Kanban from upstream processes. The upstream process produces items in the quantity and the sequence indicated by the Kanban. Parts are never to be produced or conveyed without a Kanban Kanban must be attached to the actual containers of parts Kanban is a tool to fine tune production

Inter-process Kanban Flow Market Place Post Office Kanban Post Office 4 V1 V2 V3 V4 V5 V6 A AAAA CCCC EEEE AAAA CCCC EEEE Assembly Withdraw Kanban Mailbox Inter-Process BBBBBB C E DDDD DDDD FFFF ffff Y X Z

Minimizing Waste: Kanban Control System Bin Part A Machine Center Assembly Line Material Flow Card (signal) Flow withdrawal kanban production kanban

C SdL)(1   k capacity of container Expected demand during lead time + safety stock  k = No. of kanbans in card set d = Average No. of units demanded over the period L = lead time to replenish order (same units of time as demand) S = Safety stock as % of demand during lead time C = Container size How many Kanbans? Each container = minimum replenishment lot size. Calculate lead time required to produce a "container"

Example A switch is assembled in batches of 4 units at an “ upstream ” work area. delivered in a bin to a “ downstream ” control-panel assembly area that requires 5 switch assemblies/hour. The switch assembly area can produce a bin of switch assemblies in 2 hours. Safety stock = 10% of needed inventory or 3 4 5(2)(1.1)  C dL (1  S) k size of container Expected demand during lead time + safety stock 

"Re-engineering" & Kanban Modern production methods 1. Modular/cell production 9 group technology). 2. Reduce set up, lead and waiting times between procedures. 3. Flow-of-products-oriented layout of processes & machines layout. Products flow smoothly from start to finish, parts do not sit waiting to be worked on, forklift trucks do not travel kilometres to move parts from one area of the plant to another. 4. Flexible manufacturing of mixed models 5. Theory of Constraints - drum-rope-buffer (Goldratt). Building in extra redundancy. 6. Total Preventive Maintenance, prevent machines from breaking down or malfunctioning during production time 7. Team-Work & Autonomation (decision by worker to stop line) 8. Kaizen: Continuous improvement 9. Housekeeping