Production and Operations Management: Manufacturing and Services Eighth Edition Production and Operations Management: Manufacturing and Services Ó 1997 Irwin/McGraw-Hill, A Division of the McGraw-Hill Companies PowerPoint Supplement developed by: William E. Youngdahl World Business Department Thunderbird, The American Graduate School of International Management PowerPoint Presentation for Chapter 8 Just-in-Time Production Systems Chase Aquilano Jacobs Irwin/McGraw-Hill The McGraw-Hill Companies, Inc., 1998 1

Chapter 8 Just-in-Time Production Systems JIT Logic The Japanese Approach to Productivity North American Modifications to JIT JIT Implementation Requirements JIT in Services 2 2

JIT is an integrated set of activities designed to... achieve high-volume production using minimal inventories raw materials work in process, and finished goods. Parts arrive at the next workstation "just in time". 3 3

JIT Logic Exhibit 8.1 Fab Vendor Sub Final Assy Customers 4 4

The Japanese Approach to Productivity Goal of full employment in the post WWII period. Government (MITI) supported improvement of targeted industries. Imported technologies. Efforts concentrated on factory floor. Quality improvement focus Elimination of waste & respect for people. 5 5

Waste--Operations (1) Waste from overproduction (2) Waste of waiting time (3) Transportation waste (4) Inventory waste (5) Processing waste (6) Waste of motion (7) Waste from product defects 6 6

Minimizing Waste: Focused Factory Networks Coordination System Integration Final Assembly 7 7

Minimizing Waste: Group Technology Exhibit 8.2 Departmental Specialization Saw Saw Saw Grinder Grinder Heat Treat Lathe Lathe Lathe Press Press Press 8 8

Minimizing Waste: Group Technology Exhibit 8.2 Group technology cells Grinder 1 2 Lathe Press Saw Lathe Heat Treat Grinder A B Lathe Press Saw Lathe 9 9

Minimizing Waste: Quality at the Source Self-inspection Automated inspection Line-stopping empowerment 10 10

Minimizing Waste: JIT Production Produce... ...what is needed... ...when it’s needed... ...NOTHING MORE! 11 11

Minimizing Waste: Uniform Plant Loading This does not mean building a single product. We need to maintain a stable mix of products, and firm monthly schedules. 12 12

Just-In-Time Production Exhibit 8.3 Management philosophy Pull system though the plant WHAT IT IS Attacks waste Exposes problems and bottlenecks Achieves streamlined production WHAT IT DOES Employee participation Industrial engineering/basics Continuing improvement Total quality control Small lot sizes WHAT IT REQUIRES Stable environment WHAT IT ASSUMES 13 13

Inventory Hides Problems Exhibit 8.4 Work in process queues (banks) Change orders Engineering design redundancies Vendor delinquencies Scrap Design backlogs Machine downtime Decision Inspection Paperwork backlog 14 14

Minimizing Waste: Kanban Production Control Systems Exhibit 8.6 A B Machine Center Assembly Line Storage Production Kanban Withdrawal 15 15

Calculating 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 the lead time required to produce a container is key to determining how many kanbans are required. 16 16

The Number of Kanban Card Sets, k k = Number of kanban card sets d = Average number of units demanded over some time period L = lead time to replenish an order (same units of time as demand) S = Safety stock expressed as a percentage of demand during lead time C = Container size 17 17

The Number of Kanban Card Sets, k Example A switch assembly is assembled in batches of 4 units from an “upstream” assembly area and delivered in a special container to a “downstream” control-panel assembly operation. The control-panel assembly area requires 5 switch assemblies per hour. The switch assembly area can produce a container of switch assemblies in 2 hours. Safety stock has been set at 10% of needed inventory. 18 18

The Number of Kanban Card Sets, k Example Always round up! 19 19

Minimizing Waste: Minimized Setup Times What are the consequences of long setup times? A requirement for small-lot-size, mixed-model production? 20 20

Respect for People Level payrolls Cooperative employee unions Subcontractor networks Bottom-round management style Quality circles (Small group involvement activities) 21 21

North American Modifications of JIT Can JIT work in North America? What are the cultural barriers to successful implementation? 22 22

JIT Requirements: Design Flow Process See Exhibit 8.8 Link operations Balance workstation capacities Relayout for flow Emphasize preventive maintenance Reduce lot sizes Reduce setup/changeover time 23 23

JIT Requirements: Total Quality Control Worker responsibility Measure SQC Enforce compliance Fail-safe methods Automatic inspection 24 24

JIT Requirements: Stabilize Schedule Level schedule Underutilize capacity Establish freeze windows, period of time during which the schedule is fixed and no further changes are possible. 25 25

JIT Requirements: Kanban-Pull Demand pull Backflush, periodically explode an end item’s BOM to calculate how many of each part went into the final product(s)--- periodical explosion!! Reduce lot sizes 26 26

JIT Requirements: Work with Vendors Reduce lead times Frequent deliveries Project usage requirements Quality expectations 27 27

JIT Requirements: Reduce Inventory More Stores Transit Carousels Conveyors 28 28

JIT Requirements: Improve Product Design Standard product configuration Standardize and reduce number of parts Process design with product design Quality expectations 29 29

JIT in Services (Examples) Organize Problem-Solving Groups Upgrade Housekeeping Upgrade Quality Clarify Process Flows Revise Equipment and Process Technologies 30 30

JIT in Services (Examples) Level the Facility Load Eliminate Unnecessary Activities Reorganize Physical Configuration Introduce Demand-Pull Scheduling Develop Supplier Networks 31 31