McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. 15 JIT and Lean Operations

15-2 Learning Objectives  Explain what is meant by the term lean operations system.  List each of the goals of JIT and explain its importance.  List and briefly describe the building blocks of JIT.  List the benefits of the JIT system.  Outline the considerations important in converting a traditional mode of operations to a JIT system.  List some of the obstacles that might be encountered when converting to a JIT system.

15-3 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”

15-4 Goal of JIT The ultimate goal of JIT is a balanced system. Achieves a smooth, rapid flow of materials through the system.

15-5 Summary JIT Goals and Building Blocks Figure 15.1 Product Design Process Design Personnel Elements Manufactur- ing Planning Eliminate disruptions Make the system flexible Eliminate waste A balanced rapid flow Ultimate Goal Supporting Goals Building Blocks

15-6 Supporting Goals  Eliminate disruptions  Make system flexible  Eliminate waste, especially excess inventory

15-7 Sources of Waste  Overproduction  Waiting time  Unnecessary transportation  Processing waste  Inefficient work methods  Product defects

15-8 Kaizen Philosophy  Waste is the enemy  Improvement should be done gradually and continuously  Everyone should be involved  Built on a cheap strategy  Can be applied anywhere

15-9 Kaizen Philosophy  Supported by a visual system  Focuses attention where value is created  Process oriented  Stresses main effort of improvement should come from new thinking and work style  The essence of organizational learning is to learn while doing

15-10  Big JIT – broad focus  Vendor relations  Human relations  Technology management  Materials and inventory management  Little JIT – narrow focus  Scheduling materials  Scheduling services of production Big vs. Little JIT

15-11 JIT Building Blocks  Product design  Process design  Personnel/organizational elements  Manufacturing planning and control

15-12 Product Design  Standard parts  Modular design  Highly capable production systems  Concurrent engineering

15-13 Process Design  Small lot sizes  Setup time reduction  Manufacturing cells  Limited work-in-process  Quality improvement  Production flexibility  Balanced system  Little inventory storage

15-14 Benefits of Small Lot Sizes Reduces inventory Less storage space Less rework Problems are more apparent Increases product flexibility Easier to balance operations

15-15 Single-Minute Exchange  Single-minute exchange of die (SMED): A system for reducing changeover time  Categorize changeover activities  Internal – activities that can only be done while machine is stopped  External – activities that do not require stopping the machine

15-16 Production Flexibility  Reduce downtime by reducing changeover time  Use preventive maintenance to reduce breakdowns  Cross-train workers to help clear bottlenecks

15-17 Production Flexibility  Use many small units of capacity  Use off-line buffers  Reserve capacity for important customers

15-18 Quality Improvement  Autonomation  Automatic detection of defects during production  Jidoka  Japanese term for autonomation

15-19 Production Flexibility  Balance system: Distributing the workload evenly among work stations  Work assigned to each work station must be less than or equal to the cycle time  Cycle time is set equal to the takt time  Takt time is the cycle time needed to match customer demand for final product

15-20 Personnel/Organizational Elements  Workers as assets  Cross-trained workers  Continuous improvement  Cost accounting  Leadership/project management

15-21 Manufacturing Planning and Control  Level loading  Pull systems  Visual systems  Close vendor relationships  Reduced transaction processing  Preventive maintenance

15-22 Pull/Push Systems  Pull system: System for moving work where a workstation pulls output from the preceding station as needed. (e.g. Kanban)  Push system: System for moving work where output is pushed to the next station as it is completed

15-23 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

15-24 Kanban Formula N= DT(1+X) C N = Total number of containers D = Planned usage rate of using work center T = Average waiting time for replenishment of parts plus average production time for a container of parts X = Policy variable set by management – possible inefficiency in the system C = Capacity of a standard container

15-25 Limited Work in Process  Benefits  Lower carrying costs  Increased flexibility  Aids scheduling  Saves cost of rework and scrap  Two general approaches  Kanban – focuses on individual work stations  Constant work-in-process (CONWIP) – focuses on the system as a whole

15-26 Traditional Supplier Network Buyer Supplier Figure 15.4a

15-27 Tiered Supplier Network Figure 15.4b Supplier Buyer Supplier First Tier Supplier Second Tier Supplier Third Tier Supplier

15-28 Preventive Maintenance and Housekeeping  Preventative maintenance: Maintaining equipment in good condition and replacing parts that have a tendency to fail before they actually fail.  Housekeeping: Maintaining a workplace that is clean and free of unnecessary materials.

15-29 Housekeeping Five S’s 1.Sort 2.Straighten 3.Sweep 4.Standardize 5.Self-discipline

15-30 Comparison of JIT and Traditional Systems FactorTraditionalJIT Inventory Much to offset forecast errors, late deliveries Minimal necessary to operate Deliveries Few, largeMany, small Lot sizes LargeSmall Setup; runs Few, long runsMany, short runs Vendors Long-term relationships are unusual Partners Workers Necessary to do the workAssets Table 15.3

15-31 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

15-32 Obstacles to Conversion  Management may not be committed  Workers/management may not be cooperative  Difficult to change company culture  Suppliers may resist  Why?

15-33 Why Suppliers Resist JIT  Unwilling to commit resources  Uneasy about long-term commitments  Frequent, small deliveries may be difficult  Burden of quality control shifts to supplier  Frequent engineering changes may cause JIT changes

15-34 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

15-35  JIT II: a supplier representative works right in the company’s plant, making sure there is an appropriate supply on hand. JIT II

15-36 Benefits of JIT Systems  Reduced inventory levels  High quality  Flexibility  Reduced lead times  Increased productivity

15-37 Benefits of JIT Systems  Increased equipment utilization  Reduced scrap and rework  Reduced space requirements  Pressure for good vendor relationships  Reduced need for indirect labor

15-38  Smooth flow of work (the ultimate goal)  Elimination of waste  Continuous improvement  Eliminating anything that does not add value  Simple systems that are easy to manage  Use of product layouts to minimize moving materials and parts  Quality at the source Elements of JIT

15-39  Poka-yoke – fail safe tools and methods  Preventative maintenance  Good housekeeping  Setup time reduction  Cross-trained employees  A pull system Elements of JIT