1. Lean Operations
&
Just-In-Time

2. Chapter Coverage What are lean operations and JIT?
Differences between traditional approach and JIT
Disadvantage of JIT
Lean philosophy of operations
JIT techniques
JIT planning and control

3. Lean operations:
Is the philosophy of moving towards zero waste in order to develop an operation that is:
faster,
more dependable,
produces higher quality products and service, and
operates at low cost.
Founded on doing the simple things well, on gradually doing them better and reducing waste every step of the way.

4. Just In Time, JIT:
JIT is an approach of producing goods and services exactly when they are needed.
Minimum inventory if not zero
Customers wait
Encourages efficiency
Quality not sacrificed

5. JIT definitions: (textbook definitions)
JIT aims to meet demand instantly, with perfect quality and no waste
more fully:
improved overall productivity and elimination of waste
cost-effective production and delivery of only the necessary quantity of parts at the right quality, at the right time and place, while using a minimum amount of facilities, equipment, materials and human resources
JIT is dependent on the balance between the supplier’s flexibility and the user’s flexibility
it is accomplished through the application of elements which require total employee involvement and team-work
a key philosophy of JIT is simplification

6. Traditional approach vs. JIT
Differences between traditional approach and JIT
Traditional approach vs. JIT
Traditional approach
JIT
Buffer inventory between each stage act as insulation and gives some degree of independence from upstream stages.
More buffer better insulation.
Stage A experience breakdown, Stage B can continue producing for some time.
Stage C can continue for longer time.
Problems in Stage A is not spread throughout.
Parts are produced as they are ordered – no buffer inventory.
Stage A experience breakdown, immediately all stages will have to stop.
Problems in Stage A is apparent to all and becomes everybody's responsibility.
Improves the chances of problem being solved.
Cont…

7. Traditional approach vs. JIT
Cont…
Traditional approach vs. JIT
Traditional approach
JIT
Problems are confined within the stage and go unnoticed for a period of time.
Seek efficiency by protecting each part of the operation from disruption.
Seek efficiency through exposure of system problems, making problems more evident and change the ‘motivational structure’ of the whole system towards solving the problem.

8. Traditional approach:
buffer inventory
stage C
stage A
stage B

9. JIT approach:
stage A
orders
deliveries
stage B
stage C

10. Disadvantage of JIT:
The main sacrifice of JIT is low capital utilization (see Fig 15.10).
Why is capital utilization in JIT systems low?
Produce only when needed.
Any stoppage will affect the rest of the system causing complete stoppage.
JIT argument - No point producing output just for its own sake, it is counter productive because extra inventory hides problems and hinders improvement.

11. Disadvantage of JIT: Low capacity utilization
JIT APPROACH
focus on producing only when needed
TRADITIONAL APPROACH
fewer stoppages
focus on high capacity utilization
lower capacity utilization, but
low inventory so problems are exposed and solved
more stoppages because of problems
more production at each stage
no surplus production goes into inventory
high inventory means less chance of problems being exposed and solved
Disadvantage of JIT: Low capacity utilization
extra production
goes into inventory because of continuing stoppages at stages

12. The problem with inventory
Reduce the level of inventory (water) to reveal the operations’ problems
WIP
Defective materials
Rework
Scrap
Downtime
productivity problems

13. Lean philosophy of operations:
Eliminate waste
The involvement of everyone
Continuous improvement

14. Eliminate Waste:
Waste can be defined as an activity which does not add value.
Identifying waste is the first step towards elimination.
The seven types of waste are:
Over production
Waiting time
Transport
Process
Inventory
Motion
Defective goods

15. Over production – producing more than is immediately needed by the next process in the operation – greatest source of waste.
Waiting times – Machine and labour waiting time are considered waste and they are measure in terms of machine efficiency and labour efficiency.
Transport – Moving materials around the plant and together with the double and triple handling of WIP, does not add value. Layout changes which bring processes closer together, improvement in transport methods and workplace organization can reduce waste.

16. Process – the process itself can be a source of waste
Process – the process itself can be a source of waste. For example, some operations may only exist because of poor component design.
Inventory – all inventory should be a target for elimination. However, it is only by tackling the causes of inventory that it can be reduced.
Motion – an operator may look busy but sometimes no value is being added by the work. Simplification of work is a rich source of reduction in the waste of motion.

17. Defective goods – quality waste is often very significant in operation, even if actual measure of quality are limited. Total cost of quality are much greater than what meets the eye.

18. The involvement of everyone:
Lean approach to people management is called respect-for-humans system.
It encourages:
Team based problem solving
Job enrichment – less monotonous, more responsibility, rewarding
Job rotation – change department, stage, function, cell
Multi-tasking
Its intention:
High degree of personal responsibility leads to ownership of job

19. “to eliminate waste completely”
Continuous improvement:
Lean objectives are expressed in ideals such as
“to eliminate waste completely”
Can never be fully achieved
Require continuous improvement to move closer.

20. JIT techniques: Adopt basic working practices:
Discipline – comply to work standards that are in place for the safety of staff and the environment, and for the quality of the product.
Flexibility – give more responsibility to those capable even if it is beyond he’s grade.
Equality – discard unfair and divisive personnel policies e.g. uniforms and pay structure
Autonomy – delegate decision making responsibilities to personnel involve in direct activity

21. Cont…
Development of personnel – staff training
Quality of working life – e.g. involvement in decision making, security of employment, enjoyment and working area facilities
Creativity – some enjoy not just doing a job successfully by improving it for the next time.
Total people involvement – take part in selection of new recruit, spending improvement budget, quality issues, etc.

22. Design for ease of processing:
Cont…
Design for ease of processing:
Design determines 70% – 80% of production cost
Design improvement can reduce product cost and make more efficient production process.
Example: reduce number of components, use better or cheaper material.
Emphasize operations focus:
Concept of simplicity, repetition and experience breed competence.
Focus processes on manageable sets of products, technologies, volumes and markets
Structure operations objective so that they are consistent and coherent

23. Use small simple machines:
Cont…
Use small simple machines:
Use several small machines rather than one big one.
Can produce few different components at a given time instead of batch by batch production.
More robust, mobile, layout flexibility and reduce investment risk.
Layout for smooth flow:
Long process routes provide opportunity for delay, inventory build up, adds no value to the product and slow down cycle time
Workstations are close together, use U shaped line, use cell layout.

24. Adopt Total Productive Maintenance (TPM):
Cont…
Adopt Total Productive Maintenance (TPM):
Unreliable processes create waste, for example, waiting time, delays in downstream operations. In a JIT system:
operators taught to care for processes:
maintenance personnel’s role changes:
training operators
long-term planned maintenance
condition monitoring
emphasis:
operator involvement
care for equipment
ensuring total reliability
operate correctly
detect problems
lubricate, clean, adjust
collect data

25. Adopt JIT through the supply chain:
Cont…
Reduce set-up times:
Set-up time is the time taken to changeover the process from one activity to the next. During this time operation seizes. It is reduced by cutting out:
time taken to search for tools and equipment,
Pre-preparation of tasks which delay changeover and
Constant practice of set-up routines
Ensure visibility:
More transparent operation is easier for staff to share in its management and improvement.
Problems are easily detected and information becomes simple, fast and visual.
Adopt JIT through the supply chain:
Expand JIT culture to key suppliers

26. JIT planning and control
JIT planning and control is based on the principle of a ‘pull system’
What are ‘push’ planning and control & ‘pull’ planning and control?

27. Push philosophies of planning and control
PUSH CONTROL
FORECAST
CENTRAL OPS. PLANNING AND CONTROL SYSTEM OR
Instruction on what to make and where to send it
Work centre
Work centre
Work centre
Work centre
DEMAND
Signal ‘pushes’ work through the process
Activities are scheduled by means of a central system and completed in line with central instructions
No consideration for succeeding stages’ requirements
High inventory

28. Pull philosophies of planning and control
PULL CONTROL
Request
Request
Request
Request
Work centre
Work centre
Work centre
Work centre
DEMAND
Delivery
Delivery
Delivery
Delivery
Signal ‘pulls’ work only when required.
Only customer can trigger movement – sets the work pace.
Lesser chances of inventory build-up.
JIT favored.

29. Kanban control It is a system used of JIT planning and control.
Based on the ‘pull’ planning and control.
Kanban is the Japanese word for card or signal.
Card or signal used by customer stage to instruct supplier stage to send more materials.
Cont…

30. Kanban control Three types of Kanban: Cont…
The move or conveyor kanban
Signals a previous stage that material can be withdrawn from inventory.
The production kanban
Signals a production process to start producing a part to be place in inventory.
The vendor kanban
Signals an external supplier to send material to a stage.

31. Cont…
Kanban control
Receipt of kanban triggers movement, production or supply of one unit.
Two kanbans → two units
Kanban comes in different form – empty container, verbal instruction, color tokens, etc…
Two kanban procedure:
Single-card system: either move or vendor kanban
Dual-card system: use move and production kanban

32. Empty standard container Full standard container
Move kanban
Kanban holding box
Flow path for standard containers
Flow path for move kanban
Work centre A
Work centre B
Stage A
Stage B
Output stock

33. Each stage has a work center and an area for holding inventory.
Loop 1: Stage B requires more parts → withdraw a container from output stock of stage A → empty container is kanban and sent to stage A work center → signal for stage A to start production
Loop 2: Move kanban taken from holding box to output stock point → signal to move a full container from stage A to stage B.

34. Kanban rules:
Each container must have a kanban card indicating part number and description, user and maker location, and quantity.
The parts are always pulled by the user or customer.
No parts are started without a kanban.
All containers contain exactly their number of parts.
No defective parts may be sent to the user or customer.
The maker can only produce enough parts to make up what has been withdrawn.
The number of kanbans should be reduced.
The time period should be made shorter

35. The End