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Murat Kaya, Sabancı Üniversitesi 1 MS 401 Production and Service Systems Operations Spring 2009-2010 Just-in-Time (JIT) Manufacturing Slide Set #14.

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Presentation on theme: "Murat Kaya, Sabancı Üniversitesi 1 MS 401 Production and Service Systems Operations Spring 2009-2010 Just-in-Time (JIT) Manufacturing Slide Set #14."— Presentation transcript:

1 Murat Kaya, Sabancı Üniversitesi 1 MS 401 Production and Service Systems Operations Spring 2009-2010 Just-in-Time (JIT) Manufacturing Slide Set #14

2 Murat Kaya, Sabancı Üniversitesi 2 What is Just-In-Time (JIT) ? “The more a company has, … the less likely they will have what they need”Taiichi Ohno JIT is both a philosophy and a set of techniques An integrated system related to different aspects of operations including manufacturing, scheduling, quality, product design, supplier relations, human resources and innovation Related concepts –Toyota Production System (TPS) –Lean manufacturing Recommended book: “The Toyota Way” by Jeffrey Liker

3 Murat Kaya, Sabancı Üniversitesi 3 What is Just-In-Time (JIT) ? History: Japanese companies’ desire to catch-up with their US competitors after WW II, with limited resources Main concepts Production must flexibly adopt to Required items must be produced in required quantities in required time Waste should be identified and eliminated. Waste includes –

4 Murat Kaya, Sabancı Üniversitesi 4 Why Reduce Inventory? Quality issues Unreliable suppliers Capacity imbalance

5 Murat Kaya, Sabancı Üniversitesi JIT Methods Summary-1 Synchronizing product flow with demand –pull system (kanban) –synchronized production with suppliers – Line balancing to reduce waste (Muda) –cross-trained workers – Source: Cachon and Terwiesch 2006 5

6 Murat Kaya, Sabancı Üniversitesi JIT Methods Summary-2 Quality methods to reduce defects – –build in quality (tsukurikomi) at every step rather than relying on inspection steps –worker involvement/ improvement (kaizen) quality circles structured problem solving (SPC, fish-bone diagrams etc.) Human resource practices –lifetime employment –skill-development –empowerment Source: Cachon and Terwiesch 2006 6

7 Murat Kaya, Sabancı Üniversitesi 7 Product design Process design Human / organizational elements Manufacturing planning and control JIT Building Blocks

8 Murat Kaya, Sabancı Üniversitesi 8 Product Design Standard parts Modular design Quality Fewer bill of material (BOM) levels Manufacturability in production cells

9 Murat Kaya, Sabancı Üniversitesi 9 Small lot sizes / setup time reduction –SMED: Manufacturing cells Limited work in process inventory Quality improvement Production flexibility Production bandwidth –sufficient surge capacity Process Design

10 Murat Kaya, Sabancı Üniversitesi 10 Process Design: SMED Single Minute Exchange of Dies (SMED) – Smaller lot sizes –lower inventory – The methods –convert as much as possible for example: pre-heat dyes –eliminate the needs for adjustment for example, dies constructed to can fit only in the correct position –standardize the external setup routine

11 Murat Kaya, Sabancı Üniversitesi 11 Process Design: U-type Manufacturing Cells Inbound Stock Outbound Stock Concentrate on material velocity smooth and fast flow from one machine to the next the aim is to make detailed tracking unnecessary Operator can monitor the cell without too much walking

12 Murat Kaya, Sabancı Üniversitesi 12 Workers as assets Whole person –hiring “people”, not their “muscles” Cross-trained workers –wider job definitions Flexible labor Continuous learning and improvement Accounting and performance measurement Leadership and project management Human / Organizational Elements

13 Murat Kaya, Sabancı Üniversitesi 13 Level loading – Pull systems Visual systems –kanban Close supplier relationships –continuous delivery (supplier factories located nearby) –tiered supplier network Reduced transaction processing Manufacturing Planning and Control

14 Murat Kaya, Sabancı Üniversitesi 14 Toyota: Operations are adjusted on a monthly basis such that the same sequence of cars will be produced every day – A common part needs to be produced with a A part used only in Model-A needs to be produced with Determine the number of workers and machines to achieve the required cycle times in part production MPC: Mixed Model Production ModelRequired Daily Volume Required Cycle Time (minutes) A100 B200 C400 TOTAL700 Source: Just in time production controlled by Kanban”, HBS

15 Murat Kaya, Sabancı Üniversitesi 15 Supplier The Firm Supplier First Tier Supplier Second Tier Suppliers Third Tier Suppliers Tiered Supplier Network

16 Murat Kaya, Sabancı Üniversitesi 16 Product Design Process Design Human Factors MPC Eliminate disruptions Make the system flexible Reduce setup and lead times Minimize inventories A balanced and rapid flow Ultimate Goal Supporting Goals Summary: JIT Goals and Building Blocks Building Blocks Eliminate waste

17 Murat Kaya, Sabancı Üniversitesi 17 Push system: A workcenter pushes its part output to the downstream workcenter as they are completed, according to a production plan – Pull system: When a workcenter needs parts for production, it pulls them from its upstream workcenter – Push vs. Pull Production Systems

18 Murat Kaya, Sabancı Üniversitesi 18 Kanban is the Japanese word for card Once a “balanced” production system is established, kanbans are used to transmit information on –when to transfer parts to the downstream workcenter –when to produce a (small) lot of parts to replace the transferred parts Kanban does not have to be a card (can be any visual signal) A manual and visual production control system –not production planning Kanban Systems

19 Murat Kaya, Sabancı Üniversitesi 19 Two-card Kanban System Each container must have a card A container cannot be moved forward until authorized by the receipt of a move card A container of parts cannot be produced until authorized by a production card

20 Murat Kaya, Sabancı Üniversitesi 20 Two-card Kanban System 5) Detached move card sent to WC-1 with an empty container 2) Request of WC-3 is sent from stock, production card is detached WC-1 WC-2 3) Detached production card authorizes production at WC-2 4) WC-2 production uses raw materials from stock, move card is detached 1) Request of WC-3 arrives as a move card with an empty container 6) Request of WC-2 is sent from stock, production card is detached

21 Murat Kaya, Sabancı Üniversitesi 21 How Many Kanban Card Sets? The trade-off: –more kanbans mean –fewer kanbans mean Number of kanbans can be decreased over time to – The number of kanbans limit the “demand fluctuation” that one workcenter can place on its upstream workcenter –

22 Murat Kaya, Sabancı Üniversitesi Heijunka Box with Kanbans 22 Used to achieve Source: Time intervals (such as 30 minutes)

23 Murat Kaya, Sabancı Üniversitesi Shortcomings of MRP –costly to set up –difficult to train workers – realized lead time depends on the congestion in the system –to be on the safe side, MRP considers a large leadtime causing the orders to be released too early, leading to high inventory –the shop floor can be more flexible than MRP –MRP promises more precision than it can provide 23

24 Murat Kaya, Sabancı Üniversitesi 24 Shortcomings of JIT Requires –not applicable to job-shop or continuous production Practical issues –setup times might be difficult to reduce –suppliers may not be located close by –moving products in small batches may not be possible Vulnerable to risks due to low inventory –shutdowns, demand surges etc. Hybrid approach: MRP for planning, JIT for scheduling

25 Murat Kaya, Sabancı Üniversitesi 25 MPC and JIT “production control” rather than “production planning”

26 Murat Kaya, Sabancı Üniversitesi An Alternative: Optimized Production Technology (OPT) Neither MRP nor JIT would be effective in the presence of significant “bottlenecks” For such environments, Optimized Production Technology (OPT) approach is applicable – Popularized by the book “The Goal” by E. Goldratt The Theory of Constraints (TOC) philosophy 26

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