Just-In-Time/Lean Manufacturing (Jit/Lean) : After Completing This Chapter, You Should Be Able To

Chapter
T wen t y O n e
Just-in-Time/Lean
Manufacturing (JIT/Lean)
Learning Objectives
After completing this chapter, you should be able to:

■■ Define the concept Just-in-Time/Lean (JIT/Lean).
■■ Explain the rationale for JIT/Lean.
■■ Summarize the development of JIT/Lean from its beginnings.
■■ Explain the relationship of JIT/Lean to total quality and world-class manufacturing.
■■ List the benefits of JIT/Lean.
■■ Explain the requirements of JIT/Lean.
■■ Describe how JIT/Lean relates to automation.
The manufacturing system we will be discussing in this chapter was initially developed by Taiichi Ohno in the 1950s as the succes-
sor to Henry Ford’s mass production system. Ohno named it the Toyota Production System (TPS). Since it involved making products
only when needed from materials that were made available by suppliers only as required, just-in-time (JIT) became its generic name.
For 30 odd years, Toyota Production System or Just-In-Time were the names used for Ohno’s remarkably efficient manufacturing
system. Then in 1990, three senior managers of MIT’s International Motor Vehicle Program (IMVP), Jim Womack, Dan Jones, and
Dan Roos, published a book that has had a great influence on the way industries around the world make things. That book, entitled
The Machine That Changed the World: The Story of Lean Production, was the result of a five-year, in-depth scholarly study of the
Toyota Production System. It detailed in clear terms the superiority of the TPS to the mass production system used by the rest of the
world, and virtually unchanged since World War I, and concluded that mass production simply could not compete with the Japanese
system. One of IMVP’s researchers, John Krafcik, is credited with coining the term “Lean production.”1 The system uses less of
everything involved in production: manpower, investment, engineering, inventory, facilities, and so on, thus the term “Lean” fits well.
Over the two-plus decades since the book was published, Lean has become the tag for the TPS and JIT, and has reached out across
all kinds of industries and organizations to represent a wide variety of adaptations of TPS. In Chapter 19, we devoted several pages
to Lean and its role in continual improvement, and even its marriage with Six Sigma and the Theory of Constraints. So this book uses
the name just-in-time/Lean manufacturing, or JIT/Lean, for this chapter.
As is so often the case, we find that the same product is being repackaged under other names. This is sometimes done by
those searching for clarity of description. Sometimes it is done by those wanting to be seen as having something new and differ-
ent, when in fact it is not. You may come across the term focused factory in reference to a JIT production cell. If you encounter a
production system called demand flow, or demand flow technology, it is JIT with a new label. These are not bad names, and in fact,
some may project a clearer picture of the production system than JIT/Lean. But in this book, and in most others, the generic name
for pull-system manufacturing, just-in-time/Lean, is preferred.
JIT/Lean Defined not exactly what was originally intended, just-in-time/Lean

manufacturing, by any of its names, has become a manage-
When people who should know are asked to define JIT, the ment philosophy that seeks to eliminate all forms of waste
typical response is that JIT “is getting your materials deliv- in manufacturing processes and their support activities. JIT/
ered just when you need them.” Probing a little deeper may Lean permits the production of only what is needed, only
elicit a response that suggests JIT manufacturers let their sup- when it is needed, and only in the quantity needed. This must
pliers keep their materials inventory until the manufactur- apply not only to the just-in-time/Lean manufacturer, but
ers need it. The first statement demonstrates an inadequate also to its suppliers if the system is to eliminate all possible
understanding of JIT/Lean, and the second is simply wrong. waste. Those companies that have required their suppliers to
Even so, many companies under the auspices of JIT/Lean do their warehousing clearly have not gotten the point. The
have indeed pushed their warehousing back to the suppliers supplier should not produce the material until the JIT/Lean
for a net gain of zero. If these are not the right answers to manufacturer needs it. In that mode, there is no warehousing
the question “What is JIT/Lean?” then what is it? Although
366
M21_GOET1853_08_SE_C21.indd 366 09/04/15 6:41 AM

Chapter Twenty One Just-in-Time/Lean Manufacturing (JIT/Lean) 367
and, therefore, no wasted resources for buildings, mainte- for the final assembly process, which, in turn, converts them
nance, people to care for the material, spoilage, obsolescence, into completed motion sensors. Each of the five work areas
or other related problems. produces at the rate necessary to meet a quota, or to con-
JIT/Lean is not so much related to supplier activities, sume all the input materials. The completed sensors are sent
although they are important, as to events on the manufac- to the warehouse for storage until someone buys them.
turing floor. For example, assume that a company manu- Figure 21.1a is the simplest possible depiction of this par-
factures motion sensors. There are five discrete processes ticular combination of the steps required to manufacture the
involved, each carried out by one worker, as illustrated in motion sensors. What happens in the traditional manufactur-
Figure 21.1a. The traditional production process places a big ing setting takes on a much more complicated and convoluted
supply of input materials in the warehouse, doling them out series of events. This is depicted in Figure 21.1b. In Figure
to the production line at the rate of so many pieces per unit 21.1b, the materials warehouse sends kits of appropriate ma-
time. The electronic assembly and the mechanical assembly terials and parts to the first three assembly/fabrication stations
processes convert their respective input materials into input (1, 2, and 3) according to a predetermined schedule. Working
materials for the electronic module assembly process. The to their own assigned schedules, each of the three stations con-
electronic module assembly and the frame fabrication pro- verts the kits into semifinished assemblies or parts and pushes
cesses then convert their input materials into input materials that output to the succeeding stations, 4 and 5. At this point, we
Input Materials
1
Electronic
Assembly
4
Electronic
Module Finished
2
Assembly Product
Mechanical
Assembly
5
Final
Assembly
3
Frame
Fabrication
Figure 21.1a The Traditional Production Process (Simplest Depiction).
Kits Released to If Local Staging Each of the Numbered

Manufacturing Floor is Full, Send to Production Processes
per a Schedule Wip Staging Works to a Schedule
Local Local
Electronic 1 Staging 4 Staging
Assembly Electronic (Electronic) 5
Electronic (Modules)
Kits Assembly Final
Local Module
Local Assembly
Staging Assembly
Mechanical 2 Staging
Materials Mechanical (Mechanical) (Frames)
Assembly
Warehouse Assembly
Kits
(Raw Matl’s,
Parts, etc.) Finished
Frame 3 Product
Materials Frame
Kits Fabrication
Frame Mech. Elec. Modules Finished Goods

Warehouse
Excess Wip Staging (Awaiting Customers)
Figure 21.1b Actual Practices in the Traditional Production Process.
M21_GOET1853_08_SE_C21.indd 367 09/04/15 6:41 AM

368 Chapter Twenty One Just-in-Time/Lean Manufacturing (JIT/Lean)
may run into a problem. Ideally the output of stations 1, 2, and is made. Therefore, there is no need for a staging area or the
3 would go directly to stations 4 or 5, but for a variety of rea- people required to move materials into it and out of it, account
sons, it is common that the local staging areas for stations 4 or for it, and so on. No money is tied up in inventory of raw ma-
5 may, at any given time, be unable to accept more input. When terials, WIP, or finished goods. If there are no stored materials,
that happens, the excess partially built goods, also known as there is no spoilage or obsolescence. The elimination of these
work-in-process (WIP), must be sent to a remote staging wastes alone makes JIT/Lean the most powerful manufactur-
area, as shown in Figure 21.1b. The same thing can happen ing concept to come along since Henry Ford’s moving assem-
between stations 4 and 5. A comparison of Figure 21.1a with bly line of 1913. JIT/Lean contributes to the elimination of
Figure 21.1b reveals how complicated a simple manufacturing many more forms of waste, as discussed later in this chapter.
job can become. What is not obvious from Figure 21.1b is the So, the definition of JIT/Lean as used in this book is this:
expense involved in this kind of waste in traditional manufac-
Just-in-time/Lean is producing only what is needed, when
turing. All of that WIP that cannot go straight through the sys-
it is needed, and in the quantity that is needed.
tem, as it appears to do in Figure 21.1a, must be transported
to a suitable area for storing it; someone has to keep track of
its completion status, and where it is; withdrawal from the
WIP staging area must be managed; salaries must be paid for
Rationale for JIT/Lean
the extra people involved; overhead costs for the staging area Mass production manufacturers set their production sched-
must be absorbed; and carrying costs for the WIP itself has to ules based on a forecast of future needs, which, in turn, is
be paid. Even finished goods may go to a warehouse to await based on historical data and trend analysis (see Figure 21.2).
customer orders, adding even more costs. Not one of those The great weakness of this system is that no one can predict
costs add value to the product, therefore, it is pure waste. All the future with sufficient certainty, even with a complete and
these functions have costs that add up to making the company perfect understanding of the past and a good sense of cur-
uncompetitive and are targets for elimination in a JIT/Lean or- rent trends in the marketplace. One does not have to search
ganization. A similar case can be made for competitive dam- long to find examples of failed attempts to correctly project
age caused by time lost in the process, which can easily add an the marketability of products. The Edsel is one of many au-
order of magnitude to the manufacturing cycle time. tomobiles that were released with great fanfare to a disin-
Just-in-time/Lean approaches the manufacturing process terested public. A new formula for Coca-Cola introduced in
from the opposite end of the line. Rather than pushing materi- the late 1980s is another example of market predictions gone
als into the processes and storing them whenever they cannot awry. IBM has case after case involving personal comput-
be accommodated, JIT/Lean controls the line from the output ers, such as the unlamented IBM PC Jr. (which failed in the
end. Indeed, it can be said that the customer controls the line marketplace in spite of the best market research IBM could
because nothing is built until there is an order for it. After an muster). These failures demonstrate the difficulty of trying
order is received for a product, the final assembly process is to determine beforehand what will sell and in what quantity.
turned on to put together the required number of units. The Even products that are successful in the market have lim-
assembler pulls the required input materials from the elec- its as to the quantities that buyers will absorb. When produc-
tronic module and frame fabrication processes—only enough tion is based on predictions of the future, risk of loss from
to make the required number. Similarly, the electronic module overproduction is far greater than when production is based
assembly and frame fabrication processes pull input materials on actual demand. The previous section defined JIT/Lean as
from their preceding processes, and so on back up the line. At producing what is needed, only when it is needed, and only
the top of the line, input materials are pulled from suppliers in in the quantity that is needed (see Figure 21.3). The result
the exact quantity needed, and no more. of JIT/Lean is that no goods are produced without demand.
Following the JIT/Lean procedure, no step in the produc- This, in turn, means no goods are produced that cannot be
tion process ever overproduces or produces before a demand sold at a price that supports the viability of the company.
ND S
E MA AST
D EC
R
FO
INVENTORY
YARD
Figure 21.2 Factory Producing to Forecast Demand (Mass Production).
M21_GOET1853_08_SE_C21.indd 368 09/04/15 6:41 AM

MER
CUSTO S R# RS
OR R
D E OR
DE
OME
ST
CU
#
ER
ORD
#
ORDER
Figure 21.3 Factory Producing to Orders (JIT/Lean).
So far, we have viewed JIT/Lean from the point of view of 1. Overproducing

the manufacturer and the ultimate purchaser of the product— 2. Waiting (time)
the producer and the customer. But if we look at the complete
3. Transporting
production process, we will find that it contains many produc-
ers and customers—internal producers and customers (see 4. Processing itself
Figure 21.4). Each preceding process in the overall system is 5. Having unnecessary stock on hand
a producer, or supplier, and each succeeding process is a cus- 6. Using unnecessary motion
tomer (see Chapter 7). JIT/Lean fits here as well as or better
7. Producing defective goods
than with the manufacturer-and-purchaser model. No process
in the system produces its output product until it is signaled to The elimination of these wastes is at the heart of the
do so by the succeeding process. This can eliminate waste on rationale for just-in-time/Lean: eliminate these wastes,
a grand scale. It is the elimination of waste that justifies JIT/ and you will produce better products at lower cost. If the
Lean in any kind of manufacturing operation. Eliminating competition gets there first, your rationale for JIT/Lean is
waste is translated into improving quality and lowering costs. survival.
Improving quality and lowering costs translate into becom-
ing more competitive. Although improving competitiveness
does not assure survival (the competition may still be ahead of Development of JIT/Lean
you), being noncompetitive surely guarantees disaster. We have identified Ohno as the creator of the just-in-time/
Taiichi Ohno, the creator of the just-in-time/Lean sys- Lean system, and it is true that he was responsible for devel-
tem, saw that the mass production system produced waste at oping the system as it is now known. However, other names
every step. He identified seven wastes:2 should be remembered, at least to the extent to which they
INPUT
MATERIAL PROCESS PROCESS PROCESS
FROM 1 2 3
SUPPLIER
• Supplier’s • Process 1‘s • Process 2‘s
customer customer customer
• Purchasing • Process 3’s • Process 4’s
Department’s supplier supplier
• Process 3‘s
PROCESS
customer
customer
• Process 2’s
4
• Process 5’s
supplier
supplier
FINISHED
PRODUCT PROCESS PROCESS PROCESS
TO 7 6 5
CUSTOMER
• Process 6’s • Process 5’s • Process 4’s
customer customer customer
• Shipping Department’s • Process 7’s • Process 6’s
supplier supplier supplier
Figure 21.4 Internal Supplier–Customer Relationships.
M21_GOET1853_08_SE_C21.indd 369 09/04/15 6:41 AM

contributed by inspiration. The first is Henry Ford, creator waiting; transporting work-in-process back and forth across
of mass production. Because of Ford’s great appreciation of the plant; retaining inefficient processes; maintaining costly
the expense of waste, Ohno said that if Ford were alive today, inventories of stock on hand; requiring non-value-added
he would have developed a system much like Toyota’s. In his motion because lines were set up to accommodate product,
1926 book Today and Tomorrow, Henry Ford talked about not workers; and producing defective goods because the line
the waste of inventory in raw materials, work-in-process, must continue to move. The italicized words represent the
and finished goods in the pipeline to market—and about the seven wastes.
efforts taken to reduce the investment in this waste. Between Ohno believed that a production system based on just-
1921 and 1926, Ford output doubled, but investment in in- in-time/Lean could eliminate the wastes. To appreciate fully
ventory of raw materials, semifinished goods, and finished what is involved here, one must understand that the mass
goods actually declined. Based on 1921 performance, Ford production system as defined by Henry Ford was not ir-
could have had $170 million tied up in this inventory but rational. Ford’s objective was to produce huge quantities of
in fact had (in 1926) less than $50 million. Ford also recog- the same product using an assembly line technology that
nized the waste arising from transportation, waiting (time), required little expertise of its workers. The result was a reli-
and inefficiency on the factory floor. He believed in plan- able, cheap car that millions of buyers could afford. In that,
ning ahead to eliminate the waste before it happened. This is he and others who used his mass production technology
very contemporary thinking, and Ohno may be correct that were eminently successful. But mass production is inflex-
Henry Ford, had he been living in the past 40 years, might ible and wasteful—inflexible because it is driven by the great
well have developed a Toyota-like system. When Ohno wrote stamping presses and other machines that do not easily ac-
his book on the Toyota Production System, it was titled Just- commodate a variety of products, and wasteful because the
in-Time for Today and Tomorrow. It is not known whether underlying philosophy of mass production is that the line
the book’s title was a tribute to Henry Ford’s book, but it is at must crank out products that spring from market forecasts
least an interesting coincidence. in a never-ending high-volume stream. To support that
Ford was a great influence on the Toyoda family— high-volume stream, there must be stockpiles of the materi-
Sakichi, Kiichiro, and Eiji. Sakichi Toyoda, a designer of als that go into the product because the lack of a single part
looms and founder of Toyota, is credited with the concept of can shut down the mass production line. Machines must
autonomation, or automation with a human touch. His auto- be capable of high output and are so costly they cannot sit
matic loom could determine whether a thread was broken or idle without creating trauma in the accounting department.
missing, shutting itself down instead of making a defective Therefore, even when fenders are not needed, the machines
product.3 Autonomation is one of the two pillars of the TPS, must continue to stamp them out. The overproduction will
the other being just-in-time/Lean. Kiichiro Toyoda, Toyota’s be warehoused until it is needed—perhaps when the press
founding chair, planted the seeds of the TPS prior to World breaks down. So it is with all the parts and subassemblies
War II with his planning for the introduction of the assembly that make up the complete product. They are stored in large
line at Toyota’s Kariya plant. He wrote a booklet about how quantities, just in case something goes wrong in their pro-
production was to work, and it contains the words just-in- duction or transportation cycle, when they might be needed
time. His original meaning in English was “just-on-time,” to keep the final assembly line moving—fenders for a rainy
intending that things be done exactly on schedule, with no day, so to speak.
surplus produced. World War II halted further work on the This is the norm with mass production. The problem
system, and after the war, it was Taiichi Ohno who revived with this is that the building space in which these parts and
and developed it into the present-day4 Toyota Production materials are warehoused is expensive. It requires a small
System, which we call JIT/Lean. army of people to care for the stored materials and parts,
Eiji Toyoda, Toyota’s president and chairman from 1967 and these people add not a whit to the ultimate value of the
to 1994 and Taiichi Ohno’s boss for 35 years, is credited with product. Spoilage occurs by loss, damage, or obsolescence of
the JIT/Lean philosophy: “In broad industries, such as auto- stored parts—all waste: part waste of inventory, part waste of
mobile manufacturing, it is best to have the various parts ar- overproduction.
rive alongside the assembly line just-in-time.”5 Eiji Toyoda’s Mass production advocates emphasize that the lines need
greatest contribution may have been his support for Ohno’s to keep moving and that the only way to do this is to have lots
trial-and-error approach, shielding him from the inevitable of parts available for any contingency that might arise. This
controversy of his endeavors. Ohno claims that Eiji never is the fallacy of just-in-time/Lean according to mass produc-
told him to back off or slow down. He absorbed the heat and tion advocates. JIT/Lean, with no buffer stock of parts, is too
let Ohno press on unimpeded.6 precarious. One missing part or a single failure of a machine
Taiichi Ohno’s motivation, like that of the Toyodas, was (because there are no stores of parts) causes the JIT/Lean line
to eliminate all forms of waste from the production process. to stop. It was this very idea that represented the power of JIT/
He was well schooled in the Ford mass production system Lean to Ohno. It meant that there could be no work-arounds
and observed that the system itself created waste in huge for problems that did develop, only solutions to the problems.
proportions. If one was determined to violate the seven It focused everyone concerned with the production process on
wastes, a mass production line would do it. Mass produc- anticipating problems before they happened and on develop-
tion is prone to overproducing; having people or materials ing and implementing solutions so that they would not cause
M21_GOET1853_08_SE_C21.indd 370 09/04/15 6:41 AM

mischief later on.7 The fact is that as long as the factory has processes’ output? These situations present big problems in
the security buffer of a warehouse full of parts that might be terms of cost and waste, and they are common.
needed, problems that interrupt the flow of parts to the line Just-in-time/Lean, on the other hand, is a pull system (see
do not get solved because they are hidden by the buffer stock. Figure 21.6; the term kanban in the figure will be clarified
When that buffer is eliminated, the same problems become soon). The production schedule does not originate in a market
immediately visible, they take on a new urgency, and solutions forecast, although a great deal of market research is done to de-
emerge—solutions that fix the problem not only for this time termine what customers want. The production demand comes
but for the future as well. Ohno was absolutely correct. JIT/ from the customer. Moreover, the demand is made on the final
Lean’s perceived weakness is one of its great strengths. assembly process by pulling finished products out of the factory.
Mass production is a push system (see Figure 21.5). The The operators of that process, in turn, place their pull demands
marketing forecast tells the factory what to produce and on the preceding process, and that cycle is repeated until finally
in what quantity; raw materials and parts are purchased, the pull demand reaches back to the material and parts suppli-
stored, forced into the front end of the production process, ers. Each process and each supplier is allowed to furnish only
and subsequently pushed through each succeeding step of the quantity of its output needed by the succeeding process.
the process, until finally the completed product arrives at the Figures 21.5 and 21.6 also show a difference in the rela-
shipping dock. It is hoped that by then there are orders for tionship between the customer and the factory. In the mass
these goods, or they will have to be either stored or pushed production system, no real relationship exists at all. The
(forced) into the dealers’ hands, a widespread practice in the market forecasters take the place of the customers and place
automobile business. The whole procedure, from imperfect demands on the factory months in advance of production. In
forecast of marketability to the warehouse or the dealer, is the JIT/Lean system, however, the customer’s demand is felt
one of pushing. throughout the system, all the way to the factory’s suppliers
What if the market will take only half of the predicted and even beyond that. The JIT/Lean system is simpler, elimi-
amount or wants none? What if the final assembly pro- nating entire functions such as material control, production
cess can accommodate only two-thirds of the preceding control, and warehousing and stocking.
MARKET MATERIAL
FORECAST ORDERS SUPPLIERS
CONTROL
Materials/Parts
PRODUCTION WARE-
CONTROL HOUSING
Excess
WIP
Excess
Finished
PRODUCTION FACTORY Goods
SCHEDULE PROCESSES
PUSH IN THIS DIRECTION
TOWARD CUSTOMERS
Controlling process
output; handling
WIP; expediting
factory process,
materials, etc. Finished
Pushing work Product
through factory
WAREHOUSING
DISTRIBUTION
FOR EXCESS
SYSTEM
PRODUCT
Finished
Product
CUSTOMER
?
Figure 21.5 Mass Production Push System.
M21_GOET1853_08_SE_C21.indd 371 09/04/15 6:41 AM

SUPPLIERS
KANBAN Materials
Pull
FACTORY
PROCESSES
DEMAND FROM CUSTOMERS
PULLS PRODUCTION
KANBAN
Pull
Demand Finished KANBAN
Pull Product Orders
(order)
DISTRIBUTION
SYSTEM
Note: The customer’s
order* is the
trigger; the result Demand Finished
is felt all Pull Product
the way to the (order)
materials
suppliers
CUSTOMER*
*The customer in this sense may be the ultimate user of the product, or an intermediary
such as a distributor, a store, or a dealer.
Figure 21.6 Just-In-Time/Lean Demand Pull System.
The simplicity of JIT/Lean production is most evident on In a mass production environment, question 1 matters
the factory floor. In mass production plants, or even conven- most. The tendency is to let the machine run as long as there
tional job shops (low-volume, high-variety shops), it is almost is product, good or bad, coming out of it. Defective parts will
never possible to tell from the factory floor how things are going cause problems farther down the line, but the consequences
relative to schedules. Parts of any product may be in any num- of shutting the machine down to fix it are seen as an even
ber of disparate locations in a plant at any given time—in the bigger problem. The JIT/Lean factory is more concerned
machine shop, in the welding shop, on the line, or in storage. about the second question because allowing a machine to
Computers keep track of it all, but even then, it is difficult to produce defective parts permits the production of waste, and
track a given product through the plant or to track its status at that, above all, is forbidden.
a given point in time. On the other hand, JIT/Lean, being a very Common sense dictates that machinery should a lways
visual process, makes tracking easy—even without computers. be maintained properly, but that can be very difficult in
Parts have no place to hide in a JIT/Lean factory. The only work- a mass production plant. Unfortunately, in many North
in-process is that for which the process has a kanban (see the American factories, machines tend to be ignored until
discussion of kanban in the section titled “Process Problems”). they break down, in keeping with the grammatically in-
The simplicity of today’s JIT/Lean belies the difficulty correct but telling expression “If it ain’t broke, don’t fix
Ohno encountered in developing the system. Because pro- it.” Toyota eliminated the machine problem through a
duction must stop for a missing part, a process problem, or systematic preventive maintenance process that keeps all
a broken machine, methods had to be developed to prevent machinery in top shape, modifying it for better reliability
these occurrences. These preventive strategies are explained or performance, and even predicting when parts should
in the following sections. be replaced or adjustments made to maintain the highest-
quality output. This has come to be known as total produc-
Machine Problems tive maintenance or total preventive maintenance (TPM).
It has found widespread acceptance in forward-looking
There are two basic concerns about machines:
companies. Total preventive maintenance, by keeping the
1. Is it running and turning out product? machines available for use when they are needed, elimi-
2. If it is running, is the quality of its output product nates a great many line stoppages. We will discuss TPM in
acceptable? more detail later in the chapter.
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Process Problems Traditionally, it has been a major problem to change

models on a production line because breakdown and setup
Process problems can be eliminated when people thoroughly of the machines that have to be changed take a lot of time.
understand the processes, optimize them, and use statistical Hours and days and even longer for new setups are not un-
methods (i.e., SPC) to keep them under control. In addition, common. Ohno saw that the inherent inflexibility of the
the processes are continually improved, most often through mass production line was in the setup time for the machines.
the efforts of the same people who work with them every Too much setup time meant that a manufacturer had to have
day. Time is allocated for these kinds of efforts in all JIT/ a second line—or even a new factory—for the other model,
Lean factories. or the customers’ demand for the second model was simply
The most difficult conceptual problem with JIT/Lean is ignored until the run on the current model was finished. By
the precise control of production and the flow of material attacking the problem head-on, Toyota was able to reduce
or parts through the complete production process. For that, setup times to the point where they were no longer signifi-
Ohno developed the kanban to signal the pulls through the cant. Other companies, using the Toyota approach, found
system. Mass production demonstrated that one should not that they could quickly reduce setup times by 90% and even
start the control at the beginning of the process. Too many more with some effort.
things can go wrong at the bow wave of the flow. Ohno de- Omark Industries was one of the first American compa-
cided that the control had to start at the output end of the nies to study the Toyota Production System. Using Toyota’s
factory. From this concept, he introduced kanban, which is techniques, it reduced the setup time for a large press from
a Japanese word meaning “card.” Ohno used kanban cards to eight hours to one minute and four seconds.8 After setup
trigger activity and the flow of materials or parts from one time became irrelevant, it was possible to manufacture in
process to another. When a succeeding process has used the small lots—even lots of one—thereby permitting the inter-
output of the preceding process, it issues a kanban to the pre- mixing of models on the same line. This meant that cus-
ceding process to produce another. tomer responsiveness was possible without huge inventories
Although Ohno describes the kanbans as slips of paper of prebuilt stock in all models. It also meant that one produc-
in a vinyl pouch—close enough for “card”—kanbans have tion line (or factory) could do the work of several. This abil-
evolved to a number of forms. A square painted or taped on ity is crucial if the factory is to respond to customer demand
a workstation may be a very effective kanban. For example, a in a pull system.
process produces a subassembly and places it on the marked The development of just-in-time/Lean produc-
area of the succeeding process workstation. When the suc- tion required more than the kanban, a point lost on many
ceeding process uses the subassembly, the marked area—the Westerners. JIT/Lean came about from the understanding of
kanban square—becomes empty and signals the preceding the seven wastes and the need to eliminate them. The key
process to make another subassembly and fill the square. The elimination of nearly all material and parts inventories dic-
same is done with totable bins. When the parts from a bin tated the requirement for reliability and predictability of the
have been used, the empty bin is sent back to the preceding plant’s machinery and processes. This led to total productive
process as a signal for more production. Both of these kan- maintenance and made necessary the use of statistical pro-
ban devices work when the part or subassembly in question cess control and continual improvement.
is the only possible output of the preceding process. Should With the customer as the driver of production, the con-
there be a variety of part or subassembly models, however, trol technique for production changed from push to pull,
the kanban square alone will not provide sufficient informa- and kanban was introduced as the controlling system. The
tion, and the bin with a descriptive card or the kanban card, requirement for small lot sizes, both for elimination of waste
or its electronic equivalent, must be used. (More information and for responsiveness and investment economy, led to the
about kanban is provided later in this chapter.) effort to reduce setup time. With all of these factors in place,
JIT/Lean was born. Without doubt, JIT/Lean, by any of its
Lot Size names, is the manufacturing system for today. It is adaptable
A final issue to be overcome by JIT/Lean production con- to operations both large and small, high-volume/low-variety,
cerns lot size. Mass production is keyed to the largest pos- and low-volume/high-variety as well as anything in between.
sible lot sizes: set up the machines and parts streams to make In JIT/Lean, costs, lead time, and cycle time are reduced,
as many as possible of the same item, like Henry Ford’s iden- quality is improved constantly, and both the customers and
tical black Model T’s, before changing to another model or the producers and their employees benefit.
product. So-called economic lot size is still being taught in
many universities. Just-in-time/Lean seeks to build in the Relationship of JIT/Lean to
smallest possible lots. The modern consumer demands va- Total Quality and World-
riety. No auto company could survive today with a single
Class Manufacturing
car model, with each unit the same in all respects includ-
ing equipment and color. JIT/Lean accommodates variety by The traditional production line pushes product from the
being flexible. That is, the factory is set up so that changes front of the line to the final output, and even to the custom-
can be rapidly implemented and at little cost. ers, whereas kanban is the controlling agent in a pull system.
M21_GOET1853_08_SE_C21.indd 373 09/04/15 6:41 AM

The two are incompatible. Similarly, implementing JIT/Lean happened to the cost of goods sold in this example? Look at
in the absence of a comprehensive total quality system that the numbers before and after JIT/Lean:9
includes the entire organization can be a problem. The tra-
ditional organization is incompatible with JIT/Lean, just as
Before JIT/Lean After JIT/Lean
the traditional push production system is incompatible with
kanban. In a typical manufacturing company, separate de- Indirect Expense $200,000 $188,000
partments exist for engineering, manufacturing, purchasing, Direct Labor 100,000 67,000
accounting, and so on, each with distinct boundaries and
Materials 500,000 500,000
agendas. JIT/Lean is no respecter of boundaries. It requires
all departments to respond to its needs. If the manufactur- General and Administrative 50,000 50,000
Expense
ing department has embraced JIT/Lean, but the organiza-
tion as a whole has not at least started a total quality effort, Cost of Goods Sold $850,000 $805,000
manufacturing personnel will soon encounter obstacles.
More often than not there will be outright resistance because In this example, it cost the company $45,000 less to pro-
JIT/Lean’s requirements represent change and departments duce the same goods after JIT/Lean implementation than it
without a commitment to change will fight it at every step. did before. Assuming the goods were sold for the same price,
As an example, in the defense industry it is common that $45,000 becomes pure profit. In the next competition
to defray overhead expenses (buildings, utilities, indirect for contracts, the lower cost becomes a competitive advan-
employees’ salaries, all fringe benefits, and others) against tage (price to the customer can be lowered).
direct labor dollars as a means of allocating the overhead The solution to the overhead rate problem is to
burden across all contract programs. The more direct labor change from the obsolete accounting system and adopt
on a program, the larger the share of the overhead cost that an activity-based accounting system or some other more
accrues to that program. Direct labor is defined as the manu- sensible method. In a total quality company, the account-
facturing, engineering, purchasing, and other labor charged ing department is part of the team and would respond to
to specific contract programs. The company may also have the needs of a production system (JIT/Lean) that is actu-
more than one pool for overhead defrayment, such as a ally improving company performance. But if the company
manufacturing pool and an engineering pool. Virtually all of as a whole is not involved in total quality, the accounting
these companies, and the U.S. Department of Defense, pay department, with its own walls and agendas, can be a for-
a great deal of attention to what they call overhead rate. In midable obstacle to progress. The same is true of other
a typical company in the defense industry, overhead rate is departments on whom manufacturing depends. This ex-
calculated by dividing overhead (indirect) expenses by direct ample could just as easily have been one involving the
labor cost. engineering department and a design philosophy called
Suppose that for an accounting period there were indi- concurrent engineering. Concurrent engineering requires
rect expenses of $200,000. At the same time, the wages paid that from the beginning of a new product’s design, manu-
for direct labor amounted to $100,000. The overhead rate for facturing and other departments (and even suppliers) be
the period is $200,000 , $100,000 = 200%. Assume that we directly involved with engineering to make sure, among
had been operating with that 200% rate for some time, and other things, that the product can be manufactured effi-
suddenly the manufacturing department discovered JIT/ ciently when it finally goes into production. Traditional
Lean. After the period of time necessary for the implementa- engineering departments do not like to have this kind
tion to start showing results, manufacturing finds that it can of help from outsiders and will resist—but not in a total
eliminate direct labor positions for production control and quality setting, where the departments all work for the
material control and also use fewer assemblers on the pro- common goal.
duction floor to get the same number of units out the door For JIT/Lean to bring about the benefits inherent in its
each period. A typical early reduction in the direct labor philosophy, it must be part of a total quality system. To bring
content of the work is 30 to 35%. The next period’s overhead JIT/Lean into a company not otherwise engaged in total
expense is almost the same, decreasing slightly for removal quality can be worthwhile (and may even enlighten the lead-
of fringe benefits for the employees no longer needed, say, to ership), but implementation will be much more difficult, and
$188,000. The direct labor is down by one-third to $67,000. its results severely restricted.
This yields an overhead rate of $188,000 , $67,000 = 281%.
That kind of an increase in overhead rate, if sustained, can
cause the head of manufacturing serious problems. The ac-
counting department uses this overhead rate as proof that
JIT/Lean as a Total Quality Concept
JIT/Lean doesn’t work. All too often the accounting depart-
JIT/Lean was conceived as a total management system, not just
ment blocks further progress in JIT/Lean. One might ask, for the manufacturing floor. Isolating JIT/Lean from the rest of
“But isn’t that valid if the overhead rate went out of control?” the management system will not allow it to fully develop and
The answer is nobody should care about the overhead rate. mature. JIT/Lean needs to be a part of a total quality manage-
It is simply the ratio of two numbers and carries no mean- ment system.
ing without a thorough understanding of the two. What
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Benefits of JIT/Lean Now go back to the suggestion made earlier that the three
positives associated with inventory might not be so positive
A discussion of the benefits of JIT/Lean must include four after all. The costs discussed earlier are all tangible costs. There
very important topics: inventory and work-in-process, cycle are also intangible costs that, while difficult to measure precisely,
time, continual improvement, and elimination of waste. The are nevertheless significant. Foremost among the intangibles is
discussion could be expanded to include such topics as re- the fact that as long as the manufacturer holds inventory of ma-
duced time-to-market, improved employee work life, flex- terials and WIP at high levels, it is not solving the problems and
ibility, and employee ownership. All of these are definite making the continual improvements that can bring efficiency.
benefits of JIT/Lean, but this discussion will be confined to The very presence of these inventories masks the problems,
the critical four mentioned. These are the usual targets of a so they go unnoticed and unresolved—being repeated over
JIT/Lean implementation. and over, consuming unnecessary labor, and preventing prod-
uct quality improvement. Unmasking the production system’s
Inventory and Work-in-Process problems through the elimination of inventories is a major
strength of JIT/Lean. Many North American and European
Just-in-time/Lean attempts to drive inventory to zero. But companies still tend to see the elimination of inventories as a
remember that this is a philosophical objective—an aiming generator of problems. In reality, the problems are already there,
point, if you will. In reality, zero inventory makes no sense. and they are costing a great deal in terms of money and qual-
Without some inventory, you have nothing from which to ity, but they are just not apparent with big inventories. Through
produce your goods. The real objective is to minimize the inventories maintained, tons of money is spent, but no value is
inventory to the maximum possible extent without shutting added, and needed improvements are not made in the produc-
down production. It is also important to recognize that there tion processes. The inevitable net result is loss of competitive
are at least three kinds of inventory. First, there is the inven- position and market share as enlightened competitors use JIT/
tory of raw materials and parts needed to make the product. Lean and total quality to improve their positions.
Traditionally, these have filled warehouses, with enough on If a plant could get its production processes under con-
hand for several weeks of production, or longer. Second, trol to the point that they could be relied on to perform as
there is the work-in-process inventory of semifinished goods. intended, it would be logical to reduce WIP and material and
WIP includes all materials and parts that have been put into part inventories. However, until the processes are well un-
the production system, including the various stages from the derstood and in control, reducing inventories substantially
first process to the last within the factory. WIP may be at a will certainly result in production stoppages. One philoso-
workstation undergoing one of the value-adding produc- phy of reducing WIP and lot sizes is to do so in steps. By
tion processes, or it may be in storage between processes. In incrementally lowering WIP and lot sizes, the problems be-
a mass production plant, the stored WIP can be substantial. come apparent in a gradual, manageable stream rather than
Job shops—low-volume, high-variety shops not involved in in a torrent, and they can be dealt with. Once through that
mass production—are also notorious for their WIP inven- process, the next logical step is to work with suppliers to de-
tory. Third, there is the finished goods inventory. These fin- liver materials and parts in smaller, more frequent lots, until
ished goods are ready for customers, but the customers are finally there is no need for warehousing at all. This clearly
not ready for them. Therefore, they are typically stored in requires that the production processes be capable and reli-
warehouses, although some (most notably automobiles) must able and that the suppliers be similarly capable and reliable.
be stored in yards, unprotected from the elements. This leaves only the finished goods inventory. As the
One might ask, “What is wrong with inventory?” processes and suppliers become more proficient, and the
Having materials on hand allows you to produce without JIT/Lean line takes hold, production will be geared to cus-
worrying about on-time material deliveries. Lots of WIP lets tomer demand rather than to sales forecasts. The ability of
the assembly lines continue when a machine breakdown or the JIT/Lean line to respond quickly to customer require-
some other problem occurs. Having an inventory of stored ments means that it is no longer necessary to store finished
finished goods means that you can be responsive to custom- goods. The only stored goods should be those in the distri-
ers. If those are positives (and we’ll come back to that in a bution system, and that level will typically be far less than
minute), there are also negatives. First, there are the costs of has been the case under mass production.
inventorying raw materials and parts, and finished goods. JIT/Lean strives for zero inventory of any kind.
There are the costs of the materials and goods; the labor Achieving zero inventory is not a realistic intent, but by aim-
costs for the storage, handling, and protection of the materi- ing at zero and continually reducing inventories, not only do
als and goods; and the cost of warehouses, real estate, and manufacturers cut costs by significant numbers, but also the
capital equipment used in the inventorying of the materials whole continual improvement process comes to life, result-
and goods. Second, there is the cost of spoilage while in in- ing in even more savings and improved product quality.
ventory. Spoilage can be due to damage, deterioration, cor-
rosion, obsolescence, and so on. Third, there is the cost of
taxes. While the product is in inventory, the manufacturer Cycle Time
owns it, it has value, and the various levels of government Production cycle time is defined as the period bounded by
want their share in the form of taxes. the time materials are sent to the manufacturing floor for the
M21_GOET1853_08_SE_C21.indd 375 09/04/15 6:41 AM

making of a product and the time the finished goods are dis- materials into the front of the process. This merely increased
patched from the manufacturing floor to a customer or to the number of boards in WIP.
finished goods storage. Generally speaking, the shorter the With a production rate of 50 boards a day and 3,500
production cycle time, the lower the production cost. That boards in process, one can imagine the difficulty in keep-
may be reason enough to pay attention to cycle time, but ing track of where the boards were, scheduling them into
there are other benefits. Short cycles improve a factory’s abil- and out of the various processes, and storing, retrieving, and
ity to respond quickly to changing customer demands. The safeguarding them. Such tasks were nearly impossible. More
less time a product spends in the production cycle, the less than 100 people were charged with handling and track-
chance there is for damage. ing the boards, adding no value whatever to the product.
We are accustomed to thinking of a mass production Further, because the assemblers were being pushed to their
line as having the shortest of cycle times, and there have limits, quality suffered. The net result was that nearly half of
been startling examples of this. Henry Ford’s Model T lines total direct labor was spent repairing defects. That did not
(producing up to 2 million cars per year, all the same, all add value either. Once again, however, checking with other
black) achieved remarkable cycle times even by today’s stan- manufacturers revealed that this was typical. A critical factor
dards. For example, Ford’s River Rouge facility took iron ore was that customer delivery schedules could not be met un-
in the front door and shipped completed cars out the back less a solution was found. Initially, the company had to sub-
door in four days.10 When one considers that the Ford cycle contract a great many boards, but that was a work-around,
included making the steel, in addition to stamping, casting, not a solution.
machining, and assembly, it is all the more amazing. One of The eventual answer was to implement JIT/Lean tech-
his secrets was no variability in the product. Modern lines niques on the production floor. After a couple of quick pilot
have the complication of different models and virtually un- runs, in which it was discovered that the most difficult of the
limited options. boards could be assembled and tested in eight days (versus
A modern auto assembly line cannot be compared with 13 weeks), management was convinced, and JIT/Lean was
Ford’s Model T line because the complexity and variability implemented at both plants, following the WIP reduction
of the contemporary car are so much greater. However, the and lot-size scheme outlined in the previous section. In very
best lines beat Ford’s cycle time for assembly. The differences short order, the board cycle time fell to about five days, and
in JIT/Lean lines and mass production lines are substantial. board quality improved dramatically. That enabled the com-
For example, comparisons between JIT/Lean plants and tra- pany to eliminate the 100-plus positions that had handled
ditional mass production plants reveal that JIT/Lean plants the boards and eventually many other non-value-adding po-
can assemble automobiles in 52% of the time it takes tra- sitions as well. The system delivery on-time rate went to 98%
ditional plants. Because there is very little waiting in a JIT/ (unheard of for this kind of product), customer satisfaction
Lean line, one can assume the cycle time is one-half of that improved, and a respectable profit was made.
for traditional lines. Interestingly, though not directly related The thing to remember about cycle time is this: any
to cycle time, traditional lines produce three times as many time above that which is directly required by the manufac-
defects and require nearly twice the factory space. In addi- turing process is not adding value and is costing money. For
tion, JIT/Lean plants can operate with a two-hour parts in- example, assume we use two processes to manufacture a
ventory, while traditional plants typically need a two-week product, and the total time consumed within the processes is
supply.11 two hours. It is determined that the actual cycle time is three
Consider the following example, which helps bridge the hours. That means that two hours of the cycle is adding value
issues of inventory and cycle time. The product was a line of and the other hour is not. Invariably, this means a bottleneck
very expensive military avionics test systems. The factories is preventing the product from flowing from one process di-
(two) were rather typical electronics job shops. Before being rectly into the next without delay. The key is to detect the
converted to JIT/Lean, they were struggling with a produc- bottleneck and do something about it. It may be that a plant
tion schedule requiring the assembly of 75 large, complex procedure requires inspection, logging, and a computer data
printed circuit boards per day. They rarely met the goal, entry. Are these tasks really necessary? Can they be elimi-
usually achieving about 50. The attempted solution involved nated? If they are necessary, can they be streamlined?
pushing more parts into the front end of the assembly pro- The extra hour may be the result of a problem in one of
cess, hoping that would force more out the other end as fin- the processes. For example, it may be that the second process
ished, tested boards. The computer system revealed that, at is no longer one hour in duration but 2. If the latter is the
any point in time, about 3,500 boards were in the process. case, in a traditional production plant, the product flowing
At the rate of 50 completed boards per day and 3,500 boards out of the first process will stack up at the input of the sec-
in WIP, simple arithmetic showed that the cycle time for the ond process because process 1 will continue to crank out its
average board was 13 weeks. Common sense said that 13 product at the rate of one unit per hour—whether process 2
weeks was much too long for assembling these boards, but is ready for it or not (see Figure 21.7). The surplus product
checking with others in the industry revealed that this was at the input to process 2 will have to be stored for safety and
a typical cycle time. The company also found that it made housekeeping reasons, thus obscuring the fact that there is a
absolutely no difference in final output rate to force more problem.
M21_GOET1853_08_SE_C21.indd 376 09/04/15 6:41 AM

Wait Cycle
Process Process Process Process
Time Time
Piece # 1 1 2 2
(in (in
In Out In Out
Hours) Hours)
1 7 A.M. 8 A.M. 0 8 A.M. 10 A.M. 3
2 8 A.M. 9 A.M. 1 10 A.M. 12 noon 4
3 9 A.M. 10 A.M. 2 12 noon 2 P.M. 5
4 10 A.M. 11 A.M. 3 2 P.M. 4 P.M. 6
5 11 A.M. 12 noon 4 4 P.M. 6 P.M. 7
6 12 noon 1 P.M. 5 6 P.M. 8 P.M. 8
7 1 P.M. 2 P.M. 6 8 P.M. 9 P.M. 8
8 2 P.M. 3 P.M. 6 9 P.M. 10 P.M. 8
9 3 P.M. 4 P.M. 6 10 P.M. 11 P.M. 8
10 4 P.M. 5 P.M. 6 11 P.M. 12 midn. 8
11 5 P.M. 6 P.M. 6 12 midn. 1 A.M. 8
12 6 P.M. 7 P.M. 6 1 A.M. 2 A.M. 8
13 7 P.M. 8 P.M. 6 2 A.M. 3 A.M. 8
Figure 21.7 Cycle Time Example.
As long as the problem persists, WIP will build, output would hold that having the seven units from the first process
will stay at one unit every two hours, but cycle time will in- sitting on the shelf means that process 1 could be down for
crease as backlog builds up in front of process 2; the first unit a complete shift without causing a problem for the second
went through the production system in three hours, and one process—it would merely draw from the seven.
unit per hour was expected after that, but the process is actu- In a JIT/Lean plant, the situation described here would
ally achieving one unit every two hours. Cycle time increases never happen. Process 1 would not produce an additional
by one hour for each piece—for example, eight hours later piece until process 2 asked for it (kanban). At the start, pro-
the sixth unit into process 1 will come out of process 2. Such cess 1 produces one unit to enable process 2. When process 2
an imbalance would not escape notice for long, and it would withdraws it, process 1 is signaled to produce another. If for
be corrected, but by then, several pieces of WIP would be any reason, when process 1 completes its second unit, pro-
between the processes. cess 2 is not ready to withdraw it, process 1 goes idle. It will
Suppose that the problem in the second process was stay idle until signaled to produce another—be it a few min-
corrected as the sixth unit was completed. Everything is utes or a week. No WIP inventory is produced. By process
back to the original two-hour process time, but by now, there 1 going idle, alarms go off, quickly letting the appropriate
are seven more units through process 1, on which the cycle people know that something has gone wrong. If there is a
time clock has already started. If stable from this point for- difficulty in the second process, causing it to consume too
ward, the cycle time will remain at eight hours. We started much time, it gets attention immediately. Similarly, if there
with a process that had two hours of value-adding work and is a delay getting the output of the first process to the second
a three-hour cycle. We now have a two-hour value-adding because of an administrative procedure, that, too, will be
process time and an eight-hour cycle. If some means is not dealt with quickly because it will cause problems throughout
taken to cause the second process to catch up, every time the overall process until it is solved.
there is a glitch in process 2, the cycle time will grow. In a Any contributor to cycle time is apparent in a JIT/Lean
traditional plant, with literally dozens of processes, such environment, and JIT/Lean philosophy calls for continual
conditions could go on forever. As observed earlier, some improvement and refinement. Wait time in storage is simply
M21_GOET1853_08_SE_C21.indd 377 09/04/15 6:41 AM

not a factor in JIT/Lean because nothing is produced in the other ready to try JIT/Lean even if it did seem strange.13
advance of its need by the succeeding process. That single The first supervisor refused to allow his line to be stopped,
factor can easily remove 80 to 90% of the cycle time in a tra- whereas the second didn’t hesitate to stop his. At first, the
ditional factory. In the earlier example of the printed circuit line operated by the second supervisor was producing far
board factories, the initial reduction of cycle time from 13 fewer cars than the other line because it was stopping for
weeks (65 working days) to eight days was simply the elimi- every little problem. These problems had been common
nation of storage time. That was a reduction of 88%. Further knowledge among the workers but not among the super-
refinement, made possible because of the visibility afforded visors. The problems were solved one by one as a result of
by JIT/Lean, brought the cycle to four days, or only 6% of stopping the line for each. After three weeks, the second su-
the original cycle. Taking it further was restricted by pro- pervisor’s line took the lead for good. The first supervisor
cedural and governmental requirements. In a commercial believed that stopping the line would decrease efficiency and
setting, however, the same boards could probably have been cost the company money. As it turned out, the reverse was
produced in a two-day cycle with no new capital equipment. true. By stopping the line to eliminate problems, efficiency
Before JIT/Lean, manufacturers tried to cut cycle time and economy were enhanced. The only reason for stopping a
with automation. But that was not the answer. The solution line is to improve it, eliminating the need for stopping again
was found in better control of production, and that was ob- for the same reason.
tained with JIT/Lean. JIT/Lean is the most powerful concept In a mass production plant, the sight of idle work-
available for reducing cycle time. ers will draw the ire of supervisors in no uncertain terms.
But in a JIT/Lean situation, the rule is if there is a problem,
stop. Suppose that a preceding process has responded to a
Continual Improvement kanban and provided a part to a succeeding process. The
Continual improvement has been discussed in several other succeeding process finds that the part is not acceptable for
chapters and sections of this book. By now, you should have a some reason (fit, finish, improper model, or something else).
good understanding of its meaning as applied in a total quality The succeeding process worker immediately stops, report-
context. Continual improvement seeks to eliminate waste in ing the problem to the preceding process and to supervision.
all forms, improve quality of products and services, and im- Perhaps an andon (a Japanese word meaning “lamp”) signal
prove customer responsiveness—and do all of this while also will be illuminated to call attention to the fact that his pro-
reducing costs. A note of caution should be added in regard cess is shut down. The problem is to be solved before any
to interpretation of what constitutes improvement: Problem more work is done by the two processes, which means that
solving is not necessarily improvement. If a process that had downstream processes may soon stop as well because their
previously been capable of producing 95 out of 100 good parts demands through kanban cannot be honored until the prob-
deteriorates to a level of 50 good parts and the problem is lem is fixed and the processes are once again running. This is
found and corrected to bring the process back to where it had high visibility, and it is guaranteed to get the proper attention
been—that is maintenance not improvement. Maintenance not only to solve the immediate problem but also to improve
is restoring a capability that previously existed. On the other the process to make sure it does not happen again.
hand, if a process was capable of 95 good parts out of 100 Consider the following example. A few weeks after JIT/
produced and a team developed a way to change the process Lean was implemented in a New York electronics plant, there
to produce 99 good parts—that would be improvement. It is was a line shutdown. At the end of this line was a test station
important to differentiate between maintenance and improve- that was to do a comprehensive functional test of the prod-
ment. Maintenance is important, and it must go on, but in the uct. There was an assembly all set up for test, but the techni-
final analysis, you end up where you started. Improvement cian had stopped. The line’s andon light was illuminated. A
means becoming better than when you started. Continual im- small crowd gathered. The problem was that the test instruc-
provement is to repeat that improvement cycle, in W. Edwards tions were out of date. Over time, the test instruction docu-
Deming’s words, constantly and forever.12 ment had been red-lined with changes and had, up until that
The discussion of continual improvement in this chap- point, been used without apparent difficulty. But a company
ter explains how JIT/Lean supports continual improvement. procedure required that any red-lined document be reis-
The traditional factory effectively hides its information sued to incorporate the approved changes within one year
through inventories of parts, WIP, and finished goods— of the first red line. The one-year clock had expired months
people are scurrying about, everybody busy, whether any earlier, and the technician, with guidance from quality as-
value is being added or not. The JIT/Lean factory is visual: surance, properly stopped testing. When management asked
its information is there for everyone to see and use. Quality why the document had not long since been updated, it was
defects become immediately apparent, as do improper profound that the documents seldom were updated until the
duction rates—whether too slow or too fast. Either of these, entire job was completed. In many cases, jobs lasted several
for example, will result in people stopping work. While that years. Holding all formal revisions until a job was completed
is not acceptable behavior in a mass production factory, in a meant that documentation was revised just once, thereby
JIT/Lean plant it is encouraged and expected. saving considerable expense. Of course, in the meantime,
A true story from Toyota tells of two supervisors, one manufacturing was using out-of-date or questionable infor-
from the old school and unable to adapt to JIT/Lean and mation. The standard work-around seemed to be that when
M21_GOET1853_08_SE_C21.indd 378 09/04/15 6:41 AM

a system couldn’t be completed for delivery, waivers were trying to save money by reducing the number of documenta-
generated, allowing the tests to be conducted with the out- tion revisions. Meanwhile, manufacturing may be producing
dated red-lined procedures. This had been going on for years obsolete and unusable product because the documentation
but never became apparent to the levels in manufacturing is not up-to-date. At best, it results in the continual “fire-
and engineering that could solve it. In this case, it took about fighting” that saps the collective energy of the organization,
20 minutes to solve the problem. Without JIT/Lean to high- leading to quick-fix, work-around “solutions” that let you get
light it, the problem would, in all probability, still exist. today’s product out but only make each succeeding day that
What had happened because of JIT/Lean was a stop at much more difficult. JIT/Lean, by highlighting problems, is
the test station. That also shut off kanbans through the pre- quick to dispel the quick-fix mentality, demanding instead
ceding processes. In short order, the line stopped, getting that problems be eliminated for today and tomorrow and
the attention needed to eliminate the problem. If the plant forever.
had been operating in the traditional (non–JIT/Lean) way, The analogy of a lake better illustrates JIT/Lean’s ability
the assemblies would have piled up at the test station for a to reveal real problems (see Figure 21.8). You look out over
while and then the production control people would have the lake and see the calm, flat surface of the water and per-
carted them off to a work-in-process storage area—out of haps an island or two. From this observation, you conclude
sight. Eventually, the inventory of previously tested assem- that the lake is navigable, so you put your boat in and cast
blies would have been consumed, and there would have been off. You avoid running into the islands because they can be
a “brushfire” from which a procedural waiver would have seen plainly and there is plenty of room to steer around them.
emerged to enable the test technician to pull the untested However, a rock just below the surface is not evident until
assemblies from WIP stores and quickly get them tested so you crash into it. It turns out there are lots of rocks at vari-
system deliveries could be made. This would have been re- ous depths, but you can’t see them until it is too late. This is
peated time and again, just as had been happening surrepti- like a traditional factory. The rocks represent problems that
tiously in the past. will wreak havoc on production (the boat). The water repre-
This is not an uncommon scenario. Fundamentally, it is sents all the inventory maintained: raw materials and parts,
the result of departments not communicating. Engineering is WIP, and even finished goods. Now if you make the change
WITHOUT JIT/LEAN
Production
Inventory
Hidden Problems
Not Being Solved
WITH JIT/LEAN
Problems Identified
by Lowering Inventory
Original
Inventory Level
New
Inventory Level
Still to Be
Identified
Problems
Figure 21.8 JIT/Lean Exposes Hidden Problems.
M21_GOET1853_08_SE_C21.indd 379 09/04/15 6:41 AM

to just-in-time/Lean, you start reducing those inventories. product, but cost a lot of money. In a JIT/Lean factory,
Every time you remove some, the level of the water in the lake the fender-stamping press will shut down unless it re-
is lowered, revealing problems that had been there all along ceives kanbans requesting more fenders, and there will
but that were not eliminated because they couldn’t be seen. be no overproduction. Of all the wastes, overproduction
You just kept running your boat into them, making repairs, is the most insidious because it gives rise to all the other
and sailing on to the next encounter. But with the lower water types of waste.
level, the problems become visible and can be eliminated. 2. Wait time can come from many causes: waiting for
Clear sailing? Probably not. Other rocks are no doubt just parts to be retrieved from a storage location, wait-
below the new lower surface level, so you have to take some ing for a tool to be replaced, waiting for a machine to
more water out of the lake (remove more inventory), enabling be repaired or to be set up for a different product, or
you to identify and eliminate them. Like most analogies, our waiting for the next unit to move down the line. JIT/
lake doesn’t hold all the way to the logical conclusion of zero Lean parts are typically located at the workstation, not
inventory because the lake would be dry by then. But remem- in some central staging area or warehouse. JIT/Lean
ber, true zero inventory doesn’t hold either. As was said be- sets aside time for tool and machine maintenance, so
fore, it is a target to aim at but never to be fully reached. replacement or repair during a production period is
JIT/Lean is by nature a visible process, making prob- rare. Whereas setup times for machines in mass pro-
lems and opportunities for improvement obvious. Moreover, duction plants tend to take hours (or even longer), JIT/
when problems do occur in a JIT/Lean setting, they must be Lean factories devote a great deal of attention to setup
solved and not merely patched up, or they will immediately time, typically reducing it to a very few minutes. In a
reappear. Visibility to all levels, from the workers to the top traditional factory, an operator is assigned to each ma-
executive, means that the power to make necessary changes chine. While the machine is running under automatic
to eliminate problems and improve processes is available. control, the operator has nothing to do but wait. In a
JIT/Lean factory, the same operator may run five ma-
Elimination of Waste chines, arranged so that he or she can easily see and
In the preceding three sections, it was shown how just-in- control all five without much movement. As three ma-
time/Lean facilitates reduction of inventories and cycle time chines are running automatically, the operator may set
and promotes continual improvement. This section will up the fourth and unload the fifth, for example. In this
show that JIT/Lean is also a powerful eliminator of waste. way, the operator’s day is no longer mostly wait time.
Common types of waste include waste arising from: (1) over- Perhaps the biggest waste associated with wait-
producing, (2) waiting (time), (3) transport, (4) processing, ing involves not human waiting but inventory waiting.
(5) unnecessary stock on hand, (6) unnecessary motion, In the traditional setting, raw materials and parts can
and (7) producing defective goods. These types of waste are sit idle for weeks and months before they are needed.
explained in the remainder of this section. Work-in-process may wait weeks to have a few hours of
value-adding work done. Finished goods may wait very
1. Mass production pushes materials into the front of long periods for customers. JIT/Lean does not allow
the factory in response to market forecasts. These raw any of these waits to occur, and the carrying expense is
materials are converted to finished goods and pushed eliminated.
through the distribution system. The first real cus-
tomer input into the process is at the retail level. If 3. Mass production factories tend to buy their materials
customers don’t want the goods, they will eventually and parts in very large quantities from the lowest price
be sold at prices much lower than anticipated, often (as opposed to lowest cost or best value) source, regard-
below their actual cost. That is waste to the producer. less of the distance from the source to the factory. JIT/
In addition, producing goods for which there is not Lean factories of necessity must buy in small quantities
a matching demand is a waste to society by using re- (no warehousing) with frequent deliveries, often sev-
sources to no purpose. In a JIT/Lean environment, the eral times a day. That means that the suppliers should
customers enter the system at the beginning, pulling be relatively close to the factory, cutting transportation
goods from the distribution system and, in turn, from time and costs.
the manufacturer. The JIT/Lean factory produces Transportation within plants can be a very high-
nothing without a kanban, which, in effect, originates cost item, too. Moving things costs money and time
with a customer. and increases exposure to damage. Moving materi-
The same is true within the two kinds of factories. als in and out of storage areas, to and from the floor,
A fender-stamping press in a mass production factory or back and forth across the factory from process to
will continue to stamp out fenders even though the final process is waste. None of that happens with JIT/Lean.
assembly line, which uses the fenders, is stopped. The Production materials are delivered to the point of use
overproduction must then be handled by people who in a JIT/Lean factory, so they are not shuttled in and
contribute nothing to the value of the product, stored out of storage or put in temporary storage to be moved
in buildings that would otherwise be unnecessary, and again before use. Factories are arranged to minimize
tracked by people and systems that add no value to the distances between adjacent processes, whereas the
M21_GOET1853_08_SE_C21.indd 380 09/04/15 6:41 AM

same product manufactured in the traditional factory talent. Myers believed that the most damaging of the eight
could log thousands of feet, or even miles, of move- wastes is the waste of talent.14 If all the talents of all em-
ment before completion. ployees were brought to bear on the problems and issues
4. Any process that does not operate smoothly as in- of production, the other wastes would probably disappear.
tended but instead requires extra work or attention This is the rationale for both employee involvement and
by the operator is wasteful. An example is the neces- teamwork. JIT/Lean is designed to make use of the ideas
sity for the operator to override an automatic machine and talents of all employees through team activities and
function to prevent defective products. Because one employee involvement, in an environment that fosters the
of the basic tenets of JIT/Lean is continual improve- open and free interchange of ideas, all of which are for-
ment of processes, wasteful processes are soon identi- eign to the traditional production systems. Elimination of
fied and improved to eliminate the waste. That is far waste is an integral focus of just-in-time/Lean by design.
more difficult in the traditional production environ- No other production system looks at waste except after
ment because of its emphasis on output, not process the fact.
improvement.
5. Any stock on hand has storage costs associated with Requirements of JIT/Lean
it. When that stock is unnecessary, the costs are pure
For a factory to operate as a just-in-time/Lean production
waste. Included in these costs are real estate, buildings,
facility, a number of steps must be taken. It is very important
employees not otherwise needed, and tracking and ad-
that JIT/Lean implementation be a part of a larger total qual-
ministration. Because JIT/Lean attempts to eliminate
ity program; otherwise, many interdepartmental roadblocks
stock, unnecessary stock is just not tolerated.
will crop up as time passes. Like total quality, JIT/Lean re-
6. JIT/Lean plants are laid out to minimize motion of both quires an unwavering commitment from the top because
workers and product. Motion takes time, adds no value, production is more than just the manufacturing department.
makes necessary additional workers, and hides waste. If these two elements (a total quality program and a commit-
The contrast between a JIT/Lean plant laid out with ment from the top) are in place, JIT/Lean implementation
product orientation and the traditional plant laid out should be within reach. The following discussion touches
with process orientation is profound (see Figure 21.9). on the issues that must be addressed as the implementation
In the traditional plant, there is much motion, with peo- progresses.
ple and product shuttling all over the place. In a JIT/
Lean plant, motion is almost undetectable to a casual Factory Organization
observer.
7. Defective goods will surely cost money in one of three The JIT/Lean plant is laid out quite differently from that to
ways: (a) the product may be reworked to correct the which most people are accustomed. Most traditional facto-
deficiency, in which case the rework labor and material ries are set up according to the processes that are used. For
costs represent waste; (b) it may be scrapped, in which example, there may be a welding shop, a machine shop, a
case the cost of the materials and the value added by cable assembly area, a printed circuit board assembly area,
labor has been wasted; or (c) it may be sold to custom- a soldering area, and so on. Each of these discrete processes
ers who, on discovering that the product is defective, may be set up in separate parts of the factory (all machin-
return it for repair under warranty and may be dissatis- ing operations done in the machine shop, all cable assembly
fied to the extent they will never buy this manufacturer’s done in the common cable and harness area, etc.), no mat-
products again. Warranty costs represent a waste, and ter which of many products it might be for (refer to Figure
the potential for a lost customer is great, portending a 21.9). The JIT/Lean plant attempts to set up the factory by
future loss of sales. product rather than process. All the necessary processes for
a given product should be located together in a single area
In a traditional factory, it is possible to produce large and laid out in as compact a manner as possible.
quantities of products before defects are discovered and the The chart at the top of Figure 21.9 represents the old
line corrected. It is not uncommon in mass production for a process-oriented traditional factory. Each of the processes
company to keep the line running, intentionally producing has its own territory within the plant. Additionally, an area
defective products, while trying to figure out what has hap- dedicated to warehousing is used for storage of production
pened and devising a solution. It is considered less trouble- materials, work-in-process that is waiting for the next pro-
some to fix the defective products later than to shut down the cess, and perhaps finished goods awaiting orders. There is
line. In JIT/Lean, however, because line stops are anticipated also an area set aside for shipping and receiving. Materials
and because the preferred lot size is one unit, it is improbable are received, inspected, processed, and sent to the warehouse
that more than one defective unit could be produced before area. Finished goods are taken from the warehouse or from
shutting down the line. final assembly, packed, and shipped. The upper illustration
Dr. M. Scott Myers, author of the landmark book in Figure 21.9 maps the movement from the warehouse
Every Employee Is a Manager, made the case for an eighth through the processes and finally to shipping in a traditional
waste: the waste arising from the underutilization of factory.
M21_GOET1853_08_SE_C21.indd 381 09/04/15 6:41 AM

WAREHOUSING
PROCESS F
PROCESS
E
PROCESS D
PROCESS PROCESS
A B
PROCESS C
Traditional Factory Organized by Processes

(illustrating process flow for one products)
PRODUCT 1 PRODUCT 2 PRODUCT 3
A D E
F C B
(Materials go directly
to point-of-use parts bins)
PRODUCT 4
Space for new products
JIT/Lean Factory Organized by Product

(illustrating process flow for four products)
– Parts A F E
Symbols represent
– Receiving D C discrete processes
used in manufacturing
– Shipping B
Figure 21.9 Comparison of Factory Floor Layouts: Traditional Versus JIT/Lean.
The lower illustration in Figure 21.9 represents a JIT/ implementation and the nature of the product and its antici-
Lean factory that is set up to manufacture four different pated production life.
products. The warehousing area is gone. This cannot hap- Mapped out in the upper illustration of Figure 21.9 is a
pen overnight, but an objective of JIT/Lean is to eliminate typical work-flow diagram for one product. Parts and ma-
all inventories. The second thing to notice is that the fac- terials are pulled from several locations in the warehousing
tory is divided into discrete areas dedicated to the different area and moved to a process A workstation. These materi-
products rather than to the different processes. Each product als may be in kit form (all the parts needed to make one lot
area is equipped with the processes required for that prod- of a product). The work instructions call for process A first,
uct. Parts bins are located right in the work area. These bins followed by process D. If process D is busy when the lot is
may have enough to last from a few hours to a few days or finished by process A, the lot, now WIP, may be stacked up
more, depending on the degree of maturity of the JIT/Lean in a queue at process D or taken back to the warehouse for
M21_GOET1853_08_SE_C21.indd 382 09/04/15 6:41 AM

safekeeping. Eventually, process D will process the kit, and that require other adjustment. Work cells are coarsely tuned
it will be sent to process E, perhaps waiting in queue or in at first, with fine-tuning taking place during the initial runs.
the warehouse. This same sequence is repeated through Excess capacity should be removed, just as required added
process B, process C, and process F. From there, it goes to capacity must be brought into the work cell. Bottlenecks
shipping. The diagram does not show any trips back to the will be quickly discovered and corrected. From there on, it
warehouse between processes, but that could very well hap- is a matter of continual improvement to increase efficiency
pen after every step. The flow-diagram represents a best-case forever.
scenario. (This was done purposely to ensure clarity.)
Now observe the flow in the JIT/Lean factory of
Figure 21.9. Product 1 is set up to follow exactly the same
Training, Teams, and Skills
processing sequence (from parts bins to process A and Assuming an existing factory is converted to just-in-time/
then to process D, process E, process B, process C, process Lean, one would assume that the people who had been
F, and shipping). In this case, the parts come straight from operating it would be capable of doing it under JIT/Lean.
the bins located in the work cell, not from the warehouse Naturally, many of the skills and much of the training neces-
and not in kit form, which is a waste of effort. The work sary for the traditional factory are required under JIT/Lean,
cell is laid out in a U shape for compactness, to keep all but JIT/Lean does require additional training. First, the tran-
the work cell members close to each other. The WIP flows sition from the traditional way of doing things in a factory
directly from process to process without a lot of wasted to JIT/Lean involves profound changes. It will seem that ev-
movement. Moreover, because this is a JIT/Lean work erything has been turned upside down for a while. People
cell, there will be small lot sizes, with work pulled through should not be exposed to that kind of change without prepa-
the process sequence by kanban. That means there will ration. It is advisable to provide employees with training
be no queue time on the floor or in the warehouse. Cycle about why the change is being made, how JIT/Lean works,
time for this product in the JIT/Lean work cell can be ex- what to expect, and how JIT/Lean will affect them. Initial
pected to be less than half of that for the same product in training should be aimed at orientation and familiariza-
the factory at the top of Figure 21.9. An 80 to 90% reduction. Detailed training on subjects such as kanban, process
tion would not be unusual. improvement, and statistical tools should be provided when
Before one can lay out a JIT/Lean factory, the processes they are needed—a sort of just-in-time approach to training.
required for the product must be known. This is usually not Most factory workers are accustomed to working indi-
a problem. Typically, the greatest difficulty comes in deter- vidually. That will change under JIT/Lean, which is designed
mining how much of a process is needed. How many min- around teams. A JIT/Lean work cell forms a natural team.
utes of a process does the product use? One would think The team is responsible for the total product, from the first
that if the product had been built before in the traditional production process to the shipping dock. Perhaps for the
way, one should know how much process time is required at first time the workers will be able to identify with a product,
each step. This may be a starting point, but typically it is not something that they create, and the processes they own. This
very accurate. With all the wasted motion and waiting time doesn’t happen in a traditional factory. But with JIT/Lean, it
in queues and in the warehouse, the real processing time is important to understand that workers must function as a
becomes obscured. However, you can use the best informa- team. Each will have his or her special tasks, but they work
tion available and refine it over time. Now that the processes together, supporting each other, solving problems, checking
are put right into the product work cell, having just the right work, helping out wherever they can. This may require some
amount is important. coaching and facilitating.
In the case of product 4 in Figure 21.9’s JIT/Lean fac- It was enough in the old way of production that work-
tory, it was determined that the product required more ca- ers had the skills for their individual processes. They did not
pability in process A and process E than was available from need additional skills because they were locked into one pro-
single workstations, so they were doubled. Suppose that a cess. This is not the case with JIT/Lean. Specialists are of far
product flow of 120 units per hour is anticipated. Each pro- less value than generalists. Cross-training is required to de-
cess has the following estimated capability for this product: velop new skills. As a minimum, work cell members should
develop skills in all the processes required by their product.
A: 75 units per hour D: 120 units per hour Naturally, there are limits to this. We do not propose that
all the members of a work cell become electronics techni-
B: 150 units per hour E: 70 units per hour
cians if their cell employs one for testing the product, but
C: 130 units per hour F: 135 units per hour the cross-training should broaden their skills as far as is rea-
sonable. Even on the issue of technical skills, it is beneficial
Because processes A and E are estimated to be capable of to move in that direction. For example, if an operator’s task
only about 60% of the anticipated demand, there is no point is to assemble an electronic assembly that will be part of an
in trying to improve them. Rather, the process capability was end-item device, there is no reason that operators couldn’t
doubled by putting in parallel equipment and workstations. test it when they complete the assembly. Go/no-go testers
This is a beginning. We now can watch for excess capacity can be built to facilitate testing any electronic assembly, and
that can be removed from the work cell or for bottlenecks they can be simple enough to operate that the assembler can
M21_GOET1853_08_SE_C21.indd 383 09/04/15 6:41 AM

easily perform the test. This frees the technician for the more Kanban Pull System
complicated tests downstream and ensures that the assembly
is working before it is passed on to the next higher level. It Having established the flow and simplified it to the extent
also gives operators a sense of ownership and accomplish- possible, the company can now introduce the kanban pull
ment. Over time, they may even be able to troubleshoot an system. As the work cell is being designed, the kanban
assembly that fails the test. scheme should be developed. For example, will a single or
Requiring multiple skills in JIT/Lean teams is important double kanban card system be used? Or, will kanban squares
for several reasons. First, when a team member is absent, the or bins be used? Or, will some combination or a different
work cell can still function. Second, problem solving and variation be used?
continual improvement are enhanced by having more than You may want to use an electronic kanban system, al-
one expert on whatever process is in question. New people though it might be best to use one of the manual systems
will have fresh new ideas. Third, if one of the cell’s processes initially. After the kinks are worked out the electronic system
starts falling behind, another member can augment the pro- will be easier to implement. Any kanban plan must be tai-
cess until it is back on track. lored to the application; there is no single, best, universally
applicable kanban system.
Readers who are familiar with manufacturing may know
Establishing the Flow and Simplifying that cards have been used in the manufacturing process as
Ideally, a new line could be set up as a test case to get the long as anyone can remember. They take the form of trav-
flow established, balance the flow, and generally work out eler tags, job orders, route sheets, and so on, but they are not
initial problems. In the real world, this may not be feasi- at all the same as kanbans. These cards push materials and
ble. Normally, the new line is set up to produce deliverable parts into a production process, such as PC-board stuffing.
goods. What typically happens is a line is set up and then When the boards controlled by the card are all stuffed (the
operated with just a few pieces flowing through to verify the electronic components have been inserted into the boards),
line’s parameters. It is very important to maintain strict dis- the entire batch is pushed to the next process—ready or not,
cipline on the line during pilot runs. Everyone must strictly here they come. The next process didn’t ask for them and
adhere to procedures. Each operator must stay in his or her may not be ready for them—in which case, they will stack up
assigned work area, with no helping in another process. in front of the process or be removed from the production
Only if pilot runs are conducted this way will the informa- floor and stored with other waiting WIP. By contrast, in a
tion gained be meaningful and valid. This will allow process JIT/Lean line, the succeeding process signals the preceding
times to be checked, wait times to be assessed, bottlenecks to process by kanban that it needs its output. Be sure to under-
be identified, and workers to become synchronized. It is not stand the distinction; with kanban, the succeeding process
necessary to have a pull system in place for these preliminary pulls from the preceding (supplying) process. The kanban
runs because only a few pieces will be involved. In fact, until always tells the supplying process exactly what it wants and
the flows have been established, kanban is not possible. how many. The supplying process is not authorized to make
The second thing to look for in these pilot runs is how more product until the kanban tells it to do so—nothing
well the line accommodates the work. Are the workstations waiting, no stored WIP.
positioned for the least motion? Is there sufficient space but Ohno’s double card system uses two types of kanbans:
not too much? Can the operators communicate easily with the withdrawal kanban and the production kanban.
each other? Is the setup logical and simple? Can any changes
■■ The withdrawal kanban, also called the move kanban,
be made to make it better, simpler? Don’t overlook the pro-
is used to authorize the movement of materials or WIP
cesses themselves. Ultimately, that is where most of the sim-
from one process to another (see Figure 21.10). This
plification will occur.
LOCATION PART NO.

PRODUCING
BHA-15 3371-10130 WITHDRAWING
PROCESS
PROCESS
SQ. F 1
HARNESS ASSY
PANEL INTEG
BHA-15 PART DESCR BPT-1
CONTAINER BETA HARNESS
TYPE
N/A
RECEIVING
NO. WITHDRAWN LOG
CONTAINER 1 BPT-1
CAPACITY WS
Figure 21.10 Withdrawal (Move) Kanban (MK).
M21_GOET1853_08_SE_C21.indd 384 09/04/15 6:41 AM

MATLS PART NO.

REQD PROCESS
3371-10130
HARNESS ASSY
3371-10040
3371-10041 BHA-15
DESCRIPTION
BETA HARNESS
STORE
COMPLETE
QTY AUTH
QTY COMPLETED
1 SQUARE F1
1
Figure 21.11 Production Kanban (PK).
kanban will contain information about the item it is au- grinding process has been taken back to the preceding process
thorizing for withdrawal, the quantity, the identity of the in order to obtain the parts it needs to grind six new pieces.
containers used, and the two processes involved supply- Segment 5 shows the finishing workstation halfway
ing and receiving. through its six pieces, with the grinding process started on
■■ The production kanban authorizes a process to produce an- its next six pieces. This cycle will repeat itself until there is no
other lot of one or more pieces as specified by the kanban more demand pull from the right side (from the customers
(see Figure 21.11). This kanban also describes the piece(s) and the final processes).
authorized, identifies the materials to be used, designates The finishing workstation had its Out parts pulled by
the producing process workstation, and tells the produc- the next process in segment 2, triggering finishing’s pull de-
ing process what to do with it when it is completed. mand on grinding in segment 3. That, in turn, resulted in
grinding’s pull from its previous process in segment 4. The
Consider the operation of two processes in a manufac- pulls flow from the right (customer side), all the way through
turing sequence to see how this works in practice. Figure the production processes to the left (supplier side). When
21.12 shows a preceding process that does grinding on metal demand stops at the customer side, pulling stops through-
parts. This is the supplier for the parts finishing workstation, out the system and production ceases. Similarly, increase or
the succeeding process. Figure 21.12 shows five segments, decrease in demand at the customer side is reflected by auto-
described in the following paragraphs: matically adjusted pulls throughout the system.
Segment 1 reveals that the finishing workstation has As suggested earlier, it is not always necessary to use ac-
containers at both its In and Out areas. The container at the tual kanban cards. In many applications, it is necessary only
In area carries a move kanban (MK) and has one part left to use kanban squares, kanban shelves, or kanban contain-
to be used. The container at the Out area has five finished ers. In Figure 21.12, for example, the two processes could
parts in it and is waiting for the sixth. Back at the grinding have used any of these devices. The Out side of the grinding
workstation, the Out container is filled with the six parts workstation could have the right side of its tabletop marked
authorized by the production kanban (PK) attached. The out in six kanban squares. One part ready for finishing would
container at the In area is empty, and work is stopped until be placed on each square, like checkers on a checkerboard.
another production kanban appears. The signal to grind six more parts would be the finishing
Segment 2 shows that the finishing workstation has workstation’s taking of the parts, leaving the kanban squares
completed work on the six parts, emptying the container at empty. In this case, the empty kanban square is the signal
its In area. The empty container with its attached MK for to produce more. Marked-off shelf areas, empty containers
six parts is taken back to the grinding workstation, which is designated for so many parts, and various other devices can
ready to supply the parts. be used. Combinations are the rule.
Segment 3 shows that when the empty container is re- Kanban is a shop floor control or management system.
ceived at the grinding workstation, the move kanban is re- As such, it has some rules that must be observed: (1) never
moved from the empty container and attached to the full send forward a defective product, (2) withdraw only what is
container, which is sitting at the process’s Out area. This au- needed when needed, (3) produce only the exact quantity,
thorizes movement of the six parts to the finishing worksta- (4) smooth production load, (5) adhere to kanban while fine
tion. At the same time, the production kanban is removed tuning, and (6) stabilize and rationalize.15 These rules are ex-
from the full container and attached to the empty one, which plained in the remainder of this section.
is placed at the grinding workstation’s Out area. This autho-
rizes the grinding process to grind six more pieces. Instead, stop the process, find out why it was made defec-
Segment 4 shows that the finishing process has now pro- tive, and eliminate the cause. It will be much easier to find
cessed two parts. The empty container at the In area of the the cause immediately after it happened than it will be after
M21_GOET1853_08_SE_C21.indd 385 09/04/15 6:41 AM

Segment 1
GRINDING FINISHING
AN
KA OD
NB
PR
MOVE PK
IN WORK OUT IN WORK OUT
MK KANBAN
Full
Container
Segment 2
GRINDING FINISHING
AN
KA OD
MK
NB
pty
PR
IN STOP OUT Em tainer IN PULL OUT
MK Con Pulled
by Next
VE Process
MO BAN
K N
A
Empty from PK
Next Process
Segment 3 VE
MO BAN FINISHING
GRINDING
K N
A
Swap
PK
IN STOP OUT Kanban IN PULL OUT
MK Tags
D
PRO BAN
K A N
Segment 4
GRINDING FINISHING
AN
KA OD
NB
PR
PK
IN PULL OUT MOVE IN WORK OUT
KANBAN
To Preceding
MK
Process
Segment 5
From
Preceding
GRINDING FINISHING
AN
Process
KA OD
NB
PR
PK
IN WORK OUT MOVE IN WORK OUT
MK KANBAN
Figure 21.12 Dual-Card Kanban System.
time has elapsed and conditions have changed. Attention Production flow should be such that subsequent pro-
to the problem will escalate rapidly as subsequent processes cesses withdraw from preceding processes in regular
come to a halt, forcing resolution. Only after the problem intervals and quantities. If production has not been
has been eliminated and the defective part replaced with a equalized (smoothed), the preceding process will have to
good one should the subsequent process be supplied. have excess capacity (equipment and people) to satisfy
There can be no withdrawal without a kanban (of some the subsequent process. The earlier in the production
sort). The number of items withdrawn must match the process, the greater the need for excess capacity. Because
number authorized by the kanban. A kanban must ac- excess capacity is waste, it is undesirable. The alterna-
company each item. tive would be for the processes to “build ahead” in an-
ticipation of demand. This is not allowed by rule 3. Load
Never produce more than authorized by the kanban.
smoothing will make or break the system because it is
Produce in the sequence the kanbans are received (first
the only way to avoid these two intolerable alternatives.
in, first out).
M21_GOET1853_08_SE_C21.indd 386 09/04/15 6:41 AM

In the previous section, we said that for a kanban Each product work cell or team should have one or
system to work, the flow must first be established. more boards, perhaps on easels, perhaps on computer
Kanban cannot respond to major change, but it is a screens, on which they post information. For example, if the
valuable tool for the fine-tuning process. All the pro- schedule anticipates the production of 300 subassemblies for
duction and transportation instructions dealing with the day, the workers will check off the appropriate number
when, how many, where, and so on are designated each time a succeeding process pulls subassemblies from
on the kanban. If the manufacturing process has not its output. This keeps the team apprised of how it is doing
been smoothed, one cannot, for example, tell a pre- and presents the information to managers, who only have to
ceding process to do something early to compen- glance at the chart to gauge the work cell activity and its kan-
sate. Instructions on the kanban must be observed. bans to develop a clear picture of how well the line is doing.
Adhering to the kanban’s instructions while making Another board charts statistical process control data as the
small, fine-tuning adjustments will help bring about samples are taken in the work cell. Anyone can spot develop-
optimum load smoothing. ing trends or confirm the well-being of the process with a
The processes need to be made capable and stable. Work quick look at the charts. Every time a problem beyond the
instructions and methods must be simplified and stan- control of the work cell or an issue with which the work cell
dardized. All confusion and unreasonableness must needs help comes up, it is jotted down on a board. It stays
be removed from the manufacturing system, or subse- there until resolved. If it repeats before it is resolved, annota-
quent processes can never be assured of the availabil- tions are made in the form of four marks and a slash for a
ity of defect-free material when needed, in the quantity count of five (see Figure 21.13). This keeps the concerns of
needed. the work cell in front of the managers and engineers who
have the responsibility for resolution. The mark tally also
Observing the six rules of kanban all the time is diffi- establishes a priority for resolution. The longest mark “bar”
cult, but it is necessary if the production flow in a JIT/Lean
system is to mature and costs are to be reduced.
Kanban is often used by itself for shop floor control
very effectively, but it can also be used in conjunction with
automation, such as bar code and computer augmentation.
WIDGET CELL PROBLEM
Computer-based kanban systems exist that permit the fun- BOARD JUNE
damental kanban system in a paperless environment. As with
automation in general, such a computerized system must be ORIG DESCRIPTION RECUR CORR
designed, or tailored, to suit the application. Applying tech- 6/3 341 CAP DIFFICULT llll II 6/4
nology simply for technology’s sake is never a good idea. TO INSTALL
Whatever you do, it is best to have the system working in 6/9 HARNESS TOO II 6/9
its basic manual form before automating; otherwise, you are TIGHT
likely to automate your problems. 6/11 BRACKET 21 REQS lllI lllI I 6/17
BENDING
The demand pull system has proven itself far more ef-
6/18 PRESS SCRATCHING IIII Ill
ficient than the traditional push system. If the advantages COVER
of just-in-time/Lean are wanted, there is no alternative but 6/18 SOLDER MACHINE 6/18
to use a pull system, and kanban, in one form or another, is OUT OF LIMITS
what is needed. 6/23 CHASSIS DEL FROM IIII IIII 6/24
PREV CELL LATE
6/24 NEED MORE LIGHT 6/26
Visibility and Visual Control AT PRESS
One of JIT/Lean’s great strengths is that it’s a visual sys- 6/24 INSUFFICIENT TIME 6/25
FOR CLEANING
tem. It can be difficult to keep track of what is going on in
6/26 INSTALLING LENS IIII
a traditional factory, with people hustling to and fro storing REQ TOO MUCH TIME
excess WIP and bringing stored WIP back to the floor for FOR FIT
the next stage of processing, caches of buffer WIP all over
the place, and the many crisscrossing production routes. The
JIT/Lean factory is set up in such a way that confusion is
removed from the system. In a JIT/Lean factory, it is easy
to tell whether a line is working normally or having a prob-
lem. A quick visual scan reveals the presence of bottlenecks
or excess capacity. In addition to the obvious signals, such
as an idle workstation, JIT/Lean encourages the use of in-
formation boards to keep all the workers informed of status,
problems, quality, and so on. Figure 21.13 Work Cell Problem Status Board.
M21_GOET1853_08_SE_C21.indd 387 09/04/15 6:41 AM

gets the highest priority. Maintenance schedules for tools Before our plants changed over to JIT/Lean, a
and machines are also posted in plain view, usually right at ainframe-based defect analysis system was used. The U.S.
m
or on the machine, and normal maintenance activity, such as Navy designated it as a best practice in the industry. Other
lubrication, cleaning, and cutter replacement, is assigned to companies came to see it, and many of them used it as a model
the work cell. for their own new systems. It could analyze data and present it
Consider what happens when these charts are used. in many different forms. But it had one flaw: time delay. From
Information is immediately available to the work cell. The the time a process produced a defective part until the loop was
team is empowered to perform maintenance and solve all closed with the operator of the process, several days (at best)
problems for which it has the capability. With the informa- had passed. We are not suggesting that the system was unable
tion presented to the team in real time, the team solves the to make improvements, because it did. But the real revelation
problems at once and performs maintenance at appropriate came with implementing JIT/Lean and finding what could
times. This approach minimizes waste, keeps the machines happen right inside the work cell when workers had the in-
in top shape, and produces a flow of ideas for improvement. formation they needed while it was fresh and vital and were
The shop floor control loop is as tight as it can get. The op- empowered to do something with it. Immediately, defects
erator detects and posts the information. The operator reacts dropped dramatically, and they continued to drop as continual
to the information to solve problems or take action. improvement was established. Before JIT/Lean, these plants
If a problem is beyond the work cell team’s capability, were never able to achieve results remotely comparable, even
all the people who can bring skills or authority to bear are with their megadollar computer-based system.
immediately brought in and presented with the data, and Every JIT/Lean line develops its own versions of infor-
the problem gets solved—quickly. The control loop goes mation display techniques. But whatever the variation, ev-
from information to action in one or two steps. In the tra- eryone has valuable, useful information available at all times.
ditional factory, the operator may not even be aware of a That kind of information is extremely difficult to find in a
quality problem. It is usually detected by a quality assurance traditional line and most often comes to light in the periodic
inspector hours or even days after the defect was created. (weekly or monthly) computer analysis reports. By then,
The inspector writes it up. The form may go to the manage- the trail to the root cause may have been obliterated by the
ment information system (MIS) department, where, after passage of time, other problems, or events. In the JIT/Lean
a period of time, the data are entered into the computer. factory, real-time visibility lets people know of the problem
Sometime later the computer prints a summary report in- right then and there, while the cause is obvious. Coupled
cluding an analysis of quality defects. The report is sent to with the JIT/Lean philosophy that says that the problem
management through the company mail or via an intranet must be solved before going any further, this visibility be-
system. The report may rest in queue for a length of time comes a driver for elimination of problems and for process
before being examined. Managers in traditional plants are improvement.
kept so busy with meetings and firefighting they hardly
have time to read their mail, but eventually they will get
around to looking at the report. They will see that the line
Eliminating Bottlenecks
is (or was) having a quality problem and pass the report to Richard Schonberger makes the interesting point that only
the floor supervisor for action. The floor supervisor will at- the bottlenecks in a traditional factory forward work to the
tempt to see whether the problem still exists. If it does not, next process just-in-time.16 He explains that in a conven-
case closed. It happened days or weeks ago, and the opera- tional manufacturing plant, the bottleneck process is one
tor, who up until now was unaware of the defect(s), can’t that goes as fast as it can all the time, barely keeping up with
remember anything that would confirm the problem, let demand. If it breaks down, there is real trouble. To keep it
alone suggest a root cause. If the floor supervisor is lucky, running and to attempt to find ways to increase its output,
the problem may still be there, and the cause may be found. the bottleneck receives attention out of proportion to the rest
But in the meantime, weeks of production may have been of the plant, monopolizing the efforts of engineering and
defective. management.
In this control loop, at least six functions are involved In a JIT/Lean plant, all processes are potential bottle-
before the loop is closed. That is bad enough, but when the necks in the sense just discussed because there is little ex-
time delay factor is added, finding root causes of problems cess capacity and there are no buffer stocks to fall back on
that come and go is unlikely. Process improvement is much when a process or machine shuts down. The upside of this
more difficult in this kind of traditional production system. is that all processes are constantly under scrutiny—none is
Having had personal experience with both, the authors can ignored. As Schonberger also points out, the fact that all the
attest that the most expensive, most sophisticated computer- processes must be watched carefully makes it imperative that
based defect analysis system, such as might be employed in the process operators play a major role in the care and moni-
the above example, is infinitely inferior to the simple one- or toring and improving of the processes because there cannot
two-step, person-to-person, no-computers-involved control be enough engineers to go around when every process is a
loop of JIT/Lean when it comes to presenting useful infor- potential bottleneck.
mation on a timely basis for the purpose of problem solving For this discussion, though, the bottleneck is put into a
and process improvement. slightly different frame of reference. We are talking primarily
M21_GOET1853_08_SE_C21.indd 388 09/04/15 6:41 AM

about the setup stage of a JIT/Lean operation when trying to

establish a balanced, rational flow through the production Financial Data on the Factory Floor
system. In this early stage, it is not uncommon to have some Work cells develop many kinds of charts for display in their
real functional bottlenecks. For example, if the new JIT/Lean work areas. In a San Antonio plant where employee empow-
line is being established to produce as many as 1,000 parts erment was in full bloom, we encountered financial charts in
per day, but the manual assembly process can turn out only the production areas. The cells determine their contribution
per unit produced to several financial factors, including waste,
800, there is a bottleneck. One way or the other, the process labor cost per unit, and so on, and post a running record of the
must be brought up to 1,000 or more. If the process employs numbers on a chart in each work cell for all to see. The workers
two people using hand tools, then the answer is simple: add in the cells were obviously tuned in to this and were eager to
a third person and the appropriate tools. Then the capacity explain both the data and the methodology used for collecting
for that process should be 1,200 per day. The extra capacity it. We found this interesting because workers in most factories
do not have a clue as to their impact on cost or profit. Seldom
will have to be accepted until the process can be improved to do line workers take an interest because management doesn’t
bring the daily single-operator output up to 500 each, mak- give them financial information. As a result, a connection be-
ing it possible to go back to two operators. tween their work and the financial well-being of the company
Perhaps a machine can produce only 75% of the pro- is seldom made. In this San Antonio company, however, with
jected demand. Here the options are a little different. This management’s encouragement, the production workers them-
selves proudly keep track of how their cells contribute to the
may be a very expensive machine, too expensive to replicate. company’s financial results. The benefits of this approach can
Is it possible to put that machine to work somewhere else be enormous. With the information constantly in front of the
and put two lower-capacity, less expensive machines in the cells’ workers, they always have an internal urge to improve. On
line, or maybe a single new, higher capacity machine? Can the other hand, if something goes wrong, the cell is the first to
the old machine be modified to increase its output? If setup know and react.
time is a part of the machine’s normal day, there is a poten-
tial for improvement. Another possibility may be adding a
second, smaller machine to augment the existing machine’s a cross-functional team to solve the problem. The team
capacity, although two different machines on the same line should have representation from engineering, manufactur-
making the same part or product is not a desirable solution. ing, finance, and any other relevant functional areas. Its job
Another kind of bottleneck can exist when a single physi- is to list all possibilities for eliminating the bottleneck. This
cal process is shared by two or more JIT/Lean lines. It is pref- can be done by brainstorming, setting aside those ideas that
erable to make each JIT/Lean product line independent and don’t make sense, and finding the most satisfactory solution
self-sufficient, but this is not always possible. An example in terms of quality, expense, efficiency, and timing.
might be a single-wave solder machine servicing two or more Frequently, the solution to a bottleneck results in some
JIT/Lean lines. Because of the cost, size, and maintenance re- degree of excess capacity in the process, as occurred earlier
quirements of such a machine, it may not be feasible to put one when the third operator was added. This is not always bad.
in each JIT/Lean product line. Rather, all the JIT/Lean lines Although JIT/Lean always works to achieve more and more
take their PC boards to a single-wave solder service cell for efficiency—and, taken to the extreme, would have just ex-
soldering. The JIT/Lean lines operate independently of each actly enough capacity to produce the demanded level and no
other. Therefore, it is difficult to predict when conflicts might more—in a practical sense, some excess capacity is desirable.
develop. If they all need servicing at the same time, there is a If a line is running at top speed every day, the operators will
bottleneck. If soldering delays cannot be accommodated, then have no time for problem solving or improvement activities.
one or more of the lines must have its own soldering capability. Some time should be set aside each week for those two items
Technology can often provide solutions to such prob- as well as for maintenance and housekeeping. For most ap-
lems. For example, 20 high-quality drag soldering machines plications, 10 to 15% excess capacity is acceptable.
could be purchased for the price of one wave soldering ma-
chine. Production rates of drag solder machines are much
lower than those of wave machines, but in many applications,
Small Lot Sizes and Reduced Setup Times
they are ideal for placement right in the JIT/Lean line, dedi- For a century, industrial engineers have been taught that the
cated to the line’s product and controlled by the line. Such larger the production lot size, the greater the benefit from
solutions are feasible with many other types of machines. economy of scale. If one wanted to hold down cost of produc-
Whether your bottlenecks appear during the setup tion, bigger lot sizes were the answer. This was the conven-
phase or during production, the best approach is to assign tional thinking until the JIT/Lean manufacturing bombshell
landed on our shores from Japan in the early 1980s. Under
the leadership of Toyota and Taiichi Ohno, Japanese manu-
facturers concluded that the ideal lot size is not the largest
Control Loop Effectiveness but the smallest. Is it possible that both the manufacturers
The effectiveness of any control loop is inversely proportional and the universities could have been wrong all those years?
to the number of functions in the loop and the time required to Our conclusion is that the big lot was appropriate as long
close the loop. as mass production systems were used, although they cer-
tainly had major problems even then. But once the Toyota
M21_GOET1853_08_SE_C21.indd 389 09/04/15 6:41 AM

Production System came into being, the big lot was not only JIT/Lean have done far better, often taking setups from
out of step but impossible to justify. many hours to a few minutes. For example, by 1973 Toyota
It stands to reason that if a machine is used to produce had reduced the setup time for a 1,000-ton press from four
different parts that are used in the subsequent processes of hours to three minutes. Over a five-year period, Yanmar
production and if the time it takes to change the machine Diesel reduced the setup time for a machining line from
over from one part type to another is six to eight hours, then over nine hours to just nine minutes.17 These are not isolated
once the machine is set up for a particular part type, one examples.
should make the most of it. It seems to make more sense to The general rule seems to be that organizing properly
run the machine with the same setup for four days, setting for the setup, making sure the tools and parts that will be
up for the next part on the fifth day, than to run one day, needed are in place, and having the right people there at
spend the next on setup, and so on. The one-day runs result the appointed time will yield an immediate 50% reduction.
in about 50% utilization time for the machine, assuming a Then, by analyzing the setup process step by step, a company
single shift for simplicity. The four-day run yields about 80% can usually streamline the process to cut time by half again.
utilization. Ultimately, the machine itself may be modified to make
So what is the problem? If there are four different parts setup faster and less difficult (e.g., by eliminating the need
to make on the machine, simply make 20 days’ supply in four for adjustment). In any mature JIT/Lean factory, it would be
days and then go to the next part. By the time production a rare setup that took more than a few minutes, whereas the
has used all the 20-day supply of the first part, the machine same setups were previously measured in hours.
will have cycled back to make that part again. Perhaps a 30- The previously supposed advantage of manufactur-
day supply should be made, just in case the machine breaks ing in big lots completely disappears when setup times
down. Would a 40-day supply be better? Where does this are brought down to the kinds of times being discussed
stop? If we are willing to risk an occasional breakdown, the here. Machine utilization can be high to satisfy account-
20-day cycle is acceptable. A place to store a 20-day supply ing criteria, and lots can be small to prevent waste and to
of not just one part type but four part types will be needed. enable kanban pulling straight from the machine to the
Then the capability to inventory, retrieve, and transport next process. Short setup times coupled with kanban have
these parts will also be needed. That represents land, facili- the advantage of flexibility of production. For example,
ties, and labor that would not otherwise be needed. None of Harley-Davidson used to run its motorcycle line in long
it adds value to the product, so it is pure waste. It is likely that production runs of the same model. If a dealer placed an
these costs add up to more than the supposed inefficiency of order for a model that had just finished its run, it might
running the machine with a 50% utilization factor, but these have been several weeks before that model could be run
costs are more acceptable to accountants. Land, buildings, again, allowing the order to be filled. Harley was one of the
and people in motion are not as apparent as examples of first North American companies to adopt the total quality
waste as machines that are not making product. Traditional methods—as a means of survival.
thinking says, “Because the machine is busy, people are busy, For many years now, Harley has been able to mix
floor space is full, it can’t be waste.” But it is. models on the production line. It no longer has to pro-
In addition, suppose that a production flaw is found in duce its product in big lots because it was able to reduce
one of the parts, caused by the machine. Every part made setup times all along its line. Now when an order comes
in that lot is suspect. Samples will be tested, and maybe the in, it is placed in the queue without regard for the model.
whole lot will have to be scrapped. This could be 20 days’ Customers get their new bikes as they want them config-
supply, representing significant cost. The line will be down ured and far sooner.
until new parts can be made—a major disruption. Led by Nissan in the United States, auto production
Suppose the engineering department corrects a design lines are beginning to be more flexible as well. Several manu-
weakness in one of the parts. Is the entire inventory of parts facturers have lines that accommodate two or more models
already made scrapped, or do we use them up in production, of similar vehicles. The Nissan plant in Canton, Mississippi,
knowing that they are not as good as the newly designed which came on-line in 2003, has the capability to intermix
part? Either is a bad proposition. five dissimilar models in lot sizes of one on the same line.18
Now assume that the one-day 50% utilization cycle on Flexibility like that can happen only when model-to-model
the machine was employed. The greatest loss we could take setup is eliminated or made insignificant. Who benefits? The
would be eight days’ inventory for any of these cases. The customer gets more choice, higher quality, and lower cost,
eight-day supply can be stored easier than a 20-day supply. and the manufacturer becomes more competitive.
This would reduce the cost of warehousing, control, and
transportation. Any design changes can be cut-in in eight
days. Everything seems positive except the 50% machine
utilization. Small Lot Sizes
Ideally, setup time might be reduced to 30 minutes, pro- Small lot sizes result in improved product quality, production
ducing 1 day’s supply of each part every day. Utilization will flexibility, and customer responsiveness. Shortened setup times
be 75% and need for any warehousing may be eliminated. make small lots possible.
This may seem to be out of reach, but manufacturers using
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Total Productive Maintenance and this book, but it is important to understand the dependence
Housekeeping on them by just-in-time/Lean. Is JIT/Lean a necessary pre-
requisite for process capability study and improvement, or
This is difficult to comprehend, but many manufacturers for SPC, or for continual improvement? The answer is no.
spend vast amounts on capital equipment and then ignore the At least one of the three is being done in the majority of tra-
machines until they self-destruct. By contrast, one can find ditional production plants. Still, there is a connection. The
relatively ancient machines in total quality Japanese factories philosophy and discipline of just-in-time/Lean virtually de-
that look like new and run even better. This must become mand that they be used in any JIT/Lean environment. While
the norm in the United States if U.S. companies are going to a traditional manufacturing operation may employ one or
compete with the rest of the world. Because a JIT/Lean pro- more of the three, the JIT/Lean manufacturing operation
duction line operates very close to capacity in every process, must, and it must be all three. The reason may be obvious to
no tolerance exists for machine failure. When the machine you by now. The JIT/Lean plant is fragile. Everything must
is supposed to be running, it had better be, or the whole work when it is supposed to, and it must work close to per-
line will suffer. Companies that have adopted the Japanese fection. There are no warehouses of buffer stock to come to
philosophy of total productive maintenance have virtually the aid of a broken-down process. There is never much ex-
eliminated machine breakdowns. Machines are cleaned and cess capacity to help out in tight spots. All the processes with
lubricated frequently, most of that work being done by the their machines and people must operate in top form all the
operators who run the machines. More technical preventive time.
maintenance routines are performed by experts at frequent This is where process capability, SPC, and continual
intervals. The machines are continually upgraded and modi- improvement come in. Even before the JIT/Lean line can
fied for closer tolerances, faster setup, and fewer adjustments. be certified for full production, the line has to be balanced
Not only do the machines last longer, but also during their or rationalized, and a flow has to be established. Unless it
entire life span they perform as well or better than when new. is known what the processes are capable of doing in terms
The difficulty with TPM is finding the time in which of quality and quantity, it will be difficult to achieve the
to perform the maintenance, especially in factories in which even flow that is a necessary prerequisite of a kanban sys-
three shifts are the norm. The third shift is rare in Japan tem. Without that, there is no JIT/Lean. In the traditional
and Europe, so companies there do not share this problem. factory, not knowing the capability of the processes is not
Regardless of the workday schedule, it is imperative that such a problem; normally, gross overcapacity exists, so parts
maintenance time be provided. The operator-performed are stored for the day things go wrong, and the bad parts are
maintenance is done during the normal shift (one reason to sorted out because there will still be good ones to use. In JIT/
have a bit more than just enough capacity—a half-hour to an Lean, no extra parts can be made, and all have to be good.
hour a day of excess capacity should more than cover opera- Workers must have a handle on the processes.
tor maintenance needs). Because one cannot afford (from the time or cost stand-
An added benefit of turning some of the maintenance point) to make defective parts, the processes must be in
responsibility over to the operators is that the operators de- control at all times. The only way to ensure this is through
velop a sense of ownership for the machines they use and statistical process control. This is not as necessary in a tra-
care for. They pay keen attention to the looks, sounds, vibra- ditional plant, but it is absolutely essential in JIT/Lean.
tions, and smells of the machines to spot problems before Perfection is difficult to achieve in any circumstance, so it
they develop. For the first time, the operators are in a posi- follows that in a complex manufacturing situation, perfec-
tion to call for maintenance before breakdown occurs. TPM tion is next to impossible. This is certainly true. We never
is a must for JIT/Lean production systems. quite get to the point where all the parts are perfect, but with
Housekeeping is another area that is different under solid, stable, in-control processes forming the basis of a re-
JIT/Lean. It is not unusual for the operators themselves to lentless continual improvement program, we can come very,
take on the responsibilities formerly associated with janitors. very close. (Some of the very best American plants target
In the better JIT/Lean plants, one will see planned downtime and achieve Six Sigma, 3.4 defects per million.) The best that
being taken up with cleaning chores—everything spotless, can be achieved is the minimum that is acceptable for a JIT/
everything in its place. (Remember Five-S from Chapter 15.) Lean factory. In the process of continual improvement, ways
It follows that better performance will result from a clean, are found to do things better, faster, cheaper, and with con-
tidy, and well-organized work area than from one that is stantly improving quality. The process never ends, and the
dirty and cluttered with tools scattered all over. People like diminishing-return syndrome doesn’t apply.
a clean, bright, rational place in which to work. Again, time
will have to be made available for this activity.
Suppliers
Process Capability, Statistical Process In the area of suppliers, JIT/Lean has different priorities
from the traditional production system. The most obvious
Control, and Continual Improvement difference is the need for frequent, small-lot deliveries of
Process capability, statistical process control (SPC), and con- parts, supplies, and materials, rather than the traditional in-
tinual improvement have already been discussed in detail in frequent, huge-volume deliveries. We are finding more and
M21_GOET1853_08_SE_C21.indd 391 09/04/15 6:41 AM

more JIT/Lean plants in which the suppliers deliver mate- reason to want to continue to do business with it. More and
rials directly to the production cells, usually referred to as more companies are turning to supplier partnerships to ce-
point-of-use. Several systems have been developed to cue ment these relationships. What this means is that the two
the supplier that it is time to replenish materials. One is the companies agree to work together, not only as supplier and
dual-bin kanban system. Two parts bins are used. Bin capac- customer but also as unstructured partners. The JIT/Lean
ity may range from a few hours’ to a couple of weeks’ supply, manufacturer may, for example, provide training and techni-
depending on value, size, usage rate, and intended frequency cal assistance to the supplier to get it started in total quality,
of replenishment. When the cell has withdrawn all the parts JIT/Lean, SPC, and other processes. The JIT/Lean firm may
from one bin, the empty bin itself is the signal that it is time certify the supplier’s quality system to the extent that incom-
to replenish. The supplier routinely checks the bins on the ing inspections are eliminated, relying on the partner sup-
factory floor, and whenever he or she finds a bin empty, it is plier to provide acceptable quality in all its deliveries.
refilled with the exact number and kind of part designated on The supplier partner may assign one or more employees
the bin label, usually in bar code. The supplier’s bin checking to take up residence in the JIT/Lean manufacturer’s plant.
must be scheduled frequently enough to ensure that the sec- Duties will include continually checking the kanban bins
ond bin is never exhausted before the first is replenished. In mentioned above, having them replenished appropriately,
a variation on the dual-bin kanban scheme, the cell’s opera- and coordinating on-time deliveries of materials, parts,
tors signal the supplier that a bin is empty, either by bar code and other supplies provided under the JIT/Lean partner-
transmission or by automated electronic purchase order that ship agreement between the manufacturer and supplier. In
is triggered by wanding the empty bin’s bar code. addition, the resident supplier employee is empowered to
Clearly, for this kind of point-of-use materials delivery do whatever is necessary to solve supply problems before
system to work, the supplier must be 100% reliable, the ma- they can cause disruption in the JIT/Lean factory. (While
terials delivered must be of consistently high quality, and both this practice has been around for two decades in the United
the supplier and the manufacturing organization must be States, and much longer in Japan, it is now sometimes re-
partners for the long haul. Consequently, choosing the suppli- ferred to as JIT II. In the authors’ view, it is simply a logical
ers for a JIT/Lean factory is a much more demanding job than variation of the materials element of just-in-time/Lean that
it is for a traditional plant. Traditional factories are not so con- can work very well in numerous situations.)
cerned with the delivery being on the dock at the precise date The supplier may also be called on to assist in the de-
on the purchase order. It was going to be stored for a while sign phase of a new product, bringing its unique expertise to
anyway. Before that lot was used up, there would be a nother the design team. Such relationships usually carry a multiyear
shipment in the warehouse. Neither do traditional factories agreement, so the supplier can count on the business as long
concern themselves as much with quality from suppliers. The as its performance remains high.
bad parts could always be sorted out, leaving enough good There may be preferential bidding treatment—say,
material to keep the line moving. The primary interest was an advantage of 10% or more over nonpartnership rivals.
price. Low price got the order. It quickly becomes apparent Effectively what happens is that the JIT/Lean manufacturer
that this style of purchasing is incompatible with JIT/Lean. extends its factory right back into the supplier’s premises.
The JIT/Lean plant must have its materials on the dock They operate to each other’s requirements, and both are
exactly on the day specified—in many cases at the hour and locked to each other. The results of this kind of arrangement
minute specified—or production may grind to a halt. Every have been excellent.
part delivered must be a good part—there is no inventory This kind of relationship is a far cry from the early ill-
cache from which to scrounge more parts to keep things conceived attempts of some manufacturers to get into JIT/
moving. This means that the suppliers’ quality must be con- Lean before developing a full understanding of the con-
sistently at or above specified requirements. Delivery and cept. In those days, some companies would determine that
quality performance requirements of JIT/Lean effectively by using JIT delivery of parts and materials, money could
rule out buying for price. There is an often used phrase in be saved. That part had some merit, but the execution was
JIT/Lean and TQM purchasing: “cost versus price.” It sug- flawed. The companies simply told their suppliers to deliver
gests a holistic approach to the analysis of purchasing on the a week’s supply of materials once a week, rather than their
basis of total cost and value, not simply vendor price. How customary 60 days’ supply every two months. The suppliers’
reliable is a particular vendor in terms of JIT/Lean deliver- reaction is easy to imagine. They were being told, in effect,
ies? What kind of quality can be expected from the vendor? to store the materials in their own warehouses (the capacity
Does the vendor use JIT/Lean, SPC, and continual improve- for which they didn’t have) and to trickle the deliveries from
ment? Are its processes stable and in control? A supplier that the warehouses in small quantities weekly. This was simply
gives positive responses in these and other areas may not be a case of moving the storage facility from the manufacturer’s
the lowest price contender but may well be the lowest cost. plant to the suppliers’. A GM or a Ford has the power to do
Value is what the JIT/Lean purchasing manager must look that to a supplier, but the suppliers, being smaller and with
for, not lowest price on a bid sheet, because in JIT/Lean that less influence, couldn’t force the same back to their own sup-
turns out not to be the whole story. pliers, so they got caught in an intolerable situation. Only
When a JIT/Lean factory finds a supplier that deliv- when the suppliers revolted and cried long and loud that this
ers excellent materials on time, every time, there is every was not JIT—“and by the way, if you want me to store your
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goods for you, you’re going to pay the tab anyway”—did equipment were cancelled and penalties were paid, and we
the would-be JIT/Lean manufacturers see the error of their walked away from the whole idea. We had learned in those
ways. few weeks of exposure to JIT/Lean that world-class manu-
The new approach is working well because both parties facturing equates to JIT/Lean in a total quality environment,
benefit enormously. If a company wants JIT/Lean, then it not to a factory full of robots and automatic guided vehicles.
must have the best possible suppliers, and both must want to JIT/Lean and automation are compatible, but one should
work together for the long haul. look long and hard at the need, and the company’s readiness
for it, before automating processes.
Having said that, automation clearly has its place in
Automation and JIT/Lean harmony with JIT/Lean. There are many examples of very
Automation has not been discussed a great deal in this successful automated plants, especially for high-volume
book. We have stuck to the fundamentals. One should not manufacturing. Automation and JIT/Lean are completely
read into this, however, that JIT/Lean and automation are compatible. Probably the best example of that is in today’s
mutually exclusive. Rather, it is more meaningful to discuss auto industry. Two such plants have recently come on-line
the processes that use humans and manual machines than in Alabama and Georgia. Hyundai opened its first American
the same processes powered by robots. If the fundamentals plant in Montgomery, Alabama, in May 2005, making
where humans apply are understood, the same fundamen- 300,000 vehicles per year there. This plant is one of the first
tals will be useful in an automated plant. All the same rules designed from the ground up as a highly automated JIT/
apply. We are not anti-automation. Lean auto production facility. A tour of the plant will con-
We are, however, against “automation for the sake of vince the fervent skeptic that it has taken the auto indus-
automation.” Many companies have made the costly mistake try into a new era in which JIT/Lean and automation are
of thinking that automation will solve manufacturing prob- superbly blended. Where traditional auto plants tended to
lems. During the 1980s, manufacturers in the United States be dark, noisy, grimy, smelly, hot, and frantic in the hustle
invested billions of dollars in automation. Cadillac built what and bustle, Hyundai’s Montgomery plant is none of that. No
was at the time the most highly automated auto assembly matter where you are in the plant, the atmosphere is almost
plant in North America and probably in the world. It turned soothing, and it is certainly one of the most pleasant facto-
into a nightmare of high-tech problems that took years to ries of any type that the authors have ever visited. It is a place
sort through. The plant that was to produce six cars per where the 2,300 employees genuinely seem to enjoy work-
hour, after a year of operation, could do only half that and ing. And it doesn’t end there. An hour from Montgomery,
the quality of manufacture was, to put it charitably, question- up Interstate 85 in West Point, Georgia, Kia Motors opened a
able. Two years later, Toyota opened a new plant in Kentucky. sister plant of the same size and capacity, using the same au-
Visitors to that plant, expecting to see a high-tech automated tomation technology and, of course, JIT/Lean. The first Kia
production line, were disappointed to find very little in the Sorento rolled off that line in November 2009.
way of robotics.19 The difference in the philosophies of the Regardless of factory age, and although employing large
two companies becomes obvious. Executive managers at GM numbers of workers, the auto industry is a big user of auto-
believed that by spending enough money, they could buy mation whether in North America, Japan, or Korea. And all
their way out of the trouble they were in. Toyota knew what those plants use JIT/Lean successfully. Remember, JIT/Lean
it was capable of doing in one of its other low-tech plants was originally designed for an auto producer, and as auto-
that was operating successfully in Japan and simply cloned mation has been integrated, and as automation capabilities
it down to the last detail in Kentucky. No razzle-dazzle; just have evolved, JIT/Lean has been there doing its job. In these
good common sense. plants, JIT/Lean is at least as valuable as it is in plants with
Automation may be advantageous in many applications, less automation. Its pull system prevents overproduction of
but if you have not solved the problems in the human-operated any manufacturing element, and supplies materials at the
versions of those same applications, you are not ready to auto- front end of the process when needed, and does it without
mate them effectively. If you try, you will automate your prob- the massive inventories of the pre-JIT/Lean era. Whether the
lems and will find the robots far less adept at working around processes are operated by humans or robots makes no differ-
them than the humans they replaced. ence in this regard.
It is frequently found that the need for automation is
decreased or eliminated by converting to JIT/Lean. We cer- Summary
tainly found that to be the case in two electronics plants. We
were well into a program to build a factory of the future. The 1. JIT/Lean is a management philosophy that seeks to eliminate
building was ready, much of the automation was on hand, all forms of waste. As a production system, JIT/Lean produces
and the rest—several million dollars’ worth—was on order only what is needed, when it is needed, in the quantity needed.
when we started the conversion to JIT/Lean. Within months, 2. The root justification for JIT/Lean is improved product quality
it had become obvious to everyone, including the designers with lower costs.
of the new factory, that we were getting more out of JIT/Lean 3. JIT/Lean began as a means of reducing the seven wastes. Over
for almost no investment than could be projected for the new time, the JIT/Lean system came to be a pull system whose
automated plant. The outstanding orders for automation small lot production is supported by reduced setup times. Total
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productive maintenance and statistical process control were Staging

integrated to provide the necessary production reliability and Statistical process control (SPC)
predictability. Continual improvement provides the vehicle for Supplier partnerships
the relentless attack on all wastes. Total productive maintenance (TPM)
4. JIT/Lean is at its best as a part of a total quality system. Results Toyota Production System (TPS)
can be severely restricted when JIT/Lean is operated without Value-adding labor
the total quality umbrella. Work-in-process (WIP)
5. Inventory reduction, shortened cycle time, continual improve-
ment, and elimination of waste are all inherent benefits of JIT/ Factual Review Questions
Lean.
6. JIT/Lean has a different set of requirements from traditional 1. Define JIT/Lean.
production systems: providing training in new skills; rational- 2. Explain the difference between the traditional production sys-
izing production flow for the pull system; empowering opera- tem and JIT/Lean in terms of placement of production control.
tors to take advantage of JIT/Lean’s visibility features; guarding
against bottleneck vulnerability through TPM, process capa- 3. Describe the bases for production scheduling for mass produc-
bility study, SPC, and continual improvement; producing small tion systems and for JIT/Lean.
lots and shortening setup times; and establishing close working 4. Explain how a JIT/Lean process knows when and how much
relationships with superior suppliers. to produce.
7. JIT/Lean is successfully employed around the world in situa- 5. What two fundamental advantages are provided by JIT/Lean?
tions where automation is nonexistent and equally successful 6. List the seven wastes.
in the most highly automated plants on the planet. World-class
7. Identify the two pillars of the Toyota Production System.
manufacturing employs JIT/Lean as an integral part of a total
quality system, producing the highest quality products at com- 8. Explain how traditional mass production contributes to the
petitive prices. It is not related to the presence or absence of seven wastes.
automation. 9. Explain how JIT/Lean impacts each of the seven wastes.
10. Discuss JIT/Lean’s vulnerability to parts shortages, break-
downs, and bottlenecks from the perspective of the mass pro-
Key Terms and Concepts duction advocate and the JIT/Lean advocate.
11. Explain the push system and what triggers it to start.
Automated electronic purchase order
Automation 12. Explain the pull system and how it is started.
Autonomation 13. Why is superior machine maintenance and improvement criti-
Bar code cal to JIT/Lean?
Bottlenecks 14. Describe how kanban supports the pull system.
Buffer stock
15. What are the advantages of reduced setup time?
Continual improvement
Cycle time 16. Why does this book recommend that JIT/Lean be a part of a
Demand flow total quality system?
Dual-bin kanban 17. Describe JIT/Lean’s objectives relative to inventory and WIP.
Electronic kanban 18. Discuss the relative complexity of the two production systems.
Focused factory
19. Explain cycle time, and list its constituent elements.
Internal/external customers
Just-in-time (JIT) 20. Why is a JIT/Lean production line-stop considered a positive
JIT/Lean phenomenon?
JIT II 21. Explain how inventory can deter problem solving.
Job shop 22. Describe the difference in plant organization and layout be-
Kanban tween the two production systems.
Lean production
Line stops 23. Explain how JIT/Lean can cause immediate cycle time
Lot size reduction.
Manufacturing process 24. To whom is credit given for the development of the JIT/Lean
Marketability system?
Mass production 25. Discuss the relative value of JIT/Lean in production environ-
Overhead/overhead rate ments of little or no automation versus those that are highly
Point of use automated.
Production flow
Production smoothing
Productivity gap Critical Thinking Activities
Pull production
Push production 1. Study the operations of an electric utility company, and deter-
Setup time mine where the production of electricity stands vis-à-vis push or
Seven wastes pull systems. Using charts and narrative, explain your finding.
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2. Study the operation of a supermarket, and list the JIT/Lean productivity, they are concerned that conversion to JIT/Lean, with
features in use. Look for special JIT/Lean practices such as sup- its precariousness of having little or no inventory of materials on
plier partnerships, and describe how they operate in a super- hand would be too great a risk. In order to lower production costs
market environment. and improve quality, management is leaning toward a hybrid JIT/
3. Develop a chart contrasting the philosophies of mass produc- Lean system instead. This system will employ the principles and
tion and JIT/Lean. methodology of JIT/Lean, but will maintain buffer stocks of mate-
rials and assemblies to prevent every part delivery problem or mal-
4. Mass production was the most successful production system
function on the line from shutting down the production process.
from the time of Henry Ford’s Model T until the 1960s. There
is no question that this system permitted the manufacture of a
wide range of goods at much lower prices than had been pos- Discussion Questions
sible before then. Given this success, how do you explain that Discuss the following questions in class or outside of class with
JIT/Lean is supplanting mass production? your fellow students:
5. You are the president of a new division of a major auto pro- 1. If something as trivial as a missing screw or a broken tool can
ducer. Your organization has been chartered to design and stop a JIT/Lean production line, how could Ohno consider
build a line of cars to compete with intermediate-size Asian that to be a power of the concept?
and European imports. The division is to be located in a his- 2. Discuss what would likely happen if a needed screw or a work-
torically agricultural state that has availability of unskilled ing tool is missing from a traditional mass production line.
labor but no experience in auto manufacturing. Your key staff
3. Discuss the implications of a JIT/Lean production system that
and mid-level managers will be handpicked from among other
employs buffer stocks or materials and parts.
divisions. The corporate headquarters staff has not been able
to come to terms with how the new division should be set up. 4. Discuss the potential for a nonmanufacturing organization to
The options seem to be these: (a) set up as a total quality orga- benefit from employment of JIT/Lean.
nization, using JIT/Lean in the factory or (b) because the cor-
poration has little experience with either, set up like the other Endnotes
divisions in a traditional hierarchy and production system,
converting to total quality and JIT/Lean little by little as time
1. James Womack, Daniel T. Jones, and Daniel Roos, The
and experience permit. You believe that in the long run, total
Machine That Changed the World (New York: HarperCollins,
quality and JIT/Lean are necessary to compete, especially with
1990), 13.
the Japanese and Koreans. But you and the people who will
2. Taiichi Ohno, Just-in-Time for Today and Tomorrow (Cam-
make up the division’s management team are experts in mass
bridge, MA: Productivity Press, 1990), 2.
production. Going the traditional route looks like an easier
3. Jeffrey K. Liker, The Toyota Way (New York: McGraw-Hill,
start-up path. Going directly to total quality or JIT/Lean has
2004), 129–130.
unknowns.
4. Ohno, Just-in-Time for Today and Tomorrow, 28–29.
The CEO is leaning toward letting you make the call, but
5. Ibid., 9.
he wants you to convince him and the senior staff. You have
6. Ibid., 75.
to prepare a briefing for the corporate staff for that purpose.
7. Womack, Jones, and Roos, The Machine That Changed, 62.
Which course will you choose? Explain the advantages and
8. David Lu, Kanban—Just-in-Time at Toyota (Cambridge, MA:
possible pitfalls of both, and make the argument that supports
Productivity Press and Japanese Management Association,
your choice.
1986), 6.
9. Materials and general and accounting expenses are held con-
stant for this example to keep it simple, although both could
Discussion Assignment 21.1 be expected to decrease under JIT/Lean.
10. C. E. Sorensen, My Forty Years with Ford (New York: Norton,
Taiichi Ohno’s JIT/Lean system, with the elimination of practically 1956), 174.
all inventories, and using demand pull (kanban) to coordinate the 11. Womack, Jones, and Roos, The Machine That Changed, 83.
flow of materials and assemblies through the production process, 12. W. Edwards Deming, Quality, Productivity and Competitive
has been resisted by some on the basis that if even the smallest part Position (Cambridge, MA: MIT Center for Advanced Engi-
in the system failed to appear or perform when needed, the entire neering Study, 1982), 30.
process must come to a halt. Ohno proclaimed that this “weakness” 13. Lu, Kanban, 73.
of JIT/Lean was in fact its power since it removed all safety nets, 14. M. Scott Myers, Every Employee Is a Manager (San Diego, CA:
and, with the production line stopped, forced the entire organiza- Pfeiffer, 1991), 72.
tion to focus on resolving the root cause of the problem so that it 15. Lu, Kanban, 87–92.
never recurs. 16. Richard I. Schonberger, World-Class Manufacturing (New
CourseKar Industries manufactures golf carts. Their product York: Free Press, 1986), 67.
is reasonably successful, but competing manufacturers sell their 17. Kiyoshi Suzaki, The New Manufacturing Challenge: Techniques
carts for less than CourseKar can, and yet have fewer product war- for Continuous Improvement (New York: Free Press, 1987), 43.
ranty and reliability problems. As a result, CourseKar’s market share 18. David Welch, “How Nissan Laps Detroit,” BusinessWeek
has been slipping, and the Board of Directors is calling for action. (December 22, 2003): 58–60.
Management knows that its competition has been using JIT/Lean 19. Maryann Keller, Rude Awakening: The Rise, Fall, and Struggle
production techniques for several years. But while they find JIT/ for Recovery of General Motors (New York: Morrow, 1989),
Lean appealing for eliminating waste and improving quality and 206–209.
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Chapter

After completing this chapter, you should be able to:

JIT/Lean Defined not exactly what was originally intended, just-in-time/Lean

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Figure 21.1a The Traditional Production Process (Simplest Depiction).

Kits Released to If Local Staging Each of the Numbered

Frame Mech. Elec. Modules Finished Goods

Figure 21.1b Actual Practices in the Traditional Production Process.

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Figure 21.2 Factory Producing to Forecast Demand (Mass Production).

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Figure 21.3 Factory Producing to Orders (JIT/Lean).

So far, we have viewed JIT/Lean from the point of view of 1. Overproducing

Figure 21.4 Internal Supplier–Customer Relationships.

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Figure 21.5 Mass Production Push System.

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Figure 21.6 Just-In-Time/Lean Demand Pull System.

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Process Problems Traditionally, it has been a major problem to change

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1 7 A.M. 8 A.M. 0 8 A.M. 10 A.M. 3

2 8 A.M. 9 A.M. 1 10 A.M. 12 noon 4

3 9 A.M. 10 A.M. 2 12 noon 2 P.M. 5

4 10 A.M. 11 A.M. 3 2 P.M. 4 P.M. 6

5 11 A.M. 12 noon 4 4 P.M. 6 P.M. 7

6 12 noon 1 P.M. 5 6 P.M. 8 P.M. 8

7 1 P.M. 2 P.M. 6 8 P.M. 9 P.M. 8

8 2 P.M. 3 P.M. 6 9 P.M. 10 P.M. 8

9 3 P.M. 4 P.M. 6 10 P.M. 11 P.M. 8

10 4 P.M. 5 P.M. 6 11 P.M. 12 midn. 8

11 5 P.M. 6 P.M. 6 12 midn. 1 A.M. 8

12 6 P.M. 7 P.M. 6 1 A.M. 2 A.M. 8

13 7 P.M. 8 P.M. 6 2 A.M. 3 A.M. 8

Figure 21.7 Cycle Time Example.

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Figure 21.8 JIT/Lean Exposes Hidden Problems.

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Traditional Factory Organized by Processes

PRODUCT 1 PRODUCT 2 PRODUCT 3

Space for new products

JIT/Lean Factory Organized by Product

Figure 21.9 Comparison of Factory Floor Layouts: Traditional Versus JIT/Lean.

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LOCATION PART NO.

Figure 21.10 Withdrawal (Move) Kanban (MK).

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MATLS PART NO.

Figure 21.11 Production Kanban (PK).

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Figure 21.12 Dual-Card Kanban System.