Just-in-Time Systems

Reducing Variance, Waste and Lead Time in the Supply Chain

What is JIT?
a corporate system designed to produce output within the minimum lead time and at the lowest total cost by continuously identifying and eliminating all forms of corporate waste and variance. a corporate strategy a philosophy Focus of JIT: variance & waste

INTRODUCTION
Just-In-Time(JIT) is defined in a philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity.

It also has been described as an approach with the objective of producing the right part in the right place at the right time (in other words, Just In Time)

Waste results from any activity that adds cost without adding value,

such as The unnecessary moving of materials, The accumulation of excess inventory,

The use of faulty production method that create products requiring subsequent rework.

HISTORY OF JIT
The technique was first used by the Ford Motor company during 1920s. But the technique was subsequently adopted and publicised by Toyota Motor Corporation of Japan as part of its Toyota production System(TPS). In 1954 Japanese giant Toyota implemented this concept in order to reduce wasteful overstocking in car production.

PHILOSOPHY OF JIT
Just In Time(JIT) inventory systems are not just a simple method that a company has buy in to: it has a whole philosophy that the company must follow. The ideas in this philosophy come from many different disciplines including; Statistics, Industrial engineering, Production management and Behavioral science.

JIT seeks to achieve the following goals.

1.
2. 3. 4.

Estimation of non-value added activities

Zero inventory Batch size of one A 100% on time delivery service.

The following are the key features of JIT production.

1. The production line is run on a demand pull basis, so that activity of each work station is authorised by the demand of downstream work stations. Set-up time and manufacturing lead time are minimised.

2.

Waste Types
Video on Waste

Seven Basic Types of Waste

Transportation waste Process Waste Inventory Waste Waste of motion Waste from product defects Waiting time Overproduction

Common Causes of Waste

Layout (distance) Long setup time Incapable processes Poor maintenance Poor work methods Lack of training Inconsistent performance measures Ineffective production planning Lack of workplace organization Poor supply quality/reliability

Objective of JIT
Produce only the products the customer wants. Produce products only at the rate that the customer wants them. Produce with perfect quality Produce with minimum lead time. Produce products with only those features the customer wants.

Objectives
Produce with no waste of labor, material or equipment -- every movement must have a purpose so that there is zero idle inventory. Produce with methods that allow for the development of people

JIT Principles
Create flow production one piece flow machines in order of processes small and inexpensive equipment U cell layout, counter clockwise multi-process handling workers easy moving/standing operations standard operations defined

JIT Principles - Slide 2

Establish TAKT time rate at which the customer buys a product Build Pull Product use of kanban system

JIT Tactics
Single Minute Exchange of Dies (SMED) Statistical Process Control Use of standard containers Doable stable schedules with adequate visibility TAKT-Time 5-S Program Kaizen Event Visual control Flexible workers Tools at the point of need Product redesign Group Technology Total Productive Maintenance

Balanced Production
Three elements TAKT time Work sequence Standard WIP Objective Build at rate that the customer wants work Balance the system to maximize efficiency at this rate

TAKT Time Example

Net Available Operating Time Time per shift 480 (minutes) Breaks (2 @ 10) - 20 Clean-up - 20 Lunch - 30 NAOT/shift 410 Customer Requirements Monthly 26,000 units/month No. Working Days 20 days/month CR/Day 1,300 units/day TAKT Time 410 x 60 x 3 shifts (73,800) divided by 1,300 57.769 seconds per part or 57"

TAKT Time
TAKT the beat (Net Available Operating Time) / Customer Requirements time periods must be consistent Example of calculation

SMED
Setup reduction Elements Internal Setup setup while machine idle External Setup setup while machine busy Adjustment run-ins, calibration

SMED Process
Study current process as is video tape Who owns the video tape? Convert internal to external setup Eliminate the need for Adjustment Eliminate need for fastening Goal setup time < 10 minutes

Push Vs. Pull Scheduling

Push Scheduling traditional approach move the job on when finished problems - creates excessive inventory Pull scheduling coordinated production driven by demand (pulled through system) extensive use of visual triggers (production/withdrawal kanbans)

Visual Control
A system for making problems obvious without the need for sophisticated monitoring computer systems Andon light system Kanbans Create a sense of urgency Clearly identify where the problems are located

Supplier Partnerships
Reliance on suppliers for problem solving expertise quality at the source timely communication participants in cost reduction programs Increased reliance on supplier certification

Standardization/Simplification
Eliminate inherent sources of variance eliminate opportunity for human discretion error Examples Container sizes MacDonalds with interaction with customers Consistent with Deming Wheel Standarize expose problems solve problems implement new methods

Other Techniques
Milk runs Poka-Yoke Systems Continuous Improvement Programs (CIP)

Video

JIT at DELL

JIT & Lean Manufacturing

Lean Manufacturing
Doing more with less Less of:
materials, time, resources overhead, people waste money

JIT is a subset of Lean Manufacturing Now seen as most applicable to mass production settings

Kaizen Event
A relatively new concept
Kaizen Blitz, Gemba Kaizen

Process focused Operates at two levels

on-going process of identifying opportunities for improvement
strategic, top management

short-term project lasting 1-4 days

training, documentation of process as is, identification of potential improvements, implementation, presentation, action list

Kaizen Events - Key Traits

Very short-term, finite in life Highly focused Creativity before capital Team-oriented Action-Oriented Verifiable Metrics Repetitive

Kaizen Event Process

Top management buy-in
Public Kaizen Events

Assessment of current processes

top management

Target Processes
training documentation - as is opportunities change presentation/action list

Typical Metrics
Floor space occupied by process being assessed Operators required per day Distance traveled by an order within the process WIP Inventory Setup (measured in minutes) Quality recommendations generated Safety Improvements implemented

Example of Impact of Kaizen Event

Impact of Kaizen Events - Overall Benefits (January 1, 1996 through December 31, 1996
Improvement M________ Floor Space ( ) Operators/Day Distance Traveled Inventory (WIP pieces) Setup Time Reduction Safety Improvements Before Kaizen 56,000 165 91,000 ft. 4,760,000 1,660 _______ Achievement 39,000 125 15,000 ft. 2,570,000 1,660 _________ Improvement 30% 24% 34% 46% 72%

200 improvements implement

JIT 11
Based on system developed by Bose of Framingham, MA Integration of JIT principles and practices into the supply chain JIT II
long term collaborative relationships with suppliers present suppliers to place personnel in plants of the buying organization

Limitations of JIT
Preconditions to JIT
trust must be present
labor/management suppliers/consumers

recognition of processes familiarity with problem solving quality at the source agreement over value and waste

Limitations of JIT
Right Settings
applicable in growth to maturity phases of Product Life Cycle standard product
Steinway and JIT

standard/fixed pay-rate
problems with piece-rate scheme

Universal agreement that change needed

Theoretical Benefits of JIT

Unpleasant surprises Less pressure on receiving eliminated docks and incoming Less computerization inspection areas Lower costs visual control Change in attitude Improved quality Defects are treasures WIP reduced Better communications

BENEFITS OF JIT
1. 2. Reduced set up times Improved flows of goods

3.
4. 5. 6.

Employees who possess multi-skills are utilized more efficiently.

Better consistency of scheduling and consistency of employee work hours. Increased emphasis on supplier relationships. Supplies continue around the clock keeping workers productive and businesses focused on turnover.

Key Elements of JIT

Uniform Plant loading Reduce or eliminate setup times Reduce lot sizes (manufacturing and purchase) Reduce lead time (production and delivery) Preventive maintenance Flexible work force

Require supplier quality assurance and implement a zero defects quality program
Small-lot (single unit)

Dealing with Variance

Four major stances: Buffer against it Ignore it Manage it Eliminate it All forms of variance create cost

JIT & Variance

Variance a fact of life Comes from many sources internal
scheduling changes, scheduling practices, manufacturing planning & control systems, absenteeism, process variability

external
changes in forecasts, actual demand, customer requested changes, government, competition, vendors

Cycle Times
Operator Cycle Time total time required for a worker to complete one cycle of an operation Machine Cycle Time total time for a machine to finish one complete cycle includes loading and unloading

The 5-S Program

Seiri segregate and discard get rid of what is not needed Seiton arrange and identify for ease of use a place for everything and everything in its place Seiso Clean Daily clean work place enhances quality

The 5-S Program

Seiketsu Revisit frequently revisit the first 3 steps to maintain workplace safety and effectiveness
Shitsuki Motivate to sustain promote adherence through visual performance measurement tools

JIT in Services
Service Traits
strong emphasis on process avoidance of inventory emphasis on people and their importance to process recognition of need for continuous improvement defects are treasures

JIT in Services
Elements of JIT most applicable
Synchronization and balance of information and work flows Total visibility of all components of the process Continuous improvement of the process Holistic approach to the elimination of waste Flexibility in use of resources Respect for people

JIT in Services
Key Issues
Equipment/people focus Customer contact per transaction Degree of discretion Degree of customization Location of value-added processes Product/process focus

Gemba Kaizen
Waste reduction through the execution system Gemba
heart of the system

Essence of Gemba Kaizen

to eliminate waste, you must have contact with the system that you are managing the contact must be real and not through computers

Agile Enterprise
New development Associated with Iaccoca Institute of LeHigh University Merging flexibility with JIT Much broader than Lean Enterprise Recognition that the environment
always changing unpredictably undergoing change

Agile Enterprise - Traits

Rapidly bring to market products that are variable combinations of hardware, information and services. Design products that are easily configurable and ungradable. Produce to individual customer orders in arbitrary order quantities. Bring out a continuously changing array of models within longer-lived product families

Agile Enterprise - Traits

Fragment mass markets into niche markets. Maintain and foster continuous, rather than single-instance, sales relationships by continually adding value to current customers. Cooperate intensively with other companies, including competitors, to create global product resources.

Agile Enterprise
Attempt to bring together a number of different trends
greater focus on product development greater reliance on suppliers greater concern with speed more emphasis on effective and intelligent integration greater use of technology
information

Other Tactics
Kaizen/Continuous Improvement Manufacturing Cells Business Process Reengineering Milk run logistics Supplier certification Direct delivery to point of use