Just-in-Time and

Lean Operations
 What is JIT ?
Producing only what is needed, when it is needed (not
early, not late; not less, not more)
Achieving high volume production using minimal
inventories
An integrated but simplified
system
JITs mandate:
Elimination of all waste
in production effort
 Just-in-Time
Just-in-time (JIT): A highly coordinated processing
system in which goods move through the system,
and services are performed, just as they are needed
Supplies and components are pulled through the
system to arrive where they are needed when they
are needed (just-in-time)
A management philosophy of continuous and forced
problem solving by attacking the root causes
 Lean Production
JIT lean production

Lean Production supplies customers with exactly

what the customer wants, when the customer
wants, without waste, through continuous
improvement
JIT operates with very little fat
 What Does Just-in-Time Do?

Attacks waste (anything not adding value to the

product)
Achieves streamlined production by reducing
inventory
Exposes problems and bottlenecks caused by
variability
 Goal of JIT
The ultimate goal of JIT is a balanced system.
(Achieves a smooth, rapid flow of materials through the
system)
The supporting goals are:
Eliminate disruptions

Make the system flexible

Eliminate waste, especially excess inventory

Summary:JIT Goals and Building Blocks
Ultimate A
Goal balanced
rapid flow

Supporting
Goals Eliminate disruptions
Make the system flexible Eliminate waste

Product Process Personnel Manufactur- Building

Design Design Elements ing Planning Blocks
 Quotation by Shoichiro Toyoda

Waste is anything other than

the minimum amount of
equipment, materials, parts,
space, and workers time,
which are absolutely essential
to add value to the product.
Shoichiro Toyoda
President, Toyota 1995 Corel Corp.
 Sources of Waste
Overproduction

Waiting

Unnecessary transportation

Inventory

Inefficient work methods

Inefficient processing

Unnecessary motions

Product defects
Waste in Operations (1 of 3)
Waste in Operations (2 of 3)
Waste in Operations (3 of 3)
 JIT Reduced Waste
at Hewlett-Packard
Waste Reduction (%)
Setup Time 20%
Scrap 30%
Finished Goods
Inventory 30%
Space 40%
Lead Time 50%
Raw Material
Inventory 50%
Work-in-Process
Inventory 82%
0% 20% 40% 60% 80% 100%
 Kaizen Philosophy (1 of 3)
Continuous improvement
Requires total employee involvement
Essence of JIT is willingness of workers to
Spot quality problems
Halt production when necessary
Generate ideas for improvement
Analyze problems
Perform different functions
 Kaizen Philosophy (2 of 3)
Waste is the enemy
Improvement should be done gradually and
continuously
Everyone should be involved

Built on a cheap strategy

Can be applied anywhere

 Kaizen Philosophy (3 of 3)
Supported by a visual system
Focuses attention where value is created

Process oriented

Stresses main effort of improvement should come

from new thinking and work style
The essence of organizational learning is to learn
while doing
 Big vs. Little JIT
Big JIT broad focus
Vendor relations
Human relations
Technology management
Materials and inventory management
Little JIT narrow focus
Scheduling materials
Scheduling services for production
 JIT Building Blocks

In order to achieve competitive advantage through

JIT, the necessary building blocks should be installed
The building blocks can also be regarded as JIT
success factors or the basic elements of JIT
 JIT Building Blocks
1. Product design
2. Process design
3. Personnel/organizational
elements
4. Manufacturing
planning and control
5. Supplier relationships (supplier networks)
6. Preventive maintenance
JIT Building Blocks: 1. Product Design
Process design with product design
Standard product configuration and
standart parts
Reduced number of parts
Modular design
Concurrent engineering
Highly capable production systems
 JIT Building Blocks: 2. Process Design
Small lot sizes
Setup time reduction
Cellular layout (Manufacturing cells)
Reduced Inventories (Limited WIP)
Continuous quality improvement
Production flexibility (multifunctional workers,
general purpose machines)
Balanced system
Fail-safe methods
 Small-Lot Production

Requires less space & capital investment

Moves processes closer together
Makes quality problems easier to detect
Makes processes more dependent on each other
 Small versus Large Lots
JIT produces same amount
in same time if setup times
JIT Small Lots are lowered

A A B B B C A A B B B C

Time
Small lots also increase flexibility to meet
customer demands
Large-Lot Approach

A A A A B B B B B B C C

Time
Comparison of Level and Large Lot
Material-use Approaches
 Benefits of Small Lot Sizes
Reduces inventory
Less rework
Less storage space
Problems are more apparent
Increases flexibility
Easier to balance operations
 Single-Minute Exchange
Single-minute exchange of die (SMED): A system
for reducing changeover time
Categorize changeover activities
Internal activities that can only be done while
machine is stopped
External activities that do not require stopping the
machine
 Layout
JIT objective: Reduce movement of people and material
Movement is waste!

JIT requires work-cells for product families (group

technology)
movable, changeable, flexible machinery

short distances

high level of workplace organization and neatness

reduced space for inventory

delivery directly to work areas

balanced workstation capacities

 Cellular Layouts

Group dissimilar machines in manufacturing cell to

produce family of parts
Work flows in one direction through cell
Cycle time adjusted by changing worker paths
Decreasing set-up times
Worker Routes Lengthened as Volume
Decreases
Cell 1 Cell 2

Worker Worker
1 2

Worker
3

Cell 3 Cell 4 Cell 5

 Layout Tactics

Build work cells for families of products

Minimize distance

Design little space for inventory

Improve employee communication

Use poka-yoke devices

Build flexible or movable equipment

Cross train workers to add flexibility to layout

 Quality Improvement (1 of 4)

JIT exposes quality problems by reducing inventory

JIT eliminates number defects with small lots

JIT requires quality by suppliers

Team approach and continuous improvement are

important for ensuring quality
Quality is maintained by the following procedure:

Find the root cause of the problem, solve permanently

and use team approach in solving the problems
 Quality Improvement (2 of 4)
JIT requires TQM
Statistical process control
Continuous improvement
Worker involvement & empowered employees
Inspect own work
Quality circles
Immediate feedback
Failsafe methods such as poka-yoke (prevents
defectives)
Quality at the source
 Quality Improvement (3 of 4)
JIT requires
1) Quality within the firm

Autonomation (jidoka): automatic detection of

defects during production
2) Quality by suppliers
 Quality Improvement (4 of 4)

Jidoka assures quality at the source

Andon lights signal quality problems
Visual control makes problems visible
Visual Control (1 of 3)
Visual Control (2 of 3)
Visual Control (3 of 3)
 Production Flexibility
Overall objective is to achieve the ability to process a
mix of products in a smooth flow.
Eliminate bottlenecks
Reduce downtime by reducing changeover time
Use preventive maintenance to reduce breakdowns
Cross-train workers to help clear bottlenecks
Use many small units of capacity
Use off-line buffers
Reserve capacity for important customers
 A Balanced System

Balanced system: Distributing the workload evenly

among work stations
Work assigned to each work station must be less than
or equal to the cycle time
Cycle time is set equal to the takt time

Takt time is the cycle time needed to match the pace of

production to customer demand for final product
 Streamlined Production

Traditional Flow Production Process

(stream of water)

Suppliers
Customers
Inventory (stagnant
Flow with JIT ponds) Material
(water in
stream)
Suppliers

Customers
 Inventories
Traditional: inventory exists in case problems arise
JIT objective: eliminate inventory
JIT requires
Small lot sizes
Low setup time
Containers for fixed number of parts
JIT inventory: Minimum inventory (raw material, WIP
and finished goods) to keep the system running
Specialized bins for holding previously set number of parts
 JIT Inventory Tactics
Use a pull system to move inventory
Reduce lot size
Reduce setup time
Develop Just-in-Time delivery systems with suppliers
Deliver directly to point of use
Perform-to-schedule
Use group technology
 Limited Work in Process
Benefits
Lower carrying costs
Less space

Increased flexibility

Aids scheduling

Saves cost of rework and scrap

Two general approaches

Kanban focuses on individual work stations
Constant work in process (CONWIP) focuses on
the system as a whole
 Inventory Hides Problems Just as Water in a
Lake Hides Rocks

Inventory level

Inventory level

nefficient
layout Process
Unreliable Process Scrap
supplier downtime downtime
Setup Setup Quality
Quality time
time problems problems
Bad Machine Late
Late
design breakdown deliveries
deliveries
 Lowering Inventory
Reduces Waste

Work in process inventory level

(hides problems)

Unreliable Capacity
Scrap
Vendors Imbalances
 Lowering Inventory
Reduces Waste
Reducing inventory exposes
problems so they can be solved.

WIP
Unreliable Capacity
Scrap
Vendors Imbalances
 Lowering Inventory
Reduces Waste
Reducing inventory reveals
problems so they can be solved.

Unreliable WIP Capacity

Scrap
Vendors Imbalances
 JIT Building Blocks:
3. Personnel/Organizational Elements
Workers as assets
Cross-trained workers
Employee empowerment
Continuous improvement
Cost accounting
Leadership/project
management
Commitment
 Employee Empowerment
Employee empowerment
Empowered and cross-trained employees (to help clear
bottlenecks)
Get employees involved in product & process
(employees know the job best!)
Few job classifications to ensure flexibility of employees

Training support
 Bottom-round Management Style &
Commitment
Commitment
Support of management, employees and suppliers

Any improvement must be made in accordance with the

scientific method, under the quidance of a teacher, at the
lowest possible level in the organization (Toyota
Production Systems work rule)
JIT Building Blocks:
4. Manufacturing Planning and
Control
Uniform production levels
Level loading (level
schedules)
Pull systems
Visual systems
Reduced transaction
processing
 Uniform Production
Results from smoothing production requirements
Kanban systems can handle +/- 10% demand
changes
Smooths demand across planning horizon
Mixed-model assembly steadies component
production
 Level Schedules
Reduce ripple effect of small variations in
schedules (e.g., final assembly)
Production quantities evenly distributed over
time (e.g., 7/day)
Build same mix of products every day
Results in many small lots
Item Monthly Quantity Daily
Quantity
A 40 2
B 60 3
Mixed-Model Sequencing
 JIT Scheduling Tactics
Involves timing of operations
Scheduling in JIT requires
Level loading (level schedules)
Zero deviation from schedules (performing to schedules)
Suppliers informed about schedules
Small lots (seeking one-piece-make and one-piece
move)
Making each operation produce a perfect part
Kanban techniques
 Pull/Push Systems
Pull system: System for moving work where a
workstation pulls output from the preceding station just
as it is needed. (e.g. Kanban)
vs.
Push system: System for moving work where output is
pushed to the next station as it is completed
 The Pull System

Material is pulled through the system when

needed
Reversal of traditional push system where
material is pushed according to a schedule
Forces cooperation
Prevent over and underproduction
 Kanban Production Control System (1 of 2)

Kanban: Card or other device that communicates demand

for work or materials from the preceding station
Japanese word meaning signal or visible record may
be a card, or may be a flag, ball etc.
Paperless production control system
Kanban card indicates standard quantity of production
Used often with fixed sized container
 Kanban Production Control System (2 of 2)
The kanban cards provide direct control (limit) on the amount
of work-in-process between cells.
Derived from two-bin inventory system
Maintains discipline of pull production
Signifies an authority to pull or produce which comes from a
downstream process
Production kanban authorizes production
Withdrawal kanban authorizes movement of goods
A Sample Kanban
Determination of the Number of Kanbans
Needed
Setting up a kanban system requires determining the
number of kanbans (or containers) needed.
Each container represents the minimum production lot
size
An accurate estimate of lead time required to produce a
container is key to determining how many kanbans are
required
Determination of the Number of Kanbans-
Kanban Formula
DT(1+X)
N =
C
N = Total number of containers
D = Planned usage rate of using work center
T = Average waiting time for replenishment of parts
plus average production time for a
container of parts
X = Policy variable set by management
- possible inefficiency in the system
C = Capacity of a standard container
 Here
Herethe
thecustomer
customerstarts
starts
the
theprocess,
process,pulling
pullingan
an JIT Demand-Pull Logic
inventory
inventoryitem
itemfrom
from
Final
FinalAssembly
Assembly
Then
Thensub-
sub-
assembly Fab Vendor
assemblywork
workisis
pulled
pulledforward
forwardbyby
that
thatdemand
demand Sub
Fab Vendor
Customers
Final
Assembly

The Sub Fab

Theprocess
processcontinues
continues Vendor
throughout
throughoutthe
theentire
entire
production
productionprocess
processand
and
supply
supplychain
chain Fab Vendor
 Kanban Signals Pull Material
Through the Process
Once the Production kanban is This puts the
received, the Machine Center Withdrawal system back
produces a unit to replace the kanban where it was
one taken by the Assembly Line before the item
people in the first place was pulled

Storage Storage
Machine Part A Part A Assembly
Center
Line

Production kanban
Material Flow
The process begins by the Assembly Line
people pulling Part A from Storage Card (signal) Flow
 JIT Building Blocks:
5. Supplier Relationships

Reduced number of vendors

Supportive supplier relationships

Quality deliveries on time

Frequent deliveries in small lot quantities

Reduced lead times

Reduced transaction processing

Certified vendors
 Suppliers
JIT partnerships are formed
JIT partnerships eliminate:
Some unnecessary activities
In-plant inventory
In-transit inventory
Poor suppliers
 Characteristics of JIT Partnerships
Suppliers
Few
Nearby
Long-term relationships
Analysis and support to enable desirable suppliers to
become or stay price competitive
Buyer resists vertical integration and subsequent
wipeout of supplier business
Suppliers encouraged to extend JIT to their suppliers
(2nd and 3rd tier suppliers)
 Traditional Supplier Network

Buyer
Buyer
Supplier
Supplier Supplier
Supplier
Supplier
Supplier

Supplier
Supplier Supplier
Supplier Supplier Supplier
Supplier Supplier
 Tiered Supplier Network

Buyer
Buyer

First Tier Supplier Supplier

Supplier

Second Tier Supplier Supplier

Supplier Supplier
Supplier

Third Tier Supplier Supplier

Supplier Supplier
Supplier Supplier
Supplier Supplier
Supplier
JIT Building Blocks:
6. Preventive Maintenance
All activities involved in keeping equipment in working
order
Maintaining equipment in good condition and replacing
parts that have a tendency to fail before they actually fail
Done to prevent failure
JIT requires
Scheduled & daily PM
Operator involvement in PM
Knows machines
Responsible for product quality
Total Productive Maintenance (TPM)
Breakdown maintenance
Repairs to make failed machine operational
Preventive maintenance
System of periodic inspection & maintenance
to keep machines operating
TPM combines preventive maintenance & total
quality concepts
 TPM Requires Management to:
Design products that can be easily produced on existing
machines
Design machines for easier operation, changeover,
maintenance
Train & retrain workers to operate machines
Purchase machines that maximize productive potential
Design preventive maintenance plan spanning life of
machine
 Housekeeping
Housekeeping: Maintaining a workplace that is
clean and free of unnecessary materials.
Housekeeping 5 Ss
Sort
Straighten
Sweep
Standardize
Self-discipline
 Results
Queue and delay reduction, speedier throughput,
freed assets, and winning orders
Quality improvement, reduces waste and wins orders
Cost reduction increases margin or reduces selling
price
Variability reductions in the workplace reduces waste
and wins orders
Rework reduction, reduces waste and wins orders
 Yielding

Faster response to the customer at lower cost

and higher quality

A competitive advantage!
 Summary: Just-In-Time Production

WHAT IT IS WHAT IT DOES

Management philosophy Attacks waste

Exposes problems and bottlenecks
Pull system though the plant Achieves streamlined production

WHAT IT REQUIRES WHAT IT ASSUMES

Employee participation
Industrial engineering/basics Stable environment
Continuing improvement
Total quality control
Small lot sizes
Comparison of JIT and Traditional Systems
Factor Traditional JIT
Inventory Much to offset forecast Minimal necessary to operate
errors, late deliveries

Deliveries Few, large Many, small

Lot sizes Large Small

Setup; runs Few, long runs Many, short runs

Vendors Long-term relationships Partners

are unusual

Workers Necessary to do the Assets

work
 Transitioning to a JIT System
Get top management commitment
Decide which parts need most effort
Obtain support of workers
Start by trying to reduce setup times
Gradually convert operations
Convert suppliers to JIT
Prepare for obstacles
 Obstacles to Conversion

Management may not be committed

Workers/management may not be
cooperative
May be difficult to change company
culture
Suppliers may
resist
Why?
 Suppliers May Resist JIT
Unwilling to commit resources
Uneasy about long-term commitments

Frequent, small deliveries may be difficult

Burden of quality control shifts to supplier

Frequent engineering changes may cause JIT

changes
 Benefits of JIT
1. Reduced inventory 8. Better relations with
2. Improved quality suppliers
3. Lower costs 9. Simplified scheduling
4. Reduced space and control activities
requirements 10. Increased capacity
5. Reduced lead times 11. Increased equipment
6. Increased utilization
productivity 12. Better use of human
7. Greater flexibility resources
8. Reduced scrap and 13. More product variety
rework 14. Reduced need for
indirect labor
 JIT in Services (1 of 3)

The basic goal of the demand flow technology in the

service organization is to provide optimum response to the
customer with the highest quality service and lowest
possible cost.
 JIT in Services (2 of 3)

All the techniques used in manufacturing are used in

services
Level the facility load & eliminate disruptions and
unnecessary activities
Reorganize physical configuration
Introduce demand-pull scheduling
Develop supplier networks
Minimize WIP
 JIT in Services (3 of 3)
All the techniques used in manufacturing are used in
services
Make the system flexible
Reduce setup and lead times
Eliminate waste
Simplify the process
Organize problem solving groups
Upgrade quality
 JIT II
JIT II: a supplier representative works right in the
companys plant, making sure there is an
appropriate supply on hand.
 JIT Implementation

Use JIT to finely tune an operating system

Somewhat different in
USA than Japan
JIT is still evolving
JIT isnt for everyone
 Elements of JIT (1 of 2)
Smooth flow of work (the ultimate goal)
Elimination of waste
Continuous improvement
Eliminating anything that does not add value
Simple systems that are easy to manage
Use of product layouts to minimize moving
materials and parts
Quality at the source
 Elements of JIT (2 of 2)
Poka-yoke fail safe tools and methods
Preventative maintenance

Good housekeeping

Set-up time reduction

Cross-trained employees
A pull system
Attributes of Lean Producers - They
use JIT to eliminate virtually all
inventory
build systems to help employees produce
a perfect part every time
reduce space requirements
develop close relationships with suppliers
educate suppliers
Attributes of Lean Producers - They
eliminate all but value-added activities
develop the workforce
make jobs more challenging
reduce the number of job classes and
build worker flexibility