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Operations Management

JIT Week 14 By Farrukh idrees

Presentation Sections
Introduction: JIT Background, some basic concepts of JIT, JIT and Lean Production, Suppliers Concerns for JIT, Details: Type of wastes, Relationship of Quality and JIT, Characteristics of JIT Partnership, Conclusion: Summary of the session

JIT Background
Japanese directed their best engineering talent to the shop floor, not to product design activities. Central to JIT are two philosophies: elimination of waste and respect for people.

QUIZ
Q.1. How JIT can be used for improving the quality of an assembly line. Illustrate your answer with an example as well.

JIT & Lean Production


JIT and lean production are philosophies of continuous improvement. Lean production begins with a focus on customer desires while JIT has internal focus, but both concepts focus on driving all waste out of the production process.

JIT & Price Volatility


JIT implicitly assumes a level of input price stability that obviates the need to buy parts in advance of price rises. Where input prices are expected to rise, storing inventory may be desirable.

JIT
JIT is an integrated set of activities designed to achieve high volume production using minimal inventories of raw materials, WIPs, and finished goods. Nothing will be produced until it is needed.

JIT
An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs

JIT Benefits
A surprising effect was that factory response time fell to about a day. This improved customer satisfaction by providing vehicles within a day or two of the minimum economic shipping delay. Also, the factory began building many vehicles to order, eliminating the risk they would not be sold. This improved the company's return on equity.

JIT Benefits
Since assemblers no longer had a choice of which part to use, every part had to fit perfectly. This caused a quality assurance crisis, which led to a dramatic improvement in product quality. Eventually, Toyota redesigned every part of its vehicles to widen tolerances, while simultaneously implementing careful statistical controls for quality control. Toyota had to test and train parts suppliers to assure quality and delivery. In some cases, the company eliminated multiple suppliers.

JIT Layout
JIT layouts reduce another kind of wastemovement. The movement of material/people on a factory floor (or paper in an office) does not add value. With reduction in distance, the firm saves space and eliminates potential areas for unwanted inventory.

JIT Layout
Distance reduction: Increased flexibility: Modern work cells are designed so they can be easily rearranged to adapt to changes in volume, product improvements, or even new designs. Impact on employees: Cross trained personnel

Elimination of waste
Waste is defined as anything other than the minimum amount of equipment, materials, parts, and workers (working time) which are absolutely essential to production.

Waste
The customer defines the value of the product. If production performs an activity that does not add value in the eyes of the customer, then it is a waste. If the customer does not want it or will not pay for it, it is a waste.

Seven types of wastes


1. 2. 3. 4. 5. 6. 7. Waste from over production Waste of waiting time Transportation waste Inventory waste Over Processing waste Waste of motion Waste from product defects

Over production
Producing more than the customer orders or producing early (before it is demanded) is waste.

Queues
Idle time, storage, and waiting are wastes (they add no value)

Transportation
Moving material between plants, between work centers, and handling more than once is waste.

Inventory
Unnecessary raw material, WIP, finished goods, and excess operating supplies add no value.

Motion
Movement of equipment or people that adds no value.

Over processing
Work performed on the product that adds no value is waste

Defective product
Returns, warranty claims, rework, and scrap are a waste.

JIT to eliminate waste


Focused factory network Group technology Quality at the source JIT Production Uniform Plant Loading Kanban production control system

Focused factory network


Plants designed for one purpose can be built and operated more economically. Large operations and their bureaucracies are difficult to manage and not well aligned with Japanese management style. 30-1000 workers in Japanese plants

Group Technology
Philosophy in which similar parts are grouped in a specialized work cell. Group technology cells eliminate movement and queue (waiting) time between operations, reduce inventory, and reduce the number of employees required. Workers must be flexible to run the several machines and processes.

Quality at the source


Do it right he first time and, when something goes wrong, stop the process or assembly time immediately. Factory workers become their own inspectors, personally responsible for the quality of their output. e.g. Kawasaki Motors, USA

JIT Production
JIT means producing what is needed when needed and no more. Anything over the minimum amount necessary is viewed as waste, because effort and material expended for something not needed now cannot be utilized now. JIT is applied to repetitive manufacturing, which is when the same or similar items are made one after another. JIT exposes problems otherwise hidden by excess inventories and staff

Uniform Plant Loading


Smoothing the production flow to dampen the schedule variations When a change is made in a final assembly line, the changes are magnified through the line and the supply chain.

Kanban
Kanban is a Japanese word for card that has come to mean signal; a kanban system moves parts through production via a pull from a signal.

Inventory hides problems


Problems: Scrap Decision backlogs Order entry backlogs Change orders Vendor delinquencies Machine down time

Characteristics of JIT Partnerships


For JIT to work, the purchasing agent must communicate the goal to the supplier. This includes delivery, packaging, lot sizes, quality, and so on.

Characteristics of JIT Partnerships


Suppliers
Few suppliers Nearby suppliers Repeat business with same suppliers Buyer resists vertical integration

Quantities
Share forecast of demand Long term contracts Minimal paper work to release orders (Use EDI or internet) Suppliers reduce production lot size Suppliers package in exact quantities

Characteristics for JIT Partnerships


Quality
Minimal product specifications imposed on suppliers Help suppliers meet quality requirements

Shipping
Scheduling inbound freights Use of company owned warehouses and contract shipping

Concerns of Suppliers
Desire for diversification (suppliers think that they reduce their risks if they have a variety of customers) Poor customer scheduling (many suppliers have little faith in the purchasers ability ot reduce orders to a smooth, coordinated schedule) Engineering changes (Frequent engineering changes with inadequate lead time paly havoc with JIT)

Concerns for Supplier


Quality assurance (Production with zero defect is not considered realistic by many suppliers) Small lot size (Suppliers often have processes desinged for large lot sizes) Proximity (Depending on customers location, frequent supplier delivery of small lots may be seen as uneconomical)

Respect for People


Japanese firms use a management style made up of consensus management by committees or teams. Quality Circles of employees

Conclusion
JIT Background and benefits JIT and lean production Waste types JIT-Suppliers concerns How JIT works to eliminate waste

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