Just-In-Time Systems and Lean Thinking

Chapter 17

McGraw-Hill/Irwin

The McGraw-Hill Companies, Inc. 2007, All Rights Reserved

Chapter 17 Outline
Philosophy of JIT Elements of a JIT system Stabilizing the Master Schedule The Kanban System Reducing Setup Time and Lot Sizes Layout and Equipment Effect on Workers Suppliers Implementation of JIT Comparison of JIT and MRP Beyond JIT to Lean Thinking

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Philosophy of JIT
Modern Roots of JIT (Toyota Production System, Taiichi Ohno. d. 1990) Elements of JIT Root of JIT in repetitive manufacturing JIT as a technique: to reduce inventory JIT as a philosophy: a comprehensive management system

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Elements of JIT
Small lot sizes (lot size one) Use of Kanban system Quick changeover (set-ups) Multifunction workers Efficient layout (linear flow) Close relationships with suppliers Frequent deliveries from vendors Elimination of Waste
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The Seven Wastes

Overproduction: Producing more than the demand for customers resulting in unnecessary inventory, handling, paperwork, and warehouse space. Waiting Time: Operators and machines waiting for parts or work to arrive from suppliers or other operations. Transportation: Double or triple movement of materials due to poor layouts, lack of coordination and workplace organization.

Processing: Poor design or inadequate maintenance or processes requiring additional labor or machine time.
Inventory: Excess inventory due to large lot sizes, obsolete items, poor forecasts or improper production planning. Motion: Wasted movements of people or extra walking to get materials. Defects: Use of materials, labor and capacity for production of defects, sorting our bad parts or warranty costs with customers.

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Inventory as Waste
If all our suppliers are guessing, you end up with inventory, which is the physical embodiment of bad information. Paul Bell, Dell, Inc. Europe. Dells inventories fell from 31 days of parts in 1996 to 6 days in 2000.
Source: Economist, 1 April 2000, p. 57.

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Elements of JIT as a Philosophy

S e t u p T i m e R e d u c t i o n S m a l l L o t S i z e s J I T D e l i v e r y f r o m S u p p l i e r s S u p p l i e r s ' Q u a l i t y L e v e l

P r o d u c t D e s i g n S i m p l i c i t y

M u l t i f u n c t i o n W o r k e r s S m a l l G r o u p P r o b l e m S o l v i n g

E q u i p m e n t & F a c i l i t y L a y o u t

J I T

P r e v e n t i v e M a i n t e n a n c e

E m p l o y e e T r a i n i n g D a i l y S c h e d u l e D i s c i p l i n e " P u l l " P r o d u c t i o n S y s t e m

K A N B A N S y s t e m

R e p e t i t i v e M P S

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Kanban System
A pull production system A physical (normally visual) control system Normally composed of cards and containers (production card and withdrawal card), but can be any type of signal Number of containers DT
n C

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The Kanban System

The Kanban system uses simple cards or signals to strictly control production The basic idea is that no station is permitted to produce more than is immediately required by the succeeding station This simple idea prevents the buildup of inventory No computer is required!

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The Real Origin Of Kanban

In the 1950s, Ohno visited Detroit to learn about auto making from the U.S. manufacturers.
Q - Rnot impressed. He was

He visited a supermarket, which they did not have in Japan, and observed the way they restocked the shelves.

He used that method as the basis for Kanban.

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Kanban System

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Kanban Cards

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Reducing Setup Times and Lot Sizes

Reducing setup times:
increases available capacity increases flexibility reduces inventory

Reduce setup times and run times simultaneously to reduce lot sizes and throughput times Single-digit Setup Times (Shigeo Shingo [d. 1990] or SMED System) Small lots require short setups!
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Traditional Layout
Work Centers Final Assembly

Stockrooms
Supplier A Supplier B

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JIT Layout
Final Assembly

Supplier A

Supplier B

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JIT Layout with Group Technology

Final Assembly

Line 1

Line 2

Supplier A

Supplier B

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Effect of JIT on Workers

Multifunction workers Cross-training New pay system to reflect skills variety Teamwork Suggestion system

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Suppliers
Very close relationship with suppliers Frequent deliveries demanded from suppliers Sole-sourcing Integrated supplier programs Deliveries to production line No inspectionhigh quality

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Features of Integrated Supplier Programs

Early supplier selection, preferably in the design phase Family of part sourcing to allow supplier to take advantage of GT Long-term relationships with small number of suppliers Paperwork reduction in receiving and inspection to reduce costs
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Implementation of JIT
Obtain commitment from top management Gain the cooperation of workforce Start with final assembly line Reduce setup times and lot sizes working backward from the final assembly line Balance fabrication rates with final assembly production rates Extend JIT to the suppliers
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Benefits Of JIT
1. 2. 3. 4. Reduced inventory Improved quality Lower costs Reduced space requirements 5. Shorter lead times 6. Increased productivity 7. Greater flexibility 8. Better relations with suppliers 9. Simplified scheduling and control activities 10. Increased capacity 11. Better use of human resources 12. More product variety

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Comparison of MRP and JIT

Pull versus Push production systems Situations for comparing MRP and JIT:
Pure repetitive manufacturing situation; JIT works best A batch process; JIT works well with cellular manufacturing A job shop; MRPII with some elements of JIT MRP assumes the present system is correct and seeks to make the best of that system. JIT seeks to change the system to make it better.
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The Traditional Push System

In traditional manufacturing, an item is released for production at a specified time, with an associated due date generated by MRP. The item moves through a sequence of operations When one operation is finished, the item is pushed to the next operation Finally, the product is pushed to inventory, to meet the demand forecast

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The Pull System

The pull system focuses on the output of the system rather than the input. Finished products are pulled from the final operation in response to firm customer orders. This leads to a chain reaction, with each station pulling material from its preceding station. JIT uses the Kanban system to control the flow of material with very little work-inprocess inventory.
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Uses of MRP and JIT

JIT Repetitive (mass)

JIT
SYNCRO MRP

MRP SYNCRO MRP Nonrepetitive Semirepetitive (batch or job shop)

MRP
High Low Stability of Master Schedule Stability of Bill of Material

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Lean Thinking
Term coined by Womack, Jones and Roos in 1990. Extends JIT beyond the factory Also applies to services http://www.lean.org

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Five Elements of Lean Thinking

Specify value from the customers point of view Create a value stream map and remove waste Flow the product or service through the system Pull the product or service from the customer Strive for perfection

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Summary
Philosophy of JIT Elements of a JIT system Stabilizing the Master Schedule The Kanban System Reducing Setup Time and Lot Sizes Layout and Equipment Effect on Workers Suppliers Implementation of JIT Comparison of JIT and MRP Beyond JIT to Lean Thinking

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End of Chapter Seventeen

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