Just-in-Time

Outline
The Goal debrief JIT Defined The Toyota Production System Blocking, Starving, and Buffers JIT Implementation Requirements JIT in Services

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Just-In-Time (JIT) Defined

JIT can be defined as an integrated set of activities designed to achieve high-volume production using minimal inventories (raw materials, work in process, and finished goods) JIT also involves the elimination of waste in production effort JIT also involves the timing of production resources (i.e., parts arrive at the next workstation just in time)

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Just-In-Time (JIT) Defined

Not one tool or technique, but many ideas that work together (see Exhibit 11.8 on page 435) Key elements
Product/Process design with an eye towards variance reduction
Setup time reduction Small lot sizes Quality management

Communication links with suppliers and customers Balance between production stability and responsiveness Redefined role of inventory JIT also involves the timing of production resources (i.e., parts arrive at the next workstation just in time)

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Planning

Implementation

Traditional Approach

Planning
JIT Approach

Implementation

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Key Terms
Pull system Focused factories Group technology Heijunka (uniform plant loading) Kanban (card)

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JIT and Lean Management

JIT can be divided into two terms: Big JIT and Little JIT Big JIT (also called Lean Management) is a philosophy of operations management that seeks to eliminate waste in all aspects of a firms production activities: human relations, vendor relations, technology, and the management of materials and inventory Little JIT focuses more narrowly on scheduling goods inventory and providing service resources where and when needed

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Here the customer starts the process, pulling an inventory item from Final Assembly

JIT Demand-Pull Logic

Then subassembly work is pulled forward by that demand

Customers

Fab

Vendor

Sub
Fab Vendor

Final Assembly
Sub Fab Vendor

The process continues throughout the entire production process and supply chain

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Fab

Vendor 8

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The Toyota Production System

Based on two philosophies: 1. Elimination of waste 2. Respect for people

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Waste in Operations
1. Waste from overproduction 2. Waste of waiting time 3. Transportation waste 4. Inventory waste 5. Processing waste 6. Waste of motion 7. Waste from product defects
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Minimizing Waste: Focused Factory Networks

These are small specialized plants that limit the range of products produced (sometimes only one type of product for an entire facility)
Some plants in Japan have as few as 30 and as many as 1000 employees

Coordination System Integration

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Minimizing Waste: Group Technology (Part 1)

Note how the flow lines are going back and forth
Using Departmental Specialization (a.k.a. Functional Layout) for plant layout can cause a lot of unnecessary material movement

Saw

Saw

Saw

Grinder

Grinder

Heat Treat

Lathe

Lathe

Lathe

Press

Press

Press

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Minimizing Waste: Group Technology (Part 2)

Revising by using Group Technology Cells (a.k.a. Product Layout) can reduce movement and improve product flow

Grinder Saw Lathe

Lathe

Press

Heat Treat

Grinder Saw Lathe

Lathe

Press

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Minimizing Waste: Uniform Plant Loading (Heijunka) Suppose we operate a production plant that produces a single product. The schedule of production for this product could be accomplished using either of the two plant loading schedules below. Not uniform Jan. Units 1,200 Feb. Units 3,500 or Uniform Jan. Units Feb. Units Mar. Units Total Mar. Units 4,300 Total 9,000

3,000

3,000

3,000

9,000

How does the uniform loading help save labor costs?

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Minimizing Waste: Just-In-Time Production

WHAT IT IS
Management philosophy Pull system though the plant

WHAT IT DOES
Attacks waste
Exposes problems and bottlenecks Achieves streamlined production

WHAT IT REQUIRES

WHAT IT ASSUMES
Stable environment

Employee participation

Industrial engineering/basics Continuing improvement Total quality control Small lot sizes

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Minimizing Waste: Inventory Hides Problems

Machine downtime Scrap Work in process queues (banks) Vendor delinquencies Change orders Design backlogs

Example: By identifying defective items from a vendor early in the production process the downstream work is saved

Engineering design redundancies

Paperwork backlog

Inspection backlogs

Decision backlogs

Example: By identifying defective work by employees upstream, the downstream work is saved
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B01.2314 -- Operations -- Prof. Juran

Slide courtesy of Robert B. Decosimo (MBA11)

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Minimizing Waste: Kanban Systems

Once the Production kanban is received, the Machine Center produces a unit to replace the one taken by the Assembly Line people in the first place

Withdrawal kanban

This puts the system back were it was before the item was pulled

Machine Center

Storage Part A

Storage Part A

Assembly Line

Production kanban
The process begins by the Assembly Line B01.2314 -- Operations -- Prof. Juran people pulling Part A from Storage

Material Flow Card (signal) Flow 18

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Determining the Number of Kanbans Needed

Setting up a kanban system requires determining the number of kanbans cards (or containers) needed Each container represents the minimum production lot size An accurate estimate of the lead time required to produce a container is key to determining how many kanbans are required
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k = Number of Kanbans D = Average demand L = Lead time S = Safety stock (as a % of expected lead time demand) C = Container size

Expected demand during lead time Safety stock Size of the Container DL1 S C
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Example of Kanban Card Determination

A switch assembly is assembled in batches of 4 units from an upstream assembly area and delivered in a special container to a downstream control-panel assembly operation The control-panel assembly area requires 5 switch assemblies per hour The switch assembly area can produce a container of switch assemblies in 2 hours Safety stock has been set at 10% of needed inventory

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Example of Kanban Card Determination: Calculations

k

DL1 S C 52 1 0.10 4
2.75

Always round up!

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Respect for People

Level payrolls Cooperative employee unions Subcontractor networks Bottom-round management style Quality circles (Small Group Involvement Activities or SGIAs)
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Toyota Production Systems Four Rules

1. All work shall be highly specified as to content, sequence, timing, and outcome 2. Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses 3. The pathway for every product and service must be simple and direct 4. Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization
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Blocking, Starving, Buffers

Assume that these are random processing times.
Buffer? Activity A 4 per minute Activity B 8 per minute Process Flow Buffer? Activity C 3 per minute Buffer? Activity D 5 per minute

Where is the most important place to have a buffer?

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JIT Implementation: Kanban-Pull

Demand pull Backflush Accounting
All product costs are first accumulated in Cost of Goods Sold account At the end of the period all the costs are flushed back or they are worked backed into the appropriate inventory accounts The usefulness of this is to save recording time by having all the cost go straight to final destination and then determine the proper balances for the inventory accounts Has no material inventory account Backflush costing uses fewer accounts and avoids recording several transactions

Reduce lot sizes

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JIT in Services (Examples)

Organize Problem-Solving Groups Upgrade Housekeeping Upgrade Quality Clarify Process Flows Revise Equipment and Process Technologies

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JIT in Services (Examples)

Level the Facility Load Eliminate Unnecessary Activities Reorganize Physical Configuration Introduce Demand-Pull Scheduling

Develop Supplier Networks

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Summary
JIT Defined The Toyota Production System JIT Implementation Requirements JIT in Services

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