Chapter 15 Just-in-Time Manufacturing

Just-In-Time Philosophy

Just-in-Time manufacturing is the elimination of all waste and continuous improvement of

productivity. Waste means anything other than the minimum amount of equipment, parts, space,
material, and workers time absolutely necessary to add value to the product. The long-term result of
eliminating waste is a cost-efficient, quality-oriented, fast-response organization that is responsive to
customer needs. Such an organization has a huge competitive advantage in the marketplace.

Value satisfies the actual and perceived needs of the customer and does it at a price the customer can
afford and considers reasonable. Another word for this is quality. Quality is meeting and exceeding
customers expectations.

Adding value to a product does not mean adding cost. Users are not concerned with the
manufacturers cost but only with the price they must pay and the value they receive. Many activities
increase cost without adding value and, as much as possible, these activities should be eliminated.

Waste

Anything in the product cycle that does not add value to the product is waste. Waste making starts
with the policies set by management in responding to the needs of the marketplace. Management is
responsible for establishing policies for the market segments the company wishes to serve and for
deciding how broad or specialized the product line is to be. The greater the diversity of products,
the more complex the manufacturing process becomes, and the more difficult it is to plan and
control. Standardization reduces the planning and control effort needed, the number of items
required, and the inventory that has to be carried. The ideal product is one that meets or exceeds
customer expectations, makes the best use of material, and can be manufactured with a minimum of
waste. As well as satisfying the customer, the products design determines both the basic
manufacturing processes that have to be used and the cost and quality of the product. The product
should be designed so it can be made by the most productive process with the smallest number of
operations, motions, and parts and includes all of the features that are important to the customer.

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Toyota identified seven important sources of waste in manufacturing. The first four relate to the
design of the manufacturing system and the last three to the operations and management of the
system: 1) the process 2) methods 3) movement 4) product defects 5) waiting time 6) overproduction
7) inventory (see explanations on page 399 & 400). To remain competitive, a manufacturing
organization must produce better products at lower cost while responding quickly to the marketplace.

Just-In-Time Environment

Group products together into product families. Products will be in the same family if they use
common workflow or routing, materials, tooling, setup procedures, and cycle times. Workstations
can then be set up in miniature flow lines or work cells. The work centers required to make this
family can be laid out according to the steps to make that family. Parts can now pass one by one, or
in very small lots, from one workstation to the next (cellular manufacturing). Work cells permit highvariety, low-volume manufacturing to be repetitive.

Process flexibility is desirable so the company can react swiftly to changes in the volume and mix of
their products. To achieve this, operators and machinery must be flexible. See machine flexibility,
quick changeover, and operator flexibility on pages 402, 403 and 404.

Total Quality Management (TQM) Quality is important for two reasons. If quality is not present
in what is supplied to the customer and the product is defective, the customer will be dissatisfied. If a
process produces scrap, it creates disrupted schedules that delay supplying the customer, increases the
cost of the product. Manufacturing must ensure that the process is capable of producing the required
quality consistently and with as close to zero defects as possible. The benefits of a good quality
program are less scrap, less rework, less inventory, better on-time production, timely deliveries, and
more satisfied customers.

Ultimately, the user is the companys customer, but the user is also the next operation in the process.
Quality at any one work center should meet or exceed the expectations of the next step in the
process. Quality at the source means doing it right the first time and, if something does go wrong,
stopping the process and fixing it.

Total productive maintenance is preventive maintenance plus continuing efforts to adapt, modify,
and refine equipment to increase flexibility, reduce material handling, and promote continuous flow.
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Several conditions are needed to achieve uninterrupted flow of materials: uniform plant loading, a
pull system, valid schedules, and linearity. Uniform plant loading means that the work done at each
workstation should take about the same time. In repetitive manufacturing this is called balancing the
line, which means that the time taken to perform tasks at each workstation on the line is the same or
very nearly so. The result will be no bottlenecks and no buildup of work-in-process inventory.

The pull system starts at the end of the line and pulls product from the preceding operation as
needed. The preceding operation does not produce anything unless a signal is sent from the following
operation to do so. The system for signaling demand depends on the physical layout and conditions
in the plant. The most well known system is the Kanban system. The details vary, but it is basically a
two-bin, fixed-order-quantity, order-point system (see page 406).

There should be a valid schedule. The schedule sets the flow of materials coming into the factory
and the flow of work through manufacturing. To maintain an even flow, the schedule must be level.
In other words, the same amount should be produced each day. Mixed-model scheduling means that
some of everything is made each day in the proportions to meet demand. If demand shifts between
models, the assembly line can respond daily.

The emphasis in JIT is on achieving the plan no more, no less. The concept is called linearity and
is usually reached by scheduling to less than full capacity.

Continuous Process Improvement was discussed in chapter 14.

See pages 408 and 409 for an explanation of supplier partnerships.

A successful JIT environment can be achieved only with the cooperation and involvement of
everyone in the organization (total employee involvement). Operators must take responsibility for
improving processes, controlling equipment, correcting deviations, and becoming vehicles for
continuous improvement. Employees must be flexible in the tasks they do. In a JIT environment,
more emphasis is placed on the leadership role. Managers and supervisors must become coaches and
trainers, develop the capability of employees, and provide coordination and leadership for
improvements.

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Manufacturing Planning and Control in a JIT Environment

The major effect that JIT has on forecasting is shortened lead-time. If lead times are short enough
that production rates can be matched to sales rates, forecasting for the master production schedule
becomes less important.

The JIT system emphasizes relationships with suppliers. One purpose of production planning is to
arrange for long lead-time purchases. The JIT process has the potential for reducing those lead times.

Impact of JIT on master scheduling see pages 412 and 413.

Impact of JIT on material requirements planning see page 413.

Impact of JIT on capacity management see page 413.

Impact of JIT on inventory management see page 414.

MRP is a push system, meaning that the material needs are calculated ahead of time and pushed out
to the production systems as a production order. The pull system underlying concept is not to
preplan and generate schedules, but to react to the final customer order and produce only what is
needed to satisfy demand and them only when it is needed.

If it is a purchased item, the major effort is to work with suppliers to reduce the cost and time of
purchase order and delivery.

How Kanban systems work? See pages 418 through 422.

Which to Choose MRP (ERP), Kanban, or Theory of Constraints?

Because of the forward-looking nature of MRP, it can be very effective in an environment with a
great deal of variability and uncertainty. MRPs major disadvantage is that it is highly data
dependent, both accurate and timely.

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JIT and Kanban work best in a highly stable and predictable environment. They are not as effective
in highly volatile environments.

Theory of Constraints (TOC) works best when the constraint can be identified and will be a
constraint long enough to be managed effectively. TOC is not as effective in a less stable
environment where the constraint changes and not easily identified.

Hybrid systems like Kanban and MRP are successful when MRP is used for advanced planning and
Kanban is used as an execution system. JIT and TOC can be use together where TOC prioritizes the
areas of improvement based on knowing the constraints and the JIT continuous improvement efforts
follow that lead.

Reference

1. Introduction to Material management: Fifth Edition J. R. Tony Arnold, Stephen N.

Chapman, R.V. Ramakrishnan

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