15

JIT and Lean Operations

McGraw-Hill/Irwin

Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives
Explain what is meant by the term lean operations system. List each of the goals of JIT and explain its importance. List and briefly describe the building blocks of JIT. List the benefits of the JIT system. Outline the considerations important in converting a traditional mode of operations to a JIT system. List some of the obstacles that might be encountered when converting to a JIT system.
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JIT/Lean Production
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,

JIT lean production JIT pull (demand) system JIT operates with very little fat
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Goal of JIT
The ultimate goal of JIT is a balanced system. Achieves a smooth, rapid flow of materials through the system

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Summary JIT Goals and Building Blocks Figure 15.1

Ultimate A Goal balanced rapid flow Supporting Goals Eliminate disruptions Make the system flexible Eliminate waste

Product Design

Process Design

Personnel Elements

Manufacturing Planning

Building Blocks

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Supporting Goals
Eliminate disruptions

Make system flexible

Eliminate waste, especially excess inventory

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Sources of Waste
Overproduction
Waiting time Unnecessary transportation Processing waste Inefficient work methods

Product defects

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Kaizen Philosophy
Waste is the enemy Improvement should be done gradually and continuously Everyone should be involved Built on a cheap strategy Can be applied anywhere

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Kaizen Philosophy (contd)

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

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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 of production

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JIT Building Blocks

Product design Process design Personnel/organizational elements Manufacturing planning and control

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Product Design
Standard parts
Modular design Highly capable production systems Concurrent engineering

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Process Design
Small lot sizes Setup time reduction Manufacturing cells Limited work in process Quality improvement Production flexibility Balanced system Little inventory storage
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Benefits of Small Lot Sizes

Reduces inventory Less rework Less storage space

Problems are more apparent Increases product flexibility

Easier to balance operations

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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

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Production Flexibility
Reduce downtime by reducing changeover time
Use preventive maintenance to reduce breakdowns Cross-train workers to help clear bottlenecks

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Production Flexibility (contd)

Use many small units of capacity Use off-line buffers Reserve capacity for important customers

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Quality Improvement
Autonomation
Automatic detection of defects during production

Jidoka
Japanese term for autonomation

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Production Flexibility
Balance 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 customer demand for final product

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Personnel/Organizational Elements
Workers as assets

Cross-trained workers
Continuous improvement Cost accounting

Leadership/project management
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Manufacturing Planning and Control

Level loading Pull systems

Visual systems
Close vendor relationships Reduced transaction processing Preventive maintenance
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Pull/Push Systems
Pull system: System for moving work where a workstation pulls output from the preceding station as needed. (e.g. Kanban)

Push system: System for moving work where output is pushed to the next station as it is completed

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Kanban Production Control System

Kanban: Card or other device that communicates demand for work or materials from the preceding station Kanban is the Japanese word meaning signal or visible record Paperless production control system

Authority to pull, or produce comes from a downstream process.

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Kanban Formula
N = DT(1+X) 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
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Limited Work in Process

Benefits
Lower carrying costs 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
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Traditional Supplier Network

Figure 15.4a

Buyer
Supplier Supplier

Supplier
Supplier Supplier Supplier Supplier

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Tiered Supplier Network

Figure 15.4b

Buyer
First Tier Supplier Second Tier Supplier Supplier Supplier Supplier

Third Tier Supplier

Supplier

Supplier

Supplier

Supplier

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Preventive Maintenance and Housekeeping

Preventative maintenance: Maintaining equipment in good condition and replacing parts that have a tendency to fail before they actually fail. Housekeeping: Maintaining a workplace that is clean and free of unnecessary materials.

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Housekeeping Five Ss
1. 2. 3. 4. 5. Sort Straighten Sweep Standardize Self-discipline

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Table 15.3

Comparison of JIT and Traditional

Traditional
Much to offset forecast errors, late deliveries Few, large Large Few, long runs Long-term relationships are unusual

Factor

JIT
Minimal necessary to operate Many, small Small Many, short runs Partners

Inventory
Deliveries Lot sizes Setup; runs Vendors

Workers

Necessary to do the work Assets

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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
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Obstacles to Conversion
Management may not be committed Workers/management may not be cooperative

Difficult to change company culture

Suppliers may resist
Why?

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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

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JIT in Services
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.
Eliminate disruptions Make system flexible Reduce setup and lead times Eliminate waste Minimize WIP Simplify the process
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JIT II
JIT II: a supplier representative works right in the companys plant, making sure there is an appropriate supply on hand.

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Benefits of JIT Systems

Reduced inventory levels
High quality Flexibility Reduced lead times Increased productivity

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Benefits of JIT Systems (contd)

Increased equipment utilization
Reduced scrap and rework Reduced space requirements Pressure for good vendor relationships Reduced need for indirect labor

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Elements of JIT
Table 15.4

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
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Elements of JIT (contd)

Table 15.4

Poka-yoke fail safe tools and methods Preventative maintenance Good housekeeping Set-up time reduction

Cross-trained employees

A pull system

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Video: Made for you

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Video: New system

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Video: McDonalds Process

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Video: Layout Gortrac

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