JIT, Lean Operations,

9
and the Toyota Production
System
Weeks 9 (Chapter 16)

Operations Management, Sustainability and Supply Chain Management,

Global Edition, Eleventh Edition, PEARSON
Jay Heizer and Barry Rander © 2014 Pearson Education
 Textbook for
Used

Operations Management, Sustainability and

Supply Chain Management,
Global Edition, Eleventh Edition, PEARSON
Jay Heizer and Barry Rander (2014)
 Outline
► Global Company Profile:
Toyota Motor Corporation
► Just-in-Time, the Toyota Production
System, and Lean Operations
► Just-in-Time (JIT)
► Toyota Production System (TPS)
► Lean Operations
► Lean Operations in Services
© 2014 Pearson Education
Global Company Profile
Toyota Motor Corporation © 2014 Pearson Education
 DEFINE

Just In Time (JIT)

Continuous and forced problem solving via a focus on throughput and
reduced inventory

Toyota Production System (TPS)

Focus on continuous improvement, respect for people and standart work
practices.
Lean Operations
Eliminates waste through continuous improvement and focus on exactly
what the customer wants.
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 JIT/TPS/Lean
Operations

If there is any distinction between JIT, TPS and Lean Operation,

it is that:
 JIT emphasizes forced problem solving
 TPS emphasizes employee learning and empowerment in an assembly-
line environment.
 Lean Operations emphasize understanding the customer

© 2014 Pearson Education

 eliminate
WASTE
Ohno’s Seven Wastes
 Overproduction: producing more than the customer order or producing early (before
it is demanded) is waste. Inventory of any kind is usually a waste
 Queues : idle time, storage and waiting are waste (they add no value)
 Transportation : moving material between plants or between work centers and
handling more than once is waste.
 Inventory : unnecessary raw material, work in process (WIP), finish goods and excess
operating supplies add no value and are wastes
 Motion : movement of equipment or people that adds no value is waste
 Overprocessing : work performed on the product that adds no value is waste
 Defective products : returns, warranty claims, rework and scrap are a
waste.

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 remove
VARIABILITY

Any deviation from optimum process that delivers perfect

product on time, every time

 Poor production processes that allow employees and suppliers to

produce improper quantities or late or non-conforming units.
 Unknown customer demands
 Incomplete or inaccurate drawings, specifications and bills of material

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 improve
THROUGHPUT

Throughput
The rate at which units move through a production process

Manufacturing Cycle Time

The time between the arrival of raw materials and the shipping of finished
products

Pull System
A concept that results in material being produced only when requested and
moved to where it is needed just as it is needed.
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JIT TECHNIQUES
JIT
Just-In-Time

Rapid throughput frees assets

Quality improvement reduce waste Faster response to the
Cost reduction adds pricing flexibility customer at lower cost and
Variability reduction higher quality
Rework reduction A COMPETITIVE ADVANTAGE

WHICH RESULTS IN: WHICH WINS ORDERS BY:

© 2014 Pearson Education
 JIT
partnership
Partnerships of supplies and purchasers that remove waste
and drive down costs for mutual benefits

4 goals of JIT partnerships are:

 Removal of unnecessary activities: such as receiving, incoming inspection
and paperwork related to bidding, invoicing and payment.
 Removal of in-plant inventory: by delivery in small lots directly to the using
department as needed.
 Removal of in-transit inventory: by encouraging suppliers to locate nearby
and provide frequent small shipments.
 Improved quality and reliability: through long term commitments,
communication and coorperation.

© 2014 Pearson Education

 JIT
layout
Reduce another kind of waste-movement

JIT LAYOUT TACTICS

Build work cells for families of products
Include a large number operations in a small area
Minimize distance
Design little space for inventory
Improve employee communication
Use poka-yoke devices
Build flexible or movable equipment
Cross-train workers to add flexibility

© 2014 Pearson Education

 JIT
inventory
The minimum inventory necessary to keep a perfect system
running

JIT INVENTORY TACTICS

Use a pull system to move inventory
Reduce lot sizes
Develop just-in-time delivery systems with suppliers
Deliver directly to point of use
Perform to schedule
Reduce setup time
Use group technology

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 JIT
inventory

inventory

“Inventory is Evil” S. Shingo

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 EXAMPLE
D = Annual demand = 400,000 units
d = Daily demand = 400,000/250 = 1,600 per day
p = Daily production rate = 4,000 units
Q = EOQ desired = 400
H = Holding cost = $20 per unit
S = Setup cost (to be determined)

2 DS 2 DS
Q*p  Q2 
H 1  (d / p) H 1  (d / p)

S
Q H 1  d / p  (400) (20)(1  1,600 / 4,000)
2

2
 $2.40
2D 2(400,000)

Setup time = $2.40/($30/hour) = 0.08 hr = 4.8 minutes

© 2014 Pearson Education
 JIT
scheduling
Communicatited both within the organization and to outside
suppliers, support JIT

2 techniques are paramount:

 LEVEL SCHEDULES: scheduling products so that each day’s production meets the
demand for that day.
 KANBAN: The Japanese word for card, which has come to mean “signal”; a kanban
system moves parts through production via a “pull” from a signal.

© 2014 Pearson Education

 JIT
quality
 JIT cut the cost of obtaining good quality
 JIT improves quality.
 Better quality means fewer buffers are needed and
therefore, a better easier-to-employ JIT system can exist.
JIT QUALITY TACTICS
Use statistical process control
Empower employees
Build fail-safe methods (poka-yoke, checklists, etc.)
Expose poor quality with small lot JIT
Provide immediate feedback

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 TPS
toyota production
SYSTEM

3 core components of TPS are:

 CONTINUOUS IMPREVEMENT
 RESPECT FOR PEOPLE
 STANDART WORK PRACTICE
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 standart work
PRACTICE

 Work shall be completely specified as to content, sequence,

timing, and outcome
 Internal and external customer-supplier connection are direct
 Product and service flows must be simple and direct
 Any improvement must be made in accordance with the scientific
method at the lowest possible level of the organization

© 2014 Pearson Education

 lean
OPERATION

 Broader than JIT in that it is externally focused on the

customer
 Starts with understanding what the customer wants
 Optimize the entire process from the customer’s perspective

© 2014 Pearson Education

 Thankyou very much
Operations Management, Sustainability and Supply Chain
Management,
Global Edition, Eleventh Edition, PEARSON
Jay Heizer and Barry Rander (2014)
© 2014 Pearson Education