JIT/Lean Production

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Post World War II

-Growing and rebuilding world economy

-Demand > Supply

-US Manufacturing:

Higher volumes

Capital investment

“ Breakthrough” improvements

“ The production problem has been solved ”

2

View from Japan

-Very little capital -War-ravaged workforce

-Little space -Poor or no raw materials

-Lower demand levels -Little access to latest technologies

U.S. methods would not work

3

Japanese Approach to Operations

-Maximize use of people

-Simplify first, add technology second

-Gradual, but continuous improvement

-Minimize waste (including poor quality)

Led to the development of the approach known as

Just-in-Time

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Some Statistics from 1986

Framingham (GM)

40.7 hours

130 defects

2 weeks

Toyota Takaoka

16 hours

45 defects

2 hours

A comparison of: -assembly hours

-defects per 100 cars -average inventory levels

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A highly coordinated processing system in which processing and movement of

materials and goods occur just as they are needed

The ultimate goal of JIT is a balanced system.

Just-In-Time

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Pre-JIT: Traditional Mass Production

Big lot sizesLots of inventory”PUSH” material to nextstage

Lowerper unit

cost

Big purchase shipments

Big “pushes” of finished goodsto warehouses or customers

???

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Post-JIT: “Lean Production”

Tighter coordination along the supply chainGoods are pulled along

only make and ship what is neededSmaller lotsFaster setupsLess inventory, storage space”PULL” material to next stage

Minimalor no

inventoryholding

cost

Smaller shipments

Goods are pulled out ofplant by customer demand

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JIT Goals

-Eliminate disruptions

-Make the system flexible

-Reduce setup times and lead times

-Minimize inventory

-Eliminate waste

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Waste

:

Waste is ‘anything other than the minimum amount of equipment, materials, parts, space, and workers’ time,

which are absolutely essential to add value to the product’.

“ Shoichiro Toyoda;President, Toyota”

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Forms of Waste:(‘muda’ in Japanese)

-Overproduction -Waiting

-Unnecessary movement -Wrong process

-Unnecessary inventory -Excess motion

-Defects -Underutilization of employees

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Inventory as a Waste

-Requires more storage space

-Requires tracking and counting

-Increases movement activity

-Hides yield, scrap, and rework problems

-Increases risk of loss from theft, damage, obsolescence

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Examples of Eliminating “Wastes”

Big Bob’s Automotive Axles:

Wheels bought fromSupplier outsider

Axles made andassembled in house

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“BEFORE”Shipping in Wheels

Bob’s

Wheels

Warehouse

Truck Cost: $500 (from Peoria)

Maximum load of wheels: 10,000

Weekly demand of wheels: 500

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Truck Cost: $50 (from Burlington)

Maximum load of wheels: 500

Weekly demand of wheels: 500

What wastes have been reduced?

Bob’sWheels

“AFTER”Shipping in Wheels

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BEFORE: Making Axles (Different lengths)

Manufacturing Minimum Batch1,000 Axles

Tool Bin Final Assembly

Push toFinalAssembly

“Axle Maker”Setup: 8 hoursSetup cost: $800

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BEFORE: Making Axles (Oops!)

Manufacturing Minimum Batch1,000 Axles

Tool Bin Final Assembly

Push toFinalAssembly

“Axle Maker”Setup: 8 hoursSetup cost: $800

Defect: “Axles are not true!”

What is the outcome of detecting defective axles at the end?

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Manufacturing

Final Assembly

Pull toFinalAssembly

“Axle Maker”Setup: 15 min.Setup cost: $25

Tools next to “Maker”

Nominimumbatch size

AFTER: Making Axles (Different lengths)

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After: Making Axles II(More improvements)

What wastes have been reduced?

Manufacturing

Final Assembly

Poka-YokeDevice

“Axle Maker”Setup: 15 min.Setup cost: $0

Tools next to “Maker”

Verify Trueness

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Building Blocks of JIT

-Product design (Standard parts/Production system)

-Process design (Jidoka /Poka-Yoke/quality/flexibility)

-Personnel and organizational elements (Workers as assets/Cost accounting/Continuous improvement)

-Manufacturing planning and control (Pull system/Visual system/Preventive maintenance)

MPC

Staff ORG

Process Design

Product Design

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-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 -Poka-yoke

-Preventative maintenance -Good housekeeping

-Set-up time reduction -Cross-trained employees

-A pull system

Elements of JIT

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Top Management

Long-term planningProduct line decisions

Expansion issues

Middle management

Planning, purchasinghiring, and capital decisions

Monitor costs

Supervisors

Control activities in specific areasMonitor quality, delivery, etc.

Direct Labor

Perform predetermined tasks

Technical Staff

Work methods, QCProcess improvements,

MIS

Planning Info

Control Info

Detailed Methods,Schedules

Classic Organizational View

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JIT Organization View

Top Management

Long-term planningProduct line decisions

Expansion issues

Middle management

Planning, with less purchasing,hiring, and capital decisions

Monitor costs and assist labor

Direct Labor (self-supervising)

Task performance and schedule attainmentControl specific areas of activity

Monitor quality, delivery, etc.Participate in hiring and continuous

improvement

Technical Staff

Training and TechnicalSupport

Planning Info

Control Info

Tec

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ea

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JIT VS Traditional

Factor Traditional JIT

Inventory Much to offset forecast errors, late deliveries

Minimal necessary to operate

Deliveries Few, large Many, small

Lot sizes Large Small

Setup; runs Few, long runs Many, short runs

Vendors Long-term relationships are unusual

Partners

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

-Suppliers may resist

Why?

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Benefits of JIT Systems

-Reduced inventory levels

-High quality

-Flexibility

-Reduced lead times

-Increased productivity

-Increased equipment utilization

-Reduced scrap and rework

-Reduced space requirements

-Pressure for good vendor relationships

-Reduced need for indirect labor

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Questions?

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