Bus 241 1

Production Operations Production Operations ManagementManagement

Just-In-Time ManufacturingU. Akinc

Just-In-Time ManufacturingU. Akinc

Bus 241 2

Just-in-Time (JIT)Just-in-Time (JIT)

Just in time is a philosophy of management that transcends inventory management, indeed manufacturing management

Predicated on eliminating all waste from manufacturing

Waste to be eliminated includes anything that does not add value to the product or service

Just in time is a philosophy of management that transcends inventory management, indeed manufacturing management

Predicated on eliminating all waste from manufacturing

Waste to be eliminated includes anything that does not add value to the product or service

Bus 241 3

Examples of WasteExamples of Waste Inventory Inspection Set-up Time Data Processing Most Indirect Labor Rework Scrap Customer Returns

Inventory Inspection Set-up Time Data Processing Most Indirect Labor Rework Scrap Customer Returns

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JIT & Competitive PrioritiesJIT & Competitive PrioritiesJIT & Competitive PrioritiesJIT & Competitive Priorities Reduces costs via waste eliminationReduces costs via waste elimination

Increases conformance qualityIncreases conformance quality

Improves flexibility due to small inventoryImproves flexibility due to small inventory

Improves delivery performance due to Improves delivery performance due to shorter lead timesshorter lead times

Reduces costs via waste eliminationReduces costs via waste elimination

Increases conformance qualityIncreases conformance quality

Improves flexibility due to small inventoryImproves flexibility due to small inventory

Improves delivery performance due to Improves delivery performance due to shorter lead timesshorter lead times

Bus 241 5

JIT makes problems VisibleJIT makes problems Visible

Bus 241 6

Functions of InventoriesFunctions of InventoriesRevisitedRevisited

Safety Stocks

Lot Size Inventories

Anticipation Stocks

De-coupling

Transit

Speculation

Safety Stocks

Lot Size Inventories

Anticipation Stocks

De-coupling

Transit

Speculation

Bus 241 7

Pillars of JITPillars of JIT Set-up Time reduction Total Quality Management Vendor Relations Flexible Resources Employee Involvement Meticulous Maintenance Pull vs. Push System of Scheduling

KANBAN

Set-up Time reduction Total Quality Management Vendor Relations Flexible Resources Employee Involvement Meticulous Maintenance Pull vs. Push System of Scheduling

KANBAN

Bus 241 8

JIT works best with...JIT works best with...JIT works best with...JIT works best with...

Uniform production rateUniform production rate

Flexible workforceFlexible workforce

Limited product varietyLimited product variety

Uniform production rateUniform production rate

Flexible workforceFlexible workforce

Limited product varietyLimited product variety

Bus 241 9

A KANBANA KANBAN

Bus 241 10

Two-card Kanban Two-card Kanban

Bus 241 11

Typical Benefits of JITTypical Benefits of JIT

5 Companies Surveyed: Lead time down by 90% Inventory down by 35-73% Set up time down by 75-95% Material costs down by 6-11% Quality costs down by 26-63%

Harley Davidson Inventory turns 7 to 20 Direct labor prod. up 50% Rework reduction 80% Warranty costs down by 90%’

5 Companies Surveyed: Lead time down by 90% Inventory down by 35-73% Set up time down by 75-95% Material costs down by 6-11% Quality costs down by 26-63%

Harley Davidson Inventory turns 7 to 20 Direct labor prod. up 50% Rework reduction 80% Warranty costs down by 90%’