This document provides an overview of lean operations and just-in-time (JIT) manufacturing. It discusses that JIT aims to produce goods with minimum lead time and lowest cost by eliminating waste. Toyota popularized JIT techniques like reducing setup times and implementing kanban systems. Key aspects of JIT include eliminating waste, reducing variability, and improving throughput by pulling materials based on demand. JIT requires close supplier partnerships and scheduling to achieve small lot sizes and low inventories. The document outlines tactics to implement JIT principles in both manufacturing and service industries.
2. What is JIT?
• A corporate system designed to produce
output within the minimum lead time and
at the lowest total cost by continuously
identifying and eliminating all forms of
corporate waste and variance.
3. Looking Back
• JIT originated in Japan, post WWII
• Driven by a need survive after the
devastation caused by the war
• JIT gained worldwide prominence in the
1970s
• Toyota Motor Co. developed JIT
4. Toyota Motor Corp.
• Largest vehicle manufacturer
• Techniques of JIT, TPS and Lean
Operation
• Introduced by Taiichi Ohno
6. Just-In-Time, TPS, and
Lean Operations
• JIT - continuous and forced problem solving
via a focus on throughput and reduced
inventory
• TPS -continuous improvement, respect for
people, and standard work practices
• Lean production - supplies the customer
with exact wants when the customer wants
it without waste
7. Just In Time
Good production systems require that
managers address three issues that are
pervasive and fundamental to operations
management: eliminate waste, remove
variability, and improve throughput
9. Eliminate Waste
• Waste is anything that does not add
value from the customer point of view
• Storage, inspection, delay, waiting in
queues, and defective products do
not add value and are 100% waste
12. Common Causes of Waste
• Layout (distance)
• Long setup time
• Incapable processes
• Poor maintenance
• Poor work methods
• Lack of training
• Inconsistent
performance measures
• Ineffective production
planning
• Lack of workplace
organization
• Poor supply
quality/reliability
13. Eliminate Waste
• Efficient, sustainable production
minimizes inputs, reduces waste
• Traditional “housekeeping” has been
expanded to the 5 Ss
14. The 5 Ss
• Sort/segregate – when in doubt, throw it
out
• Simplify/straighten – methods analysis
tools
• Shine/sweep – clean daily
• Standardize – remove variations from
processes
• Sustain/self-discipline – review work and
recognize progress
16. Reducing Waste: Push Vs Pull
Material Flow
Information Flow
Customer
Raw
Material
Supplier
Final
Assembly
PUSH
Customer
Raw
Material
Supplier
Final
Assembly
PULL
17. Remove Variability
• JIT systems require managers to
reduce variability caused by both
internal and external factors
• Variability is any deviation from the
optimum process
• Inventory hides variability
• Less variability results in less waste
19. Sources of Variability
1. Incomplete or inaccurate drawings or
specifications
2. Poor production processes resulting in
incorrect quantities, late, or non-
conforming units
3. Unknown customer demands
20. Improve Throughput
• The time it takes to move an order
from receipt to delivery
• The time between the arrival of raw
materials and the shipping of the
finished order is called
manufacturing cycle time
• A pull system increases throughput
21. Improve Throughput
• By pulling material in small lots,
inventory cushions are removed,
exposing problems and emphasizing
continual improvement
• Manufacturing cycle time is reduced
• Push systems dump orders on the
downstream stations regardless of the
need
24. JIT Partnerships
• JIT partnerships exist when a supplier
and purchaser work together to
remove waste and drive down costs
• Four goals of JIT partnerships are:
• Removal of unnecessary activities
• Removal of in-plant inventory
• Removal of in-transit inventory
• Improved quality and reliability
26. JIT Layout
•Reduces another kind of waste -“Movement”
•Places material directly where needed
•Eg. Toyota
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 (fail safe) devices
• Build flexible or movable equipment
• Cross-train workers to add flexibility
27. Concerns of Suppliers
• Diversification – ties to only one customer
increases risk
• Scheduling – don’t believe customers can
create a smooth schedule
• Changes – short lead times mean engineering
or specification changes can create problems
• Quality – limited by capital budgets,
processes, or technology
• Lot sizes – small lot sizes may transfer costs
to suppliers
28. JIT Inventory
•Why does extra inventory exist?
•“Just In Case”
•cover problems
•Just-in-time Inventory
•Minimum inventory to keep a perfect system
running
30. •Inventory hides variability &
problems
•Analogy with the lake full of
rocks
Inventory level
Process
downtimeScrap
Setup
time
Late deliveries
Quality
problems
Water:
Inventory Flow
Rocks:
Problems
31. •Uncovering of the “rocks”
•Reveals problems,
variability
•Management clears the
lake
Inventory
level
Process
downtimeScrap
Setup
time
Late deliveries
Quality
problems Problems
revealed
32. No problems No inventory
Inventory
level
Process
downtime
removed
No scrap
Setup
time
reduced
Late
deliveries
Quality
problems
removed
33. •Key to JIT:
“Good product in small lot
sizes”
•Reduces Inventory Costs
Q2 When average order size = 100
average inventory is 50
200 –
100 –
Inventory
Time
Q1 When average order size = 200
average inventory is 100
Lowering the order size Increases the Order size Decreases Inventory
34. •Ideal Situation
•Lot Sizes of ONE pulled from ONE process to the
next
•But, unrealistic
•Small lot sizes possible but Single lot size not
feasible
•Two necessary changes:
•Improve Material Handling
•Reduce Setup time
35. Lot Size Example: Crate Furniture Inc.
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)
Q =
2DS
H(1 - d/p)
Q2 =
2DS
H(1 - d/p)
S = = = $2.40
(Q2)(H)(1 - d/p)
2D
(3,200,000)(0.6)
800,000
Setup time = $2.40/($30/hour) = 0.08 hr = 4.8 minutes
36. • High setup costs encourage large lot sizes
Ultimate Solution: Reducing setup costs
Reduces lot size &
average inventory
Reduces Optimum
order size
38. • Setup time can be reduced through
preparation prior to shutdown and
changeover
• Reduced Setup times=A major JIT
Component
• Setup Costs highly
correlated with Setup time
40. JIT Scheduling
• Better Scheduling
Organization
• Supports JIT1
• Improves ability to meet customer orders2
• Drives down inventory3
• Allows smaller lot sizes4
• Reduces work-in-process5
41. JIT Scheduling: Example Ford Motor Company
Ford communicates its
schedules to bumper
Polycon Industries
Schedule describes:
Style and color of
the bumper for
each vehicle
It transmits the
information to
Polycon Warehouse
personnel
PW Personnel load the
bumpers onto conveyors
leading to the loading
dock
Bumpers are then trucked
to ford plant
43. 1. Level Schedules: Jelly Bean Scheduling
• Technique processes frequent small batches
• Many “always changing” small lots
A B CA AAB B B B B C
JIT Level Material-Use Approach
A CA AA B B B B B C CB B B BA A
Large-Lot Approach
Time
44. Freezing
• Not allowing changes
• Improves the performance
• The portion closest to the due dates
• Allows
– Production system to function
– Schedule to be met
45. 2. Kanban: Only when ready
• “Kanban”-Japanese word for “card”
• Technique that uses “pull” system
• Match or nearly match the processing time
• Card=an authorization for the next container of
material to be produced
• Empty containers
• Lights
• Flag or rag
• Colored golf balls
Signaling
devices to
control the
flow of
material
48. Number of Kanban Cards or Containers
• 1st – Set the size of each container
– Need to know the lead time needed to produce a
container of parts
– Need to know the amount of Safety Stock needed
• 2nd – Calculate no of Kanbans
49. Example: No of Kanban: Hobbs Bakery
• Daily Demand =500 cakes
• Production Lead Time =2 days
• Safety Stock =0.5 days
• Container size =250 cakes
• Now, Demand during lead time =2 days x 500
cakes = 1,000
50. Quality
JIT cuts the cost of
obtaining good
quality
JIT improves
quality
Better quality
means fewer
buffers=Easier-to
use JIT system
•Strong Relationship between JIT &
Quality
52. • Continuous improvement
• Build an organizational culture and value system
that stresses improvement of all processes
• Part of everyone’s job
• Respect for people
• People are treated as
knowledge workers
• Engage mental and
physical capabilities
• Empower employees
Toyota Production System
53. • Standard 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
Toyota Production System
54. Lean Operations
• Different from 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
55. Building a Lean Organization
• Transitioning to a lean system can be
difficult
• Lean systems tend to have the
following attributes
• Use JIT techniques
• Build systems that help employees
produce perfect parts
• Reduce space requirements
56. Building a Lean Organization
• Develop partnerships with suppliers
• Educate suppliers
• Eliminate all but value-added
activities
• Develop employees
• Make jobs challenging
• Build worker flexibility
57. JIT in Services
The JIT techniques used in
manufacturing are used in services
• Suppliers
• Layouts
• Inventory
• Scheduling