Just-in-Time Systems

Reducing Variance, Waste and

Lead Time in the Supply Chain
Topics to be Covered
 Review of JIT & Waste
 Objectives of JIT
 JIT Principles
 JIT and Variance
 JIT Tools and Procedures
JIT: Definitions?
 JIT Head  JIT Planes
 Chicken JIT  Bull JIT
 Oh JIT (O´JIT)  Le JIT
 Tough JIT  JIT Lag
 Strate JITs  When the JIT hits
the fan.
 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.
 a corporate strategy
 a philosophy
 Focus of JIT:
• variance & waste
Waste Types

Chrysler Video on Waste

Seven Basic Types of Waste

 Transportation waste
 Process Waste
 Inventory Waste
 Waste of motion
 Waste from product defects
 Waiting time
 Overproduction
Common Causes of Waste
 Layout (distance)  Inconsistent
performance
 Long setup time
measures
 Incapable processes  Ineffective
 Poor maintenance production planning
 Poor work methods  Lack of workplace
 Lack of training organization
 Poor supply
quality/reliability
Objective of JIT
 Produce only the products the customer
wants.
 Produce products only at the rate that
the customer wants them.
 Produce with perfect quality
 Produce with minimum lead time.
 Produce products with only those
features the customer wants.
Objectives
 Produce with no waste of labor,
material or equipment -- every
movement must have a purpose so that
there is zero idle inventory.
 Produce with methods that allow for the
development of people
 JIT Principles
 Create flow production
• one piece flow
• machines in order of processes
• small and inexpensive equipment
• U cell layout, counter clockwise
• multi-process handling workers
• easy moving/standing operations
• standard operations defined
JIT Principles - Slide 2
 Establish “TAKT” time
• rate at which the customer buys a
product
 Build Pull Product
• use of kanban system
JIT Tactics
 Single Minute  Visual control
Exchange of Dies
(SMED)
 Flexible workers
 Statistical Process Control  Tools at the point of
 Use of standard need
containers  Product redesign
 Doable stable schedules  Group Technology
with adequate visibility
 Total Productive
 TAKT-Time
Maintenance
 5-S Program
 Kaizen Event
 Balanced Production
 Three elements
• TAKT time
• Work sequence
• Standard WIP
 Objective
• Build at rate that the customer wants work
• Balance the system to maximize
efficiency at this rate
TAKT Time Example
 Net Available Operating Time
• Time per shift 480´ (minutes)
• Breaks (2 @ 10´) - 20´
• Clean-up - 20’
• Lunch - 30’
• NAOT/shift 410´
 Customer Requirements
• Monthly 26,000 units/month
• No. Working Days 20 days/month
• CR/Day 1,300 units/day
 TAKT Time
• 410’ x 60” x 3 shifts (73,800) divided by 1,300
• 57.769 seconds per part or 57"
TAKT Time
 TAKT
• the beat
• (Net Available Operating Time) /
Customer Requirements
• time periods must be consistent
 Example of calculation
 SMED
 Setup reduction
 Elements
• Internal Setup
• setup while machine idle
• External Setup
• setup while machine busy
• Adjustment
• run-ins, calibration
 SMED Process
 Study current process
• “as is”
• video tape
• Who owns the video tape?
 Convert internal to external setup
 Eliminate the need for Adjustment
 Eliminate need for fastening
 Goal
• setup time < 10 minutes
Push Vs. Pull Scheduling
 Push Scheduling
• traditional approach
• “move the job on when finished”
• problems - creates excessive inventory
 Pull scheduling
• coordinated production
• driven by demand (pulled through system)
• extensive use of visual triggers
(production/withdrawal kanbans)
Visual Control
 A system for making problems obvious
without the need for sophisticated monitoring
computer systems
• Andon light system
• Kanbans
 Create a sense of urgency
 Clearly identify where the problems are
located
Supplier Partnerships
 Reliance on suppliers for
• problem solving expertise
• quality at the source
• timely communication
• participants in cost reduction
programs
 Increased reliance on supplier
certification
Standardization/Simplification
 Eliminate inherent sources of variance
 eliminate opportunity for human discretion error
 Examples
• Container sizes
• MacDonalds with interaction with customers
 Consistent with Deming Wheel
• Standarize  expose problems  solve
problems  implement new methods
Other Techniques
 Milk runs
 Poka-Yoke Systems
 Continuous Improvement Programs
(CIP)
Video

JIT at McDonalds
JIT - Day 2

New Developments in JIT

 JIT & Lean Manufacturing
 Lean Manufacturing
• Doing more with less
• Less of:
• materials, time, resources
• overhead, people
• waste
• money
 JIT is a subset of Lean Manufacturing
 Now seen as most applicable to mass
production settings
Kaizen Event
 A relatively new concept
• Kaizen Blitz, Gemba Kaizen
 Process focused
 Operates at two levels
• on-going process of identifying opportunities for
improvement
• strategic, top management
•short-term project lasting 1-4 days
• training, documentation of process “as is”, identification of
potential improvements, implementation, presentation, action
list
Kaizen Events - Key Traits
 Very short-term, finite in life
 Highly focused
 Creativity before capital
 Team-oriented
 Action-Oriented
 Verifiable Metrics
 Repetitive
 Kaizen Event Process
 Top management buy-in
• Public Kaizen Events
 Assessment of current processes
• top management
• Target Processes
• training
• documentation - “as is”
• opportunities
• change
• presentation/action list
Typical Metrics
 Floor space occupied by process being
assessed
 Operators required per day
 Distance traveled by an order within the
process
 WIP Inventory
 Setup (measured in minutes)
 Quality recommendations generated
 Safety Improvements implemented
Application of Kaizen Events
 Shop floor
 Finance
• 401 K plan
 Purchasing
 Health Care
 Services
Example of Impact of Kaizen
Event
Impact of Kaizen Events - Overall Benefits
(January 1, 1996 through December 31, 1996
Improvement M________ Before Kaizen Achievement Improvement

Floor Space ( ) 56,000 39,000 30%

Operators/Day 165 125 24%

Distance Traveled 91,000 ft. 15,000 ft. 34%

Inventory (WIP pieces) 4,760,000 2,570,000 46%

Setup Time Reduction 1,660 _______ 1,660 _________ 72%

Safety Improvements 200 improvements implement

 JIT 11
 Based on system developed by Bose of
Framingham, MA
 Integration of JIT principles and
practices into the supply chain
 JIT II
• long term collaborative relationships with
suppliers present
• suppliers to place personnel in plants of
the buying organization
Limitations of JIT
 Preconditions to JIT
• trust must be present
• labor/management
• suppliers/consumers
• recognition of processes
• familiarity with problem solving
• quality at the source
• agreement over value and waste
Limitations of JIT
 Right Settings
• applicable in growth to maturity phases of
Product Life Cycle
• standard product
• Steinway and JIT
• standard/fixed pay-rate
• problems with piece-rate scheme
 Universal agreement that change needed
 Theoretical Benefits of JIT
 Unpleasant surprises  Less pressure on receiving
eliminated docks and incoming
 Less computerization inspection areas
• visual control  Lower costs
 Improved quality  Change in attitude
 WIP reduced • Defects are treasures
 Better
communications
Dealing with Variance
 Four major stances:
• Buffer against it
• Ignore it
• Manage it
• Eliminate it
 All forms of variance create cost
 JIT & Variance
 Variance a fact of life
 Comes from many sources
• internal
scheduling changes, scheduling practices,
manufacturing planning & control systems,
absenteeism, process variability
• external
changes in forecasts, actual demand, customer
requested changes, government,
competition, vendors
 Cycle Times
 Operator Cycle Time
• total time required for a worker to
complete one cycle of an operation
 Machine Cycle Time
• total time for a machine to finish
one
complete cycle
• includes loading and unloading
Some Interesting Calculations
• No. of Operators
• Sum OCT/(TAKT TIME)
• Example
• OCT for Operator 1= 13"
• OCT for Operator 2= 9"
• OCT for Operator 3= 11"
• OCT for Operator 4= 10"
• Total 43"
• TAKT Time 16.5"
• Number of Operators
• 43/16.5 = 2.606 or 3 operators
 The 5-S Program
 Seiri
• segregate and discard
• get rid of what is not needed
 Seiton
• arrange and identify for ease of use
• a place for everything and everything in its
place
 Seiso
• Clean Daily
• clean work place enhances quality
The 5-S Program
 Seiketsu
• Revisit frequently
• revisit the first 3 steps to maintain
workplace safety and effectiveness

 Shitsuki
• Motivate to sustain
• promote adherence through visual
performance measurement tools
Next Day
 JIT in Service Sectors
 New developments in JIT
• Lean Manufacturing
• Agile Enterprise
• JIT II
• Gemba Kaizen
• Quick Response Systems
Topics to be Covered
 JIT and Lean Manufacturing
 JIT in Services
 Kaizen Events
 JIT II
 Gemba Kaizen
 Agile Enterprise
 Limitations of JIT
JIT in Services
 Service Traits
• strong emphasis on process
• avoidance of inventory
• emphasis on people and their importance
to process
• recognition of need for continuous
improvement
• “defects are treasures”
JIT in Services
 Elements of JIT most applicable
• Synchronization and balance of information
and work flows
• Total visibility of all components of the
process
• Continuous improvement of the process
• Holistic approach to the elimination of waste
• Flexibility in use of resources
• Respect for people
JIT in Services
 Key Issues
• Equipment/people focus
• Customer contact per transaction
• Degree of discretion
• Degree of customization
• Location of value-added processes
• Product/process focus
 Gemba Kaizen
 Waste reduction through the execution
system
 Gemba
• heart of the system
 Essence of Gemba Kaizen
• to eliminate waste, you must have
contact with the system that you are
managing
• the contact must be real and not through
computers
 Agile Enterprise
 New development
 Associated with Iaccoca Institute of
LeHigh University
 Merging flexibility with JIT
 Much broader than Lean Enterprise
 Recognition that the environment
• always changing
• unpredictably undergoing change
Agile Enterprise - Traits
 Rapidly bring to market products that are
variable combinations of hardware,
information and services.
 Design products that are easily configurable
and ungradable.
 Produce to individual customer orders in
arbitrary order quantities.
 Bring out a continuously changing array of
models within longer-lived product families
Agile Enterprise - Traits
 Fragment mass markets into niche markets.
 Maintain and foster continuous, rather than
single-instance, sales relationships by
continually adding value to current
customers.
 Cooperate intensively with other companies,
including competitors, to create global
product resources.
 Agile Enterprise
 Attempt to bring together a number of
different trends
• greater focus on product development
• greater reliance on suppliers
• greater concern with speed
• more emphasis on effective and intelligent
integration
• greater use of technology
• information
Other Tactics
 Kaizen/Continuous Improvement
 Manufacturing Cells
 Business Process Reengineering
 Milk run logistics
 Supplier certification
 Direct delivery to point of use