Topic :- Just-In-Time & Kanban System

Submitted To:Mr. Pardeep Kumar Lec. Of POM

Submitted By:Parneet Walia 175 MBA 2nd

JIT (Just-In-Time)
A strategy for inventory management in which raw materials and components are delivered from the vendor or supplier immediately before they are needed in the manufacturing process. An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs.

Elements of JIT
Respect for the contribution that employees can make. Good relationship with suppliers. A demand pull system in which material only flows when needed. Kanban :- A Japanese method of controlling the movement of materials through a JIT system. Reduction of set up times. Flexible work force. Reduce lead times & Preventive maintenance .

Emergence of JIT

Evolved in Japan after World War II, as a result of their diminishing market share in the auto industry.

Toyota Motor Company- first to implement fully functioning and successful JIT system, in 1970s.
Japanese Manufacturers looked for a way to gain the most efficient use of limited resources. They worked on "optimal cost/quality relationship.

Functioning of JIT

(how it works)

Involves keeping stock levels to a minimum Stock arrives just in time to be used in production Works best where there is a close relationship between manufacturer and suppliers Goods not produced unless firm has an order from a customer Aims to get highest volume of output at the lowest unit cost.

Functioning of JIT (Contd.)

A method of production control. No demand - no production! Anticipated/planned consumer demand triggers production Finished goods assembled just in time to be sold to customer Component parts assembled just in time to become finished goods Materials purchased just in time to make component parts.

Objectives of JIT

To Reduce All Non-Value-Added Activities.

Elimination Of In-Plant Inventory.

Elimination Of In-Transit Inventory Quality And Reliability Improvement

Companies adopted JIT

Advantages of JIT
Capital not tied up in stocks Less space required for stock Closer relationships with suppliers Reduced deterioration Less vulnerability to fashion and technology changes Reduction in stockholding costs Increase in cash flow

Disadvantages of JIT
Danger of disrupted production due to nonarrival of supplies Danger of lost sales High dependence on suppliers Less time for quality control on arrival of materials Increased ordering and admin costs May lose bulk-buying discounts

What is kanban?
Kanban , also spelled kamban and literally meaning "signboard" or "billboard", is a concept related to just-in-time (JIT) production. According to Taiichi Ohno, the man credited with developing Just-in-time, kanban is one means through which JIT is achieved.

Kanban
Kanban is the Japanese word for card The card is an authorization for the next container of material to be produced A sequence of Kanbans pulls material through the process Many different sorts of signals are used, but the system is still called a Kanban.
Kan Ban card signal

Toyota's six rules

Do not send defective products to the subsequent process The subsequent process comes to withdraw only what is needed Produce only the exact quantity withdrawn by the subsequent process Level the production Kanban is a means to fine tuning Stabilize and rationalize the process

Why Consider Kanban Control ?

Lower

Inventory investment. Better customer service. Reduced Administrative costs.

Kanban card
KANBAN CARDS Kanban cards are a key component of Kanban that utilizes cards to signal the need to move materials within a manufacturing or production facility or move materials from an outside supplier to the production facility. The Kanban card is, in effect, a message that signals depletion (reduce) of product, parts or inventory that when received will trigger the replenishment of that product, part or inventory.

Types of Kanban
Production Kanban (P- Kanban) authorizes production of goods Transportation Kanban (T-Kanban) authorizes transporting a fixed amount of product to downstream (customer) Kanban Square a marked area designed to hold items

Types of Kanban (Contd.)

Material Kanban used to order material in advance of a process Supplier Kanban rotates between the factory and suppliers.

Benefits of KANBAN
Reduce Inventory. Product obsolescence. Reduce waste and scrap. Less over production. Provides flexibility in production. Reduce overall cost.