JIT and Lean Operations

Graeme Warren
Copyright Graeme Warren 1
Introduction
• “Lean” is a customer-centric philosophy and a set
of practices aimed at waste elimination and
streamlined operations.
• The Japanese term for waste is muda. The so-
called seven wastes (seven types of muda) are:
excess inventory, overproduction, waiting time,
unnecessary transportation, processing waste,
inefficient work methods, and defects.
• Lean systems (a.k.a. just-in-time (JIT) systems)
techniques originated at Toyota.
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History
• Lean techniques and philosophy was developed in the middle of the
century in Japan, but took some time to reach and penetrate the
US.
• The class text cites the book by Womack, Jones and Roos, published
in 1990, as a landmark in US exposure to lean thinking, but the
seeds were in place earlier.
• The main challenge for the US has been to shrug off outdated
modes of thinking and embrace the major philosophical and
organizational shifts needed to fully exploit lean thinking. Some of
the difficulties have been due to the differences between western
and eastern conceptions of self and community.
• Despite the difficulties and delays, lean systems thinking has
become pervasive and has had an enormous effect on operations.

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Japanese Terms
• muda (waste),
• kanban (signboard),
• heijunka (leveling of production by both volume and
product mix),
• kaizen (continuous improvement),
• poka-yoke (fail-safing/mistake-proofing),
• jidoka (autonomation),
• andon (status display station),
• genchi gebutsu (go to the place where the work is done),
• hansei (self reflection), and
• gemba (the place where the work is done).

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Goals
• “Ultimate” Goal: “achieve a system that matches supply to
customer demand; supply is synchronized to meet customer
demand in a smooth, uninterrupted flow.”

• Supporting Goals:
– To eliminate/minimize disruption and variability in the system due to
production schedule variability, lack of reliability on the part of
suppliers, equipment breakdowns, etc.

– To incorporate flexibility into the system design by enabling the system
to build a portfolio of different products without significant switchover
time between products.

– To eliminate waste.

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Waste Elimination
The kaizen philosophy of waste reduction/elimination is based upon
the following tenets:
• Target waste by going to the place where the work is done and
getting one’s hands dirty with waste-elimination activities.
• Improvement should be slow and steady, not lumpy and
intermittently.
• Everyone should be involves from top management to the lowest
levels.
• The concept is universally applicable.
• The process can be supported by a visual display system.
• It is process oriented.
• Improvements come from philosophical and work style innovations.
• The importance of learning while doing is stressed.

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Building Blocks
• Product design
• Process design
• Personnel/organization elements, and
• Elements of manufacturing planning and
control.

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Product Design Building Blocks
• Standardized parts. Using standard parts in multiple
products reduces the number of parts that have to be
designed, ordered from suppliers, stored, and handled.
Design refinements and innovations can be pursued in
greater depth when the number of parts is reduced due to
the use of standard parts.

• Modular designs. Modular designs allow for mass
customization – providing customers with options –
without requiring drastically increasing the number of
products that have to be manufactured. Modular designs
also encourage the development of components by third
parties, further increasing the number of options available
to customers.

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Product Design Building Blocks contin.
• The use of high-capability processes with built-in quality. Highly
capable processes are unlikely to be stopped for out-of-control
conditions. The goal here is to minimize the disruptions associated
with downtime, scrap, rework, and defects. Lean systems
emphasize the need for quality designs of goods/services. Fail-
safing and/or mistaking-proofing (poka-yoke) design innovations are
sought and implemented wherever cost effective because they limit
unintentional misuse of the product, and limit the likelihood of
inadvertent production errors. An example of poka-yoke is the use
of color-coded computer cables that facilitate easy desktop setup.

• The use of concurrent engineering strategies. We talked about this
in Chapter 5.

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Process Design Building Blocks
• Small lot sizes. Lean thinking argues for keeping lot sizes small (where practical) to keep
product flowing smoothly though the various stages of production. Parts have to wait
for every other part in the batch to complete an operation if they are moved between
operations in large batches. In addition, small (or even unit lot) sizes heighten attention
on quality, and allow for flexible production scheduling (products can be made without
having to accumulate enough orders to justify the scheduling of a batch). Small lot sizes
allow for tailoring of production quantities to demand. Some processes, e.g., curing,
aging, heat treating, etc., are practical only in batches.

• Setup time reduction. The move to small (or unit) lot sizes dictates that machines be
able to switch between different product types very rapidly. Shingo’s “single minute
exchange of dies” (SMED) system is widely practiced in lean operations. Fast
changeovers are achieved by simplifying tools and procedures, using automated jigs
and fixtures, and by assigning parts with similar processing requirements (group
technology) to assembly lines or manufacturing cells.

• Manufacturing cells. We have previously discussed manufacturing cells and their
efficiency in achieving a product layout even when product volumes are insufficient to
merit the creation of a separate production line for each product.
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Process Design Building Blocks contin.
• Quality improvement. Continuous improvement programs are essential. Ex ante strategies
like poka-yoke, and ex post strategies like jidoka (the use of autonomation to stop equipment
automatically when defects or out-of-control conditions occur) are common. TQM is a lean
building block.

• Production flexibility. Flexibility and agility is increased by reducing lot sizes (allowing for
rapid changes in production volume and mix), fast setup times, cross training of workers
(who can respond to new customer demands), reservation of capacity for important
customers, and using multiple small production lines or manufacturing cells rather than one
large line.

• Balanced systems. Lean thinking seeks to balance assembly lines so that workloads are
relatively evenly balanced between workstations. The bucket brigade line is an example of a
lean approach to assembly line design. In addition, lean systems thinking is to set the cycle
time of assembly lines to meet medium-term demand. The cycle time is called the takt time
when it is calculated to meet medium-term, demand. One idea not mentioned in the class
text is the use of water spiders. Water spiders (mizusumashi in Japanese) are facilitators that
deliver materials, parts, supplies, and information to team members who operate bottleneck
equipment.
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Process Design Building Blocks contin.
• Minimal inventory. Excess inventory is viewed as a waste. Inventory costs
money: it takes money to buy an item, store it, insure it, etc. In addition,
high inventory levels can obscure operational problems like high scrap
rates, unreliable suppliers, and unbalanced production lines. Inventory
often accumulates when suppliers are unreliable, and the production
process is poorly synchronized and balanced. The underlying problems
should be targeted rather than building inventory levels to “paper over the
cracks.” The lean strategy of “exposing the rocks” (see Figure 14.3) is used
to pare down inventory levels to expose (and fix) problems.

• Fail-safe methods. Fail-safe methods in the design of the process (poka-
yoke) can reduce the errors of production team members. Examples
include shrink wrapping parts or products to prevent scratches, detection
of missing items in packing applications by weighing, color coding of
wiring, use of snap fasteners rather than permanent fasteners like rivets or
spot welds, etc.

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Personnel/Organizational Elements

• Workers treated as assets. It is difficult to overstate the importance of this
building block. People are the heart of a business. They need to be treated
with respect, given the opportunity to develop, assume responsibilities,
progress in their careers and lives, and generally find motivation and
meaning in their working lives. Take a look at the reading ‘“People” Firms
Boost profits, Study Shows’ in the class text.

• Cross-training of workers. Workers in lean operations are cross-trained to
provide the flexibility to adjust the production volume and mix to
customer needs and to alleviate production bottlenecks. In addition,
cross-trained workers can be assigned different activities through the
course of a day/week/month to limit boredom and fatigue from repetitive
work. Finally, workers that are cross-trained to work multiple jobs often
have a better sense of the overall production facility and can therefore
often contribute meaningfully at the systems level to continuous
improvement programs.

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Personnel/Organizational Elements
contin.
• Continuous improvement programs. Workers in lean operations are trained in
quality control and quality management techniques, often in certification
programs like Six Sigma. Workers are delegated the responsibility for identifying
and fixing problems as they occur. Andon systems (see the photo on p. 632 of the
class text and the Boeing) are used to report process status. Quality at the source,
a pillar of TQM, is an essential. Continuous improvement programs are often team
based, with team members given authority and responsibility to develop and
implement improvements. Realize that continuous improvement is as daunting as
it sounds. Even microscopic improvements can be hard to find in a high-paced
well-functioning system.

• The use of cost accounting systems. Activity-based costing can be used to track
costs. Cost tracking is essential in lean systems to identify areas for improvement.

• Project-based leadership/facilitation. Managers are leaders and facilitators rather
than authoritarians. The key is to get the team members to take responsibility and
control for their areas of the operation.

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Manufacturing Planning and Control

• Heijunka. Lean systems emphasize level loading. That is, production volume and mix should
not vary much for relatively long periods of time. The production rate has to be set to meet
medium-term demand. Level loading simplifies the task of suppliers because they can also
level their load. Level loading is a variance-reduction strategy; variance reduction is nearly
always helpful in making an operation more manageable because there is less exception
handling/disruption and because stable operations are easier to improve than those with
significant variabilities. When mix-model production is needed (i.e., more than one product
has to be manufactured on a line or cell), the different products should be scheduled in small
lots throughout the day rather than run all units of a particular product in a single large
batch. The idea to produce roughly the same from day to day, and within each day. Lot sizes
will generally be determined by setup costs. Suppose that we have to prepare a production
plan (a model sequence) for three products,







and supposing that management chooses to use 5 “cycles,” we might use the following
model sequence: ABBBC-AABBBC-ABBBBC-AABBBC-ABBBC, where the hyphens separate
the cycles. Other reasonable solutions are possible. A point to emphasize is that a model
sequence that is not mixed, e.g., AAAAAAABBBBBBBBBBBBBBBBCCCCC, would not be used
in lean operations.

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Product Daily Quantity
A 7
B 16
C 5
Manufacturing Planning and Control
contin.
• Pull systems. Pull systems initiate production based upon demand. In
contrast, push systems manufacture inventory in anticipation of demand.
Two classic examples: a buffet is an example of a push system, and an à la
carte restaurant is an example of a pull system. The pull system works by
having an order pull work through the production system.

• Visual control systems. The communication of orders in a pull system is
often achieved using kanban. Kanban is a Japanese term meaning “visual
record” or “signal.” Kanban, which may be any visual or physical signal
(e.g., an empty tray/box/tote, card, tag, etc.), are used as work
authorizations at work centers. When a kanban is delivered to a
workstation it is authorized to produce the product associated with the
kanban card. We will skip the calculations associated with kanban. A
variety of other order-communication strategies may be used. These
include MRP, scrum, and extreme programming.

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Manufacturing Planning and Control
contin.
• Limited WIP. WIP is inventory and it is minimized
as much as possible in lean systems (without
jeopardizing the harmonious functioning of the
system). Kanban can be used to control the WIP
since kanban are production authorizations. WIP
can be reduced by reducing the number of
kanban in the production system. Kanban are
product- or workstation-specific. An alternative
to kanban control of WIP is to use the “Constant
Work In Process” (CONWIP) system that keeps
the WIP system-wide at a constant level.

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Manufacturing Planning and Control
contin.
Contrast of Push, Pull, and CONWIP. “Productstroom” mean “product flow,” “Opdrachtsignaal” means “order signal,”
“Opdracht” means “order,” “Levering” means “delivery,” and “Proces stap” means “process step.” The excellent comparison in
this figure hopefully justifies the Dutch. Permission was granted to copy, distribute and/or modify this document under the
terms of the GNU Free Documentation License, Version 1.2 or any later version published by the Free Software Foundation.
18
Manufacturing Planning and Control
contin.
• Collaborative supplier relationships. Close vendor ties are emphasized to promote design
collaboration, JIT deliveries, and vendor-managed quality assurance. The goal is smooth, defect-
free, synergy-promoting interactions. Lean moves away from a competitive/adversarial disposition
with multiple competitive suppliers to the recognition of the value in a single close long-term
supplier relationship where there is recognition that both parties are ultimately serving the same
end customer. JIT II practices are common (see later). Mutually-beneficial exchanges of relevant
engineering and research ideas is possible. See the discussion of tiers of suppliers in the class text.

• Minimized transactions. Waste elimination is an ultimate goal of lean systems. Lean systems
reduce the cost of transactions by reducing the frequency of transactions like design/engineering
changes, production planning, warehousing, inspection, data entry, etc. by developing efficient
alternatives, and by building quality into products, services, and processes from the outset.

• PM and housekeeping. Preventive maintenance programs are used in lean to minimize breakdowns
and disruptions. Workers will maintain their own equipment, and an inventory of critical spares,
parts and supplies will be maintained. Equipment will often be replaced at the end of its economic
life. Housekeeping is very important in lean. The 5S (sort, straighten, sweep, standardize, self-
discipline/sustain) allow for fast identification of defects and problems.
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Value Stream Mapping (VSM)
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Transition to Lean Systems
• The employees/team members of an organization are the key to a successful transition to lean
operations.
• Lean ultimately is much more than a collection of best practice methods.
• It involves a significant culture shift in how team members view the firm and each other.
• A cooperative/collaborative spirit has to emerge.
• ften accompanied by a flattening of the organigram and dismantling of hierarchical authority
structures in the firm. Workers accustomed to niche jobs and significant supervisory authority
are often frustrated in the move to lean because they are exposed a new world in which team
members work collaboratively, often at a fast pace, in project format, with project team
members dynamically assigned, to meet business needs as they arise.
• A successful conversion from a traditional system to lean involves sustained commitment and
support from management (including appropriate delegation of responsibility to the lowest
possible level in the firm, and the installation of motivation/incentive schemes), participation
and buy-in from team members, training of workers in lean techniques, steady implementation
of the lean techniques in operations in a continuous improvement program, and collaboration
with suppliers.
• A conversion to lean is not without cost, and commitment levels can flag. Proper planning and
a sustained focus on the conversion has to be maintained to achieve the firm/corporate culture
changes that are critical for ultimate success.
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Lean Services
• Lean techniques can be exploited in services also.
JIT delivery of services is important because
delivery speed is often a competitive priority of
service companies.
• Flexible workers, high quality services,
standardized and simplified work methods,
effective scheduling systems, and close
relationships with suppliers are some of the lean
building blocks that can be exploited by service
firms.

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JIT II
• JIT II is the practice of having a supplier’s
representative work in the customer
company’s plant. The JIT II representative
manages quality and deliveries for the
supplier.
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Operations Strategy
Lean operations should be seriously considered
by all goods and service producers. Repetitive
goods-producing environments may offer the
most scope for lean but all firms can benefit.
The transition to lean can be difficult and
strategically risky if employees do not buy into
the concept. Lean is a journey – a successful
lean system is often homegrown over a period
of time by the team members themselves.

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FIN
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