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Philosophies and tools of Just in Time

Dr David J. Newlands
IESEG
2016

Recommended Readings
http://www.amazon.co.uk/Inquiry-Nature-CausesNationsebook/dp/B00847CE6O/ref=sr_1_1?s=digitaltext&ie=UTF8&qid=1372335262&sr=11&keywords=adam+smith
http://www.amazon.co.uk/Shop-Managementebook/dp/B0084AH2X6/ref=sr_1_1?s=digitaltext&ie=UTF8&qid=1372335518&sr=11&keywords=shop+management
http://www.amazon.co.uk/The-PrinciplesScientific-Managementebook/dp/B0082Y8IWS/ref=pd_sim_kinc_2

Origins of JIT and Lean


Production

Developed by analysing supermarkets


Pioneered by Toyota in an assembly environment
Adopted by other Japanese manufacturers
Discovered much later by Western manufacturers
Known by many names:
Toyota Production System
Just In Time
Lean production
Flow production
6

Companies using Lean


Governments using lean to reduce spend
Universities using lean to teach more
students with less class time at lower cost
Consultancies use lean to help clients, their
suppliers and the entire supply chain
Managers use lean to increase capacity,
reduce cost, improve quality, widen
product variety and ensure faster delivery
Fast food restaurant to ensure fresh

Companies using JIT

Banks delay delivery of money cash to


banks reduces on-site cash and hence
reduces losses if stolen
Schools delivery of mid day meals, made in
Amiens, eaten by school children in Lille and
Paris
Pauls the baker sell and replenish
Super- and Hyper-markets delivery of
water, food, vegetables, fish,
Darty, Electro-Depot - Big ticket items like
computers, washing machines, TVs

Companies using Kanban


Designers of hardware and software, video
games, etc. Identify, prioritise, do and
complete development tasks.
Single piece (Subway) and small batch flow
(McDo) in workshops, kitchens, restaurants,
fun-fairs
Ladies hair dressers empty seats at the
washing, cutting, drying and brushing
stages
On-demand, done to order

Stated Key Benefits

Half the space


Half the human effort
Half the time
Half the investment
Less than 10% of the inventory (working
capital)
Significantly reduced work in process (90%)
and much reduced quality defects per
million
Made to order, assemble to order,

Key Benefits
Double productivity with the same number
of people. Double the sales revenue?
Lower unit costs no unnecessary work
done, reduced scrap and re-work,
Faster door to door time reduced cost of
holding stock (EOQ), reduced buy to sell
time,
Make to order, reduced price decay, faster
response to actual sales

What is JIT/Lean Production ?


Producing only what is needed, when it is
needed
A philosophy
An integrated management system
Leans mandate: Eliminate all waste
JIT is an integral part of Lean. Lean is not
JIT. Lean is the umbrella term for efficient
(typically stable and mature) processes. JIT
is a demand based value creation process
that ensures capacity is utilised.
14

When to Avoid Kanban


When there is no firm order
When making to forecast
When price decay on finished goods
inventory is negligable
When machine amortization is the priority
When demand outstrips supply and machines
are already operating at maximum capacity
If you live in a nice comfortable bubble, insolated from the
real world
When you live in the glorious 30

B2B Kanban set-up cost


ERP system costing around 5 000 000, expected
high gross volume of a variety of goods, exact
need time not known. Pay materials controllers
salaries to push Yes, Enter, pay consultants to
develop the programs
Alternative 2 x 300 computers, one in the
customer point of use with a 20 USB video
camera, with dedicated links to the other at the
supplier production cell. Suppliers can see the
kanban square and decide for themselves what to
do to satisfy actual demand

JIT Planning and Control


JIT as a Philosophy
Eliminate waste

Involve everyone

Continuous
improvement

JIT as a set of techniques


for managing operations
Basic working practices
Design for manufacture/assembly
Operational focus
Small simple machines
Layout and flow
TPM
Set-up reduction
Total people involvement
Visibility
JIT Supply

17

JIT as a method of
planning and control
Pull scheduling
Kanban control
Levelled scheduling
Mixed modelling
Synchronisation

Four key questions


Why do it?
Why do it that way?
What other ways are there?
Can we live with this for 20 or so years?

18

Now

Later

Others do it

High
Low

You do it

IMPORTANCE

URGENCY
High

Low

DO
Needed now
Make now,
Respond fast

DELAY

DELEGATE
Outsource
Purchase

Needed later
Make later
DITCH
Type 1 Muda
Stop doing it
Type 2 Muda
Redesign

Adapted from Covey, Seven Habits of Highly Effective People


Covey Delay, Delegate, Ditch, Do
Lean Ditch, Delay, Delegate, Do, Improve
Stop, Later, supplier partner, make, kaizen + kaikaku

WE ARE THE WILLING


LED BY THE UNKNOWING
DOING THE IMPOSSIBLE
FOR THE UNGRATEFUL
WE HAVE NOW DONE SO MUCH
FOR SO LONG FOR SO MANY
WITH SO LITTLE
WE CAN NOW DO ANYTHING
WITH NOTHING
1999 Jack Dustys Earth 2000 Ltd, PO Box 37 Bognor Regis
20

Approaches to Productivity
Traditional Approach
5%
VALUE-ADD

95%
WASTE

Focus on Value-added
Resources Through
Methods Improvement
Work Study
Automation

JIT Approach
Focus on the 95%
Non Value-Added
Resources Through
Total Quality Management
Total Waste Elimination
Enforced Problem Solving
Total Involvement

Source: ATKEARNEY 21

It is not that we do not have much time,


just that we waste a lot of it.
(Seneque)

22

Total Cost of Ownership


Price
- Speed and accuracy of response
- Accuracy of information
- Administration interface
- Delivery accuracy
- Lead times
- Inventory Level
- Expediting costs
- Qualification data
- Ease of design-in
- Number of suppliers
23

Inaccurate Ordering
Intended

Order

Actual

50000

What are you going to do with the


remaining 45000?
24

Inventory Hides Problems

Bad
Design
Lengthy
Setups
Inefficient
Layout

25

Poor
Quality
Machine
Breakdown

Unreliable
Supplier

Lower Levels Of Inventory To


Expose Problems

Bad
Design
Lengthy
Setups
Inefficient
Layout

26

Poor
Quality
Machine
Breakdown

Unreliable
Supplier

27

28

29

Space Needed
Space Used

Wall Storage Units


Reduce space cost per unit
Increased stock increases risk to profit

How long will it take between making this pack, and the customer actually using it?
Time between making/printing, and being paid
Space occupied square meters of ground space annual cost apportionned?
Will the printed material have to be thrown away because it is too old?

Laure Lafineur (2008)


(HR Concentration) Assistant Director (OPS)
Oxylane Continental Distribution Centre (CAC)

http://www.fhiplantservices.com/go2/wareho
use-services.cfm

Automated
Warehouse

Driverless
AGVs

AGVs at Rotterdam Port


http://www.porttechnology.org/news/euro
pe_container_terminals_rotterdam_order_
gottwald_agv_automated_container

Pro Warehouses

Stock buffering for high and low demand


Availability
Rapid reaction pick to order
Centralized distribution efficiency

Against Warehouses

Not making when selling Forecast, inventory


Cost per m2
Cost of Infrastructure
Maintenance cost of AGVs
Speed to deliver internal transport time
higher than human drivers
Need for programming
Need to collect data bar code? RFID
needed?
Not LEAN, only JOT

Lean
Perspective
httpwww.chezpilou.infopublicInclassables.g
ofirafe_obese_m.jpg
too
much stock

37

5Ys
Why? Why? Why? Why? Why?
Wining!

How did this happen?


What caused this?

Q : WHY has machine stopped ? Q : WHY overload trip ?


Q : WHY Insufficient oil ?
A : Overload tripped out ! A : Insufficient oil on shaft ! A : Oil pump in efficient !

Q : WHY is pump not efficient ? Q : WHY is this shaft worn ?


A : Pump drive shaft worn !
A : Oil filter blocked with swarf !
Root-cause

5S
&
The Visual Workplace

Sources: Mark Eaton BEF South and Coventry University EBS

The Visual Workplace


Familiar Examples

Airports
Supermarkets
Drivers Seat

The Visual Workplace

Without Visual Management

The Vision Of The


Visual Workplace

A Place For Everything


And
Everything In Its Place

The Current Workplace

The Current Workplace

Simplify
SIMPLIFY
DETERMINE WHAT IS
NECESSARY &
UNNECESSARY &
DISPOSE OF THE
LATTER.

The Vision

No Unwanted Or Infrequently Used Items


The Factory As A Showroom
Frequently Needed Items Within 3 Steps
Minimised & Simplified Paperwork
Rapid Access To Required Tools/Paperwork
Standard Procedures - Visual & Understood
Obvious Flow of Work

Deviation/Mistakes Are Obvious


The Workplace is Pleasant & Stimulating

The Benefits
SAFETY
Reduced Risk Of:
Trips, Cuts, Burns
Falling Objects
Fire Hazards

EFFICIENCY CONTROL
Reduced:
Searching Time
Movement
WIP, Lost Items
Transportation

Improved:
Control of Work
Flow of Work
Visibility

Introduction To 5S
Seiri:

SORT through & sort out

Seiton:

SET locations & limits

Seiso:

SHINE the workplace

Seiketsu: STANDARDISE the first 3Ss


Shitsuke: STICK to the rules

The ideas are NOT


new . . .
Henry Ford described
how he implemented
them in the early
1900s

Henry Ford in Today & Tomorrow


The (rail) road taken over, the first step was to put in the Ford
principals of management. The principles are extremely simple. .
1. Do the job in the most direct fashion without bothering with
red tape or any of the ordinary divisions of authority.
2. Pay every man well - not less than six dollars a day - and see
that he is employed all the time through forty-eight hours a
week and no longer.
3. Put all machinery in the best possible condition, keep it that
way, and insist upon absolute cleanliness everywhere in
order that he may learn to respect his tools, his
surroundings, and himself.

5S Exercise

SORT

SORT

PROVIDE A
CONVENIENT,SAFE &
ORDERLY PLACE FOR
EVERYTHING & KEEP IT
THERE

SORT
The Red Tag Attack
IF:
It Is Used Everyday: DONT TAG.
Item Is Not Used Regularly: TAG
Item Is Needed BUT Unsafe: TAG FOR REPAIR
You Dont Know What It Is: TAG IT

SORT
The Red Tag Attack
Establish Holding Area!
Pause!
Gain Consensus
Tell Accounts!
Before Disposal Consider:
Can It Be Recycled?
Does It Need Special Disposal Actions?

Sort

Before

After

Sort
Before

After

Pre 5S

Post 5S

SET
Give Everything A Logical Home

Frequent = Close
&
Avoid Making Life Harder:
Waste of Motion/Transport

Consider:
How Can We Minimise Waste & Mistakes

SET

SET

Set in Order (Simplify)


Send back work in progress to the area
that generated it
This is the best way to show people that the harder
they work, the more money the company will lose
Taiichi Ohno

Set In Order
Before

After

Set In Order
Before

After

Shadow Boards

SET
Control Your
Processes Visually

SET

SET
Hierarchy of
Control

Physical
Please
Stop

Please
Stop

Verbal

Visual

SHINE
Make Less Mess!
Fix Leaks, Rattles & Shakes
Involve Everybody In Shine
Practice
The 5 Minute Shine

STANDARDISE
ORGANISATION OF THE
WORKPLACE TO PRODUCE A
STANDARD WORKING PRACTICE.
Find The Best Way !
Make It Standard & Visual!

Train All Involved People!


Reduce The Risk Of
Mistakes!
Plan How To Action
Problems!

THE 5S SYSTEM.
THE FOURTH STEP.
ESTABLISHMENT OF A
CLEAN & CHECK
ACTIVITY.
TO INCLUDE
PREVENTION OF
BREAKDOWNS
THE 4TH S
SWEEPING...

Systematic Cleaning
Before

After

Before Implementing 5S

After Implementing 5S

THE 5S SYSTEM.
THE 5TH STEP.
THE ACT OF MAKING
OPERATORS AWARE &
BEING MADE
RESPONSIBLE FOR THEIR
OWN AREAS.
THE FIFTH STEP SELF
DISCIPLINE...

THE 5S SYSTEM. STEP5


CLEAN & CHECK
DONT ASSUME THAT
BECAUSE YOU HAVE
TOLD SOMEONE THAT
IT WILL HAPPEN
DESIGNATE A
CHAMPION...

THE 5S SYSTEM. STEP 4


TRAIN
SHOW EVERYONE
INVOLVED THE NEW
STANDARD
TRAIN EVERYONE
INVOLVED IN NEW
OPERATING
PROCEDURE...

STICK
Tools To Use:
Personal Checklists
Management By Walking About (MBWA)
Audits

Remember:
Find The Root Cause

THE 5S SYSTEM.
BENEFITS.
CUSTOMER CONFIDENCE.
IMPROVED WORKING
ENVOIRONMENT
SAFER WORKPLACE
IMPROVED SPACE
UTILISATION
IMPROVED QUALITY...

THE 5S SYSTEM.

THE 5S SYSTEM
1 TAGGING
2 AUCTION
3 STANDARDIZE
4 TRAIN
5 CLEAN & CHECK
6 AUDIT-AUDIT-AUDIT...

THE 5S SYSTEM. STEP 6

AUDIT - AUDIT
AUDIT - AUDIT
RE TAG
RE AUCTION
RE STANDARDISE
RE TRAIN
RE AUDIT...

Visible
Measures
THE REALLY BIG BOARD

SERVICE

PRODUCTIVITY

QUALITY

PLAN ATTAINMENT

SKILLS MATRIX
TASK
Jones
Smith
Pearson
Gregory
McGregor

Consistent
Local
Visible
Timely
Owned
Understood
Audited !!

Using the Problem/Ideas Board - QCDSM

Quality
Information
Materials
Equipment
Machine
Training
Systems
Layout

Cost

Delivery Safety

Moral

Typical 5S Board

Awards

Team Photo
Level of
Excellence
Layout
Before

Layout
After

Audit Status

Area
Plans

5S Action
Plan

THE 5S SYSTEM. STEP 6


MEASURE
BEFORE & AFTER
PHOTOGRAPHS
AUDIT RESULTS
REWARD THE RESULTS.
SHOW PEOPLE THE
IMPROVEMENT
ASK OPINIONS...

THE 5S SYSTEM.

EXERCISE
ANALYSE
TAG
AUCTION
STANDARDISE
CLEAN & CHECK
TRAIN
AUDIT...

Summary of Actions
1. Build the foundations - follow & carry out 1 - 3s. 5s Auditing
will provide you with the frequency at which you return to the
first 3 stages.

2. Carry post-it notes - always be ready to Yellow Tag


3. Start Auditing all existing cells - Frequency = weekly
4. Measure the effectiveness of 5s, complete the Radar charts - Frequency = weekly
5. Agree and sign-up to review the ratings with your Manager

Frequency = weekly

6. Hold QCDSM sessions - Frequency = weekly, or according to the priorities set by the Audit
ratings

7. Update and publicise the QCDSM Action Item Registers - Frequency = weekly

Key Outputs
Utilise QCDSM Boards
Local Operating Boards Weekly/Hourly
Productivity & Quality
Targets/OEE/Rejects/Sickness
Bragging Board - Successes/Smilie
Faces/Birthdays
Clear Kanbans
Visual signage
Audit/Task responsibility

THE 5S SYSTEM.
YOU ARE NOW
QUALIFIED
PRACTITIONERS OF
THE 5S SYSTEM

GO & DO IT...