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ANSWERS TO QUESTIONS 15-1. The purpose of JIT is to eliminate waste and continually improve operations. In its simplest form, JIT requires that only the necessary units be provided in the necessary quantities at the necessary times. 15-2. Reducing inventory was the first step in eliminating waste in early JIT systems. With no inventory to guard against poor quality, late deliveries, and machine breakdowns, companies implementing JIT are forced to improve their quality systems, supplier relationships, and preventive maintenance systems. In addition to the necessity of improving operations to set up JIT, the pull system itself encourages continuous improvements. Inventory is held only to satisfy demand during lead time (i.e., until a replacement order arrives). To reduce inventory further, one must reduce lead time or the components of lead time, such as processing time, transit time, setup time, and inspection time. Thus, JIT touches every area of operations. 15-3. Flexible resources are important to JIT because there is no excess inventory to guard against variations in demand or supply. Multifunctional workers, general-purpose machines, and a flexible control system enable JIT factories to adapt to changes in demand and supply rather than compensate for them with just-in-case inventory. 15-4. Cellular layouts, because of their manageable size, work flow, and flexibility, facilitate the pull production element of JIT. They also make problems more visible, improve quality, reduce transit times, and encourage worker ideas and input. Work centers in JIT systems must be closely linked together. The cellular concept facilitates and forms that linkage. 15-5. In a push system, a schedule is prepared in advance for a series of workstations and each workstation pushes the work they have completed to the next station. With the pull system, workers go back to previous stations and take only those parts or materials they need and can process immediately. 15-6. In the two-bin system, two bins are maintained for each item. The first (and usually larger bin) contains the order quantity minus the reorder point; the second bin contains the reorder point quantity. At the bottom of the first bin is an order card that describes the item and specifies the supplier and the quantity that is to be ordered. When the first bin is empty, the card is removed and sent to the purchasing department to order a new supply of the item. While the order is being filled, the quantity in the second bin is used. If everything goes as planned, when the second bin is empty, the new order will arrive and both bins will be filled again. The kanban system eliminates the first bin, places the order card, or kanban, at the top of the second bin, and continually orders enough inventory to fill the second bin. As the system progresses, a full bin of material arrives just as the current bin is being emptied.
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JUST-IN-TIME SYSTEMS

15-7. In a reorder point system, a certain quantity, Q, is ordered whenever the stock on hand falls below a reorder point. The reorder point is determined so that demand can be met while an order for new material is being processed. Thus, the reorder point corresponds to demand during lead time. A kanban is a visual reorder point. When the kanban arrives with an empty container, a new order needs to be placed. The kanban system and reorder point system are different in that the quantity ordered and the reorder point are equivalent in the kanban system. (In terms of the two-bin system, that means the first bin is eliminated.) With kanbans, an order for new material is always outstanding. 15-8. a. A withdrawal kanban is a request for more input from the preceding workstation. It authorizes the movement of material from one workstation to the next and it starts off attached to an empty container. If the feeding workstation that receives a withdrawal kanban has a full container of material available, it exchanges the kanbans and containers. That is, it takes the production kanban that is attached to the full container and places it on the empty container. Similarly, the withdrawal kanban that originally accompanied the empty container is attached to the full container and sent immediately to the next process. A production kanban is a work order. It signals a workstation to begin producing enough of the item requested to fill the empty container to which the production kanban is attached. A kanban square is a marked area that will hold a certain amount of output items (usually one or two). If the kanban square following a workers process is empty, the worker knows it is time to begin production again. A signal kanban closely resembles the reorder point system. A triangular marker, or signal, is placed at a certain level of inventory. When the marker is reached (a visual reorder point), it is removed from the stack of goods and placed on an order post, thereby generating a replenishment order for the item. A material kanban is a square-shaped kanban often used in conjunction with a signal kanban in cases where it is necessary to order the material for a process in advance of the initiation of the process. Supplier kanbans are used outside the factory to order material from vendors. The supplier delivers the order directly to its point of use in the factory and then picks up an empty container (with supplier kanban attached) to fill and return later.

b.

c.

d.

e.

15-9. By producing small amounts at a time, processes can be physically moved closer together and transport between stations can be simplified. Quality problems are easier to detect, and workers show less tendency to let poor quality pass

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(as they might in a system that is producing huge amounts of an item anyway). Lower inventory levels make processes more dependent on each other, revealing errors and bottlenecks that may otherwise go undetected. 15-10. Large lot sizes would slow down a pull system. The system would not be able to adjust to changing demand patterns. Production in large lots would create lumpy demand throughout the manufacturing system. Inventory would actually increase, but the product would not get out the door faster. 15-11. Small lot sizes in a push system would leave no cushion for alterations in the schedule. Forecasts would have to be extremely accurate. Outages would be frequent. In short, the system would always be operating in a crisis environment, always trying to catch up. 15-12. SMED stands for single minute exchange of dies. Its objective is to reduce setup time to under 10 minutes (hence the name single digit). The ideal achievement would be push-button setups or eliminating the need for setups altogether. The principles of SMED are: 1. separate internal setup from external setup; find out which setup activities can be performed in advance, and which must be performed at the machine while it is idle, 2. convert internal setup to external setup; perform as many preparatory tasks as you can while the machine is otherwise occupied, 3. streamline all aspects of setup; use time and motion studies to improve the setup process, 4. perform setup activities in parallel or eliminate them altogether; explore the need for setups; have teams of workers perform setups; practice setup procedures. 15-13. Uniform production is essential for a pull system. It allows component production to be balanced and work to flow smoothly from one workstation to the next. Uniform production is achieved through accurate forecasts of final demand, frozen master schedules, and mixed-model sequencing of the final assembly line. 15-14. In mixed-model sequencing, daily production is arranged in the same ratio as monthly demand, and jobs are distributed as evenly as possible across the days schedule. Thus, at least some quantity of every item is produced daily; and the company will always have some quantity of an item available to respond to variations in demand. The mix of assembly also steadies component production, reduces inventory levels. and supports the pull system of production. 15-15. In JIT systems, there is no extra inventory to buffer against defective units, so maintaining high quality levels is important. In one sense, then, quality is a prerequisite of JIT. On the other hand, the small-lot production characteristic of JIT encourages quality because workers can observe quality problems easier; when problems are detected, they can be traced to their source and remedied without reworking too many units. So in another sense, JIT facilitates quality. Implementing JIT and TQC go hand-in-hand. Companies beginning with TQC will find it necessary to improve the flow of work, work with suppliers, standardize operations, and

make other changes in the manufacturing environment that are JIT-related. Companies beginning with JIT will find the system inoperable without basic levels of quality in place. Most companies start with JIT and move very quickly into TQC. 15-16. Breakdown maintenance can be very expensive. It includes the cost of fixing the machine, the cost of downtime while the machine is being fixed, and any lost sales or other opportunities due to downtime. Preventive maintenance is less expensive when performed on a regular basis. The frequency of preventive maintenance affects cost and the probability of a breakdown occurring. A schedule of maintenance activities should consider the condition of the machine, the demand for its services, its maintenance and breakdown record, and the cost of breakdowns versus preventive maintenance. 15-17. Total productive maintenance takes a broader view of preventive maintenance. It is concerned with maximizing the productive potential of every machine over its lifespan. 15-18. Equipment operators maintain their own machines with daily care, periodic inspections, and preventive repair. They compile and interpret maintenance and operating data on their machines, identify signs of deterioration prior to failure, and scrupulously clean equipment, tools, and workspaces. 15-19. Consider a heart attack patient. Breakdown maintenance is the treatment she receives in the hospital that gets her back on her feet. Preventive maintenance is the medication she takes to control the heart condition and a change in her diet and exercise routine. Total productive maintenance is predicting before the heart attack that changes in lifestyle are needed and starting the diet, exercise, etc., before a breakdown occurs. 15-20. Suppliers must deliver fewer orders more frequently. Quality expectations are higher. Partnerships with producers mean longer-term contracts and competition based on more than price. 15-21. To facilitate meeting JIT requirements, suppliers can locate nearer to their customers, use small, side-loaded trucks and ship mixed loads, establish small warehouses near to customer sites or consolidate warehouses with other suppliers, use standardized containers and scheduled delivery times, and become a certified supplier so that quality does not have to be documented with each delivery. 15-22. Visual control enhances quality by making problems visible, making workers aware of their environment and making it easier to do things right the first time. Kanbans, andons, process control charts, and machines or stockpoints painted different colors are examples of visual control in manufacturing. The red area on the speedometer of your car that indicates legal speed is an example of visual control in day-to-day activities. 15-23. Poka-yoke goes further than visual control by preventing defects or mistakes from occurring. For example, a car that sounds an alarm when you withdraw the key from the ignition without placing the gear in park is audio control. A car that

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will not let you take the key out of the ignition until the gear is in park is a poke-yoke. 15-24. Worker involvement is essential to continuous improvement. Who knows an operation better than the people who do the job? Outsiders can make major suggestions for improvement, but day-to-day incremental continuous improvements rely on the worker. 15-25. Typical benefits from implementing JIT include: lower costs, reduced space requirements, shorter lead time, increased productivity, greater flexibility, better relations with suppliers, simplified scheduling and control activities, increased capacity, better use of human resources, continuous improvement of operations, more product variety, increased customer satisfaction, higher profits, and increased market share. 15-26. JIT has reached a level of maturity beyond the fad stage. Companies today have a better understanding of what JIT entails. Supplier relations, cellular layouts and total quality are elements of JIT that have experienced widespread adoption and are considered part of a well-run company. The pull production system and severely limited inventory levels are not appropriate for every business, and should be applied cautiously. 15-27. U.S. firms typically do not receive deliveries as often from suppliers, and the quantity received is greater (because the lead time is longer). Supplier-producer partnerships are growing stronger in the United States, but they are not as formalized as in other countries. Also, workers are motivated in different ways and may require different work practices. 15-28. HPs strategy for JIT implementation is a standard. It includes: 1. designing the flow process, 2. instituting total quality control, 3. stabilizing the schedule, 4. using kanban pull, 5. working with vendors, 6. reducing inventory, and 7. improving product design. 15-29. JIT is most successful in stable, repetitive environments with flexible resources. 15-30. Yes! Some JIT concepts are more prevalent in services than in manufacturing. Services compete on speed, provide variety, are very flexible, crosstrain their workers, use cellular layouts, have standard routines, and replenish inventory in direct response to customer demand. SOLUTIONS TO PROBLEMS 15-1. Model SS50 SS100 SS200 Total Monthly Requirements 7,200 3,600 3,600 14,400 Daily Requirements 7,200/30 = 240 3,600/30 = 120 3,600/30 = 120 480 Cycle Time 480/240 = 2 480/120 = 4 480/120 = 4 15-3. 15-2.

In order to meet daily production requirements, the assembly line will need to produce a Sudsy Soaker every minute. Because the Sudsy Soakers are produced on a mixed-model assembly line, the individual models will be produced less often. An SS50 will be produced every 2 minutes, SS100, every 4 minutes, and SS200, every 4 minutes. During the course of a day, 240 SS50s, 120 SS100s, and 120 SS200s will be assembled. Thus, in the assembly sequence model SS50 will appear twice as often as either model SS100 or model SS200. The following sequence meets those requirements and spreads out the production of each model evenly. It should be repeated 120 times a day to meet demand. SS50 SS100 SS50 SS200

Tile Quarry Italian mosaic Bathroom

Monthly Demand 30,000 15,000 45,000

Daily Demand Cycle Time 1,000 3,000/1,000 = 3 500 1,500 3,000 3,000/500 = 6 3,000/1,500 = 2

To meet the demand, the manufacturer must produce a box of quarry tile every 3 minutes, a box of Italian mosaic tile every 6 minutes and a box of 4-inch bathroom tile every 2 minutes. The following sequence is one example of how this demand can be met. Italian Bathroom Quarry Bathroom Quarry Bathroom mosaic This sequence would be repeated 500 times a day. d = 100 per hr L = 20 min = 0.33 hr S = 010(100 0.33) = 33 . . C = 10 dL + S 100(0.33) + 33 . = = 363 . C 10 Round up to 4 kanbans. N= 15-4. a. 200(0.33) + 6.66 = 7.26 , or 8 kanbans 10 d and S change in the formula. The number of kanbans doubles. L and S change in the formula N= N= 100(0.50) + 5 55 = = 55 , or 6 kanbans . 10 10

b.

The number of kanbans increases.

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c.

C changes in the formula. N= 100(0.33) + 3.33 = 7.27 , or 8 kanbans 5

15-8.

d = 250 L = 30 min = 05 hr . C = 25 S = 010(250 0.5) = 12.5 . (250 05) + 12.5 137.50 . N= = = 55 or 6 . 25 25 5.5 containers are needed, with a kanban attached to each container. The factory could have 5 full containers, plus 1 container with a cardboard insert so that only half of it can be filled. Or, the factory could use 6 kanbans and containers.

d.

The number of kanbans doubles. S changes in the formula. S = 0.20(100 0.33) = 6.6 100(0.33) + 6.6 N= = 396, or 4 kanbans . 10 The actual number of kanbans remains the same.

15-5.

L = 20 min = 0.33 hr N =5 S = 0.20(d 0.33) 0.33d + 0.20(0.33d ) 10 50 = 0.396d 126.26 = d 5= The demand for widgets is approximately 126 per hour.

15-9. a.

b.

15-6.

d = 500 L = 30 min = 05 hr . S = 010(500 05) = 25 . . C = 100 N= (500 0.5) + 25 275 = = 2.75 100 100

c.

L = 45 min, or 0.75 hr . S = 010(250 0.75) = 18.75 (250 0.75) + 18.75 206.25 = = 8.25 kanbans N= 25 25 The number of kanbans goes up slightly; inventory goes up by at least 50 units. d = 125 . . S = 010(125 05) = 6.25 (125 0.5) + 6.25 68.75 = = 2.75 N= 25 25 The number of kanbans decreases by half and inventory is halved also. C = 10 (250 05) + 12.5 137.5 . N= = = 1375 kanbans . 10 10 The number of kanbans increases significantly. There is no increase in inventory. The change in container size may also affect the lead time of the previous process, so this is a tentative calculation.

2.75, or 3, kanbans are needed for the letter-sorting process. 15-7. a. (500 05) 250 . = = 2.5 kanbans 100 100 (500 0.25) + 12.5 137.5 b. = = 1375 kanbans . N= 100 100 (500 0.5) + 25 275 c. N = = = 1375 kanbans . 200 200 Eliminating the safety factor does not change the number of kanbans required. Decreasing the time between deliveries or increasing the bin capacity reduces the number of kanbans by 1. There is generally a direct relationship between the number of kanbans and inventory levels; that is, as the number of kanbans circulating between two work centers increases, workin-process increases. Eliminating safety stock or decreasing lead time cuts inventory levels and reduces the number of kanbans. The exception is when the container size is changed. One kanbans worth of inventory with the smaller container is not equivalent to one kanbans worth of inventory in a larger container. So, if the office administrator wanted to reduce the number of kanbans to reduce inventory, she should choose option (b). N=

15-10. Most coverage of JIT and kanbans is presented in a simplistic environment. The formulas in this chapter work well for one work center feeding another, but what if multiple work centers feed a common assembly station? In this problem, we can calculate the number of kanbans needed for the production of A and B and the number of kanbans for the production of B separately. d = 200 boards per hr LA = 15 min = 0.25 hr SA = 0 C A = 20 dL + S (200 0.25) + 0 = = 2.5 kanbans or containers N= 20 C d = 200 boards per hr LB = 25 min = 0.42 hr SB = 0 CB = 10 dL + S (200 0.42) + 0 = = 8.4 kanbans or containers N= C 10

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With rounding, we have 3 kanbans circulating between process A and the assembly cell, and 9 kanbans circulating between process B and the assembly cell. CASE: JIT Woes 1. Unfortunately, the plant managers view of JIT is fairly typical. JIT is viewed as mechanically reducing inventory without an understanding of the reason behind it or a plan of action for further improvement. Kanban is a popular image too, as if there were something magic about the cards. These misconceptions are to be expected, given that many small (and not so small) suppliers have been squeezed by customers with unrealistic expectations about JIT and supplier deliveries. This is a tough one. Kelly should first analyze the flow of the assembly process, try to identify bottlenecks, eliminate wasteful operations, and determine exactly how much inventory is necessary. Shell probably find unnecessary steps and distances in the process. Creating a good flow of material would be the first step.

Next, she needs to concentrate on quality of raw materials, quality of the process, and quality of the output. She might find that workers need more training, tools or machines need adjustment, instructions need to be clarified, or supplier sources need to be upgraded. A work environment should be created to encourage quality, not impede quality. Its hard to implement JIT on one section of a plant at a time because often the operations are interrelated. If possible, Kelly should try to insulate the circuit-board assembly process from the fluctuating demands in the plant. A stable schedule is a must when implementing JIT. Finally, Kelly should get down to the pull system and kanbans, inventory reduction, vendor certification, and product design. How does Kelly get worker support? She simply has to have help making all these changes. She cant do it alone. Most workers actually enjoy being able to change a system theyve known wasnt working right for quite some time.

2.