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JUST IN TIME MANUFACTURING SYSTEMS

A.SUBASH BABU PhD PROFESSOR INDUSTRIAL ENGINEERING & OR DEPARTMENT OF MECHANICAL ENGINEERING IIT BOMBAY, POWAI, MUMBAI, 400076 subash@me.iitb.ac.in

APICS DEFINITION OF JIT

A philosophy of manufacturing based on planned elimination of waste and continuous improvement of productivity

JIT MEANS MANY THINGS TO MANY BUT WHAT ARE THE IMPLICATIONS ?

IMPLICATIONS OF JIT
Customer responsiveness Lead time reduction Quality in all Reduction of the negative impacts of inventory Flexibility Cost effectiveness What is the motivation ?

INCREASING THE PROFITABILITY IS THE MOTIVE


Profit is Revenue minus cost Revenue depends on Volume and Price Volume and price are influenced by response time, quality and flexibility Cost types: necessary and unnecessary Unnecessary cost is waste The strategy is to a) Reduce response time b) Increase flexibility and quality c) Eliminate waste and improve productivity WHAT ARE THE BENEFITS ?

LONG TERM BENEFITS ARE


Loyal customer base Higher return on capital assets (ROCE) Higher return on the current assets Stable and reliable cash- in-flow Regulated and justifiable cash-out-flow

APICS DEFINITION OF JIT


The primary elements of Just-in-Time systems are: to have only the required inventory when needed; to improve quality to zero defects; to reduce lead times by reducing setup times, queue lengths, and lot sizes; to incrementally revise the operations themselves; and to accomplish these things at minimum cost.

WHAT ELSE IS VIEWED AS JIT ?

JIT SYNONYMS
IBM - Continuous Flow Manufacturing HP - Stockless Production - Repetitive Manufacturing System GE - Management by Sight Motorola - Short Cycle Manufacturing Japanese - The Toyota System Boeing - Lean Manufacturing Ref: Operations management by N Gaither and G Frazier, Thomson Learning, 2002

TRADITIONAL VIEW OF MANUFACTURING


Key objective was to fully utilize capacity so that more products were produced by fewer workers and machines How? With large queues of in-process inventory waiting at work centers Workers and machines never had to wait for product to work on, so capacity utilization was high and production costs were low Result: Products spent most of their time in manufacturing just waiting, an arrangement that is unacceptable in todays time-based competition

ORDER-TO-DELIVERY CYCLE ORDER-TO-DELIVERY


Manufacturing Cumulative Lead Time
Customer

Places Order

Order Engineering Entry Design

Scheduling

Manufacturing Lead Times Purchasing Lead Times

Distribution

and Customer Service

Order-to-Delivery Cycle

TIME-BASED COMPETITION
It is not enough for firms to be high-quality and low-cost producers Today, they must also be first in getting products and services to the customer fast To compete in this new environment, the order-to-delivery cycle must be drastically reduced JIT is the weapon of choice today to reduce the elapsed time of this cycle

JIT MANUFACTURING PHILOSOPHY


The main objective of JIT manufacturing is to reduce manufacturing lead times This is primarily achieved by drastic reductions in work-in-process (WIP) The result is a smooth, uninterrupted flow of small lots of products throughout production

JIT: A PULL SYSTEM


In a push system, such as an MRP system, we look at the schedule to determine what to produce next In a pull system, such as JIT, we look only at the next stage of production and determine what is needed there, and then we produce only that

JIT LOGIC
Fab Sub Fab Customers Final Assy Sub Fab Vendor Vendor Vendor

Fab

Vendor

JIT PRODUCTION
WHAT IT IS Management philosophy Pull system though the plant WHAT IT DOES Attacks waste Exposes problems and bottlenecks Achieves streamlined production

WHAT IT REQUIRES

WHAT IT ASSUMES

Employee participation Industrial engineering/basics Continuing improvement Total quality control Small lot sizes

Stable environment

ELEMENTS OF JIT MANUFACTURING


Eliminating waste Enforced problem solving and continuous improvement People make JIT work Total Quality Management (TQM) Parallel processing Kanban production control JIT purchasing Reducing inventories Working toward repetitive manufacturing

WASTE--OPERATIONS
(1) Waste from overproduction (2) Waste of waiting time (3) Transportation waste (4) Inventory waste (5) Processing waste (6) Waste of motion (7) Waste from product defects

CHANGES REQUIRED FOR JIT


JIT requires certain changes to the factory and the way it is managed:
Stabilize production schedules Make the factories more focused Increase work center capacities Improve product quality Cross-train workers Reduce equipment breakdowns Develop long-term supplier relations

INCREASING PRODUCTION CAPACITY REDUCES MANUFACTURING LEAD TIMES


Only slight increases in production capacities can lead to: Significant reduction of manufacturing lead times Significant reduction of work-inprocess inventory Queuing theory ?

CAPACITY UTILIZATION
Production Lead Times (days)
60 50 40 30 20 10

Traditional Manufacturing

JIT Manufacturing % Capacity Utilization

10 20 30 40 50 60 70 80 90 100

EXAMPLE: NECESSARY PRODUCTION CAPACITY


A production manager believes reducing the firms manufacturing lead time will give the firm a significant competitive advantage. Two days is the lead time goal. Currently, jobs are arriving at the rate of 6 per day and the operation can process an average of 6.125 jobs per day. What is the current average lead time for a job? What is the necessary production rate to achieve the two-day lead time goal?

EXAMPLE: REDUCTION IN WIP


In the preceding example, the production rate was increased from 6.125 jobs per day to 6.5. This 6% increase in the production rate yielded a 75% reduction in manufacturing lead time! How much of a reduction in WIP will result from the 6 % production rate increase?

PROBLEM SOLVING AND CONTINUOUS IMPROVEMENT


JIT is a system of enforced problem solving. One approach is to lower inventory gradually to expose problems and force their solution. With no buffer inventories to rely on, in times of production interruptions, problems are highly visible and cannot be ignored. The job of eliminating production problems is never finished. Continuous improvement - a practice the Japanese call kaizen - is central to the philosophy of JIT.

UNCOVERING PRODUCTION PROBLEMS


We must lower the water level!
Machine Breakdowns In-Process Inventory Workload Imbalances Worker Absenteeism Out-of-Spec Materials Quality Quality Problems Problems
Visible Production Problems are Only 5% of the Total!

Material Shortages

KANBAN PRODUCTION CONTROL


At the core of JIT manufacturing at Toyota is Kanban, an amazingly simple system of planning and controlling production Kanban, in Japanese, means card or marquee Kanban is the means of signaling to the upstream workstation that the downstream workstation is ready for the upstream workstation to produce another batch of parts

KANBANS AND OTHER SIGNALS


There are two popular types of Kanban cards: a conveyance card (C-Kanban) a production card (P-Kanban) Signals come in many forms other than cards, What is possible ?

MAY ALSO BE
An empty crate An empty designated location on the floor A signal light

HOW KANBAN SYSTEM OPERATES


When a worker at downstream Work Center #2 needs a container of parts, she does the following:
She takes the C-Kanban from the container she just emptied

>She goes to Work centre 1 (upstream)


She finds a full container of the needed part in storage She places the C-Kanban in the full container and removes the P-Kanban from the full container and places it on a post at Work Center #1

>She takes the full container of parts with its C-Kanban back to Work Center #2

KANBAN CARDS
Conveyance Kanban Card
Part number to produce: M471-36 Lot size needed: 40 Card number: 2 of 5 From work center: 22 Part description: Valve Housing Container type: RED Crate Retrieval storage location: NW53D To work center: 35

KANBAN CARDS
Production Kanban Card
Part number to produce: M471-36 Lot size needed: 40 Card number: 4 of 5 From work center: 22 Materials required: Material no. 744B Part no. B238-5 Part description: Valve Housing Container type: RED crate Completed storage location: NW53D To work center: 35

Storage location: Storage location:

NW48C NW47B

FLOW OF KANBAN CARDS AND CONTAINERS


P-Kanban and empty container Full container and P-Kanban C-Kanban and empty container Full container and C-Kanban

Upstream Work Center #1

In-process storage Parts Flow

Downstream Work Center #2

CONTAINERS IN A KANBAN SYSTEM


Kanban is based on the simple idea of replacement of containers of parts, one at a time. Containers are reserved for specific parts, are purposely kept small, and always contain the same standard number of parts for each part number. At Toyota the containers must not hold more than about 10% of a days requirements. There is a minimum of two containers for each part number, one at the upstream producing work center and one at the downstream using work center.

CALCULATING THE NUMBER OF CONTAINERS BETWEEN WORK CENTERS


UT(1+P) N= C
N = Total number of containers between 2 stations U = Usage rate of downstream operation T = Average elapsed time for container to make entire cycle P = Policy variable indicating efficiency... 0 - 1 C = Capacity (number of parts) of standard container

EXAMPLE: NUMBER OF CONTAINERS


There are two adjacent work centers, one of which is fed parts from the other. The production rate of the using work center is 165 parts per hour. Each standard Kanban container holds 24 parts. It takes an average of 0.6 hour for a container to make the entire cycle from the time it leaves the upstream center until it is returned, filled with production, and leaves again. The efficiency of the system is observed to be 0.2. How many containers are needed?

EXAMPLE: NUMBER OF CONTAINERS


Number of Containers, N N = UT(1 + P) / C = 165(0.6)(1 + 0.2) / 24 = 99(1.2) / 24 = 118.8 / 24 = 4.95 or 5 containers

REDUCING INVENTORIES THROUGH SETUP TIME REDUCTION


Central to JIT is the reduction of production lot sizes so that inventory levels are reduced. Smaller lot sizes result in more machine setups More machine setups, if they are lengthy, result in:
Increased production costs Lost capacity (idle machines during setup)

The answer is: REDUCE MACHINE SETUP TIMES

SETUP TIME REQUIRED FOR AN EOQ


The economic production lot size (EOQ) model is:
2DS p C p-d

EOQ =

where: D = annual demand rate d = daily demand rate


p = daily production rate C = carrying cost per unit per year S = cost per setup

more

EXAMPLE: SETUP TIME REQUIRED


A firm wants to determine what the length of the setup time of an operation should be in order to make an production lot size (EOQ) of 50 economical. An analyst has made the following estimates: D = 16,800 units (annual demand) d = 84 units (daily demand rate @ 200 days/yr) p = 140 units (daily production rate) C = Rs.20 (carrying cost per unit per year) Labor rate = Rs 25.00/hour

WORKING TOWARD REPETITIVE MANUFACTURING


Reduce setup times and lot sizes to reduce inventories Change factory layout to allow streamlined flows Convert process-focused layout to cellular manufacturing (CM) centers Install flexible manufacturing systems (FMS) ..more

WORKING TOWARD REPETITIVE MANUFACTURING


Standardize parts designs Train workers for several jobs Implement preventive maintenance (PM) programs Install effective quality control programs Develop an effective subcontractor network

IMPORTANT ELEMENTS IN JIT MANUFACTURING SYSTEMS


1)Lot size reduction in production/purchase 2) Set up time reduction (SMED) 3) Buffer stock removal 4) Floor space reduction 5) Discipline in material handling 6) Group technology 7) Dedicated production line 8) Overlapped production 9) Mixed model scheduling 10) Synchronised scheduling 11)Regularity in end product scheduling 12) Under capacity scheduling 13)Small machines and multiple copies 14)Multi slot Tool magazines 15) Process data collection 16) Zero deviation from scheduling 17) Component item standardisation 18) Component routing standardisation 19)Cross trained shop floor/office workers 20) Worker oriented quality control 21) Poka-yoke 22)Autonomous inspection-quality /quantity 23) TPM 24) Kanban system 25) Just in time purchasing 26) Plant wide Kaizen 27) Quality circles 28) Computers in design and manufacturing

PEOPLE MAKE JIT WORK


JIT has a strong element of training and involvement of workers. A culture of mutual trust and teamwork must be developed. An attitude of loyalty to the team and selfdiscipline must be developed. Another crucial element of JIT is empowerment of workers, giving them the authority to solve production problems.

PEOPLE MAKE JIT WORK


JIT has a strong element of training and involvement of workers. A culture of mutual trust and teamwork must be developed. An attitude of loyalty to the team and selfdiscipline must be developed. Another crucial element of JIT is empowerment of workers, giving them the authority to solve production problems.

TQM AND JIT


Long-term relationships with suppliers
Certified suppliers eliminate incoming inspection Share design process for new products

Simplify design/processes
Poka-yoke Process capable of meeting tolerances Operators responsible for quality of own work

SUCCESSFUL JIT APPLICATIONS


Most successful JIT applications have been in repetitive manufacturing, where batches of standard products are produced at high speeds and in high volumes. Successful use of JIT is rare, in large highly complex job shops, where production planning and control is extremely complicated. Smaller, less complex job shops have used JIT, but operations have been changed so that they behave somewhat like repetitive manufacturing.

BENEFITS OF JIT
Inventory levels are drastically reduced:
frees up working capital for other projects less space is needed customer responsiveness increases

Total product cycle time drops Product quality is improved Scrap and rework costs go down Forces managers to fix problems and eliminate waste .... or it wont work!

LIMITATIONS OF JIT
Difficulty to change old ways More pressure on workers Success is varied Employee commitment Production levels Employee skills

Ref: Some Slides are related to Chapter 12 Operations management by N Gaither and G Frazier, Thomson Learning, 2002

TEN COMMANDMENTS OF JIT


>Throw out the Traditional concepts of manufacturing methods >Think about how the new method will work; not how it wont. >Dont accept excuses. Totally deny the status quo. >Dont seek perfection at the beginning; A50% implementation rate is fine as long as it is implemented on the spot. >Correct mistakes the moment they are found. >Dont spend money on innovations. >Problems give you a chance to use your brain >Ask why five times >Ten persons ideas are better than one persons knowledge. >Kaikaku knows no limit.

CREATING A LEAN SUPPLY CHAIN


What is lean? A philosophy that seeks to shorten the time between the customer order and the shipment to customer by eliminating waste (John Shook) We can relate lean to three elements (Womack and Jones)- Flow Pull Striving for excellence

ELEMENTS OF A LEAN SUPPLY CHAIN


JIT Purchasing JIT Transportation JIT Operations

ESSENTIAL ELEMENTS OF JIT PURCHASING


Cooperative and long-term relationship between customer and supplier. Supplier selection based not only on price, but also delivery schedules, product quality, and mutual trust. Suppliers are usually located near the buyers factory. Shipments are delivered directly to the customers production line. Parts are delivered in small, standard-size containers with a minimum of paperwork and in exact quantities. Delivered material is of near-perfect quality.

E-COMMERCE AND JIT PURCHASING


Internet-based information systems allow firms to quickly place orders for materials with their suppliers This is an efficient and effective purchasing process
Saves the time of paperwork Avoids errors associated with paperwork Reduces procurement lead time Reduces labor costs and Kanbans can be sent to suppliers