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be able to: • • • • • • recognize the Concept and Philosophy of Just-In-Time (JIT) system; know the Prerequisites for JIT system; identify the elements of JIT system; know the implementation of JIT system; differentiate the application of MRP and JIT system; and comprehend implementation of JIT system in the service sectors.
Abstract Just-In-Time (JIT) is a management philosophy that focuses the organization on continuously identifying and removing sources of waste so that processes are constantly improved. This topic begins with a broad orientation to JIT and its various prerequisites and elements. Then, each of the specific elements is discussed in detail in a separate section. This topic also explains on implementation of JIT system. The topic concludes with a comparison of JIT and MRP and some comments on implementation of JIT in the service sector. 4.1. Introduction Many companies are excited about Just-in-Time (JIT) manufacturing nowadays. JIT is an integrated set of activities designed to achieve high volume production using minimal inventories of raw materials, work-in-process, and finished goods. Parts arrive at the next workstation "Just in Time" and are completed and move through the operation quickly. Just-in-time is also based on the logic that nothing will be produced until it is needed. Exhibit 4.1 illustrates the JIT process. Need is created by actual demand for the product. When an item is sold, in theory, the market pulls a replacement from the last position in the system-final assembly in this case. This triggers an order to the factory production line, where a worker then pulls another unit from an upstream station in the flow to replace the unit taken. This upstream station then pulls from the next station further upstream and so on back to the release of raw materials.
Work-in-process Generally describes inventory that is currently being processed in an operation, or inventories that has been processed through one operation and are awaiting another operation.
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Course Name: Inventory Management Topic 4: Just-In-Time System
In order for this pull process to work smoothly, JIT demands high levels of quality at each stage of the process, strong vendor relations, and a fairly predictable demand for the end product.
Vendor Vendor Vendor Vendor
Customers Final Assembly
Fa Sub Fa
Material is pulled through the system only when there is demand
Figure 4.1: JIT Pull System
Not all companies use the JIT as a term. IBM uses the term continuous flow manufacture, Hewlett-Packard calls it both stockless production and the repetitive manufacturing system, GE calls it management by sight, Motorola calls it short cycle manufacturing, and several Japanese firms simply use the term “The Toyota System”. Some companies are using the term time-based competition (TBC).
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Course Name: Inventory Management Topic 4: Just-In-Time System
4.2. Philosophy of JIT The JIT system was developed at the Toyota Motor Company in Japan. Even though Schonberger (1982) indicates that JIT might be traced back to the Japanese shipbuilding industry, the modern application of JIT was popularized in the mid-1970s at Toyota by Taiichi Ohno, a Toyota vice president, and several of Ohno’s colleagues. The JIT concept was then apparently first transferred to the United States about 1980 at Kawasaki's Lincoln, Nebraska, plant. Since then, many of the best corporations in the United States have implemented JIT, and it has achieved widespread use around the world. The roots of the JIT system can probably be traced to the Japanese environment. Owing to a lack of space and lack of natural resources, the Japanese have developed an aversion to waste. They view scrap and rework as waste and thus strive for perfect quality. They also believe that inventory storage wastes space and ties up valuable materials. Anything that does not contribute value to the product is viewed as waste. U.S. companies, in contrast, with wide-open spaces and a vast supply of raw materials, have not viewed waste in the same way. As a result, it was natural for the JIT philosophy to develop in Japan. There is nothing culturally inherent in the JIT system that prevents companies anywhere in the world from using it or improving on it. Many companies now use JIT as their preferred approach. . In addition to eliminating waste, JIT has another major tenet in its philosophy, which is, utilizing the full capability of the worker. Workers in the JIT system are charged with the responsibility for producing quality parts just in time to support the next production process. If they cannot meet this responsibility, they are required to stop the production process and call for help. In addition to greater responsibility for production, workers are also charged with improving the production process. Through quality teams, suggestion systems, and other forms of participation, workers offer improvements to the process of production. Thus, the capabilities of workers are used to a much greater extent in the JIT system than in traditional production approaches. The objective of the JIT system is not, however, worker participation; rather, it is to improve profits and return on investment through cost reductions, inventory reductions, and quality improvements. The means for achieving these objectives are eliminating waste and involving
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products flow from suppliers to production to customers with little or no delays or interruptions beyond the amount of time they spend being produced at work centers. Smaller. some changes to the factories need to be taken. 4. are perhaps the best example of the use of JIT in repetitive manufacturing. but these companies have taken many steps to change operations so that they behave like repetitive manufacturing. To implement JIT system. The result is a smooth. Below are among the changes: © UNITAR 2005 Page 4 of 30 . the continuous flow of products makes planning and control rather simple. uninterrupted flow of small lots of products throughout production. The Toyota automobile factories. less complex job shops have used JIT. Pre-requisites for JIT System The basic idea of JIT is to drastically reduce work-in-process (WIP) inventories throughout the production system. The main objective of JIT system is to reduce manufacturing lead times.Course Name: Inventory Management Topic 4: Just-In-Time System workers in the production process. and this is primarily achieved by drastic reductions in WIP. and JIT works best in these shop-floor situations.3. where the notion of JIT may have started. Most successful JIT applications have been in repetitive manufacturing operations where batches of standard products are produced at high speeds and high volumes with materials moving in a continuous flow. In these factories. In this way. How this is done is summarized by prerequisites for JIT system and basic elements of JIT described in subsequent pages.
Reducing setup times at work centers can increase production capacity. the ultimate success of JIT is vastly increased. change tools. This provides the same daily production schedule throughout the month. By improving product quality. Even if only a few of a particular model were needed in a month. Production capacities are usually increased in two ways. 4.4. Because production at work centers is shut down while the work centers are being changed over. A fundamental requirement for JIT is to increase the production capacity of manufacturing work centers. and do everything it takes to change over from producing one product to a different one at a work center. Setup time is the time it takes to adjust the machine settings. With these factors present in manufacturing. there are both stable and level production schedules. and the entire MPS covers one year. some would be assembled in each day of-the month. Toyota divides the total number of each automobile model to be manufactured during a month by the number of workdays in the month to get the number of that model to be produced daily. The production schedule is exactly the same for each day of the month. reducing equipment breakdowns through preventive maintenance. and establishing reliable material flows from suppliers. This means that the same products are produced in the same quantities in the same sequence every day of the month. Elements of JIT System Elements of JIT system will be discussed by examining the below components: a) The underlying assumption of JIT system b) The approach of JIT system c) Method of planning and controlling production d) Several ongoing activities © UNITAR 2005 Page 5 of 30 . cross-training workers. replace materials. reducing setup times will reduce down time and increase production capacity. material flows. and worker job assignments. increasing production rates and reducing setup times at work centers. interruptions to production are minimized. This approach to the MPS simplifies parts explosions. for instance.Course Name: Inventory Management Topic 4: Just-In-Time System At Toyota. The master production schedule (MPS) is frozen for the first month.
the water is lowered again and more rocks are exposed. They are: 1. Table below lists and describes these wastes. At the bottom of each stream are rocks. which represent problems relating to quality. 2.e. The JIT approach is the opposite. Enforced Problem Solving and Continuous Improvement Figure 4. Shigeo Shingo. This process is repeated until all rocks are turned into pebbles and the stream flows smoothly at a low level. the water level is lowered to expose the top of the rocks. By drastically reducing the inventories. Production is viewed as a converging system of streams. © UNITAR 2005 Page 6 of 30 . the problems solved) through continuous improvement.. This analogy is very good because it highlights the problem-solving approach that is at the heart of JIT. suppliers.2 illustrates an analogy for JIT. Eliminating waste Eliminating waste of all kinds is the deep-seated ideology behind JIT. The traditional approach is to hold inventory high enough to cover up the rocks and thereby keep the stream flowing. and so forth. When these rocks have been pulverized (i.Course Name: Inventory Management Topic 4: Just-In-Time System In general. identified seven wastes in production that should be eliminated. production problem are uncovered and production have to stop until the cause of the production problem are solved. The water level in the streams is viewed as inventory. delivery. there are nine elements of JIT system. machine breakdowns. a JIT authority at Toyota.
Every material is expected to meet quality standards. There are few safety factors in JIT. or they can live with an intolerable level of interruptions to © UNITAR 2005 Page 7 of 30 . every part is expected to arrive exactly at the time promised and precisely at the place it is supposed to be. and every machine is expected to function as intended without breakdowns.Course Name: Inventory Management Topic 4: Just-In-Time System Figure 4.2: Analogy of JIT JIT is really a system of enforced problem solving. Managers in JIT manufacturing have a choice. They can put a huge effort into finding and solving the causes of production problems. every worker is expected to work productively.
the causes of most production problems have been removed. different production problems are uncovered. Machine setups may be studied with workers and managers working to strip away the fat so that setups are almost instantaneous. People Make JIT Work Businesses ultimately succeed or fail because of their people. 3. meaning that their goal is to have all setups take less than a minute. having a dedicated workforce committed to work for production problems solving is essential. Vigilance in continuing to study potential problem areas is needed to ensure continuous improvement. Managers may encourage workers to reduce in-process inventories a step further to see if any production problems occur. thus identifying a target for the workers to eliminate. But the job of eliminating production problems is not over. and the workers and their managers work to eliminate the problems.Course Name: Inventory Management Topic 4: Just-In-Time System production. One of the approaches to implementing a JIT program is to reduce in-process inventories incrementally in small steps. Then when there is almost no in-process inventory. Elements To Make JIT System Work Multifunction Worker Establish Quality Teams & Suggestion Systems Workers’ Understanding & Cooperation © UNITAR 2005 Page 8 of 30 . Japanese manufacturers have long practiced what they called kaizen. Because JIT is a system of enforced problem solving. At each step. JIT is no exception to this rule. which is an acronym for single minute exchange of dies. Below are the critical things needed to make a JIT system work. Japanese manufacturers have long used the term SMED. Continuous improvement is central to the philosophy of JIT and is a key reason for its success. Therefore JIT system must have a strong element of training and involvement of workers in all phases of manufacturing. the goal of continuous improvement in every phase of manufacturing.
it is sufficient to our understanding of JIT manufacturing to say that successful JIT manufacturing goes hand-in-hand with an organization-wide TQM culture. stop the process or assembly line immediately. quality teams and suggestion systems are used for the problem solving purpose. going from one to the next to make the parts required. Although it is tempting to discuss TQM now. and also must everyone be involved in TQM. the HR function. Factory © UNITAR 2005 Page 9 of 30 . New pay systems are needed that reward workers on the basis of the number of different jobs they can perform. JIT is not simply another program but a whole new approach to manufacturing.Course Name: Inventory Management Topic 4: Just-In-Time System Multifunction Workers: In most cases. Total commitment to producing products of perfect quality every time and total commitment to producing products for fast delivery to customers have one essential thing in common: Both are finely focused on the overall goal of satisfied customers. So many changes are required. and inspect the parts. each worker must be able to operate several machines in a group. Establish Quality Teams & Suggestion Systems: In JIT systems. Since parts are not produced unless they are needed. To achieve the goal of customer satisfaction. Worker’s Understanding and Cooperation: JIT cannot be implemented without full worker understanding and cooperation. The worker must also be able to set up machines. Traditional pay systems are often based on seniority and job skill level. company has to practice to do it right the first time and when something goes wrong. do routine maintenance. 4. This ordinarily requires workers who are cross-trained in several different skills. This will encourage workers to learn more skills and to become more flexible. Moving toward a flexible workforce may require changing the way workers are paid and rewarded. JIT cannot possibly succeed without the active and enthusiastic support of all managers. Total Quality Management JIT system depends on a system of total quality management (TQM) being in place. and employees. An environment of participation must be created in order to get all employees to contribute toward problem solving on the shop floor. Just as everyone has to be involved in JIT. Management must ensure that workers understand their new roles and accept the JIT approach to manufacturing. the worker must be able to shut off the machine and move on to another job where parts are needed.
When all products are good. if the worker finds a quality problem. and continuous improvement. In other cases. systematic support. total involvement. © UNITAR 2005 Page 10 of 30 . By doing product design and process design simultaneously. no "just-in-case" extra inventory is needed. Many operations can be made parallel simply through scheduling. 5. layout redesign and product redesign may be needed to achieve parallel processing. process. the time to bring new products to market is reduced.Course Name: Inventory Management Topic 4: Just-In-Time System workers become their own inspectors. Any operations being performed in series (one after the other) that can be performed in parallel (simultaneously) can take huge chunks out of manufacturing lead times. and service design. If the pace is too fast. Workers are empowered to do their own maintenance and housekeeping until the problem is fixed. When employees are responsible for quality. measurement systems. This concept is similar to simultaneous engineering that involves product. as production is scheduled to occur at the same time at one or more operations. But the additional costs can usually be more than offset by significant reductions in manufacturing lead times. JIT works at its best because only good-quality products are pulled through the system. personally responsible for the quality of their output. or if a safety issue is discovered. the worker is obligated to push a button to stop the line and turn on a visual signal. The same approach is taken in companies that want to engage in time-based competition through JIT. Total Quality Management An approach to business management that focuses on quality and typically has: a strong customer orientation. Workers concentrate on one part of the job at a time so quality problems are uncovered. People from other areas respond to the alarm and the problem. Parallel Processing An important part of JIT manufacturing is to exploit parallel processing wherever possible.
plaque. Kanban is a subsystem of JIT. sign.Course Name: Inventory Management Topic 4: Just-In-Time System Performed in Series Cycle Time for Each Operation = 1 Hour Total Product Cycle Time = 1x8 = 8 Hours Op 1 Op 2 Op 3 Op 4 Op 5 Op 6 Performed in Parallel Cycle Time for Each Operation Total Product Cycle Time = 1 Hour = 1x5 = 5 Hours Op 2 Op 1 Op 3 Op 6 Op 5 Op 4 Op 7 Op 8 Note: Operations and 4 starts at the same time as Operation 1 6. the supplying work centers will also soon stop. Assume for the purposes of discussion that eight containers are used between work centers A and B (A supplies B). Purpose of Kanban System The purpose of the Kanban system is to signal the need for more parts and to ensure that those parts are produced in time to support subsequent fabrication or assembly. or other device) used to control the sequencing of jobs through a sequential process. means a marker (card. © UNITAR 2005 Page 11 of 30 . The Kanban system is a physical control system consisting of cards and containers. As noted earlier. in the Japanese language. Pulling parts through from the final assembly line does this. All other machine operators and suppliers receive production orders (Kanban cards) from the subsequent (using) work centers. Only the final assembly line receives a schedule from the dispatching office and this schedule is nearly the same from day to day. Kanban Production Control Kanban is the method of production authorization and materials movement in the JIT system. and each container holds exactly 20 parts. The maximum inventory that can exist between these two work centers is then 160 units (8 x 20) since production at work center A will stop when all containers are filled. If production should stop for a time in the using work centers. Kanban. since they will no longer receive Kanban orders for more material.
assuming containers are moved one at a time. production is stopped. One container is presently being filled at work center A by the machine. when all containers are filled. One full container is being moved from A to B. The empty container is left at work center A. The significant thing about the Kanban system is that it is visual in nature. and one container is being used at B. All parts are neatly placed in containers of a fixed size. machines at A may break down. production cards and withdrawal (move) cards. The production lot size is exactly equal to one container of parts. These eight containers are needed since work center A also produces parts for other work centers. it is clear that the producing work center is getting behind. The production card from a full container of parts is removed from its container and replaced by the withdrawal card. the empty container and associated withdrawal card are taken back to work center A. The production card is then placed in the Kanban receiving post at work center A. and they generally contain the information shown in Figure 4. and move times from A to B are not always exactly predictable. The full container of parts and its withdrawal card are moved to work center B and placed in the input area. To control movement of the containers. © UNITAR 2005 Page 12 of 30 .4. Kanban cards take the place of shop paperwork used in traditional repetitive manufacturing. Here is how the Kanban system works. its withdrawal card and the empty container are taken back to work center A. Three containers are located at work center A in the output area filled with parts. On the other hand. These cards are used to authorize production and to identify parts in any container. As empty containers accumulate. thereby authorizing production of another container of parts. or plastic. When a container of parts is emptied at work center B. Kanban cards may be made of paper. When this container of parts is eventually used. metal. two full containers are sitting in the input area of work center B. the eight containers might be distributed as shown in figure 4.Course Name: Inventory Management Topic 4: Just-In-Time System How Kanban System Works? In the normal course of events.3. and the cycle is repeated. there are two main types of Kanban cards.
Container size in number of parts. used and returned to be filled again. wait. © UNITAR 2005 Page 13 of 30 . moved. Time for a container to complete an entire circuit: filled. This is illustrated by the following formula: n= DT (1 + P) C Where: n= D= C= T = Total number of containers. container size and the circulating time for a container.Course Name: Inventory Management Topic 4: Just-In-Time System Determining the number of Kanban needs The number of containers needed to operate a work center is a function of the demand rate. Demand rate of the using work center. usually less than 10 percent of daily demand.
A and B work center. It takes an average of 1.10 hours for a container to make the entire cycle from the time it leaves the work center A full until it is returned empty. run time. P =0. When any of these times has been reduced. A 0 would indicate perfect efficiency. or 3. P can take on values from 0 to 1. management can remove Kanban cards from the system and a corresponding number of containers.0 containers Reducing the size of the containers or the number of containers used can decrease inventory. filled with production. It is the responsibility of managers and workers in a JIT system to reduce inventory by a constant cycle of improvement. Case study Case Study There are two adjacent work centers. Reducing lead-time is the key. including its machine setup time. This can be done by reducing the time required to circulate a container. Solution Step 1: Define the Formula n= DT (1 + P) C Step 2: Find out the related variable values D = 175 part / hour T =1.1)(1 + 0. and leaves again. a 1. Kanban links all work centers in a production facility and the suppliers as shown in Figure 4.6 = 100 = 2. Compute the number of containers needed if the Kanban system is rated at a P of 0. All material is pulled through by the final assembly schedule.4.10 hours C = 100 parts/ containers.0 would indicate perfect inefficiency. © UNITAR 2005 Page 14 of 30 . based on a highly visible shop floor and supplier control system.Course Name: Inventory Management Topic 4: Just-In-Time System P= A policy variable that indicates the efficiency of the system. Each standard Kanban container holds 100 parts.25) 100 240.4.25. wait times. or move times does this.25 Step 3: substitute all to formula to find out the n n= 175(1. The production rate of the using work center is 175 parts per hour.
The Japanese call these relationships subcontractor networks and refer to suppliers as co-producers. JIT Purchasing The same pull-type approach in JIT is applied to purchasing shipments of parts from suppliers. suppliers use the replacement principle of Kanban by using small. Customers and suppliers often share sensitive information. but applying the same principles to suppliers also reduces raw-materials inventories. Supplier development and supplier relations undergo fundamental changes The nature of the relationships between customers and suppliers shifts from being adversarial to being cooperative. Only one cabinet is placed on this square at a time. 7. assistance in reducing costs and improving quality. The essential elements of JIT purchasing are as follows: 1.Course Name: Inventory Management Topic 4: Just-In-Time System Figure 4. and even financing. When the square is emptied by subsequent production another cabinet is produced.4: The Kanban square marked by the dashed rectangle signals the need for the production of a cabinet. In JIT purchasing. suppliers are ordinarily located near their customers. In such arrangements. standard-size containers and make several shipments daily to each customer. Kanban cards authorize the movement of containers of parts between the supplier's shop and the customer. JIT therefore not only reduces in process inventories by using Kanban. If a supplier uses Kanban. © UNITAR 2005 Page 15 of 30 .
mutual trust and cooperation become the primary basis for supplier selection. Reducing Inventories Through Setup Reduction If it costs a lot to set up a machine to produce a part. product quality. Delivery of parts Parts are delivered in small. company owned hauling equipment tends to be preferred. Higher quality of purchased materials Delivered material is of near-perfect quality. they are usually clustered together. 3. 7. Extend JIT methods Suppliers are encouraged to extend JIT methods to their own suppliers. Because suppliers are encouraged to produce and supply parts at a steady rate that matches the use rate of the buying firm. it makes sense to produce many units of the part each time it is produced. Focus on primary basis for supplier selection Although price is important. Because suppliers have a long-term relationship with the buying firms and because parts are delivered in small lot sizes. delivery schedules. 4. the quality of purchased materials tend to be higher. Delivery of shipments Shipments are delivered directly to the customer’s production line. 8.Course Name: Inventory Management Topic 4: Just-In-Time System 2. Repeat business is awarded to the same suppliers and competitive bidding is ordinarily limited to few parts. 8. standard-size containers with a minimum of paperwork and in exact quantities. Purchasing departments develop long-term relationships with suppliers The result is long-term supply contracts with a few suppliers rather than short-term supply contracts with many suppliers. 6. Shorter lead-time Suppliers are ordinarily located near the buying firm’s factory. This causes lead-times to be shorter and more reliable. Central to JIT is an ongoing program aimed at the reduction of © UNITAR 2005 Page 16 of 30 . 5. or if they are some distance from the factory.
Figure 4. Engineers study the setups. increased production costs. and lost capacity because of idle machines during setups.5: Effect of Reducing Changeover Times on Production Lot Size The economic production lot size (EOQ) model can be defined as below: EOQ = 2DS p C p-d Where: D = annual demand rate d = daily demand rate © UNITAR 2005 Page 17 of 30 . Figure 4. and the result is very short setup times. In some cases. But doesn’t it seem that very small production lot sizes would result in too many machine setups. with the result that the setup time between different parts approaches zero.5 shows that economic production lot sizes (EOQ) approach zero as the setup costs approach zero. but they turn it around.Course Name: Inventory Management Topic 4: Just-In-Time System production lot sizes so that inventory levels are reduced. workers are trained in more efficient work methods. computerized controls can make the new machine settings instantaneously. JIT systems spend large sums of money to reduce setup times to avoid these negative consequences of small lot sizes. They treat a very small EOQ lot size as a given and then solve for the setup cost. In this way. JIT firms use the same EOQ formula to analyze lot sizes. automatic devices are attached to the machines. production lot sizes can be set very low and the resulting setup times can be used for targets as engineers develop programs for reducing setup times.
workers can often come up with creative ideas for setup reduction that cost very little. She might even be able to load the first part into the new fixture that will be placed into the machine when it is free.Course Name: Inventory Management Topic 4: Just-In-Time System p = daily production rate C = carrying cost per unit per year S = cost per setup The setup cost required for a given lot size can be derived from the EOQ model as: S= 2 C(EOQ) 2 p-d 2D p The setup time can be derived from the setup cost. with little additional cost. and the first part of the next batch together beside the machine. S: Setup Time = S Labor rate Setup reduction is a continuing process in a JIT environment. These types of computations could be used in a factory-wide program to reduce setup costs. during the changeover. With encouragement from managers. The example below computes the setup time required to accommodate a small JIT production lot size. the worker might be able to collect all the tools. The best ideas for setup time reduction frequently come from the people who are most familiar with the machinery and equipments. Example: As part of a factory-wide JIT program to reduce setup times so that production lot sizes can be smaller. One example of a low cost setup improvement is to perform some of the setup tasks ahead of time. jigs. These actions could substantially reduce the time the machine is nonproductive. while the last part of the previous batch is still being processed on the machine. ready to go. Depending on the technological requirements involved. and it is important to involve the workers at each workstation in this process. a firm wants to determine what the length of the setup time of a manufacturing operation should be in order to accommodate an economic production lot size (EOQ) of 20 units of a part. fixtures. A production analyst has developed these data for the operation: © UNITAR 2005 Page 18 of 30 .
Working Toward Repetitive Manufacturing The APICS Dictionary defines repetitive manufacturing as: Repetitive manufacturing is a product-focused production of batches of standardized products. Proponents of JIT would argue that even job shops can be made to behave © UNITAR 2005 Page 19 of 30 . Repetitive manufacturing clearly does not refer to the process-focused production of custom products that occurs in job shops.Course Name: Inventory Management Topic 4: Just-In-Time System If the labor rate for the operation is $10 per hour. These are systems in which products flow continuously along a direct route until they are finished and in which there is little in-process inventory and parts rarely stop moving. what setup time results in an economic production lot size of 20 units? 9.
In CM. ☼ Convert clusters of machines within process-focused layouts to cellular manufacturing (CM) centers or cells. their component-part designs could be standardized. ☼ Install effective preventive maintenance programs so that machine breakdowns do not interrupt product flows. These groups of machines can accommodate product variety without the necessity of worker-performed machine changeovers. Among the things that can be done to modify a factory to be more repetitive in its production are: ☼ Reduce setup times and production lot sizes. componentpart production schedules could be made stable as repetitive manufacturing could produce the component parts. ☼ Install flexible manufacturing systems (FMS). ☼ Change the layout of the factory to allow streamlined product flows through the plant. some sections of the system can be repetitive. Even if a firm cannot convert all of its operations to repetitive manufacturing. Some companies have worked hard to make their factories behave more like repetitive manufacturing. © UNITAR 2005 Page 20 of 30 . These flexible workers can move from one work center to another as necessary to balance the workload in the factory. ☼ Train workers for several jobs. ☼ Install effective quality control programs so that defective products do not interrupt product flows. thereby allowing uninterrupted production.Course Name: Inventory Management Topic 4: Just-In-Time System more like repetitive manufacturing. many more factories that are not pure repetitive manufacturing may be able to implement JIT manufacturing systems and enjoy many of the same benefits. For example. ☼ Develop an effective subcontractor network so that materials flow into the factory smoothly to support the inhouse production schedules. ☼ Standardize parts designs to reduce the number of parts and the number of changeovers. With such changes as these. even if many custom-designed products are irregularly scheduled at final assembly. groups of machines function as product-focused islands within the larger layout.
compared with 10 to 20 for traditional approaches. John Deere.5. Omark. Implementation of JIT. and Honeywell. Bendix. is difficult. Tennant.A. Some of the effects of JIT implementation are as follows: In the auto industry. JIT has achieved inventory turns of 50 to 100.S. Hewlett-Packard. Westinghouse. in Nebraska. compared with 3 to 5 in traditional companies. reduced costs. General Motors. Implementation has been achieved in many other U. including Ford. companies. Briggs and Stratton. JIT has given inventory turns of about 20. To facilitate implementation the following approach is suggested: JIT is the preferred method for repetitive production in industry. IBM. and improved flexibility in these same companies. Implementation of JIT System The first and most successful application of JIT systems was at the Toyota Motor Company in Japan.S. however. JIT has such a major impact that it is being compared with the Ford moving assembly line and the Taylor system as one of the © UNITAR 2005 Page 21 of 30 . Motorola. Black & Decker. Eaton. Mercury Marine. JIT implementation started in 1980 at Kawasaki U. JIT has also improved quality. In motorcycle production. Rockwell. 3M.Course Name: Inventory Management Topic 4: Just-In-Time System 4. General Electric.
MRP-II is used to push material into the factory and to plan capacity. In this case. In this case. A master schedule is constructed representing future forecasts/orders. computerized elements. a repetitive master schedule is required for a pull system to work. such as JIT. certain elements of JIT such as reduction of setup times. and supplier partnerships can be used. pushes material into production to meet future needs. In discussing the relationship between MRP and JIT it is important to understand the distinction between pull and push systems of production control. Details of each situation are explained in the table below. there is no pushing of materials into production to meet future demands. we have come to recognize that MRP and JIT are compatible and can be used together in certain situations. This is because they were viewed as incompatible production control systems. such as JIT. works very well. There are three situations to consider in comparing MRP and JIT: pure repetitive manufacturing. a pull system will not work. material is pulled through production by the subsequent (using) work centers. a pull system. In a pull system. while the JIT (pull system) is used for execution on the shop floor. Batch Manufacturing A batch process might utilize a hybrid MRP-II and JIT type of system. The only uncertainty is breakdowns in the production process. Since there are no changes in the end products being made from day-to-day. Pure Repetitive Manufacturing A pure repetitive manufacturing situation is one where the master schedule is the same from day-today and level loaded. the master schedule will not be identical from day-to-day but will have some repetitive elements.Course Name: Inventory Management Topic 4: Just-In-Time System great innovations in production management. Even in this case. multifunction workers. rather than to each machine type. Material must be pushed into the factory to meet future demands that are different for each order.6. and expensive. and job shop manufacturing. however. A push system. such as MRP. since production will stop when using work centers stop. 4. Comparison of MRP and JIT When JIT was first introduced. There is no need for an MRP system to predict future production requirements with its more complicated. Materials are provided only when there is a subsequent demand. particularly when the batches are somewhat repetitive in nature. JIT is then used to pull material Job Shop Manufacturing A job shop process that is batchoriented and non-repetitive must use MRPII to plan and control production. More recently. Because of the lack of forward visibility. much was written on MRP versus JIT. so that MRP can provide shop orders to the cells. A capacity-planning and shop floor control system is needed to regulate the flow of materials through production. In this case. It is © UNITAR 2005 Page 22 of 30 . These disruptions are handled by a pull system and excellent maintenance. problem solving by workers and managers. This makes it possible to eliminate the shop-floor control element of MRP-II with its substantial WIP tracking. The assumptions of the JIT system are certainly opposed to most of the traditional assumptions about repetitive manufacturing. The hybrid system works particularly well when batch production has been organized into cells. the component parts needed each day are the same. batch manufacturing. An extreme example of this situation is where the factory makes products only to order and each order is different. which determines what components and parts are to be ordered and pushed through production.
Course Name: Inventory Management Topic 4: Just-In-Time System through each of the cells.6: Uses of MRP and JIT © UNITAR 2005 Page 23 of 30 . a MRP type I system is needed for major event planning. As explained in the above table. In this case. but in the sixth week the schedule will change to a different repetitive mix of products. there are various situations that are best suited to a pure JIT or a pure MRP control system. This can be done with a very simple MRP type I system used for planning purposes only. But there are many opportunities for hybrid systems too. only the Kanban system that will not work. A common variation on a pure repetitive system is a system that changes from time-to-time but is still repetitive within a fixed planning horizon. is then used for execution of the plan on the shop floor. The JIT system is adjusted for major events by the MRP system. The JIT. pull system. which is a change in the future master schedule to different production rates.6 summarizes when these various options apply. Figure 4. An example is a repetitive schedule for the next five weeks. Figure 4. All work centers and suppliers must be notified in advance of the requirements for the new schedule.
It literally “industrialized” the service delivery system so that part-time. Federal Express Corporation changed air flight patterns from origin-to-destination to origin-to-hub. and Speedy-Lube have recognized the critical nature of housekeeping. Other corporations as diverse as First Bank/Dallas. Clarify Process Flow Clarification of flows. and Miller Brewing Company are using similar approaches to improve service. where the freight is transferred to an outbound plane heading for the destination. and corporate culture. based on JIT themes. The employees clean their own areas. 2. it means consistently producing products and services that give the customers their money’s worth. Quality doesn't mean producing the best. the attitude of continuous improvement is easier to develop. skill sets. Here are 10 of the more successful applications. British Airways used quality circles as a fundamental part of its strategy to implement new service practices. 3. can dramatically improve the process performance. 4. © UNITAR 2005 Page 24 of 30 . and that everything is clean and in a constant state of readiness. casual workers could provide the same eating experience anywhere in the world. Service firms are not different in this respect. Second. First. Organize Problem-solving Groups Honeywell is extending its quality circles from manufacturing into its service operations. and customers perceive that they are receiving better service. Upgrade Quality The only cost-effective way to improve quality is to develop reliable process capabilities. Service organizations such as McDonald’s. Process quality is quality at the source-it guarantees first-time production of consistent and uniform products and services. the suitability of each technique and the corresponding work steps depends on the characteristics of the firm’s markets. It means that only the necessary items are kept in a work area. McDonald’s is famous for building quality into its service delivery process. Just as in manufacturing. Their dedication to housekeeping has meant that service processes are work better. Disneyland. Here are examples. Characteristics for a Successful JIT 1.Course Name: Inventory Management Topic 4: Just-In-Time System 4. JIT In Services Service firms have successfully applied many JIT techniques. Standard Meat Company. that there is a place for everything. Upgrade Housekeeping Good housekeeping means more than winning the clean broom award. This revolutionized the air transport industry. the order entry department of a manufacturing firm converted from functional sub departments to customer centered work groups and reduced the order processing lead-time from eight to two days. production and equipment technology.7.
Speedi-Lube converted the standard service station concept to a specialized lubrication and inspection center by changing the service bays from drive-in to drive-through and by eliminating the hoists and instead building pits under the cars where employees have full access to the lubrication areas on the vehicle. The post office charges more for next-day delivery. Supermaids sends in a team of house cleaners. Reorganize Physical Configuration Work area configurations accomplish frequently this by require up reorganization during a JIT implementation. 5. © UNITAR 2005 Page 25 of 30 . These are all examples of the service approach for creating uniform facility loads. They have developed unique approaches to leveling demand so they can avoid making customers wait for service. McDonald's offers a special breakfast menu in the morning. Revise Equipment and Process Technologies Revising technologies involves evaluation of the equipment and processes for their ability to meet the process requirements. 7. to process consistently within tolerance. 6. and to fit the scale and capacity of the work group. These cells amount to micro factories inside the plant. Retail stores use take-anumber systems. each with a specific responsibility. Level the Facility Load Service firms synchronize production with demand. a county government used the JIT approach to cut the time to record a deed transfer by 50 percent. Finally. synchronous to demand.Course Name: Inventory Management Topic 4: Just-In-Time System Third. to clean each house quickly with parallel processes. A hospital reduced operating room setup time so that it had the flexibility to perform a wider range of operations without reducing the operating room availability. Changes in process flows can literally revolutionize service industries. Eliminate Unnecessary Activities A step that does not add value is a candidate for elimination. A hospital discovered that significant time was spent 8. Often manufacturers setting manufacturing cells to produce items in small lots. A step that does add value may be a candidate for reengineering to improve the process consistency or to reduce the time to perform the tasks.
It developed a checklist of instruments required for each category of operation. Speedi-Lube eliminated steps. The original Wendy's restaurants were set up so cooks could see cars enter the parking lot. Some hospitalsinstead of routing patients allover the building for tests. This amount to micro clinics within the hospital facility. 10. separating their operations into “back room” and “customer contact” facilities. A small manufacturer recognized that it needed cooperative relationships for temporary employees as well as for parts. Introduce Demand-Pull Scheduling Due to the nature of service production and consumption. Notable exceptions must include service organizations like McDonald's. They put a pre-established number of hamburger patties onto the grill for each car. Most service firms are far behind manufacturers in this area. Develop Supplier Networks The term supplier networks in the JIT context refers to the cooperative association of suppliers and customers working over the long term for mutual benefit. but it also added steps that did not improve the lubrication process but did make customers feel more assured about the work being performed. 9. Teams that treat only trauma are common. © UNITAR 2005 Page 26 of 30 . business. This pull system was designed to have a fresh patty on the grill before the customer even placed an order.Course Name: Inventory Management Topic 4: Just-In-Time System during an operation waiting for an instrument that was not available when the operation began. This approach creates new problems in coordinating schedules between the facilities. a few interesting examples do come out of the service sector. but other work groups have been formed to treat less immediate conditions like hernias. one of the biggest food products purchasers in the world. and injections-are reorganizing their services into work groups based on the type of problem. However. demand-pull many (customer-driven) service firms are scheduling is necessary for operating a service Moreover. Service firms have not emphasized supplier networks for materials because the service costs are often predominantly labor. X-rays. It is considering a campaign to establish JIT-type relationships with a temporary employment service and a trade school to develop a reliable source of trained assemblers. exams.
Organize problem-solving groups. These changes are: o o o o o o • Stabilize production schedules. Increase production capacities of manufacturing work centers. Improve product quality.Course Name: Inventory Management Topic 4: Just-In-Time System Summary In this topic. and Working toward repetitive manufacturing. People make JIT work. Balance fabrication rates with final assembly production rates. and finished goods. Gain cooperation of the workforce. and Extend JIT to suppliers. Reducing inventories through setup reduction. Changes are needed in order to implement JIT system. Reduce equipment breakdowns through preventive maintenance. Kanban production control. Start with the final assembly line. you have learnt: • • • • JIT is an integrated set of activities designed to achieve high volume production using minimal inventories of raw materials. Total quality management. JIT eliminates waste and utilize the full capability of the workers. Obtain commitment from top management. The basic idea of JIT is to drastically reduce WIP inventories throughout the production system. which are: o o o o o o o o o • To facilitate JIT implementation. Enforced problem solving and continuous improvement. Cross-train workers so that they are multi skilled and competent in several jobs. Parallel processing. There are nine elements of JIT system. work-in-process. JIT purchasing. the following approach is suggested: o o o o o o • Below are the characteristics for a successful JIT: o © UNITAR 2005 Page 27 of 30 . Eliminating waste. and Develop long-term supplier relations that avoid interruptions to material flows. Working backward from final assembly.
Clarify process flow.Course Name: Inventory Management Topic 4: Just-In-Time System o o o o o o o o Upgrade housekeeping. Revise equipment and process technologies. Level the facility load Eliminate unnecessary activities. Reorganize Physical Configuration. Introduce demand-pull scheduling. Upgrade quality. © UNITAR 2005 Page 28 of 30 . and o Develop supplier networks.
mhhe.htm • The Kanban System Game – A Computer Simulation http://www.com/kms. www.valuebasedmanagement. content and links.htm • The Kaizen Management System http://www.isixsigma.sme.com/me/tqm • Toyota Cambridge Opens Up www.cfm • Total Quality Management (TQM) articles.htm • Operations Management: JIT/Inventory Management http://www.org/leandirections • Operations Management articles http://www. www. content and links.Course Name: Inventory Management Topic 4: Just-In-Time System Additional Readings: • Kaizen Philosophy and Kaizen Method. www.com/me/kaizen • Kanban: An Integrated JIT System www.kaizen-us.php © UNITAR 2005 Page 29 of 30 .strategosinc.com/kanban_game.hmtl • Kaizen quality methodology articles.isixsigma.com/e_article000213392.themanager.supplychainplanet.org/knowledgebase/operations/JIT.com/omc/arts-frames.net/methods_kaizen.
16 The graphic show s the operations perform ed in _____.gif 17 O ne of the elem ents to make JIT system work is the _____ w orker. 11 The goal of continuous improvem ent in every phase of manufacturing is called _____. 8 The term supplier _____ in the JIT context refers to the cooperative association of suppliers and customers w orking over the long-term for mutual benefit. W hat type of w aste does the statem ent refer to? 5 A fundamental requirement for JIT is to increase the _____ capacity of manufacturing work centers. 14 SMED stands for single m inute _____ of dies. 5 The Kanban system is a _____ control system consisting of cards and containers. 15 O ne of the characteristics for a successful JIT is _____ process flow.Course Name: Inventory Management Topic 4: Just-In-Time System CROSSWORD PUZZLE TOPIC 4: JUST-IN-TIME SYSTEM 1 3 5 7 8 9 6 2 4 10 11 13 14 15 12 16 17 18 © UNITAR 2005 Page 30 of 30 P H Y R O D U C S T A B I O N P M U R E P S X S I C A L G C N E T W A O L R K I L I Z E R C L A R A L L R L T I F U F Y E T I T I V E O K V W A S T E O R K N R B P M A R A I Z E N O N V D I A E U M L X C A U C T E L A H I T A O N C T I O N N O G N E E D ACRO SS 1 Most successful JIT applications have been in _____ manufacturing operations. . 12 Revising technologies involves _____ of the equipment and processes for their ability to meet the process requirem ents. 18 _____ is created by actual demand for the product. 13 O ne of the factory changes needed to implem ent JIT is _____ production schedules. 7 JIT's objective can be achieved by elim inating _____. W IP and finished goods. parts are delivered in small. 6 _____ is the m ethod of production authorization and materials movement in JIT system. 3 The purpose of the Kanban system is to _____ the need for m ore parts. 9 O ne of JIT's m ajor philosophy is utilizing full capability of the _____. 4 Make only what is needed now. DOWN 2 In JIT. standard-size containers with m inimum paperwork and in _____ quantities. im age/jit1. 10 JIT is an integrated set of activities designed to achieve high volum e production using _____ inventories of raw m aterials.