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JIT/Lean Production

Some Statistics from


1986 ...
A comparison of:
1) assembly hours
2) defects per 100 cars
3) average inventory levels
Framingham (GM)
40.7 hours
130 defects
2 weeks

Toyota Takaoka
16 hours
45 defects
2 hours
Chapter 15, Slide 2

Post World War II


Growing and rebuilding world economy
Demand > Supply
US Manufacturing:
Higher volumes
Capital substitution
Breakthrough improvements
The production problem has been solved
Chapter 15, Slide 3

View from Japan

Very little capital


War-ravaged workforce
Little space
Poor or no raw materials
Lower demand levels
Little access to latest technologies

U.S. methods would not work


Chapter 15, Slide 4

Japanese Approach to
Operations
Maximize use of people
Simplify first, add technology second
Gradual, but continuous improvement
Minimize waste (including poor quality)
Led to the development of the
approach known as Just-in-Time
Chapter 15, Slide 5

Just-in-Time

Repetitive production system


in which processing and movement
of materials and goods occur just as
they are needed
Chapter 10, Slide 6

Pre-JIT: Traditional Mass


Production

Chapter 15, Slide 7

Post-JIT: Lean Production


Tighter coordination along the supply chain
Goods are pulled along
only make and ship what is needed

Chapter 15, Slide 8

JIT Goals

(throughout the supply chain)

Eliminate disruptions
Make the system flexible
Reduce setup times and lead times
Minimize inventory
Eliminate waste

Chapter 15, Slide 9

Waste
Definition:
Waste is anything other than the
minimum amount of equipment,
materials, parts, space, and workers
time, which are absolutely essential to
add value to the product.
Shoichiro Toyoda
President, Toyota
Chapter 15, Slide 10

Forms of Waste:

Overproduction
Waiting time
Transportation
Processing
Inventory
Motion
Product Defects
Chapter 15, Slide 11

Inventory as a Waste

Requires more storage space


Requires tracking and counting
Increases movement activity
Hides yield, scrap, and rework
problems
Increases risk of loss from theft,
damage, obsolescence
Chapter 15, Slide 12

Inventory as Waste

Chapter 15, Slide 13

Examples of Eliminating
Wastes
Big Bobs Automotive Axles:
Wheels bought
from outside
supplier

Axles made and


assembled in house

Chapter 15, Slide 14

BEFORE: Shipping in
Wheels

Truck Cost: $500 (from Peoria)


Maximum load of wheels: 10,000
Weekly demand of wheels: 500

Chapter 15, Slide 15

AFTER: Shipping in
Wheels

Truck Cost: $50 (from Burlington)


Maximum load of wheels: 500
Weekly demand of wheels: 500

What wastes have been reduced?


Chapter 15, Slide 16

BEFORE: Making Axles


(Different lengths)

Chapter 15, Slide 17

BEFORE: Making Axles


(Oops!)

What is the outcome


of detecting defective
axles at the end?
Chapter 15, Slide 18

After: Making Axles I


(Different lengths)

Chapter 15, Slide 19

After: Making Axles II


(More improvements)

What wastes have


been reduced?
Chapter 15, Slide 20

Building Blocks of JIT


Product design
Standard parts
Modular design
Quality

Process design
Personnel and organizational elements
Manufacturing planning and control

Chapter 15, Slide 21

Process Design
Focused Factories
Group Technology
Simplified layouts with little storage
space
Jidoka and Poka-Yoke
Minimum setups
Chapter 15, Slide 22

Multi-Task Work Cells


500 chairs per hour
Packing
Backposts

Legs

Slats

Assembly

Seats

Chapter 15, Slide 23

Personnel and
Organizational Elements
Workers as assets
Cross-trained workers
Greater responsibility at lower levels
Leaders as facilitators, not order
givers
Chapter 15, Slide 24

Classic Organizational View

Chapter 15, Slide 25

JIT Organization View

Chapter 15, Slide 26

Kanban
Uses simple visual signals to control
production
Examples:
empty slot in hamburger chute
empty space on floor
kanban card
Chapter 15, Slide 27

Kanban Example

Workcenter B uses parts produced by Workcenter A


How can we control the flow of materials so that B always
has parts and A doesnt overproduce?
Chapter 15, Slide 28

Kanban card: Signal to


produce

When a container is opened by Workcenter B, its kanban card is


removed and sent back to Workcenter A.
This is a signal to Workcenter A to produce another box of parts.
Chapter 15, Slide 29

Empty Box: Signal to pull

Empty box sent back. Signal to pull another full box into
Workcenter B.

Chapter 15, Slide 30

How Many Kanbans?

DT(1 x)
y
C
y
D
T
C
X

=
=
=
=
=

number of kanban cards


demand per unit of time
lead time
container capacity
fudge factor
Chapter 15, Slide 31

Example

Hourly demand = 300 units


Lead time = 3 hours
Each container holds 300 units
Assuming no variation in lead-time or
demand (x = 0):
y = (300 3) / 300 = 3 kanban cards
Chapter 15, Slide 32

Note:
For a kanban system to work, we
NEED CONSISTENT demand across
the work centers
Example - think McDonalds
How do we ensure this?

Chapter 15, Slide 33

Implementing JIT

What about
automation?

2006 Pearson Prentice Hall Introduction to Operations and Supply Chain


Management Bozarth & Handfield

Chapter 15, Slide 34

Putting the Squeeze on


Resources . . .

Chapter 15, Slide 35