Lean Management and Just in Time

(LM and JIT)

 Just In Time (JIT)

•Just-in-time is a philosophy which means

producing only what is needed, when it is
needed, not early, not late; not less, not more.
•The key target is achieving high volume
production using minimal inventories.
•It is an integrated but simplified system.
•The JIT mandate is the elimination of all types
of waste in the organisation.
 Just In Time (JIT)

•According to this philosophy, anything which

is not generating value is called waste.
•Just-in-time (JIT) is a highly coordinated
processing system in which goods move
through the system, and services are
performed, just as they are needed.
•Supplies and components are ‘pulled’ through
the system to arrive where they are needed
when they are needed.
 Developments of JIT

1960’s: Developed as Toyota Production

System by Taiichi Ohno and his colleagues
1970’s: U.S. and European auto makers began
to apply JIT to improve quality and
productivity
1990’s and beyond: Expanded the JIT concept
to streamline all types of operations
 Definition of JIT

A set of techniques to increase, productivity,

improve quality, and reduce cost of an
operations
A management philosophy to promote
elimination of waste and continuous
improvement of productivity
 Main Elements of JIT

•Elimination of waste
•Quality at the source
•Balanced and flexible work flow
•Respect for people
•Continuous improvement (Kaizen)
•Simplification and visual control
•Focus on customer needs
•Partnerships with key suppliers
Lean Management
 Lean Management

• Introduction
• What is Lean
• Components of Lean Thinking
• Why Lean
• Who Wants What
• Key to Profitability
• Lean Cost Model
• Lean Method Model
• Tools of Lean
• Lean Benefits
 Lean Management

Introduction
• All organizations have processes that produce & deliver
products & services to satisfy customer needs.
• These processes transform inputs into outputs by means capital
& labor resources.
• The transformation involves flow of work through a network of
activities performed by available resources.
• These resulting outputs are products in the form of physical
goods, services or both.
• Products differ in attributes that customer values such as
product cost, quality, variety & delivery response time
• The ability to provide desired product attribute depends on the
corresponding process attributes such as processing costs,
quality, flexibility and flow time.
 Lean Management

ESS •Space •Process

L •Movement
•Stock/Scrap
• Waiting
A NALYSE
•5 S
•Standardized work
• Delivery
•Finance •Waste

•Quality UMERICAL CONTROL

E NHANCE
•Safety
•Performance
N •Trends
•Performance
•Status
• Flexibility •KPI
•Productivity •Visual Management
 What is Lean?

Operating philosophy:
Eliminate waste through continuous improvement:
 Define value from the customer’s perspective
 Identify the value stream
 Only make what the customer pulls
 Keep the flow moving continuously
 Always improve the process
Goal:
Increase value-added time within the value stream .

The core idea is to maximize customer value while

minimizing waste. Simply, lean means creating more value
for customers with fewer resources
 Lean Management

Components of Lean Thinking

VALUE
VALUE
PERFECTION STREAM

PULL FLOW
 Why Lean?

• All organizations have processes that produce

and deliver products or services to satisfy
customer needs, desires and expectations.

• The success of every organization depends on

its ability to attract and retain customers.

• Manufacturing Challenge Deep Dive into Lean

Thinking
 Lean Management

Who Wants What

Customers Price OR More Price Supplier
Reduction
GA More Profit Stake Holder
NIZ
ATI More Salary Employee

ON
Customer wants:
•Competitive Price
•Better Quality Your company
•On Time Delivery •Profit
•Repeat Business
•Growth
 Lean Management

Key to Profitability
Cost optimization
Old/Traditional Equation: Cost + Profit = Price
New/Present Equation: Price - Cost = Profit
Price can not change Reduce by waste minimization in production,
because this is market inventory, material movement, reducing
driven bottleneck, by applying JIT, KANBAN, Andon,
Price Muda, Mura, Muri, 5 S
Prof
it

Profit
Cost

Cost

Old New
 Lean Management

Lean Cost Model

PRICE - COST = PROFIT

Performance/Benefit (P)
Value =
Cost

Cost Performance
 Lean Management

Lean Cost Model

PRICE - COST = PROFIT

Traditional view of adding profit on top of cost to set price

is flawed
– What client is willing to pay does not depend on your
costs
– Clients’ perception of the value of your product/service
determines max. price
Lean switches focus to reducing costs and increasing
value to the client
– Higher value to client will result into higher sales
– Higher sales will result into higher shareholder value
 Lean Management
Lean Method Model
In order to increase output:

Traditional Model: Lean Model:

Increases the workforce •Eliminates waste
Increases working hours •Focuses on efficient use
Add Machines of equipment and people.

Minimizes issues by standardizing work.

Lean focuses on simplifying complexity and providing the right
product in the right amount at the right time
 Lean Management

Tools of Lean
S.No. Name of Tool Objective
1 5 S (Sorting, Set in order, Shine, Scientific method to manage work
Standardize, Sustain place
2 KAIZEN Continuous improvement
3 3 M (Muda, Mura and Muri) Muda (Any kind of waste, Over
production, inventories, processing,
transportation, motion, waiting,
correction, non-utilized talent)
Mura (Unevenness – due to
fluctuation, variation work force)
Muri (Over Burden)
4 POKA YOKE (Zero mistake)
5 KANBAN To implement Pull System for product
movement
 Lean Management

Tools of Lean
S.No. Name of Tool Objective
6 Pull System On demand of customer, Change in the manufacturing
system, design
7 Line Balancing Reduce Bottleneck, Optimize cycle time
8 Andon Applying visual management system to continuous
monitoring
9 JIT Available the item when needed
10 KPI Keep performance indicator for the process
11 QCC Quality Circle Counsel in the shop floor
12 5 Why Through viva analysis, identify the root cause
13 TPM Total Productive Maintenance
14 OEE Over all Equipment Effectiveness
 Lean Management

Lean Benefits
A comprehensive & patient implementation of lean leads to :
• Substantial reduction in
Inventories
Capital employed
Cost of quality
• Significant improvement in
Quality
Productivity
On-time delivery
 Lean Management

Thank you