Just-in-Time and

Lean Operations
 Developments of JIT and
Lean Operations
 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
What Could Be the Expected
Benefits of JIT?
Expected Benefits of JIT

 Reduction in throughput times

 Reduction in WIP
 Improvement in quality
 Improvement in productivity
 Reduction in resource requirements
 Improvement in customer satisfaction
 improvements in return on assets
 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
What is A “Waste?”
 Wastes
 Anything that exceeds the minimum resources
needed for the appropriate value
 Toyota’s seven deadly wastes:
• Overproduction (excessive production resources)
• Inventory
• Waiting
• Transportation
• Processing
• Motion
• Defective parts
Why is Inventory Reduction
Important?
 Importance of Inventory
Reduction
 Inventory costs money - carrying costs,
obsolescence costs, and opportunity costs
 Inventory covers up problems and
bottlenecks.
 Inventory reduction forces organization
and employees to eliminate sources of
problems and work as a team.
 Quality at the Source

 Jidoka – autonomation (automatic

detection of defects, e.g., Poka-yoke)
 Employee empowerment
 Statistical process control
 Prevention orientation (elimination of root
causes through PDSA cycle)
 Balanced and Flexible
Work Flow
 Yo-i-don (ready, set, go) system
 Stable production schedule
 Set-up time reduction
 Flow-shop and cellular layouts
 Shojinka (flexible & multi-skilled workforce)
 Teamwork
 Total productive maintenance (TPM)
 Respect for People
 Productivity improvement needs employee support
 Demonstrate by
• providing cross-training opportunities
• creating a safe and equitable work environment
• encouraging people to achieve their potential by
giving them greater responsibility and authority
• promoting teamwork (formal and informal)
• developing partnerships with unions
Continuous Improvement
(Kaizen)
 Employee suggestion system
 Process improvement
 5S’s
• Seiri - organization
• Seiton - tidiness
• Seiso - purity
• Seiketsu - cleanliness
• Shitsuke - discipline
 Simplification and Visual
Control
 Standard and simple product designs
 Andon boards
 Kanban pull system
 Flag systems
 Music as signals
 Performance display systems
 Focus on Customer Needs

 Customer needs determine the “value” of

a product or service
 Be responsive to customers needs
(present and future)
 Strive to “delight,” not just “satisfy”
customers
 Partnerships with Suppliers

 Reduce number of suppliers

 Use long-term contracts
 Emphasize price, delivery, and services
 Improve communication
 Share information
 Develop local just-in-time delivery
 Provide technical support to suppliers
 JIT Implementation
 Top management commitment
 Steering committee
 Education program
 Pilot project planning
 Employee training
 Pilot implementation
 Pilot post mortem
 Feedback to steering committee
 Expansion to next project
 Advancements in JIT (JIT II)
 Backwards Integration of staff and line
functions to suppliers (e.g., purchasing)
 Requires EDI or web access to materials
and logistics systems
 On-site supplier representative(s) with
transaction processing authority
 Goal: link suppliers’ cycle to firm’s cycle to
mutually reduce wait and move times
How Can JIT Be Applied to Non-
Manufacturing Operations?
 JIT for Non-Manufacturing
Operations (Lean Operations)

 Implement demand-pull operations

 Eliminate unnecessary activities
 Standardize process flows
 Increase process flexibility
 Reorganize physical layouts
 Upgrade housekeeping and workplace
organization
 JIT for Non-Manufacturing
Operations (Lean Operations)
 Develop supplier partnership networks
 Level work load
 Organize problem-solving groups
 Improve quality
 Develop effective suggestion systems
 Cross-train employees
 Promote teamwork
What Are Toyota’s Secrets of
Success?
 Toyota’s Secrets of Success
(Steve Spear, HBR, May 2004)

 There is no substitute for direct

observation
 Proposed changes should always be
structured as experiments
 Workers and managers should experiment
as frequently as possible
 Managers should coach, not fix
 Suggested Readings

 Monden, Yasuhiro (1993). Toyota Production

System: An Integrated Approach to Just-In-Time,
3rd edition, Institute of Industrial Engineers.
 Womack, James P. and Jones, Daniel T. (2003).
Lean Thinking: Banish Waste and Create Wealth in
Your Corporation, The Free Press.
 Jeffrey K. Liker (2004). The Toyota Way: 14
Management Principles from the World’s Greatest
Manufacturer, McGraw-Hill.