16-1 Just-in-Time Systems

Chapter 16

Just-In-Time
Systems

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-2 Just-in-Time Systems

JIT/Lean Production
• Just-in-time: Repetitive production system in which
processing and movement of materials and goods occur
just as they are needed, usually in small batches

• Initially developed at the Toyota Motor Company

• Philosophy encompasses all aspects of a
process, from product design through customer
service

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-3 Just-in-Time Systems

JIT Goals

• Eliminate disruptions
• Make system flexible by reduce
setup and lead times
• Eliminate waste, especially excess
inventory

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-4 Just-in-Time Systems

Eliminate Disruptions

• Disruptions are caused by:

– Poor quality
– Equipment breakdowns
– Schedule changes
– Late deliveries

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-5 Just-in-Time Systems

Sources of Waste
• Excess inventory
• Overproduction
• Waiting time
• Unnecessary transportation
• Processing waste
• Inefficient work methods
• Product defects

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-6 Just-in-Time Systems

JIT Building Blocks

• Product design
• Process design
• Personnel/organizational
elements
• Manufacturing
planning and control

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-7 Just-in-Time Systems

Product Design

• Standard parts
• Modular design
• Highly capable production
systems

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-8 Just-in-Time Systems

Process Design
• Small lot sizes
• Setup time reduction
• Manufacturing cells
• Limited work in process
• Quality improvement
• Production flexibility
• Little inventory storage

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-9 Just-in-Time Systems

Benefits of Small Lot Sizes

Reduces inventory
Less rework
Less storage space
Problems are more apparent
Increases product flexibility
Easier to balance operations

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-10 Just-in-Time Systems

Production Flexibility
• Reduce downtime by reducing changeover
time
• Use preventive maintenance to reduce
breakdowns
• Cross-train workers to help clear bottlenecks
• Reserve capacity for important customers

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-11 Just-in-Time Systems

Personnel/Organizational Elements

• Workers as assets--empowered
workforce
• Cross-trained workers
• Continuous improvement
• Cost accounting--proper allocation of
overhead costs
• Leadership/project management

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-12 Just-in-Time Systems

Summary JIT Goals and Building Blocks

Figure 16-4 Ultimate A

Goal balanced
rapid flow

Supporting Reduce setup

Goals and lead times
Eliminate disruptions Eliminate waste
Make the system flexible Minimize inventories

Product Process Personnel Manufactur- Building

Design Design Elements ing Planning Blocks

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-13 Just-in-Time Systems

Converting to a JIT System

• Get top management commitment
• Decide which parts need most effort
• Obtain support of workers
• Start by trying to reduce setup times
• Gradually convert operations
• Convert suppliers to JIT
• Prepare for obstacles

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-14 Just-in-Time Systems

Obstacles to Conversion

• Management may not be committed

• Workers/management may not be
cooperative
• Suppliers may
resist

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-15 Just-in-Time Systems

JIT in Service
The basic goal of the demand flow technology in the service
organization is to provide optimum response to the customer with the
highest quality service and lowest possible cost.
– Eliminate disruptions
– Make system flexible
– Reduce setup and lead times
– Eliminate waste
– Minimize WIP
– Simplify the process

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-16 Just-in-Time Systems

Benefits of JIT Systems

• Reduced inventory levels

• High quality
• Flexibility
• Reduced lead times
• Increased productivity

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-17 Just-in-Time Systems

Benefits of JIT Systems (cont’d)

• Increased equipment utilization

• Reduced scrap and rework
• Reduced space requirements
• Pressure for good vendor relationships
• Reduced need for indirect labor

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.