Chapter 7 – Just-in-Time and Lean Systems

1. Chapter 7– Just-in-Time and Lean Systems Life is like a roll of toilet paper - the closer it gets to the end, the faster it goes.

2. Learning Objectives • Explain the core beliefs of the JIT philosophy • Describe the meaning of waste in JIT • Explain the differences between “push” and “pull” systems • Explain the key elements of JIT manufacturing • Explain TQM’s role in JIT manufacturing • Describe the role of people in JIT • Understand impact of JIT on service and manufacturing • Understand functional impact of JIT on all areas

3. The Philosophy of JIT • Often termed “Lean Systems” • All waste must be eliminated- non value items • Broad view that entire organization must focus on serving customers • JIT is built on simplicity- the simpler the better • Focuses on improving every operation- Kaizen • Install simple visible control systems • Flexibility to produce different models/features

4. Three Elements of JIT

5. Elements of JIT Manufacturing • Inventory reduction exposes problems • Kanbans & pull production systems • Small lots & quick setups • Uniform plant loading • Flexible resources • Efficient facility layouts

6. Role of Inventory Reduction • Inventory = Lead Time (less is better) • Inventory hides problems

7. The Pull System

8. Number of Kanbans Required N = number of containers D = demand rate at the withdraw station T = lead time from supply station C = container size S = safety stock

9. Computing the Number of Kanbans: an aspirin manufacturer has converted to JIT manufacturing using kanban containers. They wish to determine the number of containers at the bottle filling operation which fills at a rate of 200 per hour. Each container holds 25 bottles, it takes 30 minutes to receive more bottles, safety stock is 10% of demand during LT.

10. Small Lot Sizes & Quick Setups • Small lots mean less average inventory and shorten manufacturing lead time • Small lots with shorter setup times increase flexibility to respond to demand changes • Strive for single digit setups- < 10 minutes • Setup reduction process is well-documented • External tasks- do as much preparation while present job is still running • Internal tasks- simplify, eliminate, shorten steps involved with location, clamping, & adjustments

11. Uniform Plant Loading • A “level” schedule is developed so that the same mix of products is made every day in small quantities • Leveling the schedule can have big impact along whole supply chain

12. Flexible Resources • Moveable, general purpose equipment: • Portable equipment with plug in power/air • E.g.: drills, lathes, printer-fax-copiers, etc. • Capable of being setup to do many different things with minimal setup time • Multifunctional workers: • Workers assume considerable responsibility • Cross-trained to perform several different duties • Trained to also be problem solvers

13. Effective Facility Layouts • Workstations in close physical proximity to reduce transport & movement • Streamlined flow of material • Often use: • Cellular Manufacturing(instead of process focus) • U-shaped lines: (allows material handler to quickly drop off materials & pick up finished work)

14. Traditional Process Focused Layout • Jumbled flows, long cycles, difficult to schedule

15. JIT Cellular Manufacturing • Product focused cells, flexible equipment, high visibility, easy to schedule, short cycles

16. JIT and TQM- Partners • Build quality into all processes • Focus on continuous improvement - Kaizen • Quality at the source- sequential inspection • Jidoka (authority to stop line) • Poka-yoke (fail-safe all processes) • Preventive maintenance- scheduled • Work environment- everything in its place, a place for everything

17. Respect for People: The Role of Employees • Genuine and meaningful respect for associates • Willingness to develop cross-functional skills • Actively engage in problem-solving (quality circles) • Everyone is empowered • Everyone is responsible for quality: understand both internal and external customer needs • Associates gather performance data • Team approaches used for problem-solving • Decisions made from bottom-up • Everyone is responsible for preventive maintenance

18. The Role of Management • Responsible for culture of mutual trust • Serve as coaches & facilitators • Support culture with appropriate incentive system including non-monetary • Responsible for developing workers • Provide multi-functional training • Facilitate teamwork

19. Supplier Relationships and JIT • Use single-source suppliers when possible • Build long-term relationships • Work together to certify processes • Co-locate facilities to reduce transport if possible • Stabilize delivery schedules • Share cost & other information • Early involvement during new product designs

20. Benefits of JIT • Smaller inventories • Shorter lead times • Improved quality • Reduced space requirements • Lower production costs • Increased productivity • Greater flexibility

21. Implementing JIT • Implementation needs a designated “Champion” • Make quality improvements- all processes O-P • Reorganize workplace • Remove clutter & minimize storage • Reduce setup times • Reduce lot sizes & lead times • Implement layout changes • Cellular manufacturing & close proximity • Switch to pull production • Extend methods to suppliers

22. JIT in Services • Most of the JIT concepts apply equally to Service companies • Cellular layouts, product focused, & flexible employees shorten response times • Service inventory, “paperwork”, should be eliminated, simplified, examined for “waste” • “Fail-safe” all processes from Orders-Payment • Team based organizations

23. Chapter 7 Highlights • JIT manufacturing has become the standard for many industries; concept incorporates TQM and respect for people. • JIT views waste as anything that does not add value. • JIT converts traditional “push” systems to a “pull” production system. • Key elements of JIT are “pull”, kanbans, small lots, quick setups, uniform plant loading, flexibility, and work cells.

24. Chapter 7 Highlights (Continued) • TQM concepts must be incorporated JIT manufacturing. • Team based work systems, empowerment, cross-functional flexibility, with appropriate reward systems are all part of JIT. • Most of the JIT concepts are equally applicable to “Service Organizations.” • JIT requires changes to be made in all functional areas and examination of all processes for waste.