Just-in-Time Systems

1. Just-in-Time Systems Reducing Variance, Waste and Lead Time in the Supply Chain

2. Topics to be Covered • Review of JIT & Waste • Objectives of JIT • JIT Principles • JIT and Variance • JIT Tools and Procedures

3. JIT Head Chicken JIT Oh JIT (O´JIT) Tough JIT Strate JITs JIT Planes Bull JIT Le JIT JIT Lag When the JIT hits the fan. JIT: Definitions?

4. What is JIT? • a corporate system designed to produce output within the minimum lead time and at the lowest total cost by continuously identifying and eliminating all forms of corporate waste and variance. • a corporate strategy • a philosophy • Focus of JIT: • variance & waste

5. Waste Types Chrysler Video on Waste

6. Seven Basic Types of Waste • Transportation waste • Process Waste • Inventory Waste • Waste of motion • Waste from product defects • Waiting time • Overproduction

7. Layout (distance) Long setup time Incapable processes Poor maintenance Poor work methods Lack of training Inconsistent performance measures Ineffective production planning Lack of workplace organization Poor supply quality/reliability Common Causes of Waste

8. Objective of JIT • Produce only the products the customer wants. • Produce products only at the rate that the customer wants them. • Produce with perfect quality • Produce with minimum lead time. • Produce products with only those features the customer wants.

9. Objectives • Produce with no waste of labor, material or equipment -- every movement must have a purpose so that there is zero idle inventory. • Produce with methods that allow for the development of people

10. JIT Principles • Create flow production • one piece flow • machines in order of processes • small and inexpensive equipment • U cell layout, counter clockwise • multi-process handling workers • easy moving/standing operations • standard operations defined

11. JIT Principles - Slide 2 • Establish “TAKT” time • rate at which the customer buys a product • Build Pull Product • use of kanban system

12. Single Minute Exchange of Dies (SMED) Statistical Process Control Use of standard containers Doable stable schedules with adequate visibility TAKT-Time 5-S Program Kaizen Event Visual control Flexible workers Tools at the point of need Product redesign Group Technology Total Productive Maintenance JIT Tactics

13. Balanced Production • Three elements • TAKT time • Work sequence • Standard WIP • Objective • Build at rate that the customer wants work • Balance the system to maximize efficiency at this rate

14. TAKT Time Example • Net Available Operating Time • Time per shift 480´ (minutes) • Breaks (2 @ 10´) - 20´ • Clean-up - 20’ • Lunch - 30’ • NAOT/shift 410´ • Customer Requirements • Monthly 26,000 units/month • No. Working Days 20 days/month • CR/Day 1,300 units/day • TAKT Time • 410’ x 60” x 3 shifts (73,800) divided by 1,300 • 57.769 seconds per part or 57"

15. TAKT Time • TAKT • the beat • (Net Available Operating Time) / Customer Requirements • time periods must be consistent • Example of calculation

16. SMED • Setup reduction • Elements • Internal Setup • setup while machine idle • External Setup • setup while machine busy • Adjustment • run-ins, calibration

17. SMED Process • Study current process • “as is” • video tape • Who owns the video tape? • Convert internal to external setup • Eliminate the need for Adjustment • Eliminate need for fastening • Goal • setup time < 10 minutes

18. Push Vs. Pull Scheduling • Push Scheduling • traditional approach • “move the job on when finished” • problems - creates excessive inventory • Pull scheduling • coordinated production • driven by demand (pulled through system) • extensive use of visual triggers (production/withdrawal kanbans)

19. Visual Control • A system for making problems obvious without the need for sophisticated monitoring computer systems • Andon light system • Kanbans • Create a sense of urgency • Clearly identify where the problems are located

20. Supplier Partnerships • Reliance on suppliers for • problem solving expertise • quality at the source • timely communication • participants in cost reduction programs • Increased reliance on supplier certification

21. Standardization/Simplification • Eliminate inherent sources of variance • eliminate opportunity for human discretion error • Examples • Container sizes • MacDonalds with interaction with customers • Consistent with Deming Wheel • Standarize  expose problems  solve problems  implement new methods

22. Other Techniques • Milk runs • Poka-Yoke Systems • Continuous Improvement Programs (CIP)

23. Video JIT at McDonalds

24. JIT - Day 2 New Developments in JIT

25. JIT & Lean Manufacturing • Lean Manufacturing • Doing more with less • Less of: • materials, time, resources • overhead, people • waste • money • JIT is a subset of Lean Manufacturing • Now seen as most applicable to mass production settings

26. Kaizen Event • A relatively new concept • Kaizen Blitz, Gemba Kaizen • Process focused • Operates at two levels • on-going process of identifying opportunities for improvement • strategic, top management •short-term project lasting 1-4 days • training, documentation of process “as is”, identification of potential improvements, implementation, presentation, action list

27. Kaizen Events - Key Traits • Very short-term, finite in life • Highly focused • Creativity before capital • Team-oriented • Action-Oriented • Verifiable Metrics • Repetitive

28. Kaizen Event Process • Top management buy-in • Public Kaizen Events • Assessment of current processes • top management • Target Processes • training • documentation - “as is” • opportunities • change • presentation/action list

29. Typical Metrics • Floor space occupied by process being assessed • Operators required per day • Distance traveled by an order within the process • WIP Inventory • Setup (measured in minutes) • Quality recommendations generated • Safety Improvements implemented

30. Application of Kaizen Events • Shop floor • Finance • 401 K plan • Purchasing • Health Care • Services

31. Example of Impact of Kaizen Event Impact of Kaizen Events - Overall Benefits (January 1, 1996 through December 31, 1996

32. JIT 11 • Based on system developed by Bose of Framingham, MA • Integration of JIT principles and practices into the supply chain • JIT II • long term collaborative relationships with suppliers present • suppliers to place personnel in plants of the buying organization

33. Limitations of JIT • Preconditions to JIT • trust must be present • labor/management • suppliers/consumers • recognition of processes • familiarity with problem solving • quality at the source • agreement over value and waste

34. Limitations of JIT • Right Settings • applicable in growth to maturity phases of Product Life Cycle • standard product • Steinway and JIT • standard/fixed pay-rate • problems with piece-rate scheme • Universal agreement that change needed

35. Unpleasant surprises eliminated Less computerization • visual control Improved quality WIP reduced Better communications Less pressure on receiving docks and incoming inspection areas Lower costs Change in attitude • Defects are treasures Theoretical Benefits of JIT

36. Dealing with Variance • Four major stances: • Buffer against it • Ignore it • Manage it • Eliminate it • All forms of variance create cost

37. JIT & Variance • Variance a fact of life • Comes from many sources • internal scheduling changes, scheduling practices, manufacturing planning & control systems, absenteeism, process variability • external changes in forecasts, actual demand, customer requested changes, government, competition, vendors

38. Cycle Times • Operator Cycle Time • total time required for a worker to complete one cycle of an operation • Machine Cycle Time • total time for a machine to finish one complete cycle • includes loading and unloading

39. Some Interesting Calculations • No. of Operators • Sum OCT/(TAKT TIME) • Example • OCT for Operator 1 = 13" • OCT for Operator 2 = 9" • OCT for Operator 3 = 11" • OCT for Operator 4 = 10" • Total 43" • TAKT Time 16.5" • Number of Operators • 43/16.5 = 2.606 or 3 operators

40. The 5-S Program • Seiri • segregate and discard • get rid of what is not needed • Seiton • arrange and identify for ease of use • a place foreverything and everything in its place • Seiso • Clean Daily • clean work place enhances quality

41. The 5-S Program • Seiketsu • Revisit frequently • revisit the first 3 steps to maintain workplace safety and effectiveness • Shitsuki • Motivate to sustain • promote adherence through visual performance measurement tools

42. Next Day • JIT in Service Sectors • New developments in JIT • Lean Manufacturing • Agile Enterprise • JIT II • Gemba Kaizen • Quick Response Systems

43. Topics to be Covered • JIT and Lean Manufacturing • JIT in Services • Kaizen Events • JIT II • Gemba Kaizen • Agile Enterprise • Limitations of JIT

44. JIT in Services • Service Traits • strong emphasis on process • avoidance of inventory • emphasis on people and their importance to process • recognition of need for continuous improvement • “defects are treasures”

45. JIT in Services • Elements of JIT most applicable • Synchronization and balance of information and work flows • Total visibility of all components of the process • Continuous improvement of the process • Holistic approach to the elimination of waste • Flexibility in use of resources • Respect for people

46. JIT in Services • Key Issues • Equipment/people focus • Customer contact per transaction • Degree of discretion • Degree of customization • Location of value-added processes • Product/process focus

47. Gemba Kaizen • Waste reduction through the execution system • Gemba • heart of the system • Essence of Gemba Kaizen • to eliminate waste, you must have contact with the system that you are managing • the contact must be real and not through computers

48. Agile Enterprise • New development • Associated with Iaccoca Institute of LeHigh University • Merging flexibility with JIT • Much broader than Lean Enterprise • Recognition that the environment • always changing • unpredictably undergoing change

49. Agile Enterprise - Traits • Rapidly bring to market products that are variable combinations of hardware, information and services. • Design products that are easily configurable and ungradable. • Produce to individual customer orders in arbitrary order quantities. • Bring out a continuously changing array of models within longer-lived product families

50. Agile Enterprise - Traits • Fragment mass markets into niche markets. • Maintain and foster continuous, rather than single-instance, sales relationships by continually adding value to current customers. • Cooperate intensively with other companies, including competitors, to create global product resources.