Session 19 Just-In-Time Manufacturing

1. Session 19Just-In-Time Manufacturing • JIT Impact on the MPC System • JIT Continuous Improvement • JIT Building Blocks • Elements of JIT • Kanban Systems • Single Card Kanban • Kanban Calculations • JIT Impact on the MPS • Mixed Model Final Assembly • JIT Assembly/Component Scheduling

2. JIT Impact on the MPC System • Eliminating discrete batches in floor of production rates • Level, mixed model MPS • Paperless, visual shop floor control • Eliminating transactions/Backflushing • Streamlined vendor scheduling

3. Manufacturing Planning and Control System and JIT

4. Building Blocks for Just-in-Time

5. JIT Benefit Summary Improvement Aggregate percentage (3-5 years) Annual percentage Manufacturing cycle time reduction 80-90% 30-40% Inventory reductions: Raw materials 35-70 10-30 Work-in-process 70-90 30-50 Finished goods 60-90 25-60 Labor cost reductions: Direct 10-50 3-20 Indirect 20-60 3-20 Space requirements reduction 40-80 25-50 Quality cost reduction 25-60 10-30 Material cost reduction 5-25 2-10

6. JIT Objectives Ultimate objectives: • Zero Inventory. • Zero lead time. • Zero failures. • Flow process. • Flexible manufacture. • Eliminate waste.

7. JIT Building Blocks • Product design: Few bill of material levels. Manufacturability in production cells. Achievable quality. Appropriate quality. Standard parts. Modular design.

8. JIT Building Blocks • Process design: Setup/lot size reduction. Quality improvement. Manufacturing cells. Limited work-in-process. Production bandwidth. No stockrooms. Service enhancements.

9. JIT Building Blocks • Human/organizational elements: Whole person. Cross training/job rotation. Flexible labor. Continual improvement. Limited direct/indirect distinction. Cost accounting/performance measurement. Information system changes. Leadership/project management.

10. JIT Building Blocks • Manufacturing planning and control: Pull systems. Rapid flow times. Small container sizes. Paperless systems. Visual systems. Level loading. MRP interface. Close purchasing/vendor relationships. JIT software. Reduced production reporting/inventory transaction processing Hidden factory cost reductions.

11. Single Kanban System

12. Kanban Calculation • Calculate the number of kanbans required for the following two components produced in a factory that works five days per week: A B Usage 240/week 120/day Lead time 1 week 2 weeks Container size 20 units 30 units Safety stock 25 percent 0

13. Kanbans Calculations A B Usage (per week) 240 600 Lead time 1 2 Container size 20 30 Safety % 25 0 Kanbans 15 40 Number of Kanbans = Usage x Lead time x (1 + safety stock) / container size Note that B's Usage must be converted to weeks A: 240 u/week x 1 week x (1 + .25) = 15 20 B: 120 u/day x 10 days x (1 + 0) = 40 30

14. Master Production Schedule Data Model _______________________________________________________________ 151A 151B 151C 151D Option configurations: Handle Basic Basic Executive Executive Pan Sheet Clad Sheet Clad Annual forecast (units) 200,000 2,500 25,000 100,000 Possible mixed model master production schedules: Daily batch MPS 800 10 100 400 Hourly batch MPS 100 1.25 12.5 50 Minimum batch MPS 80 1 10 40 * data are based on a 250-day year and an eight-hour work day.

15. Mixed Model Final Assembly 5. The Yakima Lash Company produced four models. The forecasts of annual demand for each of the four are as follows: Model I II III IV Forecast of annual demand 500 1,500 3,500 4,500 a. Use a 250-day year and an eight-hour day to determine the mixed-model-level master schedule for a daily batch and hourly batch with minimum batch sizes. b. What would the schedule of production look like for an eight-hour day using mixed-model minimum batch size production?

16. Problem 5. Yakima Lash Company • Product lineI II III IV Forecast for year 500 1,500 3,500 4,500 Daily batch 2 6 14 18 Hourly batch .25 .75 1.75 2.25 Mixed model 1 3 7 9 • Schedule for the day-order of the products' production and number of each produced. 8-12: IV,IV,IV,IV,IV,IV,IV,IV,IV,III,III,III,III,III,III,III,II,II,II,I 12-4: IV,IV,IV,IV,IV,IV,IV,IV,IV,III,III,III,III,III,III,III,II,II,II,I

17. Assembly/Component Scheduling Hofmann Enterprises produces three products using a mixed-model assembly line. This line is operated eight hours a day for 250 days per year, and produces 14 units per hour of all products. The forecasts of annual demand for each of the three products are as follows: Product Annual (code names)forecast John 16,000 units Goldie 8,000 units Ziggy 4,000 units

18. Hoffman Enterprises Example • Determine the mixed-model master production schedule for a daily batch with minimum batch size for all three products. Calculation made assuming a 250 day year Annual Daily Mixed Model Product Forecast Production Minimum Batch Size John 16000 64 4 Goldie 8000 32 2 Ziggy 4000 16 1

19. Hoffman Enterprises Example • Prepare a daily schedule indicating the number of Johns, Goldies, and Ziggys to be produced each day. Hours of the Day 1 2 3 4 5 6 7 8 John John John John John John John John John John John John John John John John John John John John John John John John John John John John John John John John Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Ziggy Ziggy Ziggy Ziggy Ziggy Ziggy Ziggy Ziggy John John John John John John John John John John John John John John John John John John John John John John John John John John John John John John John John Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Goldie Ziggy Ziggy Ziggy Ziggy Ziggy Ziggy Ziggy Ziggy

20. Hoffman Enterprises Example • Product John requires 2 units of component X and one unit of component Y to make a finished unit of John. Component X is produced on a JIT pull system basis by a separate manufacturing department. Determine the number of kanbans required for component X if the lead time is 2 days, the safety factor is 10%, and the container size is 20 units. # Kanbans = [ 2 x 64 x 2 x (1 + .10) ] / 20= 15 Usage Lead Time Safety Percent Container Kanbans 128/day 2 days 10% 20 units 15