11

Just-in-time

QuickTime™ and aTIFF (Uncompressed) decompressor

are needed to see this picture.

22

Supply Networks

organisations connected by server-client links - upstream/downstream - that service processes & activities (operations) bringing added value to each client & ultimately the end customer.

Supply Chain Performance

Delivery, Quality, Time, Cost

33

Flows of products, services & information

second-tier

suppliers

second-tier

suppliers

first-tier

suppliers

first-tier

suppliers

first-tier

customers

first-tier

customers

second-tier

customers

second-tier

customers

For Company A

Internal supply network

Immediate supply network

Total supply network

For Company A

Internal supply network

Immediate supply network

Total supply network

Company BCompany B

Company CCompany C

XX

XX

XX

XXXX

Supply side Supply side Demand sideDemand side

Up

str

eam

Up

str

eam

Do

wn

str

eam

Do

wn

str

eam

44

Just in Time

History - Japan

1980s conclusion

Japanese industry worked “smart” - JIT

Western industry worked JUST IN CASE

Think of JIT as minimum stock production

Type of relationship: close & intimate? JIT

internal JIT - in client-server stream

external JIT

55

Japanese experience

Waste in operations from

overproduction

waiting time

transportation

inventory waste

processing

motion/movement

product defects concentrate effort on shop floor

CQI focus

staff ownership of problems

66

Minimizing Waste: Inventory Hides Problems

Work in

process

queues

(banks)

Change

orders

Engineering design

redundancies

Vendor

delinquencies

Scrap

Design

backlogs

Machine

downtime

Decision

backlogsInspection

backlogs

Paperwork

backlog

identify defects from a supplier early in the process saves the downstream work

identify defective work from upstream stations, saves the downstream work

77

Forecast randomordersMaster

productionschedule

(MPS)

MRP1

Designchanges

Bill ofmaterial

Stockmovements

Inventoryrecord

Reports

7

AggregatePlan (product groups)

Firmorders

From Aggregate to MPS to MRP1

Time-phased planhow many + when we will build each end item.

Time-phased planhow many + when we will build each end item.

MRP2MRP2

JITJIT

88

Material Requirements Planning & JIT

backdrop to JIT

dependent demand (depends on known orders)

info. system to determine no. of parts, components, materials needed

scheduling - when

orders for materials should be released,

based on lead times.

batches to be ordered/produced/delivered etc

99

Operating an MRP System

Should MRP carry “safety stock”?

How much “safety stock” should be carried?

Issue of “safety lead time”

Danger of “informal” system driving out the “formal” system

Expansion of MRP to other functions (finance, HRM, etc.) of business

JIT - and the supplier-client partnership

shared information systems to "call" contractually agreed stock/materials

1010

Just-In-Time (JIT)

a system for high-volume production with minimal inventory (raw materials, WIP, finished goods).

involves

timed arrivals @ workstation JIT reduced ‘buffer’ stocks no waste in production system a “Pull” system thru the plant

a management philosophy

expose problems & bottlenecks

Take away ‘security blanket”

streamlined production

factory & warehouse networks

• participation• industrial engineering/basics• continuing improvement• TQM• reducing set up times• smaller lot/order sizes sizes• stable environment• supply partnership

Requires

1111

Suppliers & JIT

Suppliers are crucial Supplier gets Long-term guaranteed contract Steady demand

E-procurement involvement (minimal paperwork) Buyer gets Quality comp[onents Guaranteed delivery times Good prices

Supplier selection Close to plant Quality product Good labour relations Fewer suppliers (keiretsu)

1212

JIT and Demand-Pull

Customer

Supplier

Supplier

Supplier

Supplier

Final Assembly

Fabric

Fabric

Fabric

Fabric Subass

Subass

Call (Kanban) & PullCall (Kanban) & Pull

Call (Kanban) & PullCall (Kanban) & Pull

Call (Kanban) & PullCall (Kanban) & Pull

1313

Client Server Streaming

Avoid too much material stocks & WIPIncrease materials coordination & movement

Bin

SawSaw Supplier'slocalwarehouse

Supplier'slocalwarehouse

Finished GoodsWarehouse

Finished GoodsWarehouse

GrinderGrinderLatheLathe

Bin

Call for moreCall for more

MaterialswarehouseMaterialswarehouse

Bin

Bin

Bin

Bin

CustomerCustomer

JITdeliveriesJITdeliveries

Call for more

Call for more

1414

What is kanban?

developed at Toyota 1950s to manage line material flows.

Kanban ( Kan=card, Ban= signal )

simple movement system “cards” to signal & communicate reorder information boxes/containers to take “lots” of parts from one work station

to another (client-server).

Server only delivers components to client work station as & when needed (called/pulled).

minimise storage in the production area.

Workstations only produce/deliver components when called (they receive card + empty container).

The work-station produces enough to fill the container

Kanban = an authorization to produce more inventory

We thus limit the amount of inventory in process.

1515

Minimizing Waste: Kanban Control System

Bin Part A

Bin Part AMachine

Center Assembly Line

Material Flow

Card (signal) Flow

withdrawal kanban

production kanban

1616

What does a Kanban card look like?

Kanban No.Kanban No. 5678990 5678990 part No: part No: 66789X66789Xdescription description 16ga. Copper 16ga. Copper

WireWireunits units Ft.Ft.reorder/lot qty reorder/lot qty 2020store location store location Row 12, Bin 6Row 12, Bin 6supplier supplier BICCBICCsupplier tel supplier tel 0208-891-01210208-891-0121supplier part supplier part RT45502RT45502routing processName/location of next procesName/location of preceding processcontainer type & capacitynumber of containers released

• accurate data: correct part nos, accurate data: correct part nos, quantities & measure'tsquantities & measure'ts

• visible - chart if material ordered visible - chart if material ordered & when& when

• fool proof for no stockoutsfool proof for no stockouts• minimum inventoryminimum inventory• clear & complete info. to clear & complete info. to

supplierssuppliers• link inventory directly to demandlink inventory directly to demand• Tie in with POP: issuing orders, Tie in with POP: issuing orders,

receiving & authorising accounts receiving & authorising accounts payablepayable

• accurate data: correct part nos, accurate data: correct part nos, quantities & measure'tsquantities & measure'ts

• visible - chart if material ordered visible - chart if material ordered & when& when

• fool proof for no stockoutsfool proof for no stockouts• minimum inventoryminimum inventory• clear & complete info. to clear & complete info. to

supplierssuppliers• link inventory directly to demandlink inventory directly to demand• Tie in with POP: issuing orders, Tie in with POP: issuing orders,

receiving & authorising accounts receiving & authorising accounts payablepayable

1717

CSdL )(1

k capacity of container

Expected demand during lead time + safety stock

k = No. of kanbans in card set d = Average No. of units demanded over the periodL = lead time to replenish order (same units of time as demand)S = Safety stock as % of demand during lead timeC = Container size

How many Kanbans?

Each container = minimum replenishment lot size. Calculate lead time required to produce a "container"

1818

Example

A switch is assembled in batches of 4 units at an “upstream” work area.

delivered in a bin to a “downstream” control-panel assembly area that requires 5 switch assemblies/hour.

The switch assembly area can produce a bin of switch assemblies in 2 hours.

Safety stock = 10% of needed inventory.

2.75 or 3 4

5(2)(1.1) C

dL (1S)

k size of container

Expected demand during lead time + safety stock

1919

JIT Requirements 1

Kanban Pull Demand pull Back flush Reduce batch/lot sizes

Work with suppliers Reduce lead times Frequent deliveries Project usage requirements Quality expectations

Reduce inventory in Stores Transit Carousels Conveyors calculation from MRP & EOQs

2020

JIT Requirements 2

Quality Worker responsibility SQC Enforce compliance Fail-safe methods Automatic inspection

Quality Worker responsibility SQC Enforce compliance Fail-safe methods Automatic inspection

Stabilise Schedule Level schedule Under utilize capacity Establish freeze windows

Operations Design Link operations Balance workstation capacities Review layout for flow Stress preventive maintenance Reduce lot sizes Reduce setup/changeover time

Operations Design Link operations Balance workstation capacities Review layout for flow Stress preventive maintenance Reduce lot sizes Reduce setup/changeover time

People Focus pay harmonisation supportive unions subcontractor networks hands-on manager style quality commitment &

group involvement

2121

JIT Requirements 3

Product Design Improvement DFM & process design Modules & fewer parts Quality standards upgrade housekeeping clarify process flows revise equipment & process

technologies

Problem-solving Root problem Long-term solution Team contribution Line-specialist cooperation Learning Measure performance CQI Monitor & report

Problem-solving Root problem Long-term solution Team contribution Line-specialist cooperation Learning Measure performance CQI Monitor & report

2222

"Re-engineering" & Kanban

Modern production methods

1. Modular/cell production 9 group technology).

2. Reduce set up, lead and waiting times between procedures.

3. Flow-of-products-oriented layout of processes & machines layout. Products flow smoothly from start to finish, parts do not sit waiting to be worked on, forklift trucks do not travel kilometres to move parts from one area of the plant to another.

4. Flexible manufacturing of mixed models

5. Theory of Constraints - drum-rope-buffer (Goldratt). Building in extra redundancy.

6. Total Preventive Maintenance, prevent machines from breaking down or malfunctioning during production time

7. Team-Work & Autonomation (decision by worker to stop line)

8. Kaizen: Continuous improvement

9. Housekeeping

2323

Down-side of Kanban

more complex in shared-resource situations e.g. upstream server makes several parts. Each needs a separate signalling card - so the up-stream station will receive random calls for different parts - creating a scheduling & queuing situation.

client request to make/send more must wait if other parts have to be made so buffer stocks are needed.

Kanban assumes stable repetitive production & is less suited to industries where mix &volumes fluctuate.

It doesn't eliminate variability, unpredictable & lengthy down times present problems.

Poor quality (scrap &rework) affect functioning even though these are exposed. Excess inventory does not mask these effects.

2424

Further Information from

ProModel.com

http://www.dal.ca/~qhe/ie1352/KanbanPP.htm

www.google.com search on Kanban

Birmingham University PRISM - see Kanban Network (Ciardo & Tilgner)

MidWest Tool Com - Controlling Serial Production Lines Using Kanbans - download file.

Hugh Campbell - Kanban and MRP to Manage Purchased Parts and Materials

Kanban's - Simplicity at its best - Brian Willcox