batch to jit

8/7/2019 batch to JIT

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Masaaki Imai gained a huge

following when he wrote

Kaizen: The Key to Japans

Competitive Success (McGraw-Hill,

1986). Kaizen is Japanese for change

for the better or improvement. Imaisconcept: to survive, businesses must

continue to improve and produce higher

quality by involving everyone in their

organizations in the improvement effort

and not spend much money doing it.

The book was translated into 14 lan-

guages and contributed greatly to

increased corporate conscientiousness

worldwide about total quality manage-

ment (TQM). Imai was founder of the

Cambridge Group, Tokyo, an interna-

tional management and executive

recruiting firm. As his concepts gained

popularity, he created the Kaizen Insti-

tute, based in Switzerland, to help West-

ern companies introduce such systemsand tools.

Looking back on the mid-80s, he felt

he had a substantial impact. Japanese-

made products were gaining market

share, but American companies began

to make great strides in improving prod-

uct quality. They implemented kaizen

principles, incorporating TQM.

Still, he saw a lack of kaizen in how

companies addressed the actual cost of

Time to evolve

from batch productionto JIT?

Continuous improvement

24 IL may 2007 www.ilmagonline.com


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Shown here atStaunton (Va.)Steam Laundryis consultant EdKwasnick withone of hisfavorite sights: acart thats emptywhen production

is done for theday, suggestingsuccessfuljust-in-timeprocessing hastaken place.

making products, adhering to the paradigm

that says that better quality costs more

money. The real challenge to manage-

ment, he said in an interview with Quality

Digest Magazine, is to improve quality

while reducing cost because that is what

todays customers want.

Thus, he published Gemba Kaizen: A

Commonsense, Low-Cost Approach to Man-

agement(McGraw-Hill, 1997). Gemba is a

place where real business activity occurs,

like the factory floor, or where employees

have direct contact with customers. It could

be a hotel dining room, car dealers service

department, or doctors exam room. But its

not a managers desk.

U.S. management, Imai contended, had

been too focused on results and not on what

achieves or delivers them. They had avoided

looking at core processes, which add value.

Instead, they focused on peripheral elements such as

financial management, marketing, and engineering.

If they were truly focused on process improvement,

they would see the value of adopting just-in-time

(JIT) approaches and drive this change down their

corporate hierarchies, he said. JIT is the key to high

quality at low costs. Forget forecasting, Imai argued.

Concentrate instead on crashing the time taken to

execute orders.

How has the uniform and textile service industry

fared in this respect? IL asked Ed Kwasnick, of Turnkey

Industrial Engineering Services, Charlottesville, Va., to

identify ways the rental laundry business can improve

in this manner. Turnkey consults with operators of all

sizes in the industry on process improvement and

prompts them to deploy kaizen principles.

IL: Forget forecasting. That sounds a bit

sarcastic! In the laundry business, dont

you have to forecast properly to be able to

crash the time to execute orders?

Kwasnick: Forecasting on the rental side of the

laundry business is pretty easy. You have long-term

contracts and you know what your volume will be

from week to week. The JIT approach doesnt really

apply to this part of our business.

On the customer-owned goods (COG) side of our

business, forecasting is a best guess. You have to react

to the needs of the customer and be able to handle

large swings in volume from day to day. In this case

you are reacting to the customers needs JIT, but it is

due to the nature of the business. Its really not a strat-

egy as much as a necessity.

Real JIT strategies can be implemented and have a

positive impact within the plant production environ-

ment. Plant production is typically performed in a

batch format. Soil carts are unloaded and staged on

the floor in batches. Then the soil products are sorted

and stored in large batches in a monorail system.

These products are then queued up and run through

the washroom in batches.

In the uniform rental business, it is common for

large batches of garments to be sorted through the

first sort before they can run through a second or third

sort. Finally, we stage products in large batches (in

carts, on trolley systems, etc.) before they get put on

the delivery truck.

All of this batching adds cost to the process. It takes

space to store large batches in carts, slings, and trolley

systems, and you have to build that space into the facil-

ity. You also have to heat, cool, light and maintain that

space. Then there is the cost of the actual equipment

used to store these batches, including carts, monorail

systems, garment sort systems, trolley systems, etc.

The more you have to store in process, the higher

the cost of these systems. It is common to store four to

six hours of work in a soil monorail system. If you can

cut that down to two hours, you reduce your equip-

ment cost by 50 percent. How about one hour or no

hours? That is the goal of JIT: no hours of WIP (work

in process).

As you approach true JIT, your equipment costs

www.ilmagonline.com may 2007 IL 2


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plummet, your operating costs are severely reduced, you need

far less inventory and less space, and on and on.

There is another side of this coin, however. In moving to a

true JIT environment, operations processes and production

flow become very sensitive to fluctuations and cannot absorb

major changes. You must manage the process with very few

mistakes. Planning and proper scheduling become keys to

success, and the production flow must be balanced.

The reason our industry has so much WIP is because we

have not embraced this form of production management.

Our production processes are not balanced and they are not

tightly controlled. Therefore, WIP becomes a necessity to

absorb fluctuations.

IL: Give some examples of how launderers can

make the transition from batch to JIT. Maybe its

not possible. Waiting for a batch of work to accu-

mulate is critical to achieving efficiency, right?

So does this really apply?

Kwasnick: The entire laundry production process is

flush with opportunities to transition from batch to JIT. Imai

is correct when he says that such a transition requires a new

way of thinking. The laundry industry has been batching for

so long that most people dont understand the potential of

JIT.

Waiting for a batch to accumulate is not critical

to achieving efficiency if you can properly identify

what you need on the clean side and then pull

products in the proper order from the soil side.

Production scheduling becomes critical.

We can use JIT successfully in every WIP com-

ponent of a laundry facility, including soil cart

staging, soil customer bag systems, soil monorail,

clean monorail, garment sorting, garment trolley

storage, garment stockroom inventory, linen inven-

tory, mat inventory, etc.

JIT practices can also be applied to production

processes such as soil counting. Instead of waiting

for an entire days worth (a batch) of products to

arrive at the plant before starting to soil count,

products can be soil counted JIT as they are unloaded.

IL:Imai contends that without JIT, its very diffi-

cult for manufacturers to efficiently meet cus-

tomer requirements, because of the variety of

orders and volumes and time frames in which

they are needed. Rental laundries generally do

not suffer from this problem, correct? Batches

more or less need to be ready by a certain time

(for delivery on a certain day), and the industry

is pretty good about getting ahead of schedule.

Maybe the more appropriate goal for this indus-

try is to keep the batches together better? Make

soil and clean sorting more efficient?

Kwasnick: Our industry has customers. These cus-

tomers are assigned to specific routes and delivery days.

Therefore, it is a natural that these customers, routes, and

days be segregated into batches. Sometimes it is an entire

days worth of deliveries (a day lot), or an entire route of cus-

tomers (a route lot.) Also, a customer typically needs the

same products and quantities week in and week out, espe-

cially on the rental side.

So, we dont have the need to deliver different volumes in

different time frames. It is because our business is so pre-

dictable that JIT can be so successful. The industry is great at

As stockrooms become more high-tech,the industry has a better chance toachieve JIT because it can improve SKUtracking and better analyze how quicklySKUs move (Aramark photo).




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getting two to three days ahead of schedule.The real question is why do we need to be that far ahead?

Because we are waiting for late pieces to catch up; becausewe need that cushion in case a critical piece of equipment

goes down; because soil items were missorted and have to berewashed. The two to three days ahead is a JIC (just in case)

methodology and it costs us more money to operate that way.

IL:Having to carry a huge inventory of unsold

products and excess capacity are seen as conse-

quences of not implementing JIT. You may also

have hired too many people for every process.

Rental laundries seem to have this problem with

used garment stock, not everyday production or

labor. On the other hand, if their people are wait-

ing a lot during the day for work, the batching is

inefficient. Does this happen too often? Is this

where JIT really fits into the laundry business?

Kwasnick: Our volume levels on the rental side arevery predictable and our contracts are long term. This makes

the forecasting process relatively easy. We even know if thecustomer is going to quit and switch suppliers well in

advance, if sales and services are doing their job. So, a sud-den reduction in volume is rare. A really nice aspect of our

business is that inventory can be reused for existing cus-tomers. Used inventory does not equal lost income.

Your point that batching can cause excessive wait time isright on target. I was in a rental uniform plant recently that

used a batch system in the garment sorting department. Theywere working on a batch in the first sort operation, but the

second-sort people were out of work.This required them to spend about 60 minutes doing other

jobs, helping with repairs, hanging garments, etc. They werenot trained to do these jobs and were not as efficient at per-

forming these tasks. So, PPOH went down and costs went up.What is the cost if this happens two or three times per day,

five days per week, 52 weeks per year?

IL: The batch mentality, applied to selling cars,

means building an inventory of a kind of car

without knowing how many orders are coming.

Imai sees this as very inefficient. Its like a laun-

derer buying special garments for rental that a

customer uses for a short period of time. The

clothes wind up sitting in used inventory with

nowhere to go because that customer is gone or

wants something else, and no other account will

use this type of garment. Is this the kind of thing

that launderers can do a better job tracking?

Should there be more metrics for how long goods

sit in inventory? Is it important to know exactly

how long a garment has idled?

Kwasnick: Special garments are a little different thanthe car example above. You make the car because you think

that some one will buy it. However, you buy the special gar-ment because a customer has signed a contract to rent it

from you. If that wearer than cancels, you are stuck with an

item that you are not be able to use ever again.Now comes the hook: we keep it anyway. We keep it JIC

(just in case.) Most operators do a poor job of tracking stock-

keeping unit (SKU) use or what we call a velocity set (howfast items are moving by SKU.)

Knowledge is power and past performance is a good indica-tor of future performance. If I know that a special garment SKU

is not in circulating inventory, and has not been used in thepast three years, I scrap it and cut my losses. Why should I

spend the money to wash it, dry it, grade it, and store it just tothrow it away five years later? It doesnt make sense.

?

Will these garments remain in this position for a whilebefore moving onto the next step of processing? Nottoo long, you hope, because time is money.




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We should have perpetual

inventories that tell us what is in

inventory and how long its been

there. We should also know if a

SKUs velocity is increasing (grow-

ing), decreasing (dying), or stay-

ing the same (flat.) Then you

should adjust the inventory based

on these trends. This is the one of

the keys to increasing inventory

utilization and reducing costs.

(Turnkeys Jim Buchbinder is the

expert on this. His article in this

Februarys IL hit on these issues.)

IL:Part of the long-run

strategy for successful JIT is

recognizing that customers

need new products, includ-

ing those yet to reach the market. An inventor has

to examine market needs and then devise the

offering. Then the provider must purchase this

new product in the right quantity to meet the

demand. This sounds a little like trying to gauge

the market for newer, highly customized gar-

ments. How could you ever anticipate the need for

something that hasnt been invented yet?

Kwasnick: I am not an expert on customized garments

or trying to gauge demand. However, the real responsibility

for shouldering the risk of judging demand is with the gar-

ment manufacturers. With next-day delivery of garments,

rental companies can fill orders on demand. If the demand

wanes, they stop ordering. The manufacturer gets stuck with

excess inventory.

An example of identifying a need and then developing the

technology is product tracking. There was a need for product

tracking and control in the laundry industry. However, man-

ual tracking was not effective. Then the barcode and RF chip

came into play.

We now have a cost-effective manner in which we track

and control inventory. The need was anticipated, but the

technology had not been invented. This is a good example of

identifying the need and then developing the technology.

Now we are now scanning garments, mats, and even linen.

IL: Companies are obsessed with growth; many

make their greatest profits only

when the market is growing. In

times like those, why should they

devote such effort to continuous

improvement? Isnt it better to

examine your practices when you

have more time?

Kwasnick: The time to implement

continuous improvement is now, not later.

It doesnt matter whether you are growing

fast, slow, or not at all. Continuous

improvement makes you better under all

circumstances. The longer you wait, the

less time you have to reap the benefits of

your improvements.

You may have less time and resources

when you are in high growth mode. But

that is exactly why you need to track per-

formance and enhance it! When a compa-

ny is in fast growth mode, it becomes service and sales

focused, and can take its eye off the production ball. Slowly,

quality and efficiency begin to slip.

This is the exact moment that you need production to

improve, not falter! As sales increase, production must be

able to support this growth by producing higher volume and

increased quality at a lower cost. If you wait until growth

slows to implement improvements, you are too late: the dam-

age is done and you are struggling to catch up.

If you are in slow growth mode, you need to improve as

well. As prices continue to drop, competition will erode profits.

If you are not continuously improving your internal process-

es, you will not be able to hold your margins. As margins

drop, you have less money to reinvest in the company. You

begin to spend less and less on capital improvements, process

improvements, training, etc. And the downward spiral begins.

The less you spend on improvements, the less your long

term profits. The less your profits, the less money you are

willing to spend on improvements. Slow growth is a great

time to improve because you have the time, resources, and

profits to dedicate to the process.

Continuous improvements are amustif you are in a no-

growth phase. That is the only way to continuously grow

profits without growing sales. It is a method to stay fiscally

healthy and prosper when the business is flat.

Next month: More from Ed Kwasnick on how kaizen

principles can apply to large-scale laundering. IL



We now havea cost-effectivemanner in which

we trackand controlinventory.

batch to jit

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