Presented By:-Muhammad Shahroze IlyasDaniyal MujahidMubeen Abdul ShakoorShahid MushtaqAneeqa Ashraf

Just In Time And Lean Manufacturing

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.

What is JIT?

JIT originated in Japan, post WWIIDriven by a need survive after the devastation

caused by the warJIT gained worldwide prominence in the 1970sToyota Motor Co. developed JIT

Looking Back

Largest vehicle manufacturer Techniques of JIT, TPS and Lean OperationIntroduced by Taiichi Ohno

Toyota Motor Corp.

JIT - continuous and forced problem solving via a focus on throughput and reduced inventory

TPS -continuous improvement, respect for people, and standard work practices

Lean operations - supplies the customer with exact wants when the customer wants it without waste

Just-In-Time, TPS, andLean Operations

Eliminate Waste

• Waste is anything that does not add value from the customer point of view

• Storage, inspection, delay, waiting in queues, and defective products do not add value and are 100% waste

Shigeo Shingo

The most dangerous kind of waste is the waste we do not recognize

Ohno’s Seven Wastes• Overproduction• Queues• Transportation• Inventory• Motion• Over processing• Defective

products

Layout (distance)Long setup timeIncapable processesPoor maintenancePoor work methodsLack of training

Common Causes of Waste

• Inconsistent performance measures• Ineffective production

planning • Lack of workplace

organization• Poor supply

quality/reliability

Eliminate Waste

• Efficient, sustainable production minimizes inputs, reduces waste

• Traditional “housekeeping” has been expanded to the 5 Ss

Sort/segregate – when in doubt, throw it out

Simplify/straighten – methods analysis tools

Shine/sweep – clean dailyStandardize – remove variations from

processesSustain/self-discipline – review work and

recognize progress

The 5 Ss

Safety- build in good practices

Support Maintenance- reduce variability and unplanned downtime

Two additional Ss

JIT and Competitive Advantage

JIT and Competitive Advantage

JIT Partnerships• JIT partnerships exist when a

supplier and purchaser work together to remove waste and drive down costs

• Four goals of JIT partnerships are:• Removal of unnecessary activities• Removal of in-plant inventory• Removal of in-transit inventory• Improved quality and reliability

JIT Partnerships

Concerns of Suppliers• Diversification – ties to only one

customer increases risk• Scheduling – don’t believe customers

can create a smooth schedule• Changes – short lead times mean

engineering or specification changes can create problems

• Quality – limited by capital budgets, processes, or technology

• Lot sizes – small lot sizes may transfer costs to suppliers

Just in time inventory is the minimum inventory necessary to keep a perfect system running.Exact time of goods arrives at the moment it is needed.

JIT Inventory

Inventory is Evil

•JIT Inventory Tactics•Four tactics

JIT Inventory

• Reduce Inventory

• Reduce Lot Size

•Reduce Variability

• Reduce Setup Costs

4 123

variability is any deviation from the optimum process that delivers perfect product on time, every time.

JIT systems require managers to reduce variability caused by both internal and external factors.

Inventory hides variability.

Less variability results in less waste.

Remove variability

1. Incomplete or inaccurate drawings or specifications

2. Poor production processes resulting in incorrect quantities, late, or non-conforming units

3. Unknown customer demands

Sources of variability

•Inventory hides variability & problems•Analogy with the lake full of rocks

Inventory level

Process downti

meScrap

Setup timeLate deliveries

Quality proble

ms

Water:Inventory

Flow

Rocks:Proble

ms

•Uncovering of the “rocks”•Reveals problems, variability•Management clears the lakeInventor

y level

Process downtim

eScrapSetup time

Late deliveries

Quality problem

sProblems revealed

No problems

No inventory

Inventory level

Process downtim

e removed

No scrapSetup time

reduced Late

deliveries

Quality problem

s removed

•Key to JIT:“Good product in small lot sizes”•Reduces Inventory Costs

Lowering the order size Increases the Order size Decreases Inventory

•Improve Material Handling•Reduce Setup time

Lot Size Example: Crate Furniture Inc.D= Annual demand = 400,000 unitsd= Daily demand = 400,000/250 = 1,600 per dayp= Daily production rate = 4,000 unitsQ= EOQ desired = 400H= Holding cost = $20 per unitS= Setup cost (to be determined)

Q = 2DSH(1 - d/p) Q2 = 2DS

H(1 - d/p)

S = = = $2.40(Q2)(H)(1 - d/p)

2D(3,200,000)(0.6)

800,000

Setup time = $2.40/($30/hour) = 0.08 hr = 4.8 minutes

• High setup costs encourage large lot sizes

Ultimate Solution: Reducing setup costs

Reduces lot size & average inventory

Reduces Optimum order size

Better SchedulingJIT Scheduling

Organization Supplier

sEffective

Scheduling• Supports JIT1

• Improves ability to meet customer orders

2

• Drives down inventory3

• Allows smaller lot sizes4

• Reduces work-in-process5

JIT Scheduling: Example Ford Motor Company

Ford communicates its schedules to bumper Polycon

Industries

Schedule describes: Style and color of the

bumper for each vehicle

It transmits the information to

Polycon Warehouse personnel

PW Personnel load the bumpers onto

conveyors leading to the loading dock

Bumpers are then trucked to ford

plant

JIT Scheduling: Two major tools

Level Schedules

Kanban

Technique processes frequent small batchesMany “always changing” small lots

1. Level Schedules: Jelly Bean Scheduling

A B CA AAB B B B B C

JIT Level Material-Use Approach

A CA AA B B B B B C CB B B BA A

Large-Lot Approach

Time

“Kanban”-Japanese word for “card”Technique that uses “pull” systemMatch or nearly match the processing timeCard=an authorization for the next container of

material to be produced• Empty containers• Lights• Flag or rag• Colored golf balls

2. Kanban:Only when ready

Signaling devices to control the

flow of material

Work cell

Raw Materi

al Supplie

r

Kanban

Purchased Parts

Supplier

Sub-assembl

y

Ship

Kanban

Kanban

Kanban

Kanban

Finished goods

Customer order

Final assembly

Kanban

Kanban

1st – Set the size of each containerNeed to know the lead time needed to produce

a container of partsNeed to know the amount of Safety Stock

needed2nd – Calculate no of Kanbans

Number of Kanban Cards or Containers

Daily Demand =500 cakesProduction Lead Time =2 daysSafety Stock =0.5 daysContainer size =250 cakesNow, Demand during lead time =2 days x 500

cakes = 1,000

Example: No of Kanban: Hobbs Bakery

Quality

JIT cuts the cost of obtaining good quality

JIT improves quality

Better quality means fewer

buffers=Easier-to use JIT

system

•Strong Relationship between JIT & Quality

JIT Quality TacticsUse statistical process controlEmpower employeesBuild fail-safe methods (poka-yoke, checklists, etc.)Expose poor quality with small lot JITProvide immediate feedback

Table 16.4

JIT in ServicesThe JIT techniques used in manufacturing are used in services

• Suppliers• Layouts• Inventory• Scheduling

High holding costs are the nature of the fast food industries

WastageTime

In McDonald’s

JIT system wherein McDonald's doesn't begin to cook its orders until a customer has placed a specific order.

In McDonald’s

sophisticated burger-making technology (including a record-breaking bun toaster)

McDonald's is able to make food fast enough to wait until it's been ordered.

Reduction in wastage

Implementation of JIT

    Improved Quality – The burgers are prepared freshly and hence the quality has improved.

     Customer service – As the burger is made only after the order is placed, making special orders is not an issue.

     Cost Reduction – Due to significant reduction in wastage as uncooked material has a higher shelf life.

Reduction in waiting – Customer’s waiting time reduce 11 min. to just 1 and half min

Benefits

• Continuous improvement• Build an organizational culture and value

system that stresses improvement of all processes

• Part of everyone’s job• Respect for people

• People are treated as knowledge workers

• Engage mental and physical capabilities

• Empower employees

Toyota Production System

• Standard work practice• Work shall be completely specified as

to content, sequence, timing, and outcome

• Internal and external customer-supplier connection are direct

• Product and service flows must be simple and direct

• Any improvement must be made in accordance with the scientific method at the lowest possible level of the organization

Toyota Production System

Lean Operations

• Different from JIT in that it is externally focused on the customer

• Starts with understanding what the customer wants

• Optimize the entire process from the customer’s perspective

Building a Lean Organization

• Transitioning to a lean system can be difficult

• Lean systems tend to have the following attributes• Use JIT techniques• Build systems that help

employees produce perfect parts• Reduce space requirements

Building a Lean Organization• Develop partnerships with

suppliers• Educate suppliers• Eliminate all but value-added

activities• Develop employees• Make jobs challenging• Build worker flexibility

Lean operations apply to other services just as they do in other sectors.

Suppliers:every restaurant deals with its supplier on JIT basis. Those do not are usually unsuccessful. The waste is too evident– food spoils and customers complain or get sick.Layouts:Lean layouts are required in restaurant kitchen, where cold food must be serve cold and hot food hot.

Lean operations in services

Scheduling:At air-line ticket counters, the focus of the customers is on adjusting to customer demand. Through elaborate scheduling, ticket counter personnel show up just in time to cover peaks in customer demand.

At McDonald’s , scheduling of personnel is down to 15 minute increments, based on precise forecasting demand.

To deliver goods and services to customers under continuously changing demand, suppliers need to reliable, inventories lean, cycle times short, and schedules nimble. A lean focus engages and empowers employees to create and deliver the customers perception of value, eliminating whatever does not contribute to this goal. Lean operations are currently being developed with great success in many firms, regardless of their products. Lean techniques are widely used in both goods-producing and service producing firms; they just look different.

Thank you