Managerial Issues

1. Managerial Issues • Using JIT as a tool for controlling the flow of materials, identifying sources of error, and minimizing inventories. • Developing the strong supplier relationships on which successful implementation of JIT depends. • Achieving production linearity in manufacturing and service operations. Fundamentals of Operations Management 4e

2. JIT Logic • JIT (just-in-time) • Is an integrated set of activities Seeks to achieve high volume production using minimal inventories of raw material, work in process, and finished goods. • A coordinated approach that continuously reduces inventory while also improving quality. • Just in time is also based on the logic that nothing will be produced until it is needed • “Big” JIT (lean production) • Seeks to eliminate all forms of waste in production activities: human relations, supplier relations, technology and management of material and inventories. • “Little” JIT • Focuses on scheduling goods inventories and providing service resources where and when needed. Fundamentals of Operations Management 4e

3. Pull System Exhibit 14.1 Fundamentals of Operations Management 4e

4. The Japanese Approach To Productivity • Fundamental National Goal • Full employment through industrialization • Target Industries for Market Dominance • Electronics, vehicles, shipbuilding • Competitive tactics: • Imported technology rather than take R&D risks. • Focused engineering on the shop floor to achieve high productivity and low cost. • Improved quality beyond that of competitors. • Eliminated waste in all forms. • Have great respect for people. Fundamentals of Operations Management 4e

5. Quasar Plant Productivity *2 years later.†Same people Exhibit 14.2 Fundamentals of Operations Management 4e

6. The Japanese Approach to Productivity • Elimination of Waste • Focused Factory Networks • Group Technology • Jidoka (quality at the source) (stop everything when something goes wrong) • Just-in-Time Production • Uniform Plant Loading • Kanban • Minimized Setup Times Fundamentals of Operations Management 4e

7. Group Technology versus Departmental Specialty Exhibit 14.3 Fundamentals of Operations Management 4e

8. Just-In-Time Exhibit 14.4 Fundamentals of Operations Management 4e Source: Adapted from Chris Gopal (of Price Waterhouse), “Notes on JIT.”

9. Inventory Hides Problems Exhibit 14.5 Fundamentals of Operations Management 4e

10. Toyota Example of Mixed-Model Production Cycle in a Japanese Assembly Plant Exhibit 14.6 Fundamentals of Operations Management 4e

11. Flow of Two Kanbans • Kanban Pull System • A manual, self-regulating system for controlling the flow of material. Workers produce only when the Kanban ahead of them is empty, thereby creating a “pull” system through the factory. Exhibit 14.7 Fundamentals of Operations Management 4e

12. Minimizing Setup Time—Hood andFender Press Comparison (800 ton press) *For low-demand items (less that 1,000 per month), as large as seven days. Exhibit 14.8 Fundamentals of Operations Management 4e

13. Setup Reduction Results at JKC Exhibit 14.9 Fundamentals of Operations Management 4e

14. Respect for People • Lifetime Employment • Company Unions • Attitude toward Workers • Automation/Robotics • Bottom-Round Management • Subcontractor Networks • Quality Circles Fundamentals of Operations Management 4e

15. JIT in the United States • Problems with Implementing JIT • Geographic distances • Supplier-customer relationships • “Jumbo-Inventory-Transfer” • MRP systems Fundamentals of Operations Management 4e

16. Implementing JIT Production • JIT Layouts/Design Flow Process • Design must ensure balanced continuous workflow with minimum of work in process and delays. • Internal and external logistics must be considered. • Preventive maintenance is emphasized. • Process orientation encourages the use of simple machines. • Goal is a economic production lot size of one. Fundamentals of Operations Management 4e

17. How to Accomplish Just-in-Time Production Exhibit 14.10 Source: This diagram is modeled after the one used by Hewlett-Packard’s Boise plant to accomplish its JIT program. Fundamentals of Operations Management 4e

18. The Impact of JIT on Lot Size Exhibit 14.11 Fundamentals of Operations Management 4e

19. Implementing JIT Production • JIT in a Line Flow or Product Layout • No work done until product has been pulled from the end of the line. • Completed work stays at the workstation until remove by a downstream station. Exhibit 14.12 Fundamentals of Operations Management 4e

20. Relationship between JIT and Quality Source: Richard J. Schonberger, “Some Observations on the Advantages and Implementation Issues of Just-in-Time Productions Systems,” Journal of Operations Management 3, no. 1 (November 1982), p. 5. Exhibit 14.13 Fundamentals of Operations Management 4e

21. Total Quality Control • Stabilize Schedule • Kanban Pull • Work with Vendors • Continuous Inventory Reduction • Improve Product Design • Concurrently Solve Problems and Measure Performance Fundamentals of Operations Management 4e

22. Diagram of Outbound Stockpointwith Warning Signal Marker Exhibit 14.14 Source: Robert Hall, Zero Inventories (Homewood, IL: Dow Jones-Irwin, 1983), p. 51. Fundamentals of Operations Management 4e

23. Company Experiences with JIT • JIT/TQC benefits • Average inventory reduction of about 50 percent • Reduction of throughput time of 50 to 70 percent • Reduction in setup times of as much as 50 percent without major investment in plant or equipment Fundamentals of Operations Management 4e

24. JIT in Services • Application of JIT to Services • Synchronization and balance of information and workflow • Total visibility of all components and processes • Continuous improvement of the process • Holistic approach to the elimination of waste • Flexibility in the use of resources • Respect for people Fundamentals of Operations Management 4e

25. Gizmo Production Flow Case Exhibit 14.1 Fundamentals of Operations Management 4e