Just-In-Time Philosophy

1. Just-In-Time Philosophy The philosophy of JIT can be traced back to Henry Ford, but formalized JIT originated in Japan as the Toyota Production System. W. Edwards Deming’s lesson of variability reduction was a huge influence. JIT is a long-term approach to process improvement. It uses timeliness as a lever to lower costs, improve quality and improve responsiveness. However, JIT requires enormous commitment. It took Toyota more than 25 years to get right! The focus of JIT is to improve the system of production by eliminating all forms of WASTE.

2. Just-in-Time • Downstream processes take parts from upstream as they need. • Get what you want • when you want it • in the quantity you want.

3. 4. Just In Time-- What is It? • Just-in-Time: produce the right parts, at the right time, in the right quantity • Requires repetitive, not big volume • Batch size of one • Short transit times, keep 0.1 days of supply

4. Pull method of materials flow • Consistently high quality • Small lot sizes • Uniform workstation loads • Standardized components and work methods • Close supplier ties • Flexible workforce • Line flows • Automated production • Preventive maintenance Characteristics of Just-in-Time

5. Push versus Pull • Push system: material is pushedinto downstream workstations regardless of whether resources are available • Pull system: material is pulled to a workstation just as it is needed

6. From a a « push » to a « pull » System Work is pushed to the next station as it is completed S U P P L I E R S C U S T O M E R S

7. From a a « push » to a « pull » System A workstation pulls output as needed S U P P L I E R S C U S T O M E R S

8. Vendor Fab Sub Vendor Fab Final Assembly Customers Sub Fab Vendor Fab Vendor JIT Demand-Pull Logic Here the customer starts the process, pulling an inventory item from Final Assembly… Then sub-assembly work is pulled forward by that demand… The process continues throughout the entire production process and supply chain

9. Pull Versus Push Systems • A pull system uses signals to request production and delivery from upstream stations • Upstream stations only produce when signaled • System is used within the immediate production process and with suppliers

10. Pull Versus Push Systems • By pulling material in small lots, inventory cushions are removed, exposing problems and emphasizing continual improvement • Manufacturing cycle time is reduced • Push systems dump orders on the downstream stations regardless of the need

11. Waste in Operations • Waste from overproduction • Waste of waiting time • Transportation waste • Inventory waste • Processing waste • Waste of motion • Waste from product defects • Underutilization of people

12. Traditional Flow Production Process (stream of water) Suppliers Customers Inventory (stagnant ponds) Flow with JIT Material(water in stream) Suppliers Customers Streamlined Production

13. Lowering Inventory Reduces Waste WIP hides problems

14. Lowering Inventory Reduces Waste WIP hides problems

15. STOP Lowering Inventory Reduces Waste Reducing WIP makes problem very visible

16. Lowering Inventory Reduces Waste Reduce WIP again to find new problems

17. Process downtime Scrap Setup time Quality problems Late deliveries Reduce Variability Inventory level

18. Reduce Variability Inventory level Process downtime Scrap Setup time Quality problems Late deliveries

19. Causes of Variability Employees, machines, and suppliers produce units that do not conform to standards, are late, or are not the proper quantity Engineering drawings or specifications are inaccurate Production personnel try to produce before drawings or specifications are complete Customer demands are unknown

20. Variability Reduction • JIT systems require managers to reduce variability caused by both internal and external factors • Variability is any deviation from the optimum process • Inventory hides variability • Less variability results in less waste

21. Performance and WIP Level • Less WIP means products go through system faster • reducing the WIP makes you more sensitive to problems, helps you find problems faster • Stream and Rocks analogy: • Inventory (WIP) is like water in a stream • It hides the rocks • Rocks force you to keep a lot of water (WIP) in the stream

22. 200 – 100 – Q1 When average order size = 200 average inventory is 100 Inventory Q2 When average order size = 100 average inventory is 50 Time Reduce Lot Sizes

23. Reducing Lot Sizes Increases the Number of Lots Customer orders 10 Lot size = 5 Lot 2 Lot 1 Lot size = 2 Lot 1 Lot 2 Lot 3 Lot 4 Lot 5

24. Reduce Lot Sizes • Ideal situation is to have lot sizes of one pulled from one process to the next • Often not feasible • Can use EOQ analysis to calculate desired setup time • Two key changes • Improve material handling • Reduce setup time

25. Initial Setup Time 90 min — Separate setup into preparation and actual setup, doing as much as possible while the machine/process is operating (save 30 minutes) Step 1 60 min — Move material closer and improve material handling (save 20 minutes) Step 2 45 min — Standardize and improve tooling (save 15 minutes) Step 3 25 min — Use one-touch system to eliminate adjustments (save 10 minutes) Step 4 15 min — Training operators and standardizing work procedures (save 2 minutes) 13 min — Step 5 Repeat cycle until subminute setup is achieved — Reduce Setup Times

26. Kanban • Japanese for ‘signboard’ • Method for implementing JIT • In order to produce, you need both material to work on, and an available kanban. • Each work station has a fixed # kanbans.

27. Kanban Flow of work • Worker 2 finishes a part, outbound moves over • 2 has a blue tag avaliable, so 2 gets another part to work on: • 2 takes off 1’s green tag giving it back to 1, and • puts on her blue tag and moves it into position. 2 3

28. Kanban Flow of work • When 3 finishes a part, • Finished parts move over one spot • He has to have a red tag available to put on, • He gets a part from 2’s outbound pile, • And gives the blue back to 2 2 3

29. Kanban Flow of work • When 3 finishes a part, • Finished parts move over one spot • He has to have a red tag available to put on, • He gets a part from 2’s outbound pile, • And gives the blue back to 2 • 3’s production will be taken by 4, offstage right. • Tag goes back into 3’s bin 2 3

30. Kanban • Red finishes his part next. • But 4 hasn’t freed up any of the red kanbans, so there is nothing for 3 to work on now. • 3 could maintain his machine, or see if 4 needs help 2 3 2 3

31. Demand during Safety lead time + stock Size of container Number of kanbans = The Number of Cardsor Containers • Need to know the lead time needed to produce a container of parts • Need to know the amount of safety stock needed

32. 1,000 + 250 250 Number of kanbans = = 5 Number of Kanbans Example Daily demand = 500 cakes Production lead time = 2 days (wait time + material handling time + processing time) Safety stock = 1/2 day Container size = 250 cakes Demand during lead time = 2 days x 500 cakes = 1,000

33. Expected demand during lead time + safety stock = k size of container 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. dL (1+S) 5(2)(1.1) = = = 2.75 or 3 C 4

34. JIT Level Material-Use Approach A A B B B C A A B B B C A A A A A A B B B B B B B B B C C C Large-Lot Approach Time Scheduling Small Lots

35. Minimizing Waste: Uniform Plant Loading Suppose we operate a production plant that produces a single product. The schedule of production for this product could be accomplished using either of the two plant loading schedules below. Not uniform Jan. Units Feb. Units Mar. Units Total 1,200 3,500 4,300 9,000 or Uniform Jan. Units Feb. Units Mar. Units Total 3,000 3,000 3,000 9,000 How does the uniform loading help save labor costs?

36. Mixed Batch Example • Company produces three products with a mixed model assembly line. • Operates 16 hours per day for 250 days/yr. • Determine the mixed model MPS for a daily batch. • Determine minimum batch MPS and the mix schedule for a day.

37. Calculations For every unit of #3 (minimum batch), we need twice as many #2 and 4 times As many #1 so for minimum batch: Produce during each day produce #1,1,1,1,2,2,3 - repeated 20 times

38. Characteristics of JIT Partnershps • Few, nearby suppliers • Supplier just like in-house upstream process • Long-term contract agreements • Steady supply rate • Frequent deliveries in small lots • Buyer helps suppliers meet quality • Suppliers use process control charts • Buyer schedules inbound freight

39. Cellular Layout Inbound Stock Outbound Stock • Promote flow with little WIP • Facilitate workers staffing multiple machines • U-shaped cells • Maximum visibility • Minimum walking • Flexible in number of workers • Facilitates monitoring of work entering and leaving cell • Workers can conveniently cooperate to smooth flow and address problems

40. Group Technology An engineering and manufacturing philosophy that identifies physical similarities of parts and establishes their effective production. Assignment of individual products to product families

41. Cellular Manufacturing Assignment of product families to manufacturing cells

42. Group Technology (Part 1) Note how the flow lines are going back and forth • Using Departmental Specialization for plant layout can cause a lot of unnecessary material movement Saw Saw Saw Grinder Grinder Heat Treat Lathe Lathe Lathe Press Press Press

43. Group Technology (Part 2) • Revising by using Group Technology Cells can reduce movement and improve product flow Grinder 1 2 Lathe Press Saw Lathe Heat Treat Grinder Press Lathe A B Saw Lathe

44. Group Technology (con’d) • A set of machines dedicated to processing one or more family • Arrange machines in a narrow U • Workers rotate among several machines

45. Group Technology (con’d) • Advantages • Reduce cycle time • Move time • Queue time • Set up time • Adjust the output rate by increasing or decreasing the number of workers in a cell • Facilitate job training • Promote job satisfaction

46. Typical Benefits of JIT • Cost savings: inventory reductions, reduced scrap, fewer defects, fewer changes due to both customers and engineering, less space, decreased labor hours, less rework. • Revenue increases: better service and quality to the customer. • Investment savings: less space, reduced inventory, increased the volume of work produced in the same facility. • Workforce improvements: more satisfied, better trained employees. • Uncovering problems: greater visibility to problems that JIT allows, if management is willing to capitalize on the opportunity to fix these problems.