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Know about Just-In-Time and Lean manufacturing system. Find benefits and difference between JIT and Lean Manufacturing by Nilesh Arora, a founder of AddValue Consulting Inc.

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JIT vs. Lean Manufacturing System - ADDVALUE - Nilesh Arora

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Jit vs lean manufacturing system addvalue nilesh arora

“JIT & Lean Manufacturing”

by

Best Performing Consulting Organization

AddingValueInTotality!!


Session topics

Session Topics

  • What is JIT?

  • Benefits of JIT

  • Value Added Management

  • Push vs. Pull

  • Buffered vs. Lean Manufacturing

  • Performance Measures


What is just in time

What is Just-in-Time?

  • Management philosophy of continuous and forced problem solving

  • Supplies and components are ‘pulled’ through system to arrive where they are needed when they are needed.


What does just in time do

What Does Just-in-Time Do?

  • Attacks waste

    • Anything not adding value to the product

      • Customer’s perspective

  • Exposes problems and bottlenecks

    • Caused by variability

      • Deviation from optimum

  • Achieves streamlined production

    • By reducing inventory


What is waste

What is Waste

Waste is ‘anything other than the minimum amount of equipment, materials, parts, space, and worker’s time, which are absolutely essential to add value to the product.’

— Shoichiro Toyoda President, Toyota


Just in time manufacturing

Just-In-Time Manufacturing

JIT seeks to reduce waste. Waste is viewed as a symptom of some unsolved problem. Types of waste include:

  • Overproduction

  • Waiting Time

  • Movement

  • Inventory

  • Product Defects

  • Process Waste


Just in time manufacturing1

Just-In-Time Manufacturing

JIT is used for many activities including:

  • Inventory Reduction

  • Quality Improvement

  • Lead Time Reduction

  • Continuous Improvement (Kaizen)

  • Preventive Maintenance


Major objective of jit

Major Objective of JIT

Identify the causes of system variance (waste) and eliminate or control these causes. By attacking the causes of variance, JIT can reduce the dependency of the manufacturing process on wasteful buffers like excessive inventory, long lead times, and idle capacity.


Variability occurs because

Variability Occurs Because

  • 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


Benefits of jit

Benefits of JIT

  • Shorter Lead Times (Faster Response)

  • Lower Defect Rates

  • Reduced Inventories

  • Enhanced Flexibility


Advantages of faster response times

Advantages Of Faster Response Times

  • Increased Productivity

  • Increased Quality

  • Reduced Risk

  • Increased Profitability

  • Increased Market Share

  • Increased Product Variety


Value added management

Value Added Management

  • A Strategy for Time-Based Competition

  • Focus on:

    • Reducing Lead Times

    • Process Flow Analysis

    • Eliminating or Reduce Non-Value Adding Activities

    • WIP Storage

    • Material Movement

    • Inspection

    • Rework

    • Unscheduled Maintenance

    • Changeovers


Value added management1

Value Added Management

Value-Added Activity Time

The time required to perform those activities essential to the production of a product, or the delivery of a service.


Value added management2

Value Added Management

Non Value-Adding Activities

Any activity that does not add value to the product being built, or the service being offered. Non value-adding activities are waste.


Value added management3

Value Added Management

Examples of Non-Value Added Activities

  • Administrative Processes & Paperwork

  • Process Delays

  • Material Movement

  • Material Storage

  • Inspection

  • Rework

  • Unscheduled Maintenance

  • Machine Changeovers


Value added management4

Value Added Management

Cycle Time Improvements

Improvements to cycle times are achieved by reducing or eliminating non value-adding activities


Value added management5

Value Added Management

Identifying Non Value-Adding Activities

The key to identifying non value-adding activities is process flow analysis.


Value added management6

Value Added Management

Value-Added Time Analysis

Worksheet

Process

Activity

Total

Time

Value

Added Time

Non Value

Added Time


Value added management7

Total Mfg. Lead Time

95%

5%

Non Value-Adding

Value

Adding

Traditional Response

2%

98%

Non Value-Adding

Value

Adding

50%

50%

Value Added Management

Value-Adding Response

Non

Value

Adding

Value

Adding

Lead Time Reduced

Non Value-Adding Time Reduced


Value added ratio

Value Added Ratio

V.A.R. = Value Added Time

Total Cycle Time

Improved By:

  • Eliminating or Reducing Non Value-Adding Time

    WIP Storage/FGI Storage

    Material Movement

    Rework

    Unscheduled Maintenance

    Changeover Time

    ANYTHING THAT DOES NOT ADD VALUE FOR THE CUSTOMER

Increase V.A.R. by

Reducing Cycle Time

Forces Continuous Process

Flow Analysis

Drives Quality Improvement


Value added management results

Value Added Management Results

  • Oregon Cutting SystemsOutput Per Hour Up 55%

  • Lead Time from 21 to 1 day

  • Abbott LaboratoriesProduction Cost Down 40%

  • Lead Time Reduced > 80%

  • LockheedDefect Rate Reduced 80% Rework Down 91%

  • Lead Time Down by 95%

  • Texas InstrumentsLead Time Down 15.8 to 3.7 days


Jit inventory

JIT & Inventory

  • Why do companies hold inventories?

  • What are some advantages to holding inventories?

  • What are some problems with holding inventories?


Inventory

Inventory

  • Traditional: inventory exists in case problems arise

  • JIT objective: Reduce inventory

  • JIT requires

    • Small lot sizes

    • Low setup time

    • Containers for fixed number of parts

  • JIT inventory: Minimum inventory to keep system running


Inventory hides problems

Inventory Hides Problems

Machine

downtime

Scrap

Vendor

Change

delinquencies

Work in

orders

process

queues

Engineering design

Design

(banks)

redundancies

backlogs

Decision

Paperwork

Inspection

backlogs

backlog

backlogs

14


Lowering inventory reduces waste

Lowering Inventory Reduces Waste

Work in process inventory level(hides problems)

Unreliable Vendors

Capacity Imbalances

Scrap


Lowering inventory reduces waste1

Lowering Inventory Reduces Waste

Reducing inventory revealsproblems so they can be solved.

WIP

Unreliable Vendors

Capacity Imbalances

Scrap


Lowering inventory reduces waste2

Lowering Inventory Reduces Waste

Reducing inventory revealsproblems so they can be solved.

WIP

Unreliable Vendors

Capacity Imbalances

Scrap


Jit inventory tactics

JIT Inventory Tactics

  • Use a pull system to move inventory

  • Reduce lot size

  • Reduce setup time

  • Develop Just-in-Time delivery systems with suppliers

  • Deliver directly to point of use

  • Perform-to-schedule

  • Use group technology


Reducing lot sizes increases the number of lots

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


Which increases inventory costs

…Which Increases Inventory Costs

Cost

Total Cost

Holding Cost

Setup Cost

Lot Size

SmallerLot Size

Optimal Lot Size


Unless setup costs are reduced

Cost

Total Cost

Holding Cost

Setup Cost

Original optimal lot size

New optimal lot size

Lot Size

Unless Setup Costs are Reduced


Minimizing waste reducing setup times

Minimizing Waste: Reducing Setup Times

  • What are the consequences of long setup times?

  • What are the advantages of short setup times?

20


Steps to reduce setup time

Separate setup into preparation, and actual setup, doing as much as possible while the machine/process is running

Step 1

Move material closer and improve material handling

Step 2

Standardize and improve tooling

Step 3

Use one-touch system to eliminate adjustments

Step 4

Step 5

Training operators and standardizing work procedures

Steps to Reduce Setup Time


Push versus pull

Push versus Pull

  • Push system: material is pushed into downstream workstations regardless of whether resources are available

  • Pull system: material is pulled to a workstation just as it is needed


Push scheduling

Push Scheduling

Moves an order to the next operation or work center in its route immediately on completion of the current activity whether or not that work center can begin processing it.


Traditional push system

Traditional Push System

F

I

N

I

S

H

E

D

G

O

O

D

S

Inv.

M

A

T

E

R

I

A

L

Inv.

Process

Process

Process

Work-In-Process

Staging Area

Work-In-Process

Staging Area

Material Is Moved Down Stream After Processing at Each Stage

Work-In-Process Inventories Develop

Traditional Efficiency Measures Encourage Overproduction


Push scheduling benefits

Push Scheduling Benefits

  • Implementation is relatively simple

  • Eliminates the need to coordinate between work centers

  • Keeps a work center busy as long as work remains in its queue


Push scheduling problems

Push Scheduling Problems

  • High WIP Levels

  • Higher Quality Problems

  • Hides Processing Problems

  • Requires dispatching rules to sequence orders


Pull scheduling

Pull Scheduling

Orders are processed and transferred in response to signals from downstream work centers


Alternative pull system

Alternative Pull System

Signal

Supplier

C

U

S

T

O

M

E

R

D

E

M

A

N

D

Signal

M

A

T

E

R

I

A

L

Inv.

Process

Process

Process

Signal

Signal

Signal

FGI

Pull Systems Move Material In Response To A Signal From a Downstream Process

Minimal WIP Buildup/Reduced Space Requirements

Reduced Material Inventory/ More Frequent Supplier Deliveries

Minimal Finished Goods InventoryEmphasis on Throughput Not Efficiencies


Pull scheduling benefits

Pull Scheduling Benefits

  • Simplifies scheduling—each center builds only what is required when needed

  • Orders are driven by real demand thus minimizing inventory accumulation

  • Makes problems immediately apparent

  • Prevents additional load from piling up extra work at the bottleneck in the event of some problem


Pull scheduling problems

Pull Scheduling Problems

  • Challenging to implement

  • Success requires coordination among related work centers

  • Requires good planning

  • Must limit interventions requesting changes in product mix, quantity, or due dates.


Layout

Layout

  • JIT objective: Reduce movement of people and material

    • Movement is waste!

  • JIT requires

    • Work cells for product families

    • Moveable or changeable machines

    • Short distances

    • Little space for inventory

    • Delivery directly to work areas


Work cell versus process layout

Work Cell versus Process Layout

Process Layout

Work Cell

1

Lathe

Saw

2

Saw

Press

Lathe

Saw

2

4

Lathe

Lathe

5

Heat

Treat

Grinder

3

1

Press

Grinder

Heat

Treat

6

Press

Grinder


Layout tactics

Layout Tactics

  • Distance reduction

    • Build work cells for families of products

  • Increased flexibility

    • Flexible or movable equipment

  • Impact on employees

    • Cross-training; immediate feedback

    • ‘Poka-yoke’ self-testing functions

  • Reduced space and inventory

    • Design little space for inventory


Just in time manufacturing2

Just-In-Time Manufacturing

  • Management philosophy

  • Pull system though the plant

WHAT IT IS

  • Attacks waste

  • Exposes problems and bottlenecks

  • Achieves streamlined production

WHAT IT DOES

  • Employee participation

  • Industrial engineering/basics

  • Continuing improvement

  • Total quality control

  • Small lot sizes

WHAT IT REQUIRES

  • Stable environment

WHAT IT ASSUMES


Just in time

Just-in-Time

  • People Management

    • Housekeeping

    • Control Through Visibility

    • Total Quality

    • Problem Solving

    • Employee Involvement

  • Technology Management

    • Structured Flows

    • Set-Up Reduction

    • Small Lot Sizes

JIT

  • Systems Management

    • Balanced Lines

    • TPM

    • Supplier Partnerships

    • Pull System


Buffered manufacturing

Buffered Manufacturing

Buffered Manufacturing Has Limited Goals:

  • Acceptable Number Of Defects

  • Acceptable Inventory Levels

  • Limited Product Variety

  • Acceptable Levels Of Waste


Lean manufacturing

Lean Manufacturing

Lean Manufacturing Seeks Perfection

  • Strives To Reduce Costs

  • Strives For Zero Defects

  • Strives To Reduce Inventory

  • Strives For Greater Product Variety

  • Strives To Reduce Cycle Times

  • Seeks To Eliminate Waste

  • Seeks Continuous Process Improvement


Lean manufacturing1

Lean Manufacturing

Key Features Of Lean Manufacturing

  • Transfers Tasks To Workers Adding Value

  • Quickly Uncovers & Solves Problems


Employee empowerment

Employee Empowerment

  • Getting employees involved in product & process improvements

    • Know job best

  • JIT requires

    • Empowerment

    • Cross-training

    • Training support

    • Few job classifications

© 1995 Corel Corp.


Lean manufacturing2

Lean Manufacturing

Basic Tenets of Lean Manufacturing

  • Produce Only What Is Demanded

  • Produce At The Market Rate Of Demand

  • Produce With Perfect Quality

  • Produce With No Waste

  • Develop Employees’ Productive Potential


Traditional performance measures

Traditional Performance Measures

Traditional Measures Focus On Outputs. This Leads To

  • Long Production Runs

  • Large Inventories

  • Large Buffers

  • Long Lead Times

  • Poorer Quality

  • Lack Of Responsiveness


Time based performance measures

Time-Based Performance Measures

Time-Based Measures Track Process Improvements

  • Value-Added Ratio

  • Setup Times & Number

  • Throughput Times

  • Quality

  • Delivery Speed & Reliability


New management measures

New Management Measures

Customer Focused

On-Time Delivery

Defects

Customer Satisfaction

Drivers

of

Competitive

Mfg.

Measures

are

Stable

Capable

Improving

Production Focused

Throughput

WIP

FGI

Lead Time

Process Focused

Value Added Ratio

Changeover Times


New business paradigm

New Business Paradigm

New Performance Measures

Time-Based - Quality Based - Customer Focused

Value-Added Management

Process Flow Analysis - Focus on Time

Competing Through Manufacturing

Just-In-Time - Pull Manufacturing Philosophies

Total Quality

Leadership - Culture- Customers- Suppliers - Process Improvement

People- Business Planning - Communication - Recognition


Homework assignment

Homework Assignment

  • Estimate the value added ratio for some process in your organization.

  • Identify 3 sources of waste in your operation? Is it possible to eliminate the waste?

  • What performance measures do you use? Do the measures help or hinder your continuous improvement efforts? Can you suggest better performance measures?


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