Just-in-Time Systems

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1977 Hertz Repair Study. Quasar Benchmarking Study. JIT's Management Philosophy. Elimination of WasteFocused Factory NetworkGroup TechnologyJidoka

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Just-in-Time Systems

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1. Just-in-Time Systems An integrated management system developed by Taiichi Ohno, VP of Toyota Motor Company It takes Toyota 20 years to perfect the system Early Studies 1977 Hertz Repair Study Quasar Plant Productivity Study Two Fundamental Concepts Elimination of Waste Respect for People

2. 1977 Hertz Repair Study

3. Quasar Benchmarking Study

4. JIT’s Management Philosophy Elimination of Waste Focused Factory Network Group Technology Jidoka– Quality at the Source Just-in-Time Production (little JIT) Kanban System Uniform Plant Loading Minimize setup times

5. Focused Factory Networks Small Specialized plants # Employees # Plants 1000+ <750 30-1000 60,000 30- 180,000 Difficult to manage a large installation Create waste Stifle communication flows Buy special machine tools to do critical job Create Business Group Toyota, Mitsubishi, Hitachi, ….

6. Group Technology Key concepts Group products into product families Assign a set of dissimilar machine to each family Arrange machines in a narrow U Use multifunctional workers Why Product families? job shop – move a job from department to department Cincinnati Miracron’s Study Move time + setup + queue time: 90-95% of the total processing time Run Time: 5-10%

7. Group Technology (con’d)

8. Group Technology (con’d) Convert Job Shop Layout to Group Technology Layout (Cellular Manufacturing) Classification and Coding Scheme Assign a code number to each part (products) Assign products with similar codes to a family Production Flow Analysis Form product families based on manufacturing similarities

9. 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

10. 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

11. Jidoka: Quality at the Source Stop everything when something goes wrong Instead of using QC staff, each worker becomes his or her own inspector Avoid batch processing: give each person only on part to work on at a time Autonomation: automatic control of defect Foolproof systems Visual control (call light, Andon, and stop watch)

12. Just-in-Time Production What is JIT? – provide Necessary products (services) Necessary quantities Necessary time Work well in a repetitive processing environment The ideal lot size is one (Inventory is evil!) Typical internal lot sizes are 1/10 of a day’s production Makes no allowances for contingencies JIT Vs. Just-in-case Philosophy

13. Little JIT (Con’d)

14. Kanban Control Kanban = Card Production Kanban: Authorizes the manufacturing of a container of material Withdrawal Kanban: Authorizes the withdrawal and the move of one container Kanban Flow Kanban Rule: No Kanban card, no production or movement of material Can accommodate 10%-20% of changes in planned production Can easily extend to suppliers (supplier Kanban)

15. Uniform Plant Loading Kanban system cannot function smoothly if parts withdrawal is irregular How to ensure smooth production Mixed model assembly line: an assembly produces small quantities of several products at the same time. Avoid the reaction wave in response to schedule variation Freeze monthly production rate Produce the same mix of products every day Determine the sequence for “introducing” products to the same assembly line (Goal Chasing Algorithm)

16. Uniform Plant Loading (con’d) One production cycle consists of 4 units of A’s, 3 units of B’s, 2 C’s, and I D The sequence for producing this cycle is determined by the Goal Chasing Algorithm to ensure a constant parts consumption

17. Goal Chasing Algorithm Objective: maintain a constant parts consumption rate (create a constant demand) Principle: minimize the difference between the ideal parts consumption and actual parts consumption

18. Minimize Setup Times Attanept to achieve a single-digit setup (less than one minute) Relationship between setup time and inventory level Example: Hood and Fender press comparison (800-ton press)

19. Minimize Setup Times (con’d) Separate internal setup from external setup Internal setup: has to be performed while the machine is stopped External setup: can be performed while the machine is running Convert internal setup to external setup Eliminate the adjustment process Abolish the setup step Produce more than one parts at the same time (one die, two parts)

20. JIT’s Management Philosophy (con’d) Respect for People Life time employee Company-wide unions Attitude toward workers Automation/Robotics Bottom-Round Management Subcontractor Quality Circle

21. Life time Employment 1/3 of workforce (permanent workers) No layoff or firing of the regular workers Mandatory retirement at age 55 Lump sum compensation Advantages Job stability and lifetime training Opening for young people Team spirit and loyalty Forced savings

22. Company Unions Included everybody in the company (did not matter what skills were) The relationship between the union and management is cooperative Compensation (based on bonus, up to 50% of salaries) reinforces the harmony relationship

23. Attitude Toward Workers Do not look at people like human machines If a machine can do a job, then a person should not do it (human dignity) Give opportunity for workers to do more (what workers are doing is only tapping their capability) The Japanese spend more for employee training and education than any other industrial nation.

24. Automation/ Robotics Automation and robotics are not considered staff-cutting moves; eliminates dull jobs Japan has invested as much as 1/ of its GNP in capital investment Invested first in low-cost enhancement Japan had about 5 times of the number of programmable robots (some very simple) as the United States Employees often initiate automation projects

25. Bottom-Round Management More than 100 million people crowded on an island about the size of California, 80% of which is mountainous The importance of the group superseded that of individual Decisions are made at the lowest possible level and involved all potentially interested parties A very slow decision making process (quick implementation)

26. Subcontractor Networks The bulk of the subcontractors have fewer than 30 employees More than 90% of all Japanese companies are part of am enormous subcontractor network Sole-source arrangement Mutual trust No inspection, no paperwork, no delay Help vendors improve their manufacturing system Provide financial help

27. Quality Circles The OC circles at Toyota mirror its formal organizational structure A QC circle is made of a foreman and his subordinates All employees must participate in some circles Discuss problems encountered and devise solutions to their management Education & training Problems solving and presentation skills Advisor and trainer courses Inspection tours to U.S. and Europe

28. Quality Circles (con’d) Reward Systems Topic Recommendation awards the individual topic registered by a circle Effort Prize (momentary rewards): when a topic is completed Advisor Prize: 1/3 of the Topics Recommendations Coordinator Prize: 1/3 of the Advisor Prize Gold and Silver Prize (at the plant level) QC circle-Toyota Prize All-Japan QC Circles Contest

29. Quality Circles (con’d) Nissan spent $30,000+ to train each assembly worker (Smyrna, Tennessee) before they started on the job Effects Toyota: 5 million suggestions a year (500/employee) Cannon: 900,000 suggestions, 78 suggestions per employees Matsushita: 6.5 million suggestions a year

30. Principles of Continuous Improvement Create a mind-set for improvement Try and try again Think; Don’t buy improvement Work in teams Recognize improvement knows no limits

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