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Lean Systems and JIT. Lean Production. Lean Production can be defined as an integrated set of activities designed to achieve high-volume production using minimal inventories (raw materials, work in process, and finished goods)

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Lean Systems and JIT

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lean production
Lean Production
  • Lean Productioncan be defined as an integrated set of activities designed to achieve high-volume production using minimal inventories (raw materials, work in process, and finished goods)
    • Lean Production also involves the elimination of waste in production effort
    • Lean Production also involves the timing of production resources (i.e., parts arrive at the next workstation “just in time”)

Adding value

overview of jit
Overview of JIT

Toyota Production System (post-WWII)

  • reducing costs, eliminating waste, and improving productivity

Just-in-Time (1980s)

  • way of planning operations
  • reduces variability of demand
  • enhances responsiveness
  • conducts value-adding operations as close to consumption as possible
jit and lean management
JIT and Lean Management
  • Big JIT (also called Lean Management)
    • is a philosophy of operations management that seeks to eliminate waste in all aspects of a firm’s production activities:
    • human relations, vendor relations, technology, and the management of materials and inventory
  • Little JIT
    • focuses more narrowly on scheduling goods inventory and providing service resources where and when needed

Question: If you had a 7 a.m. flight out of Newark, what time would you leave Allentown? A 7 p.m. flight? Is there a difference in elapsed time? Why?

the toyota production system
The Toyota Production System
  • Based on two philosophies:
    • 1. Elimination of waste
    • 2. Respect for people

Toyota Production System Video

toyota production system s four rules
Toyota Production System’s Four Rules
  • All work shall be highly specified as to content, sequence, timing, and outcome
  • Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses
  • The pathway for every product and service must be simple and direct
  • Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization
waste in operations
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
  • Take an activity from a job or personal life (e.g. a sport, study, Muhlenberg processes, a class)
  • Identify areas of waste
  • Identify opportunities for eliminating waste and improving the performance
  • Write down and share with the class
minimizing waste inventory hides problems
Minimizing Waste: Inventory Hides Problems

Example: By identifying defective items from a vendor early in the production process the downstream work is saved







Work in




Engineering design





Example: By identifying defective work by employees upstream, the downstream work is saved







jit demand pull logic
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

supply chain and e commerce considerations in jit

Supplier structural improvements

reduced inventory at suppliers results in lower fixed costs

suppliers provide small quantities with frequent deliveries

Supplier infrastructural improvements

emphasis on win-win relationship

Customer structural improvements

design for manufacturability and procurement

establish EDI systems to remove demand uncertainty

reduce inventories of purchased materials

Customer infrastructural improvements

frequent small orders

eliminate just-in-case inventories

smoother demand patterns

scheduling and capacity management in jit systems

JIT planning and control:

relies on a level master schedule

prefers excess capacity to excess inventory

works with suppliers and customers to reduce complexity & uncertainty

improves system’s responsiveness to customer requirements

Level master schedule:

same mix of product-service bundles created repeatedly for period for which the master schedule is frozen

Independent demand inventory models balance order and holding costs

economics are just as valid for JIT systems

jit in services examples
JIT in Services (Examples)

Organize Problem-Solving Groups

Upgrade Housekeeping

Upgrade Quality

Clarify Process Flows

Revise Equipment and Process Technologies

Level the Facility Load

Eliminate Unnecessary Activities

Reorganize Physical Configuration

Introduce Demand-Pull Scheduling

Develop Supplier Networks

supplier networks trends in supplier policies
Supplier Networks: Trends In Supplier Policies

1. Locate near to the customer

2. Consider establishing small warehouses near to the customer or consolidating warehouses with other suppliers

3. Use standardized containers and make deliveries according to a precise delivery schedule

4. Become a certified supplier and accept payment at regular intervals rather than upon delivery

potential supplier concerns with jit purchasing
Potential Supplier Concerns withJIT Purchasing

Desire for diversification

-- concerned about all business stemming from single customer.

Poor customer scheduling

-- concerned that customer will be unable to develop smooth, consistent schedule.

Engineering changes

-- concerned that customer will promulgate frequent engineering changes with inadequate lead time.

Quality assurance

-- production with zero defects may be considered unrealistic.

Small lot sizes

-- many suppliers are unaccustomed to working with small lot sizes.


-- delivery of small lot sizes over long distances may not be economical.

critique of jit
Critique of JIT

Contrast pragmatic JIT vs. romantic JIT

  • Pragmatic JIT
    • focuses on concrete details of production process
    • use practical tools to address problems
    • continuous improvement
  • Romantic JIT
    • appeals to “revolutionary rhetoric”
    • cutting inventories is a prompt to reform
    • against tradeoffs

HBR: Does Manufacturing Need a JIT Revolution? By Paul Zipkin

critique of jit17
Critique of JIT


  • System of beliefs and collection of methods
  • Successes due to genius of Ohno and Shingo (of Toyota) – they did make tradeoffs
  • Moves inventories to suppliers but does not reduce overall
  • Workers in JIT environments under high levels of pressure -- burn out!

HBR: Does Manufacturing Need a JIT Revolution? By Paul Zipkin