14-1 JIT and Lean Operations

CHAPTER14

JIT andLean Operations

McGraw-Hill/IrwinOperations Management, Eighth Edition, by William J. StevensonCopyright © 2005 by The McGraw-Hill Companies, Inc. All rights

reserved.

14-2 JIT and Lean Operations

JIT/Lean ProductionJIT/Lean Production

Just-in-time (JIT): A highly coordinated processing system in which goods move through the system, and services are performed, just as they are needed,

JIT lean production

JIT pull (demand) system

JIT operates with very little “fat”

14-3 JIT and Lean Operations

Reduced inventory (up to 90%) Reduced lead time (up to 90%) Reduced labor cost (up to 30%) Reduced manufacturing & storage space (up

to 50%) Improvement of quality (up to 90%) Increased flexibility and adaptability to

changes Increased productivity

Benefits of JITBenefits of JIT

14-4 JIT and Lean Operations

Goal of JITGoal of JIT

The ultimate goal of JIT is a balanced system.

Achieves a smooth, rapid flow of materials through the system

14-5 JIT and Lean OperationsSummary JIT Goals and Building Summary JIT Goals and Building BlocksBlocks

Figure 14.1

Product Design

ProcessDesign

PersonnelElements

Manufactur-ing Planning

Eliminate disruptions

Make the system flexible Eliminate waste

Abalancedrapid flow

UltimateGoal

SupportingGoals

BuildingBlocks

14-6 JIT and Lean Operations

Supporting GoalsSupporting Goals

Eliminate disruptions

Make system flexible

Eliminate waste, especially excess inventory

14-7 JIT and Lean Operations

Sources of WasteSources of Waste

Overproduction Waiting time Unnecessary transportation Processing waste Inefficient work methods Product defects

14-8 JIT and Lean Operations

JIT Building BlocksJIT Building Blocks

Product design Process design Personnel/organizational

elements Manufacturing

planning and control

14-9 JIT and Lean Operations

Product DesignProduct Design

Standard parts

Modular design

Highly capable production systems

Concurrentengineering

14-10 JIT and Lean Operations

Process DesignProcess Design

Small lot sizes Setup time reduction Manufacturing cells Limited work in process Quality improvement Production flexibility Little inventory storage

14-11 JIT and Lean Operations

Benefits of Small Lot SizesBenefits of Small Lot Sizes

Reduces inventory

Less storage space

Less rework

Problems are more apparent

Increases product flexibility

Easier to balance operations

14-12 JIT and Lean Operations

Lot Size and Cycle InventoryLot Size and Cycle Inventory

Average cycle inventory

Lot size = 100

Lot size = 50On

-han

d in

ven

tory

5 10 15 20 25 30

Time (hours)

100 –

75 –

50 –

25 –

0 –

Figure 16.1

14-13 JIT and Lean Operations

HOOD & FENDER SETUP COMPARISONHOOD & FENDER SETUP COMPARISON(800 TON PRESS)(800 TON PRESS)

* For low demand items (less than 1000/month)Up to 7 days

Toyota U.S.A. Sweden W. Germany

Setup Time 10 min 6 hr. 4 hr. 4 hr.

Setups/Day 3 1 - 1/2

Lot Size 1 day* 10 days 1 month -

14-14 JIT and Lean Operations

Personnel/Organizational ElementsPersonnel/Organizational Elements

Workers as assets

Cross-trained workers

Continuous improvement

Cost accounting

Leadership/project management

14-15 JIT and Lean Operations

Manufacturing Planning and ControlManufacturing Planning and Control

Pull systems

Level loading

Visual systems

Close vendor relationships

Reduced transaction processing

Preventive maintenance

14-16 JIT and Lean Operations

Pull/Push SystemsPull/Push Systems

Pull system: System for moving work where a workstation pulls output from the preceding station as needed. (e.g. Kanban)

Push system: System for moving work where output is pushed to the next station as it is completed

14-17 JIT and Lean Operations

Pull SystemPull System

VENDOR

VENDOR

VENDOR

VENDOR

FAB

FAB

FAB

FAB

FAB

FAB

FAB

FAB

FAB

SUB

SUB

VENDOR

FINAL ASSEMBLY

PRODUCTION SCHEDULE

LEVELED ASSEMBLY

INSTRUCTIONS

A

BA

B

C

14-18 JIT and Lean Operations

14-19 JIT and Lean Operations

14-20 JIT and Lean Operations

Kanban Production Control SystemKanban Production Control System

Kanban: Card or other device that communicates demand for work or materials from the preceding station

Kanban is the Japanese word meaning “signal” or “visible record”

Paperless production control system

Authority to pull, or produce comes from a downstream process.

14-21 JIT and Lean Operations

Traditional Supplier NetworkTraditional Supplier Network

BuyerBuyer

SupplierSupplierSupplierSupplier SupplierSupplier SupplierSupplier

SupplierSupplier

SupplierSupplierSupplierSupplier

Figure 14.4a

14-22 JIT and Lean Operations

Tiered Supplier NetworkTiered Supplier NetworkFigure 14.4b

SupplierSupplier

SupplierSupplier

SupplierSupplier

SupplierSupplierSupplierSupplier SupplierSupplier

BuyerBuyer

SupplierSupplierFirst Tier SupplierFirst Tier Supplier

Second Tier SupplierSecond Tier Supplier

Third Tier SupplierThird Tier Supplier

14-23 JIT and Lean Operations

Comparison of JIT and TraditionalComparison of JIT and Traditional

Factor Traditional JIT

Inventory Much to offset forecast errors, late deliveries

Minimal necessary to operate

Deliveries Few, large Many, small

Lot sizes Large Small

Setup; runs Few, long runs Many, short runs

Vendors Long-term relationships are unusual

Partners

Workers Necessary to do the work

Assets

Table 14.3

14-24 JIT and Lean Operations

JIT II: a supplier representative works right in the company’s plant, making sure there is an appropriate supply on hand.

JIT IIJIT II

14-25 JIT and Lean Operations

Benefits of JIT SystemsBenefits of JIT Systems

Reduced inventory levels

High quality

Flexibility

Reduced lead times

Increased productivity

14-26 JIT and Lean Operations

Benefits of JIT Systems (cont’d)Benefits of JIT Systems (cont’d)

Increased equipment utilization

Reduced scrap and rework

Reduced space requirements

Pressure for good vendor relationships

Reduced need for indirect labor