http://www.bsu.edu/web/scfrazier2/jit/mainpage.htm

JIT Manufacturing"Just -in-Time"

(Lean Manufacturing and Stockless Production)

 

Scott C. Frazier

Undergraduate Student, Ball State University

Spring 2004

 

Introduction

    Just-in-time (JIT) manufacturing is a way of managing manufacturing

systems that could reduce waste, and lower cost, thus increasing profit.  In its

most basic explanation and principle JIT is every component in the

manufacturing system arriving just in time for it to be used.  Since  the products

arrive just in time there is no need for stock holding facilities of any kind.  The

most common industry using JIT manufacturing is the automobile industries. 

However, many other companies of all sizes and products are currently using

and transitioning to just-in-time manufacturing.  Although just-in-time

manufacturing sounds like a very simple application, implementing it can be a

very costly and difficult task.

History

    JIT manufacturing can be traced back to the late 1700’s (Just In Time,

Toyota).  Eli Whitney contributed his concept of interchangeable parts to the

idea of JIT manufacturing in 1799.  This concept was developed when Whitney

took a contract from the United States Army to manufacture 10,000 muskets at

the low price of $13.40 each (Just In Time, Toyota).  Over the next several

years manufactures overall focused on the development of individual

technologies.  Through these years few people were concerned with the

processes that each product went through during production (Just In Time,

Toyota). 

    Early industrial engineers in 1890 began to be concerned with individual

work methods, applying science to management, and all work elements. 

Frederick Taylor contributed the idea of standardized work (Just In Time,

Toyota).  Frank Gilbert conducted a motion study, which led to the

development of process charting and organized labor tasks (Just In Time,

Toyota). 

    In 1914 Henry Ford introduced the idea of the moving assembly line to the

world while producing his Model-T Ford, this revolutionized manufacturing

(Henry Ford, n.d.).  By 1916, Ford began to implement the idea of JIT

manufacturing (Wren, 1999). This reduced the inventory needed from $60

million to $20 million dollars to produce the same number of vehicles (Wren,

1999). 

    The present idea of JIT manufacturing can be traced to Toyota motor

company in Japan.  However, to begin use of JIT manufacturing in Japan, they

first researched American production methods focusing on Ford’s practices

(Just In Time, Toyota).  In Japan JIT manufacturing is referred to as the Toyota

Production System (Beasley, J. E., n.d.).  The realization for the new

system came after World War II when the Japanese automotive manufactures

knew they were far behind the American motor companies. The president of

Toyota made a comment about the gap, "Catch up with America in three years,

otherwise the automobile industry of Japan will not survive." (Beasley, J. E.,

n.d.) JIT manufacturing is a result of limited demand, space, and resources in

Japan compared to America.  By assessing and solving these problems Toyota

was able to increase efficiency and keep up with American auto

manufacturing.  Ten years after the first introduction of the new production

system Toyota successfully implemented this technique across the company. 

This began started to be implemented into the western world during the late

1970's to early 1980's.

Toyota Production System

    Toyota realized that they could not follow the same manufacturing technique

as American manufacturing because of the their relatively low space, resources,

and demand.  At the time the American auto manufacturers used the traditional

way such as to make a batch of certain products (Beasley, J. E., n.d.).  To do

this they ordered enough parts to complete the batch, so they have to stock or

store the materials.  So Ohno came up with a system that would better fit

Japan's capabilities.  The whole system is based on the elimination of waste

principle.  Time, resources, and materials were all areas where waste could be

found according to Ohno.  The following are more specific areas that could be

corrected to improve efficiency:   

"overproduction - waste from producing more than is needed

time spent waiting - waste such as that associated with a worker being

idle whilst waiting for another worker to pass him an item he needs (e.g.

such as may occur in a sequential line production process)

transportation/movement - waste such as that associated with

transporting/moving items around a factory

processing time - waste such as that associated with spending more time

than is necessary processing an item on a machine

inventory - waste associated with keeping stocks

defects - waste associated with defective items"(Beasley, J. E., n.d.)

      Ohno discovered two ways to reduce waste, just-in-time and autonomation. 

The theory of just-in-time is the basic principle for the majority of his

manufacturing system (Beasley, J. E., n.d.).  Stock is seen as unnecessary and a

waste using this method.  Materials and resources are provided only when they

are ready to be used in the production system.  Autonomation is technique that

regulates the amount of human interaction concerning inspections of parts or

products.  The goal is to limit the human involvement and make the system as

automated as possible.  A device will be implemented into the system to detect

defects, and only when that device detects a defect is there a human inspection. 

However, when a defect is detected the system stops and will not start again

until the problem is recognized and fixed.

    Toyota used the kanban to control the flow of inputs and output in the

production system.  Kanban is a Japanese word that basically means sign.  This

was a "rectangular piece of paper within a transparent vinyl envelope, (Beasley,

J. E., n.d.)"  that gave instructions on what needed to be done.  It gave

instructions such as things that needed to be withdrawn from the system, items

that needed to be produced, and amounts of materials need and when.  There

are two main types of kanban, the production kanban and the conveyance

kanban (Just In Time (JIT), n.d.).  The production kanban lets the workers

know that more of a certain part needs to be produced.  The conveyance kanban

lets them know that parts need to be transported to another center.  This type

can also be called a move or withdrawal kanban.  The kanban is classified as a

pull system  in production, which means that when parts are need they are

pulled and sent to the location in need (Just In Time (JIT), n.d.).  The starting

point for a pull system is the customers and then it works it way backwards all

the way to the original resources (Glenn, T. 2001).  This differs from a push

system in that a push system has a set schedule and all the parts are moved

when the schedule is complete.  However the kanban did not allow or take into

account defects.  So it an item was found to have a defect the end production

quantity would not be achieved.  There are three key rules when using the

kanban (Just In Time (JIT), n.d.).  First, no part can be manufactured with

authorization from the kanban.  Second, each container has a production and

conveyance kanban.  Third, all containers used are standard.  The number and

type of containers used is determined by the management.  In America this is

generally referred to as kitting and has basically the same concepts, limitations,

and rules (Ideal Manufacturing Scene).  

    Limiting setup time is also a key factor in the Toyota Production System. 

Since setup time is also down time which means the production line has

stopped and employees are getting paid for waiting.  To decrease setup time the

machines were reengineered so that optimal setup time could be achieved thus

saving money (Beasley, J. E., n.d.).

Implementation and Integration

    Implementing or integrating JIT into a company is not a decision made

lightly.  It must be thought through and planned very carefully.  Implementing

JIT will not happen in a overnight it takes time and commitment.  Commitment

must be made at all levels within the company to successfully implement it into

the system.   

Objectives

    An overall objective is to limit resources used in the manufacturing system to

only those needed (Just-In-Time Manufacturing).  There are six other

objectives that are a key part to obtain the overall objective.  The first is to

optimize each individual step of the manufacturing system.  In other words

make part as efficient as possible to get the most from the least.  Second is to

make a a product with no flaws or defects.  This ensures that each part of the

production line will go as planned.  Third is to reduce the manufacturing cost,

the cheaper it is to make the product the larger the profit for the company. 

Fourth is to make a product that is demanded by consumers.  If there is no

demand then then there is only money lost.  Fifth there needs to be flexibility in

the system.  Things will not always go as planned and there needs to be a

flexible enough system so that it can be modified easily.  Sixth, there needs to

be a strong and reliable relationship between customers and suppliers.  Since

JIT technique has virtually no extra stock or materials the companies need to

rely on each other to be reliable and on time.  These objectives need to be taken

into consideration by any company looking to integrate JIT, and are crucial to

being successful in the integration.

   Keys to Implementation and Integration

    Just-in Time manufacturing is difficult to setup because each company needs

to personalize for their type of company to fit their specific needs.  Although

many companies seek help from consultant firms for the difficult task ahead,

there are many key points that they they can address themselves (Just-In-Time

Manufacturing).  Changing over the current output production in the companies

factories to limited or constant quantity is a good start in the process to

determine exactly how many resources are going into making a certain amount

of products.  setup time is an issue that each company can look to improve its

efficiency.  A good rule is to be able to change the setup in a single digit time

frame.  Schedule meetings on a regular basis with the workers to gather

information on problems as well as a possible possible solutions, and other

suggestions (Beasley, J. E., n.d.).  This will make the workers feel involved in

the implementation, and may result in a positive attitude about the change

over.  This could mean redesigning several areas such as the product or the

process itself.  Once a reduced setup time is achieve the system now has the

ability to more efficiently produce smaller batches of products.  However, this

will require deliveries of materials to be more often.  Reducing time in between

the transportation of the individual parts can also improve the efficiency.  To

accomplish this, work stations can be moved closer together. As well as the

amount of time a part is waiting to be processed at an individual station can be

lowered.  Finding  a supplier closer to the factory or convincing one to relocate

closer will also reduce lead time.  Using down time is also another way to help

with productivity and efficiency.  While a worker or machine is waiting for

other parts of the system to be used maintenance can be performed on the

machinery.  This makes the most of the workers time and can help to prevent

future breakdowns do to lack of maintenance.  Provide the workers with more

responsibilities and training.  This can include training on several machines,

ability to maintain the machines, and perform correct inspection  This will

make the the companies work force more versatile and can help with issues of

absences.  Although the kanban system is not required in a JIT system it is a

good organizational tool to help eliminate misunderstandings and increase

communication.  These points are things the company can control and improve

to help the successful integration of the JIT system.

Suppliers

    Since JIT is a stockless production and does not allow room for defects or

error having trustworthy reliable suppliers is an important factor.  When

choosing a reliable supplier consider their location and prior occurrences with

labor issues such as strikes.  Once a reliable supplier is found creating a good

relationship is the next step.  This is a two way relationship in that both the

company and supplier get some positive out of it (Just-In-Time

Manufacturing).  The company gets products or material with no errors or

defects, a quality partnership, and gets everything on time according to delivery

schedules.  Also the supplier must have a back-up plan incase for emergencies

such as strike, weather conditions, and any other problem that many arise.  The

supplier gets a long term contract, constant demand for their product, and a

good constant price. 

Non-Automotive Companies 

    When discussing JIT manufacturing usually it is being applied to the

production of a tangible item, more specifically automotive manufacturing. 

Strategy Manufacturing Inc. is an example of an non-automotive company that

explored the option of JIT as an manufacturing technique (Glenn, T. 2001). 

Strategy  specializes in printing publications, such as manuals, book, and

manuscripts.  They originally printed in large batches and that was a problem

because they could not keep up with consumer demand because of switching

from one publication to the next took to long.  They tried implements JIT with

their current technology but this was not sufficient to there needs.  It increased

their efficiency when printing low volumes of publication, but with higher

volumes it was more expensive and placed limitations on the companies

output.  After updating their system and purchasing an on demand printing

system they were better able to implement several components of JIT.  Some of

the components being shorter setup times, smaller cycle times, and fewer

defects.  The most influential component being setup times which gave them

the ability to change printing one publication to another rather fast.  Now their

system is suitable for both high and low volume batches and is very efficient

and cost effective.  This also allowed them to switch to a pull system where

they produce publications according to consumer demands.  This especially

helped with printing manuals because the companies required high volumes

that were switched about five times a year.  Before this left Strategy with

outdated and useless manuals in inventory.  The company now runs it

production all day.  Implementing JIT gave Strategy a huge advantage over its

competitors, and quadrupled its annual revenue since it fully implemented the

system in 1999.  Although this was a successful story about implementing JIT

into a non-automotive company a huge risk was taken by Strategy.  To

completely integrate the JIT system they had to spend large amounts of money

to update there facilities with no guarantee of a larger profit.

American Automotive Industries

    American automotive companies such as Ford and General Motors have

implemented JIT into their production, however, not as smoothly as Toyota. 

They came across several problems including strikes and the suppliers inability

to supply the materials demanded (Glenn, T. 2001).  Since JIT is a stockless

production system it leaves the company at the mercy of the suppliers.  Ford

experienced a problem with a JIT supplier that may have cost them tens of

millions of dollars.  They had to shut down six plants leaving many workers

with nothing to do.  So the plant was still costing money to run, but nothing

productive was taking place.  A similar problem took place with General

Motors in 1996 resulting in them temporarily closing over two-thirds of their

plants.  Their supply company had a seventeen day strike and without having

any emergency or back-up materials there was nothing that could be done to

correct the problem.  Even after the strike was over there were still

complications for some time.  After the strike was over the supplier had to

speed up production to meet General Motors needs resulting in a large amount

of defective products.  This seventeen day strike resulted in General Motors

loosing between 600-800 million dollars in profits.  A statement by Keith Crain

of Automotive news sums up these problem very well, "JIT manufacturing,

along with single source suppliers, creates terrific manufacturing efficiencies,

quality improvements, and lower costs.  Unfortunately, the downside is it

creates and Achilles' heel for manufacturers.  any natural or unnatural disaster

at any critical supply plant whether it's a flood, fire, or strike- that shuts off the

flow of materials from that critical plant to the assembly process can shut down

a manufacturing operation in a matter of hours."(Glenn, T. 2001)  

Barriers for Small Manufacturing Enterprises (SME)

    Small manufacturing enterprises have just as much to gain as large

enterprises from implementing JIT into their company.  They also a few

advantages by being smaller than the larger companies.  However, There are

more barriers for them to overcome and they are taking a larger risk.  An

accepted measurement of a small manufacturing enterprises are fewer than 100

employees having a sales volume of no more than 5 million dollars (Johnston,

R. B. n.d.).  Some advantages that SMEs have are they can be owned privately

which means the decision to switch does not have to be held up in an approval

process.  Also with fewer employees it is easier to communicate the new

system to the employee.  Since they have fewer employees many SMEs train

their employees on several machine in case of sudden absences.  That gives

them one less component to worry about.  They also are used to making smaller

batches of products and switches over so thus makes them more flexible.  Many

SMEs do not have union contracts to worry about which makes it much easier

to make the change over.  Although SMEs have several advantages their risks

are much greater and there size creates several barriers.  The first is money is

always an issue with smaller companies, and implementing JIT can cost a

relatively large amount of money without any short time returns.  Since smaller

companies do not have a large amount of free cash and are less susceptible to

get loans, coming up with appropriate funding can be a huge issue.  Also since

SMEs do not use as large an amount of materials they do not have any

bargaining power over the larger manufacturing companies.  This can restrict

them form getting a good price ordering only small amounts at a time. 

Although SMEs implementing JIT into their manufacturing system can have

positive result it can be a risk.  Unlike large manufacturing having an

unsuccessful attempt could cost the smaller manufacture enough most to result

in bankruptcy.  To be successful a SME needs to look at the different

components of JIT and choose which one will fit.  An SME trying to

implement the who concept has a smaller chance of succeeding because certain

components are not designed for them.      

Advantages

There are many advantages of that a manufacture can receive from JIT. 

However they can differ from company to company.  Listed below are some of

the advantages overviewed throughout this paper:

Possible increase in profits

Quality products

Quicker setup

Eliminates costs of storage facilities

More flexible employees

Quality relationships with suppliers

Elimination of waste

No down time

Disadvantages

    Although the advantages outweigh the disadvantages, the disadvantages can

have a negative effect on the company.  Listed below are some of the

disadvantages overviewed throughout the paper:

Long term commitment

Possible large initial cost with no short term returns

Problems with supplier can cost company large amounts of money

Risk of never successfully implementing JIT

Conclusion

    Just-in-time manufacturing can be a positive influence on a company. 

However there are many risks associated with attempting to implement JIT

manufacturing techniques.  When looked at it appears to be a very simple,

quick, and easy thing to do.  In reality it is a very complicated technique that

takes long term commitment and a initial cost with no guarantee of success.  If

implemented successfully it would eliminate waste, make the company more

productive and more efficient.  It does this through shorter transportation and

increased communication.  Although there are many companies that are

successful, many companies are not.  Even though there are enormous risks

many still consider implementing JIT for it many advantages.

Companies Currently using JIT

Harley Davidson

Toyota Motor Company

General Motors

Ford Motor Company

Manufacturing Magic

Hawthorne Management Consulting

Strategy Manufacturing Inc.

Figure 1 Traditional System of Stock Inventory (Beasley, J. E.)

Figure 2 JIT System of Stock Inventory (Just-In-Time Manufacturing)

Figure 3 JIT Flow Chart (Wong, S.)

IntroductionOverview The objective of this report is to introduce the basic concepts of a Just-in-Time (JIT) manufacturing system. This report is compiled in a way to provide the reader with a basic overview of JIT manufacturing. The following issues are covered in the report:

Just In Time (JIT) ManufacturingJust in Time manufacturing is a systems approach to developing and operating a manufacturing system. It is based on the total elimination of waste. JIT is not a new concept. It has been part and parcel of the Japanese manufacturing industry adopted approach for quite some time. It requires that equipment, resources and labor are made available only in the amount required and at the time required to do the job. It is based on producing only the necessary units in the necessary quantities at the necessary time by bringing production rates exactly in line with market demand. In short, JIT means making what the market wants, when it wants it. JIT has been found to be so effective that it increases productivity, work performance and product quality, while saving costs.

Fig.1 JIT improvements to manufacture

Topics :

Planning for JIT . Requirements for JIT manufacturing Critical elements in JIT manufacturing Integrated Process ControlDetect Defects before they Affect...PurchasingQuality Control (QC)ConclusionThe AuthorsReferencesDisclaimer

Planning for JITIt is impossible to establish a new JIT system that can be used successfully without modification. Since each manufacturing process is different (e.g. in terms of Goals, Product requirements, Customer requirements etc.), it is up to the individual company to determine the degree of appropriateness and the final application of JIT. However, it is very important to define the plan and objectives before setting up a JIT manufacturing system.

Defining the PlanningDefining the planning process for a JIT manufacturing system requires an understanding of the objectives of JIT, and the goals and objectives of the JIT system. After the objectives are established for the manufacturing, the process of planning becomes one of determining what is required to meet those objectives.

The goal of a JIT approach is to develop a system that allows a manufacturer to have only the materials equipment and people on hand required to do the job. Achieving this goal requires six basic objectives:

Integrating and optimizing every step of the manufacturing processProducing quality productReducing manufacturing costProducing product on demandDeveloping manufacturing flexibilityKeeping commitments and links made between Customers and Suppliers

It should be noted that obtaining these objectives does not automatically make a company a JIT manufacturer, on the other hand failing to achieve even one of these objectives will prevent a manufacturer from establishing a successful JIT system.

" A company cannot decide to implement JIT; they must earn the right to use JIT by revising their quality procurement systems."

Integrating and Optimizing

The manufacturing system is a continual process of reducing the number of discrete steps required to complete a particular process rather than plateaus of steps. Removal of bottlenecks in the manufacturing process is a critical step in integration. One of the best ways to accomplish this objective is to plan for 100 % defect free quality.Integrating and optimizing will involve reducing the need for unnecessary functions and systems such as inspection, rework loops and inventory.

Producing a Quality Product

"Total Quality Control" is one of the fundamental goals in JIT manufacturing. Total Quality Control (TQC) emphasizes the quality at every stage of manufacture including product design down to the purchase of raw materials. Quality control is carried out at every stage of the manufacturing steps; from the source to the final step rather than relying on a single processing stage which implements quality control on the final product. Each individual and function involved in the manufacturing system must, therefore, accept the responsibility for the quality level of its products. This concept introduces the correction of the problem before many other defective units have been completed.

Reducing Manufacturing Cost

Designing products that facilitate and ease manufacturing processes helps to reduce the cost of manufacturing and building the product to specifications. One aspect in designing products for manufacturability is the need to establish a good employer and employee relationship. This is to cultivate and tap the resources of the production experts (production floor employee), and the line employees to develop cost saving solutions. Participatory quality programs utilize employee knowledge about their job functions and review the department performance, encouraging with rewards for suggested cost saving solutions.

Producing product on demand

The fundamental principle of JIT is the concept of producing product only as needed or on demand. This implies that product is not held in inventory, and production is only initiated by demand. Adopting the produce-on-demand concept will ensure that only materials that are needed are processed and that labour will be expended only on goods that will be shipped to a customer. At the end of the production cycle, there would be no excess inventory.

Developing Manufacturing Flexibility

Manufacturing flexibility is the ability to start new projects or the rate at which the production mix can be adjusted to meet customer demand. Planning for manufacturing flexibility requires the understanding of the elements in the manufacturing process and identifying elements in the process that restrict flexibility and improving on these areas. The unique feature of JIT is the change from a PUSH to a PULL system. The idea behind this concept is that work should not be pushed on to the next worker until that worker is ready for it. As such manufacturing flexibility requires production managers to consider the following aspects in scheduling and manufacturing flexibility improvement:

supplier lead timethe need to ensure fast and reliable delivery of finished goods to the customerproduction process timeprocess setup time

bottlenecks in production process should be reduced and resources (e.g. workers, machines should be fully utilized.

Keeping Commitments and Links made between Customers and Suppliers

The corporate commitment to developing the internal structures and the customer and supplier bases to support JIT manufacturing is the primary requirement for developing the JIT system. Trust and commitment between the supplier and the customer is a must, because every Just-in-Time operation relies on it. Failure to keep the commitments is a serious form of break-down in a JIT system.

Requirements for JIT manufacturing

Requirements for JIT ManufacturingThe corporate commitment to developing the internal structures and the customer and supplier bases to support JIT manufacturing is the primary requirement for developing a viable JIT system. To be able to establish a JIT manufacturing system, every department should have some commitment to align with a common goal. This goal must also be supported by the company's top management in order to have resources and time allocated to developing the necessary systems and procedures.

A significant financial commitment is necessary during the early stages of development and implementation to change over to a JIT system. This system, however, needs to be methodically developed on a scale that is within the employer's means from both a financial and an applications standpoint. Ultimately, the operation of a JIT system will require the unwavering support and commitment of the entire company.

Management needs to come with grips during the early transition phase of implementing JIT. The prospect must be faced of some production loss and changes to management procedures and operation policies while existing operations and manufacturing problems are being concurrently resolved. Just-in-Time will require every department in a company to contribute to the overall success of the system and patience is required as results are not instantaneous. In the long term, the rewards are worth the initial setbacks.

Trust and commitment between the supplier and the customer is a must, and it is essential to keep these commitments as this is to ensure that customer's confidence in a supplier's ability to meet production schedules.

Critical elements in JIT manufacturing

Critical Elements in JIT manufacturing

PartnershipsCommitmentsContracts Supporting PartnershipsDeveloping JIT SuppliersPartnerships - A Mutually Beneficial SystemCustomer-Supplier proximity

PartnershipsIn the past companies were capable of remaining independent and competitive when they had the capability and resources necessary to produce a product. This is no longer possible. As technology increases in complexity, companies overcome capital limitations or labor intensive requirements by becoming dependent on suppliers to provide services. Many services and Original Equipment Manufacturing (OEM) suppliers have evolved as the result. Companies now appreciate that long-term success relies on the quality of the customer-supplier relationship established so that they will develop successful partnerships. Hence, successful partnerships require the development of mutually beneficial programs.

CommitmentsTo enable suppliers to deal with customers in a confident manner, they must be backed by the level of commitment given by manufacturers. Without a partnership between the customer and supplier, there will always be hesitation instead of trust. The concept of trust and commitment in JIT is used to build partnerships and to reduce the needs for materials-production control, receiving inspection or inventory buffers that many companies have constructed. Contracts used by JIT manufacturing company to record the details of an agreement usually stress the level of commitments.

Contracts Supporting Partnerships

By ensuring fair and equitable contracts, many of the problems in developing customer-supplier relationships are overcome by JIT manufacturers. The goal of JIT is to make long-term contracts with suppliers. A long-term contract gives the supplier a job security for as long as the supplier remains competitive and committed. Long-term contracts usually extend for one or more years and can consist of one or more part requirements.

Developing JIT SuppliersIt is important to develop a link between the companies so to ensure a long-term business relationship. This will provide both companies with the stability required to optimize the profit potential. There are four needs that affect the supplier's ability to perform : trust, communications, linearity of production, and time and visibility to make changes.

Trust

The most basic need of suppliers is to be able to trust that the customer will provide stability if the supplier meets requirements. This will allow the two organizations to work much more closely than they would based just on a contract.

Communications

To successfully manage the communication link between customers and suppliers can be done in two ways:

Supplier contacts: To overcome the complexity of the communication problem, some companies assign a buyer-quality engineer team to be the contact for each supplier. The advantage of this solution is that it provides a formal communication channel for the supplier and reduces the potential for miscommunications.

Supplier programs: Supplier programs keep the supplier informed on topics of mutual interest and ensure the supplier access to information that will have an effect on the supplier's production. These programs strengthen supplier relationships by opening communications and providing an understanding of one anothers needs.

Linear Production Schedules

Linear production schedules contribute to improving the performance of manufacturing. In a JIT system, the need for the supplier to track the customers needs closely is important. For this to occur, the supplier must reduce lead time to the minimum. This consists of isolating the bottlenecks in the operation, balancing the production system, and reducing setup-time.

Time and visibility to make changes

Most suppliers can respond to changes in customer demand, but they must have enough time to make the changes. The types of changes suppliers must make are purchasing materials, adding equipment, establishing work shifts, and hiring and training labor. With better schedule visibility, suppliers could react more quickly to changes in production requirements.

Partnerships - A Mutually Beneficial SystemA mutually beneficial system requires that the supplier and customer work in cooperation to achieve a greater benefit than they would have individually. Three mutually beneficial systems are :

Early supplier involvementJust-in-Time materials shipmentInvoicing systems

Early supplier involvement

Involving the supplier early in the design phase of a new product can obtain the best performance from a supplier. Suppliers will often make suggestions that can improve the design of the product. Supplier feedback provides avenues for improvement in cost, quality, and scheduling.

Just-in-Time materials shipments

Deliveries can cause traffic problems. In addition, there are the problems of unloading material, unpacking it, and moving it to the production-line. Several systems have been developed to improve the efficiency of deliveries to customer. An example is the "Bus Route" system installed by Xerox Corporation. The bus routes system improves material flow, communications, and the interaction of companies.

Invoicing systems

JIT requires frequent deliveries. There are solutions to handling increased invoice load. Electronic invoicing will work where compatible equipment transmits customers accounts directly. Another solution is to pay suppliers based on purchasing records that have completed the assembly process. A third possibility is to batch invoices and submit them on a bimonthly or monthly schedule. A company can also invoice the monthly deliveries on one invoice, hence decreasing the amount of paperwork.

Customer-Supplier Proximity

Customer-supplier partnerships can be formed irrespective of the physical distance between two companies. Close proximity, however, offers three advantages : early supplier involvement, line problems are easier to resolve, and communications are easier. The criteria for determining supplier selection are based on suppliers ability, location and price.

Integrated Process Control (IPC)In most cases, the typical goals of manufacturing consist of meeting production schedules, cost projections, and product specifications. However, two key points are usually overlooked : optimizing the production process and meeting customer requirements concurrently. The company must be aware of changes in requirements and continually improve the production process. Integrated Process Control (IPC) achieves the goals of JIT manufacturing by optimizing production to meet both manufacturer and customer requirements. In IPC, two concepts control the process of continual improvement. They are:

First, the process of continual improvement is directed toward producing product of quality at low cost.

The second concept is that customers needs have to be continually monitored since they change regularly.

The development of an IPC system is based on understanding these two requirements and combining them into a single system.

Management and Labor Responsibilities Decision-making and communications are generally associated with inefficiencies in a company. Problems with communications include ambiguity in the interpretation of the requirement and failure to specify the requirement. To allow employees to contribute to the decision-making cycle requires changes. For instance, too often employees think of most `job' as a single job responsibility. With the decision-making level moved to the production line, IPC reduces the involvement of management but increase the involvement of production line supervision and production workers.

The Role of Other Functions in Process Control (PC) PC is improving the production process by continual improvement. In manufacturing, production would seem to be the function responsible for PC. However, the action or lack of action of functions outside of production can influence production.

The production function: Productions responsibility to a company is to minimize the cost of manufacturing and provide product that meets customer requirements. Integrating quality into production is a priority in a competitive market.

The Quality Assurance function The responsibility of the quality assurance function in IPC utilizes statistical process control (SPC) in the production system and to train production personnel in its use. To retain the responsibility for failure analysis, process and product audit, and reliability testing of product.

The Engineering Function Engineering's responsibility in PC is to design for customer requirements and product production requirements. To satisfy a customers need is just as important as designing a product using top production technology.

The purchasing function The responsibility of the purchasing function is to ensure that the required materials are available at the proper quality level, on time, and at a fair price. The sales function Sales provides most of the information on a customers needs and requirements that are used by engineers to determine product specification and configuration.

Detect Defects before they Affect...Improving the production process is streamlining and integrating the production system to achieve an efficient and simple product flow. Continuous improvement implies that the manufacturing system will continue to include both process and product improvement. The process of continual improvement is aimed at reducing the need for gate inspection, rework, scrap, and test. IPC is an economical tool to minimize these costs. The results of using IPC is the prevention of defects before they occur.

Planning the production processA valuable tool in planning the production process is to isolate and define the elements that make up a production system as building blocks.

Product flowchartIn a flowchart, the building blocks of the production process can be analyzed for significance of impact to the production system and points requiring improvements.

Performance measuresTo achieve continued improvement, a company must measure the performance levels of its smallest processes against its optimum values. This is accomplished by having performance measures visible to all levels in a company. The use of control charts is one of the best ways to show the collected performance measures.

Floor plan layoutThe design or layout of the production line can be considered after the specification has been evaluated and matched to the required production process. A JIT production line uses multi machine manning. The advantage is not actually the reduction in labor cost rather to reduce the number of support systems.

Balancing production capacity and setup-time.The setup-time can be minimized by the use a fast production process and only produce parts on demand. If the setup-time is a factor, the preferred process is to apply a smaller and slower production method that has the ability to produce the daily requirement in a more continuous production movement.

Material delivery

By delivering material directly to the production line on at least a daily basis optimize materials delivery for a JIT system. Two primary requirements that influence material delivery and inventory concerns are material quality and availability.

JIT and PurchasingThe most challenging area for most manufacturers in achieving JIT is the purchasing of raw materials and parts. This is important because an internal JIT system can only be operated successfully when the material being fed into it are of sufficient quality and delivered on time. Therefore, unless the quality and delivery of purchased material are not production issues, the purchasing function should begin to establish a JIT supplier base. In JIT purchasing several tactics are being used to achieve certain goals and objectives.

GoalsSecure a steady flow of quality parts.Reduce the lead time required for ordering product.

Reduce the amount of inventory in the supply and production pipe lines.Reduce the cost of purchased material.

ObjectivesImprove purchasing efficiency.Improve quality and delivery performance of suppliers.Isolate factors that influence the cost of material.Remove unnecessary cost factors in the materials supply system.

TacticsRegard suppliers as an extension of the internal manufacturing process and

cultivate them as long term business partners.Establish long term purchasing and supply commitments.Improve communication with suppliers.Involve suppliers in early stages of new product planning.Use supplier expertise to improve design manufacturability and reduce product

cost.

Purchasing Requirements Material purchased in a JIT system should meet three requirements:

An acceptable level of quality,On time delivery schedule, andA reasonable cost.

Quality for JITQuality is an integral part of a JIT program. Quality control concentrates on quality at every stage of manufacture including the purchase of raw material. To increase the supplier quality two methods are used in a JIT system; supplier quality engineering (SQE) and receiving inspection (RI).Supplier quality engineering is used to evaluate supplier capability, help suppliers develop process control, resolve quality issues with suppliers, and certify that suppliers qualify for JIT production. Receiving inspection provides an inspection service for purchasing.

Delivery of Purchased MaterialOn time delivery, frequency of delivery, and receiving and stocking the material are three major aspects that are important in purchasing.

On-time material delivery means that the work stations receive the material just before it is required. A suppliers ability to deliver on time is a combination of factors ; transportation, raw material availability, price, holidays, etc. If a factor arises that could

affect the delivery schedule, the company should be able to increase production schedules and establish enough inventory to see them past the expected disruption.

Frequent delivery is required if dependency on inventory is to be minimized. The suppliers' ability to make frequent deliveries depends on the suppliers ability to produce product at the rate the customer requires delivery. Local suppliers usually have an advantage in being able to deliver daily. Frequent delivery means that a loss of one small shipment will have less significance than the loss of a large shipment in on time delivery.

Material shipping and handling requirements: Costs associated with material shipping includes packaging and handling costs. Packaging costs mainly include material handling, shipping damage, and the cost of packaging materials. Handling costs include receiving, unpacking, counting, repacking, stocking, kitting and moving the material to the production area. Reusable packaging material, packing containers that can be used on the production line, and standardised containers that eliminate counting are ways to reduce costs and damage in transporting. These cost reducing methods are then reviewed with the supplier to determine how the supplier can best meet these needs.

Scheduling : A major concern of purchasing managers is the process of coordinating the manufacturing need for materials. The process is complicated by periodic changes in product mix and volume requirement and the continual introduction of new products. Companies solve the problem of how much material to order and when to order by placing contracts based on order requirements supplied by material control. Material control makes its decisions based on the master schedule less current inventory. In a JIT system the supplier picks up the information on the next production requirements every time a delivery is made.

Reasonable Cost Price of purchased material is an important issue. Material that cause or require additional production costs reduce company profits. Every extra inspection or test step, rework requirement or item scrapped represents a reduction in company profit. These additional costs are remedied by purchasing products that meet both specification and production needs.

ConclusionHence we can see that to have a Total JIT manufacturing system, a company-wide commitment, proper materials, quality, people and equipments must always be made available when needed. In addition; the policies and procedures developed for an internal JIT structure should also be extended into the company's supplier and customer base to establish the identification of duplication of effort and performance feedback review to continuously reduced wastage and improve quality. By integrating the production process; the supplier, manufacturers and customers become an extension of the manufacturing production process instead of independently isolated processes where in fact in clear sense these three sets of manufacturing stages are inter-related and dependent on one another. Once functioning as individual stages and operating accordingly in isolated perspective; the suppliers, manufacturers and customers can no longer choose to

operate in ignorance. The rules of productivity standards have changed to shape the economy and the markets today; every company must be receptive to changes and be dynamically responsive to demand. In general, it can be said that there is no such thing as a KEY in achieving a JIT success; only a LADDER; where a series of continuous steps of dedication in doing the job right every time is all it takes.

The Authors

Submitted: October 1994

Gihan Perera GalhenageMichael LazuardiArion LeeChin Teck LimHenry Nyi Nyi Lwin

Submitted: October 1995 Gregory Kim

http://kernow.curtin.edu.au/www/jit/jit.htm