EMBA-2, BUP

EO - 702

Just-in-Time /Lean Production

EMBA-2, BUP

EO - 702Just-In-Time (JIT)

• JIT involves controlling the flow of materials and manpower so that adequate resources are on hand when needed. It ensures an organization produces and delivers the right items, at the right time, in the right amounts

• The overriding principle of JIT is that a cache of excess inventory and materials do not contribute to the improvement of an organization's profitability.

• The fundamental component of JIT, is the elimination of waste while adding value.

EMBA-2, BUP

EO - 702JIT and Lean Management

• Little JIT focuses more narrowly on scheduling goods inventory and providing service resources where and when needed

• Big JIT is a philosophy of operations management that seeks to eliminate waste in all aspects of a firm’s production activities: human , vendor, technology, and the management of materials, scheduling and inventory – which is also called Lean Manufacturing / Production

• While JIT focuses more on inventory management, Lean’s focus is on manufacturing and operations management.

EMBA-2, BUP

EO - 702

Features of Lean Production

• Management philosophy• “Pull” system though the plant

WHAT IT IS

• Employee participation• Industrial engineering/basics• Continuing improvement• Total quality control• Small lot sizes

WHAT IT REQUIRES

• Attacks waste• Exposes problems and bottlenecks• Achieves streamlined production

WHAT IT DOES

• Stable environment

WHAT IT ASSUMES

EMBA-2, BUP

EO - 702The Toyota’s Lean Production System

Based on two philosophies:• Elimination of waste • Respect for people

Fujio Chao identified 7 types of Waste in Operations

Waste from overproduction Waste of waiting time Transportation waste Inventory waste Processing waste Waste of motion Waste from product defects

EMBA-2, BUP

EO - 702Minimizing Waste

• Group Technology • Uniform Plant Loading (heijunka)• Just-In-Time Production• Reduce Inventory: Look for

• Stores,• Transit, • Conveyors• Carousel, etc

• Small lot size

In lean production system Ideal Lot size is ONE in JIT ???

EMBA-2, BUP

EO - 702Benefits of small lot size

Reduces inventory• Less space require to store• Less rework if defect occurs• Less inventory to work off for defects• Increases production flexibility• Easier to balance operations

The two methodologies share some tools, for instance,

• Kanban (pull systems), and a. 2-bin inventory system b. 2 card System, kanban squares, kanban flag etc

• Poka-yoke (error-proofing)

EMBA-2, BUP

EO - 7022-bin inventory system

EMBA-2, BUP

EO - 7022-bin inventory system

EMBA-2, BUP

EO - 702Kanban Production Control Systems

Storage Part A

Storage Part AMachine

Center Assembly Line

Material Flow

Card (signal) Flow

Withdrawal kanban

Once the Production kanban is received, the Machine Center produces a unit to replace the one taken by the Assembly Line people in the first place

This puts the system back were it was before the item was pulled

The process begins by the Assembly Line people pulling Part A from Storage

Production kanban

EMBA-2, BUP

EO - 702Comparison of JIT and Traditional

Factor Traditional JIT

Inventory Asset, Much to offset forecast errors, late deliveries

Liability, 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

Quality Tolerate some scrap Zero defects

Workers Necessary to do the work Assets