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Just in Time Production
Emergence of JIT
Evolved in Japan after World War II, as a result of their diminishing market share in the auto industry.
Toyota Motor Company- first to implement fully functioning and successful JIT system, in 1970’s.
Japanese Manufacturers looked for a way togain the most efficient use of limited resources. They worked on "optimal cost/quality relationship.
JIT Means …
Keeping work flows moving Eliminating inventories Reducing travel distances Eliminating defects and scrap Maximizing usage of space
JIT Demand-Pull Logic
Customers
Sub
Sub
Fab
Fab
Fab
Fab
Vendor
Vendor
Vendor
Vendor
Final Assembly
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
6 Three Elements of JIT
7 Three Elements of JIT…
JIT manufacturing focuses on production system to achieve value-added manufacturing
TQM is an integrated effort designed to improve quality performance at every level
Respect for people rests on the philosophy that human resources are an essential part of JIT philosophy
8 Flexible Resources
Moveable, general purpose equipment: Portable equipment with plug in power/air Drills, lathes, printer-fax-copiers, etc. Capable of being setup to do many different things with
minimal setup time Multifunctional workers:
Workers assume considerable responsibility Cross-trained to perform several different duties Trained to also be problem solvers
9 Respect for People
The Role of Employees: Genuine and meaningful respect for associates Willingness to develop cross-functional skills Bottom-round management – consensus management by committees or
teams Quality circles – small volunteer teams that solve quality problems
10 Respect for People
Lifetime Employment:
Everyone feels secure/is empowered
Everyone is responsible for quality: understand both internal and external customer needs
11 Respect for People
The Role of Management: Responsible for culture of mutual trust Serve as coaches & facilitators
Responsible for developing workers Provide multi-functional training Facilitate teamwork
Support culture with appropriate incentive system including non-monetary
12 Respect for People
Supplier Relationships Single-source suppliers
Can supply entire family of parts Build long-term relationships with small
number of suppliers Fewer contracts Cost and information sharing Work together to certify processes
Traditional Systems Compared to JIT
Priorities
Traditionally Accept all customer orders Provide a large number of options from which customers may order
JIT low cost/high quality within limited market
Engineering
Traditional design custom
outputs JIT
design standard outputs
incremental improvements
design for manufacturability (DFM)
Capacity Traditional
excess capacity designed into system just-in-case problem arises highly utilized inflexible
JIT minimize waste of having extra capacity flexible capacity moderately utilized
Transformation System
Traditional job shop materials handling equipment lots of space to store inventory
JIT mostly used in repetitive production situations job shops often converted to cellular manufacturing
Workforce Traditional
competitive attitude between workers and managers status symbols and privileges much of the employees’ time is nonworking time: looking for
parts, moving materials, setting up machines, getting instructions, and so on. When actually working, they tend to work fast.
JIT broadly skilled flexible workers who can uncover and solve
problems workteams cooperative attitudes
Inventories
Traditional used to buffer
operations large WIP buffers
JIT inventory is seen as
an evil small WIP buffers
Suppliers
Traditional suppliers treated as
adversaries multiple sourcing
JIT supplier considered
part of team single-sourcing
agreements supplier certification
programs
Planning and Control
Traditional focus is on planning planning complex and computerized
JIT focus is on control procedures kept simple and visual rather than planning and forecasting for an uncertain future, the firm
attempts to respond to what actually happens in real time with flexible, quick operations.
Quality
Traditional inspect goods at critical points scrap rates tracked
JIT goal is zero defects workers themselves inspect parts
Maintenance
Traditional corrective maintenance, repairing a machine when it breaks
down done by experts who do nothing but repair broken equipment equipment run fast
JIT preventive maintenance, conducting maintenance before the
machine is expected to fail, or at regular intervals. done by equipment operators equipment run slow (minimizes their chance of breakdown
while maximizing their output)
Companies adopted JIT
• Dell do not have to tie up capital in stock which means they can invest it in other areas of the business, such as R&D or promotion, to increase sales.
• Dell require less space for stock which means they save money on storage facilities which will increase their profit margins.
• Dell have a high dependence on their suppliers and should the suppliers fail them, it is Dell’s reputation and sales which would suffer if they were unable to meet demand from their customers.
• Dell may be unable to benefit from bulk-buy discounts which leaves them with an option of increasing the price to the customer or reducing their own profit margin.
Benefits of JIT
Cost savings: inventory reductions, reduced scrap, fewer defects, fewer changes due to both customers and engineering, less space, decreased labor hours, les rework.
Revenue increases: better service and quality to the customer.
Investment savings: less space, reduced inventory, increased the volume of work produced in the same facility.
Workforce improvements: more satisfied, better trained employees.
Uncovering problems: greater visibility to problems that JIT allows, if management is willing to capitalize on the opportunity to fix these problems.
Disadvantages of JIT Danger of disrupted production due to non-arrival of
supplies
Danger of lost sales
High dependence on suppliers
Less time for quality control on arrival of materials
Increased ordering and admin costs
May lose bulk-buying discounts