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Topic: Introduction to JIT

Made by: Sagar Bhavsar

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INTRODUCTION Toyota Motors is73-years old, established on August28, 1937in Japan. Toyota became the world's largest automaker in the first half of 2008, with

sales of more than 4.8 million cars and trucks,

Toyota ranked 5thof the world's largest corporations in the 2008 FortuneGlobal 500.

Toyota ranked1stof the world's largest automaker corporations in the 2008Fortune Global 500

Has53overseas manufacturing companies, in 27

countries/regions.

Has168distributors sell vehicles in more than170countries/regions.

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1) What is Just-in-Time (JIT

1) What is Just-in-Time (JIT)? Whatkind of suppliers an organizationmust have in order to practice JIT?

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Just-In-Time (JIT)DefinedJIT can be defined as an integrated set of activitiesdesigned to achieve high-volume production usingminimal inventories (raw materials, work in process,and finished goods)JIT also involves the elimination of waste inproduction effortJIT also involves the timing of production resourcesi.e., parts arrive at the next workstation just intime)

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JIT and LEAN MANAGEMENTJIT can be divided into two terms: Big JITand Little JITBig JIT (also called Lean Management) is aphilosophy of operations management that

seeks to eliminate waste in all aspects of afirms production activities: human relations,vendor relations, technology, and the

management of materials and inventoryLittle JITfocuses more narrowly onscheduling goods inventory and providing

service resources where and when needed

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Produce only the products thatcustomers want

Produce as and when the customerwants

Produce products with perfect quality

Produce with minimum possible lead

time

Produce products only with featuresthat customer wants-nothing more

Produce with no wastage

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Big lot sizes

Lots of inventory

PUSH material to nextstage

Lower

per unit

cost

Big purchase shipments

Big pushes of finished goods

to warehouses or customers

???

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Smaller lots

Faster setups

Less inventory, storage spacePULL material to next stage

Minimal

or no

inventory

holding

cost

Smaller shipments

Goods are pulled out of

plant by customer demand

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Work in

process

queues

(banks)

Changeorders

Engineering design

redundancies

Vendor

delinquencies

Scrap

Design

backlogs

Machine

downtime

Decision

backlogsInspection

backlogs

Paperwork

backlog

Example: Byidentifying defective

items from a vendor

early in the

production process

the downstream work

is saved

Example: Byidentifying defective

work by employees

upstream, the

downstream work is

saved

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Close to production plant Produce Quality components

Maintain Good labor relations Fewer suppliers (keiretsu) Contingency plans to cope with

disruptions like the effect of bad

weather, a truck drivers strike, blockingroads/ports etc.

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Quality Commitment Cost Saving

Additional Resources and Capabilities

Prior Work Experience Contract Terms

Confidentiality

Financial Stability

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2) WHAT ARE THE ADVANTAGESDISADVANTAGES OF JIT?

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LOWER INVENTORY LEVELS LESS PRODUCTION CYCLE TIME

QUALITY OUTPUT

LESS MATERIAL HANDLING LESS WORKER IDLE TIME

IMPROVED EMPLOYEE MORALE

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Only 8 weeks required to reach fullproduction capacity

Automatic delivery system and aerial tunnelsare developed

There is barely any stock required as mostparts are made to order

The need of conventional truck delivery is

minimum

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FORD &ITS SUPPLIERS STARTED WORKING ASONE TEAM

25% SHORTER TIME PRODUCTION TIMENEEDED

SAVING $6+ MILLION PER YEAR ONTRANSPORT

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Higher amount ofmachine/worker idle time.

More efficient when demandpattern is stable.

When there is a sudden

change in the demandpattern it will take time for

JIT system to react sincethere is no centralinformation unit.

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It may be difficult and expensive to introduce. There is little room for mistakes as minimal

stock is kept for re-working faulty product.

Production is very reliant on suppliers and ifstock is not delivered on time, the wholeproduction schedule can be delayed.

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It requires more training,more consciousness, moreemployee commitment.

More difficult goals to beattained.

Coordination betweencustomer and suppliers needto be much better anddisciplined.

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Toyota the Developer of JIT System Toyota, the developer of JIT, found this outthe hard way. One Saturday, a fire at Aisinseiki Company's plant in Aichi Prefecture

stopped the delivery of all break parts toToyota. By Tuesday, Toyota had to closedown all of its Japanese assembly line. By thetime the supply of break parts had beenrestored, Toyota had lost an estimated $15billion in sales.

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3) Explain with examples (a) Kanban (b)Milk Run Concept. Discuss how thesetwo concepts a help a firm like Toyotato be more efficient and effective.

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Kan-card, Ban-Signal

Small signboard, visual card etc that is a keycontrol tool for JIT production

Communication signal from a downstreamprocess to an upstream process.

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RAW MATERIAL

WORK STATION1

FINISHED PARTS

WORK STATION2

FINISHED PARTS

ASSEMBLYFINISHED

PRODUCTS

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The mechanics of operation consists ofmoving upstream beginning with the last

operation.When final assembly section requires partsfrom work station 2, it will send a jobcard/kanban to wk station 2.This kanban becomes the job order forworkstation 2, which starts producingreplacements for the parts removed and atthe same time sends the kanban toworkstation 1 to do the same.This finally reaches the raw materialinventory where withdrawals are also made

in small lots, hence orders are supplied

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With drawal kanban

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Reduce Inventory

Improve work flow

Prevent Overproduction

Improves responsiveness to changes indemand

Minimize risk of obsolete inventory, becauseinventory is only created as it is needed.

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Delivery method for mixed loads from

different suppliers. A transport andlogistic technique for the collection andtransport of goods from suppliers with a

defined delivery route, in which variousstops are planned and executed in termsof quantities and timing. Milk Run is oneof the advanced delivery concepts that

can improve your transportationmanagement system. Milk Run Deliverymeans a routing of a supply or delivery

vehicle to make multiple pickups or-

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SAME FREIGHT COSTS DESPITE INCREASEDDELIVERY FREQUENCY AND SMALLER PARTIALDELIVERIES

REDUCED STOCK IN GOODS RECEIPT AND

THUS REDUCED HANDLING EXPENSES

INCREASED INVENTORY TURNOVER

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