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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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