Just-in-Time Systems

1
Just-in-Time Systems

• Reducing Variance, Waste and Lead Time in the
  Supply Chain

2
Topics to be Covered

• Review of JIT Waste
• Objectives of JIT
• JIT Principles
• JIT and Variance
• JIT Tools and Procedures

3
JIT Definitions?

• JIT Head
• Chicken JIT
• Oh JIT (OJIT)
• Tough JIT
• Strate JITs

• JIT Planes
• Bull JIT
• Le JIT
• JIT Lag
• When the JIT hits the fan.

4
What is JIT?

• a corporate system designed to produce output
  within the minimum lead time and at the lowest
  total cost by continuously identifying and
  eliminating all forms of corporate waste and
  variance.
• a corporate strategy
• a philosophy
• Focus of JIT
• variance waste

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Waste Types

• Chrysler Video on Waste

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Seven Basic Types of Waste

• Transportation waste
• Process Waste
• Inventory Waste
• Waste of motion
• Waste from product defects
• Waiting time
• Overproduction

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Common Causes of Waste

• Layout (distance)
• Long setup time
• Incapable processes
• Poor maintenance
• Poor work methods
• Lack of training

• Inconsistent performance measures
• Ineffective production planning
• Lack of workplace organization
• Poor supply quality/reliability

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Objective of JIT

• Produce only the products the customer wants.
• Produce products only at the rate that the
  customer wants them.
• Produce with perfect quality
• Produce with minimum lead time.
• Produce products with only those features the
  customer wants.

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Objectives

• Produce with no waste of labor, material or
  equipment -- every movement must have a purpose
  so that there is zero idle inventory.
• Produce with methods that allow for the
  development of people

10
JIT Principles

• Create flow production
• one piece flow
• machines in order of processes
• small and inexpensive equipment
• U cell layout, counter clockwise
• multi-process handling workers
• easy moving/standing operations
• standard operations defined

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JIT Principles - Slide 2

• Establish TAKT time
• rate at which the customer buys a product
• Build Pull Product
• use of kanban system

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JIT Tactics

• Single Minute Exchange of Dies (SMED)
• Statistical Process Control
• Use of standard containers
• Doable stable schedules with adequate visibility
• TAKT-Time
• 5-S Program
• Kaizen Event

• Visual control
• Flexible workers
• Tools at the point of need
• Product redesign
• Group Technology
• Total Productive Maintenance

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Balanced Production

• Three elements
• TAKT time
• Work sequence
• Standard WIP
• Objective
• Build at rate that the customer wants work
• Balance the system to maximize
• efficiency at this rate

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TAKT Time Example

• Net Available Operating Time
• Time per shift 480 (minutes)
• Breaks (2 _at_ 10) - 20
• Clean-up - 20
• Lunch - 30
• NAOT/shift 410
• Customer Requirements
• Monthly 26,000 units/month
• No. Working Days 20 days/month
• CR/Day 1,300
  units/day
• TAKT Time
• 410 x 60 x 3 shifts (73,800) divided
  by 1,300
• 57.769 seconds per part or 57"

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TAKT Time

• TAKT
• the beat
• (Net Available Operating Time) / Customer
  Requirements
• time periods must be consistent
• Example of calculation

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SMED

• Setup reduction
• Elements
• Internal Setup
• setup while machine idle
• External Setup
• setup while machine busy
• Adjustment
• run-ins, calibration

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SMED Process

• Study current process
• as is
• video tape
• Who owns the video tape?
• Convert internal to external setup
• Eliminate the need for Adjustment
• Eliminate need for fastening
• Goal
• setup time lt 10 minutes

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Push Vs. Pull Scheduling

• Push Scheduling
• traditional approach
• move the job on when finished
• problems - creates excessive inventory
• Pull scheduling
• coordinated production
• driven by demand (pulled through system)
• extensive use of visual triggers
• (production/withdrawal kanbans)

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Visual Control

• A system for making problems obvious without the
  need for sophisticated monitoring computer
  systems
• Andon light system
• Kanbans
• Create a sense of urgency
• Clearly identify where the problems are located

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Supplier Partnerships

• Reliance on suppliers for
• problem solving expertise
• quality at the source
• timely communication
• participants in cost reduction programs
• Increased reliance on supplier certification

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Standardization/Simplification

• Eliminate inherent sources of variance
• eliminate opportunity for human discretion error
• Examples
• Container sizes
• MacDonalds with interaction with customers
  
• Consistent with Deming Wheel
• Standarize ? expose problems ? solve
• problems ? implement new methods

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Other Techniques

• Milk runs
• Poka-Yoke Systems
• Continuous Improvement Programs (CIP)

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Video

• JIT at McDonalds

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JIT - Day 2

• New Developments in JIT

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JIT Lean Manufacturing

• Lean Manufacturing
• Doing more with less
• Less of
• materials, time, resources
• overhead, people
• waste
• money
• JIT is a subset of Lean Manufacturing
• Now seen as most applicable to mass production
  settings

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Kaizen Event

• A relatively new concept
• Kaizen Blitz, Gemba Kaizen
• Process focused
• Operates at two levels
• on-going process of identifying
  opportunities for
• improvement
• strategic, top management
• short-term project lasting 1-4 days
• training, documentation of process as is,
  identification of potential improvements,
  implementation, presentation, action list

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Kaizen Events - Key Traits

• Very short-term, finite in life
• Highly focused
• Creativity before capital
• Team-oriented
• Action-Oriented
• Verifiable Metrics
• Repetitive

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Kaizen Event Process

• Top management buy-in
• Public Kaizen Events
• Assessment of current processes
• top management
• Target Processes
• training
• documentation - as is
• opportunities
• change
• presentation/action list

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Typical Metrics

• Floor space occupied by process being assessed
• Operators required per day
• Distance traveled by an order within the process
• WIP Inventory
• Setup (measured in minutes)
• Quality recommendations generated
• Safety Improvements implemented

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Application of Kaizen Events

• Shop floor
• Finance
• 401 K plan
• Purchasing
• Health Care
• Services

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Example of Impact of Kaizen Event Impact of
Kaizen Events - Overall Benefits (January 1,
1996 through December 31, 1996
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JIT 11

• Based on system developed by Bose of Framingham,
  MA
• Integration of JIT principles and practices into
  the supply chain
• JIT II
• long term collaborative relationships with
  
• suppliers present
• suppliers to place personnel in plants of
  the buying organization

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Limitations of JIT

• Preconditions to JIT
• trust must be present
• labor/management
• suppliers/consumers
• recognition of processes
• familiarity with problem solving
• quality at the source
• agreement over value and waste

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Limitations of JIT

• Right Settings
• applicable in growth to maturity phases of
  
• Product Life Cycle
• standard product
• Steinway and JIT
• standard/fixed pay-rate
• problems with piece-rate scheme
• Universal agreement that change needed

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Theoretical Benefits of JIT

• Unpleasant surprises eliminated
• Less computerization
• visual control
• Improved quality
• WIP reduced
• Better communications

• Less pressure on receiving docks and incoming
  inspection areas
• Lower costs
• Change in attitude
• Defects are treasures

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Dealing with Variance

• Four major stances
• Buffer against it
• Ignore it
• Manage it
• Eliminate it
• All forms of variance create cost

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JIT Variance

• Variance a fact of life
• Comes from many sources
• internal
• scheduling changes, scheduling practices,
  
• manufacturing planning control systems,
• absenteeism, process variability
• external
• changes in forecasts, actual demand,
  customer
• requested changes, government,
  competition, vendors

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Cycle Times

• Operator Cycle Time
• total time required for a worker to
• complete one cycle of an operation
• Machine Cycle Time
• total time for a machine to finish one
• complete cycle
• includes loading and unloading

39
Some Interesting Calculations

• No. of Operators
• Sum OCT/(TAKT TIME)
• Example
• OCT for Operator 1 13"
• OCT for Operator 2 9"
• OCT for Operator 3 11"
• OCT for Operator 4 10"
• Total 43"
• TAKT Time 16.5"
• Number of Operators
• 43/16.5 2.606 or 3 operators

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The 5-S Program

• Seiri
• segregate and discard
• get rid of what is not needed
• Seiton
• arrange and identify for ease of use
• a place for everything and everything in
  its place
• Seiso
• Clean Daily
• clean work place enhances quality

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The 5-S Program

• Seiketsu
• Revisit frequently
• revisit the first 3 steps to maintain
  workplace safety and effectiveness
• Shitsuki
• Motivate to sustain
• promote adherence through visual
  performance measurement tools

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Next Day

• JIT in Service Sectors
• New developments in JIT
• Lean Manufacturing
• Agile Enterprise
• JIT II
• Gemba Kaizen
• Quick Response Systems

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Topics to be Covered

• JIT and Lean Manufacturing
• JIT in Services
• Kaizen Events
• JIT II
• Gemba Kaizen
• Agile Enterprise
• Limitations of JIT

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JIT in Services

• Service Traits
• strong emphasis on process
• avoidance of inventory
• emphasis on people and their importance
  to process
• recognition of need for continuous
  improvement
• defects are treasures

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JIT in Services

• Elements of JIT most applicable
• Synchronization and balance of
  information and work flows
• Total visibility of all components of the
  process
• Continuous improvement of the process
• Holistic approach to the elimination of
  waste
• Flexibility in use of resources
• Respect for people

46
JIT in Services

• Key Issues
• Equipment/people focus
• Customer contact per transaction
• Degree of discretion
• Degree of customization
• Location of value-added processes
• Product/process focus

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Gemba Kaizen

• Waste reduction through the execution system
• Gemba
• heart of the system
• Essence of Gemba Kaizen
• to eliminate waste, you must have
  contact with the system that you are managing
• the contact must be real and not through
• computers

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Agile Enterprise

• New development
• Associated with Iaccoca Institute of LeHigh
  University
• Merging flexibility with JIT
• Much broader than Lean Enterprise
• Recognition that the environment
• always changing
• unpredictably undergoing change

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Agile Enterprise - Traits

• Rapidly bring to market products that are
  variable combinations of hardware, information
  and services.
• Design products that are easily configurable and
  ungradable.
• Produce to individual customer orders in
  arbitrary order quantities.
• Bring out a continuously changing array of models
  within longer-lived product families

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Agile Enterprise - Traits

• Fragment mass markets into niche markets.
• Maintain and foster continuous, rather than
  single-instance, sales relationships by
  continually adding value to current customers.
• Cooperate intensively with other companies,
  including competitors, to create global product
  resources.

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Agile Enterprise

• Attempt to bring together a number of different
  trends
• greater focus on product development
• greater reliance on suppliers
• greater concern with speed
• more emphasis on effective and intelligent
  
• integration
• greater use of technology
• information

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Other Tactics

• Kaizen/Continuous Improvement
• Manufacturing Cells
• Business Process Reengineering
• Milk run logistics
• Supplier certification
• Direct delivery to point of use