Chapter 21

1. Chapter 21 Just in Time/Lean Manufacturing

2. Objectives • After reading the chapter and reviewing the materials presented the students will be able to: • Define Just In Time Manufacturing (JIT) • Understand the benefits of JIT • Understand the requirements of JIT

3. JIT defined • Just in Time (JIT) is producing only what is needed, when it is needed, and in the quantity that it is needed.

4. Rationale for JIT • Mass production is based on historical data and trend analysis. No one can predict the future with sufficient certainty. • The result of JIT is that no goods are produced without demand. This in turn means that no goods are produced that cannot be sold at a price that supports the viability of the company.

5. Seven Wastes • The creator of JIT identified 7 wastes: • 1. Overproducing • 2. Waiting (time) • 3. Transporting • 4. Processing • 5. Having unnecessary stock on hand • 6. Using unnecessary motion • 7. Producing defective goods. • The elimination of these wastes is at the heart for the rationale for JIT. Eliminate these wastes and you will produce better products at lower cost.

6. Push System • Mass production is a push system. • The marketing forecast tells the factory what to produce and in what quantity. • The completed product will have to be stored or pushed into the dealers hands (automobile practice). • The whole procedure from imperfect forecast of marketability to the warehouse or the dealer is one of pushing.

7. Pull System • Just in Time (JIT) on the other hand is a pull system. • The production demand comes from the customer. • Each process and each supplier is allowed to furnish only the quantity of its output needed by the succeeding process.

8. Inventory and Work in Progress • Just in time attempts to drive inventory to zero. • There are at least 3 kinds of inventory: • First, there is the inventory of raw materials and parts needed to make the product. • Then there is the work in progress (WIP) inventory of semi finished goods. • Third, there is the finished goods inventory. • There are costs of inventory raw material, and parts, and finished goods. • The logical step is to work with suppliers to deliver smaller, more frequent lots, until there is no need for warehousing at all. • The ability of the JIT line to respond quickly to customer requirements means that it is no longer necessary to store finished goods. • Aiming for zero inventory cuts cost by significant numbers and results in savings and improved product quality.

9. Cycle Time • Production cycle time is defined as the period bounded by the time materials are sent to the manufacturing floor for the making of a product and the time finished goods are dispatched from the manufacturing floor to a customer or to finished goods storage. • Shorter cycle time (JIT) improves the factory’s ability to respond quickly to changing customer demands and generally lowers production costs.

10. JIT Production Line Stop • By stopping the production line to eliminate problems, efficiency and economy are enhanced. • The only reason for stopping a line is to improve it, eliminating the need for stopping it again for the same reason.

11. Elimination of Waste with JIT • 1. Waste arising from overproducing: The JIT factory produces nothing without a kanban, which originates with the customer. • 2. Waste arising from waiting (time): In a traditional setting raw material and parts can sit idle for weeks before they are needed. • 3. Waste arising from transport: JIT factories must buy in small quantities with frequent deliveries from suppliers close to the factory, cutting transportation time and costs. • 4. Waste arising from processing: Because JIT includes continual improvement wasteful processes are identified and improved to eliminate the waste. In a traditional environment emphasis is on output, not process improvement. • 5. Waste arising from unnecessary stock on hand: Because JIT attempts to eliminate stock, unnecessary stock is not tolerated. • 6. Waste arising from unnecessary motion: JIT plants are laid out to minimize motion of workers and product. • 7. Waste arising from producing defective goods: In a traditional factory, it is possible to produce a large quantity of products before defects are discovered.

12. Factory Organization • Most non-JIT factories are set up according to the processes that are used. For example, there may be a welding shop, a machine shop, and so on. • The JIT plant attempts to set up the factory by product rather than process. All the necessary processes for a given product should be located together in a single area and laid out in as compact a manner as possible.

13. Summary • Just in Time (JIT) is producing only what is needed, when it is needed, and in the quantity that it is needed. • Mass production is based on historical data and trend analysis. No one can predict the future with sufficient certainty. • Mass production is a push system. The marketing forecast tells the factory what to produce and in what quantity. • Just in Time (JIT) on the other hand is a pull system. The production demand comes from the customer. Each process and each supplier is allowed to furnish only the quantity of its output needed by the succeeding process. • Just in time attempts to drive inventory to zero. The logical step is to work with suppliers to deliver smaller, more frequent lots, until there is no need for warehousing at all. Aiming for zero inventory cuts cost by significant numbers and results in savings and improved product quality. • Production cycle time is defined as the period bounded by the time materials are sent to the manufacturing floor for the making of a product and the time finished goods are dispatched from the manufacturing floor to a customer or to finished goods storage. • By stopping the production line to eliminate problems, efficiency and economy are enhanced. • Most non-JIT factories are set up according to the processes that are used. For example, there may be a welding shop, a machine shop, and so on. • The JIT plant attempts to set up the factory by product rather than process. All the necessary processes for a given product should be located together in a single area and laid out in as compact a manner as possible.

14. Home Work • Answer Questions 1, 17 on page 413. • 1. Define JIT. • 17. Describe JIT’s objectives relative to inventory and WIP.