Just-in-time

1. Just-in-time Prof. Jiang Zhibin Dept. of IE, SJTU

2. Tools of Lean Manufacturing Pull Systems / Kanban A Tool for Implementing Pull Systems Lean Production Through Waste Elimination Quality at the Source JIT People Operational Stability

3. JIT Goals • Zero defects • Zero excess lot size or lot size of one • Zero setups • Zero breakdowns • Zero handling • Zero lead time • Zero Surging • Level production plan and uniform product mix

4. Cost + Need to Reduce Cost Traditional Method (Push) Seller Driven Selling Price Profit = (SELLER) PROFIT (MARKET) Modern Method (Pull) Customer Driven = Selling Price - Cost

5. Just in Time • History - Japan • 1980s conclusion • Japanese industry worked “smart” - JIT • Think of JIT as minimum stock production • Type of relationship: close & intimate? JIT • internal JIT - in client-server stream • external JIT

6. Japanese Experience Waste in operations from • overproduction • waiting time • transportation • inventory waste • processing • motion/movement • product defects • concentrate effort on shop floor • CQI focus • staff ownership of problems

7. Minimizing Waste: Inventory Hides Problems identify defects from a supplier early in the process saves the downstream work Machine downtime Scrap Vendor Change delinquencies Work in orders process queues Engineering design Design (banks) redundancies backlogs identify defective work from upstream stations, saves the downstream work Decision Paperwork Inspection backlogs backlog backlogs

8. 8 From Aggregate to MPS to MRP1 Aggregate Plan (product groups) MRP2 Firm orders Forecast random orders Master production schedule (MPS) Design changes Time-phased plan how many + when we will build each end item. JIT Bill of material Inventory record MRP1 Stock movements Reports

9. participation • industrial engineering/basics • continuing improvement • TQM • reducing set up times • smaller lot/order sizes sizes • stable environment • supply partnership Requires Just-In-Time (JIT) • a system for high-volume production with minimal inventory (raw materials, WIP, finished goods). • involves • timed arrivals @ workstation JIT • reduced ‘buffer’ stocks • no waste in production system • a “Pull” system thru the plant • a management philosophy • expose problems & bottlenecks • Take away ‘security blanket” • streamlined production • factory & warehouse networks

10. JIT Requirements 1 Kanban Pull • Demand pull • Back flush • Reduce batch/lot sizes Work with suppliers • Reduce lead times • Frequent deliveries • Project usage requirements • Quality expectations Reduce inventory in • Stores • Transit • Conveyors • calculation from MRP & EOQs

11. JIT Requirements 2 Quality • Worker responsibility • SQC • Enforce compliance • Error proffing • Automatic inspection Stabilise Schedule • Level schedule • Under utilize capacity People Focus • pay harmonisation • supportive unions • subcontractor networks • hands-on manager style • quality commitment & group involvement Operations Design • Link operations • Balance workstation capacities • Review layout for flow • Stress preventive maintenance • Reduce lot sizes • Reduce setup/changeover time

12. JIT Requirements 3 Problem-solving • Root problem • Long-term solution • Team contribution • Line-specialist cooperation • Learning • Measure performance • CQI • Monitor & report Product Design Improvement • DFM & process design • Modules & fewer parts • Quality standards • upgrade housekeeping • clarify process flows • revise equipment & process technologies

13. Call (Kanban) & Pull Call (Kanban) & Pull Fabric Fabric Fabric Fabric JIT and Demand-Pull Supplier Call (Kanban) & Pull Subass Supplier Final Assembly Customer Subass Supplier Supplier

14. Bin Bin Bin Bin Client Server Streaming Avoid too much material stocks & WIP Increase materials coordination & movement Supplier's local warehouse Call for more Saw Materials warehouse Call for more Finished Goods Warehouse JIT deliveries Lathe Grinder Bin Bin Customer

15. What is Kanban? • developed at Toyota 1950s to manage line material flows. • Kanban ( Kan=card, Ban= signal ) • simple movement system • “cards” to signal & communicate reorder information • boxes/containers to take “lots” of parts from one work station to another (client-server). • Server only delivers components to client work station as & when needed (called/pulled). • minimise storage in the production area. • Workstations only produce/deliver components when called (they receive card + empty container). • The work-station produces enough to fill the container • Kanban = an authorization to produce more inventory • We thus limit the amount of inventory in process.

16. Benefits of Kanban • An information network used to control production quantities • A communication process that controls the movement of material • A cost reduction (waste elimination) tool that prevents over production • A quality control enforcer because it limits lot quantities to small amounts, thereby allowing defects to be identified early in the manufacturing process

17. Benefits of Kanban (cont.) • Manages just-in-time production • Gives specific part number, quantity, location, and time demands to lower work centers • Identify excess in plant inventory levels • Identify potential inventory shortages (low stock indicators) • Limits quality rejects byreducing lot size produced

18. Kanban Pre-conditions • Point of use inclusion (all parts on the assembly line) • Level production There are four pre-conditions for the successful implementation of Kanban • Quick Changeover procedures • Stabilized processes

19. Kanban Market Address Kanban Number Line-Side Address <<KAN>> <<Market_Address>> <<Line_Side_Address>> Part Number Route <<Part Number>> <<Route>> Bar Code Area Part Description Dock Code <<Dock Code>> <<Part Number>> Supplier Code Quantity Serial Number <<Supplier Code >> <<Quantity>> Comment: <<Comment>>

20. What Does a Kanban Card Look Like? • accurate data: correct part nos, quantities & measure'ts • visible - chart if material ordered & when • fool proof for no stockouts • minimum inventory • clear & complete info. to suppliers • link inventory directly to demand • Tie in with POP: issuing orders, receiving & authorising accounts payable Kanban No. 5678990 part No: 66789X description 16ga. Copper Wire units Ft. reorder/lot qty 20 store location Row 12, Bin 6 supplier BICC supplier tel 0208-891-0121 supplier part RT45502 routing process Name/location of next proces Name/location of preceding process container type & capacity number of containers released

21. Function of Kanban • Helps to reduce passage of defects from one area to another by identifying preceding processes. • Provides pick-up and/or transportation information, which includes “where from” and “where to” locations. It can also, in some cases, indicate schedule times for pick-up. • Communicates production information. It tells what to produce and how many are required. Function No. 3 also states Kanban must be produced in the order received. • Prevents overproduction and excessive transportation by restricting in-bound raw material and the production quantity of a process to specific pre-determined lot quantity indicated on the Kanban. It allows ordering of multiple lot quantities only to the extent of Kanban available to be replenished • Serves as a work order indicating what has been produced and identifies the physical product • Reveals existing production problems and maintains inventory control

22. Rules of Kanban • Never send defective products to downstream processes • The downstream process draws only what is required by the Kanban from upstream processes. • The upstream process produces items in the quantity and the sequence indicated by the Kanban. • Parts are never to be produced or conveyed without a Kanban • Kanban must be attached to the actual containers of parts • Kanban is a tool to fine tune production

23. Market Place 2 3 4 Assembly Withdraw Kanban Mailbox Post Office Inter-Process 1 Kanban Post Office A V1 5 X B B B V2 A A C C E E V3 C Y D D V4 D D V5 E Z A A C C E E f f F F V6 Inter-process Kanban Flow

24. Minimizing Waste: Kanban Control System withdrawal kanban Bin Part A Bin Part A Machine Center Assembly Line production kanban Material Flow Card (signal) Flow

25. Expected demand during lead time + safety stock = k capacity of container + dL (1 S ) = C How many Kanbans? • Each container = minimum replenishment lot size. • Calculate lead time required to produce a "container" k = No. of kanbans in card set d = Average No. of units demanded over the period L = lead time to replenish order (same units of time as demand) S = Safety stock as % of demand during lead time C = Container size

26. Expected demand during lead time + safety stock = k size of container Example • A switch is assembled in batches of 4 units at an “upstream” work area. • delivered in a bin to a “downstream” control-panel assembly area that requires 5 switch assemblies/hour. • The switch assembly area can produce a bin of switch assemblies in 2 hours. • Safety stock = 10% of needed inventory. dL (1+S) 5(2)(1.1) = = = 2.75 or 3 C 4

27. "Re-engineering" & Kanban Modern production methods • 1. Modular/cell production 9 group technology). • 2. Reduce set up, lead and waiting times between procedures. • 3. Flow-of-products-oriented layout of processes & machines layout. Products flow smoothly from start to finish, parts do not sit waiting to be worked on, forklift trucks do not travel kilometres to move parts from one area of the plant to another. • 4. Flexible manufacturing of mixed models • 5. Theory of Constraints - drum-rope-buffer (Goldratt). Building in extra redundancy. • 6. Total Preventive Maintenance, prevent machines from breaking down or malfunctioning during production time • 7. Team-Work & Autonomation (decision by worker to stop line) • 8. Kaizen: Continuous improvement • 9. Housekeeping