Just-in-time

1. Just-in-time

2. Waste is ‘anything other than the minimum amount of equipment, materials, parts, space, and worker’s time, which are absolutely essential to add value to the product.’ — Shoichiro Toyoda President, Toyota © 1995 Corel Corp.

3. What is Just-in-Time? • Management philosophy of continuous and forced problem solving • Supplies and components are ‘pulled’ through system to arrive where they are needed when they are needed.

4. THE APPLICABILITY OF JIT • System characteristics for a good fit: • demand is reasonably stable • high-volume repetitive systems making standardized product-service bundles • Requires cooperation and coordination of employees and suppliers • Continuous improvement and employee involvement are core aspects • Cellular manufacturing arrangement is ideal characteristic of JIT suppliers

5. Push versus Pull • Push system: material is pushed into downstream workstations regardless of whether resources are available • Pull system: material is pulled to a workstation just as it is needed

6. Traditional Flow Production Process (stream of water) Suppliers Customers Inventory (stagnant ponds) Flow with JIT Material(water in stream) Suppliers Customers Streamlined Production

7. Suppliers Employee Empowerment Layout JIT Quality Inventory Preventive Maintenance Scheduling Just-in-Time Success Factors

8. JIT Contribution to Competitive Advantage • Suppliers • reduced number of vendors • supportive supplier relationships • quality deliveries on time

9. JIT Contribution to Competitive Advantage - continued • Inventory • small lot sizes • low setup times • specialized bins for holding set number of parts • Scheduling • zero deviation from schedules • level schedules • suppliers informed of schedules • Kanban techniques

10. Reducing Lot Sizes Increases the Number of Lots Customer orders 10 Lot size = 5 Lot 2 Lot 1 Lot size = 2 Lot 1 Lot 2 Lot 3 Lot 4 Lot 5

11. …Which Increases Inventory Costs Cost Total Cost Holding Cost Setup Cost Lot Size SmallerLot Size Optimal Lot Size

12. …Need to reduce setup cost Cost Total Cost Holding Cost Setup Cost Lot Size New optimalLot Size Optimal Lot Size

13. …Need to reduce setup cost Cost New Total Cost Total Cost Holding Cost Setup Cost Lot Size New optimalLot Size Optimal Lot Size

14. Steps to Reduce Setup Time 90 min Initial Setup Time Separate setup into preparation, and actual setup, doing as much as possible while the machine/process is running (save 30 minutes) Step 1 60 min Move material closer and improve material handling (save 20 minutes) Step 2 45 min Standardize and improve tooling (save 15 minutes) Step 3 Use one-touch system to eliminate adjustments (save 10 minutes) 25 min Training operators and standardizing work procedures (save 2 minutes) Step 4 15 min 13 min Step 5

15. Small versus Large Lots JIT produces same amount in same time if setup times are lowered JIT Small Lots C A A B B B C A A B B B Time Small lots also increase flexibility to meet customer demands Large-Lot Approach C A A A A B B B B B B C Time

16. JIT Contribution to Competitive Advantage - continued • Preventive Maintenance • scheduled • daily routine • operator involvement • Quality Production • statistical process control • quality by suppliers • quality within firm

17. JIT Contribution to Competitive Advantage - continued • Employee Empowerment • empowered and cross-trained employees • few job classifications to ensure flexibility of employees • training support • Commitment • support of management, employees, and suppliers

18. Single-Card Kanban System • Assembly always withdraws from fabrication (pull system) • Containers cannot be moved without a kanban • Containers should contain the same number of parts • Only good parts are passed along • Production should not exceed authorization Part Number: 1234567Z Location: Aisle 5 Bin 47 Lot Quantity: 6 Supplier: WS 83 Customer: WS 116 KANBAN

19. How many Kanban containers?

20. How many Kanban containers? • Lead time – time between placement of an order and receipt of an order. • Lead time demand – the demand that occurs during the lead time • Safety stock – extra stock to allow for uneven demand.

21. Westerville Auto Parts Company Westerville Auto Parts produces rocker-arm assemblies for use in the steering and suspension systems of 4-WD trucks. The daily expected demand is 2000. A Kanban container holds 22 assemblies. The lead time to produce a container of parts is 0.08 days. The safety stock is 16 assemblies. How many Kanbans are required?

22. Number of Containers Westerville Auto Parts Demand = 2000 units/day Safety stock = 16 Lead time = 0.08 days Container Size = 22

23. Number of Containers Westerville Auto Parts Demand = 2000 units/day Safety stock = 16 Lead time = 0.08 days Container Size = 22

24. Number of Containers Westerville Auto Parts Demand = 2000 units/day Safety stock = 16 Lead time = 0.08 days Container Size = 22

25. Number of Containers Westerville Auto Parts Demand = 2000 units/day Safety stock = 200 Lead time = 0.8 days Container Size = 22

26. Lean manufacturing • Just-in-time manufacturing with Kanban approach • Production smoothing in the schedule • Reduce set-up time • Line balance by standardizing operations • Machine layout and multi-functional workers for flexible production • Continuous improvement/employee involvement • Quality

27. Can Boeing Make Lean Manufacturing Fly? http://www.boeing.com/news/releases/2006/q4/061107b1_pr.html

28. Can Boeing Make Lean Manufacturing Fly? • How has lean manufacturing affected the line-workers? • Explain the statement: “Provided it [Boeing] can sell the philosophy to its workers.” • What has Boeing implemented on the Long Beach assembly line besides the ‘moving’ plane? • How has the supplier behavior changed? • What is the role of the ‘water-spiders’?