15 JIT and Lean Operations Mc GrawHillIrwin Copyright

15 JIT and Lean Operations Mc. Graw-Hill/Irwin Copyright © 2007 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

Learning Objectives § § § Explain what is meant by the term lean operations system. List each of the goals of JIT and explain its importance. List and briefly describe the building blocks of JIT. List the benefits of the JIT system. Outline the considerations important in converting a traditional mode of operations to a JIT system. List some of the obstacles that might be encountered when converting to a JIT system. 2

JIT/Lean Production § Just-in-time (JIT): A highly coordinated processing system in which goods move through the system, and services are performed, just as they are needed, § JIT lean production § JIT pull (demand) system § JIT operates with very little “fat” 3

Goal of JIT The ultimate goal of JIT is a balanced system. Achieves a smooth, rapid flow of materials through the system 4

Summary JIT Goals and Building Blocks Figure 15. 1 Ultimate A Goal balanced rapid flow Supporting Goals Eliminate disruptions Make the system flexible Product Design Process Design Eliminate waste Personnel Elements Manufacturing Planning Building Blocks 5

Supporting Goals § Eliminate disruptions § Make system flexible § Eliminate waste, especially excess inventory 6

Sources of Waste § Overproduction § Waiting time § Unnecessary transportation § Processing waste § Inefficient work methods § Product defects 7

Kaizen Philosophy § Waste is the enemy § Improvement should be done gradually and continuously § Everyone should be involved § Built on a cheap strategy § Can be applied anywhere 8

Kaizen Philosophy (cont’d) § § Supported by a visual system Focuses attention where value is created Process orienteted Stresses main effort of improvement should come from new thinking and work style § The essence of organizational learning is to learn while doing 9

Big vs. Little JIT § Big JIT – broad focus § § Vendor relations Human relations Technology management Materials and inventory management § Little JIT – narrow focus § Scheduling materials § Scheduling services of production 10

JIT Building Blocks § Product design § Process design § Personnel/organizational elements § Manufacturing planning and control 11

Product Design § Standard parts § Modular design § Highly capable production systems § Concurrent engineering 12

Process Design § § § § Small lot sizes Setup time reduction Manufacturing cells Limited work in process Quality improvement Production flexibility Balanced system Little inventory storage 13

Benefits of Small Lot Sizes Reduces inventory Less rework Less storage space Problems are more apparent Increases product flexibility Easier to balance operations 14

Single-Minute Exchange § Single-minute exchange of die (SMED): A system for reducing changeover time § Categorize changeover activities § Internal – activities that can only be done while machine is stopped § External – activities that do not require stopping the machine 15

Production Flexibility § Reduce downtime by reducing changeover time § Use preventive maintenance to reduce breakdowns § Cross-train workers to help clear bottlenecks 16

Production Flexibility (cont’d) § Use many small units of capacity § Use off-line buffers § Reserve capacity for important customers 17

Quality Improvement § Autonomation § Automatic detection of defects during production § Jidoka § Japanese term for autonomation 18

Production Flexibility § Balance system: Distributing the workload evenly among work stations § Work assigned to each work station must be less than or equal to the cycle time § Cycle time is set equal to the takt time § Takt time is the cycle time needed to match customer demand for final product 19

Personnel/Organizational Elements § Workers as assets § Cross-trained workers § Continuous improvement § Cost accounting § Leadership/project management 20

Manufacturing Planning and Control § Level loading § Pull systems § Visual systems § Close vendor relationships § Reduced transaction processing § Preventive maintenance 21

Pull/Push Systems § Pull system: System for moving work where a workstation pulls output from the preceding station as needed. (e. g. Kanban) § Push system: System for moving work where output is pushed to the next station as it is completed 22

Kanban Production Control System § Kanban: Card or other device that communicates demand for work or materials from the preceding station § Kanban is the Japanese word meaning “signal” or “visible record” § Paperless production control system § Authority to pull, or produce comes from a downstream process. 23

Kanban Formula N DT(1+X) = C N = Total number of containers D = Planned usage rate of using work center T = Average waiting time for replenishment of parts plus average production time for a container of parts X = Policy variable set by management - possible inefficiency in the system C = Capacity of a standard container 24

Limited Work in Process § Benefits § § Lower carrying costs Increased flexibility Aids scheduling Saves cost of rework and scrap § Two general approaches § Kanban – focuses on individual work stations § Constant work in process (CONWIP) – focuses on the system as a whole 25

Traditional Supplier Network Figure 15. 4 a Buyer Supplier Supplier 26

Tiered Supplier Network Figure 15. 4 b Buyer First Tier Supplier Second Tier Supplier Third Tier Supplier Supplier 27

Preventive Maintenance and Housekeeping § Preventative maintenance: Maintaining equipment in good condition and replacing parts that have a tendency to fail before they actually fail. § Housekeeping: Maintaining a workplace that is clean and free of unnecessary materials. 28

Housekeeping Five S’s 1. 2. 3. 4. 5. Sort Straighten Sweep Standardize Self-discipline 29

Table 15. 3 Comparison of JIT and Traditional Factor Traditional JIT Inventory Much to offset forecast errors, late deliveries Minimal necessary to operate Deliveries Few, large Many, small Lot sizes Large Small Setup; runs Few, long runs Many, short runs Vendors Long-term relationships are unusual Partners Workers Necessary to do the work Assets 30

Transitioning to a JIT System § Get top management commitment § Decide which parts need most effort § Obtain support of workers § Start by trying to reduce setup times § Gradually convert operations § Convert suppliers to JIT § Prepare for obstacles 31

Obstacles to Conversion § Management may not be committed § Workers/management may not be cooperative § Difficult to change company culture § Suppliers may resist § Why? 32

Suppliers May Resist JIT § § § Unwilling to commit resources Uneasy about long-term commitments Frequent, small deliveries may be difficult Burden of quality control shifts to supplier Frequent engineering changes may cause JIT changes 33

JIT in Services The basic goal of the demand flow technology in the service organization is to provide optimum response to the customer with the highest quality service and lowest possible cost. § § § Eliminate disruptions Make system flexible Reduce setup and lead times Eliminate waste Minimize WIP Simplify the process 34

JIT II § JIT II: a supplier representative works right in the company’s plant, making sure there is an appropriate supply on hand. 35

Benefits of JIT Systems § Reduced inventory levels § High quality § Flexibility § Reduced lead times § Increased productivity 36

Benefits of JIT Systems (cont’d) § Increased equipment utilization § Reduced scrap and rework § Reduced space requirements § Pressure for good vendor relationships § Reduced need for indirect labor 37

Elements of JIT Table 15. 4 § § Smooth flow of work (the ultimate goal) Elimination of waste Continuous improvement Eliminating anything that does not add value § Simple systems that are easy to manage § Use of product layouts to minimize moving materials and parts § Quality at the source 38

Table 15. 4 § § Elements of JIT (cont’d) Poka-yoke – fail safe tools and methods Preventative maintenance Good housekeeping Set-up time reduction § Cross-trained employees § A pull system 39