Production Operations Management JustInTime Manufacturing U Akinc Bus

Production Operations Management Just-In-Time Manufacturing U. Akinc Bus 241 1

Just-in-Time (JIT) Just in time is a philosophy of management that transcends inventory management, indeed manufacturing management l Predicated on eliminating all waste from manufacturing l Waste to be eliminated includes anything that does not add value to the product or service l Bus 241 2

Examples of Waste Inventory l Inspection l Set-up Time l Data Processing l Most Indirect Labor l Rework l Scrap l Customer Returns l Bus 241 3

JIT & Competitive Priorities l Reduces costs via waste elimination l Increases conformance quality l Improves flexibility due to small inventory l Improves delivery performance due to shorter lead times Bus 241 4

JIT makes problems Visible Bus 241 5

Functions of Inventories Revisited l Safety Stocks l Lot Size Inventories l Anticipation Stocks l De-coupling l Transit l Speculation Bus 241 6

Pillars of JIT Set-up Time reduction l Total Quality Management l Vendor Relations l Flexible Resources l Employee Involvement l Meticulous Maintenance l Pull vs. Push System of Scheduling l l KANBAN Bus 241 7

JIT works best with. . . l Uniform production rate l Flexible workforce l Limited product variety Bus 241 8

A KANBAN Bus 241 9

Two-card Kanban Bus 241 10

Typical Benefits of JIT l 5 Companies Surveyed: Lead time down by 90% l Inventory down by 35 -73% l Set up time down by 75 -95% l Material costs down by 6 -11% l Quality costs down by 26 -63% l l Harley Davidson Inventory turns 7 to 20 l Direct labor prod. up 50% l Rework reduction 80% l Warranty costs down by 90%’ l Bus 241 11