06 JIT Production

7/29/2019 06 JIT Production

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JIT Production

Henry C. Co

Technology and Operations Management,

California Polytechnic and State University


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JIT Production (Henry C. Co) 2

Major MPC Approaches

Up to the late 1960s, the EOQ/ROP approach

was the method of choice in production-inventory management (PIM).

During the 1970s, the American Productionand Inventory Control Society (APICS)

campaigned to promote MRP. For the 1980s, APICS promotes JIT

production as the proper method of PIM.

Another contemporary technique for

managing production and inventory is theOptimized Production Technology (OPT)system.


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EOQ/ROP

Developed at Westinghouse by F. W. Harris

in 1915.Event-triggered, uses Calculus to find the

optimal order quantity

Q =

Major deficiencies. Ignores product structure relationships. Does not permit effective rescheduling in response

to dynamic changes in demand or productionactivities.

Reactive [backward looking] rather than proactive[forward looking].

2DS

H


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MRP Resolves EOQ/ROP Deficiencies

Matched sets. structured bill of material provides

"matched sets" of components parts fromwhich to build the end items called for bythe master schedule.

Proactive. Inventory and production management is

guided by firm orders and forecasts offuture demand.

orders for parts are matched with thedemand these parts are expected tosatisfy.


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Nervousness of MRP

Steady stream of changes confronted by

manufacturing companies. Forecasts are wrong!

bill of materials are revised!

parts are scraped!

vendors are late! etc.

A significant change in the final assemblycreates changed requirements in feederoperations that are usually amplifiedbecause of lot size rules, set-ups, queues,

and waiting time. A 10% change at assembly could easily

result in a 100 % change at the front end.


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The Toyota Production System

A manufacturing strategy having a dominant

theme of constantly reduced inventory and asystem of equipment, procedures andattitudes which eliminate waste and promoterespect for people.

Just-in-time manufacturing is a productionphilosophy which calls for the production ofprecisely the necessary units, in thenecessary quantities, at the necessary times.

The kanban system is an MPC system thatsupports JIT manufacturing.


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Kanban System

Developed in the 1970s by Toyota.

Information system that supports JIT production. Kanban is a card, usually put in a rectangular vinyl

envelope, that authorizes the production orwithdrawal of materials.

Consequently, we can think of the kanban system

as a manufacturing planning and control system. Three categories:

pickup information,

transfer information,

production information.

The kanban controls the production of morethan $4.8 billion a year!


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FUNCTIONS RULES FOR USE

Provides pick-up or

transport information.

Subsequent process picks up the

number of items indicated by the

kanban at the preceding stage.

Provides production

information.

Preceding process produces

items in the quantity and

sequence indicated by the

kanban.

Prevents overproductionand excessive transport. No items are made ortransported without a kanban.

Serves as a work order

attached to goods.

Always attach a kanban to the

goods.

Prevents defective

product by identifying

the process making the

product.

Defective products are not

attached with a kanban.

Reveals existing

problems and maintains

inventory control.

Reducing the number ofkanban

heighten their sensitivity.


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Key Elements of Toyota Production

Just-in-time production.

People involvement: Teamwork, Discipline (jobdesign, methods), Supplier involvement.

Total quality control.

Kanban-controlled flow.

Rapid setup to achieve JIT production. Group technology: mixed-model assembly.

Streamlined plant layout.

Capacity reserve to support peak production.


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Total quality.

Quality is everyone's job, each has an immediatecustomer. Many quality-related efforts are moved to the

workers. TQC must become a company culture to be fully

effective.

Work simplification. Preventive maintenance. JIT production control: kanban-controlled. Focused factories.

Supplier network. JIT accounting. Team approach.


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Toyota Focuses on Eliminating Waste

Queues = waste.

Reduce queues a way to discoverproblems and reduce cost.

Waste of overproduction and unnecessary

inventory. Waste of time waiting.

Waste in transportation.

Waste of processing (making defective

products). Waste of movement.


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JIT Production

Uniform production rate.

Purchasing and producing small lots. Quick, inexpensive setups.

Multiskilled workers and flexible facilities.

High quality level.

Effective preventive maintenance.

Continuous improvement.Fix it, even if it ain't broke.

Wake up the sleeping dog! A pull method of coordinating work

centers (e.g., kanban).


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Production Smoothing at Toyota The JIT system works in Toyota because of the unique way

Toyota structure its master production schedule. Master production schedule in MRP seeks economies and

efficiencies through economical lot sizes. at Toyota, the master production schedule is prepared with

the goal of scheduling every product every day. Mixed-model assembly: processing a variety of models of the

same family on the same assembly line.

Aggregate production schedule. One-year horizon. Updated monthly; marketing and finance input.

MPS has a three-month horizon. First month shows daily schedule for the final assembly of

each model. Next two months lso in daily time-buckets, but in terms of

model family. Daily schedules are determined by dividing the number of

units required for the month by the number of working days inthe month.

Same production for each item each day.


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Illustration

Forecasts for next two weeks:

50% of the sales will be Product A, 25% will be Product B, and

25% will be Product C:

Typical U.S. plant: Make Product A for 5 straight days,

Change over to Product B for two and a half daysProduce Product C for the balance of the week

Under the JIT system: make Product A, followed by Product B, followed

by Product A, followed by Product C, and the cyclerepeats.

The goal is to schedule every product every day,and in a sequence which intermixes all products.


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JIT MPS: Future Resembles Past

OthersWeek 1 A A A A A A A A A A

A A A A A A A A A A

Week 2 B B B B B B C C C C

B B B B C C C C C C

Toyota (JIT)

Week 1 A B A B A B A B A B

A C A C A C A C A C

Week 2 A B A B A B A B A B

A C A C A C A C A C


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A Two Card Kanban System

Consider a multi-stage system.

The output of workstation A is the input toworkstation B. Each filled container at the outgoing stocking point

of A has a production (P) kanban; At the incoming stocking point in B, each has a

withdrawal (W) kanban.

At workstations B (the customer): As each container is opened, B detaches the W-

kanban and deposits it in a withdrawal post(either a box or a board).

At fixed intervals (e.g., 2 hours), a material

handler (called "mizusumashi" at Toyota) picks upthe W-kanban at the withdrawal post; takes theW-kanban and the corresponding number ofempty containers to the outgoing stock point atworkstation A.


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Order-Picking at the outgoing stocking point ofWorkstation A: The material handler:

Picks up the corresponding number of filled containers.

Detaches the P-kanban from each filled containers atthe outgoing stock point.

Deposits the detached P-kanban in a receiving post.

Attaches a W-kanban to each of these filled containers. Transports the filled containers to Workstation B.

Production at Workstation A: Each kanban card deposited in the P-kanban post

authorizes workstation A to produce one container.

Attaches the production kanban to each filledcontainers, store at the outgoing stock point.


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Two Card Kanban


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Pull & Push Systems

Push system (conventional production system).

To maintain a high level of utilization (i.e., to keep theworkstations working), materials are pushed from eachstage to the succeeding stage(s).

When something goes wrong in some intermediatestage, inventory builds up in the up-stream stages.

Pull system (kanban-controlled) Production at each stage is triggered by its successor

stage(s), and this process is carried all the way to theraw material acquisition stage.

Production is controlled (i.e., pulled) by demand, asinformation of demand flows backwards from the finalstage (the final assembly) to the initial stage (the raw

material acquisition). at each work center, all requests for production are

made through the kanban cards.


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Number of kanban Needed

Number of kanban cards =

AD = average daily demand for the month. WT = waiting time.

PT = processing time for one container. CQ = container quantity -- limited to

maximum of 10% of day's demand. PV = policy variable (determined by

management) up to 10% of day's demand. WT + PT = time interval between order

picking.

( ) ( )CQ

PVPTWTAD ++ 1


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Kanban and EOQ/ROP

Observations by Walter Goddard of

Oliver Wight Educational Associates,Inc.

Both are reactive systems designed to

replenish inventory -- the quantityused is the quantity ordered -- not inanticipation of future orders (MRP).

Kanban system: linked replenishment.


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Linked Replenishment

The conventional EOQ/ROP system ignored

the product structure/bill-of-materialsrelationships among the component parts.the demand of each component item isassumed to be independent of each other.Hence, items are replenished independently.

With the kanban system, production of anitem is "pulled" by the demand for the itemat the succeeding stage. Last stage = the final assembly, which is planned

in the master production schedule. If something is not used in the final assembly, no

replenishment action will take place. Replenishment is therefore linked with the master

production schedule, just like in MRP.


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Quick Setups at Toyota

To make:

10,000 coronas a month, consisting of5,000 sedans, 2500 hardtops, and 2500wagons.

20 days/month means producing 250

sedans/day, 125 hardtops/day, and 125wagons/day.

Die-change time

In 1940's die-change time was 2-3 hours. In the late 1960's, it was cut to 3

minutes.

A 50 fold decrease!

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06 JIT Production