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Session 19Just-In-Time Manufacturing

• JIT Impact on the MPC System• JIT Continuous Improvement

– JIT Building Blocks– Elements of JIT

• Kanban Systems– Single Card Kanban– Kanban Calculations

• JIT Impact on the MPS– Mixed Model Final Assembly– JIT Assembly/Component Scheduling

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JIT Impact on the MPC System

• Eliminating discrete batches in floor of production rates

• Level, mixed model MPS

• Paperless, visual shop floor control

• Eliminating transactions/Backflushing

• Streamlined vendor scheduling

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Manufacturing Planning and Control System and JIT

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Building Blocks for Just-in-Time

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JIT Benefit SummaryImprovementAggregatepercentage(3-5 years) Annual percentage

Manufacturing cycle time reduction 80-90% 30-40%Inventory reductions:

Raw materials 35-70 10-30Work-in-process 70-90 30-50Finished goods 60-90 25-60

Labor cost reductions:Direct 10-50 3-20Indirect 20-60 3-20

Space requirements reduction 40-80 25-50Quality cost reduction 25-60 10-30Material cost reduction 5-25 2-10

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JIT Objectives

Ultimate objectives:

• Zero Inventory.

• Zero lead time.

• Zero failures.

• Flow process.

• Flexible manufacture.

• Eliminate waste.

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JIT Building Blocks

• Product design:Few bill of material levels.Manufacturability in production cells.Achievable quality.Appropriate quality.Standard parts.Modular design.

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JIT Building Blocks

• Process design:Setup/lot size reduction.Quality improvement.Manufacturing cells.Limited work-in-process.Production bandwidth.No stockrooms.Service enhancements.

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JIT Building Blocks

• Human/organizational elements:Whole person.Cross training/job rotation.Flexible labor.Continual improvement.Limited direct/indirect distinction.Cost accounting/performance measurement.Information system changes.Leadership/project management.

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JIT Building Blocks

• Manufacturing planning and control:Pull systems.Rapid flow times.Small container sizes.Paperless systems.Visual systems.Level loading.MRP interface.Close purchasing/vendor relationships.JIT software.Reduced production reporting/inventory transaction

processingHidden factory cost reductions.

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Single Kanban System

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Kanban Calculation

1. Calculate the number of kanbans required for the following two components produced in a factory that works five days per week:

A B Usage 240/week 120/dayLead time 1 week 2 weeksContainer size 20 units 30 unitsSafety stock 25 percent 0

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Kanbans Calculations A B

Usage (per week) 240 600

Lead time 1 2Container size 20 30Safety % 25 0Kanbans 15 40

Number of Kanbans = Usage x Lead time x (1 + safety stock) / container size

Note that B's Usage must be converted to weeks

A: 240 u/week x 1 week x (1 + .25) = 15 20

B: 120 u/day x 10 days x (1 + 0) = 40 30

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Master Production Schedule Data

Model_______________________________________________________________

151A 151B 151C 151DOption configurations:Handle Basic Basic Executive ExecutivePan Sheet Clad Sheet CladAnnual forecast (units) 200,000 2,500 25,000 100,000

Possible mixed modelmaster productionschedules:

Daily batch MPS 800 10 100 400Hourly batch MPS 100 1.25 12.5 50Minimum batch MPS80 1 10 40

* data are based on a 250-day year and an eight-hour work day.

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Mixed Model Final Assembly

5. The Yakima Lash Company produced four models. The forecasts of annual demand for each of the four are as follows:

ModelI II III IV

Forecast of annual demand 500 1,500 3,500 4,500

a. Use a 250-day year and an eight-hour day to determine the mixed-model-level master schedule for a daily batch and hourly batch with minimum batch sizes.

b. What would the schedule of production look like for an eight-hour day using mixed-model minimum batch size production?

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Problem 5. Yakima Lash Company

a. Product line I II III IVForecast for year 500 1,500 3,500 4,500Daily batch 2 6 14 18Hourly batch .25 .75 1.75 2.25Mixed model 1 3 7 9

b. Schedule for the day-order of the products' production and number of each produced.

8-12: IV,IV,IV,IV,IV,IV,IV,IV,IV,III,III,III,III,III,III,III,II,II,II,I12-4: IV,IV,IV,IV,IV,IV,IV,IV,IV,III,III,III,III,III,III,III,II,II,II,I

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Assembly/Component Scheduling

Hofmann Enterprises produces three products using a mixed-model assembly line. This line is operated eight hours a day for 250 days per year, and produces 14 units per hour of all products. The forecasts of annual demand for each of the three products are as follows:

Product Annual(code names) forecastJohn 16,000 unitsGoldie 8,000 unitsZiggy 4,000 units

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Hoffman Enterprises Example

a. Determine the mixed-model master production schedule for a daily batch with minimum batch size for all three products.

Calculation made assuming a 250 day year

Annual Daily Mixed Model

Product Forecast Production Minimum Batch Size

John 16000 64 4

Goldie 8000 32 2

Ziggy 4000 16 1

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Hoffman Enterprises Exampleb. Prepare a daily schedule indicating the number of Johns, Goldies,

and Ziggys to be produced each day.Hours of the Day1 2 3 4 5 6 7 8John John John John John John John JohnJohn John John John John John John JohnJohn John John John John John John JohnJohn John John John John John John JohnGoldie Goldie Goldie Goldie Goldie Goldie Goldie GoldieGoldie Goldie Goldie Goldie Goldie Goldie Goldie GoldieZiggyZiggy Ziggy Ziggy Ziggy Ziggy Ziggy ZiggyJohn John John John John John John JohnJohn John John John John John John JohnJohn John John John John John John JohnJohn John John John John John John JohnGoldie Goldie Goldie Goldie Goldie Goldie Goldie GoldieGoldie Goldie Goldie Goldie Goldie Goldie Goldie GoldieZiggyZiggy Ziggy Ziggy Ziggy Ziggy Ziggy Ziggy

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Hoffman Enterprises Example

c. Product John requires 2 units of component X and one unit of component Y to make a finished unit of John. Component X is produced on a JIT pull system basis by a separate manufacturing department. Determine the number of kanbans required for component X if the lead time is 2 days, the safety factor is 10%, and the container size is 20 units.

# Kanbans = [ 2 x 64 x 2 x (1 + .10) ] / 20= 15

Usage Lead Time Safety Percent Container Kanbans

128/day 2 days 10% 20 units 15