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14-1 JIT and Lean Operations
CHAPTER14
JIT andLean Operations
McGraw-Hill/IrwinOperations Management, Eighth Edition, by William J. StevensonCopyright © 2005 by The McGraw-Hill Companies, Inc. All rights
reserved.
14-2 JIT and Lean Operations
JIT/Lean ProductionJIT/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”
14-3 JIT and Lean Operations
Reduced inventory (up to 90%) Reduced lead time (up to 90%) Reduced labor cost (up to 30%) Reduced manufacturing & storage space (up
to 50%) Improvement of quality (up to 90%) Increased flexibility and adaptability to
changes Increased productivity
Benefits of JITBenefits of JIT
14-4 JIT and Lean Operations
Goal of JITGoal of JIT
The ultimate goal of JIT is a balanced system.
Achieves a smooth, rapid flow of materials through the system
14-5 JIT and Lean OperationsSummary JIT Goals and Building Summary JIT Goals and Building BlocksBlocks
Figure 14.1
Product Design
ProcessDesign
PersonnelElements
Manufactur-ing Planning
Eliminate disruptions
Make the system flexible Eliminate waste
Abalancedrapid flow
UltimateGoal
SupportingGoals
BuildingBlocks
14-6 JIT and Lean Operations
Supporting GoalsSupporting Goals
Eliminate disruptions
Make system flexible
Eliminate waste, especially excess inventory
14-7 JIT and Lean Operations
Sources of WasteSources of Waste
Overproduction Waiting time Unnecessary transportation Processing waste Inefficient work methods Product defects
14-8 JIT and Lean Operations
JIT Building BlocksJIT Building Blocks
Product design Process design Personnel/organizational
elements Manufacturing
planning and control
14-9 JIT and Lean Operations
Product DesignProduct Design
Standard parts
Modular design
Highly capable production systems
Concurrentengineering
14-10 JIT and Lean Operations
Process DesignProcess Design
Small lot sizes Setup time reduction Manufacturing cells Limited work in process Quality improvement Production flexibility Little inventory storage
14-11 JIT and Lean Operations
Benefits of Small Lot SizesBenefits of Small Lot Sizes
Reduces inventory
Less storage space
Less rework
Problems are more apparent
Increases product flexibility
Easier to balance operations
14-12 JIT and Lean Operations
Lot Size and Cycle InventoryLot Size and Cycle Inventory
Average cycle inventory
Lot size = 100
Lot size = 50On
-han
d in
ven
tory
5 10 15 20 25 30
Time (hours)
100 –
75 –
50 –
25 –
0 –
Figure 16.1
14-13 JIT and Lean Operations
HOOD & FENDER SETUP COMPARISONHOOD & FENDER SETUP COMPARISON(800 TON PRESS)(800 TON PRESS)
* For low demand items (less than 1000/month)Up to 7 days
Toyota U.S.A. Sweden W. Germany
Setup Time 10 min 6 hr. 4 hr. 4 hr.
Setups/Day 3 1 - 1/2
Lot Size 1 day* 10 days 1 month -
14-14 JIT and Lean Operations
Personnel/Organizational ElementsPersonnel/Organizational Elements
Workers as assets
Cross-trained workers
Continuous improvement
Cost accounting
Leadership/project management
14-15 JIT and Lean Operations
Manufacturing Planning and ControlManufacturing Planning and Control
Pull systems
Level loading
Visual systems
Close vendor relationships
Reduced transaction processing
Preventive maintenance
14-16 JIT and Lean Operations
Pull/Push SystemsPull/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
14-17 JIT and Lean Operations
Pull SystemPull System
VENDOR
VENDOR
VENDOR
VENDOR
FAB
FAB
FAB
FAB
FAB
FAB
FAB
FAB
FAB
SUB
SUB
VENDOR
FINAL ASSEMBLY
PRODUCTION SCHEDULE
LEVELED ASSEMBLY
INSTRUCTIONS
A
BA
B
C
14-18 JIT and Lean Operations
14-19 JIT and Lean Operations
14-20 JIT and Lean Operations
Kanban Production Control SystemKanban 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.
14-21 JIT and Lean Operations
Traditional Supplier NetworkTraditional Supplier Network
BuyerBuyer
SupplierSupplierSupplierSupplier SupplierSupplier SupplierSupplier
SupplierSupplier
SupplierSupplierSupplierSupplier
Figure 14.4a
14-22 JIT and Lean Operations
Tiered Supplier NetworkTiered Supplier NetworkFigure 14.4b
SupplierSupplier
SupplierSupplier
SupplierSupplier
SupplierSupplierSupplierSupplier SupplierSupplier
BuyerBuyer
SupplierSupplierFirst Tier SupplierFirst Tier Supplier
Second Tier SupplierSecond Tier Supplier
Third Tier SupplierThird Tier Supplier
14-23 JIT and Lean Operations
Comparison of JIT and TraditionalComparison 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
Table 14.3
14-24 JIT and Lean Operations
JIT II: a supplier representative works right in the company’s plant, making sure there is an appropriate supply on hand.
JIT IIJIT II
14-25 JIT and Lean Operations
Benefits of JIT SystemsBenefits of JIT Systems
Reduced inventory levels
High quality
Flexibility
Reduced lead times
Increased productivity
14-26 JIT and Lean Operations
Benefits of JIT Systems (cont’d)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
