Just in Time Manufacturing Just in Time Manufacturing (JIT) refers to a system of manufacturing in which products are not built

until the product is ordered and paid for. Some companies that have successfully implemented JIT include Toyota, Dell and Harley Davidson. Toyota Toyota is considered by many to be the poster child for JIT success. The Toyota production strategy is highlighted by the fact that raw materials are not brought to the production floor until an order is received and this product is ready to be built. No parts are allowed at a node unless they are required for the next node, or they are part of an assembly for the next node. This philosophy has allowed Toyota to keep a minimum amount of inventory which means lower costs. This also means that Toyota can adapt quickly to changes in demand without having to worry about disposing of expensive inventory. Important factors to Toyota success:

Small amounts of raw material inventory must be kept at each node in production, so that production can take place for any product. These parts are then replenished when they are used. Accuracy of forecasting is important so the correct amount of raw materials can be stocked.

Dell Dell has also leveraged JIT principles to make its manufacturing process a success. Dells approach to JIT is different in that they leverage their suppliers to achieve the JIT goal. They are also unique in that Dell is able to provide exceptionally short lead times to their customers, by forcing their suppliers to carry inventory instead of carrying it themselves and then demanding (and receiving) short lead times on components so that products can be simply assembled by Dell quickly and then shipped to the customer. Important factors to Dells success:

Dependable suppliers with the ability to meet Dells demanding lead time requirements.

A seamless system that allows Dell to transmit its component requirements so that they will arrive at Dell in time to fulfill its lead times. A willingness of suppliers to keep inventory on hand allowing Dell to be free of this responsibility.

Harley Davidson Harley Davidsons use of JIT is mostly characterized by its transformation in the late World War 2 era from an inefficient manufacturer that solved all of its problems with extra inventory to a nimble manufacturer able to meet demand and provide short lead times. Results of Harley Davidsons JIT implementation:

Inventory levels decreased 75%. Increased productivity.

Harley Davidsons success with the implementation of JIT had a lot to do with the fact that when JIT was put into practice, process problems could no longer be hidden by costly inventory that helped to meet ship dates. The inefficiencies in the processes were quickly identified and solved.

Origins of Just In Time Management Strategy

Although the history of JIT traces back to Henry Ford who applied Just in Time principles to manage inventory in the Ford Automobile Company during the early part of the 20th Century, the origins of the JIT as a management strategy traces to Taiichi Onho of the Toyota Manufacturing Company. He developed Just in Time strategy as a means of competitive advantage during the post World War II period in Japan. The post-World War II Japanese automobile industry faced a crisis of existence, and companies such as Toyota looked to benchmark their thriving American counterparts. The productivity of an American car worker was nine times that of a Japanese car worker at that time, and Taiichi Onho sought ways to reach such levels. Two pressing challenges however prevented Toyota from adopting the American way: 1. American car manufacturers made lots or a batch of a model or a component before switching over to a new model or component. This system was not suited to the Japanese conditions where a small market required manufacturing in small quantities. 2. The car pricing policy of US manufacturers was to charge a mark-up on the cost price. The low demand in Japan led to price resistance. The need of the hour was thus to reduce manufacturing costs to increase profits. To overcome these two challenges, Taiichi Onho identified waste as the primary evil. The categories of waste identified included

overproduction inventory or waste associated with keeping dead stock time spent by workers waiting for materials to appear in the assembly line

time spend on transportation or movement workers spending more time than necessary processing an item waste associated with defective items

Taiichi Onho then sought to eliminate waste through the just-in-time philosophy, where items moved through the production system only as and when needed How Toyota Implemented Just in Time: Kanban Toyota JIT manufacturing strategy centered on changing factory layout to eliminate transporting items back and forth to different machines and instead arranging machines to ensure the items flow smoothly from one machine to another. To control the flow of items in the new environment, Toyota introduced kanban, or information on what to do that controlled all movements throughout the factory. The two types of kanban in Toyota are:

withdrawal kanban that details the items marked for withdrawal from the preceding step in the process production ordering kanban that details the items to be produced

A part disappearing from an assembly station was the sign to produce or order a new part. Toyota started work on the Just in Time system in 1952, and established kanbans throughout the organization by 1962.

TOYOTA AND JIT MANUFACTURING Just in Time (JIT) is a management philosophy aimed at eliminating waste and continuously improving quality. Credit for developing JIT as a management strategy goes to Toyota. Toyota JIT manufacturing started in the aftermath of World War II.

How Toyota Implemented Just in Time: Autonomation The origin of kanban effected precise specifications of item quantities, leaving no room for defects. The success of this initiative therefore depends on no defective components entering the assembly line. To ensure this, Toyota introduced autonomation, or automating the production system and reducing human intervention only on detection of defects. The system detects defect automatically and will not proceed until human intervention fix the problem. The implementation of autonomation meant stoppage of the entire production line, and in the first week, line stops occurred almost hourly. It took six months for line stops to fall to few-a-week and have no economic impact. How Toyota Implemented Just in Time: SMED A major initiative of the Just in Time was re-engineering machines and processes to reduce the setup time required before processing of a new item. Toyota JIT manufacturing identified changing stamping dies used for body parts as the critical retooling operation. The traditional re-tooling way entailed installation of die-tools one at a time, and adjustment by hand, with crowbars and wrenches. Installing large die sets took several days, during which time the production line remained shut. Toyota launched "The Single Minute Exchange of Die" (SMED) that substituted measurements for adjustments, controlling the quality of stampings through a written recipe. This reduced the die change times dramatically to about a half an hour, and facilitated economic lot sizes of even one vehicle, How Toyota Implemented Just in Time: Challenges Faced and Results The major challenges faced by Toyota in implementing JIT included

Multi-skilling the workforce to operate multiple machines based on work-flow patterns

Redesigning every part of the vehicle to eliminate or widen tolerance since assembly lines did not have a choice of which parts to use and every part had to fit perfectly Testing and training suppliers of parts to assure quality and delivery in time on demand

The implementation of JIT met with remarkable success at Toyota. The sale of in-process inventory generated surplus cash, response time fell to about a day, product quality increased improving customer satisfaction, and vehicles built to order eliminating the risk of vehicles remaining unsold, improving the company's return on equity. The success of Just in Time made Toyota the envy of the industrialized world. Several organizations have emulated Toyotas Just in Time Strategy. The next landmark in JIT history is when it spread to America by the late 1970's and early 1980's. Today, many organizations such as Hewlett Packard, Dell, McDonalds, and others owe their success to the Just in Time Management strategy