Assignment

Lean and JIT in Services

Submitted to

Submitted By

Concept of JIT in Services

The Just-in-time philosophy also can be applied to the production of services. In general, service environments may benefit from JIT systems if their operations are repetitive, have reasonably high volumes, and deal with tangible items such as sandwiches, mail, checks, or bills. In other words, services must involve manufacturing-like operations.

Other services involving a high degree of customization, such as hair cutting, can also make use of JIT systems but to a lesser degree-basically utilizing elements of JIT systems in their operations.

The focus of JIT systems is on improving the process; therefore some of the JIT concepts useful for manufacturers are also useful for service providers. These concepts include the following: Consistently high quality: Benchmarking, service design, and quality function deployment can be used successfully in service operations. Uniform facility loads: Reservation systems and differential pricing are two ways in which service providers can level the loads on their facilities. Standard work methods: In highly repetitive service operations great efficiencies cab be gained by analyzing work methods and standardization improvements for all employees to use. Close supplier ties: Volume services such as fast-food restaurants and mass merchandisers such as Wal-Mart and Kmart require close supplier contacts to ensure frequent, short lead time and high-quality shipments of supplier. Flexible work force: The more customized the service, the greater is the need of multiskilled work force. Automation: Automation can play a big role in providing just-in-time services. For example, banks offer ATMs that provide various bank services on demand 24 hours a day. Preventive maintenance: Services that are highly dependent on machinery can make good use of routine preventive maintenance. Pull method of material flows: Services operations where tangible items are processed, such as fast-food restaurants, can utilize the pull method.

Product focus: Managers of service operations can organize their employees and equipment to provide uniform flows through the system and eliminate wasted employee time.

What is achieved using JIT: Eliminate wasted inventory items from sitting in warehouses going unordered for large amounts of times only to tie up your accounting books depreciating in value and taking up space. Order equipment when you need it and fulfill orders or services on time with a cost efficient model. Puts in a system and streamlines your inventory item re-ordering and order fulfillment process.

How SME Handles JIT: Inventory items that become assigned or "tied" to an order belong to that order and becomes easily traceable. Set minimum on hand, and reorder amount for every inventory item. Set the count required to fulfill orders. Identify preferred inventory vendors, manufacturers, and the lead item needed when ordering new inventory items. Detail kit items to create specific packages that are custom to your specific company's offers.

Lean Operations Management in Escalating cost and global competition

There are two types of cost associated with production 1. Costs that deliver value to customers: These costs are good costs and help deliver profits so are to be encouraged. These costs deliver the value that people pay for the product or service that the company makes. 2. The other sort of cost is associated with those that are incurred but do not deliver any discernable value to the end customer. These costs are termed waste. Lean is all about eliminating waste while improving organization efficiency and flow. Simple cost cutting exercises do not discriminate between cost and therefore as a result can do more harm i.e. decreasing effectiveness or capability. A key aspect to remember in regard to lean is that it discriminates between waste and value Lean is also not a productivity initiative productivity usually refers to getting more from an existing asset by working them harder again this does not discriminate between working on the right or wrong things and therefore may result in greater waste lean refers to aligning production so that the product flows through the entire process with minimal waiting time (leadtime) and with inventory, machinery and other resources aligned at the right time in the right quantity exactly meeting demand.

The main cost will consist of: Training and Consultancy: No successful implementation of Lean Manufacturing has succeeded without the help of experienced professionals. You will have to train your employees and you need support in your project team. Increased initial maintenance costs: Elimination of manufacturing waste and

implementation of improvement ideas are likely to increase the maintenance costs. Project team members: You will need people to run the project. Project management and coaching are equivalent to about one full-time coordinator per 100 employees in the facility. Benefits Increased: Overall Equipment Efficiency (OEE) is the main factor that may be used to approximate the return on the efforts.

Can the increased capacity be used to increase sales? One important question is if there is a market for expansion. If so, the increased capacity may be used for increased sales. It is common that the company's market share might grow after implementing TPM or Lean Manufacturing. This is possible as improved delivery accuracy and shorter lead times make more sales possible even if the market is stagnant. If expansion is not considered possible, the increased capacity may instead be used to lower the production costs.

Lean manufacturing tenets can be used in all manufacturing and services industries even the principle is based on the original Toyota production system designed around waste elimination. They are, Changeovers the process of reducing time for a product to move from machine to machine or work station to work station. Waste elimination a continuing search for waste, not only of materials but also of time. Supplier management supplies delivered in smaller amounts to reduce the need for storage and inventory management. Problem solving use of systematic tools and processes to remove challenges and barriers. Organization maintaining supplies in an efficient system, incorporation of solid cleaning practices designed to enhance safety and time management. Process mapping developing flow and process charts for common practices

All these lean manufacturing tenets help the company to sustain and be successful in global competition.

Another lean principle with universal applicability, whatever your organization, is the principle of 5Sa protocol for ensuring individual work areas are free of clutter and organized for effectiveness. 5S stands for: Sort: the elimination of all unnecessary items from the workplace. Set in order: the creation of efficient storage methods to arrange items so they are easy to find, use and store. Shine: a thoroughly clean work area.

Standardize: recording the best practices in each work area to create a consistent approach to how work is done. Sustain: making a habit of the four preceding stepsoften the most difficult, as old habits are hard to break.

Every business and organization continues to face increasing customer requirementsthe need to reduce costs, competition and shorter lead times. Implementation of lean manufacturing principles into any kind of business will ultimately improve the bottom line and increase customer satisfaction.