Just-in-Time and

Lean Operations

Developments of JIT and

Lean Operations
1960s:

Developed as Toyota Production

System by Taiichi Ohno and his colleagues

1970s:

U.S. and European auto makers

began to apply JIT to improve quality and
productivity

1990s

and beyond: Expanded the JIT

concept to streamline all types of operations

Definition of JIT
A

set of techniques to increase

productivity, improve quality, and

reduce cost of an operations
A

management philosophy to promote

elimination of waste and continuous

improvement of productivity

What Could Be the Expected

Benefits of JIT?

Expected Benefits of JIT

Reduction

in throughput times

Reduction

in WIP

Improvement

in quality

Improvement

in productivity

Reduction

in resource requirements

Improvement

in customer satisfaction

improvements

in return on assets

Main Elements of JIT

Elimination

of waste
Quality at the source
Balanced and flexible work flow
Respect for people
Continuous improvement (Kaizen)
Simplification and visual control
Focus on customer needs
Partnerships with key suppliers

What is A Waste?

Wastes
Anything

that exceeds the minimum resources

needed for the appropriate value
Toyotas seven deadly wastes:

Overproduction (excessive production resources)

Inventory
Waiting
Transportation
Processing
Motion
Defective parts

Why is Inventory Reduction

Important?

Importance of Inventory
Reduction
Inventory

costs money - carrying costs,

obsolescence costs, and opportunity costs

Inventory

covers up problems and

bottlenecks.

Inventory

reduction forces organization

and employees to eliminate sources of
problems and work as a team.

Quality at the Source

Jidoka

autonomation (automatic

detection of defects, e.g., Poka-yoke)

Employee

empowerment

Statistical

process control

Prevention

orientation (elimination of root

causes through PDSA cycle)

Balanced and Flexible

Work Flow
Yo-i-don

(ready, set, go) system

Stable

production schedule

Set-up

time reduction

Flow-shop
Shojinka

and cellular layouts

(flexible & multi-skilled workforce)

Teamwork
Total

productive maintenance (TPM)

Respect for People

Productivity improvement needs employee support

Demonstrate by

providing cross-training opportunities

creating a safe and equitable work environment
encouraging people to achieve their potential by
giving them greater responsibility and authority

promoting teamwork (formal and informal)

developing partnerships with unions

Continuous Improvement
(Kaizen)
Employee

suggestion system
Process improvement
5Ss

Seiri - organization
Seiton - tidiness
Seiso - purity
Seiketsu - cleanliness
Shitsuke - discipline

Simplification and Visual

Control
Standard
Andon

boards

Kanban
Flag

and simple product designs

pull system

systems

Music

as signals

Performance

display systems

Focus on Customer Needs

Customer

needs determine the value of

a product or service

Be

responsive to customers needs

(present and future)

Strive

to delight, not just satisfy

customers

Partnerships with Suppliers

Reduce
Use

number of suppliers

long-term contracts

Emphasize
Improve
Share

price, delivery, and services

communication

information

Develop
Provide

local just-in-time delivery

technical support to suppliers

JIT Implementation
Top management commitment
Steering committee
Education program
Pilot project planning
Employee training
Pilot implementation
Pilot post mortem
Feedback to steering committee
Expansion to next project

Advancements in JIT (JIT II)

Backwards

Integration of staff and line

functions to suppliers (e.g., purchasing)

Requires

EDI or web access to materials

and logistics systems

On-site

supplier representative(s) with

transaction processing authority

Goal:

link suppliers cycle to firms cycle to

mutually reduce wait and move times

How Can JIT Be Applied to NonManufacturing Operations?

JIT for Non-Manufacturing

Operations (Lean Operations)
Implement
Eliminate

demand-pull operations

unnecessary activities

Standardize
Increase

process flexibility

Reorganize
Upgrade

process flows
physical layouts

housekeeping and workplace

organization

JIT for Non-Manufacturing

Operations (Lean
Operations)
Develop
Level

supplier partnership networks

work load

Organize

problem-solving groups

Improve

quality

Develop

effective suggestion systems

Cross-train
Promote

employees

teamwork

What Are Toyotas Secrets

of Success?

Toyotas Secrets of
Success

(Steve Spear, HBR, May 2004)

There

is no substitute for direct

observation

Proposed

changes should always be

structured as experiments

Workers

and managers should experiment

as frequently as possible

Managers

should coach, not fix

Suggested Readings

Monden, Yasuhiro (1993). Toyota Production

System: An Integrated Approach to Just-In-Time,
3rd edition, Institute of Industrial Engineers.

Womack, James P. and Jones, Daniel T. (2003).

Lean Thinking: Banish Waste and Create Wealth in
Your Corporation, The Free Press.

Jeffrey K. Liker (2004). The Toyota Way: 14

Management Principles from the Worlds Greatest
Manufacturer, McGraw-Hill.