4 Lean Operation and Jit

15.
Lean Operations
&
Just-In-Time
Nigel Slack, Stuart Chambers & Robert Johnston, 2004
Operations Management, 4E: Chapter 15
15.2
Chapter Coverage
What are lean operations and JIT?
Differences between traditional approach and
JIT
Disadvantage of JIT
Lean philosophy of operations
JIT techniques
JIT planning and control
15.3
Lean operations:
Is the philosophy of moving towards zero
order to develop an operation that is:
1)
2)
3)
4)
waste in
faster,
more dependable,
produces higher quality products and service, and
operates at low cost.
Founded on doing the simple things well, on gradually

doing them better and reducing waste every step of the
way.
15.4
Just In Time, JIT:

1) JIT is an approach of producing goods and services
exactly when they are needed.
2) Minimum inventory if not zero
3) Customers wait
4) Encourages efficiency
5) Quality not sacrificed
15.5
JIT definitions:
(textbook definitions)
JIT aims to meet demand instantly, with perfect quality and no waste
more fully:
improved overall productivity and elimination of waste
cost-effective production and delivery of only the necessary quantity
of parts at the right quality, at the right time and place, while using a
minimum amount of facilities, equipment, materials and human
resources
JIT is dependent on the balance between the suppliers flexibility and
the users flexibility
it is accomplished through the application of elements which require
total employee involvement and team-work
a key philosophy of JIT is simplification

15.6
Differences between traditional approach and JIT
Traditional approach vs. JIT

Traditional approach
JIT
1) Buffer inventory between each

stage act as insulation and gives
some degree of independence
from upstream stages.
2) More buffer better insulation.
3) Stage A experience breakdown,
Stage B can continue producing
for some time.
4) Stage C can continue for longer
time.
5) Problems in Stage A is not spread
throughout.
1) Parts are produced as they are

ordered no buffer inventory.
2) Stage A experience breakdown,
immediately all stages will have
to stop.
3) Problems in Stage A is apparent
to all and becomes everybody's
responsibility.
4) Improves the chances of problem
being solved.
Cont
15.7
Cont
Traditional approach vs. JIT

Traditional approach
JIT
6)
5)
7)
Problems are confined within

the stage and go unnoticed for a
period of time.
Seek efficiency by protecting
each part of the operation from
disruption.
Seek efficiency through

exposure of system problems,
making problems more evident
and change the motivational
structure of the whole system
towards solving the problem.
15.8
Traditional approach:
stage A
buffer
inventory
stage B
buffer
inventory
stage C
15.9
JIT approach:
orders
stage A
orders
stage B
deliveries
stage C
deliveries
15.10
Disadvantage of JIT:
The main sacrifice of JIT is low capital utilization

(see Fig 15.10).
Why is capital utilization in JIT systems low?
i.
ii.
Produce only when needed.

Any stoppage will affect the rest of the system
causing complete stoppage.
JIT argument - No point producing output just for

its own sake, it is counter productive because extra
inventory hides problems and hinders
improvement.
15.11
JIT APPROACH
focus on producing
only when needed
TRADITIONAL APPROACH
focus on high
capacity utilization
more production
at each stage
fewer stoppages
lower capacity
utilization, but
more stoppages
because of
problems
high inventory means
less chance of problems
being exposed and
solved
extra production
goes into inventory
because of continuing
stoppages at stages
low inventory so
problems are
exposed and solved
no surplus
production goes
into inventory
Disadvantage of JIT:
Low capacity
utilization
15.12
The problem with inventory
productivity
problems
WIP
Defective
materials
Scrap
Rework
Downtime
Reduce the level of

inventory (water) to
reveal the operations
problems
WIP
Defective
materials
productivity
problems
Scrap
Rework
Downtime
15.13
Lean philosophy of operations:

1. Eliminate waste
2. The involvement of everyone
3. Continuous improvement
15.14
Eliminate Waste:
Waste can be defined as an activity which does not add

value.
Identifying waste is the first step towards elimination.
The seven types of waste are:
1.
2.
3.
4.
Over production
Waiting time
Transport
Process
5.
6.
7.
Inventory
Motion
Defective goods
15.15
1. Over production producing more than is

immediately needed by the next process in the
operation greatest source of waste.
2. Waiting times Machine and labour waiting time
are considered waste and they are measure in terms
of machine efficiency and labour efficiency.
3. Transport Moving materials around the plant and
together with the double and triple handling of WIP,
does not add value. Layout changes which bring
processes closer together, improvement in transport
methods and workplace organization can reduce
waste.
15.16
4. Process the process itself can be a source of

waste. For example, some operations may only
exist because of poor component design.
5. Inventory all inventory should be a target for
elimination. However, it is only by tackling the
causes of inventory that it can be reduced.
6. Motion an operator may look busy but sometimes
no value is being added by the work.
Simplification of work is a rich source of reduction
in the waste of motion.
15.17
7. Defective goods quality waste is often very

significant in operation, even if actual measure of
quality are limited. Total cost of quality are much
greater than what meets the eye.
15.18
The involvement of everyone:

Lean approach to people management is called
respect-for-humans system.
It encourages:
Team based problem solving
Job enrichment less monotonous, more responsibility,
rewarding
Job rotation change department, stage, function, cell
Multi-tasking
Its intention:
High degree of personal responsibility leads to ownership
of job
15.19
Continuous improvement:
Lean objectives are expressed in ideals such as
to eliminate waste completely
Can never be fully achieved
Require continuous improvement to move closer.
15.20
JIT techniques:
1) Adopt basic working practices:
a.
Discipline comply to work standards that are in place

for the safety of staff and the environment, and for the
quality of the product.
b. Flexibility give more responsibility to those capable
even if it is beyond hes grade.
c. Equality discard unfair and divisive personnel policies
e.g. uniforms and pay structure
d. Autonomy delegate decision making responsibilities
to personnel involve in direct activity
15.21
Cont
e.
f.
Development of personnel staff training

Quality of working life e.g. involvement in decision
making, security of employment, enjoyment and
working area facilities
g. Creativity some enjoy not just doing a job
successfully by improving it for the next time.
h. Total people involvement take part in selection of new
recruit, spending improvement budget, quality issues,
etc.
15.22
Cont
2) Design for ease of processing:
Design determines 70% 80% of production cost

Design improvement can reduce product cost and make
more efficient production process.
Example: reduce number of components, use better or
cheaper material.
3) Emphasize operations focus:
Concept of simplicity, repetition and experience breed

competence.
Focus processes on manageable sets of products,
technologies, volumes and markets
Structure operations objective so that they are consistent
and coherent
15.23
Cont
4) Use small simple machines:
Use several small machines rather than one big one.

Can produce few different components at a given time
instead of batch by batch production.
More robust, mobile, layout flexibility and reduce
investment risk.
5) Layout for smooth flow:
Long process routes provide opportunity for delay,

inventory build up, adds no value to the product and
slow down cycle time
Workstations are close together, use U shaped line, use
cell layout.
15.24
6)
Cont
Adopt Total Productive Maintenance (TPM):

Unreliable processes create waste, for
example, waiting time, delays in downstream
operations. In a JIT system:
operators taught
to care for
processes:
maintenance
personnels
role
changes:
emphasis:
operate correctly
detect problems
lubricate, clean, adjust
collect data
training operators
long-term planned maintenance
condition monitoring
operator involvement
care for equipment
ensuring total reliability
15.25
Cont
8) Reduce set-up times:
Set-up time is the time taken to changeover the process

from one activity to the next. During this time
operation seizes. It is reduced by cutting out:
time taken to search for tools and equipment,

Pre-preparation of tasks which delay changeover
and
Constant practice of set-up routines
9) Ensure visibility:
More transparent operation is easier for staff to share in

its management and improvement.
Problems are easily detected and information becomes
simple, fast and visual.
10) Adopt JIT through the supply chain:
Expand JIT culture to key suppliers
15.26
JIT planning and control

JIT planning and control is based on the principle of
a pull system
What are push planning and control & pull
planning and control?
15.27
Push philosophies of
planning and control
PUSH CONTROL
CENTRAL OPS. PLANNING AND CONTROL SYSTEM
Instruction on
what to make
and where to
send it
Work
centre
Work
centre
Work
centre
Work
centre
FORECAST
OR
DEMAND
Signal pushes work through the process
Activities are scheduled by means of a central system and completed in

line with central instructions
No consideration for succeeding stages requirements
High inventory
15.28
Pull philosophies of planning

and control
PULL CONTROL
Work
centre
Work
centre
Delivery
Request
Request
Request
Work
centre
Delivery
Request
Work
centre
Delivery
DEMAND
Delivery
Signal pulls work only when required.
Only customer can trigger movement sets the work pace.
Lesser chances of inventory build-up.
JIT favored.
15.29
Kanban control
It is a system used of JIT planning and control.

Based on the pull planning and control.
Kanban is the Japanese word for card or signal.
Card or signal used by customer stage to instruct
supplier stage to send more materials.
Cont
15.30
Cont
Kanban control
Three types of Kanban:

1. The move or conveyor kanban
Signals a previous stage that material can be withdrawn

from inventory.
2. The production kanban
Signals a production process to start producing a part to be

place in inventory.
3. The vendor kanban
Signals an external supplier to send material to a stage.
15.31
Cont
Kanban control
Receipt of kanban triggers movement, production

or supply of one unit.
Two kanbans two units
Kanban comes in different form empty container,
verbal instruction, color tokens, etc
Two kanban procedure:
Single-card system: either move or vendor kanban

Dual-card system: use move and production kanban
15.32
Work centre A
Work centre B
Stage A
m
m
m
Stage B
Output stock
Full standard container
m Move kanban
Kanban holding box

m
m
m
Output stock
Empty standard container
Flow path for standard containers
Flow path for move kanban
15.33
Each stage has a work center and an area for

holding inventory.
Loop 1: Stage B requires more parts
withdraw a container from output stock of
stage A empty container is kanban and sent
to stage A work center signal for stage A to
start production
Loop 2: Move kanban taken from holding box
to output stock point signal to move a full
container from stage A to stage B.
15.34
Kanban rules:
Each container must have a kanban card indicating
part number and description, user and maker location,
and quantity.
The parts are always pulled by the user or customer.
No parts are started without a kanban.
All containers contain exactly their number of parts.
No defective parts may be sent to the user or
customer.
The maker can only produce enough parts to make up
what has been withdrawn.
The number of kanbans should be reduced.
The time period should be made shorter
15.35
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4 Lean Operation and Jit

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15.

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Operations Management, 4E: Chapter 15

Founded on doing the simple things well, on gradually

Operations Management, 4E: Chapter 15

Just In Time, JIT:

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

a key philosophy of JIT is simplification

Operations Management, 4E: Chapter 15

Differences between traditional approach and JIT

Traditional approach vs. JIT

1) Buffer inventory between each

1) Parts are produced as they are

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Traditional approach vs. JIT

Problems are confined within

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Seek efficiency through

Operations Management, 4E: Chapter 15

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

The main sacrifice of JIT is low capital utilization

Produce only when needed.

JIT argument - No point producing output just for

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

The problem with inventory

Reduce the level of

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Lean philosophy of operations:

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Waste can be defined as an activity which does not add

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

1. Over production producing more than is

Operations Management, 4E: Chapter 15

4. Process the process itself can be a source of

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

7. Defective goods quality waste is often very

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

The involvement of everyone:

Operations Management, 4E: Chapter 15

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

Discipline comply to work standards that are in place

Operations Management, 4E: Chapter 15

Development of personnel staff training

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15

2) Design for ease of processing:

Design determines 70% 80% of production cost

3) Emphasize operations focus:

Concept of simplicity, repetition and experience breed

Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Operations Management, 4E: Chapter 15