Just in Time and

Lean Production
Lecture Note
Fahmy Radhi
 Introductory Quotation

Waste is ‘anything other

than the minimum amount
of equipment, materials,
parts, space, and worker’s
time, which are absolutely
essential to add value to
the product.’
— Shoichiro Toyoda © 1995 Corel Corp.

President, Toyota
 Green Gear Cycling
 Designs and manufacturers high performance
travel bicycles (bike-in-a-suitcase!)
 Strategy is mass customization with low
inventory, work cells, and elimination of
machine setups.
 Major focus on JIT and supply-chain
management.
 Two lines with seven work cells
 One day throughput time
 Focus on quality
 Supplier – Production – Distribution
System
Supplier Distribution Customer
Productions Inventories
Inventories Distribution
Raw Material Work-in-process Inventories
Factory
Inventory Inventory Finished Retailer
Goods Inventory
Inventory
Raw material
in-transit
Orders
Component
Inventory

Warehouse
Sub-assembly
Inventory
parts in-transit MRO
Inventory
Orders

Maintenance,
repair, and ordering
supplies in-transit Production and Shipping and
Purchasing Inventory Control Traffic
 What is Just-in-Time?

 Management philosophy of continuous

and forced problem solving
 Supplies and components are ‘pulled’
through system to arrive where they are
needed when they are needed.
 Lean Production
 Lean Production supplies customers with
exactly what the customer wants, when
the customer wants, without waste,
through continuous improvement.
 What Does Just-in-Time Do?
 Attacks waste
– Anything not adding value to the product
 From the customer’s perspective

 Exposes problems and bottlenecks caused

by variability
– Deviation from optimum
 Achieves streamlined production
– By reducing inventory
 Types of Waste
 Overproduction
 Waiting
 Transportation
 Inefficient processing
 Inventory
 Unnecessary motion
 Product defects © 1995
Corel
Corp.
 JIT Reduced Waste
at Hewlett-Packard
Waste Reduction (%)
Setup Time 20%
Scrap 30%
Finished Goods
Inventory 30%
Space 40%
Lead Time 50%
Raw Material
Inventory 50%
Work-in-Process
Inventory 82%
0% 20% 40% 60% 80% 100%
 JIT Contribution to Competitive
Advantage
 Suppliers
– reduced number of vendors
– supportive supplier relationships
– quality deliveries on time
 Layout
– work-cell layouts with testing at each step of the
process
– group technology
– movable, changeable, flexible machinery
– high level of workplace organization and neatness
– reduced space for inventory
– delivery direct to work areas
JIT Contribution to Competitive
Advantage - Continued
 Inventory
– small lot sizes
– low setup times
– specialized bins for holding set number of
parts
 Scheduling
– zero deviation from schedules
– level schedules
– suppliers informed of schedules
– Kanban techniques
JIT Contribution to Competitive
Advantage - Continued
 Preventive Maintenance
– scheduled
– daily routine
– operator involvement
 Quality Production
– statistical process control
– quality by suppliers
– quality within firm
JIT Contribution to Competitive
Advantage - Continued
 Employee Empowerment
– empowered and cross-trained employees
– few job classifications to ensure flexibility
of employees
– training support
 Commitment
– support of management, employees, and
suppliers
 Results

 Queue and delay reduction, speedier throughput,

freed assets, and winning orders
 Quality improvement, reduces waste and wins
orders
 Cost reduction increases margin or reduces selling
price
 Variability reductions in the workplace reduces
waste and wins orders
 Rework reduction, reduces waste and wins orders
 Yielding
Faster response to the customer at lower
cost and higher quality

A competitive advantage!
 Just-in-Time
Success Factors
Suppliers
Employee
Layout
Empowerment

JIT
Quality Inventory

Preventive
Scheduling
Maintenance
 Suppliers

 Incoming material and finished goods

involve waste
 Buyer and supplier form JIT partnerships
 JIT partnerships eliminate
– Unnecessary activities
– In-plant inventory
– In-transit inventory
– Poor suppliers
 Goals of JIT partnerships
 Elimination of unnecessary activities
 Elimination of in-plant inventory
 Elimination of in-transit inventory
 Elimination of poor suppliers
 Streamlined Production
Traditional Flow Production Process
(stream of water)

Suppliers
Customers
Inventory (stagnant
Flow with JIT ponds) Material
(water in
stream)
Suppliers

Customers
 Layout
 JIT objective: Reduce movement of
people and material
– Movement is waste!
 JIT requires
– Work cells for product families
– Moveable or changeable machines
– Short distances
– Little space for inventory
– Delivery directly to work areas
 Work Cell versus
Process Layout
Process Layout Work Cell
1
Lathe Saw 2
Lathe Saw Saw Press
2
5 4 Heat Lathe Lathe
Treat
Grinder
3 1
Press Grinder Heat
6 Treat
Press Grinder
 Inventory
 Traditional: inventory exists in case
problems arise
 JIT objective: eliminate inventory
 JIT requires
– Small lot sizes
– Low setup time
– Containers for fixed number of parts
 JIT inventory: Minimum inventory to
keep system running
 JIT Inventory Tactics
 Use a pull system to move inventory
 Reduce lot size
 Reduce setup time
 Develop Just-in-Time delivery systems
with suppliers
 Deliver directly to point of use
 Perform-to-schedule
 Reduce setup time
 Use group technology
 Inventory Hides Problems Just as
Water in a Lake Hides Rocks

Inventory level

Inventory level

Process Process
Scrap Scrap downtime
downtime
Setup time Setup time Quality
Quality
problems problems

Late deliveries Late deliveries

 Lowering Inventory
Reduces Waste

Work in process inventory level

(hides problems)

Unreliable Capacity
Scrap
Vendors Imbalances
 Lowering Inventory
Reduces Waste
Reducing inventory reveals
problems so they can be solved.

WIP
Unreliable Capacity
Scrap
Vendors Imbalances
 Lowering Inventory
Reduces Waste
Reducing inventory reveals
problems so they can be solved.

Unreliable WIP Capacity

Scrap
Vendors Imbalances
 JIT Scheduling Tactics
 Communicate the schedule to suppliers
 Make level schedules
 Freeze part of the schedule
 Perform to schedule
 Seek one-piece-make and one-piece-move
 Eliminate waste
 Produce in small lots
 Use kanbans
 Make each operation produce a perfect part
Comparison of Level and Large
Lot Material-use Approaches
 Kanban
 Japanese word for card
– Pronounced ‘kahn-bahn’ (not ‘can-ban’)
 Authorizes production from downstream
operations
– ‘Pulls’ material through plant
 May be a card, flag, verbal signal etc.
 Used often with fixed-size containers
– Add or remove containers to change
production rate
Diagram of Outbound Stockpoint
with Warning-Signal Marker
Kanban Signals “Pull” Material
Through the Process
 Kanban: Additional Points
 When producer and user are not in visual contact, a
card may be used; otherwise, a light, flag, or empty
spot on the floor may work.
 Because a pull station may require several resupply
components, several kanban pull techniques can be
used at the same station.
 Usually, each card controls a specific quantity of
parts, although multiple card systems can be used if
the producing cell produces several components or
the lot size is different from the move size.
 In an MRP system, the schedule can be thought of as
a “build” authorization and the kanban as a type of
“pull” system that initiates the actual production.
 Kanban: Additional Points -
Continued
 The kanban cards provide direct control
(limit) on the amount of work-in-
process between cells.
 If there is an intermediate storage area,
a two-card system may be used; one
card circulates between user and
storage area, and the other circulates
between the storage area and the
producing area.
 Preventive Maintenance (PM)
 All activities involved in keeping
equipment in working order
 Done to prevent failure
 JIT requires
– Scheduled & daily PM
– Operator performs PM
 Knows machines
 Responsible for product quality
 Quality
 JIT exposes quality problems by
reducing inventory
 JIT limits number defects with small lots
 JIT requires TQM
– Statistical process control
– Worker involvement
 Inspect own work
 Quality circles
– Immediate feedback
 JIT Quality Tactics
 Use statistical process control
 Empower employees
 Build failsafe methods (poka-yoke,
checklists, etc.)
 Provide immediate feedback
 Employee Empowerment
 Get employees involved in product &
process improvements
– Employees know job best!
 JIT requires © 1995 Corel Corp.

– Empowerment
– Cross-training
– Training support
– Few job classifications
JIT in Services
All the techniques
used in
manufacturing are
used in services
Suppliers
Layouts
Inventory
Scheduling
Attributes of Lean Producers -
They
 use JIT to eliminate virtually all inventory
 build systems to help employees product a
perfect part every time
 reduce space requirements
 develop close relationships with suppliers
 educate suppliers
 eliminate all but value-added activities
 develop the workforce
 make jobs more challenging
 reduce the number of job classes and build
worker flexibility