JUST IN TIME & SCM

JIT & SCM

SCM is a concept involving the integration of all the value-creating elements in the supply, manufacturing, and distribution processes, from raw material extraction, through the transformation process, to end user consumption. The supply chain Raw material/extraction

Ultimate sale/delivery to the final consumer

JIT & SCM

JIT & SCM

SCM is a process oriented, integrated approach to procuring, producing, and delivering products and services to customers, covering the management of material, information and financial flows. JIT can be transferred to an entire supply chain management.

Why JIT? Inventories a type of investment Types of inventories Cost of inventories Factors leading to inventory waste

Just In Time
Introduced in the TOYOTA production system for the purpose of eliminating waste, during 1950s and 1960's. Kiichiro Toyoda, the Father of Japanese Automobile Industry was the one who conceived the idea of JIT. Taichi Ohno is responsible for the successful implementation of JIT. JIT principles can be used to increase the effectiveness of SCM

Just In Time
A philosophy of manufacturing based on planned elimination of all waste and continuous improvement of productivity. It encompasses the successful execution of all manufacturing activities required to produce a final product, from design engineering to delivery and including all stages of conversion from raw material onward. The primary elements include having only the required inventory when needed; to improve quality to zero defects; to reduce lead time by reducing setup times, queue lengths and lot sizes; to incrementally revise the operations themselves; and to accomplish these things at minimum cost. -The American Production and Inventory Control Society (APICS)

Just In Time
JIT is a broad management philosophy that seeks to eliminate waste that results from any activity that adds cost without adding value, by producing the right part in the right place at the right time (Ohno,1988) JIT seeks to improve profits and return on investments by reducing inventory levels and cutting unnecessary inventory, reducing variability, improving product quality, reducing production and delivery lead times, and reducing other costs such as those associated with machine setup and equipment breakdown (Liker,2004)

JIT Philosophy
JIT system a combination of JIT purchasing, JIT manufacturing & JIT inbound logistics An entire philosophy that must be observed in order to avoid the downfalls

JIT Philosophy
First sell it, then make it Stockless/Zero inventory Pull methods Reverse order Lean production Eliminate Waste Aimed at to produce and deliver finished goods just in time to be sold, subassemblies just in time to be assembled in to finished goods, fabricated parts just in time to go into assemblies, and purchased materials just in time to be transformed in to fabricated parts.

Continuous Flow Production

Traditional Flow
Production Process (stream of water)

Suppliers

Customers Inventory (stagnant ponds)

Flow with JIT

Material (water in stream) Customers

Suppliers

Elements of JIT
1.Continuous improvement Attacking fundamental problems - anything that does not add value to the product. Devising systems to identify problems. Striving for simplicity - simpler systems may be easier to understand, easier to manage and less likely to go wrong. A product oriented layout - produces less time spent moving of materials and parts. Quality control at source - each worker is responsible for the quality of their own output. Pokayoke - `foolproof' tools, methods, jigs etc. prevent mistakes Preventative maintenance, Total productive maintenance ensuring machinery and equipment functions perfectly when it is required, and continually improving it.

2.Eliminating waste
Waste from Overproduction Transportation Waste Processing Waste Waste from Product Defects Waste of waiting/idle time Inventory Waste Waste of Motion

3. Good housekeeping(5s for wokplace improvement)

` Seiri: Proper arrangement (sort through and sort out, identify what you need, discard what you do not need ) ` Seiton: Orderliness (assign a separate location for all essential items) ` Seiso: Cleanliness (keep the workplace spotless at all times) ` Seiketsu: Cleanup (maintain equipment and tools) ` Shitsuke: Discipline (stick to the rules scrupulously) 4. Set-up time reduction- increases flexibility and allows smaller batches. Ideal batch size is 1 item. 5. Multi-process handling- a multi-skilled workforce has greater productivity, flexibility and job satisfaction. 6. Levelled / mixed production- to smooth the flow of products through the factory.

7. Kanbans- simple tools to `pull' products and components

through the process. - a flag or a piece of paper which contains all relevant information, part number, description, process area used, time of delivery, quantity available, quantity delivered, production quantity

8. Jidoka (Autonomation)- providing machines with the

autonomous capability to use judgment, so workers can do more useful things than standing watching them work.

9. Andon(trouble lights)- to signal problems to initiate

corrective action.

JIT Goals and Building Blocks

Ultimate A Goal balanced rapid flow

Supporting Goals

Eliminate disruptions Make the system flexible Eliminate waste

Product Design

Process Design

Personnel Elements

Manufacturing Planning

Building Blocks

Goals of JIT
Inc. productivity Waste elimination Reduce costs Zero Defect process Optimal cost/quality relationship

Efficiency

Respond to customer needs

Competi tiveness

Reliable relationship with suppliers

Pre requisites of JIT system

Purchasing
Must cultivate a limited number of highly-reliable suppliers/vendors with long term partnerships. Using local suppliers to reduce replenishment cycle time. Suppliers must be particularly strong in lead time dependability and quality. Quality at the source must be ensured by preventing defects and doing it right the first time, along with eliminating incoming inspection. Suppliers must have knowledge of production and inventory of buyers to plan their own production. Online electronic data interchange system is essential for real time communication of information.

Transportation
Delivery schedules and turn around times of high discipline are required in JIT system

Warehousing
Focus on material movement not on material storage. Hence, emphasis must be on the ability to move material quickly and efficiently as against automated storage systems. Parts and components must be delivered in fragments directly to the point of use.

Inventory Control
Elimination of safety stock Reduction of errors in inventory system Trade off between order size and time phased intended use; and Low variety and stability of demand.

Production
Small production lots Short production run Rapid set up time Flexible manufacturing system

Traditional Mass Production

After JIT - Lean Production

Tighter coordination along the supply chain Goods are pulled along-only make and ship what is needed

Advantages of JIT
Inventory levels are drastically reduced. Process time, space requirement and set up time are reduced considerably Leads to time based competition using speed as a weapon to capture market share Eliminating waste by prohibiting overproduction, waiting, undue warehousing and handling facilities, and defective production. Improve customer service and commitments, bringing competitive advantage. Improve productivity. Motion of efforts by greater employees participation and motivation.

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