Operations Management

Just-in-Time Systems

JIT/Lean Production
Just-in-time:
Repetitive production system in which processing and movement of materials and goods occur just as they are needed, usually in small batches

Is characteristic of lean production systems Operates with very little fat Is very responsive to customers

Types of Resource Planning Systems

Material Requirements Planning (MRP) A set of techniques that uses bill of material data, inventory data, and the master production schedule to calculate time-phased requirements for materials. Recommends release of replenishment orders and rescheduling of open orders as conditions (priorities) change.
APICS Dictionary - 9th Ed.

MRP Overview
MRP Inputs MRP Processing MRP Outputs Changes Master schedule Primary reports Bill of materials file MRP computer programs Secondary reports Order releases Planned-order schedules Exception reports Planning reports Performancecontrol reports Inventory transaction

Inventory records file

Types of Resource Planning Systems

Enterprise Resource Planning (ERP)
A method for the effective planning and control of all resources needed to take, make, ship, and account for customer orders. Differs from typical MRP II in technical requirements such as graphical user interface, relational database, 4GL languages, clientserver architecture and open-system portability (Example SAP R/3)
Modified from APICS Dictionary - 9th Ed.

JIT vs. MRP/ERP

Similar goals
Right products, right place, right time

MRP/ERP
Computer-based, manages complexity

JIT
Manual systems, simplicity/execution

The Super Bowl of Planning & Control Choice? - play to strengths

Just-In-Time Concepts
jit - Inventory/production control system
Supplies and components are pulled through system to arrive where they are needed when they are needed.

JIT - Management philosophy of continuous improvement and forced problem solving

What Does Just-in-Time Do?

Multi-pronged approach
High quality, quick response, flexibility

Attacks waste
Anything not adding value to product (customer view)

Exposes problems and bottlenecks caused by variability

Deviation from optimum

Achieves streamlined production (pull system)

Reduced inventory Simplified Execution

Waste
Waste is anything other than the minimum amount of equipment, materials, parts, space, and workers time, which are absolutely essential to add value to the product.
Shoichiro Toyoda President, Toyota
1995 Corel Corp.

Variability
Employees, machines, and suppliers produce units that do not conform to standards, are late, or are not the proper quantity Engineering drawings or specifications are inaccurate Production personnel try to produce before drawings or specifications are complete Customer demands are unknown

Push versus Pull

Push system: material is pushed into downstream workstations regardless of whether resources are available Pull system: material is pulled to a workstation just as it is needed

JIT Characteristics
A Fixed, Steady Rate of Production
Uniform flow/communicated to vendors Mixed model, linear production

Low Inventories
Less space, investment Uncover defects

Small Lot Sizes

Less WIP Flexibility/Velocity Fast feedback

JIT Characteristics
Quick, Low Cost Setups
Flexibility/Velocity Small lot sizes

Layout
U-shaped Cellular/flexible

Preventive Maintenance & Repair

Worker pride/ownership

JIT Characteristics
Empowered Workers
Multifunctional/Cooperative (Guerilla squad) Flexible capacity

High Quality Levels

On-going production Small/frequent deliveries

Product simplification
Standardization Fewer part numbers/drawings

JIT Characteristics
Reliable Suppliers
Dock-to-stock Much fewer in number Long-term relationships

A Pull System of Moving Goods

Request-based Kanban signal

Commitment to Problem Solving/ Continuous Improvement

JIT Building Blocks

Ultimate A Goal balanced rapid flow Supporting Goals Reduce setup and lead times Eliminate waste Eliminate disruptions Make the system flexible Minimize inventories

Product Design

Process Design

Personnel Elements

Manufacturing Planning

Building Blocks

JIT in Services
All the techniques used in manufacturing are used in services
Suppliers Layouts Inventory Scheduling

Converting to a JIT System

Top management commitment Prioritize efforts Worker support Start by reducing setup times Gradually convert operations Convert suppliers to JIT Prepare for obstacles

Obstacles to Conversion
Management not committed Workers not cooperative Suppliers may resist

JIT & Operations Planning and Control

MRP as planning tool Level loading/linear production Pull systems/visual control Closer relationships w/ fewer vendors Reduced transaction processing

Attributes of Lean Producers

use JIT to eliminate virtually all inventory build systems to help employees produce 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