JIT and lean operations

Slides of JIT and lean operations

1. JIT and Lean Operations

2. Just-in-time (JIT) is an approach which aims to produce the right part in the right place at the right time. It is a philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity It is a Japanese philosophy, firstly introduced by Toyota

3. Good production systems require that managers address three issues that are pervasive and fundamental to operations management eliminate waste, remove variability, and improve throughput

4. 1. Eliminate Waste Waste is anything that does not add value from the customer point of view Storage, inspection, delay, waiting in queues, and defective products do not add value and are 100% waste

5. Overproduction Waiting Transportation Inventory Motion Over processing Defective products Abbreviation: TIMWOOD

6. 5s is checklist for better housekeeping Developed in Japan Helps lean operations Structure/Organization( Seiri ) separating items that are essential to the job from those that are not Placing the vital items in convenient locations Systemize/Neatness ( Seiso ) Work area should be neat It reduces the time taken to locate the items

7. 3. Sanitize/cleaning( Seiton ) If the environment is clean, individuals will all start to maintain cleanliness Regular thorough cleaning is necessary and specific cleaning responsibilities should be assigned Dirty environment generates negative thoughts and pessimism 4. Standardize( Seiketsu ) emove variations from processes Following standard guidelines, employees better understand the working environment and work within it quickly and safely 5. Self Discipline/Discipline( Shitsuke ) Following the defined rules and regulations into the day-to-day working culture of organization

8. 2. Remove Variability JIT systems require managers to reduce variability caused by both internal and external factors Variability is any deviation from the optimum process Inventory hides variability Less variability results in less waste

9. Sources of Variability Incomplete or inaccurate drawings or specifications Poor production processes resulting in incorrect quantities, late, or non-conforming units Unknown customer demands

10. 3. Improve Throughput The time it takes to move an order from receipt to delivery The time between the arrival of raw materials and the shipping of the finished order is called manufacturing cycle time A pull system increases throughput

11. Key Elements of JIT Stabilize and level the MPS with uniform plant loading Create a uniform load in all work centers through constant daily production or mixed model assembly (producing same mix of products each day) Reduce or eliminate setup times Operations should aim for single digit setup times Can be accomplished through better planning, process redesign and product redesign Reduce lot sizes (manufacturing and purchases) Manufacture or purchase in small lots Requires close tie with the suppliers

12. Reduce lead times (production and delivery ) Reduce production lead times by placing work centers closer, using cellular layout and reducing queue length Reduce delivery lead time by making better tie with the suppliers Preventive maintenance Use a machine and worker idle time to maintain equipment and prevent breakdowns Flexible work force Workers should be made versatile Require supplier quality assurance and implement a zero defects quality program Quality at source program must be implemented to give worker personal responsibility for the quality of the work they do and authority to stop when something goes wrong

13. Small-lot (single unit) conveyance Use control system such as Kanban to convey parts between work stations in small quantities (ideally one unit at a time) Kanban: a visual display board that provides information about the stock of materials and supplies

14. Just in Time and Competitive Advantage JIT is of utmost importance in the cut throat competition scenario of every industry JIT provides competitive advantage by Reducing inventories Fastening the process of quality monitoring Increasing the responsive capability to the demand Increase quality and efficiency

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17. JIT Partnerships JIT partnerships exist when a supplier and purchaser work together to remove waste and drive down costs Four goals of JIT partnerships are: Removal of unnecessary activities (like inspection, receiving, paper works, bidding, etc ) Removal of in-plant inventory Removal of in-transit inventory( by suppliers locating nearby firm, and consignment inventory) Obtain improved quality and reliability

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19. Layout determines how the raw materials are travelled before finished goods and services would be created JIT lay out reduce wastes in operations Tactics for JIT layout Distance reduction High flexibility Impact on employees Reduce the space and inventory JIT Layout

20. Distance Reduction JIT layout focus on reducing the total length of layout as much as possible Often U-shaped layout for shorter paths and improved communication Often using group technology concepts group technology: a manufacturing technique in which functionally-grouped machine(producing parts or products with similar characteristics) are organized into cells to achieve high repeatability levels.

21. High Flexibility Cells are made highly flexible and interchangeable Applicable in office environments as well as production settings Cells designed to be rearranged as volume or designs of product change Facilitates both product and process improvement

22. Impact of Employees Employees may be cross trained for flexibility and efficiency Highly qualified, skilled, experienced and employees only handle the operation layout or cell without creating the waste Improved communications facilitate the passing on of important information about the process Workers become their own inspectors, personally responsible for the quality of their outputs

23. Reduced Space and Inventory With reduced space, inventory must be in very small lots Units are always moving because there is no storage

24. JIT Inventory Inventory is at the minimum level necessary to keep operations running JIT Inventory Tactics Reduce or Eliminate Setup Times Reduce Lot Sizes (manufacturing and purchase) Reduce Lead Times (production and delivery) Reduce the Variability Reduce Setup Costs

25. Reduce Setup Times Aim for single digit setup times through better planning, process redesign, and product redesign Reduce Lot Sizes (manufacturing and purchases) Just in time has also come to mean elimination of waste by reducing investment in inventory Ideal situation is to have lot sizes of one pulled from one process to the next Reduce Lead Times (production and delivery) Production lead times can be minimized by moving work stations closer together, applying group technology cellular manufacturing concepts Reducing queue length Improving the coordination between successive processes

26. Delivery lead time can be reduced by closer cooperation with suppliers, Inducing supplier to locate near the factory 4. Reduce the variability Jit eliminates the variability in the production system

27. Reduce Variability Inventory level Process downtime Scrap Setup time Late deliveries Quality problems

28. Inventory level Reduce Variability Process downtime Scrap Setup time Late deliveries Quality problems

29. Inventory level Reduce Variability Process downtime removed No scrap Setup time reduced Late deliveries Quality problems removed

30. 5. Reduce Inventory Reducing inventory uncovers the “rocks” Problems are exposed Ultimately there will be virtually no inventory and no problems Shingo says “Inventory is evil”

31. 6. Reduce Setup Costs High setup costs encourage large lot sizes Reducing setup costs reduces lot size and reduces average inventory Setup time can be reduced through preparation prior to shutdown and changeover

32. Better scheduling improves performance JIT Scheduling Tactics Communicate schedules to suppliers Make level schedules Perform to schedule Seek one-piece-make and one-piece move Eliminate waste Produce in small lots Use K anbans Make each operation produce a perfect part

33. Level Schedules Also called “Jelly bean” scheduling Process frequent small batches rather than a few large batches Make and move small lots so the level schedule is economical

34. Scheduling Small Lots A B C A A A B B B B B C JIT Level Material-Use Approach A C A A A B B B B B C C B B B B A A Large-Lot Approach Time

35. Kanban is the Japanese word for card Many different sorts of signals are used, but the system is still called a kanban I is a pull production control system It uses simple visual signals to control the movement of materials between work centers as well as production of new materials to replenish those sent downstream to the next work center

36. Dual Card Kanban As used by Toyota there are two types of Kanban Production Kanban: signals the need to produce more parts Withdrawal(move or conveyance) Kanban: signals the need to withdraw parts from one work center and deliver them to the next work center

37. Dual C ard Kanban Rules No parts are made unless there is production Kanban to authorize production. In absence of production Kanban, the process remains idle, workers perform other activities There is exactly one Kanban per container Containers for each specific part are standardized and they are always filled with the same quantity

38. Determining the number of Kanban cards or container The number of JIT system sets the amount of authorized inventory Number of Kanbans (containers) =  

39. Advantages of Kanban Kanban helps in meeting schedules reducing the time and costs required by setups and economical material handling Small batches allow only a very limited amount of faulty or delayed material It keeps the operations away from all the pitfalls of keeping inventory

40. JIT Quality There is Strong relationship between JIT and Quality JIT cuts the cost of obtaining good quality because JIT exposes poor quality Because lead times are shorter, quality problems are exposed sooner Better quality means fewer buffers and allows simpler JIT systems to be used

41. JIT Quality Tactics Use statistical process control Empower employees Build fail-safe methods ( poka -yoke, checklists, etc.) Expose poor quality with small lot JIT Provide immediate feedback

42. Difference Between Lean and JIT JIT is a tool of Lean where as Lean is a total business strategy Lean is externally focused on customer where as JIT is internally focused JIT’s role is to explicitly highlight process problems while lean aims at eliminating the problems

43. Lean Operations Different from JIT in that it is externally focused on the customer Starts with understanding what the customer wants Optimize the entire process from the customer’s perspective Lean operation means identify what customer prefer and make the necessary arrangement to the creation of value for them

44. Building a Lean Organization Transitioning to a lean system can be difficult Lean systems tend to have the following attributes Use JIT techniques Build systems that help employees produce perfect parts Reduce space requirements

45. Building a Lean Organization Develop partnerships with suppliers Educate suppliers Eliminate all but value-added activities Develop employees Make jobs challenging Build worker flexibility

46. Lean and JIT Operations in Services When JIT is used in the context of ser v ices, the focus is often on time needed to perform service Focus on inventory reduction Emphasis on Consistent high quality Standard work methods Flexible workers Close supplier relationship

47. Tactics for Deriving JIT Benefits in Services Eliminate disruption Workers should not be disturbed while working Make the S ystem F lexible Though standardization works better but the employees should be able to perform the varieties of works if needed Reduce setup times and processing times Eliminate waste Minimize work in process

48. Simplify the process When customers are part of the system Use of machines like ATMs, vending machines, mobile phone recharge machine, etc

49. Checking the sampling process Preparation of questionnaire Pilot survey Fix procedures Use of competent manpower Provide information Provide training Use of experts Checking data processing and analysis