Operations Management

Lecture 3: Just in Time

Dr. Gyan Prakash

Backdrop
 Just in Time (JIT)
 Japanese firms, particularly Toyota, in 1970's and 1980's
 Geographical and cultural roots
 Country of many islands – poor in natural resources
 Focus on relationships
 Japanese objectives after second world war
 “catch up with America” (within 3 years of 1945)
 provide small lots of many models
 Japanese motivation
 Japanese domestic production in 1949 – trucks: 25622, cars: 1,008
 American to Japanese productivity ratio – 9 :1
 Industries were witnessing “slow growth” in 1970's.
Toyota Production System
Pillars
 Just-in-time,
 Autonomation, automation with a human touch (machine will stop in case of problems)

Practices
 setup reduction  Single-Minute Exchange of Die (SMED)
 worker training  cross-trained multi-skilled workers
 vendor relations  long-term
 ensuring quality  at source
 fool proofing (baka-yoke)  mistake proofing (poka-yoke)
 Insuring error free operations or identifying error immediately
 …
Motivation: Supermarket Stimulus

Build from insights from supermarket:

Customers get only what they need

Stock replenished quickly

But, who holds inventory?

 Inventory is on the move and replenished frequently

Frequent Deliveries
Inventory level

One type of item in one delivery

Inventory level

JIT model: Various types of items in one

delivery
Zero Inventories
Platonic Ideal
 Zero Inventories connotes a level of perfection not ever attainable in a production process.
 Concept of a high level of manufacturing excellence

 Stimulates a quest for constant improvement

Metaphorical Writing:
– Shingo 1990
 5W = 1H
(who, when, where, what and why)  why, why, why, why, why and how)
JIT material flow
buffer inventory to
maintain smooth
Traditional approach flow of production

buffer buffer
inventory inventory
stage A stage B stage C

Use of signals for

JIT approach need based
material flows
orders orders

stage A stage B stage C

deliveries deliveries

Adapted from Slack, Chambers and

JIT and capacity utilization
focus on producing
Traditional approach
only when needed
focus on high JIT approach
capacity utilization leading to lean
fewer stoppages
more stoppages lower capacity
because of utilization, but low inventory so
problems
problems are
more production
high inventory exposed and
at each stage
means less chance solved
of problems being
exposed and solved no surplus
production goes
extra production
into inventory
goes into inventory
because of continuing
stoppages at stages

Adapted from Slack, Chambers and

The 5 S’s
 Sort (Seiri) Eliminate what is not needed and keep
what is needed.
 Set (Seiton) Position things in such a way that they
can be easily reached whenever they are needed.
 Shine (Seiso) Keep things clean and tidy; no waste
or dirt in the work area.
 Standardize (Seiketsu) Maintain cleanliness and
order – perpetual neatness.
 Sustain (Shitsuke) Develop a commitment and pride
in keeping to standards.
The Seven Zeros
 Zero Defects: avoid delays due to defects. (Quality at the source)
 Zero (Excess) Lot Size: avoid “waiting inventory” delays (develop a lot size of one.)
 Zero Setups: minimize setup delay and facilitate small lot sizes.
 Zero Breakdowns: avoid stopping, machine failures/repair are planned.
 Zero (Excess) Handling: reduce material movement from work station to work station.
 Zero Lead Time: ensure rapid replenishment of parts (very close to the core of the zero
inventories objective).
 Zero Surging: parts are produced as needed without WIP buffers.
JIT Small Machines Approach
 The conventional western approach was to use large machines to get
‘economies of scale’.
 But long, complex set-ups, big-batches, create ‘waste’.
 Use of several small machines allows simultaneous processing
 robust and is more flexible
 requires fewer set-ups
 quick set-up
 flexible scheduling options
 cheaper tooling
 planned maintenance easier
 fewer set-ups needed
 Emphasise flexibility and economies of scope

Adapted from Slack, Chambers and

The Environment as a Control
Environment as control Western approaches JIT approaches
Machine setup times High Reduction in set up time
Vendor deliveries EOQ Long-term relation with frequent
deliveries
Quality levels Inspection-scrap, rework Quality at source
Production schedule Wagner-Whitin model Customer due dates are negotiated,
integration of marketing and manufac.
Product designs Given design Manufacturer and engineering work
together to design what is practical

By improving the environment manufacturing system can be made much easier to manage .
Implementing JIT
Careful restructuring of production environment
Production Smoothing:
 relatively constant volumes
 relatively constant product mix
Mixed Model Production Scheduling (Heijunka):
 Smoothing aggregate production requirements
 Sequencing final assembly
 Master Production Schedule (MPS)  Final Assembly Schedule (FAS)
 MPS- production volume:10,000 per month (20 working days)
 FAS- 500 per day (2 shifts), 250 per shift (480 minutes)

 1 unit every 1.92 minutes ---- Takt time

Production of discrete parts – fairly steady rate

Repetitive Manufacturing– basis for Kanban
Implementing JIT …
 Translation of MPS  Final Assembly Schedule (daily rates)
 Product specific requirements  production sequence
Assume you are making A,B,C with:
Mix of 50% A, 25% B, 25% C in daily production of 500 units
0.50  500 = 250 units of A
0.25  500 = 125 units of B
0.25  500 = 125 units of C

A–B–A–C–A–B–A–C–A–B–A–C–A–B–A–C…

Production sequence
Inherent Inflexibility of JIT
JIT results in many inflexibilities:
 Stable volume
 Stable mix
 Precise sequence
 Rapid (instant?) replenishment

Measures to Promote Flexibility:

 Capacity buffers
 Setup reduction
 Cross training
 Plant layout
Measures to Promote Flexibility:
Capacity Buffers
Buffer Capacity:
 Protection against quota shortfalls/stock outs
 Regular flow allows matching with customer demands
 Planned down time preventive maintenance or catch-up
 Two shifting
 4 – 8 – 4 – 8 (eight hour shifts for regular flow, 4 hour downtime for preventive maintenance or catch-up
Measures to Promote Flexibility: Setup
Reduction
Internal vs. External Setups:
 External setup– performed while machine is still running
 Internal setup– performed while machine is down

Setup reduction requires:

1. Separation of the internal setup from the external setup
2. Convert as much as possible of the internal setup to the external setup
3. Elimination the adjustment process by use of fixtures or sensors
4. Abolish the setup itself (uniform product design, combining production, using parallel
machines)
Measures to Promote Flexibility: Cross
Training
 Cross-training of workers and worker rotation system
 Adds flexibility to inherently inflexible system
 Allows capacity to float to smooth flow
 Reduces boredom
 Fosters appreciation for overall picture
 Increases potential for idea generation
Measures to Promote Flexibility:
Workforce Agility
Cross-trained workers:
 perform work where needed
 work can be performed by workers at adjacent stations
 reduces variability in tasks, and hence line stoppages/quality problems reduces
 provide more heads per problem area
 facilitate sharing of tasks
 appreciate line-wide perspective
Measures to Promote Flexibility: Plant
Layout
Better plant layout
Machines for successive operations can be placed together

Promote flow with little WIP

Facilitate workers staffing multiple machines

U-shaped cell layouts (prominently used in Japan)

 Provide maximum visibility
 Provide minimum walking
 Allows flexibility in number of workers Inbound Stock Outbound Stock
 Facilitates monitoring of work entering and leaving cell
 Workers can conveniently cooperate to smooth flow and address problems
Focused Factories
Pareto Analysis:
 Small percentage of SKUs represent large percentage of volume
 Large percentage of SKUs represent little volume but much complexity
Dedicated Lines (large volume)
 for families of high runners
 few setups Saw Lathe Mill Drill
 little complexity

Warehouse
Saw Mill Drill Paint

Assembly
Stores
Job Shop Environment (little volume) Grind Mill Drill Paint

 for low runners Weld Grind Lathe Drill

 many setups
Saw Grind Paint
 poorer performance, but only
on smaller portion of business

Warehouse
Assembly
Stores
Lathe

Mill
Drill
Kanban
Definition: A “Kanban” is a sign-board or card in Japanese and is the name of the flow control
system developed by Toyota.
Kanban enables:
 Kanban is a tool for realizing just-in-time.
 Production process must be managed to provide smooth flow
 Leveling of production volumes
 Working in accordance with standard work methods.

Push vs. Pull

 Push systems schedule releases
 Pull systems authorize releases
 Kanban is a “pull system
 Two-Card Kanban
Inbound Outbound Inbound Outbound
stockpoint stockpoint stockpoint stockpoint
A full container is found and moved
to inbound stock point.

Move card is put on

empty container.
It authorizes pickup
When material is needed
When stock is removed, Move card is placed in
production card placeed hold box.
in hold box.
Production cards Move cards Production card authorizes
preceding operation to make
enough
No. of Kanbans= demand in the cycle

d
Deman
size of each container Production card Workstation ready for new task.
Cycle: Production part + demand part Move card Operator takes production card.
D is demand per unit of time
Adapted from Hopp and
MRP versus Kanban
Production is triggered by schedule
MRP
Lover Level
Inventory … Assembly

Completed work pushed to the next workstation

Kanban
Lover Level Assembly
Inventory …

…
Production is triggered by Kanban signal

Kanban Signals Full Containers

The Lessons of JIT
 The production environment itself is used as a control
 Setup time reduction, designing products for manufacturing, leveling production
schedule…
 Operational issues matter strategically
 Need to examine examine mundane aspect to reduce waste
 Controlling WIP is important
 Need short cycle times, high quality levels
 Speed and flexibility are important assets
 Quality can come first
 Continual improvement is a condition for maintaining competitive edge
Thank you