14-1 JIT and Lean Operations

Lean and JIT Systems

Originated from: Operations Management, 8th edition, William J Stevenson

McGraw-Hill
14-2 JIT and Lean Operations

Lean Production
 Lean Production supplies customers with exactly
what the customer wants, when the customer
wants, without waste, through continuous
improvement.
14-3 JIT and Lean Operations

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.
14-4 JIT and Lean Operations

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
14-5 JIT and Lean Operations

JIT/Lean Production

 Just-in-time (JIT): A highly coordinated

processing system in which goods move
through the system, and services are
performed, just as they are needed,
 JIT   lean production
 JIT  pull (demand) system
14-6 JIT and Lean Operations

Goal of Lean

The ultimate goal of lean is a balanced

system.

Achieves a smooth, rapid flow of materials

through the system
14-7 JIT and Lean Operations

Goals & Building Blocks of Lean Systems

Ultimate A
Goal balanced
rapid flow

Supporting
Goals Eliminate disruptions
Make the system flexible Eliminate waste

Product Process Personnel Manufactur- Building

Design Design Elements ing Planning Blocks
14-8 JIT and Lean Operations

Supporting Goals

 Eliminate disruptions
 Make system flexible
 Eliminate waste, especially excess
inventory
14-9 JIT and Lean Operations

Waste

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
President, Toyota © 1995 Corel Corp.
14-10 JIT and Lean Operations

Types of Waste

 Overproduction
 Waiting
 Unnecessary
Transportation
 Inefficient processing
 Inventory
 Unnecessary motion
© 1995

 Product defects Corel

Corp.
14-11 JIT and Lean Operations

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%
14-12 JIT and Lean Operations

Lean Building Blocks

 Product design
 Process design
 Personnel/organizational
elements
 Manufacturing
planning and control
14-13 JIT and Lean Operations

Lean Goals and Building Blocks

Figure 14.1

Ultimate A
Goal balanced
rapid flow

Supporting
Goals Eliminate disruptions
Make the system flexible Eliminate waste

Product Process Personnel Manufactur- Building

Design Design Elements ing Planning Blocks
14-14 JIT and Lean Operations

Product Design

 Standard parts
 Modular design
 Highly capable production systems
 Concurrent
engineering
14-15 JIT and Lean Operations

Process Design

 Small lot sizes

 Setup time reduction

 Manufacturing cells

 Limited work in process

 Quality improvement

 Production flexibility

 Little inventory storage

14-16 JIT and Lean Operations

Inventory level

Process
Scrap downtime

Setup Quality
time problems

Late deliveries
Figure 16.1
14-17 JIT and Lean Operations

Inventory
level

Process
Scrap downtime

Setup Quality
time problems

Late deliveries
Figure 16.1
 14-18 JIT and Lean Operations

Reduce Lot Sizes

Q1 When average order size = 200

average inventory is 100
200 –
Inventory

Q2 When average order size = 100

average inventory is 50
100 –

Time

Figure 16.2
14-19 JIT and Lean Operations

Benefits of Small Lot Sizes

Reduces inventory
Less rework
Less storage space
Problems are more apparent
Increases product flexibility
Easier to balance operations
14-20 JIT and Lean Operations

Production Flexibility

 Reduce downtime by reducing

changeover time
 Use preventive maintenance to reduce
breakdowns
 Cross-train workers to help clear
bottlenecks
14-21 JIT and Lean Operations

Production Flexibility (cont’d)

 Use many small units of capacity

 Use off-line buffers

 Reserve capacity for important customers

14-22 JIT and Lean Operations

Quality Improvement

 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
14-23 JIT and Lean Operations

Quality Improvement

 Autonomation
 Automatic detection of defects during
production
 Jidoka
 Japanese term for autonomation
14-24 JIT and Lean Operations

Personnel/Organizational Elements

 Workers as assets
(empowerment)
 Cross-trained workers
 Continuous
improvement
 Cost accounting
 Leadership/project
management
14-25 JIT and Lean Operations

Manufacturing Planning and Control

 Level loading
 Pull systems
 Visual systems
 Close vendor relationships
 Reduced transaction
processing
 Preventive maintenance
 Comparisons (cont.)

Advantages Disadvantages

MRP  PUSH
Allows Managers to manage – that
Can lead to large inventories
is, plan and control things
Requires intricate knowledge of Can generate large quantities of
Production Times & Product Flow scrap before errors are discovered
Can lead to economies of scale in Requires diligence to maintain
purchasing and production effective product flow
Allows for the planning and
completion of complex assemblies Requires maintenance of large and
as sub-components are delivered complex databases
only by scheduled need
14-27 JIT and Lean Operations

Comparisons (cont.)

Advantages Disadvantages
JIT  PULL
Every job is a ‘High Stress’ Rush
Limited and known Final Inventory
order
Worker only consume their time &
Balanced systems MUST be in
Raw Materials on what is actually
place
needed
Setup times will greatly impact
Quality MUST be High – each piece throughput
has a definite place to go – else Any problem will lead to unhappy
immediate feedback is given customers (either internal or
external)
14-28 JIT and Lean Operations

Pull/Push Systems

 Pull system: System for moving work where

a workstation pulls output from the preceding
station as needed. (e.g. Kanban)
 Push system: System for moving work where
output is pushed to the next station as it is
completed
14-29 JIT and Lean Operations

Kanban Production Control System

 Kanban: Card or other device that

communicates demand for work or materials
from the preceding station
 Kanban is the Japanese word meaning
“signal” or “visible record” (May be a card,
flag, verbal signal etc.)
 Paperless production control system
 Authority to pull, or produce comes
from a downstream process.
14-30 JIT and Lean Operations

Kanban Signals “Pull” Material Through the Process

14-31 JIT and Lean Operations

Comparison of Lean and Traditional

Table 14.3

Factor Traditional JIT / Lean

Inventory Much to offset forecast Minimal necessary to operate
errors, late deliveries
Deliveries Few, large Many, small

Lot sizes Large Small

Setup; runs Few, long runs Many, short runs

Vendors Long-term relationships Partners

are unusual
Workers Necessary to do the Assets
work
14-32 JIT and Lean Operations

Benefits of Lean Systems

 Reduced inventory levels

 High quality
 Flexibility
 Reduced lead times
 Increased productivity
14-33 JIT and Lean Operations

Benefits of Lean Systems (cont’d)

 Increased equipment utilization

 Reduced scrap and rework
 Reduced space requirements
 Pressure for good vendor relationships
 Reduced need for indirect labor