Dr. RAVI SHANKAR

Professor

Department of Management Studies

Indian Institute of Technology DelhiHauz Khas, New Delhi 110 016, India

Phone: +91-11-26596421 (O); 2659-1991(H); (0)-+91-9811033937 (m)

Fax: (+91)-(11) 26862620

Email: r.s.research@gmail.comhttp://web.iitd.ac.in/~ravi1

SESSION#5a: Just-in-Time Systems (CFVG: 2012)

JUST IN TIME SYSTEMS IN OPERATIONS MANAGEMENT

The philosophy of JIT can be traced back to

Henry Ford, but formalized JIT originated in Japan as the Toyota Production System. W. Edwards Deming’s lesson of variability reduction was a huge influence.

The focus of JIT is to improve the system of production by eliminating

all forms of WASTE.

Just-In-Time Philosophy

JIT is a long-term approach to process improvement. It uses

timeliness as a lever to lower costs, improve quality and improve

responsiveness. However, JIT requires enormous commitment. It

took Toyota more than 25 years to get right!

The Seven Zeros: To identify waste

• Zero Defects: Quality at the source

• Zero Lot Size: To avoid batching delays

• Zero Setups: To minimize setup delay and allow production in

small lots

• Zero Breakdowns: To avoid stopping tightly coupled line

• Zero Handling: To promote flow of parts

• Zero Lead Time: To ensure rapid replenishment of parts

• Zero Surging: Necessary in system without WIP buffers.

Waste exists unless all the following goals are achieved

4

Lean Production

Lean Production can be defined as an integrated set of activities designed to achieve high-volume production using minimal inventories (raw materials, work in process, and finished goods)

Lean Production also involves the elimination of waste in production effort

Lean Production also involves the timing of production resources (i.e., parts arrive at the next workstation “just in time”)

4/10/20125 (c) Dr. Ravi Shankar, AIT (2008) 5

Just-in-Time (JIT) Mfg.

Producing just what is needed, when it is needed, in the amount needed, with only the minimum required materials, equipment, labor, and space.

6

Pull System

Customers

Sub

Sub

Fab

Fab

Fab

Fab

Vendor

Vendor

Vendor

Vendor

Final

Assembly

Here the customer starts

the process, pulling an

inventory item from

Final Assembly…

Here the customer starts

the process, pulling an

inventory item from

Final Assembly…

Then sub-

assembly work is

pulled forward by

that demand…

Then sub-

assembly work is

pulled forward by

that demand…

The process continues

throughout the entire

production process and

supply chain

The process continues

throughout the entire

production process and

supply chain

7

Features of Lean Production

• Management philosophy• “Pull” system though the plant

WHAT IT IS

• Employee participation

• Industrial engineering/basics

• Continuing improvement

• Total quality control

• Small lot sizes

WHAT IT REQUIRES

• Attacks waste

• Exposes problems and bottlenecks

• Achieves streamlined production

WHAT IT DOES

• Stable environment

WHAT IT ASSUMES

8

The Toyota Production System (TPS)

Based on two philosophies:

• 1. Elimination of waste

• 2. Respect for people

9

Some Examples of Waste

• Watching a machine run

• Waiting for parts

• Counting parts

• Over-runs in production

• Moving parts over long distances

• Storing inventory

• Looking for tools

• Machine breakdown

• Rework

10

Toyota Production System’s Four Rules

1. All work shall be highly specified as to content, sequence, timing, and outcome

2. Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses

3. The pathway for every product and service must be simple and direct

4. Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization

11

How Basic Elements of JITContribute to the “system”

Pull (Kanban) production control system

• Produce only what is needed - only when it is needed

Small-lot production

• Faster through-put, greater flexibility

Quick setups

• Facilitates economical small-lot-size production

Flexible resources

• Facilitates cellular layouts, TPM, and Kaizen

Cellular layouts

• Retain relevant flexibility of job shop, obtain efficiency of production line

12

How Basic Elements of JITContribute to the “system”

Uniform production• Create and maintain a stable production system

Quality at the source• Facilitates removal of “buffers” and contributes to

stability of the “system”

Total productive maintenance• Contributes to stability of the “system”

Supplier networks• Facilitates frequent, small quantity delivery of

materials

13

Minimizing Waste: Inventory Hides Problems

Work in

process

queues

(banks)

Change

orders

Engineering design

redundancies

Vendor

delinquencies

Scrap

Design

backlogs

Machine

downtime

Decision

backlogs

Inspection

backlogs

Paperwork

backlog

Example: By identifying defective items from a vendor early in the production process the downstream work is saved

Example: By identifying defective work by employees upstream, the downstream work is saved

14

Inventory Hides Problems

Poor

Quality

Unreliable

Supplier

Machine

BreakdownInefficient

Layout

Bad

Design

Lengthy

Setups

15

To Expose Problems:Reduce Inventory Levels

Poor

Quality

Unreliable

Supplier

Machine

BreakdownInefficient

Layout

Bad

Design

Lengthy

Setups

16

Remove Sources of Problems and Repeat the Process

Poor

Quality

UnreliableSupplier

Machine

BreakdownInefficient

Layout

Bad

Design

Lengthy

Setups

17

JIT Production: Total Quality Control

Worker responsibility

Measure SQC

Enforce compliance

Fail-safe methods

Automatic inspection ....

18

Quality At The Source

Jidoka is authority to stop production line

Andon lights signal quality problems

Under-capacity scheduling allows for planning,

problem solving & maintenance

Visual signals for production control makes problems apparent to everyone

Poka-yoke (mistake-proofing) prevents defects

19

Kaizen

Continuous improvement

Requires total employee involvement

Essence of JIT is willingness of workers to

• spot quality problems

• halt production when necessary

• generate ideas for improvement

• analyze problems

• perform different functions

20

JIT Production: Work with Vendors

Reduce lead times

Frequent deliveries

Project usage requirements

Quality expectations ....

21

JIT Production: Minimize Setup Times

What are the consequences of long setup times?

A requirement for small-lot-size, mixed-model production? ....

4/10/201222 (c) Dr. Ravi Shankar, AIT (2008) 22

JIT Production? Pull Systems? Kanban? … How does it all relate?

“Kanban”

• Means “card” in Japanese

• It is a “pull” production system and used as the means of production control in JIT

How kanbans work:• When an order to produce a finished product is issued to the plant,

workers withdraw components from a “standard container” and

build the product.

• Each container has a kanban on it, which is sent to the upstream as an authorization to produce.

• This in turn activates kanbans at that operation, sent to the next operation upstream, and so on. The process goes all the way to

kanbans issued to the vendor to produce and/or ship.

• Computer control is unnecessary:

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Minimizing Waste: Kanban Production Control Systems

Storage

Part A

Storage

Part AMachine

CenterAssembly

Line

Material Flow

Card (signal) Flow

Withdrawal kanban

Once the Production kanban is

received, the Machine Center

produces a unit to replace the

one taken by the Assembly Line

people in the first place

This puts the

system back

were it was

before the item

was pulled

The process begins by the Assembly Line

people pulling Part A from Storage

Production kanban

24

Kanban Card

46-281247p127” Al Rim

Qty

23

Stock Loc:

RIP 1

Line Loc:

Asm. 1

Unique Part #

Description

Kanban QtyWhere to find

part when bin

is empty Where to return

filled Kanban

4/10/201225 (c) Dr. Ravi Shankar, AIT (2008) 25

Characteristics of Systems Well-suited to JIT

Discrete parts produced in a highly

repetitive environment.

Fairly smooth demand pattern throughout the year.

Setup times/costs that can be reduced.

High worker flexibility - solve problems

Close proximity to vendors.

4/10/201226 (c) Dr. Ravi Shankar, AIT (2008) 26

JIT Philosophy Requires Strong Partnerships with Suppliers

Characteristics of true JIT buyer-supplier partnerships• JIT requires fast and regular supply

• Cost not only factor in vendor selection: quality, flexibility and delivery are also key factors.

• Preferred vendors offer small lot sizes, frequent deliveries

• JIT requires few to single suppliers to solidify partnerships

Typical Supplier Concerns

• Erratic schedules from customer

• Impact of small lot sizes - additional transportation costs.

• Proximity

4/10/201227 (c) Dr. Ravi Shankar, AIT (2008) 27

CONCLUSION

The Lessons of JIT

•The production environment itself is a control

•Operational details matter strategically

•Controlling WIP is important

•Speed and flexibility are important assets

•Quality can come first

•Continual improvement is a condition for survival

29

Just-In-Time Production

• Management philosophy

• Pull system though the plant

• Management philosophy

• Pull system though the plant

WHAT IT IS

• Employee participation

• Industrial engineering/basics

• Continuing improvement

• Total quality control

• Small lot sizes

• Employee participation

• Industrial engineering/basics

• Continuing improvement

• Total quality control

• Small lot sizes

WHAT IT REQUIRES

• Attacks waste (time, inventory,

scrap)

• Exposes problems and bottlenecks

• Achieves streamlined production

• Attacks waste (time, inventory,

scrap)

• Exposes problems and bottlenecks

• Achieves streamlined production

WHAT IT DOES

• Stable environment• Stable environment

WHAT IT ASSUMES

....