Operations Management For Competitive Advantage 1
Just-in-Time andJust-in-Time andLean SystemsLean Systems
Operations ManagementFor Competitive Advantage
Chapter 10
Operations Management For Competitive Advantage 2
Chapter 10
Just-in-Time and Lean Systems
JIT Defined
The Japanese Approach to Productivity
JIT Implementation Requirements
JIT in Services
Operations Management For Competitive Advantage 3
Just-In-Time (JIT)Defined JIT 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).
JIT also involves the elimination of waste in production effort.
JIT also involves the timing of production resources (e.g., parts arrive at the next workstation “just in time”).
Operations Management For Competitive Advantage 4
JIT Demand-Pull LogicExhibit 10.1Exhibit 10.1
Customers
Sub
Sub
Fab
Fab
Fab
Fab
Vendor
Vendor
Vendor
Vendor
Final Assembly
Operations Management For Competitive Advantage 5
The Japanese Approach to Productivity Imported technologies Efforts concentrated on shop floor Quality improvement focus Elimination of waste Respect for people
Operations Management For Competitive Advantage 6
Waste in Operations
(1) Waste from overproduction
(2) Waste of waiting time
(3) Transportation waste
(4) Inventory waste
(5) Processing waste
(6) Waste of motion
(7) Waste from product defects
Operations Management For Competitive Advantage 7
Minimizing Waste: Focused Factory Networks
Final Assembly
CoordinationSystem Integration
Operations Management For Competitive Advantage 8
Minimizing Waste: Group Technology (Part 1)
Using Departmental Specialization for plant layout can cause a lot of
unnecessary material movement.
Saw Saw
Lathe PressPress
Grinder
LatheLathe
Saw
Press
Heat Treat
Grinder
Operations Management For Competitive Advantage 9
Minimizing Waste: Group Technology (Part 2) Revising by using Group Technology Cells can reduce movement and
improve product flow.
Press
Lathe
Grinder
Grinder
A
2
BSaw
Heat Treat
LatheSaw Lathe
PressLathe
1
Operations Management For Competitive Advantage 10
Minimizing Waste: Uniform Plant Loading
Not uniform Jan. Units Feb. Units Mar. Units Total
1,200 3,500 4,300 9,000
Uniform Jan. Units Feb. Units Mar. Units Total
3,000 3,000 3,000 9,000
Suppose we operate a production plant that produces a single product. The schedule of production for this product could be accomplished using either of the two plant loading schedules below.
How does the uniform loading help save labor costs?
or
Operations Management For Competitive Advantage 11
Minimizing Waste: Just-In-Time 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
Exhibit 10.3Exhibit 10.3
Operations Management For Competitive Advantage 12
Minimizing Waste: Inventory Hides Problems
Exhibit 10.4Exhibit 10.4
Work in
process
queues
(banks)
Change
orders
Engineering design
redundancies
Vendor
delinquencies
Scrap
Design
backlogs
Machine
downtime
Decision
backlogsInspection
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.
Operations Management For Competitive Advantage 13
Minimizing Waste: Kanban Production Control Systems
Exhibit 10.6Exhibit 10.6
Storage Part A
Storage Part AMachine
Center Assembly Line
Material Flow
Card (signal) Flow
Withdrawal kanban
Production kanban
Operations Management For Competitive Advantage 14
Determining the Number of Kanbans Needed Setting up a kanban system requires
determining the number of kanbans (or containers) needed.
Each container represents the minimum production lot size.
An accurate estimate of the lead time required to produce a container is key to determining how many kanbans are required.
Operations Management For Competitive Advantage 15
The Number of Kanban Card Sets
C
SdL
k
)(1
container theof Size
stockSafety timelead during demand Expected
k = Number of kanban card sets (a set is a card)d = Average number of units demanded over some time periodL = lead time to replenish an order (same units of time as demand)S = Safety stock expressed as a percentage of demand during lead timeC = Container size
Operations Management For Competitive Advantage 16
Example of Kanban Card Determination: Problem Data A switch assembly is assembled in batches of 4 units
from an “upstream” assembly area and delivered in a special container to a “downstream” control-panel assembly operation.
The control-panel assembly area requires 5 switch assemblies per hour.
The switch assembly area can produce a container of switch assemblies in 2 hours.
Safety stock has been set at 10% of needed inventory.
Operations Management For Competitive Advantage 17
Example of Kanban Card Determination: Calculations
3or ,75.24
5(2)(1.1))(1
container theof Size
stockSafety timelead during demand Expected
C
SdL
k
Always round up!
Operations Management For Competitive Advantage 18
Respect for People
Level payrolls
Cooperative employee unions
Subcontractor networks
Bottom-round management style
Quality circles (Small group involvement activities)
Operations Management For Competitive Advantage 19
JIT Requirements: Design Flow Process Link operations
Balance workstation capacities
Relayout for flow
Emphasize preventive maintenance
Reduce lot sizes
Reduce setup/changeover time
See Exhibit 10.8See Exhibit 10.8
Operations Management For Competitive Advantage 20
JIT Requirements: Total Quality Control
Worker responsibility
Measure SQC
Enforce compliance
Fail-safe methods
Automatic inspection
Operations Management For Competitive Advantage 21
JIT Requirements: Stabilize Schedule
Level schedule
Underutilize capacity
Establish freeze windows
Operations Management For Competitive Advantage 22
JIT Requirements: Kanban-Pull
Demand pull
Backflush
Reduce lot sizes
Operations Management For Competitive Advantage 23
JIT Requirements: Work with Vendors
Reduce lead times
Frequent deliveries
Project usage requirements
Quality expectations
Operations Management For Competitive Advantage 24
JIT Requirements: Reduce Inventory More Look for other areas
Stores
Transit
Carousels
Conveyors
Operations Management For Competitive Advantage 25
JIT Requirements: Improve Product Design
Standard product configuration
Standardize and reduce number of parts
Process design with product design
Quality expectations
Operations Management For Competitive Advantage 26
JIT in Services (Examples)
Organize Problem-Solving Groups
Upgrade Housekeeping
Upgrade Quality
Clarify Process Flows
Revise Equipment and Process Technologies
Operations Management For Competitive Advantage 27
JIT in Services (Examples)
Level the Facility Load
Eliminate Unnecessary Activities
Reorganize Physical Configuration
Introduce Demand-Pull Scheduling
Develop Supplier Networks