jit, kanban, kaizen, muda in tps (toyota production system)

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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan Impact of JIT Inventory on procurement function in Perspective of Toyota Motor rporation Presented to Mr. Usman Khalid

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Page 1: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

Impact of JIT

Inventory on

procurement

function in

Perspective of

Toyota Motor

CorporationPresented to Mr. Usman Khalid

Page 2: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan2

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

Group Members

Page 3: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

ContentsIntroduction and History of

Toyota

JIT and other TPS Terms

JIT Process & Principles

Toyota Production System (TPS)

Questions......

JIT Philosophy

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 4: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

Origin of Toyota Production System Sakichi Toyoda (1867-1930)

Automatic Loom

Kiichiro Toyoda (1894- 1952)Used chain conveyor into the Assembly

line

Eiji Toyoda (1913)Implementation of Jidoka and JIT

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 5: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Toyota Production System(TPS)

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 6: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

JIT

KANBAN

KAIZEN

MUDA

NEMAWASHI

POKAYOKE

YOKOTEN

ANDON

GENCHI GENGUSTU

HEIJUNKA

OSHIN

JIDOKA

JISHUKAN

TPS TERMS

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 7: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

Take timeContinuous

Fow

The pull system

Just In Time ConceptOne of the two main pillars of TPS. It

refers to the manufacturing and

conveyance of only “what is needed,

when is needed, and in the amount

needed in the system”.

1. The Pull System

2. Continuous Flow Processing

3. Take time

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 8: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

JIT is a philosophy of continuous improvement in which non-value-

adding activities (or wastes) are identified and removed for the

purposes of:

◧ Reducing Cost

◩ Improving Quality

◨ Improving Performance

◪ Improving Delivery

♦ Adding Flexibility

▬ Increase innovativeness

Just In Time Philosophy

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 9: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

“A philosophy of manufacturing based on planned elimination of all

waste and continuous improvement of productivity.  It encompasses

the successful execution of all manufacturing activities required to

produce a final product, from design engineering to delivery and

including all stages of conversion from raw material onward.  The

primary elements include having only the required inventory when

needed; to improve quality to zero defects; to reduce lead time by

reducing setup times, queue lengths and lot sizes; to incrementally

revise the operations themselves; and to accomplish these things at

minimum cost."

The American Production and Inventory Control Society (APICS) has the following definition of JIT

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 10: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan10

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

Page 11: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

Limitations/Disadvantages of JIT⋑ Higher amount of machine/worker idle time

⋑ More efficient when demand pattern is stable

⋑ When there is a sudden change in the demand pattern it will

take time for JIT system to react since there is no central

information unit

⋑ It may be difficult and expensive to introduce

⋑ There is little room for mistakes as minimal stock is kept for re-

working faulty product

⋑ Production is very reliant on suppliers and if stock is not

delivered on time, the whole production schedule can be

delayed

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 12: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

Limitations/Disadvantages of JIT⋑ Higher amount of machine/worker idle time

⋑ It requires more training, more consciousness, more employee

commitment

⋑ More difficult goals to be attained

⋑ Coordination between customer and suppliers need to be much

better and disciplined

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 13: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

KANBANA small time that is the key control for JIT production

instruction

tool

cont

rol

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 14: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

KANBAN (Contd…)

A unique production control method

It can be based on supermarket method

Taiichi Ohno ,promoted the idea of JIT, applied this concept

KAN= card BAN=signals

It is a Japanese word for card & the use of card is central to many

Japanese control systems including one at Toyota whose kanban

system has received

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 15: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

Types of Kanban System

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 16: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

MUDANon-value added. Muda is translated as waste

There are Seven types of muda

OVER

PRODUCTION

WAITING

CONVEYANCECORRECTION

PROCESSINGINVENTORY

MOTIVE

MUDA

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 17: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

Reduction of MUDAReduce Setup Times

All setup practices are wasteful because they add no value and they tie up labor and equipment. By organizing procedures, using carts, and training workers

Small-Lot Production

Producing things in large batches results in huge setup costs, high capital cost of inventories. Because Toyota has found the way to make setups short and inexpensive

Employee Involvement and Empowerment

Toyota organized their workers by forming teams and gave them the responsibility and training to do many specialized tasks

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 18: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

Reduction of MUDA (Contd…)Quality at the SourceTo eliminate product defects, they must be discovered and corrected as soon as possible. If a defect cannot be readily fixed, any worker can halt the entire line by pulling a cord (called Jidoka)

Equipment MaintenanceToyota operators are assigned primary responsibility for basic maintenance since they are in the best position to detect signs of malfunctions

Pull ProductionTo reduce inventory holding costs and lead times, Toyota developed the pull production method wherein the quantity of work performed at each stage of the process is dictated solely by demand for materials from the immediate next stage

Supplier InvolvementToyota treats its suppliers as partners, as integral elements of Toyota Production System (TPS)

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 19: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

KAIZENA system of continuous improvement in which instances of Muda (waste)

are eliminated one-by-one at minimal cost. This is performed by all

employees rather than by specialists

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 20: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

Questions….

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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Page 21: JIT, Kanban, Kaizen, Muda in TPS (Toyota Production System)

Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

Thanks to All….

Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation

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