Just in time

PAWAN SEHRAWAT (VOLTAS LTD.)

Just In Time is an optimal material requirement planning system for amanufacturing process in which there is little or no manufacturingmaterial inventory on hand at the manufacturing site and little or noincoming inspection.

Just in time

Leading Japanese companies attribute their success in reducing wasteand speeding production to the implementation of so called Just In Time (JIT ) methods of working. It is also known as stockless productionbecause the aim is to receive supplies and manufacture components Justin time for next operation. In JIT, the ideal inventory is one.

Just in time

Just in time

First sell it, then make it : JIT reverses the conventional approach of firstmaking and then selling. Ideally nothing is produced unless a customer isidentified. In some Japanese factories the cars are shipped with thecustomer’s name already attached.This helps in reducing inventories , warehousing and other holding costs.

Just in time

From finish to start: JIT reverses the conventional approach of planningproduction from start to finish. Employees responsible for final operationreceive the production plan first. The organization is forced to get theproduction process right before commencing production.

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Implementing Just-In-Time Production Systems

Just-in-Time (JIT) is a philosophy of continuous improvement inwhich non-value-adding activities (or wastes) are identified andremoved for the purposes of reducing cost, improving quality,performance, delivery and flexibility and increasinginnovativeness.

JIT is not about automation. Typically, JIT eliminates waste byproviding the environment to perfect and simplify theprocess(es). After this is done to the furthest extent possible, theopportunities for applying technology effectively are moreobvious.

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Implementing JIT Production Systems

JIT can mean either of two things:

A collection of techniques that is used to improve operations(TQM, set-up time reduction, multi-skilled employees, teamapproaches, simultaneous engineering, etc.);

or,A new production system that is used to produce goods orservices (evolving from the Toyota Production Systemdeveloped in the early 1950's, and is know by other terms, suchas: stockless production, zero inventories, lean production, etc.).

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Implementing JIT Production Systems

The American Production and Inventory Control Society's definition ofJIT reflects these two views. They define JIT as:

A philosophy of manufacturing based on planned elimination of allwaste and continuous improvement of productivity. It encompasses thesuccessful execution of all manufacturing activities required to producea final product, from design engineering to delivery and including allstages of conversion from raw material onward.

The primary elements include having only the required inventory whenneeded; to improve quality to zero defects; to reduce lead time byreducing setup time, queue lengths and lot sizes; to incrementallyrevise the operations themselves; and to accomplish these things atminimum cost.

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Implementing JIT Production Systems

Almost all companies in repetitive manufacturing industries areimplementing JIT principles.

Many companies in non-repetitive manufacturing industries andservice industries are also implementing JIT principles. When theimplementation is successful, significant competitive advantagesare realized.

JIT principles can be applied to all parts of an organization - fromorder taking, purchasing, operations, distribution to sales,accounting design, etc. This guideline focuses on the operationspart of the organization, where JIT is traditionally implemented first.

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Implementing JIT Production Systems

Defining Production SystemsGood or services are produced by a production system. Aproduction system can be divided into six subsystems or areas,including: human resources policies; organization structure andcontrols; sourcing; production planning and control; processtechnology; and facilities. These six subsystems or areasinteract to form a production system, whose outputs are goodsor services with certain levels of cost, quality, performance,delivery, flexibility and innovativeness. There are only threedifferent production systems:

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Implementing JIT Production Systems

• The craft production system - designed to produce a wide variety oflow volume/high value products. The facility and equipment are generalpurpose and very flexible. The craft production system includes jobshop and small batch production.

• The mass production system - designed to produce a very smallnumber of high volume/low unit value products. The facility andequipment are specialized and highly automated.

• The Just-In-Time production system - designed to produce manyproducts in low to medium volumes on a line flow.

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Implementing JIT Production Systems

There are major differences between the production systems.

First, each production system is designed to produce differentnumbers of products in different volumes.

Second, each system arranges its equipment in a differentlayout. The material flow is different because of that layout.

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Implementing JIT Production Systems

Third and most important, each provides different levels ofoutput viz:

1.cost

2.quality

3.performance

4.delivery

5.flexibility

6.innovativeness output.

The JIT production system can make improvements in all the 6outputs mentioned above.

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Implementing JIT Production Systems

Implementing a JIT production system consists of completing asequence of projects, each of which makes changes to one ormore of the six subsystems that comprise the productionsystem.

The sequence of projects is divided into two parts, those beingthe preliminary and main projects.

The preliminary projects have two goals, to achieve early, visiblesuccesses, and to prepare a foundation for the more difficultprojects to follow. The main projects are further divided intothree phases.

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Implementing JIT Production Systems

It is important to track the progress of each project, and so at thestart of each project, performance measures, such as qualityattributes, repair costs, inventory levels, lot sizes, cycle time,setup time, etc., are selected.

The measures are then tracked on display boards, so thateveryone can follow each project's progress.

Tracking ensures that the improvement made during a projectdo no go unnoticed. It also helps to build enthusiasm andmomentum, and helps to keep each project on course.

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Becoming a Time-Based Competitor

Broadly speaking, an organization competes on the basis ofquality, cost, flexibility and time. These factors arecomplementary, even symbiotic. Today's discriminatingcustomer demands world-class quality at a competitive price.When all the leading companies in an industry have achieved ahigh level of quality, a focus on quality alone cannot keep acompany competitive.

Quality then becomes a common expected factor, which mustbe complemented by a faster response time and flexibility.Increasingly, cost and quality are viewed as residuals oroutcomes of competing on the basis of time and flexibility.

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JIT and Time-Based Competition

In business, time is not infinite and limitless. Competing on thebasis of time is defined to include the following: using time as astrategic weapon, identifying market opportunities andresponding to those opportunities before competitors do,responding to customers' needs in their own time frame andeliminating non-value-added activities.

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JIT and Time-Based Competition

Time-compressed competitors measure the cycle time and leadtime of all-important activities. Cycle time is their staplemeasurement. Cycle time in this guideline is defined as theduration from the initial expression of a customer's need to thepoint when that need is satisfied. This cycle encompasses theentire value-added chain of a company's product or servicedelivery process.

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JIT and Time-Based Competition

The overall delivery chain is composed of several key workprocesses, which in this context are not functional departments,but are the logical outputs performed by groups of people fromdifferent functions. Some work processes and costs add valuefor customers, while others do not. For example, adding cost inthe form of better raw materials or hand finishing a portion of theproduct adds value. But many overhead items, such as factoryrework or the cost of idle assets, add cost but no value.

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JIT and Time-Based Competition

Fast-cycle capability contributes to better performance acrossthe board.

Costs drop because production materials and overhead do notaccumulate as work-in-process inventory.

Customer service improves because the lead-time from receiptof order to shipment diminishes.

Quality is higher because the production cycle overall cannotspeed up unless everything is done right the first time.

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JIT and Time-Based Competition

Time advantage is also an organizational capability - a level ofperformance that management shapes and builds into the company.

The basic idea is to build on organizational operating systems thatperform without the bottlenecks, delays, errors and inventories mostcompanies live with.

The faster that information, decisions and materials can flow througha large organization, the faster the conditions.

In summary, time-advantaged companies enjoy one or more of thefollowing benefits, relative to their peers: increased productivity;pricing flexibility; reduced risks; reduced costs and increasedresponse capability.