Download Just-in-Time (JIT)

Just-in-Time and
Lean Operations
Developments of JIT and
Lean Operations
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1960’s: Developed as Toyota Production
System by Taiichi Ohno and his colleagues

1970’s: U.S. and European auto makers
began to apply JIT to improve quality and
productivity

1990’s and beyond: Expanded the JIT
concept to streamline all types of operations
Definition of JIT

A set of techniques to increase
productivity, improve quality, and
reduce cost of an operations

A management philosophy to promote
elimination of waste and continuous
improvement of productivity
What Could Be the Expected
Benefits of JIT?
Expected Benefits of JIT
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Reduction in throughput times
Reduction in WIP
Improvement in quality
Improvement in productivity
Reduction in resource requirements
Improvement in customer satisfaction
improvements in return on assets
Main Elements of JIT
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Elimination of waste
Quality at the source
Balanced and flexible work flow
Respect for people
Continuous improvement (Kaizen)
Simplification and visual control
Focus on customer needs
Partnerships with key suppliers
What is A “Waste?”
Wastes

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Anything that exceeds the minimum resources
needed for the appropriate value
Toyota’s seven deadly wastes:
• Overproduction (excessive production resources)
• Inventory
• Waiting
• Transportation
• Processing
• Motion
• Defective parts
Why is Inventory Reduction
Important?
Importance of Inventory
Reduction

Inventory costs money - carrying costs,
obsolescence costs, and opportunity costs
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Inventory covers up problems and
bottlenecks.

Inventory reduction forces organization
and employees to eliminate sources of
problems and work as a team.
Quality at the Source

Jidoka – autonomation (automatic
detection of defects, e.g., Poka-yoke)
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Employee empowerment
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Statistical process control
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Prevention orientation (elimination of root
causes through PDSA cycle)
Balanced and Flexible
Work Flow
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Yo-i-don (ready, set, go) system
Stable production schedule
Set-up time reduction
Flow-shop and cellular layouts
Shojinka (flexible & multi-skilled workforce)
Teamwork
Total productive maintenance (TPM)
Respect for People

Productivity improvement needs employee support

Demonstrate by
• providing cross-training opportunities
• creating a safe and equitable work environment
• encouraging people to achieve their potential by
giving them greater responsibility and authority
• promoting teamwork (formal and informal)
• developing partnerships with unions
Continuous Improvement
(Kaizen)
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Employee suggestion system
Process improvement
5S’s
• Seiri - organization
• Seiton - tidiness
• Seiso - purity
• Seiketsu - cleanliness
• Shitsuke - discipline
Simplification and Visual
Control

Standard and simple product designs
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Andon boards
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Kanban pull system
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Flag systems
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Music as signals
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Performance display systems
Focus on Customer Needs

Customer needs determine the “value” of
a product or service
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Be responsive to customers needs
(present and future)
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Strive to “delight,” not just “satisfy”
customers
Partnerships with Suppliers
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Reduce number of suppliers
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Use long-term contracts
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Emphasize price, delivery, and services
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Improve communication
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Share information
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Develop local just-in-time delivery
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Provide technical support to suppliers
JIT Implementation
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Top management commitment
Steering committee
Education program
Pilot project planning
Employee training
Pilot implementation
Pilot post mortem
Feedback to steering committee
Expansion to next project
Advancements in JIT (JIT II)
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Backwards Integration of staff and line
functions to suppliers (e.g., purchasing)
Requires EDI or web access to materials
and logistics systems
On-site supplier representative(s) with
transaction processing authority
Goal: link suppliers’ cycle to firm’s cycle to
mutually reduce wait and move times
How Can JIT Be Applied to NonManufacturing Operations?
JIT for Non-Manufacturing
Operations (Lean Operations)
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Implement demand-pull operations
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Eliminate unnecessary activities
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Standardize process flows
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Increase process flexibility
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Reorganize physical layouts
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Upgrade housekeeping and workplace
organization
JIT for Non-Manufacturing
Operations (Lean Operations)
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Develop supplier partnership networks
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Level work load
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Organize problem-solving groups
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Improve quality
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Develop effective suggestion systems
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Cross-train employees
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Promote teamwork
What Are Toyota’s Secrets of
Success?
Toyota’s Secrets of Success
(Steve Spear, HBR, May 2004)
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There is no substitute for direct
observation
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Proposed changes should always be
structured as experiments
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Workers and managers should experiment
as frequently as possible
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Managers should coach, not fix
Suggested Readings
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Monden, Yasuhiro (1993). Toyota Production
System: An Integrated Approach to Just-In-Time,
3rd edition, Institute of Industrial Engineers.
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Womack, James P. and Jones, Daniel T. (2003).
Lean Thinking: Banish Waste and Create Wealth in
Your Corporation, The Free Press.
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Jeffrey K. Liker (2004). The Toyota Way: 14
Management Principles from the World’s Greatest
Manufacturer, McGraw-Hill.