Just-in-time (JIT) is an inventory strategy that
strives to improve a business's return on
investment by reducing in-process inventory and
associated carrying costs.
Total quality control
Total elimination of waste
Zero setup time
Zero lead time
They produce 20000 cars per day
Two 8 hr shifts (separated by 4 hrs)
Daily schedule adherence @ 97%
Sheet steel to car, less than 16hrs
Average 6 hrs of component inventory
Delivery of components to plant organised by
No incoming inspection
As a general policy Toyota do not dual source
Toyota Production System (TPS)
It follows “Just In Time Production” approach created by the
founder of Toyota, Sakichi Toyoda, his son Kiichiro Toyoda, and
the engineer Taiichi Ohno.
Definition: The production system developed by Toyota
Motor Corporation to provide best quality, lowest cost, and
shortest lead time through the elimination of waste.
TPS is comprised of two pillars, Just-in-Time and Jidoka
TPS is maintained and improved through
Iterations of standardized work and kaizen (continuous
It follows Plan–Do-Check-Act (PDCA Cycle) or the
The main objectives of the TPS are to design out overburden
(muri) and inconsistency (mura), and to eliminate waste
(muda). There are seven kinds of muda that are addressed in
motion (of operator or machine)
waiting (of operator or machine)
inventory (raw material)
correction (rework and scrap)
What it is
•‘Pull’ system through the plant
What it Does
•Attacks waste (time, inventory,
•Exposes problems &
What it require
•Total quality control
•Small lot sizes
What it assumes
JIT Tactics by Toyota
Use pull system to move inventory
Reduce setup time
Reduce lot size
Toyota use a kanban system (pull-system) to pull parts to
the next production stage only when they are needed.
A kanban is a card that is attached to a storage and transport
A sequence of kanbans pulls material through the process.
Reducing Setup Time
More frequent orders require reducing setup costs,
otherwise, inventory costs will rise. Setup cost is highly
correlated with setup time.
Methods used to reduce setup time:-
training workers to do their own setups
Toyota managed to slash setup times from months to hours
and sometimes even minutes
Reducing Lot Size
With close cooperation with its suppliers and the
implementation of Kaiban system lot sizes are
Toyota USA Sweden Germany
Setup time 10
6 hours 4 hours 4 hours
1 day* 10 days 1 month -
Employees are cross trained for flexibility and efficiency
Toyota use unskilled workers, preferring to train them
Improved communications facilitate the passing on of
important information about the process.
Toyota designed the factory to be 30 percent more
compact than other factories with similar output, to curb
building and operating costs and enhance communication.
Each Toyota employees has right to stop production line
when defect occur
Total productive maintenance (TPM):Designed to ensure
that every machine in a production process always performs its
required task and its output rate is never disrupted
SMED (single minute exchange of dies): Lean production
methods for reducing waste in a manufacturing process. It
provides a rapid and efficient way of converting a
manufacturing process from running the current product to
running the next product. This rapid changeover is key to
reducing production lot sizes and thereby improving flow which
is a 'Lean' aim. It is also often referred to as Quick Changeover
Pokayoke: Poka Yoke is one of the main components of Shingo's Zero
Defect Quality Control (ZQC) system . The idea being to produce zero
One way this is achieved is through the use of Poka Yoke Multiple
Devices that are used to either Detect or Prevent Defects from
occurring in the First Place. These CIW Poka Yoke Multi-Patented
Welding Methods are simple Real-Time Methods to help achieve Zero
Andon Lights: one of the visual management tools used in places
which have adapted a lean manufacturing philosophy. When the term
visual management is used, its main meaning is if you were to walk out
on the production floor, and look around, you could visually see the
status of the lines or work cells.
5s: 5S is a system of workplace organization. It is
fundamental to the implementation of the Lean
The 5S are :
Set in Order
Each component of the 5S is necessary to derive the
benefits and sustain workplace organization.
The 5-S Program
segregate and discard
get rid of what is not needed
arrange and identify for ease of use
a place for everything and everything in its place
clean work place enhances quality
revisit the first 3 steps to maintain workplace safety and
Motivate to sustain
promote adherence through visual
performance measurement tools
Companies Currently using JIT
Toyota Motor Company
Ford Motor Company
Hawthorne Management Consulting
Strategy Manufacturing Inc.
And Many more…
JIT at Xerox
Rank Xerox Manufacturing (Netherlands)
Largest Xerox company outside US.
Produces and refurbished mid-volume copier
equipment for distribution throughout the world.
Implemented JIT ~1980s.
Part of JIT program:-
Installed an automated materials handling
system and information processing system
Production procedures were modified
Xerox-Result of Implementing JIT
Warehouse stock 3-month ½ month
Supplier base 3000 300
98% on-time inbound delivery, 70%
materials arriving within an hour
Overall material costs reduce 40%
Most inbound product inspection stations
were eliminated because of higher-quality
materials from suppliers.
Inbound transportation costs were reduced
Reject levels for defective or inferior
materials 17% 0.8%
Positions for 40 repack people were
eliminated because of standardized
On-time inbound delivery performance
JIT at McDonald’s
PRE COOK A BATCH AND PUT THEM UNDER
DISCARD WHAT COULD NOT BE SOLD
FRESH FOOD OBTAINED BY SPECIAL ORDERS
JIT at McDonald’s (Contd..)
Burger assembled when order is placed
Raised quality and reduced costs
Higher quality customer service
Adapt to demand in a better manner
JIT and Lean Management
JIT can be divided into two terms: “Big JIT” and
Big JIT (also called Lean Management) is a
philosophy of operations management that seeks
to eliminate waste in all aspects of a firm’s
Materials and inventory management
Little JIT – narrow focus
Scheduling services of production
JIT at Harley Davidson
Just-in-time inventory was the driving
force of Harley's quality-improvement
Harley trusted its partners to deliver the
quantities it needed
Suppliers of Harley had to implement JIT
into their production process to
compliment Harley's system
Inventory levels down 75 %.
Percentage of motorcycles coming off
the line completed up from 76% to 99%
Scrap and rework reduced by 68 %.
Productivity up by 50 %.
Space requirements down by 25 %.
Comparison of MRP (Material Requirements Planning),
JIT, and TOC (Theory of Constraints)
MRP JIT TOC
Batch sizes One week or
Variable to exploit
Slow Very fast Fast
MRP JIT TOC
Flexibility Lowest Highest Moderate
Cost Highest Lowest Moderate
Goals Meet demand
Planning focus Master
Plan Need Need and plan
Higher profits and improved customer satisfaction.
Stronger and more reliable working relations with
Improved working relations between employees.
Loss of individual autonomy
Resistance to change
Success varies from industry to industry
Limited to Japanese environment:
Participation resulting from the use of quality
Participation involves empowering the
workforce with respect to decision making.
It is prone to inventory shortage which may result
in reducing efficiency of whole process.
High cost of training the employees is involved.
Leaves consumers and suppliers open to supply
Strategy is heavily dependent on the demand
curve of the time when it is applied.