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JIT Implementation Roadmap - to achieve a balanced rapid flow from planning to scheduling

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  1. 1. Just in Time JIT Implementation Roadmap - to achieve a balanced rapid flow from planning to scheduling Anand Subramaniam
  2. 2. <ul><li>“ Management is the organ of institutions, the organ that converts a mob into an organisation, and human efforts into performance.” </li></ul><ul><ul><li>- Peter F. Drucker </li></ul></ul>
  3. 3. Highlights <ul><li>JIT - Overview </li></ul><ul><li>JIT Relationship </li></ul><ul><li>Kanban Pull System </li></ul><ul><li>JIT - Implementation Roadmap </li></ul>
  4. 4. JIT - Overview
  5. 5. JIT Philosophy JIT Lower inventory levels / small lots sizes Streamlined with no waste or variability in production system A “Pull” system thru the plant Fewer suppliers (keiretsu) with long-term guaranteed contract Employee empowerment Guaranteed delivery times A management philosophy Works well in high-volume production with minimal inventory (RM, WIP, FG) Exposes problems & bottlenecks, requires TQM
  6. 6. JIT - Big Vs. Little <ul><li>Big </li></ul><ul><li>Broad focus </li></ul><ul><ul><li>Vendor relations </li></ul></ul><ul><ul><li>Human relations </li></ul></ul><ul><ul><li>Technology management </li></ul></ul><ul><ul><li>Materials and inventory management </li></ul></ul><ul><li>Little </li></ul><ul><li>Narrow focus </li></ul><ul><ul><li>Scheduling materials </li></ul></ul><ul><ul><li>Scheduling services of production </li></ul></ul>
  7. 7. JIT Objectives Objectives Zero lead time Zero failures Flow process Flexible manufacture Eliminate waste Zero Inventory
  8. 8. JIT – Building Blocks JIT Product Design Process Design Manf Plan & Control Human Resource / Organisation
  9. 9. JIT – Building Blocks <ul><li>Product Design </li></ul><ul><li>Few BOM levels </li></ul><ul><li>Achievable quality </li></ul><ul><li>Appropriate quality </li></ul><ul><li>Standard parts </li></ul><ul><li>Modular design Manufacturability in production cells </li></ul><ul><li>Process Design </li></ul><ul><li>Limited WIP </li></ul><ul><li>No stockrooms </li></ul><ul><li>Reduced setup / lot size </li></ul><ul><li>Quality improvement </li></ul><ul><li>Manufacturing cells </li></ul><ul><li>Service enhancements </li></ul><ul><li>HR / Org </li></ul><ul><li>Cross training / job rotation </li></ul><ul><li>Flexible labor </li></ul><ul><li>Continual improvement </li></ul><ul><li>Limited direct / indirect distinction </li></ul><ul><li>Cost accounting / performance measurement </li></ul><ul><li>Information system changes </li></ul><ul><li>Leadership / project management </li></ul><ul><li>MPC </li></ul><ul><li>Pull systems </li></ul><ul><li>Rapid flow times </li></ul><ul><li>Small container sizes </li></ul><ul><li>Paperless systems </li></ul><ul><li>Visual systems </li></ul><ul><li>Level loading </li></ul><ul><li>MRP interface </li></ul><ul><li>Close vendor relationships </li></ul><ul><li>Reduced production reporting / inventory transaction processing </li></ul><ul><li>Factory cost reductions </li></ul>
  10. 10. JIT Requirements <ul><li>People </li></ul><ul><li>Involvement </li></ul><ul><li>Supportive unions </li></ul><ul><li>Hands-on manager style </li></ul><ul><li>Quality commitment </li></ul><ul><li>Inventory </li></ul><ul><li>Reduce # of stores, in-transit, carousels </li></ul><ul><li>Calculate from MRP & EOQs </li></ul><ul><li>Product </li></ul><ul><li>DFM / Modular & fewer parts </li></ul><ul><li>Quality standards </li></ul><ul><li>Clarify process flows </li></ul><ul><li>Maintain process & technologies </li></ul><ul><li>Operation </li></ul><ul><li>Balance work centre capacities </li></ul><ul><li>Flow layout </li></ul><ul><li>Preventive maintenance </li></ul><ul><li>Reduce lot sizes, setup times </li></ul><ul><li>Suppliers </li></ul><ul><li>Quality defined </li></ul><ul><li>Frequent deliveries </li></ul><ul><li>Reduce lead times </li></ul><ul><li>Project usage requirements </li></ul><ul><li>Leveling </li></ul><ul><li>Level schedule </li></ul><ul><li>Under utilise capacity </li></ul><ul><li>Establish freeze windows </li></ul><ul><li>Kanban </li></ul><ul><li>Back flush </li></ul><ul><li>Demand pull </li></ul><ul><li>Reduce batch / lot sizes </li></ul><ul><li>Quality </li></ul><ul><li>Worker responsibility </li></ul><ul><li>SQC / compliance </li></ul><ul><li>Fail-safe methods </li></ul><ul><li>Auto inspect </li></ul>Requirement
  11. 11. JIT Relationship
  12. 12. JIT in Manufacturing Planning & Control
  13. 13. MRP vs. JIT <ul><li>MRP </li></ul><ul><li>Rigid MRP schedule </li></ul><ul><li>Slow between schedules </li></ul><ul><li>Structured to support complex BOM’s </li></ul><ul><li>Centralised </li></ul><ul><li>Forecast driven (Inaccurate) </li></ul><ul><li>Supports long lead-times beyond MRP run frequency </li></ul><ul><li>Infinite capacity </li></ul><ul><li>Complex </li></ul><ul><li>JIT </li></ul><ul><li>High flexibility </li></ul><ul><li>Fast response </li></ul><ul><li>Flattened BOM’s & reduce transaction </li></ul><ul><li>Decentralisation </li></ul><ul><li>Consumption driven </li></ul><ul><li>Supports lead-times inside of MRP run frequency </li></ul><ul><li>Planned capacity </li></ul><ul><li>Simple (Usually) </li></ul>
  14. 14. JIT & TQM <ul><li>Jidoka (authority to stop line) </li></ul><ul><li>Build quality into all processes </li></ul><ul><li>Poka-yoke (fail-safe all processes) </li></ul><ul><li>Preventive maintenance - scheduled </li></ul><ul><li>Quality at the source - sequential inspection </li></ul><ul><li>Focus on continuous improvement – Kaizen </li></ul><ul><li>Work environment - everything in its place, a place for everything </li></ul>
  15. 15. Supplier / Buyer Partnership <ul><li>Buyer </li></ul><ul><li>Focus on core competencies </li></ul><ul><li>Develop long term relationships </li></ul><ul><li>Share customer preferences and demand forecasts </li></ul><ul><li>Support supplier innovation & price competitiveness </li></ul><ul><li>Minimise product specifications and encourage innovation </li></ul><ul><li>Process orders with minimal paperwork (use EDI / Internet) </li></ul><ul><li>Supplier </li></ul><ul><li>Locate near buyer </li></ul><ul><li>Detailed routing labels </li></ul><ul><li>Focus on core competencies </li></ul><ul><li>Include packaging & routing details </li></ul><ul><li>Extend JIT techniques to their suppliers (tier 2) </li></ul><ul><li>Quantities </li></ul><ul><li>Produce small lots </li></ul><ul><li>Produce with zero defects </li></ul><ul><li>Deliver with little coverage & underage </li></ul><ul><li>Meet mutually developed quality requirements </li></ul><ul><li>Shipping </li></ul><ul><li>Consider 3PL </li></ul><ul><li>Ship frequently – small orders </li></ul><ul><li>Use ASN (Advance Shipping Notice) </li></ul><ul><li>Seek joint scheduling & shipping efficiencies </li></ul>Build Trust
  16. 16. Supplier – Partnership & Concerns <ul><li>Partnership </li></ul><ul><li>Eliminate poor suppliers </li></ul><ul><li>Eliminate in-plant inventory </li></ul><ul><li>Eliminate in-transit inventory </li></ul><ul><li>Eliminate unnecessary activities </li></ul><ul><li>Concerns </li></ul><ul><li>Diversification </li></ul><ul><li>Small lot sizes </li></ul><ul><li>Quality assurance </li></ul><ul><li>Physical proximity </li></ul><ul><li>Poor customer scheduling </li></ul><ul><li>Frequent engineering changes </li></ul>
  17. 17. Kanban Pull System
  18. 18. What is Kanban Kanban Kan=card Ban= signal Cards to signal & communicate reorder information Minimise storage in the production area Workstations only produce / deliver components when a card PLUS empty container is received Toyota in 1950s developed it to manage line / material flows Authorisation to produce more inventory Limits the amount of inventory in process To deliver components to a work station as & when needed (pull) Work-station produces enough to fill the container
  19. 19. Kanban System Machine Centre Assembly Line Bin Part A Bin Part A Material Flow Card (signal) Flow Withdrawal kanban Production kanban
  20. 20. Kanban - Pull Signal
  21. 21. Kanban Card # of containers released Name / location of preceding process Routing process Store bin / location Units of measure Part # Container type & capacity Name / location of next process Supplier Part # Supplier Name Reorder / Lot Qty Description Kanban #
  22. 22. Kanban - Rules <ul><li>Each container of parts must have a kanban card </li></ul><ul><li>Production started only on receipt of a production kanban </li></ul><ul><li>No parts may be obtained without a withdrawal kanban </li></ul><ul><li>Only standard containers are used that contain standard quantities </li></ul><ul><li>The parts are always pulled where, the using department must come to the providing department & not vice versa </li></ul>
  23. 23. Kanban Card Calculation <ul><li>Each container = minimum replenishment lot size </li></ul><ul><li>Calculate lead time required to produce a &quot;container&quot; </li></ul>k = No. of kanbans in card set d = Average No. of units demanded over the period L = lead time to replenish order (same units of time as demand) S = Safety stock as % of demand during lead time C = Container size C S dL ) (1   k Container capacity Expected demand during lead time + safety stock 
  24. 24. Example <ul><li>A switch is assembled in batches of 4 units at an “upstream” work area. </li></ul><ul><li>It is delivered in a bin to a “downstream” control-panel assembly area that requires 5 switch assemblies / hour. </li></ul><ul><li>The switch assembly area can produce a bin of switch assemblies in 2 hours. </li></ul><ul><li>Safety stock = 10% of needed inventory. </li></ul>  C dL (1  S ) 4 5(2)(1.1) 2.75 or 3  k size of container Expected demand during lead time + safety stock 
  25. 25. Kanban Challenges Challenges Assumes stable repetitive production Gets complex when upstream w/station makes several parts, each with separate signaling card Poor quality (scrap & rework) affect functioning Doesn't eliminate variability and / or lengthy down times Less suited to industries where mix & volumes fluctuate Buffer stocks may be needed
  26. 26. JIT - Implementation Roadmap
  27. 27. JIT – Phased Implementation Phase 1 Phase 2 Phase 3 Design Flow Process Review product design, TQC & SPC Kanban Pull Review inventory policies Work & build trust with Vendors Manage Stakeholder Expectations JIT Implementation Inventory reduction Skill / Capability Development Measure performance Business Improvement Improve product design 1 2 3 4 5 6 7 Months Baseline & Stabilise schedules Project / Change Management
  28. 28. JIT – Implementation Steps Design Flow Process Total Quality Control Baseline & Stabilise Schedule Demand / Kanban Pull Inventory Review & Reduction Build Skills & Capabilities Improve Product Design Continuously Improve Work & Build Trust with Vendors Measures & Metrics
  29. 29. JIT – Implementation Steps (Contd.) <ul><li>Design Flow Process </li></ul><ul><li>Review JIT building blocks </li></ul><ul><li>Review & align MPC operations </li></ul><ul><li>Balance work-centre capacities </li></ul><ul><li>Review flow layout </li></ul><ul><li>Educate on preventative maintenance </li></ul><ul><li>Review and reduce lot sizes </li></ul><ul><li>Review and reduce setup / changeover time </li></ul><ul><li>Total Quality Control </li></ul><ul><li>Review & define worker role & responsibilities </li></ul><ul><li>Define & measure statistical quality control </li></ul><ul><li>Analyse & improve compliance </li></ul><ul><li>Define and implement face safe methods </li></ul><ul><li>Review & automate inspection process </li></ul><ul><li>Stabilise Schedules </li></ul><ul><li>Review load & capacity schedules </li></ul><ul><li>Level schedules </li></ul><ul><li>Underutilise capacity </li></ul><ul><li>Establish time fences (frozen and liquid) </li></ul><ul><li>Kanban Pull </li></ul><ul><li>Educate on production & withdrawal Kanban methods </li></ul><ul><li>Define and implement Kanban rules </li></ul><ul><li>Review demand pull process </li></ul><ul><li>Implement back-flush process </li></ul><ul><li>Review lot size policies and reduce lot sizes </li></ul>
  30. 30. JIT – Implementation Steps (Contd.) <ul><li>Vendors </li></ul><ul><li>Review vendor lists and rationalise </li></ul><ul><li>Educate and build trust </li></ul><ul><li>Review lead time and negotiate reduction </li></ul><ul><li>Negotiate for small lot size & frequent deliveries </li></ul><ul><li>Review usage metrics and measures </li></ul><ul><li>Project usage requirements </li></ul><ul><li>Define quality expectations and measures / metrics </li></ul><ul><li>Inventory </li></ul><ul><li>Review inventory policies and controls </li></ul><ul><li>Reduce inventory movements </li></ul><ul><li>Product Design </li></ul><ul><li>Review & standardise product configuration </li></ul><ul><li>Educate on JIT building blocks </li></ul><ul><li>Standardise & reduce number of parts </li></ul><ul><li>Review & redesign production process </li></ul><ul><li>Define and implement quality measures & metrics </li></ul><ul><li>Continuous Improve / Measure </li></ul><ul><li>Root cause analysis </li></ul><ul><li>Team education & empowerment </li></ul><ul><li>Skills development </li></ul><ul><li>Introduce few meaningful measures </li></ul><ul><li>Define measures and metrics </li></ul><ul><li>Emphasise improvement </li></ul><ul><li>Track trends </li></ul>
  31. 31. JIT – Continuously Improve Design Flow Process Total Quality Control Baseline & Stabilise Schedule Demand / Kanban Pull Inventory Review & Reduction Build Skills & Capabilities Improve Product Design Work & Build Trust with Vendors Measures & Metrics
  32. 32. <ul><li>“ There are two ways of exerting one’s strength; one is pushing down, the other is pulling up .” </li></ul><ul><ul><li>- Booker T Washington </li></ul></ul>
  33. 33. <ul><li>Good Luck </li></ul><ul><li>http://www.linkedin.com/in/anandsubramaniam </li></ul>