2. Developments of JIT and
Lean Operations
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
3. 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
5. Expected Benefits of JIT
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
6. Main Elements of JIT
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
8. Wastes
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
10. Importance of Inventory
Reduction
Inventory costs money - carrying costs,
obsolescence costs, and opportunity costs
Inventory covers up problems and
bottlenecks.
Inventory reduction forces organization
and employees to eliminate sources of
problems and work as a team.
11. Quality at the Source
Jidoka – autonomation (automatic
detection of defects, e.g., Poka-yoke)
Employee empowerment
Statistical process control
Prevention orientation (elimination of root
causes through PDSA cycle)
12. Balanced and Flexible
Work Flow
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)
13. 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
15. Simplification and Visual
Control
Standard and simple product designs
Andon boards
Kanban pull system
Flag systems
Music as signals
Performance display systems
16. Focus on Customer Needs
Customer needs determine the “value” of
a product or service
Be responsive to customers needs
(present and future)
Strive to “delight,” not just “satisfy”
customers
17. Partnerships with Suppliers
Reduce number of suppliers
Use long-term contracts
Emphasize price, delivery, and services
Improve communication
Share information
Develop local just-in-time delivery
Provide technical support to suppliers
18. JIT Implementation
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
19. Advancements in JIT (JIT II)
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
20. How Can JIT Be Applied to Non-
Manufacturing Operations?
21. JIT for Non-Manufacturing
Operations (Lean Operations)
Implement demand-pull operations
Eliminate unnecessary activities
Standardize process flows
Increase process flexibility
Reorganize physical layouts
Upgrade housekeeping and workplace
organization
22. JIT for Non-Manufacturing
Operations (Lean Operations)
Develop supplier partnership networks
Level work load
Organize problem-solving groups
Improve quality
Develop effective suggestion systems
Cross-train employees
Promote teamwork
24. Toyota’s Secrets of Success
(Steve Spear, HBR, May 2004)
There is no substitute for direct
observation
Proposed changes should always be
structured as experiments
Workers and managers should experiment
as frequently as possible
Managers should coach, not fix
25. Suggested Readings
Monden, Yasuhiro (1993). Toyota Production
System: An Integrated Approach to Just-In-Time,
3rd edition, Institute of Industrial Engineers.
Womack, James P. and Jones, Daniel T. (2003).
Lean Thinking: Banish Waste and Create Wealth in
Your Corporation, The Free Press.
Jeffrey K. Liker (2004). The Toyota Way: 14
Management Principles from the World’s Greatest
Manufacturer, McGraw-Hill.