Chapter 3: JIT, Value Added and Waste
Elimination
Part1- What is Just-In-Time (JIT)?
Continuous Improvement is a basic and important concept in modern manufacturing,
and it is a cornerstone of JIT and TOM. However, it is a very general and open-
ended concept. Another important element of the modern manufacturing and service
operations is the concept of VALUE_ADDED
Just-in-time (JIT) is an approach to manufacturing which aims to increase “value-
add” activity and eliminate waste by providing the environment to simplify and
perfect processes within an organization. Just-in-time manufacturing means
producing the necessary items, in the required quantities at the appropriate time.
JIT can deliver significant improvements in operating efficiency. Having raw
materials arrive at a manufacturing facility, just in time to enter the production
process allows an organization to minimize the amount of inventory it must hold
and store. It also minimizes the potential cost of obsolescence, which can arise due
to change in product specifications, customer demands, etc..
Putting the JIT concept into practice means a reversal of traditional thinking with
regard to managing a manufacturing process flow. In conventional production
processes, units are transported to the next production stage as soon as they are
ready. In JIT, each stage in the production process looks back to the previous stage
to pick up the exact number of units needed. Product (and services) are pulled
through the process driven by demand from customers, rather than the traditional
approach where product and services are pushed forward based on planned
schedules.
A)-The benefits associated with Just In Time Manufacturing
While the prevailing view of JIT is that of an inventory control system, it is much
more. JIT is an operational philosophy which can deliver a broad range of benefits.
Examples of the benefits associated with implementing a JIT process:
– The production of high quality, high reliability products that customers want,
resulting is satisfied and loyal customers.
– The delivery of products which match the rate that the customers require.
– Optimized manufacturing process lead-times.
– Minimized and eliminated waste of labor, material and equipment.
– All activity having a defined purpose towards meeting customer needs.
– Continuous reductions in process and equipment set-up and change-over times.
– The elimination of unnecessary inventory and improved inventory management
and control.
– Continuous reductions in supplier lead times.
– Ongoing significant improvements in organizational productivity and efficiency.
B)-IS JIT applicable only to Manufacturing?
The concepts of Just In Time are applied to all value creating organizations. While
JIT originated in .
1. Chapter 3: JIT, Value Added and Waste
Elimination
Part1- What is Just-In-Time (JIT)?
Continuous Improvement is a basic and important concept in
modern manufacturing,
and it is a cornerstone of JIT and TOM. However, it is a very
general and open-
ended concept. Another important element of the modern
manufacturing and service
operations is the concept of VALUE_ADDED
Just-in-time (JIT) is an approach to manufacturing which aims
to increase “value-
add” activity and eliminate waste by providing the environment
to simplify and
perfect processes within an organization. Just-in-time
manufacturing means
producing the necessary items, in the required quantities at the
appropriate time.
JIT can deliver significant improvements in operating
efficiency. Having raw
2. materials arrive at a manufacturing facility, just in time to enter
the production
process allows an organization to minimize the amount of
inventory it must hold
and store. It also minimizes the potential cost of obsolescence,
which can arise due
to change in product specifications, customer demands, etc..
Putting the JIT concept into practice means a reversal of
traditional thinking with
regard to managing a manufacturing process flow. In
conventional production
processes, units are transported to the next production stage as
soon as they are
ready. In JIT, each stage in the production process looks back to
the previous stage
to pick up the exact number of units needed. Product (and
services) are pulled
through the process driven by demand from customers, rather
than the traditional
approach where product and services are pushed forward based
on planned
schedules.
3. A)-The benefits associated with Just In Time Manufacturing
While the prevailing view of JIT is that of an inventory control
system, it is much
more. JIT is an operational philosophy which can deliver a
broad range of benefits.
Examples of the benefits associated with implementing a JIT
process:
– The production of high quality, high reliability products that
customers want,
resulting is satisfied and loyal customers.
– The delivery of products which match the rate that the
customers require.
4. – Optimized manufacturing process lead-times.
– Minimized and eliminated waste of labor, material and
equipment.
– All activity having a defined purpose towards meeting
customer needs.
– Continuous reductions in process and equipment set-up and
change-over times.
– The elimination of unnecessary inventory and improved
inventory management
and control.
5. – Continuous reductions in supplier lead times.
– Ongoing significant improvements in organizational
productivity and efficiency.
B)-IS JIT applicable only to Manufacturing?
The concepts of Just In Time are applied to all value creating
organizations. While
JIT originated in manufacturing in Toyota and Ford, the
concepts, principles,
approaches and benefits are equally applicable to all industries.
In fact, many of the
JIT benefits achieved in manufacturing environments, arise due
to JIT
implementation, in the support and back-off services,
6. purchasing, human
resources, customer services, etc..
2) Value-Added
This principal state that, if an operation does not add value to
the product, it should
be considered waste. Value added Waste Elimination
3)- What are JIT elements
1)-Simplification
2)-Clearness & Organization
3)-Visibility
Components of JIT
4)- Cycle timing
5)- Variability Reduction
6)- measurement Principle
1)Simplification: Eliminate unnecessary elements of a system.
If possible, try to
simplify/shorten the operations (cut # of
steps)
7. 2)- Clearness & Organization. Pay attention to details and take
all variables into
account
3)- Visibility. Provide ease of data collection, analysis and
reporting to ensure the
shop floor workers get the right information at
the right time
4)- Cycle Timing. Cycle times of different components of the
says must be as
Close/equal as possible. The cycle time of the
system must closely
coincide with customer demand. A flexible
cycle time is essential
because of variations in customer demand.
Examples for Element # 4 The
Product
Op. 1
Op. 3
Demand 185
units/week
8. OP. 2
(5 days/week)
Based on the Cycle Timing requirement of JIT manufacturing
system, cycle times
must be changed as follows
Process
Current Cycle time
Minutes/unit
Change cycle times TO
(Different Alternatives) **
1 2 3 Others
9. Production of table Legs
5 3.75 3 5 ….
Production of Tabletop
12 15 12 20 ….
Assembly Operations
# of Tables can produce/hr.
15
4
15 12 20 ….
4 5 3
** These times are calculated using the equation that for
producing one unit out of assembly, we
need one unit of output from Op/2 and 4 units of output from
Op. 1
10. NOTE: Through application of JIT principles, we can have
almost uniform speed
and produce flexible volume of output to meet
variable demand.
Assembly
4 units/he
Produce Legs
12 units/hr.
Produce. Tabletop
5 units/hr.
5) Variability Reduction. This principle requires a continuous
effort to reduce
process variability (speed, quality, setup, man-
hours, …) . Process
variability is one of the largest sources of waste
which results in bad
quality and higher cost.
6)-Principle of Measurement. The measurement of impact of
each element must
be precise. This will enable us to determine the
sources of waste and
inefficiency in each part of the systems. A system
11. of standard metrics
to be used in accurate evaluation of each system or
sub-system must be
stablished
NOTE: Although the 6 elements listed above are called
principals od JIT, they
are also considered the principals of competitive
manufacturing
=============================
PART II: Implementing JIT
a)- Value Added Focus (for details, see Part III)
Every activity or element of a system (machine, labor, time,
space, energy, ..)
Should add value to the output of the system. It should be
noted that all
Improvements in a system are not necessarily VALUE-
ADDED. For example,
in the table assembly operation, we may spend a lot of
resources (time and
money) to reduce % reject to say 2%. But the benefit of
improvement may be
12. much less that the additional profit we will realize. That
improvement may
also complicates the assembly process or lower the quality,
or increase labor
hours, and so on
2)- Necessary and unnecessary Activities Focus.
Elements of each operations are divided into two distinct
group
Value Added
Elements of an operation
Necessary
Non-Value added (services)
Unnecessary
We already covered the concept of value-added activities
(called LINE operators)
Those providing services (do not add value to product in a
direct way) are called
STAFF. The activities performed by the second group (STAFF)
may be necessary
or unnecessary. ==============================
13. PART III: Value Analysis, an overview
What is a Value-Added operation?
Value analysis is a systematic effort to improve upon cost
and/or performance of
products (services), either purchased or produced.
It examines the materials, processes, information systems, and
the flow of materials
involved, and determines ways to improve quality and reduce
product cost.
Why is it important
Implemented diligently, value analysis can result in
1)- Reduced material use and cos
2)- Reduced distribution costs
3)- Reduced waste
4)- Improved profit margins
5)- Increased customer satisfaction
. 6)- Increased employee morale
When to use it?
14. 1- What is the function of the item?
2- Is the function Necessary?
3- Can a lower cost standard part that serve the purpose be
identified?
4- To achieve a lower price, can the item be simplified, or its
specifications be relaxed?
5- Can the item be designed/re-designed so it can be produced
more
efficiently or more quickly?
6- Can the features that customer values highly, be added to the
item?
Note: Value analysis should be part of all the continuous
Improvement effort
Application Example:
Among all components of a product:
1)- A metal part can be substituted by plastic part. The
substitution will
save $0.15 per unit in material cost.
2)- One of the drilled holes in the frame of the product can be
eliminated.
15. (quality Improvement). Not drilling the hole will save $1.1
labor cost per unit.
3)- 20 hours of labor is required for the changes.
4)- Because of improved quality, sale price could be increased
by $1/unit
If current sales price, cost/unit, and demand are $45, #22, and
50000 units/month
respectively. Is the proposed changes economically “valuable”?
Assume that the VA team will spend 100 hours to run the
project and the total
average salary for the team is $60/hr.
Solution
:
The per unit cost saving and value-added improvement:
=$15+$1.10+$1.00 = $2.25
16. Monthly profit w/o improvements = 50000($45-$22) =
$1,150,000
Monthly profit with improvements =5000 [($45-$22) +$2.25]
=$1,262,500
Net result of the project = 1262500-1150000 –($60 * 1000) =
$52500
Conclusion: ➔ The project is valuable
========================
PART IV: Lean & Just-In-Time Manufacturing.
JIT versus a more traditional approach to organizational
management
Every day, in every organization there is a need to manage:
17. 1)-The levels of WIP (work in progress),
2)-To implement work arounds due to defective deliveries,
3)-Manage machine downtime,
4)-Manage unstable demand,
5)-Schedule unplanned rework,
6)-Respond to inaccurate quantities,
7)-Train staff where errors are identified,
8)-Schedule production flows,
Etc., etc..
The presence of inventory through the process allows managers
to work around the
daily tasks and problems, while decisions can be made, and
18. problems addressed.
When a problem arises, e.g. a process or equipment failure, the
problem is addressed,
and work continues till the next problem. Most of the problem
are not seen as major
issues, as they become part of daily work life. Many times, the
solutions implemented
are just short-term fixes.
In a JIT environment, the process “STOPS”, when problems
arise. JIT exposes any
productivity problems, delays, process failures, etc. and as there
is no buffer
inventory, forces immediate and permanent solutions so that the
problems do not re-
19. appear.
Under JIT, a process or equipment failure becomes a major
failure. The result is an
immediate focus by technical, supervisory and management
staff to identify and
implement a solution. Due to the major organizational focus on
the problem, a permanent
solution is demanded, in order to ensure there is no repeat. As
JIT gets implemented
throughout an organization, problems are permanently
addressed and disappear.
http://www.presentationeze.com/presentations/lean-
manufacturing-just-in-time/lean-manufacturing-just-in-time-
full-details/
20. Overview:
Class Exercise/Lab. (JIT) Elimination of Waste
This exercise contains information about a Garment production
system (see Below). Data on operations
are given by management asking us to determine Categories of
waste. We must use the data to prove type
and existence of the waste in current operations. Once a waste
is recognized, you must provide at least
two general method of eliminating the Waste. This exercise is
composed of 2 parts.
21. 1)- list of possible wastes in this type of systems
2)-Your findings/proposals (list of waste and how to eliminate
them)
PART I
Type and description of wastes
22. Additionally, while thinking about wastes, there are three types
of activities that should be defined within
organizations:
1. Value adding activity: those activities that, in the eyes of the
final customer, make a product or service
more valuable. A value adding activity is simple to define;
industries can ask themselves if they as a
customer would be happy to pay for it.
2. Necessary non-value adding activity: those activities that, in
the eyes of the final customer, do not
make a product or service more valuable but are necessary, in
the event the existing supply process is
23. radically changed. Such waste is more difficult to remove in the
short term and should be a target for
longer term or radical change.
3. Non-value adding activity: those activities which, in the eyes
of the final customer, do not make a
product or service more valuable and are not necessary even
under present circumstances. These
activities are clearly ‘wastes’ and should therefore be the target
of immediate or, at least, short term
removal. L
EAMPLE: The ABC Garment Inc, operates two plants (see
Figure 1) in Eastern Virginia. Plant 1&2 produce
a special winter Jacket and two other small size products. In
this case study, we are interested in
application of Continuous Improvement in the operations,
specifically, production of jackets and
Waste Type
24. 1. Overproduction
2. Defects Frequent errors,
3. Unnecessary inventory
4. Inappropriate processing
5. Excessive motion
6. Waiting
7. Unnecessary motion
Description
Producing too much or too soon, resulting from poor flow of
Information
Product quality problems, or poor delivery performance
25. Excessive storage and delay of information or products,
resulting
in excess inventory
Going about the work process using the wrong set of tools,
procedures or systems, often when a simpler approach may be
effective
Excessive movement of people, information or goods, resulting
in
wasted time, effort and cost
Long periods of inactivity for people, information or goods
Poor workplace organization, resulting in poor ergonomics, for
example excessive bending or stretching and frequently lost
items
26. Storage
Plant 2
purchase of raw material (yarn) used the production of jackets.
After jackets are produced, they are
stored in a special storage (see figure 1). About 50% of raw
material is stored in Plant 1 building and the
rest, in Plant 2 building.
d= 30 miles d= distance in miles
To customers
A)- Historical data on Demand and Production of jackets and
Yarn units in the 2 factories (about 55 miles
apart) operates
TABLE 1
27. Final Product (Jacket) Raw Material (Yarn)**
Year Production (SS) Demand (DD) Year Production (SS)
Demand (DD)
Oct-2010
588202
261727
Oct-2010 110269 70944
Nov-2010 506152 664402 Nov-2010 104398 51926
Dec-2010 473379 565576 Dec-2010 123191 75568
Jan-2011
376092 242484 Jan-2011 50050 32292
31. May-2012 44593 30749
Jun-2012 267355 583408 Jun-2012 67017 51359
**All data points should be used except the those for July &
August 2011 on Raw Material (yarn).
Note: demand statistics for Yarn is 50% of the Yarn needed in
the whole operations
d=45 miles
Plant 1
B)- The standard practice (if followed) requires using 0.10 units
of yarn for each jacket. Yarn purchased
is used in producing jackets and two other garments. Historical
data shows that, total yarn used in the
production of the two other garments is approximately the same
as the total used for jacket., Data
32. required to do this project is given in table 1 above.
Assumptions:
Assuming the company receives the raw material at the
beginning of each month and ship the finished
product (produced in a period) at the end of the same period.
Determine average inventory level for
the jackets and Yarn units. Note that, standard practice requires
only 1200 units of yarn and jacket
(each) in inventory. The following cost information is made
available for your study.
Per unit of jacket per unit of yarn
Inventory carrying cost $ 3.75 $0.91
Transportation/handling cost/mile $.65 $.22
What is required.
33. This is a JIT project and the objective is to improve the
operations by eliminating waste as much as
possible. Use the data provided and Determine:
1). Types of waste (list as many as you recognize from the list
shown above)
2). Quantify the waste (In time, $,%..).
3). Develop at least 2 alternative solution to eliminate the
waste. (Explain your solution (a few lines)
4. Show % improvement in operation if we implement your
recommendations
Hints: It is possible to find all types of wastes listed in page 1
of this document in this system. Some
(page 1, items, 1, 3, &5) more severe than others.
34. Question 1 …….
Question 2:……
Question 3:……….
Question 4:……
SOLUTION: (See the last page for direction and understanding
the solution)
As a first step, it is necessary to compare production/purchase
with demand for the jackets as well as
demand for yarn (on average per month basis)
A)- Production/purchase B)-Demand A-B (overproduction)
--------------------------------- ------------------- ---------------------
------
Jackets 400454 315.688.5 84765.5
35. Yarn 77874.5 36008.6 41805.9 **
Figure 1 and 2 shows the absence of balance between
production volume and demand for jacket.
(Random)
Conclusion: On average, the company carried an average extra
inventory of 84765.5 jacket. Similar
statement is also true for Yarn. If the produced/purchased Yarn
shown in table was for all products
(Jacket & the other two products), then average extra inventory
of yarn =38145.8-32728.6 =5417 units
➔ Types of waste involved include: 1)-Overproduction Waste.
2)-Unnecessary Inventory. In addition
to the ese 2 obvious Waste, There were probably waste
involving “Excessive and/or Unnecessary
motion”
37. Figure 2 (vertical access in in 1000)
Answer s to Questions
Question 1: Types of waste involved are:
1)-Overproduction
2)- Excess Inventory
3)- Unnecessary transportation (location of the warehouse with
respect to the two plants)
4)- Excess motion /move ( excess inventory require more than
required handling)
5)- Overproduction and excess inventory require more labor,
more monitoring, more
waiting and more damaged product (reject and waste) which are
all unnecessary.
38.
39. P
ro
d
u
se
d
Question #2:
1)-Overproduction. We proved before that volume of
overproduction was:
Jacket: ➔ 84765.5 units per month (average value) ➔
84765.5/400454 =21.16%
**Yarn ➔41805.9 “ “ “ “ “ “ (this may be = 5857 if the
40. assumption
discussed in “Conclusion” is applied ➔ 5857/77874.5 = 7.52%
2)- Excess inventory. (the same values as in item 1 above.
However, if we consider the
requirement for a safety stock of (desired by management)
1200, then excess inventory
will be 83565.8 and 4657 units for Jackets and Yarn
respectfully.
Cost associate with excess inventory = 83656.8*3.73 + 4657
*0.91 = $315924
3)- cost associated with unnecessary transportation/handling is
that the warehouse is location. should
Change from current location to a new location approximately
between the two plants
➔ The excess (unnecessary) transportation = (75-55) /75 =
26.67 %
41. 4)- No data is available to quantify other wastes
Question 3-4
Overproduction:
1)- cut overproduction/purchase quantity. Purchase enough to
meet the demand (the purchased
quantity must be X% more than demand, where X is the
percentage required for safety stock and
rejected (damaged, scrapped, …)
2)- Improve sales forecast. only through a good forecasting
system, the company could predict
demand level for the next month.
Excess Inventory:
1)- if we eliminate the overproduction problem as stated in the
42. previous part, the
Excess inventory cost/waste will be eliminated resulting in
$315924 savings
2)- If possible, the production planning and inventory
replenishment should be based on say a
weekly schedule not monthly. (closer to JIT inventory system)
Using weekly replenishment, average inventory will be smaller
and cost of carrying
inventory will drop from $315924 to ($315924 *12/52) =
$72906. This is a reduction of
77% in inventory carrying cost.
3)- Use EOQ system of inventory
Excess motion/transportation:
1)- Move the warehouse to a location where total distance
traveled from the two plant to the
43. warehouse will be minimized (55 miles). The savings (cost
reduction) due to this waste
reduction alternative, is shown in question 2 as 26.67 % and the
$ value is:
Total transportation cost/month of moving 400454 units of
Jackets and 77874.5 units of Yarn
= (400454) *0.65 + (77874.5) * 0.22 = $223427.5
Savings (if we change location of warehouse) = (26.67%)
*(223427.5 = $69420.7
2)- Implementing the item2 1 and 2 (See overproduction above)
will result in eliminating
excess/unnecessary labor usage, excess motion, and related
wastes). We need additional data
to quantify other savings because of waste elimination.
44. Discussion & Assignment Help: waste
Elimination.
In JIT project, the primary focus is on eliminating waste. But,
to eliminate waste, as a first step, we
have to define it (in the context of the system under study) and
then determine the types of waste
in the system and quantify the impact of each type, on the
performance measures of the system.
Note that in early part of the study, we need to look at waste in
the overall system (those that are
obvious) and after that, if further studies are needed, search for
waste in the sub-systems and
continue this process to the smallest component of the whole
system.
45. In Assignment #2 that you are working on now, It is obvious
that monthly production volume of
jackets and yarn compared to their corresponding demand
volume, are random and does not follow
a logical pattern. Comparing production with demand for each
product on a monthly basis will
show that we had shortage (Demand > production) in some
months or overproduction (Production
> demand) in others.
In this case study (or similar ones), since initial inventory is not
given, do not conduct an inventory
analysis to find out whether in a row (Monthly data) there is a
balance between Production volume
data and data on demand for that month. The information
represents 2 years of data from an
ongoing operation. The data provided does in table 1 does not
46. imply that this company’s
operations started on September 2010 or stopped on June 2012.
For instance, they we able to sell
more jacket in September 2010 than they produce the same
period, because, the beginning
inventory in September was high enough to allow them to meet
the demand from the inventory.
To find and quantify wastes in the system. let us assume that the
sample data is large enough to be
used in the Waste Elimination study. (in real-life situations, we
need at least 30 pieces of data to
make sure that the sample is large enough to make the result
statistically valid). Let:
X= Average monthly production Y= Average monthly demand
If X > Y, this imply that we have “Overproduction”. This will
create other waste in the system
47. which may include inventory, labor force, ….
If X < Y, there are two interpretation (see below)
a) We did not satisfy customer demand (waste of resources.
Capability….). ➔ We did
not use all our resources efficiently to produce enough to meet
the demand.
b). On September 1, 2010, we had a large inventory of jackets
in storage which
allowed us to (combined with production) meet customers
demand for 2 years
As shown in this case study, a lean system aims at balancing
periodic input and output, while a
traditional system continues operations without requiring such a
balance. This is possible because
a traditional system maintains large volume of inventories and
allows us to satisfy customer
48. demand from Inventory. Inventory and operations related to
maintaining inventory are all very
costly.
Using the data provided, you can quantify those losses and
determine the cost associated with each
type of waste
JUST-IN-TIME SYSTEMS
Basic Elements of JIT JIT is a philosophy and integrated
management system based on the concept of eliminating all
waste.
Just-in-time production is also known as lean production. The
intention of just-in-time production is to produce only what is
needed, when it is needed. Waste has a very comprehensive
meaning in just-in-time systems. Some examples of waste are
· Watching a machine run
· Waiting for parts
49. · Counting parts
· Overproduction
· Moving parts over long distances
· Storing inventory
· Looking for tools
· Machine breakdowns
· Rework
Many techniques are used for eliminating waste in a just-in-
timeproduction system. Ideas come from employees working on
continuous programs of improvement. There are also other
common elements of just-in-time that define the philosophy and
management system:
· Flexible resources
· Cellular layouts
· Pull production system
· Kanban production control
· Small-lot production
· Quick set-ups
· Uniform production
· Quality at the source
· Total productive maintenance
· Supplier networks
Flexible Resources
Flexibility is the key to eliminating waste, like excess or
obsolete inventory and worker idle time. The following
50. resources are the source of such flexibility:
· Multifunctional workers -- workers able to operate multiple
machines or skilled at multiple tasks. They can be easily rotated
as demand changes.
With workers operating several machines, an incentive is
created to modify machines so that they require minimal human
intervention.
· General purpose machines -- create flexibility by allowing
various machining operations to be performed on a single
machine.
· Improved operator movements and operations -- Time and
motion studies lead to new ideas of how to minimize movement
and travel.
Cellular Layouts
Intersecting flow patterns are a problem in process (functional)
layouts where similar machines are grouped together. Cellular
layouts eliminate the intersecting flow pattern by:
· Using group technology to group parts into families with
similar processing requirements.
· Grouping dissimilar machines in a U-shape or manufacturing
cell to produce a family of parts
· Laying out the cell so that work flows in one direction through
the cell.
51. · Adjusting the cycle time by changing work paths. Workers in a
cell may operate several machines. The workers do not
necessarily operate in the same consecutive flow pattern as the
product
The Pull System/Kanban Production System
In a pull system, the system pace is determined by the slowest
workstation in the system. A worker cannot pass on any work
to the next station until the next station has passed its work on
to its subsequent station
Pull production (Kanban System) is a process that aims to
arrange an organization so that customer preference or orders
are what cause materials to be "pulled" through a system.
Kanban is the Japanese word for card. It is the "visible record"
used in a pull system. Kanbans provide the means for signaling
when work needs to flow. The kanban system should always be
kept as simple as possible.
Small-lot ProductionProducing in small lots has many benefits,
including
· Requires less space and capital investment.
· Moves processes closer together.
· Makes quality problems easier to detect.
· Makes processes more dependent on each other.
· Prevents excess work-in-process inventory and allows quicker
change to a new product when demand changes.
52. One of the Important goals of JIT is to reduce lead time, which
is made up of four components:
· Processing time -- can be reduced by reducing the number of
items processed and the efficiency or speed of the machine or
worker.
· Move time -- can be decreased if machines are moved closer
together, the method of movement is simplified, or the need for
movement is eliminated.
· Waiting time can be reduced through better scheduling of
materials, workers, and machines and sufficient capacity.
· Setup times -- can be reduced through a variety of techniques
as described next.
Quick Setups Setup time can be very lengthy -- often hours
long. When setups are long, manufacturers often want to
produce a large number of the same item before changing to
another. The concept of long setups does not work well with
small lot production.
Shigeo Shingo is well-known for his SMED (single-minute-
exchange of dies) principles, which were developed to reduce
setup times. For example, Shingo reduced the setup time on a
1,000 ton press from six hours to three minutes using the
following principles:
· Separate internal setup from external setup -- internal setups
must be performed while the machine is stopped; external
53. setups may be made while the machine is running.
· Convert internal setup to external setup
· Streamline all aspects of setup
· Perform setup activities in parallel or eliminate them entirely
Total Productive Maintenance
Two basic types of maintenance are
· Breakdown maintenance -- repairs to make failed machine
operational
· Preventive maintenance -- system of periodic inspection and
maintenance to keep machines operating
Total productive maintenance(TPM) seeks a higher degree of
maintenance than preventive maintenance. Total productive
maintenance combines the practice of preventive maintenance
with the concepts of total quality -- employee involvement,
decisions based on data, zero defects, and a strategic focus.
TPM requires management to
· Design products that can be easily produced on existing
machines.
· Design machines for easier operations, changeover, and
maintenance.
· Train and retrain workers to operate machines.
· Purchase machines that maximize productive potential
· Design preventive maintenance plan spanning life of machine
Uniform Production Levels
Uniform production levels help moderate the amount of
54. inventory in the system and avoid the use of excess overtime.
Production is leveled by the use of better forecasting techniques
and the use of mixed model sequencing.
A sequence of L-M-S-M-L repeated 40 times per day represents
mixed model sequencing. Producing 80 L's, then 80 M's, then 40
S's is batch production and sequencing..
Quality at the Source
Quality must be extremely high in a JIT system because
there is little inventory to buffer against quality mistakes. A JIT
system should have a zero defect policy that seeks to identify
quality problems at their source. Workers, not inspectors should
be responsible for quality. Worker responsibility for quality
requires the following components:
· Jidoka - the authority to stop the production line.
· Andon lights - to signal quality problems on the line.
· Undercapacity scheduling - allows for planning, problem-
solving, and maintenance
· Visual control - makes problems visible (Figure 15.9)
· Poka Yoke - devices, processes, and designs to prevents
defects
· Kaizen - Continuous improvement which requires total
employment involvement
The essence of JIT is the willingness of workers to
· spot quality problems
· halt production when necessary
55. · generate ideas for improvement
· analyze problems
· perform different functions
Supplier Networks
Just-in-time purchasing and supply has developed rapidly.
Trends in supplier policies include:
· Locate near to the customer
· Use small, side loaded trucks and ship mixed loads
· Consider establishing small warehouses near to the customer
or consolidating warehouses with other suppliers
· Use standardized containers and make deliveries according to
a precise delivery schedule
· Become a certified supplier and accept payment at regular
intervals rather than upon delivery
Benefits of JITThe benefits of JIT are similar to those of
advanced manufacturing technology, but they are achieved
through reduction of waste and productive management of
human resources. In essence, JIT achieves the four strategic
objectives of manufacturing simultaneously -- low cost, high
quality, high flexibility, and quick delivery. These overall
benefits come from
· Reduced inventory
· Reduced space requirements
· Shorter lead time
· Increased productivity
56. · Better relations with suppliers
· Simplified scheduling and control activities
· Increased capacity
· Better use of human resources
· More product variety
JIT Implementation
Just-in-time production began in Japan in the 1970’s and
spread to the U. S. in the 1980’s. We can make these general
observations about JIT:
· JIT is used to finely tune an operating system.
· JIT is somewhat different in U. S. than in Japan and goes by
several names, including stockless production, material-as-
needed, continuous-flow, zero inventory production system, and
lean production.
· JIT is still evolving and meshing in new ways with advanced
technology
· JIT isn’t for everyone -- mass production is still best for very
high volume production; job shops are still necessary for highly
specialized products
58. in
-
time production is also known as
lean production
. The intention
of just
-
in
-
time
production is to produce only what is n
eeded, when it is
needed.
Waste has a very comprehensive meaning in just
-
in
-
time
systems. S
ome examples of
waste
are
o
59. Watching a machine run
o
Waiting for parts
o
Counting parts
o
Overproduction
o
Moving parts over long dist
ances
o
Storing inventory
o
60. Looking for tools
o
Machine breakdowns
o
Rework
Many techniques are used for eliminating waste in a
just
-
in
-
time
production system
. Ideas come from employees working on continuous
programs of improvement. There are also other common
elements of
just
-
in
61. -
time that define the philosop
hy and management system:
o
Flexible resources
o
Cellular layouts
o
Pull production system
JIT: Value Added and Waste Elimination
62. OutlineValue-added focusSources of wasteJIT PrinciplesThe
meaning of JIT
Value-added FocusDistinguish necessary and unnecessary
activitiesImprove the necessary ones, eliminate the unnecessary
ones
The Support OrganizationA large portion of most companies is
involved in support activitiesPlanning, control,
accountingLogisticsQuality activitiesChange activitiesMost of
these don’t add value, and many may be unnecessary
Employee involvementThe people most familiar with the
processes are the workersEmployee involvement is critical to
successful improvement efforts
63. Sources of WasteToyota’s seven wastesCanon’s nine wastes
Toyota’s Seven WastesProducing
defectsTransportationInventoryOverproductionWaiting
timeProcessingMotion
Canon’s Nine WastesWork-in-
processDefectsEquipmentExpenseIndirect
LabourPlanningHuman resourcesOperationsStartup
Waste Reduction and the EnvironmentDesign for environment
(DFE)Minimize use of environmentally unfriendly materials and
processesMaximize use of environmentally friendly
alternativesDesign products for ease of repairDesign products
for ease of disassembly after disposal
JIT PrinciplesSimplificationCleanliness and
67. AgilityLean manufacturers are also agileAgility means
responding to unpredictable changeChanging demandChanging
product mixNew productsAgile elements of LeanShort setups
and small batchesFlexible equipmentFlexible workers
Variation reductionVariability always makes performance
worseThe goal is to reduce or eliminate variability of all
kindsExample:Batch and queue has high variabilityEvery day is
differentSmall lot, repetitive, flow production has low
variabilityEvery day is the same
MeasurementMeasurement is critical to improvementWithout
measurement, how do we know things are better (or worse)?
Other IssuesLimitations and implementation
barriersAttitudesTime commitmentQuality
68. commitmentVariation reduction and stabilityMisunderstanding
of JITSocial impact needs to be consideredImplement lean
practices FIRST, then automateLearn as you go
.Main Page
.Home Page
Information should be visible.
1
JIT Implementation using Value Analysis
A Case Study (For help, See tutorial on page 4)
Consider the steel cabinet manufacturing line with the following
process flow diagram.
(see Figure 1**)
71. 1.5 Hr
, 0.1 Hrs for Inspection
and 0.1 Hrs for Rework
34 hours ( 2.5
hours from plant to Company
To Customers warehouse and
31.5 hrs. From warehouse to customers
Figure 1**
** See “Legend” for Figure 1 on page 3.
Steel coil preprocessing stamping
Buffer
73. Coil Storage
Final assembly
2
The value-added analysis using a flow chart is a mechanism to
improve cycle times
and productivity by visually separating value-adding from non-
value-adding activities.
The process is very straightforward and explained here. Follow
this procedure apply it
to the case study.
Lis 1. List all of the steps in the process from beginning to end
(Figure 1)
2. Figure 1 shows a box for every step, in sequence.
74. 3. Use the production rate in each box and determine the Total
Cycle Time.
4. Identify those steps that do not add value to the process.
Non value-added operations.
.
5. to separate the value-added and non-value-added activities,
move the boxes representing non-
value-added processes to the right of the value added steps
(as shown in Fiq.. 2)
. 6 From the information collected in step 5 determine the
Non-Value-Added Cycle Time. This is the
maximum waste that could be eliminated from the
processing operations
. 7. Repeat step 5 and 6 above for all operations and then
determine the Value Added Cycle time.
. Now determine the ratio R1= value added time as % of total
cycle time)
75. . 8. Move the boxes representing the value-added processes
to the left of the value- adding steps
(see Fig 2) Calculate the percentage of the current Total
Cycle Time that is spent on Non-Value-
Added operations. Construct a pie chart to communicate the
analysis performed in steps 7 and 8
above.
A recent study by a group of Industrial Engineers proved that
some operation simplification
and./or modifications could eliminate waste and substantially
shorten the total cycle time. The
following assumptions/facts must be used as the basis for
elimination some non-value-added
operations
• Assume A)-The existing Layout could not be modified,
B)-The existing layout could be modified
• A stock entering a buffer storage must be moved to the next
process within 0.5 hours
• Only one Inspection-Rework station should be used
76. throughout the manufacturing cycle (You
need to determine which one to keep). Note that, all other
inspection functions could be
incorporated into the individual processes. In addition, the
items found defective in a
processing station will be allowed to move through the system
(with no further processing)
and will be rejected at the end of the line.
• Steel coil inventory time should be reduced to 10 hours.
10.
.
10. After step 8, the remaining processes are usually called
Target Processes.
a)- Develop the Diagram of the new layout (similar to
figure 2) with Target Processes only, and
determine the total Target Cycle Time.
b)- Determine the ratio R2= value added time as % of total
cycle time). Compare R1 and R2
and comment on the changes/improvements because of
77. waste elimination.
c)- Analyze the Non-Value-Added steps (in the improved
system) and suggest at least 3
alternatives method of improving those non value added
activities.
.
3
APPENDIX
V Value-Added Non-Value-Added
78. Figure 2
Symbols used in Figure 1:
Symbol Used to indicate
Processing
Unit
Storage
(buffer or offline storage)
Rework/Reclamation station
79. Material/product handling (Time requires insignificant)
Material/product handling (Time requires significant)
Operation
2
Operati
on 1
Operati
on c
80. R
e
w
o
r
k
4
Tutorial: Value Added & Waste elimination
Necessary and Un-necessary Activities.
Distinguishing necessary, nonvalue-added activities from the
unnecessary,
purely wasteful ones is tricky because unnecessary activities in
organizations
often seem necessary. For example, most purchasing-related
81. tasks are
necessary because they procure the materials needed by value-
added activities
for transformation the raw material into the final output.
Inspecting incoming parts for defects or counting materials in
inventory also
seem necessary; inspection prevents defective parts from going
into the
product (a valuable endeavor) and counting ensures that
inventories are kept at
the right levels (also valuable). But the fact that an activity
fulfills a valuable
purpose should not be confused with its adding value. For
activities like
inspection and counting, alternatives might exist that would
eleminate the
82. need for either. For example, requiring vendors to deliver only
zero-defect
parts would eliminate the need for incoming inspection.
Here is a simple procedure to keep all this straight:
About each step, task, or activity in a process ask:
1. Does it transform something? If yes, go to 2. If no, go to 4.
2. Are customers willingly to pay for it? If yes, go to 3. If no,
go to 4.
3. Is it done right the first time? If yes, it’s a value-added
activity. If no, go to 4.
4. Is it necessary for the business or regulations? If yes, it’s a
83. necessary nonvalue-
added activity. If no, it’s an unnecessary nonvalue-added
activity, waste.
Support Organization:
To distinguish value-added from nonvalue-added activities, it is
useful to
think of an organization as comprised of two organizations:
One, the
production organization, makes the product or provides the
service; the
other, the support organization, assists and supports the
production
organization but does little that qualifies as value added. In
common parlance,
84. 5
the production organization is called the line (or frontline) and
the support
organization is called the staff.
The number of activities classified within the support
organization can be very
large. Some of these activities include:
• Planning, control, and accounting activities.
• Logistical activities.
• Quality Activities.
• Change activities
Waste Elimination
85. Sources Of Waste
When all the obvious sources of waste have been removed,
continuous
improvement efforts switch to searching for the hidden sources.
What are
classified as waste?
Toyota’s Seven Wastes + 1
◾ Waste from producing defects
◾ Waste from overproduction
◾ Wasted (nonutilized) human talent
◾ Waste in transportation
◾ Waste from inventory
86. ◾ Waste of motion
◾ Waste in processing
A way to help remember the eight wastes is the acronym
DOWNTIME:
Defects, Overproduction, Waiting, Nonutilized human talent,
Transportation, Inventory, Motion, and Excess processing.
Canon’s Nine Wastes
Toyota’s seven wastes emphasize factory wastes. Canon
corporation uses a
6
broader classification scheme of nine wastes that could be
87. applied even to
service companies:
◾ Waste caused by work-in-process
◾ Waste caused by defects
◾ Waste in equipment
◾ Waste in expense
◾ Waste in indirect labor
◾ Waste in planning
◾ Waste in human resources
◾ Waste in operations
◾ Waste in startup
Classifying wastes is useful because it is easier to focus on
88. wastes than to try
to attack everything at once. A company can begin eliminating
waste by using
the eight or nine waste categories, then tailor the categories to
better suit its
purposes and programs.
============================================
Improvement Kickoff
Making housekeeping the responsibility of everyone is a way to
ease workers
into the improvement process and to prepare them for greater
responsibility
later on. To this end, staffers and frontline workers should get
together to
clean and organize their workplace. Keeping it that way on a
89. continuous basis.
Five-S
One way to instigate and maintain ongoing, workplace
improvement is with a
5S projects. 5S refers to Japanese names for five steps to
workplace
organization. The five Ss are:
◾ (sort): sort everything; toss out anything not needed
◾ (straighten): specify a place for everything; designate
locations
by number, color coding, name; put everything in its
place,
◾ (shine): wash, clean, or paint everything so abnormal
or
problematic situations become obvious).
90. 7
◾ (standardize): Standardize (create procedures, rules, or
guidelines for maintaining the first three Ss
◾ (sustain): self-discipline (develop habits and culture to
maintain a clean,
organized
NOTE: At some companies, a sixth S for safety is added and
91. everything is
organized with an eye on safety as well as functionality.
JIT Implementation using Value Analysis
A Case Study, ISEN5881
Consider the steel cabinet manufacturing line with the following
process flow diagram.
(see Figure 1**)
Processing, storage/handling time (Hrs)
0.3 Hr
0.15
96 hrs. (storage time)
93. 0.1 Hrs Inspection
and 0.1 Hrs for Rework
0.5 Hrs
3.00 Hrs
1.5 Hr
, 0.1 Hrs for Inspection
and 0.1 Hrs for Rework
94. 34 hours ( 2.5
hours from plant to Company
To Customers warehouse and
31.5 hrs. From warehouse to customers
Figure 1**
Steel coil preprocessing stamping
Buffer
Inventory
1 Step Cabinet
Manufacturing
Inspect (QC
station)
96. ** See “Legend” for Figure 1 on page 3.
The value-added analysis using a flow chart is a mechanism to
improve cycle times
and productivity by visually separating value-adding from non-
value-adding activities.
The process is very straightforward and explained here. Follow
this procedure apply it
to the case study.
Lis 1. List all of the steps in the process from beginning to end
(Figure 1)
2. Figure 1 shows a box for every step, in sequence.
3. Use the production rate in each box and determine the Total
Cycle Time.
4. Identify those steps that do not add value to the process.
Non value-added operations.
97. .
5. to separate the value-added and non-value-added activities,
move the boxes representing non-
value-added processes to the right of the value added steps
(as shown in Fiq.. 2)
. 6 From the information collected in step 5 determine the
Non-Value-Added Cycle Time. This is the
maximum waste that could be eliminated from the
processing operations
. 7. Repeat step 5 and 6 above for all operations and then
determine the Value Added Cycle time.
. Now determine the ratio R1= value added time as % of total
cycle time)
. 8. Move the boxes representing the value-added processes
to the left of the value- adding steps
(see Fig 2) Calculate the percentage of the current Total
Cycle Time that is spent on Non-Value-
Added operations. Construct a pie chart to communicate the
analysis performed in steps 7 and 8
above.
98. A recent study by a group of Industrial Engineers proved that
some operation simplification
and./or modifications could eliminate waste and substantially
shorten the total cycle time. The
following assumptions/facts must be used as the basis for
elimination some non-value-added
operations
• Assume A)-The existing Layout could not be modified,
B)-The existing layout could be modified
• A stock entering a buffer storage must be moved to the next
process within 0.5 hours
• Only one Inspection-Rework station should be used
throughout the manufacturing cycle (You
need to determine which one to keep). Note that, all other
inspection functions could be
incorporated into the individual processes. In addition, the
items found defective in a
processing station will be allowed to move through the system
(with no further processing)
and will be rejected at the end of the line.
99. • Steel coil inventory time should be reduced to 10 hours.
10.
.
10. After step 8, the remaining processes are usually called
Target Processes.
a)- Develop the Diagram of the new layout (similar to
figure 2) with Target Processes only, and
determine the total Target Cycle Time.
b)- Determine the ratio R2= value added time as % of total
cycle time). Compare R1 and R2
and comment on the changes/improvements because of
waste elimination.
c)- Analyze the Non-Value-Added steps (in the improved
system) and suggest at least 3
alternatives method of improving those non value added
activities.
101. Symbol Used to indicate
Processing
Unit
Storage
(buffer or offline storage)
Rework/Reclamation station
Material/product handling (Time requires
insignificant)
Material/product handling (Time requires significant)
Operation
2
Operati
