Ch9 Jit

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Ch9 Jit

  1. 1. Just-in-Time Systems Reducing Variance, Waste and Lead Time in the Supply Chain
  2. 2. Topics to be Covered <ul><li>Review of JIT & Waste </li></ul><ul><li>Objectives of JIT </li></ul><ul><li>JIT Principles </li></ul><ul><li>JIT and Variance </li></ul><ul><li>JIT Tools and Procedures </li></ul>
  3. 3. JIT: Definitions? <ul><li>JIT Head </li></ul><ul><li>Chicken JIT </li></ul><ul><li>Oh JIT (O´JIT) </li></ul><ul><li>Tough JIT </li></ul><ul><li>Strate JITs </li></ul><ul><li>JIT Planes </li></ul><ul><li>Bull JIT </li></ul><ul><li>Le JIT </li></ul><ul><li>JIT Lag </li></ul><ul><li>When the JIT hits the fan. </li></ul>
  4. 4. What is JIT? <ul><li>a corporate system designed to produce output within the minimum lead time and at the lowest total cost by continuously identifying and eliminating all forms of corporate waste and variance. </li></ul><ul><li>a corporate strategy </li></ul><ul><li>a philosophy </li></ul><ul><li>Focus of JIT: </li></ul><ul><li>• variance & waste </li></ul>
  5. 5. Waste Types Chrysler Video on Waste
  6. 6. Seven Basic Types of Waste <ul><li>Transportation waste </li></ul><ul><li>Process Waste </li></ul><ul><li>Inventory Waste </li></ul><ul><li>Waste of motion </li></ul><ul><li>Waste from product defects </li></ul><ul><li>Waiting time </li></ul><ul><li>Overproduction </li></ul>
  7. 7. Common Causes of Waste <ul><li>Layout (distance) </li></ul><ul><li>Long setup time </li></ul><ul><li>Incapable processes </li></ul><ul><li>Poor maintenance </li></ul><ul><li>Poor work methods </li></ul><ul><li>Lack of training </li></ul><ul><li>Inconsistent performance measures </li></ul><ul><li>Ineffective production planning </li></ul><ul><li>Lack of workplace organization </li></ul><ul><li>Poor supply quality/reliability </li></ul>
  8. 8. Objective of JIT <ul><li>Produce only the products the customer wants. </li></ul><ul><li>Produce products only at the rate that the customer wants them. </li></ul><ul><li>Produce with perfect quality </li></ul><ul><li>Produce with minimum lead time. </li></ul><ul><li>Produce products with only those features the customer wants. </li></ul>
  9. 9. Objectives <ul><li>Produce with no waste of labor, material or equipment -- every movement must have a purpose so that there is zero idle inventory. </li></ul><ul><li>Produce with methods that allow for the development of people </li></ul>
  10. 10. JIT Principles <ul><li>Create flow production </li></ul><ul><li>• one piece flow </li></ul><ul><li> • machines in order of processes </li></ul><ul><li>• small and inexpensive equipment </li></ul><ul><li>• U cell layout, counter clockwise </li></ul><ul><li>• multi-process handling workers </li></ul><ul><li>• easy moving/standing operations </li></ul><ul><li>• standard operations defined </li></ul>
  11. 11. JIT Principles - Slide 2 <ul><li>Establish “TAKT” time </li></ul><ul><li>• rate at which the customer buys a product </li></ul><ul><li>Build Pull Product </li></ul><ul><li>• use of kanban system </li></ul>
  12. 12. JIT Tactics <ul><li>Single Minute Exchange of Dies (SMED) </li></ul><ul><li>Statistical Process Control </li></ul><ul><li>Use of standard containers </li></ul><ul><li>Doable stable schedules with adequate visibility </li></ul><ul><li>TAKT-Time </li></ul><ul><li>5-S Program </li></ul><ul><li>Kaizen Event </li></ul><ul><li>Visual control </li></ul><ul><li>Flexible workers </li></ul><ul><li>Tools at the point of need </li></ul><ul><li>Product redesign </li></ul><ul><li>Group Technology </li></ul><ul><li>Total Productive Maintenance </li></ul>
  13. 13. Balanced Production <ul><li>Three elements </li></ul><ul><li>• TAKT time </li></ul><ul><li>• Work sequence </li></ul><ul><li>• Standard WIP </li></ul><ul><li>Objective </li></ul><ul><li>• Build at rate that the customer wants work </li></ul><ul><li>• Balance the system to maximize </li></ul><ul><li>efficiency at this rate </li></ul>
  14. 14. TAKT Time Example <ul><li>Net Available Operating Time </li></ul><ul><li>• Time per shift 480´ (minutes) </li></ul><ul><li>• Breaks (2 @ 10´) - 20´ </li></ul><ul><li>• Clean-up - 20’ </li></ul><ul><li>• Lunch - 30’ </li></ul><ul><li>• NAOT/shift 410´ </li></ul><ul><li>Customer Requirements </li></ul><ul><li>• Monthly 26,000 units/month </li></ul><ul><li>• No. Working Days 20 days/month </li></ul><ul><li>• CR/Day 1,300 units/day </li></ul><ul><li>TAKT Time </li></ul><ul><li>• 410’ x 60” x 3 shifts (73,800) divided by 1,300 </li></ul><ul><li>• 57.769 seconds per part or 57&quot; </li></ul>
  15. 15. TAKT Time <ul><li>TAKT </li></ul><ul><li>• the beat </li></ul><ul><li>• (Net Available Operating Time) / Customer Requirements </li></ul><ul><li>• time periods must be consistent </li></ul><ul><li>Example of calculation </li></ul>
  16. 16. SMED <ul><li>Setup reduction </li></ul><ul><li>Elements </li></ul><ul><li>• Internal Setup </li></ul><ul><li>• setup while machine idle </li></ul><ul><li>• External Setup </li></ul><ul><li>• setup while machine busy </li></ul><ul><li>• Adjustment </li></ul><ul><li>• run-ins, calibration </li></ul>
  17. 17. SMED Process <ul><li>Study current process </li></ul><ul><li>• “ as is” </li></ul><ul><li>• video tape </li></ul><ul><li>• Who owns the video tape? </li></ul><ul><li>Convert internal to external setup </li></ul><ul><li>Eliminate the need for Adjustment </li></ul><ul><li>Eliminate need for fastening </li></ul><ul><li>Goal </li></ul><ul><li>• setup time < 10 minutes </li></ul>
  18. 18. Push Vs. Pull Scheduling <ul><li>Push Scheduling </li></ul><ul><li>• traditional approach </li></ul><ul><li>• “ move the job on when finished” </li></ul><ul><li>• problems - creates excessive inventory </li></ul><ul><li>Pull scheduling </li></ul><ul><li>• coordinated production </li></ul><ul><li>• driven by demand (pulled through system) </li></ul><ul><li>• extensive use of visual triggers </li></ul><ul><li>(production/withdrawal kanbans) </li></ul>
  19. 19. Visual Control <ul><li>A system for making problems obvious without the need for sophisticated monitoring computer systems </li></ul><ul><li>• Andon light system </li></ul><ul><li>• Kanbans </li></ul><ul><li>Create a sense of urgency </li></ul><ul><li>Clearly identify where the problems are located </li></ul>
  20. 20. Supplier Partnerships <ul><li>Reliance on suppliers for </li></ul><ul><li>• problem solving expertise </li></ul><ul><li>• quality at the source </li></ul><ul><li>• timely communication </li></ul><ul><li>• participants in cost reduction programs </li></ul><ul><li>Increased reliance on supplier certification </li></ul>
  21. 21. Standardization/Simplification <ul><li>Eliminate inherent sources of variance </li></ul><ul><li>eliminate opportunity for human discretion error </li></ul><ul><li>Examples </li></ul><ul><li>• Container sizes </li></ul><ul><li>• MacDonalds with interaction with customers </li></ul><ul><li>Consistent with Deming Wheel </li></ul><ul><li>• Standarize  expose problems  solve </li></ul><ul><li>problems  implement new methods </li></ul>
  22. 22. Other Techniques <ul><li>Milk runs </li></ul><ul><li>Poka-Yoke Systems </li></ul><ul><li>Continuous Improvement Programs (CIP) </li></ul>
  23. 23. Video <ul><li>JIT at McDonalds </li></ul>
  24. 24. JIT - Day 2 <ul><li>New Developments in JIT </li></ul>
  25. 25. JIT & Lean Manufacturing <ul><li>Lean Manufacturing </li></ul><ul><li>• Doing more with less </li></ul><ul><li>• Less of: </li></ul><ul><li>• materials, time, resources </li></ul><ul><li>• overhead, people </li></ul><ul><li>• waste </li></ul><ul><li>• money </li></ul><ul><li>JIT is a subset of Lean Manufacturing </li></ul><ul><li>Now seen as most applicable to mass production settings </li></ul>
  26. 26. Kaizen Event <ul><li>A relatively new concept </li></ul><ul><li>• Kaizen Blitz, Gemba Kaizen </li></ul><ul><li>Process focused </li></ul><ul><li>Operates at two levels </li></ul><ul><li>• on-going process of identifying opportunities for </li></ul><ul><li>improvement </li></ul><ul><li>• strategic, top management </li></ul><ul><li>• short-term project lasting 1-4 days </li></ul><ul><li>• training, documentation of process “as is”, identification of potential improvements, implementation, presentation, action list </li></ul>
  27. 27. Kaizen Events - Key Traits <ul><li>Very short-term, finite in life </li></ul><ul><li>Highly focused </li></ul><ul><li>Creativity before capital </li></ul><ul><li>Team-oriented </li></ul><ul><li>Action-Oriented </li></ul><ul><li>Verifiable Metrics </li></ul><ul><li>Repetitive </li></ul>
  28. 28. Kaizen Event Process <ul><li>Top management buy-in </li></ul><ul><li>• Public Kaizen Events </li></ul><ul><li>Assessment of current processes </li></ul><ul><li>• top management </li></ul><ul><li>• Target Processes </li></ul><ul><li>• training </li></ul><ul><li>• documentation - “as is” </li></ul><ul><li>• opportunities </li></ul><ul><li>• change </li></ul><ul><li>• presentation/action list </li></ul>
  29. 29. Typical Metrics <ul><li>Floor space occupied by process being assessed </li></ul><ul><li>Operators required per day </li></ul><ul><li>Distance traveled by an order within the process </li></ul><ul><li>WIP Inventory </li></ul><ul><li>Setup (measured in minutes) </li></ul><ul><li>Quality recommendations generated </li></ul><ul><li>Safety Improvements implemented </li></ul>
  30. 30. Application of Kaizen Events <ul><li>Shop floor </li></ul><ul><li>Finance </li></ul><ul><li>• 401 K plan </li></ul><ul><li>Purchasing </li></ul><ul><li>Health Care </li></ul><ul><li>Services </li></ul>
  31. 31. Example of Impact of Kaizen Event Impact of Kaizen Events - Overall Benefits (January 1, 1996 through December 31, 1996
  32. 32. JIT 11 <ul><li>Based on system developed by Bose of Framingham, MA </li></ul><ul><li>Integration of JIT principles and practices into the supply chain </li></ul><ul><li>JIT II </li></ul><ul><li>• long term collaborative relationships with </li></ul><ul><li>suppliers present </li></ul><ul><li>• suppliers to place personnel in plants of the buying organization </li></ul>
  33. 33. Limitations of JIT <ul><li>Preconditions to JIT </li></ul><ul><li>• trust must be present </li></ul><ul><li>• labor/management </li></ul><ul><li>• suppliers/consumers </li></ul><ul><li>• recognition of processes </li></ul><ul><li>• familiarity with problem solving </li></ul><ul><li>• quality at the source </li></ul><ul><li>• agreement over value and waste </li></ul>
  34. 34. Limitations of JIT <ul><li>Right Settings </li></ul><ul><li>• applicable in growth to maturity phases of </li></ul><ul><li>Product Life Cycle </li></ul><ul><li>• standard product </li></ul><ul><li>• Steinway and JIT </li></ul><ul><li>• standard/fixed pay-rate </li></ul><ul><li>• problems with piece-rate scheme </li></ul><ul><li>Universal agreement that change needed </li></ul>
  35. 35. Theoretical Benefits of JIT <ul><li>Unpleasant surprises eliminated </li></ul><ul><li>Less computerization </li></ul><ul><li>• visual control </li></ul><ul><li>Improved quality </li></ul><ul><li>WIP reduced </li></ul><ul><li>Better communications </li></ul><ul><li>Less pressure on receiving docks and incoming inspection areas </li></ul><ul><li>Lower costs </li></ul><ul><li>Change in attitude </li></ul><ul><li>• Defects are treasures </li></ul>
  36. 36. Dealing with Variance <ul><li>Four major stances: </li></ul><ul><li>• Buffer against it </li></ul><ul><li>• Ignore it </li></ul><ul><li>• Manage it </li></ul><ul><li>• Eliminate it </li></ul><ul><li>All forms of variance create cost </li></ul>
  37. 37. JIT & Variance <ul><li>Variance a fact of life </li></ul><ul><li>Comes from many sources </li></ul><ul><li>• internal </li></ul><ul><li>scheduling changes, scheduling practices, </li></ul><ul><li> manufacturing planning & control systems, </li></ul><ul><li> absenteeism, process variability </li></ul><ul><li>• external </li></ul><ul><li> changes in forecasts, actual demand, customer </li></ul><ul><li> requested changes, government, competition, vendors </li></ul>
  38. 38. Cycle Times <ul><li>Operator Cycle Time </li></ul><ul><li>• total time required for a worker to </li></ul><ul><li>complete one cycle of an operation </li></ul><ul><li>Machine Cycle Time </li></ul><ul><li>• total time for a machine to finish one </li></ul><ul><li>complete cycle </li></ul><ul><li>• includes loading and unloading </li></ul>
  39. 39. Some Interesting Calculations <ul><li>• No. of Operators </li></ul><ul><li>• Sum OCT/(TAKT TIME) </li></ul><ul><li>• Example </li></ul><ul><li>• OCT for Operator 1 = 13&quot; </li></ul><ul><li>• OCT for Operator 2 = 9&quot; </li></ul><ul><li>• OCT for Operator 3 = 11&quot; </li></ul><ul><li>• OCT for Operator 4 = 10&quot; </li></ul><ul><li>• Total 43&quot; </li></ul><ul><li>• TAKT Time 16.5&quot; </li></ul><ul><li>• Number of Operators </li></ul><ul><li>• 43/16.5 = 2.606 or 3 operators </li></ul>
  40. 40. The 5-S Program <ul><li>Seiri </li></ul><ul><li>• segregate and discard </li></ul><ul><li>• get rid of what is not needed </li></ul><ul><li>Seiton </li></ul><ul><li>• arrange and identify for ease of use </li></ul><ul><li>• a place for everything and everything in its place </li></ul><ul><li>Seiso </li></ul><ul><li>• Clean Daily </li></ul><ul><li>• clean work place enhances quality </li></ul>
  41. 41. The 5-S Program <ul><li>Seiketsu </li></ul><ul><li>• Revisit frequently </li></ul><ul><li>• revisit the first 3 steps to maintain workplace safety and effectiveness </li></ul><ul><li>Shitsuki </li></ul><ul><li>• Motivate to sustain </li></ul><ul><li>• promote adherence through visual performance measurement tools </li></ul>
  42. 42. Next Day <ul><li>JIT in Service Sectors </li></ul><ul><li>New developments in JIT </li></ul><ul><li>• Lean Manufacturing </li></ul><ul><li>• Agile Enterprise </li></ul><ul><li>• JIT II </li></ul><ul><li>• Gemba Kaizen </li></ul><ul><li>• Quick Response Systems </li></ul>
  43. 43. Topics to be Covered <ul><li>JIT and Lean Manufacturing </li></ul><ul><li>JIT in Services </li></ul><ul><li>Kaizen Events </li></ul><ul><li>JIT II </li></ul><ul><li>Gemba Kaizen </li></ul><ul><li>Agile Enterprise </li></ul><ul><li>Limitations of JIT </li></ul>
  44. 44. JIT in Services <ul><li>Service Traits </li></ul><ul><li>• strong emphasis on process </li></ul><ul><li>• avoidance of inventory </li></ul><ul><li>• emphasis on people and their importance to process </li></ul><ul><li>• recognition of need for continuous improvement </li></ul><ul><li>• “ defects are treasures” </li></ul>
  45. 45. JIT in Services <ul><li>Elements of JIT most applicable </li></ul><ul><li>• Synchronization and balance of information and work flows </li></ul><ul><li>• Total visibility of all components of the process </li></ul><ul><li>• Continuous improvement of the process </li></ul><ul><li>• Holistic approach to the elimination of waste </li></ul><ul><li>• Flexibility in use of resources </li></ul><ul><li>• Respect for people </li></ul>
  46. 46. JIT in Services <ul><li>Key Issues </li></ul><ul><li>• Equipment/people focus </li></ul><ul><li>• Customer contact per transaction </li></ul><ul><li>• Degree of discretion </li></ul><ul><li>• Degree of customization </li></ul><ul><li>• Location of value-added processes </li></ul><ul><li>• Product/process focus </li></ul>
  47. 47. Gemba Kaizen <ul><li>Waste reduction through the execution system </li></ul><ul><li>Gemba </li></ul><ul><li>• heart of the system </li></ul><ul><li>Essence of Gemba Kaizen </li></ul><ul><li>• to eliminate waste, you must have contact with the system that you are managing </li></ul><ul><li>• the contact must be real and not through </li></ul><ul><li>computers </li></ul>
  48. 48. Agile Enterprise <ul><li>New development </li></ul><ul><li>Associated with Iaccoca Institute of LeHigh University </li></ul><ul><li>Merging flexibility with JIT </li></ul><ul><li>Much broader than Lean Enterprise </li></ul><ul><li>Recognition that the environment </li></ul><ul><li>• always changing </li></ul><ul><li>• unpredictably undergoing change </li></ul>
  49. 49. Agile Enterprise - Traits <ul><li>Rapidly bring to market products that are variable combinations of hardware, information and services. </li></ul><ul><li>Design products that are easily configurable and ungradable. </li></ul><ul><li>Produce to individual customer orders in arbitrary order quantities. </li></ul><ul><li>Bring out a continuously changing array of models within longer-lived product families </li></ul>
  50. 50. Agile Enterprise - Traits <ul><li>Fragment mass markets into niche markets. </li></ul><ul><li>Maintain and foster continuous, rather than single-instance, sales relationships by continually adding value to current customers. </li></ul><ul><li>Cooperate intensively with other companies, including competitors, to create global product resources. </li></ul>
  51. 51. Agile Enterprise <ul><li>Attempt to bring together a number of different trends </li></ul><ul><li>• greater focus on product development </li></ul><ul><li>• greater reliance on suppliers </li></ul><ul><li>• greater concern with speed </li></ul><ul><li>• more emphasis on effective and intelligent </li></ul><ul><li>integration </li></ul><ul><li>• greater use of technology </li></ul><ul><li>• information </li></ul>
  52. 52. Other Tactics <ul><li>Kaizen/Continuous Improvement </li></ul><ul><li>Manufacturing Cells </li></ul><ul><li>Business Process Reengineering </li></ul><ul><li>Milk run logistics </li></ul><ul><li>Supplier certification </li></ul><ul><li>Direct delivery to point of use </li></ul>

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