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IE-009 Just In Time Systems

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IE-009 Just In Time Systems

  1. 1. Just-in-Time Systems Reducing Variance, Waste and Lead Time in the Supply Chain
  2. 2. Topics to be Covered  Review of JIT & Waste  Objectives of JIT  JIT Principles  JIT and Variance  JIT Tools and Procedures
  3. 3. JIT: Definitions?  JIT Head  JIT Planes  Chicken JIT  Bull JIT  Oh JIT (O´JIT)  Le JIT  Tough JIT  JIT Lag  Strate JITs  When the JIT hits the fan.
  4. 4. What is JIT?  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.  a corporate strategy  a philosophy  Focus of JIT: • variance & waste
  5. 5. Waste Types Chrysler Video on Waste
  6. 6. Seven Basic Types of Waste  Transportation waste  Process Waste  Inventory Waste  Waste of motion  Waste from product defects  Waiting time  Overproduction
  7. 7. Common Causes of Waste  Layout (distance)  Inconsistent  Long setup time performance measures  Incapable processes  Ineffective  Poor maintenance production planning  Poor work methods  Lack of workplace  Lack of training organization  Poor supply quality/reliability
  8. 8. Objective of JIT  Produce only the products the customer wants.  Produce products only at the rate that the customer wants them.  Produce with perfect quality  Produce with minimum lead time.  Produce products with only those features the customer wants.
  9. 9. Objectives  Produce with no waste of labor, material or equipment -- every movement must have a purpose so that there is zero idle inventory.  Produce with methods that allow for the development of people
  10. 10. JIT Principles  Create flow production • one piece flow • machines in order of processes • small and inexpensive equipment • U cell layout, counter clockwise • multi-process handling workers • easy moving/standing operations • standard operations defined
  11. 11. JIT Principles - Slide 2  Establish “TAKT” time • rate at which the customer buys a product  Build Pull Product • use of kanban system
  12. 12. JIT Tactics  Single Minute  Visual control Exchange of Dies  Flexible workers (SMED)  Statistical Process  Tools at the point of Control need  Use of standard  Product redesign containers  Group Technology  Doable stable schedules  Total Productive with adequate visibility Maintenance  TAKT-Time  5-S Program  Kaizen Event
  13. 13. Balanced Production  Three elements • TAKT time • Work sequence • Standard WIP  Objective • Build at rate that the customer wants work • Balance the system to maximize efficiency at this rate
  14. 14. TAKT Time Example  Net Available Operating Time • Time per shift 480´ (minutes) • Breaks (2 @ 10´) - 20´ • Clean-up - 20’ • Lunch - 30’ • NAOT/shift 410´  Customer Requirements • Monthly 26,000 units/month • No. Working Days 20 days/month • CR/Day 1,300 units/day  TAKT Time • 410’ x 60” x 3 shifts (73,800) divided by 1,300 • 57.769 seconds per part or 57quot;
  15. 15. TAKT Time  TAKT • the beat • (Net Available Operating Time) / Customer Requirements • time periods must be consistent  Example of calculation
  16. 16. SMED  Setup reduction  Elements • Internal Setup • setup while machine idle • External Setup • setup while machine busy • Adjustment • run-ins, calibration
  17. 17. SMED Process  Study current process • “as is” • video tape • Who owns the video tape?  Convert internal to external setup  Eliminate the need for Adjustment  Eliminate need for fastening  Goal • setup time < 10 minutes
  18. 18. Push Vs. Pull Scheduling  Push Scheduling • traditional approach • “move the job on when finished” • problems - creates excessive inventory  Pull scheduling • coordinated production • driven by demand (pulled through system) • extensive use of visual triggers (production/withdrawal kanbans)
  19. 19. Visual Control  A system for making problems obvious without the need for sophisticated monitoring computer systems • Andon light system • Kanbans  Create a sense of urgency  Clearly identify where the problems are located
  20. 20. Supplier Partnerships  Reliance on suppliers for • problem solving expertise • quality at the source • timely communication • participants in cost reduction programs  Increased reliance on supplier certification
  21. 21. Standardization/Simplification  Eliminate inherent sources of variance  eliminate opportunity for human discretion error  Examples • Container sizes • MacDonalds with interaction with customers  Consistent with Deming Wheel • Standarize  expose problems  solve problems  implement new methods
  22. 22. Other Techniques  Milk runs  Poka-Yoke Systems  Continuous Improvement Programs (CIP)
  23. 23. Video JIT at McDonalds
  24. 24. JIT - Day 2 New Developments in JIT
  25. 25. JIT & Lean Manufacturing  Lean Manufacturing • Doing more with less • Less of: • materials, time, resources • overhead, people • waste • money  JIT is a subset of Lean Manufacturing  Now seen as most applicable to mass production settings
  26. 26. Kaizen Event  A relatively new concept • Kaizen Blitz, Gemba Kaizen  Process focused  Operates at two levels • on-going process of identifying opportunities for improvement • strategic, top management •short-term project lasting 1-4 days • training, documentation of process “as is”, identification of potential improvements, implementation, presentation, action list
  27. 27. Kaizen Events - Key Traits  Very short-term, finite in life  Highly focused  Creativity before capital  Team-oriented  Action-Oriented  Verifiable Metrics  Repetitive
  28. 28. Kaizen Event Process  Top management buy-in • Public Kaizen Events  Assessment of current processes • top management • Target Processes • training • documentation - “as is” • opportunities • change • presentation/action list
  29. 29. Typical Metrics  Floor space occupied by process being assessed  Operators required per day  Distance traveled by an order within the process  WIP Inventory  Setup (measured in minutes)  Quality recommendations generated  Safety Improvements implemented
  30. 30. Application of Kaizen Events  Shop floor  Finance • 401 K plan  Purchasing  Health Care  Services
  31. 31. Example of Impact of Kaizen Event Impact of Kaizen Events - Overall Benefits (January 1, 1996 through December 31, 1996 Improvement M________ Before Kaizen Achievement Improvement Floor Space ( ) 56,000 39,000 30% Operators/Day 165 125 24% Distance Traveled 91,000 ft. 15,000 ft. 34% Inventory (WIP pieces) 4,760,000 2,570,000 46% Setup Time Reduction 1,660 _______ 1,660 _________ 72% Safety Improvements 200 improvements implement
  32. 32. JIT 11  Based on system developed by Bose of Framingham, MA  Integration of JIT principles and practices into the supply chain  JIT II • long term collaborative relationships with suppliers present • suppliers to place personnel in plants of the buying organization
  33. 33. Limitations of JIT  Preconditions to JIT • trust must be present • labor/management • suppliers/consumers • recognition of processes • familiarity with problem solving • quality at the source • agreement over value and waste
  34. 34. Limitations of JIT  Right Settings • applicable in growth to maturity phases of Product Life Cycle • standard product • Steinway and JIT • standard/fixed pay-rate • problems with piece-rate scheme  Universal agreement that change needed
  35. 35. Theoretical Benefits of JIT  Unpleasant surprises  Less pressure on receiving eliminated docks and incoming  Less computerization inspection areas • visual control  Lower costs  Improved quality  Change in attitude  WIP reduced • Defects are treasures  Better communications
  36. 36. Dealing with Variance  Four major stances: • Buffer against it • Ignore it • Manage it • Eliminate it  All forms of variance create cost
  37. 37. JIT & Variance  Variance a fact of life  Comes from many sources • internal scheduling changes, scheduling practices, manufacturing planning & control systems, absenteeism, process variability • external changes in forecasts, actual demand, customer requested changes, government, competition, vendors
  38. 38. Cycle Times  Operator Cycle Time • total time required for a worker to complete one cycle of an operation  Machine Cycle Time • total time for a machine to finish one complete cycle • includes loading and unloading
  39. 39. Some Interesting Calculations • No. of Operators • Sum OCT/(TAKT TIME) • Example • OCT for Operator 1= 13quot; • OCT for Operator 2= 9quot; • OCT for Operator 3= 11quot; • OCT for Operator 4= 10quot; • Total 43quot; • TAKT Time 16.5quot; • Number of Operators • 43/16.5 = 2.606 or 3 operators
  40. 40. The 5-S Program  Seiri • segregate and discard • get rid of what is not needed  Seiton • arrange and identify for ease of use • a place for everything and everything in its place  Seiso • Clean Daily • clean work place enhances quality
  41. 41. The 5-S Program  Seiketsu • Revisit frequently • revisit the first 3 steps to maintain workplace safety and effectiveness  Shitsuki • Motivate to sustain • promote adherence through visual performance measurement tools
  42. 42. Next Day  JIT in Service Sectors  New developments in JIT • Lean Manufacturing • Agile Enterprise • JIT II • Gemba Kaizen • Quick Response Systems
  43. 43. Topics to be Covered  JIT and Lean Manufacturing  JIT in Services  Kaizen Events  JIT II  Gemba Kaizen  Agile Enterprise  Limitations of JIT
  44. 44. JIT in Services  Service Traits • strong emphasis on process • avoidance of inventory • emphasis on people and their importance to process • recognition of need for continuous improvement • “defects are treasures”
  45. 45. JIT in Services  Elements of JIT most applicable • Synchronization and balance of information and work flows • Total visibility of all components of the process • Continuous improvement of the process • Holistic approach to the elimination of waste • Flexibility in use of resources • Respect for people
  46. 46. JIT in Services  Key Issues • Equipment/people focus • Customer contact per transaction • Degree of discretion • Degree of customization • Location of value-added processes • Product/process focus
  47. 47. Gemba Kaizen  Waste reduction through the execution system  Gemba • heart of the system  Essence of Gemba Kaizen • to eliminate waste, you must have contact with the system that you are managing • the contact must be real and not through computers
  48. 48. Agile Enterprise  New development  Associated with Iaccoca Institute of LeHigh University  Merging flexibility with JIT  Much broader than Lean Enterprise  Recognition that the environment • always changing • unpredictably undergoing change
  49. 49. Agile Enterprise - Traits  Rapidly bring to market products that are variable combinations of hardware, information and services.  Design products that are easily configurable and ungradable.  Produce to individual customer orders in arbitrary order quantities.  Bring out a continuously changing array of models within longer-lived product families
  50. 50. Agile Enterprise - Traits  Fragment mass markets into niche markets.  Maintain and foster continuous, rather than single-instance, sales relationships by continually adding value to current customers.  Cooperate intensively with other companies, including competitors, to create global product resources.
  51. 51. Agile Enterprise  Attempt to bring together a number of different trends • greater focus on product development • greater reliance on suppliers • greater concern with speed • more emphasis on effective and intelligent integration • greater use of technology • information
  52. 52. Other Tactics  Kaizen/Continuous Improvement  Manufacturing Cells  Business Process Reengineering  Milk run logistics  Supplier certification  Direct delivery to point of use

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