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Operations Management Session 7 –  JIT and Lean Operations
Outline ,[object Object],[object Object],[object Object],[object Object],[object Object]
Outline – Continued ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Outline – Continued ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Outline – Continued ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Learning Objectives ,[object Object],[object Object],[object Object],[object Object],[object Object]
Learning Objectives ,[object Object],[object Object],[object Object]
Toyota Motor Corporation ,[object Object],[object Object],[object Object],[object Object]
Toyota Motor Corporation ,[object Object],[object Object],[object Object],[object Object],[object Object]
Just-In-Time, TPS, and  Lean Operations ,[object Object],[object Object],[object Object]
Just-In-Time, TPS, and  Lean Operations ,[object Object],[object Object],[object Object]
Eliminate Waste ,[object Object],[object Object]
Ohno’s Seven Wastes ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Eliminate Waste ,[object Object],[object Object],[object Object]
The 5 Ss ,[object Object],[object Object],[object Object],[object Object],[object Object]
The 5 Ss ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Remove Variability ,[object Object],[object Object],[object Object],[object Object]
Sources of Variability ,[object Object],[object Object],[object Object]
Sources of Variability ,[object Object],[object Object],[object Object],Both JIT and inventory reduction are effective tools in identifying causes of variability
Improve Throughput ,[object Object],[object Object],[object Object]
Improve Throughput ,[object Object],[object Object],[object Object]
Just-In-Time (JIT) ,[object Object],[object Object],[object Object],[object Object]
JIT and Competitive Advantage Figure 16.1
JIT and Competitive Advantage Figure 16.1
JIT Partnerships ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
JIT Partnerships Figure 16.2
Concerns of Suppliers ,[object Object],[object Object],[object Object],[object Object],[object Object]
JIT Layout Table 16.1 Reduce waste due to movement JIT Layout Tactics Build work cells for families of products Include a large number operations in a small area Minimize distance Design little space for inventory Improve employee communication Use poka-yoke devices Build flexible or movable equipment Cross-train workers to add flexibility
Distance Reduction ,[object Object],[object Object],[object Object]
Increased Flexibility ,[object Object],[object Object],[object Object]
Impact on Employees ,[object Object],[object Object],[object Object]
Reduced Space and Inventory ,[object Object],[object Object]
Inventory Inventory is at the minimum level necessary to keep operations running Table 16.2 JIT Inventory Tactics Use a pull system to move inventory Reduce lot sizes Develop just-in-time delivery systems with suppliers Deliver directly to point of use Perform to schedule Reduce setup time Use group technology
Reduce Variability Inventory level Figure 16.3 Process downtime Scrap Setup time Late deliveries Quality problems
Reduce Variability Inventory level Scrap Setup time Late deliveries Quality problems Process downtime Figure 16.3
Reduce Lot Sizes Figure 16.4 200  – 100  – Inventory Time Q 2 When average order size = 100 average inventory is 50 Q 1 When average order size = 200 average inventory is 100
Reduce Lot Sizes ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Lot Size Example D = Annual demand = 400,000 units d = Daily demand = 400,000/250 = 1,600 per day p = Daily production rate = 4,000 units Q = EOQ desired = 400 H = Holding cost = $20 per unit S = Setup cost (to be determined) Setup time = $2.40/($30/hour) = 0.08 hr = 4.8 minutes Q = 2DS H(1 - d/p) Q 2  = 2DS H(1 - d/p) S =  =  = $2.40 (Q 2 )(H)(1 - d/p) 2D (3,200,000)(0.6) 800,000
Reduce Setup Costs ,[object Object],[object Object],[object Object]
Lower Setup Costs Figure 16.5 Sum of ordering and holding costs Holding cost Setup cost curves (S 1 , S 2 ) T 1 S 1 T 2 S 2 Cost Lot size
Reduce Setup Times Figure 16.6 Use one-touch system to eliminate adjustments (save 10 minutes) Step 4 Step 5 Training operators and standardizing work procedures (save 2 minutes) Initial Setup Time Step 2 Move material closer and improve material handling (save 20 minutes) Step 1 Separate setup into preparation and actual setup, doing as much as possible while the machine/process is operating  (save 30 minutes) Step 3 Standardize and improve tooling (save 15 minutes) 90 min  — 60 min  — 45 min  — 25 min  — 15 min  — 13 min  — — Repeat cycle until subminute setup is achieved Step 6
JIT Scheduling ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
JIT Scheduling Table 16.3 Better scheduling improves performance JIT Scheduling Tactics Communicate schedules to suppliers Make level schedules Freeze part of the schedule Perform to schedule Seek one-piece-make and one-piece move Eliminate waste Produce in small lots Use kanbans Make each operation produce a perfect part
Level Schedules ,[object Object],[object Object],[object Object],[object Object]
Scheduling Small Lots Figure 16.7 A B C A A A B B B B B C JIT Level Material-Use Approach A C A A A B B B B B C C B B B B A A Large-Lot Approach Time
Kanban ,[object Object],[object Object],[object Object],[object Object]
Kanban ,[object Object],[object Object],Figure 16.8 Part numbers mark location Signal marker on boxes
Kanban Figure 16.9 Purchased Parts Supplier Work cell Raw Material Supplier Kanban Sub-assembly Ship Kanban Kanban Kanban Kanban Finished goods Customer order Final assembly Kanban
Advantages of Kanban ,[object Object],[object Object],[object Object],[object Object]
Quality ,[object Object],[object Object],[object Object],[object Object]
JIT Quality Tactics Table 16.4 Use statistical process control Empower employees Build fail-safe methods (poka-yoke, checklists, etc.) Expose poor quality with small lot JIT Provide immediate feedback
Toyota Production System ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Toyota Production System ,[object Object],[object Object],[object Object],[object Object],[object Object]
Lean Operations ,[object Object],[object Object],[object Object]
Building a Lean Organization ,[object Object],[object Object],[object Object],[object Object],[object Object]
Building a Lean Organization ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
JIT in Services ,[object Object],[object Object],[object Object],[object Object],[object Object]

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Jit And Lean

  • 1. Operations Management Session 7 – JIT and Lean Operations
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  • 23. JIT and Competitive Advantage Figure 16.1
  • 24. JIT and Competitive Advantage Figure 16.1
  • 25.
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  • 28. JIT Layout Table 16.1 Reduce waste due to movement JIT Layout Tactics Build work cells for families of products Include a large number operations in a small area Minimize distance Design little space for inventory Improve employee communication Use poka-yoke devices Build flexible or movable equipment Cross-train workers to add flexibility
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  • 33. Inventory Inventory is at the minimum level necessary to keep operations running Table 16.2 JIT Inventory Tactics Use a pull system to move inventory Reduce lot sizes Develop just-in-time delivery systems with suppliers Deliver directly to point of use Perform to schedule Reduce setup time Use group technology
  • 34. Reduce Variability Inventory level Figure 16.3 Process downtime Scrap Setup time Late deliveries Quality problems
  • 35. Reduce Variability Inventory level Scrap Setup time Late deliveries Quality problems Process downtime Figure 16.3
  • 36. Reduce Lot Sizes Figure 16.4 200 – 100 – Inventory Time Q 2 When average order size = 100 average inventory is 50 Q 1 When average order size = 200 average inventory is 100
  • 37.
  • 38. Lot Size Example D = Annual demand = 400,000 units d = Daily demand = 400,000/250 = 1,600 per day p = Daily production rate = 4,000 units Q = EOQ desired = 400 H = Holding cost = $20 per unit S = Setup cost (to be determined) Setup time = $2.40/($30/hour) = 0.08 hr = 4.8 minutes Q = 2DS H(1 - d/p) Q 2 = 2DS H(1 - d/p) S = = = $2.40 (Q 2 )(H)(1 - d/p) 2D (3,200,000)(0.6) 800,000
  • 39.
  • 40. Lower Setup Costs Figure 16.5 Sum of ordering and holding costs Holding cost Setup cost curves (S 1 , S 2 ) T 1 S 1 T 2 S 2 Cost Lot size
  • 41. Reduce Setup Times Figure 16.6 Use one-touch system to eliminate adjustments (save 10 minutes) Step 4 Step 5 Training operators and standardizing work procedures (save 2 minutes) Initial Setup Time Step 2 Move material closer and improve material handling (save 20 minutes) Step 1 Separate setup into preparation and actual setup, doing as much as possible while the machine/process is operating (save 30 minutes) Step 3 Standardize and improve tooling (save 15 minutes) 90 min — 60 min — 45 min — 25 min — 15 min — 13 min — — Repeat cycle until subminute setup is achieved Step 6
  • 42.
  • 43. JIT Scheduling Table 16.3 Better scheduling improves performance JIT Scheduling Tactics Communicate schedules to suppliers Make level schedules Freeze part of the schedule Perform to schedule Seek one-piece-make and one-piece move Eliminate waste Produce in small lots Use kanbans Make each operation produce a perfect part
  • 44.
  • 45. Scheduling Small Lots Figure 16.7 A B C A A A B B B B B C JIT Level Material-Use Approach A C A A A B B B B B C C B B B B A A Large-Lot Approach Time
  • 46.
  • 47.
  • 48. Kanban Figure 16.9 Purchased Parts Supplier Work cell Raw Material Supplier Kanban Sub-assembly Ship Kanban Kanban Kanban Kanban Finished goods Customer order Final assembly Kanban
  • 49.
  • 50.
  • 51. JIT Quality Tactics Table 16.4 Use statistical process control Empower employees Build fail-safe methods (poka-yoke, checklists, etc.) Expose poor quality with small lot JIT Provide immediate feedback
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