Just-in-Time and Lean Production Systems: Professor Ahmadi

Just-in-Time and Lean
Production Systems
Professor Ahmadi
Slide
1
Introductory Quotation
Waste is anything other than the minimum

amount of equipment, materials, parts,
space, and worker’s time, which are
absolutely essential to add value to the
product.
Shoichiro Toyoda
President, Toyota
Slide
2
Types of Waste
 Overproduction
 Waiting
 Transportation
 Inefficient processing
 Inventory
 Unnecessary motion
 Product defects
Slide
3
What is Just-in-Time?
 Management philosophy of continuous and forced
problem solving
 Supplies and components are ‘pulled’ through system
to arrive where they are needed when they are needed.
What Does Just-in-Time Do?
 Attacks waste
• Anything not adding value to the product

From the customer’s perspective
 Exposes problems and bottlenecks caused by variability
• Deviation from optimum
 Achieves streamlined production
• By reducing inventory
Slide
4
Push versus Pull
 Push system: material is pushed into

downstream workstations regardless of
whether resources are available
 Pull system: material is pulled to a workstation

just as it is needed
Slide
5
JIT Contribution to Competitive Advantage
 Suppliers
• reduced number of vendors
• supportive supplier relationships
• quality deliveries on time
 Layout
• work-cell layouts with testing at each step of the
process
• movable, changeable, flexible machinery
• high level of workplace organization and neatness
• reduced space for inventory
• delivery direct to work areas
Slide
6
JIT Contribution to Competitive Advantage -
Continued
 Inventory
• small lot sizes
• low setup times
• specialized bins for holding set number of parts
 Scheduling
• zero deviation from schedules
• level schedules
• suppliers informed of schedules
• Kanban techniques
Slide
7
Continued
 Preventive Maintenance
• scheduled
• daily routine
• operator involvement
 Quality Production
• statistical process control
• quality by suppliers
• quality within firm
Slide
8
Continued
 Employee Empowerment
• empowered and cross-trained employees
• few job classifications to ensure flexibility of
employees
• training support
 Commitment
• support of management, employees, and suppliers
Slide
9
Results
 Queue and delay reduction, speedier throughput, freed

assets
 Quality improvement, reduces waste and wins orders
 Cost reduction which reduces selling price
 Variability reductions in the workplace reduces waste
 Rework reduction, reduces waste and wins orders
 Faster response to the customer at lower cost and higher
quality, which leads to:
A competitive advantage!
Slide
10
Just-in-Time
Success Factors
Suppliers
Employee
Layout
Empowerment
JIT
Quality Inventory
Preventive
Scheduling
Maintenance
Slide
11
Suppliers
Goals of JIT Partnership with Suppliers

 JIT partnerships eliminate
• Unnecessary activities
• In - plant inventory
• In - transit inventory
• Poor suppliers
Slide
12
Goals of JIT partnerships
 Elimination of unnecessary activities

 Elimination of in-plant inventory
 Elimination of in-transit inventory
 Elimination of poor suppliers
Slide
13
Concerns of Suppliers
 Diversification
 Poor customer scheduling
 Frequent engineering changes
 Quality assurance
 Small lot sizes
 Physical proximity
Slide
14
Layout
 JIT objective: Reduce movement of people and material

• Movement is waste!
 JIT requires
• Work cells for product families
• Moveable or changeable machines
• Short distances
• Little space for inventory
• Delivery directly to work areas
Slide
15
Inventory
 Traditional: inventory exists in case problems arise

 JIT objective: eliminate inventory
 JIT requires
• Small lot sizes
• Low setup time
• Containers for fixed number of parts
 JIT inventory: Minimum inventory to keep system
running
Slide
16
Lot Size Example
(See page 635 of your textbook)
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)
2DS 2DS
Q= Q2 =
H(1 - d/p) H(1 - d/p)
(Q2)(H)(1 - d/p) (3,200,000)(0.6)

S= 2D = 800,000 = $2.40
Slide
17
JIT Inventory Tactics
 Use a pull system to move inventory

 Reduce lot size
 Reduce setup time
 Develop Just-in-Time delivery systems with
suppliers
 Deliver directly to point of use
 Perform-to-schedule
 Reduce setup time
Slide
18
JIT Scheduling Tactics
 Communicate the schedule to suppliers

 Make level schedules
 Perform to schedule
 Eliminate waste
 Produce in small lots
 Use kanbans
 Make each operation produce a perfect part
Slide
19
Kanban
 Japanese word for card

• Pronounced ‘kahn-bahn’ (not ‘can-ban’)
 Authorizes production from downstream
operations
• ‘Pulls’ material through plant
 May be a card, flag, verbal signal etc.
 Used often with fixed-size containers
• Add or remove containers to change
production rate
Slide
20
Kanban: Additional Points
 When producer and user are not in visual contact, a

card may be used; otherwise, a light, flag, or empty
spot on the floor may work.
 Because a pull station may require several re-supply
components, several Kanban pull techniques can be
used at the same station.
 Usually, each card controls a specific quantity of
parts, although multiple card systems can be used if
the producing cell produces several components or
the lot size is different from the move size.
 In an MRP system, the schedule can be thought of as
a “build” authorization and the Kanban as a type of
“pull” system that initiates the actual production.
Slide
21
Kanban: Additional Points - Continued
 The Kanban cards provide direct control (limit) on

the amount of work-in-process between cells.
 If there is an intermediate storage area, a two-card
system may be used; one card circulates between
user and storage area, and the other circulates
between the storage area and the producing area.
Slide
22
The Number of Cards
or Containers
 Need to know the lead time needed to

produce a container of parts
 Need to know the amount of safety stock
needed
Demand during Safety

lead time + stock
Number of kanbans =
Size of container
Slide
23
Number of Kanbans Example
(See page 640 of your textbook)
Daily demand = 500 cakes

Production lead time = 2 days
(wait time +
material handling time +
processing time)
Safety stock = 1/2 day
Container size = 250 cakes
Demand during lead time = 2 days x 500 cakes = 1,000
1,000 + 250
Number of kanbans = 250 =5
Slide
24
Quality
 JIT reduces inventory

 JIT limits number defects with small lots
 JIT requires TQM
• Statistical process control
• Worker involvement

Inspect own work

Quality circles
• Immediate feedback
Slide
25
JIT Quality Tactics
 Use statistical process control

 Empower employees
 Build failsafe methods (checklists, etc.)
 Provide immediate feedback
Slide
26
Employee Empowerment
 Get employees involved in product & process

improvements
• Employees know job best!
 JIT requires
• Empowerment
• Cross-training
• Training support
• Few job classifications
Slide
27
Lean Production
Lean Production supplies customers

with exactly what the customer
wants, when the customer wants,
without waste, through continuous
improvement.
Slide
28
Attributes of Lean Producers
 use JIT to eliminate virtually all inventory

 build systems to help employees produce a perfect
part every time
 reduce space requirements
 develop close relationships with suppliers
 educate suppliers
 eliminate all but value-added activities
 make jobs more challenging
 reduce the number of job classes and build worker
flexibility
Slide
29

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Just-in-Time and Lean

Waste is anything other than the minimum

 Push system: material is pushed into

 Pull system: material is pulled to a workstation

 Queue and delay reduction, speedier throughput, freed

Goals of JIT Partnership with Suppliers

 Elimination of unnecessary activities

 JIT objective: Reduce movement of people and material

 Traditional: inventory exists in case problems arise

(Q2)(H)(1 - d/p) (3,200,000)(0.6)

 Use a pull system to move inventory

 Communicate the schedule to suppliers

 Japanese word for card

 When producer and user are not in visual contact, a

 The Kanban cards provide direct control (limit) on

 Need to know the lead time needed to

Demand during Safety

Daily demand = 500 cakes

Demand during lead time = 2 days x 500 cakes = 1,000

 JIT reduces inventory

 Use statistical process control

 Get employees involved in product & process

Lean Production supplies customers

 use JIT to eliminate virtually all inventory

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