Final Exam
• A total of 33 questions.
• Chapter 11
• Chapter 12
• Chapter 13
• Chapter 14 ( 3 blank filling qualitative questions)
• 30 quantitative multiple choice questions on Ch 11, 12, 13
Just In Time (JIT)
• A production system in which processing and
movement of materials and products are carefully
timed and occur just as they are needed, usually in
small batches.
• The next small batch arrives as the preceding batch
is completed. ----Just In Time.
• JIT is characteristic of lean production systems
• Lean production system operates with very little fat
• Fat? excess inventory, extra workers, extra space,...
JIT / lean Production : Competing edge
• Smooth production flow
• Fewer defectives
• Quick response
• Greater flexibility
JIT Goals
• Eliminate disruptions. Disruptions are caused by
poor quality, equipment breakdown, changes in
production and delivery schedules, etc. They have
negative impact on the smooth flow of material.
• Make system flexible. Variety of product, high and
low production levels.
• Reduce setup and lead times. They are not
value added activities. Furthermore, they reduce
flexibility.
• Eliminate Waste
WASTE ???
7 types of Waste
• Overproduction: Production more than demand
• Inventory: idle capital, idle space, hides problems
• Defects : rework, waste of resources, customer
dissatisfaction.
• Transportation & handling :
handling costs, extra WIP
• Material waiting for processes:
requires space--no value added
• Unnecessary Processing : waste
of equipment and manpower, scrap
• Extra motion: inefficient methods
JIT Building Blocks
Manufacturing
Personnel and
organizational
planning
and control
elements
Product
design
Process design
Product Design
• Standard parts
• Delayed Differentiation
• Modular design
• Quality
Product Design
• Standard parts: workers have fewer parts to deal with.
==> training time and cost is reduced. Easier purchasing,
checking, handling. Standard parts lend themselves to
standard processes. Standardization results in less variation.
Results in simplicity and speed. Disadvantage is less variety
• Delayed Differentiation: is a way to achieve
standardization and variation. Postpone differentiation as
much as you can.
Suppose the only difference between two parts is an extra
operation on one of them. Postpone this operation as much
as you can. Then up to the last minute you have a standard
part that can serve two different purposes
Product Design
• Modular design: An extension of standardization.
Clusters of parts treated as a single unit. Reduces the
number of elements to deal with. Delayed differentiation is
also applied to modules.
• Quality : JIT can not survive without high quality. Any
quality problem is a stop to the whole production system.
Since there is only a small inventory, production
must cease until the problem is fixed
Therefore low quality has
extreme high cost of No Production.
Process Design
• Small lot sizes
• Setup time reduction
• Cellular layout
• Quality improvement
• Production flexibility
• Little inventory storage
Small Lot Size
The ideal lot size in JIT is 1. But usually it is not technically and economically
possible. The goal is to have small lots. Small batches at each run.
Benefits of small lot sizes
Less inventory ==> less carrying costs, less space
When there is quality problem, it hits a small number of parts ==> less rework
Flexibility : we can easily switch from one product to another and fulfill customer
orders. Example; Suppose 50% of our production time is devoted to product A,
25% to B and 25% to C.
In conventional system we may produce product A for 6 months, then switch to B
for 3 months and then to C.
In JIT, we may produce A for 4 hours, then B for 2 hours, then C. A lot of flexibility
and quick response to any change in customer demand.
We can not achieve this flexibility, if we do not have short setup and changeover
time.
Setup Time Reduction
When we switch from one product or part to another product or part, the
production system should be setup for the next product.
Setup could take several weeks in conventional systems.
In JIT it is a matter of minutes.
Setup time reduction is a must in JIT.
General guides
– Use simple equipment and standard and simple procedures for setup.
– Use small and multi-purpose changeover equipment.
– Products and parts which are similar in shape or material may require very
similar setups. Sequence them after each others.
– Train the operating personnel to do setups themselves.
– There is no separate setup group.
Cellular Layout
U shaped manufacturing cells are one of the main characteristics of JIT.
Cellular layout benefits from flexibility of process layout and productivity of product
layout.
Having manufacturing cells for families of products result in
• Low changeover time
• High utilization of equipment
• Cross training of operators
Quality Improvement
Never ending quest for quality
Poor quality ===> stop production
Continuos effort to find and eliminate problems and potential problems
Autonomation
Minimize defects through the use of Autonomation
Autonomation : automatic detection of defects during production.
It can be used with both machines and manual operations.
It consists of two mechanisms :
• One for detecting defects when they occur
• The other for stopping production to correct the cause
Production Flexibility
• Create the ability to process a mix of products in a smooth
flow.
• Cross-train workers to help to clear bottlenecks, and to replace
each others.
• Reduce setup times
Minimize Inventory
• JIT hates inventory because it is waste, it wastes
capital and space.
• It hides problems or at least make them seem less
serious. When machines breakdown, it won’t disrupt
the system, when production line is not balanced, it
won’t show up because there is inventory.
• In a river, large rocks (problems) are hidden by a high
water level (inventory). Lowering the water level,
reveals rocks. Once the rocks are removed, the water
level (inventory) can be lowered to reveal the next
layer of rocks or grovels (even clay and silt). Finally,
we will have a problem-free production system.
• Reduce inventories gradually to uncover problems.
Personnel and Organizational Elements
• Workers as assets
•
•
•
•
Cross-trained workers
Continuous improvement
Leadership and project management
Cost accounting
Personnel and Organizational Elements
• Workers as assets; well-trained workers are the heart
of JIT. They are given authority to make decision.
• Cross-trained workers; this makes JIT more flexible,
workers can help each others when bottleneck occurs.
• Continuous improvement; JIT workers have more
responsibility in problem solving and process
improvement. Any interrupt or potential interrupt in
smooth flow of material should be captured and
removed immediately.
• Cost accounting: ABC costing to
identify tractable costs and assign
them to specific activities
• Leadership/project management
Manufacturing Planning and Control
• Level loading
• Pull systems
• Visual systems
• Close vendor relationships
• Reduced transaction
Level Loading
level capacity loading; rate based production schedule
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10
B
15
C
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A
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B
16
C
5
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Pull vs Push System
• Push system: System for moving work where
output of one station is pushed to the next
station as it is completed. Authority to produce
comes from a upstream process.
Production based on forecast
• Pull system: System for moving work where a
workstation pulls output from the preceding
station as needed. Authority to produce comes
from a downstream process.
Production based on customer orders
Visual Information System
• In Pull system work flow is dictated by “Next-step
Demand” using a visual system. Usually a Card
• JIT information system is called Kanban.
• Kanban is the Japanese word for card.
• In a Kanban system, a card (a Kanban card !! ) is attached to
each container, box, pallet, unit load etc.
• When the next work station starts to work on a new
container, the Kanban card of that container is posted on a
visible board. This is indeed work order for the previous
work station. The operator of the upstream station pickup
the card and start working on the next container.
Visual Information System
• The smaller the number of cards, the tighter the inventory
system. If there is only 2 cards, then we only have one
container as buffer between two stations.
• Andon: Japanese word for a light system. There are three
lights on each work station. Green : no problem, Amber :
minor problem, Red: serious problem.
Closer Vendor Relationship
Traditional Supplier Network
Buyer
Suppler
Suppler
Suppler
Suppler
Suppler
Suppler
Suppler
Tiered Supplier Network
Buyer
First Tier Supplier
Suppler
Second Tier Supplier
Third Tier Supplier
Suppler
Suppler
Suppler
Suppler
Suppler
Suppler
Local Suppliers
Some companies prefer to work with local
suppliers.
This creates
– closer relationship with supplier
– quick response
– better image in society due to support of local
industries
Global Supply Chain
• No national barriers any more, opening up
previously untapped markets
• It has also increased the number of competitors
• Distances and lead times become more critical
as the supply chain becomes more stretched
out
Suppliers
• Choosing suppliers
• Evaluating suppliers
• Supplier audits
• Supplier certification
• Supplier partnerships
Supplier Evaluation
• Vendor analysis - evaluating the
sources of supply in terms of
– Price
– Quality
– Services
– Location
– Inventory policy
– Flexibility
Evaluating Source of Supply
• Supplier analysis: Evaluating the sources of
supply in terms of price, quality, reputation,
and service
Vendor Score Sheet
Vendor A Vendor B Vendor C
Price
Quality
Service
Reputation
Supplier Audit
Periodic audit of suppliers to ensure of supplier
performance, quality and delivery.If audit
reveals problem areas, the buyer can address
these, before they result in a serious problem.
Factors typically covered in supplier audit
– management style
– quality assurance
– design process
– process improvement
Supplier Certification
A detailed examination of the policies and
capabilities of a supplier.
Verifies whether the supplier meets or exceeds
the requirements of the buyer.
This is particularly important when the buyer is
seeking to establish long term relationships with
the supplier.
Certified suppliers are also referred to as world
class suppliers.
When a supplier is certified, much or all of the
inspections are eliminated.
Suppliers as Partners
Aspect
# of suppliers
Partner
one or few
Length of
the relationship
Low price
long term
Reliability
Openness
Quality
Volume of
business
Location
Flexibility
Adversary
many; playoff one
against the other
may be brief
moderately
important
high
major consideration
high
at source
certified vendor
high
low
inspection
proximity is stressed
for short lead time
relatively high
may not be high
may be low due to many
suppliers
widely dispersed
relatively low
Supplier Partnership
• Ideas from suppliers could lead to improved
competitiveness
–
–
–
–
–
–
Reduce cost of making the purchase
Reduce transportation costs
Reduce production costs
Improve product quality
Improve product design
Reduce the time it takes to get the product to
market
– Improve customer satisfaction
– Reduce inventory costs
– Introduce new products or services
Reduce Transactions
• Logistical Transactions; ordering, execution,
confirmation
• Quality transaction; determining and monitoring
specifications.
• Change Transactions; in product design or material.
Review: JIT Goals and Building Blocks
Ultimate
Goal
Supporting
Goals
A
smooth
flow
Reduce setup
and lead times
Eliminate disruptions
Make the system flexible
Product
Design
Process
Design
Eliminate waste
Minimize inventories
Personnel &
Organization
Planning &
Control
Building
Blocks
Benefits of JIT Systems
•
•
•
•
•
•
•
•
•
•
Increased product quality
Smoother production flow
Reduced lead times
Reduced levels of inventories
Reduced space requirements
Greater flexibility in product mix
Increased productivity
Good vendor relationships
Worker participation in problem solving
Reduced need for indirect labor
From Conventional to JIT
• Get top management commitment
• Decide which parts need most effort
• Obtain support of workers
• Start by trying to reduce setup times
• Gradually convert operations
• Convert suppliers to JIT
• Prepare for obstacles
Obstacles of Conversion
• Management may not be committed
• Workers/management may not be
cooperative
• Suppliers may resist
Solved Problems
Page 643; Problems 1 and 2