Production Planning &
Control
Just-in-Time and Lean Production
Systems
Learning Outcomes
When you complete this supplement, you should
be able to :
Identify or Define:
Types of waste
Kanban
Describe or Explain:
Just-in-Time (JIT) philosophy
Pull systems
Push systems
The goals of JIT partnerships
Lean Production
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
© 1995 Corel Corp.
Just-in-Time Goal
To minimize the presence of non-value-adding
operations and non-moving inventories in the
production line.
Result
a) shorter throughput times
b) better on-time delivery performance,
c) higher equipment utilization
d) lesser space requirement
e) lower dpm’s
f) lower costs, and greater profits.
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.
Key ingredient of lean production
Lean Production
Lean Production supplies customers with exactly
what the customer wants, when the customer
wants, without waste, through continuous
improvement.
Driven by the “pull” of the customer order
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
Types of Waste
Overproduction
Waiting
Transportation
Inefficient processing
Inventory
Unnecessary motion
Product defects
© 1995
Corel
Corp.
JIT Reduced Waste
at Hewlett-Packard
Waste Reduction (%)
Setup Time 20%
Scrap 30%
Finished Goods
Inventory 30%
Space 40%
Lead Time 50%
Raw Material
Inventory 50%
Work-in-Process
Inventory
82%
0% 20% 40% 60% 80% 100%
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
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
group technology
movable, changeable, flexible machinery
high level of workplace organization and neatness
reduced space for inventory
delivery direct to work areas
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
JIT Contribution to Competitive
Advantage - Continued
Preventive Maintenance
scheduled
daily routine
operator involvement
Quality Production
statistical process control
quality by suppliers
quality within firm
JIT Contribution to Competitive
Advantage - 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
Just-in-Time
Success Factors
Suppliers
Employee
Layout
Empowerment
JIT
Quality Inventory
Preventive
Scheduling
Maintenance
JIT Success Factors
JIT Requires:
JIT and Competitive Advantage
Which Results In:
Which Yields:
Table 16.1
Suppliers
JIT partnerships exist when a
supplier and purchaser work
together to remove waste and drive
down costs
Four goals of JIT partnerships are:
Elimination of unnecessary
activities
Elimination of in-plant inventory
Elimination of in-transit inventory
Elimination of poor suppliers
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
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
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
Use group technology
Inventory level
Process
downtime
Scrap
Setup Quality
time problems
Late deliveries
Figure 16.1
Inventory
level
Process
downtime
Scrap
Setup Quality
time problems
Late deliveries
Figure 16.1
Reduce Lot Sizes
Q1 When average order size = 200
average inventory is 100
200 –
Inventory
Q2 When average order size = 100
average inventory is 50
100 –
Time
Figure 16.2
Scheduling
Involves timing of operations
JIT requires
Communicating schedules to suppliers
Level schedules
Freezing part of schedule nearest due date
Small lots
Kanban techniques
JIT Scheduling Tactics
Communicate the schedule 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
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
Diagram of Outbound Stockpoint
with Warning-Signal Marker
Scheduling Small Lots
JIT Level Material-Use Approach
A A B B B C A A B B B C
Large-Lot Approach
A A A A A A B B B B B B B B B C C C
Time
Figure 16.5
Kanban Signals “Pull” Material
Through the Process
Quality
Strong relationship
JIT cuts the cost of obtaining good
quality because JIT exposes poor
quality
Because lead times are shorter,
quality problems are exposed
sooner
Better quality means fewer buffers
and allows simpler JIT systems to
be used
JIT Quality Tactics
Use statistical process control
Empower employees
Build fail-safe methods (poka-
yoke, checklists, etc.)
Expose poor quality with small
lot JIT
Provide immediate feedback
Table 16.6
Quality
JIT exposes quality problems by reducing
inventory
JIT limits number defects with small lots
JIT requires TQM
Statistical process control
Worker involvement
Inspect own work
Quality circles
Immediate feedback
Employee Empowerment
Get employees involved in product & process
improvements
Employees know job best!
JIT requires © 1995 Corel Corp.
Empowerment
Cross-training
Training support
Few job classifications
Lean Production
Different from JIT in that it is
externally focused on the customer
Often called the Toyota Production
System (TPS)
In practice, JIT, Lean Systems, and
TPS are often essentially the same