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Just in time

Just in time

Just In Time is an optimal material requirement planning system for a


manufacturing process in which there is little or no manufacturing
material inventory on hand at the manufacturing site and little or no
incoming inspection.
Just in time

Leading Japanese companies attribute their success in reducing waste


and speeding production to the implementation of so called Just In Time (
JIT ) methods of working. It is also known as stockless production
because the aim is to receive supplies and manufacture components Just
in time for next operation. In JIT, the ideal inventory is one.
Just in time

First sell it, then make it : JIT reverses the conventional approach of
first making and then selling. Ideally nothing is produced unless a
customer is identified. In some Japanese factories the cars are shipped
with the customer’s name already attached.
This helps in reducing inventories , warehousing and other holding
costs.
Just in time

From finish to start: JIT reverses the conventional approach of planning


production from start to finish. Employees responsible for final operation
receive the production plan first. The organization is forced to get the
production process right before commencing production.
FICCI CE

Implementing Just-In-Time Production Systems

Just-in-Time (JIT) is a philosophy of continuous improvement in


which non-value-adding activities (or wastes) are identified and
removed for the purposes of reducing cost, improving quality,
performance, delivery and flexibility and increasing
innovativeness.
JIT is not about automation. Typically, JIT eliminates waste by
providing the environment to perfect and simplify the
process(es). After this is done to the furthest extent possible,
the opportunities for applying technology effectively are more
obvious.
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Implementing JIT Production Systems

JIT can mean either of two things:


A collection of techniques that is used to improve operations
(TQM, set-up time reduction, multi-skilled employees, team
approaches, simultaneous engineering, etc.);
or,
A new production system that is used to produce goods or
services (evolving from the Toyota Production System
developed in the early 1950's, and is know by other terms, such
as: stockless production, zero inventories, lean production, etc.).
FICCI CE

Implementing JIT Production Systems

The American Production and Inventory Control Society's definition of


JIT reflects these two views. They define JIT as:
A philosophy of manufacturing based on planned elimination of all
waste and continuous improvement of productivity. It encompasses the
successful execution of all manufacturing activities required to produce
a final product, from design engineering to delivery and including all
stages of conversion from raw material onward.
The primary elements include having only the required inventory when
needed; to improve quality to zero defects; to reduce lead time by
reducing setup time, queue lengths and lot sizes; to incrementally
revise the operations themselves; and to accomplish these things at
minimum cost.
FICCI CE

Implementing JIT Production Systems

Almost all companies in repetitive manufacturing industries are


implementing JIT principles.
Many companies in non-repetitive manufacturing industries and
service industries are also implementing JIT principles. When the
implementation is successful, significant competitive advantages
are realized.
JIT principles can be applied to all parts of an organization - from
order taking, purchasing, operations, distribution to sales,
accounting design, etc. This guideline focuses on the operations
part of the organization, where JIT is traditionally implemented first.
FICCI CE

Implementing JIT Production Systems

Defining Production Systems


Good or services are produced by a production system. A
production system can be divided into six subsystems or areas,
including: human resources policies; organization structure and
controls; sourcing; production planning and control; process
technology; and facilities. These six subsystems or areas
interact to form a production system, whose outputs are goods
or services with certain levels of cost, quality, performance,
delivery, flexibility and innovativeness. There are only three
different production systems:
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Implementing JIT Production Systems

• The craft production system - designed to produce a wide variety of


low volume/high value products. The facility and equipment are general
purpose and very flexible. The craft production system includes job
shop and small batch production.
• The mass production system - designed to produce a very small
number of high volume/low unit value products. The facility and
equipment are specialized and highly automated.
• The Just-In-Time production system - designed to produce many
products in low to medium volumes on a line flow.
FICCI CE

Implementing JIT Production Systems

There are major differences between the production systems.


First, each production system is designed to produce different
numbers of products in different volumes.
Second, each system arranges its equipment in a different
layout. The material flow is different because of that layout.
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Implementing JIT Production Systems

Third and most important, each provides different levels of


output viz:
1.cost
2.quality
3.performance
4.delivery
5.flexibility
6.innovativeness output.
The JIT production system can make improvements in all the 6
outputs mentioned above.
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Implementing JIT Production Systems

Implementing a JIT production system consists of completing a


sequence of projects, each of which makes changes to one or
more of the six subsystems that comprise the production
system.
The sequence of projects is divided into two parts, those being
the preliminary and main projects.
The preliminary projects have two goals, to achieve early,
visible successes, and to prepare a foundation for the more
difficult projects to follow. The main projects are further divided
into three phases.
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Implementing JIT Production Systems

It is important to track the progress of each project, and so at


the start of each project, performance measures, such as quality
attributes, repair costs, inventory levels, lot sizes, cycle time,
setup time, etc., are selected.
The measures are then tracked on display boards, so that
everyone can follow each project's progress.
Tracking ensures that the improvement made during a project
do no go unnoticed. It also helps to build enthusiasm and
momentum, and helps to keep each project on course.
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Becoming a Time-Based Competitor

Broadly speaking, an organization competes on the basis of


quality, cost, flexibility and time. These factors are
complementary, even symbiotic. Today's discriminating
customer demands world-class quality at a competitive price.
When all the leading companies in an industry have achieved a
high level of quality, a focus on quality alone cannot keep a
company competitive.
Quality then becomes a common expected factor, which must
be complemented by a faster response time and flexibility.
Increasingly, cost and quality are viewed as residuals or
outcomes of competing on the basis of time and flexibility.
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JIT and Time-Based Competition

In business, time is not infinite and limitless. Competing on the


basis of time is defined to include the following: using time as a
strategic weapon, identifying market opportunities and
responding to those opportunities before competitors do,
responding to customers' needs in their own time frame and
eliminating non-value-added activities.
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JIT and Time-Based Competition

Time-compressed competitors measure the cycle time and lead


time of all-important activities. Cycle time is their staple
measurement. Cycle time in this guideline is defined as the
duration from the initial expression of a customer's need to the
point when that need is satisfied. This cycle encompasses the
entire value-added chain of a company's product or service
delivery process.
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JIT and Time-Based Competition

The overall delivery chain is composed of several key work


processes, which in this context are not functional departments,
but are the logical outputs performed by groups of people from
different functions. Some work processes and costs add value
for customers, while others do not. For example, adding cost in
the form of better raw materials or hand finishing a portion of the
product adds value. But many overhead items, such as factory
rework or the cost of idle assets, add cost but no value.
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JIT and Time-Based Competition

Fast-cycle capability contributes to better performance across


the board.
Costs drop because production materials and overhead do not
accumulate as work-in-process inventory.
Customer service improves because the lead-time from receipt
of order to shipment diminishes.
Quality is higher because the production cycle overall cannot
speed up unless everything is done right the first time.
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JIT and Time-Based Competition

Time advantage is also an organizational capability - a level of


performance that management shapes and builds into the company.
The basic idea is to build on organizational operating systems that
perform without the bottlenecks, delays, errors and inventories most
companies live with.
The faster that information, decisions and materials can flow through
a large organization, the faster the conditions.
In summary, time-advantaged companies enjoy one or more of the
following benefits, relative to their peers: increased productivity;
pricing flexibility; reduced risks; reduced costs and increased
response capability.