16-1 Just-in-Time Systems

Chapter 16

Just-In-Time
Systems

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-2 Just-in-Time Systems

JIT/Lean Production

• Just-in-time: Repetitive production system in which

processing and movement of materials and goods
occur just as they are needed, usually in small batches

• JIT is characteristic of lean production

systems
• JIT operates with very little “fat”

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-3 Just-in-Time Systems

JIT Goals

• Eliminate disruptions
• Make system flexible by reduce
setup and lead times
• Eliminate waste, especially excess
inventory

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-4 Just-in-Time Systems

Sources of Waste
• Overproduction
• Waiting time
• Unnecessary transportation
• Processing waste
• Inefficient work methods
• Product defects

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-5 Just-in-Time Systems

Big vs. Little JIT

• Big JIT – broad focus
– Vendor relations
– Human relations
– Technology management
– Materials and inventory management
• Little JIT – narrow focus
– Scheduling materials
– Scheduling services of production

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-6 Just-in-Time Systems

JIT Building Blocks

• Product design
• Process design
• Personnel/organizational
elements
• Manufacturing
planning and control

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-7 Just-in-Time Systems

Product Design

• Standard parts
• Modular design
• Highly capable production
systems

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-8 Just-in-Time Systems

Process Design
• Small lot sizes
• Setup time reduction
• Manufacturing cells
• Limited work in process
• Quality improvement
• Production flexibility
• Little inventory storage

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-9 Just-in-Time Systems

Benefits of Small Lot Sizes

Reduces inventory
Less rework
Less storage space
Problems are more apparent
Increases product flexibility
Easier to balance operations

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-10 Just-in-Time Systems

Production Flexibility
• Reduce downtime by reducing changeover
time
• Use preventive maintenance to reduce
breakdowns
• Cross-train workers to help clear bottlenecks
• Reserve capacity for important customers

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-11 Just-in-Time Systems

Personnel/Organizational Elements
• Workers as assets
• Cross-trained workers
• Continuous
improvement
• Cost accounting
• Leadership/project
management

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-12 Just-in-Time Systems

Manufacturing Planning and Control

• Level loading
• Pull systems
• Visual systems
• Close vendor relationships
• Reduced transaction
processing
• Preventive maintenance

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-13 Just-in-Time Systems

Pull/Push Systems

• Pull system: System for moving work

where a workstation pulls output from
the preceding station as needed. (e.g.
Kanban)
• Push system: System for moving work
where output is pushed to the next
station as it is completed

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-14 Just-in-Time Systems

Kanban Production Control System

• Kanban: Card or other device that communicates
demand for work or materials from the preceding station
• Kanban is the Japanese word meaning “signal” or
“visible record”
• Paperless production control system
• Authority to pull, or produce comes
from a downstream process.

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-15 Just-in-Time Systems

Traditional Supplier Network

Figure 16-3a

Buyer
Buyer

Supplier
Supplier Supplier
Supplier

Supplier
Supplier

Supplier
Supplier Supplier
Supplier Supplier Suppiler
Supplier Suppiler

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-16 Just-in-Time Systems

Tiered Supplier Network

Figure 16-3b Buyer

Buyer

First Tier Supplier Supplier

Supplier

Second Tier Supplier Supplier

Supplier Supplier
Supplier

Third Tier Supplier Supplier

Supplier Supplier
Supplier Supplier
Supplier Supplier
Supplier

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-17 Just-in-Time Systems

Summary JIT Goals and Building Blocks

Figure 16-4 Ultimate A

Goal balanced
rapid flow

Supporting Reduce setup

Goals and lead times
Eliminate disruptions Eliminate waste
Make the system flexible Minimize inventories

Product Process Personnel Manufactur- Building

Design Design Elements ing Planning Blocks

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-18 Just-in-Time Systems

Converting to a JIT System

• 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

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-19 Just-in-Time Systems

Obstacles to Conversion

• Management may not be committed

• Workers/management may not be
cooperative
• Suppliers may
resist

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-20 Just-in-Time Systems

JIT in Service
The basic goal of the demand flow technology in the service
organization is to provide optimum response to the customer with the
highest quality service and lowest possible cost.
– Eliminate disruptions
– Make system flexible
– Reduce setup and lead times
– Eliminate waste
– Minimize WIP
– Simplify the process

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-21 Just-in-Time Systems

JIT Purchasing

• New challenges
– Meeting manufacturing requirements
– Changing from traditional thinking and
practices – frequent on-time delivery of
small quantities
– Long term relationships with suppliers as
partners

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-22 Just-in-Time Systems

JIT II

• JIT II: the practice of allowing vendors

to manage some aspects of buying their
products or services for the buyer

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-23 Just-in-Time Systems

Benefits of JIT Systems

• Reduced inventory levels

• High quality
• Flexibility
• Reduced lead times
• Increased productivity

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-24 Just-in-Time Systems

Benefits of JIT Systems (cont’d)

• Increased equipment utilization

• Reduced scrap and rework
• Reduced space requirements
• Pressure for good vendor relationships
• Reduced need for indirect labor

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-25 Just-in-Time Systems

Sources of Waste
Table 16-5
• Waste from overproduction
• Waste of waiting time
• Transportation waste
• Inventory waste
• Processing waste
• Waste of motion
• Waste from product defects

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-26 Just-in-Time Systems

Elements of JIT
Table 16-5
• Smooth flow of work (the ultimate goal)
• Elimination of waste
• Continuous improvement
• Eliminating anything that does not add value
• Simple systems that are easy to manage
• Use of product layouts to minimize moving
materials and parts
• Quality at the source

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
16-27 Just-in-Time Systems

Elements of JIT (cont’d)

Table 16-5

• Poka-yoke – fail safe tools and methods

• Preventative maintenance
• Good houskeeping
• Set-up time reduction
• Cross-trained employees
• A pull system

Operations Management, Seventh Edition, by William J. Stevenson

McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.