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Just-in-Time and
Lean Operations
Developments of JIT and
Lean Operations
 1960’s: Developed as Toyota Production
System by Taiichi Ohno and his colleagues
 1970’s: U.S. and European auto makers
began to apply JIT to improve quality and
productivity
 1990’s and beyond: Expanded the JIT
concept to streamline all types of operations
Definition of JIT
 A set of techniques to increase
productivity, improve quality, and
reduce cost of an operations
 A management philosophy to promote
elimination of waste and continuous
improvement of productivity
What Could Be the Expected
Benefits of JIT?
Expected Benefits of JIT
 Reduction in throughput times
 Reduction in WIP
 Improvement in quality
 Improvement in productivity
 Reduction in resource requirements
 Improvement in customer satisfaction
 improvements in return on assets
Main Elements of JIT
 Elimination of waste
 Quality at the source
 Balanced and flexible work flow
 Respect for people
 Continuous improvement (Kaizen)
 Simplification and visual control
 Focus on customer needs
 Partnerships with key suppliers
What is A “Waste?”
Wastes
 Anything that exceeds the minimum resources
needed for the appropriate value
 Toyota’s seven deadly wastes:
•Overproduction (excessive production resources)
•Inventory
•Waiting
•Transportation
•Processing
•Motion
•Defective parts
Why is Inventory Reduction
Important?
Importance of Inventory
Reduction
 Inventory costs money - carrying costs,
obsolescence costs, and opportunity costs
 Inventory covers up problems and
bottlenecks.
 Inventory reduction forces organization
and employees to eliminate sources of
problems and work as a team.
Quality at the Source
 Jidoka – autonomation (automatic
detection of defects, e.g., Poka-yoke)
 Employee empowerment
 Statistical process control
 Prevention orientation (elimination of root
causes through PDSA cycle)
Balanced and Flexible
Work Flow
 Yo-i-don (ready, set, go) system
 Stable production schedule
 Set-up time reduction
 Flow-shop and cellular layouts
 Shojinka (flexible & multi-skilled workforce)
 Teamwork
 Total productive maintenance (TPM)
Respect for People
 Productivity improvement needs employee support
 Demonstrate by
• providing cross-training opportunities
• creating a safe and equitable work environment
• encouraging people to achieve their potential by
giving them greater responsibility and authority
• promoting teamwork (formal and informal)
• developing partnerships with unions
Continuous Improvement
(Kaizen)
 Employee suggestion system
 Process improvement
 5S’s
• Seiri - organization
• Seiton - tidiness
• Seiso - purity
• Seiketsu - cleanliness
• Shitsuke - discipline
Simplification and Visual
Control
 Standard and simple product designs
 Andon boards
 Kanban pull system
 Flag systems
 Music as signals
 Performance display systems
Focus on Customer Needs
 Customer needs determine the “value” of
a product or service
 Be responsive to customers needs
(present and future)
 Strive to “delight,” not just “satisfy”
customers
Partnerships with Suppliers
 Reduce number of suppliers
 Use long-term contracts
 Emphasize price, delivery, and services
 Improve communication
 Share information
 Develop local just-in-time delivery
 Provide technical support to suppliers
JIT Implementation
 Top management commitment
 Steering committee
 Education program
 Pilot project planning
 Employee training
 Pilot implementation
 Pilot post mortem
 Feedback to steering committee
 Expansion to next project
Advancements in JIT (JIT II)
 Backwards Integration of staff and line
functions to suppliers (e.g., purchasing)
 Requires EDI or web access to materials
and logistics systems
 On-site supplier representative(s) with
transaction processing authority
 Goal: link suppliers’ cycle to firm’s cycle to
mutually reduce wait and move times
How Can JIT Be Applied to Non-
Manufacturing Operations?
JIT for Non-Manufacturing
Operations (Lean Operations)
 Implement demand-pull operations
 Eliminate unnecessary activities
 Standardize process flows
 Increase process flexibility
 Reorganize physical layouts
 Upgrade housekeeping and workplace
organization
JIT for Non-Manufacturing
Operations (Lean Operations)
 Develop supplier partnership networks
 Level work load
 Organize problem-solving groups
 Improve quality
 Develop effective suggestion systems
 Cross-train employees
 Promote teamwork
What Are Toyota’s Secrets of
Success?
Toyota’s Secrets of Success
(Steve Spear, HBR, May 2004)
 There is no substitute for direct
observation
 Proposed changes should always be
structured as experiments
 Workers and managers should experiment
as frequently as possible
 Managers should coach, not fix
Suggested Readings
 Monden, Yasuhiro (1993). Toyota Production
System: An Integrated Approach to Just-In-Time,
3rd edition, Institute of Industrial Engineers.
 Womack, James P. and Jones, Daniel T. (2003).
Lean Thinking: Banish Waste and Create Wealth in
Your Corporation, The Free Press.
 Jeffrey K. Liker (2004). The Toyota Way: 14
Management Principles from the World’s Greatest
Manufacturer, McGraw-Hill.

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Topic 4 JIT.ppt

  • 2. Developments of JIT and Lean Operations  1960’s: Developed as Toyota Production System by Taiichi Ohno and his colleagues  1970’s: U.S. and European auto makers began to apply JIT to improve quality and productivity  1990’s and beyond: Expanded the JIT concept to streamline all types of operations
  • 3. Definition of JIT  A set of techniques to increase productivity, improve quality, and reduce cost of an operations  A management philosophy to promote elimination of waste and continuous improvement of productivity
  • 4. What Could Be the Expected Benefits of JIT?
  • 5. Expected Benefits of JIT  Reduction in throughput times  Reduction in WIP  Improvement in quality  Improvement in productivity  Reduction in resource requirements  Improvement in customer satisfaction  improvements in return on assets
  • 6. Main Elements of JIT  Elimination of waste  Quality at the source  Balanced and flexible work flow  Respect for people  Continuous improvement (Kaizen)  Simplification and visual control  Focus on customer needs  Partnerships with key suppliers
  • 7. What is A “Waste?”
  • 8. Wastes  Anything that exceeds the minimum resources needed for the appropriate value  Toyota’s seven deadly wastes: •Overproduction (excessive production resources) •Inventory •Waiting •Transportation •Processing •Motion •Defective parts
  • 9. Why is Inventory Reduction Important?
  • 10. Importance of Inventory Reduction  Inventory costs money - carrying costs, obsolescence costs, and opportunity costs  Inventory covers up problems and bottlenecks.  Inventory reduction forces organization and employees to eliminate sources of problems and work as a team.
  • 11. Quality at the Source  Jidoka – autonomation (automatic detection of defects, e.g., Poka-yoke)  Employee empowerment  Statistical process control  Prevention orientation (elimination of root causes through PDSA cycle)
  • 12. Balanced and Flexible Work Flow  Yo-i-don (ready, set, go) system  Stable production schedule  Set-up time reduction  Flow-shop and cellular layouts  Shojinka (flexible & multi-skilled workforce)  Teamwork  Total productive maintenance (TPM)
  • 13. Respect for People  Productivity improvement needs employee support  Demonstrate by • providing cross-training opportunities • creating a safe and equitable work environment • encouraging people to achieve their potential by giving them greater responsibility and authority • promoting teamwork (formal and informal) • developing partnerships with unions
  • 14. Continuous Improvement (Kaizen)  Employee suggestion system  Process improvement  5S’s • Seiri - organization • Seiton - tidiness • Seiso - purity • Seiketsu - cleanliness • Shitsuke - discipline
  • 15. Simplification and Visual Control  Standard and simple product designs  Andon boards  Kanban pull system  Flag systems  Music as signals  Performance display systems
  • 16. Focus on Customer Needs  Customer needs determine the “value” of a product or service  Be responsive to customers needs (present and future)  Strive to “delight,” not just “satisfy” customers
  • 17. Partnerships with Suppliers  Reduce number of suppliers  Use long-term contracts  Emphasize price, delivery, and services  Improve communication  Share information  Develop local just-in-time delivery  Provide technical support to suppliers
  • 18. JIT Implementation  Top management commitment  Steering committee  Education program  Pilot project planning  Employee training  Pilot implementation  Pilot post mortem  Feedback to steering committee  Expansion to next project
  • 19. Advancements in JIT (JIT II)  Backwards Integration of staff and line functions to suppliers (e.g., purchasing)  Requires EDI or web access to materials and logistics systems  On-site supplier representative(s) with transaction processing authority  Goal: link suppliers’ cycle to firm’s cycle to mutually reduce wait and move times
  • 20. How Can JIT Be Applied to Non- Manufacturing Operations?
  • 21. JIT for Non-Manufacturing Operations (Lean Operations)  Implement demand-pull operations  Eliminate unnecessary activities  Standardize process flows  Increase process flexibility  Reorganize physical layouts  Upgrade housekeeping and workplace organization
  • 22. JIT for Non-Manufacturing Operations (Lean Operations)  Develop supplier partnership networks  Level work load  Organize problem-solving groups  Improve quality  Develop effective suggestion systems  Cross-train employees  Promote teamwork
  • 23. What Are Toyota’s Secrets of Success?
  • 24. Toyota’s Secrets of Success (Steve Spear, HBR, May 2004)  There is no substitute for direct observation  Proposed changes should always be structured as experiments  Workers and managers should experiment as frequently as possible  Managers should coach, not fix
  • 25. Suggested Readings  Monden, Yasuhiro (1993). Toyota Production System: An Integrated Approach to Just-In-Time, 3rd edition, Institute of Industrial Engineers.  Womack, James P. and Jones, Daniel T. (2003). Lean Thinking: Banish Waste and Create Wealth in Your Corporation, The Free Press.  Jeffrey K. Liker (2004). The Toyota Way: 14 Management Principles from the World’s Greatest Manufacturer, McGraw-Hill.