Jit And Lean Production

“Team Members” • • • • •

Rehman AKbar Syed Asad Raza Muhammad Muzzamil M.Salman Saleem Murtaza Subhani

060904-009 060904-005 060904-001 060904-008 063305-007

Just in time & Lean Production

Just in time & Lean Production • Waste Reduction • Variability Reduction • Pull vs Push

(Manufacturing cycle time) (e.g.Northern Telecom

Green Gear cycling

• Des ig ns an d man ufa ct ur es hig h p er form an ce tra vel bic ycle s (bik e-in -a-s uitc as e) • St ra te gy is ma ss cu sto miza tion with low inv ent or y , w or k c ells , a nd elimin ati on of mac hin e s etu ps

“The Major Misconceptions of JIT” • JIT is Only an Inventory Control System • It is a Method to “Push” Inventory Back to the Supplier • JIT is a Quality Control Program

“JIT Requires to Achieve Competitative Advantage” • Suppliers • Preventive Maintainace • Quality Production

• Employee Empowerment • Commitment • Layout • Inventory

Suppliers(Jit) • JIT Partnership

“Partnership of suppliers and purchasers that removes wastes and drive down costs for mutual benefits”

 Goals of JIT Partnership.  Characteristics of JIT Partnership.  Concerns of suppliers.

Concerns of suppliers • Desire for Diversification • Poor customer Scheduling • Engineering Changes • Quality Assurance • Small Lot Sizes • Proximity

Goals of JIT Partnership • Elimination of unnecessary Activities • Elimination of plant inventory • Elimination of transit inventory (Consignment inventory) e.g G.M

• Elimination of poor suppliers

Inventory (JIT)

Reduce Variability Reduce Inventory Reduce Lot sizes Reduce Setup Costs

Reduce Variability Inventory level

Process downtime

Scrap Setup time

Quality problems

Late deliveries

Reduce Variability

Inventory level

Process downtime

Scrap Setup time

Quality problems

Late deliveries

Lot Size Example D= d= p= Q= H= S= Q=

Annual demand = 400,000 units Daily demand = 400,000/250 = 1,600 per day Daily production rate = 4,000 units EOQ desired = 400 Holding cost = $20 per unit Setup cost (to be determined) 2DS H(1 - d/p)

Q2 =

2DS H(1 - d/p)

(Q2)(H)(1 - d/p) (3,200,000)(0.6) S= = = $2.40 2D 800,000

Reduce Setup Times Initial Setup Time

Step 1

90 min —

Separate setup into preparation and actual setup, doing as much as possible while the machine/process is operating (save 30 minutes) Move material closer and improve material handling (save 20 minutes)

Step 2

Standardize and improve tooling (save 15 minutes)

Step 3

Step 4 Step 5

Use one-touch system to eliminate adjustments (save 10 minutes) Training operators and standardizing work procedures (save 2 minutes) Repeat cycle until subminute setup is achieved

60 min —

45 min —

25 min — 15 min — 13 min — —

Scheduling (JIT) “Schedules must be communicated inside and outside the organization”  Level Schedules  Kanban

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

Time

B

B

B

B C C C

Kanban  User removes a standard sized container  Signal is seen by the producing department as authorization to replenish Signal marker on boxes Part numbers mark location

Number of Kanbans Example Daily demand = 500 cakes Production lead time = 2 days (wait time + material handling time + processing time) Safety stock = 1/2 day Container size = 250 cakes Demand during lead time = 2 days x 500 cakes = 1,000 1,000 + 250 Number of kanbans = =5 250

Advantages of Kanban • Avoids over production • Minimizing waste • Simple and understandable • Reduce Lead time

Disa dvantages o f Ka nban • Break down in kanban system can result in the entire line shutting down. •k

JIT Layout+Tactics “Reduce waste due to movement” • Distance Reduction • Increased Flexibility • Impact on Employees • Reduced space and inventory

Quality (JIT) JIT c uts the c ost of o btain in g good q uali ty because J IT exposes poor qualit y Be cause l ead time s are shorte r, q uali ty pro blems are exposed s ooner

JIT Quality Tactics Use statistical process control Empower employees Build fail-safe methods Expose poor quality with small lot JIT Provide immediate feedback

Employee Empowerment • Brin g th eir kn ow led ge an d involvemen t to d aily op erat ion s • Tr ain ing • En ric hme nt or job Ro ta tio ns • Comp anie s gain f rom

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

Toyota Production System  Work shall be completely specified as to content, sequence, timing, and outcome  Every customer-supplier connection must be direct  Product and service flows must be simple and direct  Any improvement must be made in accordance with the scientific method at the lowest possible level of the organization

Lean Systems Use JIT techniques Reduce space requirements Educate suppliers Develop close relationships with suppliers Build systems that help employees to produce perfect parts  Make jobs more challenging  Reduce the number of job classes     

The 5 S’s  Sort/segregate  Simplify/straighten  Shine/sweep  Standardize  Sustain/self discipline  Safety  Support/maintenance

Seven Wastes  Overproduction  Queues  Transportation  Inventory  Motion  Over-processing  Defective product

A broader perspective suggests other resources like energy and water are wasted but should not be

JIT in Services • Suppliers (e.g. Restaurants)

• Layouts

(e.g. McDonald)

• Inventory

(e.g McDonald)

• Scheduling (e.g Hospitals)

Conclusion