Chapter 7 – Just-in-Time and Lean SystemsLearning ObjectivesLearning Objectives con’tJust-in-TimePhilosophy of Just-in-TimeThe Philosophy of JIT con’tThree Elements of JITThree Elements of JIT con’tElements of JIT ManufacturingRole of Inventory ReductionJIT Manufacturing: The Pull SystemComputing the Number of Kanbans: an aspirin manufacturer has converted to JIT manufacturing using kanban containers. They must determine the number of containers at the bottle filling operation which fills at a rate of 200 per hour. Each container holds 25 bottles, it takes 30 minutes to receive more bottles, safety stock is 10% of demand during LT.Number of Kanbans RequiredVariations on Kanban ProductionSmall Lot Sizes & Quick SetupsUniform Plant LoadingFlexible ResourcesEffective Facility LayoutsRespect for People: The Role of EmployeesJIT and TQMRespect for PeopleSlide 22Slide 23Slide 24Benefits of JITImplementing JITImplementing JIT – con’tJIT in ServicesTQM con’tJIT & Lean Systems: How it all Fits TogetherJIT Across the OrganizationChapter 7 HighlightsSlide 33Chapter 7 Highlights con’tSlide 35Slide 36Chapter 7 Homework Hints© Wiley 2010 1Chapter 7 – Just-in-Time and Lean SystemsOperations ManagementbyR. Dan Reid & Nada R. Sanders4th Edition © Wiley 2010© Wiley 2010 2Learning ObjectivesExplain the core beliefs of the JIT philosophyDescribe the meaning of waste in JITExplain the differences between “push” and “pull” systemsExplain the key elements of JIT manufacturing© Wiley 2010 3Learning Objectives con’tExplain the elements of TQM and their role in JITDescribe the role of people in JIT and why respect for people is so importantUnderstand impact of JIT on service and manufacturingUnderstand functional impact of JIT on all areas© Wiley 2010 4Just-in-TimeJIT philosophy means getting the right quantity of goods at the right place and the right timeJIT exceeds the concept of inventory reduction; it is an all-encompassing philosophy geared to eliminate waste, anything that does not add valueA broad JIT view – or lean production/lean systems - is one that encompasses the entire organization© Wiley 2010 5Philosophy of Just-in-TimeJIT originated in Japan at Toyota Motor Co, fueled by a need to survive the devastation post WWII JIT gained worldwide prominence in the 1970sOften termed “Lean Production” or “Lean Systems”Broad view that entire organization has the same goal - to serve customers© Wiley 2010 6The Philosophy of JIT con’tJIT is built on simplicity - simpler is betterContinuous improvement – often using kaizen blitzVisibility – all waste must be visible to be identified and eliminatedFlexibility - to adapt to changes in environment© Wiley 2010 7Three Elements of JIT© Wiley 2010 8Three Elements of JIT con’tJIT manufacturing focuses on production system to achieve value-added manufacturingTQM is an integrated effort designed to improve quality performance at every levelRespect for people rests on the philosophy that human resources are an essential part of JIT philosophy© Wiley 2010 9Elements of JIT ManufacturingJIT Manufacturing is a philosophy of value-added manufacturingAchieved by focusing on these elements:Inventory reduction - exposes problemsKanbans & pull production systemsSmall lots & quick setupsUniform plant loadingFlexible resourcesEfficient facility layouts© Wiley 2010 10Role of Inventory ReductionInventory = Lead Time (less is better)Inventory hides problems© Wiley 2010 11JIT Manufacturing: The Pull System© Wiley 2010 12down?or up round:Questioncontainers kanban 4.42510(200)(.5)CSDTNbottles 10.5)0.10(200)(d)(T)0.10(deman Scontainerper bottles 25Chour .5minutes 30Thourper bottles 200D:SolutionComputing the Number of Kanbans: an aspirin manufacturer has converted to JIT manufacturing using kanban containers. They must determine the number of containers at the bottle filling operation which fills at a rate of 200 per hour. Each container holds 25 bottles, it takes 30 minutes to receive more bottles, safety stock is 10% of demand during LT.© Wiley 2010 13Number of Kanbans RequiredN = number of containersD = demand rate at the withdraw stationT = lead time from supply station C = container sizeS = safety stock CSDT N© Wiley 2010 14Variations on Kanban ProductionKanban boxes – space on factory floor for storing suppliesFlags – used to indicate when supplies need to be orderedSupplier kanbans – brings filled containers to point of usage in factory/picks up empty containers© Wiley 2010 15Small Lot Sizes & Quick SetupsSmall lots mean less average inventory and shorten manufacturing lead timeSmall lots with shorter setup times increase flexibility to respond to demand changes Strive for single digit setups- < 10 minutesSetup reduction process is well-documentedExternal tasks- do as much preparation while present job is still runningInternal tasks- simplify, eliminate, shorten steps involved with location, clamping, & adjustmentsUltimate goal is single unit lot sizes© Wiley 2010 16Uniform Plant LoadingA “level” schedule is developed so that the same mix of products is made every day in small quantities Leveling the schedule can have big impact along whole supply chainMonday Tuesday Wednesday Thursday FridayAAAAA BBBBB BBBBB DDDDD EEEEEAAAAA BBBBB BBBBB CCCCC EEEEEMonday Tuesday Wednesday Thursday FridayAABBBB AABBBB AABBBB AABBBB AABBBBCDEE CDEE CDEE CDEE CDEE5 units5 units10 unitsWeekly Production RequiredTraditional Production PlanJIT Plan with Level SchedulingABCDE10 units20 units© Wiley 2010 17Flexible ResourcesMoveable, general purpose equipment:Portable equipment with plug in power/airDrills, lathes, printer-fax-copiers, etc.Capable of being setup to do many different things with minimal setup timeMultifunctional workers: Workers assume considerable responsibilityCross-trained to perform several different dutiesTrained to also be problem solvers© Wiley 2010 18Effective Facility LayoutsWorkstations in close physical proximity to reduce transport & movementStreamlined flow of materialOften use:Cellular Manufacturing (instead of process focus)U-shaped lines: (allows material handler to quickly drop off materials & pick up finished work)© Wiley 2010 19Respect for People: The Role of