Just-In-Time Systems and

Lean Thinking

Chapter 17

McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc. 2007, All Rights

Reserved
 Chapter 17 Outline
Philosophy of JIT Layout and Equipment
Elements of a JIT system Effect on Workers
Stabilizing the Master Suppliers
Schedule Implementation of JIT
The Kanban System Comparison of JIT and
Reducing Setup Time and MRP
Lot Sizes Beyond JIT to Lean
Thinking

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 Philosophy of JIT
Modern Roots of JIT (Toyota Production
System, Taiichi Ohno. d. 1990)
Elements of JIT
Root of JIT in “repetitive” manufacturing
JIT as a technique: to reduce inventory
JIT as a philosophy: a comprehensive
management system

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 Elements of JIT
Small lot sizes (lot size one)
Use of Kanban system
Quick changeover (set-ups)
Multifunction workers
Efficient layout (linear flow)
Close relationships with suppliers
Frequent deliveries from vendors
Elimination of Waste

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 The Seven Wastes
Overproduction: Producing more than the demand for customers resulting in unnecessary
inventory, handling, paperwork, and warehouse space.
Waiting Time: Operators and machines waiting for parts or work to arrive from suppliers or
other operations.
Transportation: Double or triple movement of materials due to poor layouts, lack of
coordination and workplace organization.
Processing: Poor design or inadequate maintenance or processes requiring additional labor
or machine time.
Inventory: Excess inventory due to large lot sizes, obsolete items, poor forecasts or
improper production planning.
Motion: Wasted movements of people or extra walking to get materials.

Defects: Use of materials, labor and capacity for production of defects, sorting our bad parts
or warranty costs with customers.

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 Inventory as Waste
“If all our suppliers are guessing, you end
up with inventory, which is the physical
embodiment of bad information.”
–Paul Bell, Dell, Inc. Europe.
Dell’s inventories fell from 31 days of parts
in 1996 to 6 days in 2000.

Source: Economist, 1 April 2000, p. 57.

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Elements of JIT as a Philosophy
Setup Time Small Lot JIT Delivery Suppliers'
Reduction Sizes from Suppliers Quality Level

Product Design Multi-function

Simplicity Workers

Small Group
Equipment &
Facility Layout JIT Problem
Solving

Preventive
Employee
Maintenance
Training

Daily "Pull"
KANBAN Repetitive
Schedule Production
System MPS
Discipline System

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 Kanban System
A “pull” production system
A physical (normally visual) control system
Normally composed of cards and containers
(production card and withdrawal card), but
can be any type of signal
Number of containers DT
n=
C

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 The Kanban System
The Kanban system uses simple cards or signals to
strictly control production
The basic idea is that no station is permitted to
produce more than is immediately required by the
succeeding station
This simple idea prevents the buildup of inventory
No computer is required!

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 The Real Origin Of Kanban
In the 1950s, Ohno visited Detroit to learn
about auto making from the U.S. manufacturers.
He was
Q - Rnot impressed.

He visited a supermarket, which they did not

have in Japan, and observed the way they
restocked the shelves.
He used that method as the basis for Kanban.

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Kanban System

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Kanban Cards

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Reducing Setup Times and Lot Sizes
Reducing setup times:
– increases available capacity
– increases flexibility
– reduces inventory
Reduce setup times and run times simultaneously to
reduce lot sizes and throughput times
Single-digit Setup Times (Shigeo Shingo [d. 1990] or
SMED System)
Small lots require short setups!

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 Traditional Layout
Final
Work Centers
Assembly

Stockrooms

Supplier A Supplier B

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 JIT Layout
Final
Assembly

Supplier A Supplier B

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JIT Layout with Group Technology
Final
Assembly

Line 1

Line 2

Supplier A Supplier B

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 Effect of JIT on Workers
Multifunction workers
Cross-training
New pay system to reflect skills variety
Teamwork
Suggestion system

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 Suppliers
Very close relationship with suppliers
Frequent deliveries demanded from suppliers
Sole-sourcing
Integrated supplier programs
Deliveries to production line
No inspection—high quality

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Features of Integrated Supplier Programs

Early supplier selection, preferably in the

design phase
Family of part sourcing to allow supplier to
take advantage of GT
Long-term relationships with small number of
suppliers
Paperwork reduction in receiving and
inspection to reduce costs

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 Implementation of JIT
Obtain commitment from top management
Gain the cooperation of workforce
Start with final assembly line
Reduce setup times and lot sizes working backward from
the final assembly line
Balance fabrication rates with final assembly production
rates
Extend JIT to the suppliers

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 Benefits Of JIT
1. Reduced inventory 8. Better relations with
2. Improved quality suppliers
9. Simplified scheduling
3. Lower costs and control activities
4. Reduced space 10. Increased capacity
requirements 11. Better use of human
5. Shorter lead times resources
6. Increased productivity 12. More product variety
7. Greater flexibility

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 Comparison of MRP and JIT
Pull versus Push production systems
Situations for comparing MRP and JIT:
– Pure repetitive manufacturing situation; JIT works best
– A batch process; JIT works well with cellular manufacturing
– A job shop; MRPII with some elements of JIT
MRP assumes the present system is correct and seeks to make
the best of that system.
JIT seeks to change the system to make it better.

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The Traditional Push System
In traditional manufacturing, an item is released
for production at a specified time, with an
associated due date generated by MRP.
The item moves through a sequence of operations
When one operation is finished, the item is
“pushed” to the next operation
Finally, the product is pushed to inventory, to
meet the demand forecast

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 The Pull System
The pull system focuses on the output of the
system rather than the input.
Finished products are “pulled” from the final
operation in response to firm customer orders.
This leads to a chain reaction, with each
station pulling material from its preceding
station.
JIT uses the “Kanban” system to control the
flow of material with very little work-in-
process inventory.
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 Uses of MRP and JIT
JIT JIT
Repetitive (mass)

SYNCRO MRP
MRP
SYNCRO MRP Nonrepetitive
Semirepetitive (batch or job
shop) MRP

Low High
Stability of Master Schedule
Stability of Bill of Material

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 Lean Thinking

Term coined by Womack, Jones and Roos in

1990.
Extends JIT beyond the factory
Also applies to services
http://www.lean.org

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Five Elements of Lean Thinking

Specify value from the customer’s point of view

Create a value stream map and remove waste
Flow the product or service through the system
Pull the product or service from the customer
Strive for perfection

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 Summary
Philosophy of JIT Layout and Equipment
Elements of a JIT system Effect on Workers
Stabilizing the Master Suppliers
Schedule Implementation of JIT
The Kanban System Comparison of JIT and
Reducing Setup Time and MRP
Lot Sizes Beyond JIT to Lean
Thinking

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End of Chapter Seventeen

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