“Team Members”

• Rehman AKbar 060904-009• Syed Asad Raza 060904-005• Muhammad Muzzamil 060904-001• M.Salman Saleem 060904-008• Murtaza Subhani 063305-007

Just in timeJust in time&&

Lean ProductioLean Productionn

• Waste Reduction

• Variability Reduction

• Pull vs Push(Manufacturing cycle time)(e.g.Northern Telecom

Just in time&

Lean Production

Green Gear cycling

• Designs and manufactures high Designs and manufactures high performance travel bicycles performance travel bicycles (bike-in-a-suitcase)(bike-in-a-suitcase)

• Strategy is Strategy is mass customizationmass customization with with low inventorylow inventory, work cells, , work cells, and elimination of machine and elimination of machine setupssetups

““The MajorThe Major Misconceptions Misconceptions of JIT”of JIT”

• JIT is Only an JIT is Only an Inventory Control Inventory Control SystemSystem

• It is a Method to It is a Method to “Push” Inventory “Push” Inventory BackBack to the Supplier to the Supplier

• JIT is a JIT is a Quality ControlQuality Control Program Program

““JIT JIT Requires Requires to Achieve Competitative to Achieve Competitative

Advantage”Advantage”• SuppliersSuppliers• Preventive Maintainace• Quality Production

• Employee Empowerment• Commitment

• LayoutLayout

• InventoryInventory

• SchedulingScheduling

Suppliers(Jit)Suppliers(Jit)

• JITJIT PartnershipPartnership““Partnership of suppliers and purchasers that removes Partnership of suppliers and purchasers that removes

wastes and drive down costs for mutual benefits”wastes and drive down costs for mutual benefits”

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

Concerns of suppliersConcerns of suppliers

• Desire for DiversificationDesire for Diversification

• Poor customer SchedulingPoor customer Scheduling

• Engineering ChangesEngineering Changes

• Quality AssuranceQuality Assurance

• Small Lot SizesSmall Lot Sizes

• ProximityProximity

Goals of JIT Goals of JIT PartnershipPartnership

• Elimination of unnecessary ActivitiesElimination of unnecessary Activities

• Elimination of plant inventoryElimination of plant inventory

• Elimination of transit inventoryElimination of transit inventory (Consignment (Consignment inventory) e.ginventory) e.g G.M G.M

• Elimination of poor suppliersElimination of poor suppliers

InventoryInventory (JIT) (JIT)

Reduce VariabilityReduce VariabilityReduce InventoryReduce InventoryReduce Lot sizesReduce Lot sizesReduce Setup CostsReduce Setup Costs

Reduce Variability

Inventory levelInventory level

Process downtimeScrap

Setup time

Late deliveries

Quality problems

Inventory Inventory levellevel

Reduce Variability

Scrap

Setup time

Late deliveries

Quality problems

Process downtime

Lot Size Example

DD == Annual demand Annual demand = 400,000= 400,000 units unitsdd == Daily demand Daily demand = 400,000/250 = 1,600= 400,000/250 = 1,600 per day per daypp == Daily production rate Daily production rate = 4,000= 4,000 units unitsQQ == EOQ desired EOQ desired = 400= 400HH == Holding cost Holding cost = $20= $20 per unit per unitSS == Setup cost (to be determined)Setup cost (to be determined)

QQ == 2DS2DSHH(1 -(1 - d/p d/p))

QQ22 = = 2DS2DSHH(1 -(1 - d/p d/p))

S S = = = $2.40= = = $2.40((QQ22)()(HH)(1 -)(1 - d/p d/p))

22DD(3,200,000)(0.6)(3,200,000)(0.6)

800,000800,000

Reduce Setup Times

Use one-touch system to eliminate Use one-touch system to eliminate adjustments (save 10 minutes)adjustments (save 10 minutes)Step 4Step 4

Step 5Step 5Training operators and standardizing Training operators and standardizing work procedures (save 2 minutes)work procedures (save 2 minutes)

Repeat cycle until subminute Repeat cycle until subminute setup is achievedsetup is achieved

Initial Setup Time

Step 2Step 2

Move material closer and improve material handling

(save 20 minutes)

Step 1Step 1

Separate setup into preparation and actual setup, doing as much as possible while the

machine/process is operating (save 30 minutes)

Step 3Step 3

Standardize and improve tooling

(save 15 minutes)

90 min —90 min —

60 min —60 min —

45 min —45 min —

25 min —25 min —

15 min —15 min —13 min —13 min —

——

SchedulingScheduling (JIT) (JIT)

Level SchedulesLevel Schedules

KanbanKanban

““Schedules must be communicated Schedules must be communicated inside and outside the organization”inside and outside the organization”

Scheduling Small Lots

AA BB CCAA AAAABB BB BB BB BB CC

JIT Level Material-Use ApproachJIT Level Material-Use Approach

AA CCAA AAAA BB BB BB BB BB CC CCBB BB BB BBAA AA

Large-Lot ApproachLarge-Lot Approach

TimeTime

Kanban

User removes a User removes a standard sized standard sized containercontainer

Signal is seen by Signal is seen by the producing the producing department as department as authorization to authorization to replenishreplenish

Part numbers Part numbers mark locationmark location

Signal marker Signal marker on boxeson boxes

Number of Kanbans Example

Daily demandDaily demand == 500500 cakes cakes

Production lead timeProduction lead time == 22 days days(wait time + (wait time + material handling time + material handling time + processing time)processing time)

Safety stockSafety stock == 1/21/2 day day

Container sizeContainer size == 250250 cakes cakes

Demand during lead time Demand during lead time = 2= 2 days days x 500x 500 cakes cakes = 1,000= 1,000

Number of kanbans Number of kanbans = = 5= = 51,000 + 2501,000 + 250

250250

• Avoids over production

• Minimizing waste

• Simple and understandable

• Reduce Lead time

Advantages of Kanban

Disadvantages of Kanban

• Break down in kanban system can result in the entire line shutting down.

• k

JIT LayoutJIT Layout++TacticsTactics

• DistanceDistance Reduction Reduction

• Increased Increased FlexibilityFlexibility

• Impact on Impact on EmployeesEmployees

• Reduced Reduced space space and and inventoryinventory

““Reduce waste due to movement”Reduce waste due to movement”

Quality (JIT)Quality (JIT)

JIT cuts the cost of obtaining JIT cuts the cost of obtaining good quality because JIT exposes good quality because JIT exposes poor qualitypoor quality

Because lead times are shorter, Because lead times are shorter, quality problems are exposed quality problems are exposed soonersooner

JIT Quality Tactics

Use statistical process controlUse statistical process control

Empower employeesEmpower employees

Build fail-safe methods Build fail-safe methods

Expose poor quality with small lot JITExpose poor quality with small lot JIT

Provide immediate feedbackProvide immediate feedback

Employee EmpowermentEmployee Empowerment

• Bring their Bring their knowledge knowledge and and involvement to daily operationsinvolvement to daily operations

• Training Training

• EnrichmentEnrichment or or job Rotationsjob Rotations

• Companies gain from increased Companies gain from increased commitmentcommitment from employees from employees

Lean ProductionLean Production

Different from JIT in that it is Different from JIT in that it is externally focused on the customerexternally focused on the customer

Often called the Toyota Production Often called the Toyota Production System (System (TPSTPS))

In practice, JIT, Lean Systems, and In practice, JIT, Lean Systems, and TPS are often essentially the sameTPS are often essentially the same

Toyota Production System

Work shall be completely specified as to Work shall be completely specified as to contentcontent, , sequence, timing, and outcomesequence, timing, and outcome

Every customer-supplier connection must Every customer-supplier connection must be directbe direct

Product and service flows must be Product and service flows must be simple simple and directand direct

Any Any improvement improvement must be made in must be made in accordance with the accordance with the scientific methodscientific method at at the the lowest possible level lowest possible level of the of the organizationorganization

Lean Systems

Use Use JITJIT techniques techniques Reduce Reduce spacespace requirements requirements Educate suppliersEducate suppliers Develop Develop close relationshipsclose relationships with suppliers with suppliers Build systems that help employees to Build systems that help employees to

produce produce perfect partsperfect parts Make jobs more Make jobs more challengingchallenging Reduce the number of Reduce the number of job classesjob classes

The 5 S’s

Sort/segregateSort/segregate

Simplify/straightenSimplify/straighten

Shine/sweepShine/sweep

StandardizeStandardize

Sustain/self disciplineSustain/self discipline

Safety

Support/maintenance

Seven Wastes

OverproductionOverproduction

QueuesQueues

TransportationTransportation

InventoryInventory

MotionMotion

Over-processingOver-processing

Defective productDefective product

A broader perspective

suggests other resources like

energy and water are wasted but should not be

JIT in ServicesJIT in Services

• SuppliersSuppliers

(e.g. Restaurants)(e.g. Restaurants)

• LayoutsLayouts(e.g. McDonald)(e.g. McDonald)

• InventoryInventory(e.g McDonald)(e.g McDonald)

• SchedulingScheduling(e.g Hospitals)(e.g Hospitals)

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