Contents

A. Introduction to Just in Time Manufacturing

B. Seven Wastes

C. JIT Philosophy

D. Major Elements of JIT

E. Impact of JIT on Manufacturing Planning and Control

F. The hidden factory

G. JIT cornerstones and linkages to Manufacturing Planning and Control

H. Kanban System

I. Benefits of JIT

J. Challenges in implementation of JIT

K. Applications of JIT (Case study of Toyota’s Kanban System)

L. Summary and Conclusion

Introduction to Just In Time (JIT) Manufacturing

Most successful companies develop and implement strategies that will give them a competitive advantage. A company that improves performance on a regular and continuous basis certainly will gain the competitive edge. Companies seek competitive advantage by emphasizing on performance factors such as flexibility, quick responsiveness, cost, efficiency, quality and reliability and service.

Just In Time manufacturing is a philosophy rather than a technique. By eliminating all wastes and seeking continuous improvement, it aims at creating a manufacturing system that is responsive to market needs.

The phrase “Just-In-Time” is used because this system operates with very low WIP (work in process) inventory and often with very low finished goods inventory. Products are assembled just before they are sold, subassemblies are made just before they are assembled and components are made and fabricated just before subassemblies are made. This leads to lower WIP and reduced lead times. To achieve this, organizations have to be excellent in other areas, e.g., quality.

JIT is a manufacturing system whose goal is to optimize processes and procedures by continuously pursuing waste reduction.

According to Voss, JIT is viewed as a “Production methodology which aims to improve overall productivity through elimination of waste and which leads to improved quality.” JIT provides for the cost efficient production in an organization and delivery of only the necessary parts in the right quantity at the right time and place using the minimum of facilities.

JIT enables one to conceive, design, implement and operate a manufacturing and supporting systems, as an integrated whole based on the principles of continuous improvements and elimination of all kinds of waste.

Seven Wastes

Shigeo Shingo, a Japanese JIT authority and engineer at the Toyota Motor Company identifies seven wastes as being the targets of continuous improvement in production processes. By attending to these wastes, improvement is achieved.

1. Waste of overproduction: Eliminate by reducing set-up times,

synchronise quantities and timing between processes, layout problems. Make only what is needed now.

2. Waste of waiting: Eliminate bottlenecks and balance uneven loads by

flexible workforce and equipment.

3. Waste of transportation: Establish layouts and locations to make handling and transport unnecessary if possible. Minimize transportation and handling to eliminate.

4. Waste of processing itself: Question regarding the existence of the

product and then why each process is necessary.

5. Waste of stocks: Reducing all other wastes reduces stocks.

6. Waste of motion: Study motion for economy and consistency. Economy improves productivity and consistency improves quality. First improve the motions, then mechanise or automate. Otherwise there is a danger of automating the waste.

7. Waste of making defective products: Develop the production

process to prevent defects from being produced, so as to eliminate inspection. At each process, do not accept defects and make no defects. Make the process fail safe. A quantify process always yields quality product.

JIT PHILOSOPHY

The roots of the JIT system can probably be traced to the Japanese environment. Japan has inherent limitations of lack of space and lack of natural resources. Japanese have developed an aversion towards all kinds of wastes. They view scrap and rework as waste and hence strive for perfect quality. They strongly believe that inventory storage wastes space and results in locking up of valuable materials and capital. Any thing that does not contribute value to the product is viewed as waste. Thus, it is quite natural for JIT philosophy to develop in Japan. Apart from eliminating wastes JIT has another important feature utilizing the full capability of the worker. Workers in JIT system are charged with responsibility for producing quality parts just in time to support the next production process. The objective of JIT system is to improve profits and return on investment through cost reductions, inventory reduction and quality improvement. Involvement of workers and eliminations of waste are the means of achieving these objectives. So, JIT manufacturing is a broad philosophy of continuous improvement that includes three mutually supportive components such as,

1. People participation and involvement 2. Total quality control 3. Just in time flow

The People Involvement

The stock less production or zero inventories have created an impression that JIT is only an inventory program. JIT has a strong human resource management component that must be recognized in order to exploit the full potential of technology component. The success of JIT depends upon how the companies train their human resource to have on appropriate skill, responsibility and co-ordinate and motivate people JIT seeks to fully utilize the creative talents of employees, suppliers, subcontractors and others who may contribute to the company’s improvement. Teamwork, discipline and supplier involvement are the important components that contribute to the success of JIT.

Total Quality Control (TQC)

Total Quality Control refers to the achievement and improvement in quality in a JIT company, which involve every department and each employee in the company. All employees should seek ways to serve the final customer better so that the company can remain competitive.

Internal customer Concept:

JIT companies believe in broad definition of a customer. The traditional organization define that customer is a person outside the company who buys and uses the products and services. JIT companies add to these definition the concept of immediate customer.(or internal customer) who is the next person or department or process who uses or further processes them. If each worker sends only defect free items to his immediate customer, no defective final products will be produced. Quality at Source: Each employee is given the responsibility for quality his workstation. Employees are trained in quality principles and testing procedures. They inspect their own work to ensure that the defectives are not passes to the next process. The defective element is more easily detected by the immediate customer than by the person who is responsible for it e.g. a part may not fit into the assembly if it is not properly made. A procedure called “JIDOKA” is brought into effect. Any employee who senses that a process is producing defects or is to go out of proper specification has the authority and the responsibility to stop the process. The concept behind this is that it is better to stop the production rather than producing defects. TQC is culture not a program: The TQC philosophy aims at the culture continuous improvement in which people always strive to do better. Companies continue to look for incremental product improvements and process refinements. The objective here is to reduce variability in processes and in parts because it is the variation, which makes the product deviation from quality. Total quality efforts extend to suppliers. When suppliers’ quality reaches a consistently high quality, there is no need for the supplier to go through incoming inspection. JIT Flow: A queue in front of the work center represents the WIP. Any form of inventory is a waste as per the JIT philosophy. When the queues are long, the cost of hiding the WIP becomes high and the time required for the job to flow through the required work center becomes excessive. The major objective of JIT is to have only the right item at the right place at the right time. This practice reduces the WIP and hence the working capital

requirement but also the floor space and the flow through time. Thus the important aspects that support the JIT flow are

• Uniform production rate and mixed model assembly. • Pull method of coordinating work centers. • Quick and inexpensive setups. • Multi skilled workforce and flexible facilities. • High quality levels with no rejects or reworks.

The JIT system is represented in the following figure.

Major Elements of Just in Time

1. Flow Layout:

The physical layout of production facilities is arranged, so that the process flow is streamlined, i.e., for each component, the proportion of value-added time should be more, there should be minimum queuing and non-value-added items.

2. Smoothed build up rate:

The build up rate should be smooth over a monthly cycle. To achieve this, under capacity scheduling is resorted to so that they can respond to demand changes.

3. Mixed Model Scheduling:

JIT objective is to match the production rate to demand as closely as possible. One way of doing this is to increase the flexibility of production lines to allow concurrent assembly of different models on the same line.

4. Small lots and minimum setup time:

The objective of minimizing setup times is to reduce the batch sizes to the minimum possible. This reduces the minimum cycle time and inventory.

5. Buffer stock removal:

Constant elimination of buffer stocks is emphasized to highlight production problems scheduled by high inventory levels.

6. Kanban card:

It is a pull system of managing material movement comprising of “Kanban card” based on information system. It helps to trigger the movements of material from one operation to another (next). Merely by alternating the frequency of circulating Kanban, the production system can be made to adjust to demand fluctuations within limits.

The number of cards in the system determines the total inventory. Hence, the objective is to minimize the number of kanbans.

7. Quality:

The achievement of high quality levels is a prerequisite of successful JIT. Zero defect, statistical process control, process data collection and worker centred quality are commonly used quality programmes.

8. Product and process simplification:

This is achieved through:

(i) Rationalization of product range (ii) Simplification of methods of manufacture (iii) Simplification through component item standardisation

9. Standardised container:

JIT emphasizes small standardized containers. This simplifies material movement.

10. Flexible workforce:

Flexible workforce is developed through cross-functional training. It is necessary to match the production rate and demand rate as closely as possible.

11. Continuous improvement:

JIT is not one time effort. It is a philosophy of continuous improvement.

12. JIT purchasing:

Materials and components are purchased in accordance with well defined requirements in terms of quality, quantity and delivery.

The Impact of JIT on Manufacturing Planning

and Control

JIT covers more than MPC activities but impacts on all the areas of MPC framework. JIT provides for greatly streamlined execution on shop floor and in purchasing. JIT offers the potential for eliminating of large portions of standard shop floor control systems, for sharply reducing the cost of detailed shop scheduling, for significant reductions in work-in process and lead times, and for better vendor scheduling. In the detailed MRP planning of engine, JIT plays a strong role in reducing the number of parts planned and number of levels in the bill of materials. Production plans and master production schedules that provide information about what degrees of level capacity loading is necessary for smooth shop operations, will be required. In many cases this also requires a rate based MPS, i.e., so many units per hour or day. This drive towards more stable, level, daily mix schedules dictates many of the required JIT activities, such as setup time reduction and reduction of lead time. This, in turn, can impact demand management activities. Execution under JIT is based on the concept that orders will move through the factory so quickly that it is not necessary to track their progress with a complex shop-floor control system. A similar argument holds for purchased items. The JIT approach in execution is focused on simplicity. The intent is to so design the manufacturing cells, products, and systems that goods flow through very routinely.

The Hidden Factory

A manufacturing firm can be thought of as comprising two “factories”. One makes products and other (the hidden factory) processes transactions on paper and computer system. The former factory incurs relatively lesser cost as compared to the latter. A major driver for these costs is transactions that include ordering, execution, and confirmation of materials moving from one location to another. Under JIT, the goal is to eliminate the vast majority of this work and the associated costs. Balancing transactions that include planning, production control, purchasing, master scheduling, forecasting, and customer order processing/ maintenance comprise 10 to 20 percent of the total manufacturing overhead costs. JIT offers a significant opportunity to sharply reduce these costs. Quality transactions include identification and communication of specifications, certification, and recording of required backup data. JIT, with closer coupling of production and consumption, has faster quality monitoring and response capability. One way in which firms are attacking the hidden factory is by finding ways to significantly reduce the number of transactions. JIT is based on stabilized transactions. Still another attack on hidden factory transaction costs is through automation of transactions, such as with bar coding, and the elimination of redundancies in data entry. JIT is clearly a key in the pursuit of achieving hidden factory cost reductions.

JIT Cornerstones and Linkages

The figure given below provides a holistic view of JIT and the linkage to MPC systems. This holistic model depicts JIT as having three cornerstones: product design, manufacturing process design, and the whole person concept. These all interact with the MPC system; JIT provides the linkage of these four areas.

Critical activities in product design include quality, designing for manufacture n existing cells, and reducing the number of “real” levels in the bill of materials to as few as possible. Some firms say there should be no more than two or three (phantom levels not controlled separately are not counted). By not having more than three levels in the bill of materials, the products will only have to go into inventory and out again, with MRP-based planning, once or twice as they are produced.

A natural linkage is between the bill of material level reduction and the design of the manufacturing process cells. For the use of fewer levels to be practical, manufacturing process has to be so put in place that a number of product conversion steps are included in routing. A related manufacturing process objective has to do with “efficiency”. Efficiency in the cells needs to be defined in material terms, not in the more common currencies of labor and capital utilization. The objective is to concentrate

on material velocity. Jobs must flow through in short cycle times; so detailed tracking is not required.

“Band width” is another important notion in designing manufacturing processes. A wide bandwidth system is one that has enough surge capacity to take on a fairly mixed set of products, and some variation in demand for the products, as well. The impact on MPC system design is through the focus on inventory & through put time reduction, which means that inventory is not built to level out capacity requirements. JIT system are designed to be responsive to as large a set of demands as possible. Superior manufacturing processes support greater bandwidth. The objective is to be able to make any product, right behind any other, with minimum disruption.

The whole person concept is the third cornerstone to JIT. The whole person concept will continually apply training, study, process improvement, and whatever else is needed for the elimination of recurring problems. The objective is continually learning and improvement. The whole person concept recognizes that the workers range of capabilities and level of knowledge is asset to the firm. Education and cross training are continuing investments in this asset base. As the asset base grows the need for overhead support is reduced, and overhead personnel can be redeployed to address other issues.

The whole person concept has a very significant impact on MPC system design and operation. Surge capacity in direct labor personnel means that these people will not be fully utilized in direct production activities. In fact, the whole person concept is based on the premises of hiring people, not just their muscles. As a consequence, direct workers are cross-trained to take on many tasks not usually associated with “direct labor”. Included are maintenance of equipment, education, process improvement, data entry and scheduling. From a MPC standpoint, the key point is that the whole person concept puts a greater emphasis on scheduling by the workers and less on scheduling by the centralized staff function. The entire process is fostered by the inherent JIT push towards simplification. With no defects, zero inventories, no disturbance, and fast throughput, detailed scheduling is easier; moreover, any problems that arise tend to be local in nature and amenable to solution on decentralized basis. Also depicted in fig. is the two-way relationship of JIT to manufacturing, planning and control. If the bill of material is reduced to two or three levels, the detailed MRP planning and associated transaction cost can be cut significantly. If all detailed tracking is done by direct laborers under the whole person concept, additional savings can be achieved.

Kanban System

Kanban system is a simple information system used by a work center to signal its supplier work center to request a replacement container and to authorize production of another container of that particular item. The name comes from a Japanese word “Kanban” which means a card or sign. Originally a card was used to signal the supplying work center. A work center can use a variety e.g. a flashing light, the empty container or a computer communication or a message. The purpose of the kanban system is to signal the need for more parts and to ensure that those parts are produced in time to support subsequent fabrication or assembly. This is achieved by pulling parts through the assembly line. Only final assembly line receives a schedule from the dispatch office. All other operators and suppliers receive production orders (Kanban cards) from the subsequent (using) work centers.

The Kanban system is a physical control system consisting of cards and containers. In the two cards kanban system, two types of cards are used. The production card (p-card) authorizes the work centers to make on standard container of a particular part specified on the card. Since these cards are continually reused, they are issued only when the production of an item is to be started or changed significantly.

A working of a Kanban system is shown in fig. below

Fig. Working of Kanban System

The work of the system is as follows:

Assume that the containers are moved one at a time. When the containers of the parts is emptied at work center B, the empty container and the withdrawal are taken back to work center A. the production card form a full container of parts is removed from its container and replaced by the withdrawal card. The production card is then placed in the kanban receiving post at work center A, there by authorizing production of another

container of parts. The empty container is left at the work center A. The full container and its withdrawal card are moved to work center B and placed in the input area. When this container of parts is used, its withdrawal card is empty container are taken back to work center A and the cycle is repeated.

The number of containers needed to operate a work center is a function of the demand rate, container rate and the circulating time for a container.

The number of container is computed using the formula;

n = D T C

where n = total number of containers. D = Demand rate of using work center. C = Container size in number of parts. T = Time for the container to complete entire cycle (referred to as lead time)

Inventory can be decreased by reducing the size of the containers or the number of containers used. This is done by reducing the time required to circulate the container including its machine setup time operation time, waiting time or move time.

Kanban system can be a very simple and effective method of co-coordinating work centers and vendors. The organization must be well disciplined so that there is always a authorizing kanban with every container, ensuring that only appropriate items are produced and excessive inventory does not build up.

Benefits of Just in Time

The benefits of JIT are:

• Better quality products

• Quality is the responsibility of every worker, not just quality

control inspectors

• Reduced scrap and rework

• Reduced cycle times

• Lower setup times

• Smoother production flow

• Less inventory, of raw materials, work-in-progress and

finished goods

• Cost savings

• Higher productivity

• Higher worker participation

• More skilled workforce, able and wiling to switch roles

• Reduced space requirements

• Improved relationships with suppliers

However you should be absolutely clear that implementing a JIT system is a task that cannot be undertaken lightly. It will be expensive in terms of management time and effort, both in terms of the initial implementation and in terms of the continuing effort required to run the system over time.

Challenges in implementation of JIT

Though increasing usage of just-in-time techniques is reported, academics, including Karmarkar at UCLA (Anderson) and Cusumano at MIT (Sloan), as well as practitioners caveat the increasing popularity of JIT philosophy. They suggest that pure JIT is appropriate only for limited economic environments, that it is ineffective in some organizational cultures, that it is unattainable by many suppliers, and that, in practice; it does not reduce global costs. External Obstacles:

Just-in-time faces difficulties under current the economic environment. Both Karmarkar (1989) and Aggarwal (1985) identify that just-in-time system cannot cope with increasing rates in demand. JIT assumes the production rate at final assembly is even; Aggarwal (1985) specifies that a JIT master production schedule cannot tolerate load fluctuations of more than 10% and that it breaks down under larger deviations from average conditions. Economists such as Maury Harris, who heads PaineWebber's unit, speaks for many in stating that for this reason, JIT may not be fully appropriate for current management (Bleakley, 1994). JIT is also credited with motivating inflationary behaviors. According to Norris (1994), just in time assumes that additional inventory is always available for quick delivery at the same price as old inventories, and the fourth quarter 1993 upturn serves as a counterexample to this assumption. Shortages in certain commodities and a spectrum of consumer products motivated supply-based price hikes negatively impacting JIT companies; inflation in that quarter doubled from the prior quarter. Some economists had argued that JIT would tame the amplification of the business cycle effected by the reactionary moves in inventories; the argument was not borne out during the 1990-1991 recessionary period, with firms cutting their inventories near the average of past recessions (The Economist, 1993). The current higher costs for capital further detract from JIT practices. Global and Logistical Issues:

As would be expected, serious logistical issues impede the success of just-in-time. The brief 1992 railroad strike is often cited as a major example of the most obvious inherent risk within JIT (Seideman, 1992). General Motors was forced to shut down certain factories involving 75,000 workers on the first day of the strike, and would have experienced a total shutdown without immediate resolution; as a practical matter, some safety stock is required even in the purest of JIT environments. In its initial

implementation of JIT, Japanese managers did not have to seriously consider logistical issues in its localized, non-industrial state (Cusumano, 1994). Japan, however, are now experiencing the opposing geographical obstacle to JIT. Nissan began to experience difficulties with JIT deliveries in congested, urban areas as early as the 1970's when they adopted the Toyota style; difficulties not then experienced by suppliers enjoying the proximities of Toyoda City. In recent years, increasing congestion effected by rising rates of JIT deliveries forced the Japanese government to launch a media campaign encouraging companies to actually reduce the frequency of their deliveries (Cusumano, 1994). In theory, traditionally underestimated inventory carry costs heavily outweigh the increase in transportation costs, however many suppliers claim the opposite (Bleakley, 1994; Wise, 1989). For example, the apparel industry, due to its trendy nature, already practiced a high level of delivery delay. Further tightened delivery schedules under just-in-time are forcing a dramatic change in practice; air shipments, and their incremental costs, are becoming standard operating procedure, and some in the industry believe the change to be sub optimal (Armbruster, 1992). Logistical issues are further complicated by the new global marketplace. According to Cusumano, "the days when even Toyota can operate in a highly predictable and geographically small area within Japan are now over (1994)." Global sourcing affects longer pipelines and so, even under JIT tenets, forces higher inventories; one GE manager suggests a minimum of four to six weeks of incremental pipeline inventory when sourcing from South America, Europe, or Africa for US manufacture (McClenahen, 1990). The global market places other constraints on just-in-time. It means a greater sum risk of political or natural disaster (McClenahen, 1990), and may require significant financial and human resource commitment from the manufacturer to the supplier to establish a partnership strong enough to tolerate JIT discipline (McClenahen, 1990). Just-in-time requires high raw material quality to avoid stoppages (Wise, 1990), a requirement that can be impacted by global sourcing; one practicing manager advises that even the filtering of the operational definitions of quality through culture and language effects significant rework costs (McClenahen, 1990).

Japanese managers are experiencing cultural barriers to JIT as they globalize operations; e.g., it does not readily export the trust requisite to JIT to foreign suppliers (Cusumano, 1994). Historically, Japanese practitioners of just-in-time relied on well-trained workers capable of broad responsibility to eliminate waste and JIT productivity gains (Aggarwal, 1985; Cusumano, 1994). Recent shortages of Japanese blue-collar labor, an employment category resisted by the current generation, forced the importation of less skilled foreign labor, in turn negatively impacting quality

and productivity advantages, and requiring inspected in quality tactics (Cusumano, 1994). In general, the foundational culture on which Japanese production methods rely does not translate well; consider the difficulty Toyota managers encountered in persuading adoption of their traditional familial references, ie, where direct labor is referred to as "children" of the company.

Behavioral Constraints:

Prerequisite to the success of just-in-time is adequate human capital. Just-in-time assumes employees are motivated and perform at best when entrusted with increasing responsibility and authority. Intractable Accounting Systems:

Traditional accounting and financial measures generally tend to defeat just-in-time objectives. The short-term focus of financial measures such as ROI often deters executive commitment to the longer-term goals of JIT. According to Aggarwal (1985), kanban systems take at least two years to be considered operational, and do not normally achieve optimum results until five to ten years. The early commitments to JIT have negative impact on short-term results, so its abandonment is encouraged in potential takeover scenarios, external pressures for immediate performance, under increasing training costs, etc. (Keys, 1991). Successful JIT implementers often report no less than a total abandonment of standard cost accounting, a dramatic move considered infeasible by many companies, setting the stage for resistance within the accounting units (Wise, 1990). Small Supplier Difficulties:

Small supplier companies report tremendous difficulties and resistance to JIT. A survey of such suppliers says that only half believe they can ever hope to take advantage of the efficiencies attributed to just-in-time (Sheridan, 1989). Small companies cannot reap the same scale of benefits from JIT since they lack the economies of scale that their high volume, repetitive manufacturing customers possess (Sheridan, 1989). They are forced to purchase in much smaller quantities, and hold far less influence over their suppliers to reciprocate just-in-time policies, and so view themselves as the "whipping boys (Sheridan, 1989)" for JIT.

Theoretical Difficulties:

As noted above, the JIT model cannot tolerate neither increasing rates, nor wide fluctuations, in demand. In addition, Zangwell (1992) has presented the following model where reducing setup time actually increases inventory levels.

Case Study

Organization name: Toyota Motor Company Organization Background: Manufacturer of motorcars The production system at Toyota is the most advanced JIT system in the world. The results of this system are seen on the highways of the world. For example, Toyota turns its inventories at rate of more than 10 times that of U.S. and European automobile manufacturers. It also turns its inventories about 50 percent faster than its Japanese competitors. The Toyota view of just-in time production shown in fig. below includes “information system”, with kanban below it. The information system encompasses the MPC activities necessary to support JIT execution. Kanban is the Toyota technique for controlling material flows. The Japanese word kanban means card, and Toyota uses two card systems. The first is transport or conveyance card and the second is a production card.

Fig. Toyota’s Production System

An example of the two cards, both for the same part number, is shown in fig. Fig. shows the flow of the kanban cards and the resultant “pull” approach to authorizing production.

Starting at the right side of fig. 4, work centre k123 decides to make one container (50 pieces) of part number 33311-3501 (it did so because a production kanban has just been received in the k123 box). Someone at k123 removed a container of parts awaiting production from stock location a-12. When this container is removed from the location, a conveyance kanban is taken from the container (the top half of fig. 3) and placed in the a-12 box. It authorizes someone to go stock location a-12 (with the conveyance kanban card). This container, while at stock location a-07, would have a production kanban attached (the lower half of fig. 3). This production kanban card is removed before the container is moved to stock location A-12, and placed in the A-07 Box. It then flows to the Y321 Box where it becomes the authorization for work centre Y321 to remove two containers of components from their input stock locations. These locations are not shown in fig 7.21, but the production kanban tells us that, to make 50 units of part number 33311-3501, work centre y321 needs material 33311-3504 (location A-05) and part number 33825-2474 (location B-03). In each of this location, one would find container with exactly 50 pieces.

The kanban cards replace all work orders and move tickets. To the extent that work-in– process is significantly reduced, the problem of sequencing job at work centers is also diminished. The system is completely visual and manual in execution. The chain of dual kanban cards can extend all the way back to the suppliers. Several of Toyota’s suppliers receive their authorizations to produce via kanban cards.

The kanban system is a pull system, because the work centers are only authorized to produce when they have a production kanban. They only get one when downstream wor4k center pulls a completed container of work from the producing work center’s output storage area. No work center is allowed to process input to output merely to keep workers busy. Nor is a work allowed to transport work (push) to a downstream work center. All movements are pulled, and workers are placed by the flow of kanban cards.

y = DL(1 + α) a

where: y = No. of kanban card sets

D = Demand per unit of time L = Lead time a = Container capacity α = Policy variable (safety shock)

FIGURE : Calculating the no. of kanbans

The number of kanban cards sets in the system directly determines the level of work-in-process inventory. The more kanban cards, the more containers filled waiting to be used at work center. The formula used to calculate the number of kanban cards needed is given in fig. 5. In this formula, there is a factor for including safety stock, which Toyota says should be less than 10%. Using the formula, no safety stock, and a container size of 1, we can see the philosophy of the system. If the work center requires eight units per day (one per hour) and it took one hour to

make one unit, only one set of kanban cards would be theoretically necessary; that is just as a unit was finished, it would be needed at a subsequent operation.

The container sizes are kept small and standard. Toyota feels that no container should have more than 10% of the day’s requirements. Since everything revolves around these containers and the flow of cards, a great deal of discipline is necessary. The following rules are used to keep the systems operating.

• Each container of parts must have a kanban card. • The parts are always pulled. The using department must come to

the providing department and not vice versa. • No parts may be obtained without a conveyance kanban card. • All containers contain their standard quantities and only the

standard container for the parts can be used. • No extra production is permitted. Production can only be started

upon receipt of a production kanban card.

These rules keep the shop floor under control. The execution effort is directed toward flawless following of the rules. Execution is also directed toward continual improvement. In kanban term, this means to reduce the number of kanban cards and, thereby, reduce the level of work-in-process inventory. Reducing the number of cards is consistent with an overall view of inventory as undesirable.

SINGLE CARD KANBAN:

The Toyota system is based on dual card kanban system, with both a production kanban and a conveyance kanban. There are other approaches involving only one card, its equivalent card, or no cards at all. A single card kanban system does not use a production kanban. It is the conveyance kanban that provides the primary control over material movement.

The somewhat greater autonomy provided by the single card kanban approaches is not without its costs. To the extent that work centers are allowed schedule flexibility, there necessarily will be greater inventory levels and a concomitant “hiding of the rocks”. It is also more cumbersome to reduce inventory levels directly than is the case by removing some of the kanbans from the system. Finally, the dual card approach provides a production schedule with less need for work rates being provided from a central staff activity. Despite these seeming costs of single card kanban system, the single card approach is far more widely used.

Summary and Conclusion

JIT is an important operational system for manufacturing and supplying companies to adopt and implement. Technically, procedurally and managerially it requires attention to

• Data, information and communication. • Assessment of requirements. • Programmes to change the structure of production, materials

handling, manufacturing processes and distribution facilities . • Improved methods of controlling unit supply costs. • Consideration of the buyer-supplier partnership and the possibility

of strategic collaboration.

JIT emphasizes superior organizational values and philosophies, long-term strategic goals, a two-way communication system, cooperation, harmonious relationships, functional structures, strong commitment and loyalty to the organization on the part of its members, and a consultative decision-making process. It is important to emphasize that the success of JIT is not the result of cultural, structural, or environmental factors, but rather success stems from planned management actions. It is the discipline, understanding, dedication, confidence, and continuous striving for improvement that make JIT successful.

References:

1. Vollmann T.E., Manufacturing Planning and Control Systems, Galgotia publications Ltd., New Delhi (2003)

2. David L., Just in Time, Jaico Publications Ltd., (2004)

Websites:

(i) http://kernow.curtin.edu.au/www/jit/jit.htm (ii) http://www.ifm.eng.cam.ac.uk/default.html (iii) http:/www.gemba.com