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Chapter 14 Just-in-Time Systems Just-in-time.

Repetitive production system in which processing and movement of materials and movement of materials and goods occur just as they are needed, usually in small batches. The result is a system with no idle items waiting to be processed, and no idle workers or equipment waiting for items to process. JIT Goals. The ultimate goal of JIT is a balanced system; that is, one that achieves a smooth, rapid flow of materials through the system. Those goals are: 1. Eliminate disruptions. Disruptions have a negative influence on the system by upsetting the smooth flow of products through the system, and they should be eliminated. 2. Make the system flexible. A flexible system is one that is robust enough to handle a mix of products, often on a daily basis, and to handle changes in the level of output while still maintaining balance and throughput speed. 3. Reduce setup times and lead times. Setup times and delivery lead times prolong a process without adding any value to the product. 4. Minimize inventory. Inventory is an idle resource, taking up space and adding cost to the system. It should be minimized or even eliminated wherever possible. 5. Eliminate waste. Waste represents unproductive resources. Waste include: a. Overproduction b. Waiting time c. Unnecessary transporting d. Inventory storage e. Scrap f. Inefficient work methods g. Product defects Building Blocks. The foundation is made up of four building blocks: 1. Product design 2. Process design 3. Personnel/organizational elements 4. Manufacturing planning and control Speed and simplicity are two common threads that run through these building blocks. Product Design. Three elements of product design are key to JIT systems: 1. Standard parts. The use of standard parts means that workers have fewer parts to deal with, and training times and costs are reduced. 2. Modular design. An extension of standard parts. Delayed differentiation is a delay in the decision about the manufacture of a certain product while the standard parts or modules are being produced. 3. Quality. The sine qua non (without which not) of JIT. Process Design. Seven aspects of product design are particularly important for JIT systems: 1. Small lot sizes 2. Setup time reduction 3. Manufacturing cells 4. Limited work in process 5. Quality improvement 6. Production flexibility 7. Little inventory storage Automation. Automatic detection of defects during production.

Preventive Maintenance. Maintaining equipment in good operating condition and replacing parts which have a tendency to fail before they actually do fail. Personnel Organizational Elements 1. Workers as assets. Well-trained and motivated workers are the heart of a JIT system. 2. Cross-trained workers. This adds to system flexibility because workers are able to help one another when bottlenecks occur or when a co-worker is absent. 3. Continuous improvement. JIT workers typically receive extensive training in statistical process control, quality improvement, and problem solving. Andon is a system of lights used at each workstation to signal problems or slowdowns. 4. Cost accounting. The method of allocating overhead. 5. Leadership/project management. Managers are expected to be leaders and facilitators, not order givers. Manufacturing Planning and Control Five elements of manufacturing planning and control are particularly important for JIT systems: 1. Level loading. JIT systems place a strong emphasis on achieving stable, level daily mix schedules. 2. Pull systems. System for moving work where a workstation pulls output from the preceding station as it is needed. Push system is a system for moving work where output is pushed to the next station as it is closed. 3. Visual systems. Kanban is a card or other device that communicates demand for work or materials from the preceding station. N = DT(1 + X)/C N Total number of containers D Planned usage rate of using work center T Average waiting time for replenishment of parts plus average production time for a container of parts X Policy variable set by management that reflects possible inefficiency in the system C Capacity of a standard container *D and T must use the same time units 4. Close vendor relationships. JIT systems typically have close relationships with vendors, who are expected to provide frequent small deliveries of high-quality goods. 5. Reduced transaction processing. The transactions can be classified as: a. Logistical transactions include ordering, execution, and confirmation of materials transported from one location to another. b. Balancing transactions include forecasting, production planning, production control, procurement, scheduling, and order processing. c. Quality transactions include determining and communicating specifications, monitoring, recording, and follow up activities. d. Change transactions primarily involve engineering changes and the ensuring changes generated in specifications, bills of material, scheduling, processing instructions, and so on. Benefits of JIT Systems 1. Reduced levels of in-process inventories, purchased goods, and finished goods 2. Reduced space requirements 3. Increased product quality and reduced scrap and rework 4. Reduced manufacturing lead times 5. Greater flexibility in changing the production mix 6. Smoother production flow with fewer disruptions caused by problems due to quality, shorter setup times, and multiskilled workers who can help each other and substitute for others.

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Increased productivity levels and utilization of equipment Worker participation in problem solving Pressure to build good relationships with vendors Reduction in the need for certain indirect labor, such as material handlers.

Planning a Successful Conversion to JIT System 1. Make sure top management is committed to the conversion and that they know what will be required 2. Study the operations carefully 3. Obtain the support and cooperation of workers 4. Begin by trying to reduce setup times while maintaining the current system. 5. Gradually convert operations, beginning at the end of the process and working backward. 6. As one of the last steps, convert suppliers to JIT and be prepared to work closely with them. 7. Be prepared to encounter obstacles to conversion. Obstacles to Conversion 1. Management may not be totally committed or may be unwilling to devote the necessary resources to conversion 2. Workers and/or management may not display a cooperative spirit. 3. Suppliers may resist for several reasons: a. Buyers may not be willing to commit the resources necessary to help them adapt to the JIT systems. b. They may be uneasy about long-term commitments to a buyer. c. Frequent, small deliveries may be difficult, especially if the supplier has other buyers who use traditional systems. d. The burden of quality control will shift to the supplier. e. Frequent engineering changes resulting from continuing JIT improvements by the buyer. JIT in Services An important key to JIT service is the ability to provide service when it is needed. That requires flexibility on the part of the provider, which generally means short setup times, and it requires clear communication on the part of the requester. OPERATIONS STRATEGY The JIT philosophy of production offers new perspectives on manufacturing that must be given serious consideration by managers in repetitive manufacturing who wish to be competitive. Potential adopters should carefully study the requirements and benefits of lean production system, as well as the difficulties and strengths of their current systems, before making a decision on whether to convert to JIT. Careful estimates of time and cost to convert, and assessment of how likely workers, managers, and suppliers are to cooperate in such an approach, are essential. The decision to convert can be sequential, giving management an opportunity to gain firsthand experience with portions of JIT without wholly committing themselves. For instance, improving vendor relations, reducing setup times, improving quality, and reducing waste and inefficiency are desirable goals in themselves. Moreover, a level production schedule is a necessary element of a JIT system, and achieving that will also be useful under a traditional system of operation.

The important thing is to not dismiss the concept of lean production without serious consideration, because it could turnout to give a formidable competitive advantage to ones company or ones competitors.