Management of Manufacturing Systems JIT Manufacturing "Just -in-Time"

(Lean Manufacturing and Stockless Production)

Assignment

Amit Ramawat MBA/8001/12 Date: - 10 DEC 201!

"ntro#uction
Just-in-time (JIT) manufacturing is a way of managing manufacturing systems that could reduce waste and lower cost thus increasing !rofit" In its most #asic e$!lanation and !rinci!le JIT is e%ery com!onent in the manufacturing system arri%ing &ust in time for it to #e used" Since the !roducts arri%e &ust in time there is no need for stock holding facilities of any kind" The most common industry using JIT manufacturing is the automo#ile industries" 'owe%er many other com!anies of all si(es and !roducts are currently using and transitioning to &ust-in-time manufacturing" )lthough &ust-in-time manufacturing sounds like a %ery sim!le a!!lication im!lementing it can #e a %ery costly and difficult task"

$istory
JIT manufacturing can #e traced #ack to the late *+,,-s (Just In Time Toyota)" .li /hitney contri#uted his conce!t of interchangea#le !arts to the idea of JIT manufacturing in *+00" This conce!t was de%elo!ed when /hitney took a contract from the 1nited States )rmy to manufacture *, ,,, muskets at the low !rice of 2*3"4, each (Just In Time Toyota)" 5%er the ne$t se%eral years manufactures o%erall focused on the de%elo!ment of indi%idual technologies" Through these years few !eo!le were concerned with the !rocesses that each !roduct went through during !roduction (Just In Time Toyota)"

.arly industrial engineers in *60, #egan to #e concerned with indi%idual work methods a!!lying science to management and all work elements" 7rederick Taylor contri#uted the idea of standardi(ed work (Just In Time Toyota)" 7rank 8il#ert conducted a motion study which led to the de%elo!ment of !rocess charting and organi(ed la#or tasks (Just In Time Toyota)" In *0*4 'enry 7ord introduced the idea of the mo%ing assem#ly line to the world while !roducing his Model-T 7ord this re%olutioni(ed manufacturing ('enry 7ord n"d")" 9y *0*: 7ord #egan to im!lement the idea of JIT manufacturing (/ren *000)" This reduced the in%entory needed from 2:, million to 2;, million dollars to !roduce the same num#er of %ehicles (/ren *000)" The !resent idea of JIT manufacturing can #e traced to Toyota motor com!any in Ja!an" 'owe%er to #egin use of JIT manufacturing in Ja!an they first researched )merican !roduction methods focusing on 7ord-s !ractices (Just In Time Toyota)" In Ja!an JIT manufacturing is referred to as the Toyota Production System (9easley J" ." n"d")" The reali(ation for the new system came after /orld /ar II when the Ja!anese automoti%e manufactures knew they were far #ehind the )merican motor com!anies" The !resident of Toyota made a comment a#out the ga! "<atch u! with )merica in three years otherwise the automo#ile industry of Ja!an will not sur%i%e"" (9easley J" ." n"d") JIT manufacturing is a result of limited demand s!ace and resources in Ja!an com!ared to )merica" 9y assessing and sol%ing these !ro#lems Toyota was a#le to increase efficiency and kee! u! with )merican auto manufacturing" Ten years after the first introduction of the new !roduction system Toyota successfully im!lemented this techni=ue across the com!any"

This #egan started to #e im!lemented into the western world during the late *0+,>s to early *06,>s"

%oyota &ro#uction System

Toyota reali(ed that they could not follow the same manufacturing techni=ue as )merican manufacturing #ecause of the their relati%ely low s!ace resources and demand" )t the time the )merican auto manufacturers used the traditional way such as to make a #atch of certain !roducts (9easley J" ." n"d")" To do this they ordered enough !arts to com!lete the #atch so they ha%e to stock or store the materials" So 5hno came u! with a system that would #etter fit Ja!an>s ca!a#ilities" The whole system is #ased on the elimination of waste !rinci!le" Time resources and materials were all areas where waste could #e found according to 5hno" The following are more s!ecific areas that could #e corrected to im!ro%e efficiency?

"o%er!roduction - waste from !roducing more than is needed time s!ent waiting - waste such as that associated with a worker #eing idle whilst waiting for another worker to !ass him an item he needs (e"g" such as may occur in a se=uential line !roduction !rocess)

trans!ortation@mo%ement - waste such as that associated with trans!orting@mo%ing items around a factory

!rocessing time - waste such as that associated with s!ending more time than is necessary !rocessing an item on a machine

in%entory - waste associated with kee!ing stocks

defects - waste associated with defecti%e items"(9easley J" ." n"d")

5hno disco%ered two ways to reduce waste &ust-in-time and autonomation" The theory of &ust-in-time is the #asic !rinci!le for the ma&ority of his manufacturing system (9easley J" ." n"d")" Stock is seen as unnecessary and a waste using this method" Materials and resources are !ro%ided only when they are ready to #e used in the !roduction system" )utonomation is techni=ue that regulates the amount of human interaction concerning ins!ections of !arts or !roducts" The goal is to limit the human in%ol%ement and make the system as automated as !ossi#le" ) de%ice will #e im!lemented into the system to detect defects and only when that de%ice detects a defect is there a human ins!ection" 'owe%er when a defect is detected the system sto!s and will not start again until the !ro#lem is recogni(ed and fi$ed" Toyota used the kan#an to control the flow of in!uts and out!ut in the !roduction system" Aan#an is a Ja!anese word that #asically means sign" This was a "rectangular !iece of !a!er within a trans!arent %inyl en%elo!e (9easley J" ." n"d")" that ga%e instructions on what needed to #e done" It ga%e instructions such as things that needed to #e withdrawn from the system items that needed to #e !roduced and amounts of materials need and when" There are two main ty!es of kan#an the !roduction kan#an and the con%eyance kan#an (Just In Time (JIT) n"d")" The !roduction kan#an lets the workers know that more of a certain !art needs to #e !roduced" The con%eyance kan#an lets them know that !arts need to #e trans!orted to another center" This ty!e can also #e called a mo%e or withdrawal kan#an" The kan#an is classified as a !ull system in !roduction which means that when !arts are need they are !ulled and sent to the location in need (Just In Time (JIT) n"d")" The starting !oint for a !ull system is the customers and then it works it way #ackwards all

the way to the original resources (8lenn T" ;,,*)" This differs from a !ush system in that a !ush system has a set schedule and all the !arts are mo%ed when the schedule is com!lete" 'owe%er the kan#an did not allow or take into account defects" So it an item was found to ha%e a defect the end !roduction =uantity would not #e achie%ed" There are three key rules when using the kan#an (Just In Time (JIT) n"d")" 7irst no !art can #e manufactured with authori(ation from the kan#an" Second each container has a !roduction and con%eyance kan#an" Third all containers used are standard" The num#er and ty!e of containers used is determined #y the management" In )merica this is generally referred to as kitting and has #asically the same conce!ts limitations and rules (Ideal Manufacturing Scene)" Limiting setu! time is also a key factor in the Toyota Production System" Since setu! time is also down time which means the !roduction line has sto!!ed and em!loyees are getting !aid for waiting" To decrease setu! time the machines were reengineered so that o!timal setu! time could #e achie%ed thus sa%ing money (9easley J" ." n"d")"

"m'(ementation an# "ntegration

Im!lementing or integrating JIT into a com!any is not a decision made lightly" It must #e thought through and !lanned %ery carefully" Im!lementing JIT will not ha!!en in a o%ernight it takes time and commitment" <ommitment must #e made at all le%els within the com!any to successfully im!lement it into the system"

)*+ecti,es
)n o%erall o#&ecti%e is to limit resources used in the manufacturing system to only those needed (Just-In-Time Manufacturing)" There are si$ other o#&ecti%es that are a key !art to o#tain the o%erall o#&ecti%e" The first is to o!timi(e each indi%idual ste! of the manufacturing system" In other words make !art as efficient as !ossi#le to get the most from the least" Second is to make a a !roduct with no flaws or defects" This ensures that each !art of the !roduction line will go as !lanned" Third is to reduce the manufacturing cost the chea!er it is to make the !roduct the larger the !rofit for the com!any" 7ourth is to make a !roduct that is demanded #y consumers" If there is no demand then then there is only money lost" 7ifth there needs to #e fle$i#ility in

the system" Things will not always go as !lanned and there needs to #e a fle$i#le enough system so that it can #e modified easily" Si$th there needs to #e a strong and relia#le relationshi! #etween customers and su!!liers" Since JIT techni=ue has %irtually no e$tra stock or materials the com!anies need to rely on each other to #e relia#le and on time" These o#&ecti%es need to #e taken into consideration #y any com!any looking to integrate JIT and are crucial to #eing successful in the integration"

Keys to Implementation and Integration

Just-in Time manufacturing is difficult to setu! #ecause each com!any needs to !ersonali(e for their ty!e of com!any to fit their s!ecific needs" )lthough many com!anies seek hel! from consultant firms for the difficult task ahead there are many key !oints that they they can address themsel%es (Just-In-Time Manufacturing)" <hanging o%er the current out!ut !roduction in the com!anies factories to limited or constant =uantity is a good start in the !rocess to determine e$actly how many resources are going into making a certain amount of !roducts" setu! time is an issue that each com!any can look to im!ro%e its efficiency" ) good rule is to #e a#le to change the setu! in a single digit time frame" Schedule meetings on a regular #asis with the workers to gather information on !ro#lems as well as a !ossi#le !ossi#le solutions and other suggestions (9easley J" ." n"d")" This will make the workers feel in%ol%ed in the im!lementation and may result in a !ositi%e attitude a#out the change o%er" This could mean redesigning se%eral areas such as the !roduct or the !rocess itself" 5nce a reduced setu! time is achie%e the system now has the

a#ility to more efficiently !roduce smaller #atches of !roducts" 'owe%er this will re=uire deli%eries of materials to #e more often" Beducing time in #etween the trans!ortation of the indi%idual !arts can also im!ro%e the efficiency" To accom!lish this work stations can #e mo%ed closer together" )s well as the amount of time a !art is waiting to #e !rocessed at an indi%idual station can #e lowered" 7inding a su!!lier closer to the factory or con%incing one to relocate closer will also reduce lead time" 1sing down time is also another way to hel! with !roducti%ity and efficiency" /hile a worker or machine is waiting for other !arts of the system to #e used maintenance can #e !erformed on the machinery" This makes the most of the workers time and can hel! to !re%ent future #reakdowns do to lack of maintenance" Pro%ide the workers with more res!onsi#ilities and training" This can include training on se%eral machines a#ility to maintain the machines and !erform correct ins!ection This will make the the com!anies work force more %ersatile and can hel! with issues of a#sences" )lthough the kan#an system is not re=uired in a JIT system it is a good organi(ational tool to hel! eliminate misunderstandings and increase communication" These !oints are things the com!any can control and im!ro%e to hel! the successful integration of the JIT system"

Su''(iers
Since JIT is a stockless !roduction and does not allow room for defects or error ha%ing trustworthy relia#le su!!liers is an im!ortant factor" /hen choosing a relia#le su!!lier consider their location and !rior occurrences with la#or issues such as strikes" 5nce a relia#le su!!lier is found creating a good relationshi! is the ne$t ste!" This is a two way relationshi! in that #oth the com!any and su!!lier get some !ositi%e out of it (Just-In-Time Manufacturing)" The com!any gets !roducts or material with no errors or

defects a =uality !artnershi! and gets e%erything on time according to deli%ery schedules" )lso the su!!lier must ha%e a #ack-u! !lan incase for emergencies such as strike weather conditions and any other !ro#lem that many arise" The su!!lier gets a long term contract constant demand for their !roduct and a good constant !rice"

-on-Automoti,e Com'anies
/hen discussing JIT manufacturing usually it is #eing a!!lied to the !roduction of a tangi#le item more s!ecifically automoti%e manufacturing" Strategy Manufacturing Inc" is an e$am!le of an non-automoti%e com!any that e$!lored the o!tion of JIT as an manufacturing techni=ue (8lenn T" ;,,*)" Strategy s!eciali(es in !rinting !u#lications such as manuals #ook and manuscri!ts" They originally !rinted in large #atches and that was a !ro#lem #ecause they could not kee! u! with consumer demand #ecause of switching from one !u#lication to the ne$t took to long" They tried im!lements JIT with their current technology #ut this was not sufficient to there needs" It increased their efficiency when !rinting low %olumes of !u#lication #ut with higher %olumes it was more e$!ensi%e and !laced limitations on the com!anies out!ut" )fter u!dating their system and !urchasing an on demand !rinting system they were #etter a#le to im!lement se%eral com!onents of JIT" Some of the com!onents #eing shorter setu! times smaller cycle times and fewer defects" The most influential com!onent #eing setu! times which ga%e them

the a#ility to change !rinting one !u#lication to another rather fast" Cow their system is suita#le for #oth high and low %olume #atches and is %ery efficient and cost effecti%e" This also allowed them to switch to a !ull system where they !roduce !u#lications according to consumer demands" This es!ecially hel!ed with !rinting manuals #ecause the com!anies re=uired high %olumes that were switched a#out fi%e times a year" 9efore this left Strategy with outdated and useless manuals in in%entory" The com!any now runs it !roduction all day"

American Automoti,e "n#ustries

)merican automoti%e com!anies such as 7ord and 8eneral Motors ha%e im!lemented JIT into their !roduction howe%er not as smoothly as Toyota" They came across se%eral !ro#lems including strikes and the su!!liers ina#ility to su!!ly the materials demanded (8lenn T" ;,,*)" Since JIT is a stockless !roduction system it lea%es the com!any at the mercy of the su!!liers" 7ord e$!erienced a !ro#lem with a JIT su!!lier that may ha%e cost them tens of millions of dollars" They had to shut down si$ !lants lea%ing many workers with nothing to do" So the !lant was still costing money to run #ut nothing !roducti%e was taking !lace" ) similar !ro#lem took !lace with 8eneral Motors in *00: resulting in them tem!orarily closing o%er two-thirds of their !lants" Their su!!ly com!any had a se%enteen day strike and without ha%ing any emergency or #ack-u! materials there was nothing that could #e done to correct the !ro#lem" .%en after the strike was o%er there were still com!lications for some time" )fter the strike was o%er the su!!lier had to s!eed u! !roduction to meet 8eneral Motors needs resulting in a large amount of defecti%e !roducts" This se%enteen day strike resulted in 8eneral Motors loosing #etween :,,-6,, million dollars in !rofits" ) statement #y Aeith <rain

of )utomoti%e news sums u! these !ro#lem %ery well "JIT manufacturing along with single source su!!liers creates terrific manufacturing efficiencies =uality im!ro%ements and lower costs" 1nfortunately the downside is it creates and )chilles> heel for manufacturers" any natural or unnatural disaster at any critical su!!ly !lant whether it>s a flood fire or strike- that shuts off the flow of materials from that critical !lant to the assem#ly !rocess can shut down a manufacturing o!eration in a matter of hours""(8lenn T" ;,,*)

Barriers for Sma(( Manufacturing Enter'rises .SME/

Small manufacturing enter!rises ha%e &ust as much to gain as large enter!rises from im!lementing JIT into their com!any" They also a few ad%antages #y #eing smaller than the larger com!anies" 'owe%er There are more #arriers for them to o%ercome and they are taking a larger risk" )n acce!ted measurement of a small manufacturing enter!rises are fewer than *,, em!loyees ha%ing a sales %olume of no more than D million dollars (Johnston B" 9" n"d")" Some ad%antages that SM.s ha%e are they can #e owned !ri%ately which means the decision to switch does not ha%e to #e held u! in an a!!ro%al !rocess" )lso with fewer em!loyees it is easier to communicate the new system to the em!loyee" Since they ha%e fewer em!loyees many SM.s train their em!loyees on se%eral machine in case of sudden a#sences" That gi%es them one less com!onent to worry a#out" They also are used to making smaller #atches of !roducts and switches o%er so thus makes them more fle$i#le" Many SM.s do not ha%e union contracts to worry a#out which makes it much easier to make the change o%er" )lthough SM.s ha%e se%eral ad%antages their risks are much greater and there si(e creates se%eral #arriers" The first is money is

always an issue with smaller com!anies and im!lementing JIT can cost a relati%ely large amount of money without any short time returns" Since smaller com!anies do not ha%e a large amount of free cash and are less susce!ti#le to get loans coming u! with a!!ro!riate funding can #e a huge issue" )lso since SM.s do not use as large an amount of materials they do not ha%e any #argaining !ower o%er the larger manufacturing com!anies" This can restrict them form getting a good !rice ordering only small amounts at a time"

A#,antages
There are many ad%antages of that a manufacture can recei%e from JIT" 'owe%er they can differ from com!any to com!any" Listed #elow are some of the ad%antages o%er%iewed throughout this !a!er?

Possi#le increase in !rofits Euality !roducts Euicker setu! .liminates costs of storage facilities More fle$i#le em!loyees Euality relationshi!s with su!!liers .limination of waste Co down time

Fisad%antages

)lthough the ad%antages outweigh the disad%antages the disad%antages can ha%e a negati%e effect on the com!any" Listed #elow are some of the disad%antages o%er%iewed throughout the !a!er?

Long term commitment Possi#le large initial cost with no short term returns Pro#lems with su!!lier can cost com!any large amounts of money Bisk of ne%er successfully im!lementing JIT

&(anning for 0"%

It is im!ossi#le to esta#lish a new JIT system that can #e used successfully without modification" Since each manufacturing !rocess is different (e"g" in terms of 8oals Product re=uirements <ustomer re=uirements etc") it is u! to the indi%idual com!any to determine the degree of a!!ro!riateness and the final a!!lication of JIT" 'owe%er it is %ery im!ortant to define the !lan and o#&ecti%es #efore setting u! a JIT manufacturing system"

Defining the Planning

Fefining the !lanning !rocess for a JIT manufacturing system re=uires an understanding of the o#&ecti%es of JIT and the goals and o#&ecti%es of the JIT system" )fter the o#&ecti%es are esta#lished for the manufacturing the !rocess of !lanning #ecomes one of determining what is re=uired to meet those o#&ecti%es" The goal of a JIT a!!roach is to de%elo! a system that allows a manufacturer to ha%e only the materials e=ui!ment and !eo!le on hand re=uired to do the &o#" )chie%ing this goal re=uires si$ #asic o#&ecti%es? Integrating and o!timi(ing e%ery ste! of the manufacturing !rocess Producing =uality !roduct Beducing manufacturing cost Producing !roduct on demand

Fe%elo!ing manufacturing fle$i#ility Aee!ing commitments and links made #etween <ustomers and Su!!liers It should #e noted that o#taining these o#&ecti%es does not automatically make a com!any a JIT manufacturer on the other hand failing to achie%e e%en one of these o#&ecti%es will !re%ent a manufacturer from esta#lishing a successful JIT system" " A company cannot decide to implement 0"%; they must earn the right to use 0"% by revising their quality procurement systems." Integrating and Optimizing The manufacturing system is a continual !rocess of reducing the num#er of discrete ste!s re=uired to com!lete a !articular !rocess rather than !lateaus of ste!s" Bemo%al of bottlenecks in the manufacturing !rocess is a critical ste! in integration" 5ne of the #est ways to accom!lish this o#&ecti%e is to !lan for *,, G defect free =uality"Integrating and o!timi(ing will in%ol%e reducing the need for unnecessary functions and systems such as ins!ection rework loo!s and in%entory"

Producing a Quality Product "Total Euality <ontrol" is one of the fundamental goals in JIT manufacturing" Total Euality <ontrol (TE<) em!hasi(es the =uality at e%ery stage of manufacture including !roduct design down to the !urchase of raw materials" Euality control is carried out at e%ery stage of the manufacturing ste!sH from the source to the final ste! rather than relying on a single !rocessing stage which im!lements =uality control on the final !roduct" .ach indi%idual and function in%ol%ed in the manufacturing system must therefore acce!t the res!onsi#ility for the =uality le%el of its !roducts" This conce!t introduces the correction of the !ro#lem #efore many other defecti%e units ha%e #een com!leted" Reducing Manufacturing Cost Fesigning !roducts that facilitate and ease manufacturing !rocesses hel!s to reduce the cost of manufacturing and #uilding the !roduct to s!ecifications" 5ne as!ect in designing !roducts for manufactura#ility is the need to esta#lish a good em!loyer and em!loyee relationshi!" This is to culti%ate and ta! the resources of the !roduction e$!erts (!roduction floor em!loyee) and the line em!loyees to de%elo! cost sa%ing solutions" Partici!atory =uality !rograms utili(e em!loyee knowledge a#out their &o# functions and re%iew the de!artment !erformance encouraging with rewards for suggested cost sa%ing solutions"

&ro#ucing 'ro#uct on #eman#

The fundamental !rinci!le of JIT is the conce!t of !roducing !roduct only as needed or on demand" This im!lies that !roduct is not held in inventory and !roduction is only initiated #y demand" )do!ting the !roduce-on-demand conce!t will ensure that only materials that are needed are !rocessed and that la#our will #e e$!ended only on goods that will #e shi!!ed to a customer" )t the end of the !roduction cycle there would #e no e$cess in%entory"

De,e(o'ing Manufacturing 1(e2i*i(ity

Manufacturing fle$i#ility is the a#ility to start new !ro&ects or the rate at which the !roduction mi$ can #e ad&usted to meet customer demand" Planning for manufacturing fle$i#ility re=uires the understanding of the elements in the manufacturing !rocess and identifying elements in the !rocess that restrict fle$i#ility and im!ro%ing on these areas" The uni=ue feature of JIT is the change from a P1S' to a P1LL system" The idea #ehind this conce!t is that work should not #e !ushed on to the ne$t worker until that worker is ready for it" )s such manufacturing fle$i#ility re=uires !roduction managers to consider the following as!ects in scheduling and manufacturing fle$i#ility im!ro%ement? su!!lier lead time the need to ensure fast and relia#le deli%ery of finished goods to the customer !roduction !rocess time !rocess setu! time #ottlenecks in !roduction !rocess should #e reduced and resources (e"g" workers machines should #e fully utili(ed"

3ee'ing Commitments an# 4in5s ma#e *etween Customers an# Su''(iers

The cor!orate commitment to de%elo!ing the internal structures and the customer and su!!lier #ases to su!!ort JIT manufacturing is the !rimary re=uirement for de%elo!ing the JIT system" Trust and commitment #etween the su!!lier and the customer is a must #ecause e%ery Just-in-Time o!eration relies on it" 7ailure to kee! the commitments is a serious form of #reak-down in a JIT system" Be=uirements for JIT manufacturing

Re6uirements for 0"% Manufacturing

The cor!orate commitment to de%elo!ing the internal structures and the customer and su!!lier #ases to su!!ort JIT manufacturing is the !rimary re=uirement for de%elo!ing a %ia#le JIT system" To #e a#le to esta#lish a JIT manufacturing system e%ery de!artment should ha%e some commitment to align with a common goal" This goal must also #e su!!orted #y the com!any>s to! management in order to ha%e resources and time allocated to de%elo!ing the necessary systems and !rocedures"

) significant financial commitment is necessary during the early stages of de%elo!ment and im!lementation to change o%er to a JIT system" This system howe%er needs to #e methodically de%elo!ed on a scale that is within the em!loyer>s means from #oth a financial and an a!!lications stand!oint" 1ltimately the o!eration of a JIT system will re=uire the unwa%ering su!!ort and commitment of the entire com!any" Management needs to come with gri!s during the early transition !hase of im!lementing JIT" The !ros!ect must #e faced of some !roduction loss and changes to management !rocedures and o!eration !olicies while e$isting o!erations and manufacturing !ro#lems are #eing concurrently resol%ed" Just-in-Time will re=uire e%ery de!artment in a com!any to contri#ute to the o%erall success of the system and !atience is re=uired as results are not instantaneous" In the long term the rewards are worth the initial set#acks" Trust and commitment #etween the su!!lier and the customer is a must and it is essential to kee! these commitments as this is to ensure that customer>s confidence in a su!!lier>s a#ility to meet !roduction schedules"

Critica( E(ements in 0"% manufacturing

Partnershi!s <ommitments <ontracts Su!!orting Partnershi!s Fe%elo!ing JIT Su!!liers Partnershi!s - ) Mutually 9eneficial System <ustomer-Su!!lier !ro$imity

Partnerships
In the !ast com!anies were ca!a#le of remaining inde!endent and com!etiti%e when they had the ca!a#ility and resources necessary to !roduce a !roduct" This is no longer !ossi#le" )s technology increases in com!le$ity com!anies o%ercome ca!ital limitations or labor intensive re=uirements #y #ecoming de!endent on su!!liers to !ro%ide ser%ices" Many ser%ices and 5riginal .=ui!ment Manufacturing (5.M) su!!liers ha%e e%ol%ed as the result" <om!anies now a!!reciate that long-term success relies on the =uality of the customer-su!!lier relationshi! esta#lished so that they will de%elo! successful !artnershi!s" 'ence successful !artnershi!s re=uire the de%elo!ment of mutually #eneficial !rograms"

Commitments
To ena#le su!!liers to deal with customers in a confident manner they must #e #acked #y the le%el of commitment gi%en #y manufacturers" /ithout a !artnershi! #etween the customer and su!!lier there will always #e hesitation instead of trust" The conce!t of trust and commitment in JIT is used to #uild !artnershi!s and to reduce the needs for materials-!roduction control recei%ing ins!ection or in%entory #uffers that many

com!anies ha%e constructed" <ontracts used #y JIT manufacturing com!any to record the details of an agreement usually stress the le%el of commitments"

Contracts Supporting Partnerships

9y ensuring fair and e=uita#le contracts many of the !ro#lems in de%elo!ing customersu!!lier relationshi!s are o%ercome #y JIT manufacturers" The goal of JIT is to make long-term contracts with su!!liers" ) long-term contract gi%es the su!!lier a &o# security for as long as the su!!lier remains com!etiti%e and committed" Long-term contracts usually e$tend for one or more years and can consist of one or more !art re=uirements"

Developing JIT Suppliers

It is im!ortant to de%elo! a link #etween the com!anies so to ensure a long-term #usiness relationshi!" This will !ro%ide #oth com!anies with the sta#ility re=uired to o!timi(e the !rofit !otential" There are four needs that affect the su!!lier>s a#ility to !erform ? trust communications linearity of !roduction and time and %isi#ility to make changes" Trust The most #asic need of su!!liers is to #e a#le to trust that the customer will !ro%ide sta#ility if the su!!lier meets re=uirements" This will allow the two organi(ations to work much more closely than they would #ased &ust on a contract" Communications To successfully manage the communication link #etween customers and su!!liers can #e done in two ways? Supplier contacts: To o%ercome the com!le$ity of the communication !ro#lem some com!anies assign a #uyer-=uality engineer team to #e the contact for each su!!lier" The ad%antage of this solution is that it !ro%ides a formal communication channel for the su!!lier and reduces the !otential for miscommunications" Supplier programs: Su!!lier !rograms kee! the su!!lier informed on to!ics of mutual interest and ensure the su!!lier access to information that will ha%e an effect on the su!!lier>s !roduction" These !rograms strengthen su!!lier relationshi!s #y o!ening communications and !ro%iding an understanding of one anothers needs" Linear Production Sc edules Linear !roduction schedules contri#ute to im!ro%ing the !erformance of manufacturing" In a JIT system the need for the su!!lier to track the customers needs closely is im!ortant" 7or this to occur the su!!lier must reduce lead time to the minimum" This consists of isolating the #ottlenecks in the o!eration #alancing the !roduction system and reducing setu!-time"

Time and !isi"ility to ma#e c anges Most su!!liers can res!ond to changes in customer demand #ut they must ha%e enough time to make the changes" The ty!es of changes su!!liers must make are !urchasing materials adding e=ui!ment esta#lishing work shifts and hiring and training la#or" /ith #etter schedule %isi#ility su!!liers could react more =uickly to changes in !roduction re=uirements"

Partnerships - A Mutually Beneficial System

) mutually #eneficial system re=uires that the su!!lier and customer work in coo!eration to achie%e a greater #enefit than they would ha%e indi%idually" Three mutually #eneficial systems are ? .arly su!!lier in%ol%ement Just-in-Time materials shi!ment In%oicing systems $arly supplier in!ol!ement In%ol%ing the su!!lier early in the design !hase of a new !roduct can o#tain the #est !erformance from a su!!lier" Su!!liers will often make suggestions that can im!ro%e the design of the !roduct" Su!!lier feed#ack !ro%ides a%enues for im!ro%ement in cost =uality and scheduling" Just%in%Time materials s ipments Feli%eries can cause traffic !ro#lems" In addition there are the !ro#lems of unloading material un!acking it and mo%ing it to the !roduction-line" Se%eral systems ha%e #een de%elo!ed to im!ro%e the efficiency of deli%eries to customer" )n e$am!le is the "9us Boute" system installed #y Iero$ <or!oration" The #us routes system im!ro%es material flow communications and the interaction of com!anies" In!oicing systems JIT re=uires fre=uent deli%eries" There are solutions to handling increased in%oice load" .lectronic in%oicing will work where com!ati#le e=ui!ment transmits customers accounts directly" )nother solution is to !ay su!!liers #ased on !urchasing records that ha%e com!leted the assem#ly !rocess" ) third !ossi#ility is to #atch in%oices and su#mit them on a #imonthly or monthly schedule" ) com!any can also in%oice the monthly deli%eries on one in%oice hence decreasing the amount of !a!erwork"

Customer-Supplier Proximity
<ustomer-su!!lier !artnershi!s can #e formed irres!ecti%e of the !hysical distance #etween two com!anies" <lose !ro$imity howe%er offers three ad%antages ? early su!!lier in%ol%ement line !ro#lems are easier to resol%e and communications are easier" The criteria for determining su!!lier selection are #ased on su!!liers a#ility location and !rice"

"ntegrate# &rocess Contro( ."&C/

In most cases the ty!ical goals of manufacturing consist of meeting !roduction schedules cost !ro&ections and !roduct s!ecifications" 'owe%er two key !oints are usually o%erlooked ? o!timi(ing the !roduction !rocess and meeting customer re=uirements concurrently" The com!any must #e aware of changes in re=uirements and continually im!ro%e the !roduction !rocess" Integrated Process <ontrol (IP<) achie%es the goals of JIT manufacturing #y o!timi(ing !roduction to meet #oth manufacturer and customer re=uirements" In IP< two conce!ts control the !rocess of continual im!ro%ement" They are? 7irst the !rocess of continual im!ro%ement is directed toward !roducing !roduct of =uality at low cost" The second conce!t is that customers needs ha%e to #e continually monitored since they change regularly" The de%elo!ment of an IP< system is #ased on understanding these two re=uirements and com#ining them into a single system" Management and Labor Responsibilities Fecision-making and communications are generally associated with inefficiencies in a com!any" Pro#lems with communications include am#iguity in the inter!retation of the re=uirement and failure to s!ecify the re=uirement" To allow em!loyees to contri#ute to the decision-making cycle re=uires changes" 7or instance too often em!loyees think of most J&o#> as a single &o# res!onsi#ility" /ith the decision-making le%el mo%ed to the !roduction line IP< reduces the in%ol%ement of management #ut increase the in%ol%ement of !roduction line su!er%ision and !roduction workers" he Role o! "ther #unctions in $rocess %ontrol &$%' P< is im!ro%ing the !roduction !rocess #y continual im!ro%ement" In manufacturing !roduction would seem to #e the function res!onsi#le for P<" 'owe%er the action or lack of action of functions outside of !roduction can influence !roduction" he production !unction? Productions res!onsi#ility to a com!any is to minimi(e the cost of manufacturing and !ro%ide !roduct that meets customer re=uirements" Integrating =uality into !roduction is a !riority in a com!etiti%e market"

he (uality Assurance !unction The res!onsi#ility of the =uality assurance function in IP< utili(es statistical !rocess control (SP<) in the !roduction system and to train !roduction !ersonnel in its use" To retain the res!onsi#ility for failure analysis !rocess and !roduct audit and relia#ility testing of !roduct" he )ngineering #unction .ngineering>s res!onsi#ility in P< is to design for customer re=uirements and !roduct !roduction re=uirements" To satisfy a customers need is &ust as im!ortant as designing a !roduct using to! !roduction technology"

Detect Defects *efore t7ey Affect

Im!ro%ing the !roduction !rocess is streamlining and integrating the !roduction system to achie%e an efficient and sim!le !roduct flow" <ontinuous im!ro%ement im!lies that the manufacturing system will continue to include #oth !rocess and !roduct im!ro%ement" The !rocess of continual im!ro%ement is aimed at reducing the need for gate ins!ection rework scra! and test" IP< is an economical tool to minimi(e these costs" The results of using IP< is the !re%ention of defects #efore they occur"

Planning the pro uction process

) %alua#le tool in !lanning the !roduction !rocess is to isolate and define the elements that make u! a !roduction system as #uilding #locks"

Pro uct flo!chart

In a flowchart the #uilding #locks of the !roduction !rocess can #e analy(ed for significance of im!act to the !roduction system and !oints re=uiring im!ro%ements"

Performance measures
To achie%e continued im!ro%ement a com!any must measure the !erformance le%els of its smallest !rocesses against its o!timum %alues" This is accom!lished #y ha%ing !erformance measures %isi#le to all le%els in a com!any" The use of control charts is one of the #est ways to show the collected !erformance measures"

"loor plan layout

The design or layout of the !roduction line can #e considered after the s!ecification has #een e%aluated and matched to the re=uired !roduction !rocess" ) JIT !roduction line uses multi machine manning" The ad%antage is not actually the reduction in la#or cost rather to reduce the num#er of su!!ort systems"

Balancing pro uction capacity an setup-time#

The setu!-time can #e minimi(ed #y the use a fast !roduction !rocess and only !roduce !arts on demand" If the setu!-time is a factor the !referred !rocess is to a!!ly a smaller

and slower !roduction method that has the a#ility to !roduce the daily re=uirement in a more continuous !roduction mo%ement"

Material elivery
9y deli%ering material directly to the !roduction line on at least a daily #asis o!timi(e materials deli%ery for a JIT system" Two !rimary re=uirements that influence material deli%ery and in%entory concerns are material =uality and a%aila#ility"

0"% an# &urc7asing

The most challenging area for most manufacturers in achie%ing JIT is the !urchasing of raw materials and !arts" This is im!ortant #ecause an internal JIT system can only #e o!erated successfully when the material #eing fed into it are of sufficient =uality and deli%ered on time" Therefore unless the =uality and deli%ery of !urchased material are not !roduction issues the !urchasing function should #egin to esta#lish a JIT su!!lier #ase" In JIT !urchasing se%eral tactics are #eing used to achie%e certain goals and o#&ecti%es"

$oals
Secure a steady flow of =uality !arts" Beduce the lead time re=uired for ordering !roduct" Beduce the amount of in%entory in the su!!ly and !roduction !i!e lines" Beduce the cost of !urchased material"

%&'ectives
Im!ro%e !urchasing efficiency" Im!ro%e =uality and deli%ery !erformance of su!!liers" Isolate factors that influence the cost of material" Bemo%e unnecessary cost factors in the materials su!!ly system"

Tactics
Begard su!!liers as an e$tension of the internal manufacturing !rocess and culti%ate them as long term #usiness !artners" .sta#lish long term !urchasing and su!!ly commitments" Im!ro%e communication with su!!liers" In%ol%e su!!liers in early stages of new !roduct !lanning" 1se su!!lier e$!ertise to im!ro%e design manufactura#ility and reduce !roduct cost"

Purchasing (e)uirements
Material !urchased in a JIT system should meet three re=uirements?

)n acce!ta#le le%el of &uality On time deli!ery schedule and ) reasona#le cost"

8ua(ity for 0"%

Euality is an integral !art of a JIT !rogram" Euality control concentrates on =uality at e%ery stage of manufacture including the !urchase of raw material" To increase the su!!lier =uality two methods are used in a JIT systemH su!!lier =uality engineering (SE.) and recei%ing ins!ection (BI)" Su!!lier =uality engineering is used to e%aluate su!!lier ca!a#ility hel! su!!liers de%elo! !rocess control resol%e =uality issues with su!!liers and certify that su!!liers =ualify for JIT !roduction" Becei%ing ins!ection !ro%ides an ins!ection ser%ice for !urchasing"

Delivery of Purchase Material

5n time deli%ery fre=uency of deli%ery and recei%ing and stocking the material are three ma&or as!ects that are im!ortant in !urchasing" "n*time material delivery means that the work stations recei%e the material &ust #efore it is re=uired" ) su!!liers a#ility to deli%er on time is a com#ination of factors H trans!ortation raw material a%aila#ility !rice holidays etc" If a factor arises that could affect the deli%ery schedule the com!any should #e a#le to increase !roduction schedules and esta#lish enough in%entory to see them !ast the e$!ected disru!tion" #requent delivery is re=uired if de!endency on in%entory is to #e minimi(ed" The su!!liers> a#ility to make fre=uent deli%eries de!ends on the su!!liers a#ility to !roduce !roduct at the rate the customer re=uires deli%ery" Local su!!liers usually ha%e an ad%antage in #eing a#le to deli%er daily" 7re=uent deli%ery means that a loss of one small shi!ment will ha%e less significance than the loss of a large shi!ment in on time deli%ery" Material shipping and handling requirements? <osts associated with material shi!!ing includes !ackaging and handling costs" Packaging costs mainly include material handling shi!!ing damage and the cost of !ackaging materials" 'andling costs include recei%ing un!acking counting re!acking stocking kitting and mo%ing the material to the !roduction area" Beusa#le !ackaging material !acking containers that can #e used on the !roduction line and standardised containers that eliminate counting are ways to

reduce costs and damage in trans!orting" These cost reducing methods are then re%iewed with the su!!lier to determine how the su!!lier can #est meet these needs" Scheduling ? ) ma&or concern of !urchasing managers is the !rocess of coordinating the manufacturing need for materials" The !rocess is com!licated #y !eriodic changes in !roduct mi$ and %olume re=uirement and the continual introduction of new !roducts" <om!anies sol%e the !ro#lem of how much material to order and when to order #y !lacing contracts #ased on order re=uirements su!!lied #y material control" Material control makes its decisions #ased on the master schedule less current in%entory" In a JIT system the su!!lier !icks u! the information on the ne$t !roduction re=uirements e%ery time a deli%ery is made" Reasonable %ost $rice o! purchased material is an im!ortant issue" Material that cause or re=uire additional !roduction costs reduce com!any !rofits" .%ery e$tra ins!ection or test ste! rework re=uirement or item scra!!ed re!resents a reduction in com!any !rofit" These additional costs are remedied #y !urchasing !roducts that meet #oth s!ecification and !roduction needs"

Com'anies Current(y using 0"%

'arley Fa%idson Toyota Motor <om!any 8eneral Motors 7ord Motor <om!any Manufacturing Magic 'awthorne Management <onsulting Strategy Manufacturing Inc"

Conc(usion
Just-in-time manufacturing can #e a !ositi%e influence on a com!any" 'owe%er there are many risks associated with attem!ting to im!lement JIT manufacturing techni=ues" /hen looked at it a!!ears to #e a %ery sim!le =uick and easy thing to do" In reality it is a %ery com!licated techni=ue that takes long term commitment and a initial cost with no guarantee of success" If im!lemented successfully it would eliminate waste make the com!any more !roducti%e and more efficient" It does this through shorter trans!ortation and increased communication" )lthough there are many com!anies that are successful many com!anies are not" .%en though there are enormous risks many still consider im!lementing JIT for it many ad%antages"

The Authors
8ihan Perera 'al enage Michael Lazuardi )rion Lee <hin Teck Lim 'enry (yi (yi L)in 8regory Kim