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Just-in-time (JIT) is a management philosophy that strives to eliminate
sources of manufacturing waste by producing the right part in the right place
at the right time. Waste results from any activity that adds cost without
adding value, such as moving and storing. JIT (also known as lean
production or stockless production) should improve profits and return on
investment by reducing inventory levels (increasing the inventory turnover
rate), reducing variability, improving product quality, reducing production
and delivery lead times, and reducing other costs (such as those associated
with machine setup and equipment breakdown). In a JIT system,
underutilized (excess) capacity is used instead of buffer inventories to hedge
against problems that may arise.
JIT is also known as lean production or stockless production, since the key
behind a successful implementation of JIT is the reduction of inventory
levels at the various stations of the production line to the absolute minimum.
This necessitates good coordination between stations such that every station
produces only the exact volume that the next station needs. On the other
hand, a station pulls in only the exact volume that it needs from the
preceding station.
The JIT system consists of defining the production flow and setting up the
production floor such that the flow of materials as they get manufactured
through the line is smooth and unimpeded, thereby reducing material
waiting time.
This requires that the capacities of the various workstations that the
materials pass through are very evenly matched and balanced, such that
bottlenecks in the production line are eliminated. This set-up ensures that the
materials will undergo manufacturing without queuing or stoppage.
Another important aspect of JIT is the use of a 'pull' system to move
inventories through the production line. Under such a system, the
requirements of the next station are what modulate the production of a
particular station. It is therefore necessary under JIT to define a process by
which the pulling of lots from one station to the next is facilitated.
With JIT, it is believed that the root causes of most problems are due to
faulty production process design. Hence, with JIT, nothing is taken for
granted, everything is subject to analysis.
One motivated reason for developing JIT and some other better production
techniques was that after World War II, Japanese people had a very strong
incentive to develop a good manufacturing techniques to help them
rebuilding the economy. They also had a strong working ethnic which was
concentrated on work rather than leisure, seeked continuous improvement,
life commitment to work, group conscious rather than individualism and
achieved common goal. This kind of motivation had driven Japanese
economy to succeed.
Because of the natural constraints and the economy constraints after World
War II, Japanese Manufacturers looked for a way to gain the most efficient
use of limited resources. They worked on "optimal cost/quality relationship".
Before the introduction of JIT, there were a lot of manufacturing defects for
the existing system at that time. According to Hirano, this included
inventory problem, product defects, risen cost, large lot production and
delivery delays. The inventory problems included the unused accumulated
inventory that was not only unproductive, but also required a lot of effort in
storing and managing them. Other implied problems such as parts storage,
equipment breakdowns, and uneven production levels.
For the product defects, manufacturers knew that only one single product
defects can destroy the producer’s creditability. They must create a "defect-
free" process.
Instead of large lot production - producing one type of products, they
awaked that they should produce more diversified goods. There was also a
problem of rising cost, the existing system could not reduce cost any further
but remember improvement always leads to cost reduction.
Lastly, the existing system did not manage well for fast delivery request, so,
there was a need to have a faster and reliable delivery system in order to
handle customers’ needs.
Mainly JIT focuses to eliminate the waste or the non-value added. Thus
there are several types of wastes categorised. JIT usually identifies seven
prominent types of waste to be eliminated:
The idea of giving up old concept was especially for the large lot production,
The lot production was felt that "having fewer changeover was better", but it
was no longer true. Whereas JIT is a one-piece flow manufacturing. To
compare the two, Hirano had this idea:
The main point here is to have an awareness of the need of throwing out old
system and adopting a new one.
Seiri - Proper Arrangement means sorting what you have, identifying the
needs and throwing out those unnecessary.
Shitsuke - Discipline means following the rules and making them a habit.
Step 3: Flow Manufacturing
Flow
1. Cycle time It means how long it would take to "carry out part all the
way through the cell". Following are the equations for calculating
cycle time.
2. Work sequence
3. Standard stock-on-hand
· Uses casters extensively as author written, "Floor bolts are our enemies!
Machines must be movable."
Elements of Just in Time
· People Involvement
· Plants
· System
People Involvement
3. Kanban - a Japanese term for card or tag. Special inventory and process
information are written on the card. This helps tying and linking the process
more efficiently.
System
This refers to the technology and process that combines the different
processes and activities together. Two major types are MRP(Material
Requirement Planning) and MRP II (Manufacturing Resource Planning).
3. Reduce unwanted wastes. Wastes that do not add value to the products
itself should be eliminated.
2. Reduction of Lead Time. Lead time such as setup time and move time and
waiting time is reduced.
These major objectives are suitable for all organizations. But each
organization is unique in some way, adjustments of JIT objectives for each
form should be made in order to complement the overall production process.
Limitation of Just in Time
Regardless of the great benefits of JIT, it has its limitations, the following
are the major limitations.
· Loss of individual autonomy. This is mainly due to the shorter cycle times
which adds pressures and stress on the workers.
· Loss of method autonomy. It means the workers must act some way when
problems occur, this does not allow them to have their own method to solve
a problem.
· JIT success is varied from industry to industry. Some industries are benefit
more from JIT while others do not.
· Production level JIT works best for medium to high range of production
volume.
Just In Time is a philosophy and not the technique for elimination of wastes.
The JIT strategy is to have "the right product at the right place at the
right time."
The "Just in time" (JIT.) inventory concept, also called Kanban, asserts that
just enough inventories, arriving just in time to replace that which was just
used, is all the inventory that is necessary at any given time. Excessive
inventory unnecessarily ties up money, adds warehousing costs, increases
risk of damage and risks obsolescence, and most of all, can possibly obscure
opportunities for operational improvements.
Suppose, for example, that all products pass through a drilling operation and
then a milling operation. With JIT, the drill produces only what the mill will
need next. It also holds for the last step that is, the system produces only
what the customer desires.
Production Smoothing
Capacity Buffers
Set-up Reduction
Reduce lot sizes. This will smoothen out the flow of inventories from one
station to another, although this may necessitate more frequent deliveries or
transfers.
Reduce lead times by moving work stations closer together and streamlining
the production floor lay-out, applying cellular manufacturing concepts, using
technology to automate processes and improve coordination.
Require stringent supplier quality assurance since an operation under JIT can
not afford to incur errors due to defects.
Benefits of JIT
One of the benefits of JIT is that with raw materials and WIP being
processed in smaller batches, errors can be easily identified and corrected
quickly, during each stage of the production process. This in turn has the
‘knock-on’ effects of reducing non-value added costs
Conceptually, the JIT benefits could be grouped into the following
categories;
JIT can affect the bottom line in a variety of ways. Improvement in quality
and delivery times can increase demand and, thus, revenue. Costs are also
affected; the JIT philosophy contends that inventory reduction and increased
quality reduce costs. Traditional cost accounting Systems often makes it
difficult to measure the effects of changes except in very aggregate terms.
One of the tenets of JIT is to account for these effects more accurately.
These basic causes of indirect costs are called cost drivers. The cost
accounting system must report the cost of these activities to accurately
determine the costs of individual products. Such reporting enables
manufacturing management to treat set-up, inspection, receiving, and
transaction costs as direct costs, to base decisions on accurate information,
and to focus on reducing high cost elements. An ABC analysis can be used
to select the activities that are appropriate for cost reduction studies.
JIT, TQM, AND THE PRODUCTION PIPELINE
Think of a company as a pipeline with raw materials entering at one end and
products emerging at the other.( the pipe can be extended conceptually with
customer needs or orders going in at one end and products arriving to
customers at the other.)
The goal is to minimize the through put time, that is to move the materials as
quickly as possible Shorter throughput time is better But the pipeline varies
in size and has obstructions through out. Output is determined by the
narrowest part of the pipeline and the biggest obstruction.
These must be identified and then eliminated to achieve the goal. As each
obstruction is eliminated the flow speeds up but only by as much as allowed
by the next biggest obstruction elsewhere in the pipeline.
Sources of obstructions keep changing and it could be any one of the factors
of production and /or in any combination of the factors. One gets eliminated
and another one crops up and therefore it has got to be continuously attended
to.
The pipeline itself and the things that floe through are changing always. The
diameter of the pipeline may have to be changed. But only the extent
required. Over size is waste, while undersize would not meet the required
throughput.
The BEST flow rate would be that which matches the required output rate.
JIT /TQM greatly increase the number of people who are involved in
identifying and eliminating obstructions. Every one does it Level of
authority of workers to make and carry out decisions is much higher
Emphasis is on measure, diagnose, and improve it.
4. Identify critical functions and estimate the time, the company can afford
without such function.
Just in Time-----Manufacturing
(1) Introduction
We also should keep in mind that achieving these obtaining targets does not
automatically make a company a JIT manufacturer. On the contrary, it will
lead to achieve even one of these objectives will prevent a manufacturer
from establishing a successful JIT system. According to Common Wealth on
May, 1996 report, it said that “A company cannot decide to implement JIT;
they must earn the right to use JIT by revising their quality for system."
AUTO ANALYSIS
Manufacturing Cells
Manufacturing Lines
Facility Layout
Technology Development
In Process Inspection
Experimental Design
Process Development
Example:
To sum up, we should make fully use of Kanban in order to improve the
performance of a production line which is under controlled by Kanban.
Generally speaking, Kanban is combined with base stock or immediately
improvement to create a hybrid production control system. Simulation
results based on a Toyota factory show that this policy meets throughput
targets with significantly lower inventories than Kanban alone. As a result,
Toyota research considers a line production system which purchases raw
materials from a supplier, processes them into finished products and delivers
them to a buyer just in time. This study focuses on finding the optimal
number of raw material orders, finished goods deliveries and Kanbans
between work stations for a time-proportionate demand of finished goods.
Just In Time in Ford
EXECUTIVE SUMMARY
In this paper, we are examining the implementation of Just-In-Time
methodology in Ford for its latest small car KA; possibly one of the most
interesting manufacturing revolution where companies involved in the
production are integrated not only in their business processes moreover in
their physical plants. The concept has been successfully developed and
implemented in Valencia, Spain and is due to be adopted in other Ford
production plants. The case study clearly shows how companies can work
together in a harmonic and synchronised system meeting probably the most
idealistic manufacturing principles (JIT) to produce the best quality product
within the shortest time frame with minimum/no wastage and cost-effective
to all parties. Careful production planning, cost-benefit analysis, adequate
outsourcing plans and customer orientation are being praises as the key
success factors of this amazing Just-In-Time concept.
FORD KA IN JUST IN TIME
Production of Ford latest small car, the Ford KA has been a dramatic
improvement compared to Ford previous product, Fiesta (Kochan, 1997).
This is a real example of successful JIT implementation with all its
outsourcing strategies. The production target of 1,100 KA cars per day has
been reached only within 8 weeks since the launch date, compared to 15
weeks required for Fiesta. Ford found that the initial bottleneck was caused
by material handling, assembly time and inbound logistic. Some of the
components in Fiesta are supplied by various suppliers and these
components had to be made, loaded in the container and scheduled for
delivery before finally delivered by trucks. This common process is found to
be inefficient as every part has to be continuously handled by human and
this causes big risks of damages, misplaced and imperfection in quality,
especially for cosmetically sensitive and fragile parts such as instrument
consoles, electrical wiring and airbags.
With the new developed JIT system supported with sophisticated aerial
tunnels connecting Ford with its suppliers, production lead times can be
minimised, product quality can be improved, responsiveness towards
customer demands can me boosted and the most important thing is
inventory, space requirements, handling and transportation cost can be
dramatically reduced (Kochan, 1997). Ford is now connected with more than
50 suppliers in Valencia with specifically designed aerial tunnels. These
tunnels are also very useful to transport bulky and heavy items such as seats
and fuel tank. The brain of this amazing system is DAD (direct automated
delivery) which will integrate the whole processes virtually as one extended
manufacturing warehouse. DAD will enable a smooth manufacturing
process by applying Ford scheduling system so that all the supplied
components being delivered right on time they are needed. In addition, DAD
and its tunnels enable the integration of manufacturing equipment so that the
component being delivered can be immediately installed with the main body
or other components in Ford factory.
COSTS BENEFITS
• Extending outsourcing (losing control) • Speed-up production process 8 weeks
• $500 million pilot plan and analysis • Smaller number or manufacturing parts
• Concentrating on core business
functions
• 25% shorter time production time
needed
• Accuracy of production on plan
• Building aerial tunnels • Less handling = less damages / costs
• Setup Direct Automated Delivery DAD • Less conventional transport dependent
• $16 million delivery system • Time saving
• Manufacturing seamless integration
• Further interest from more suppliers
• Saving $6+ million per year on
transport
CONCLUSION
In this paper, we examined the implementation of Just-In-Time methodology
in Ford for its latest small car KA; possibly one of the most interesting
manufacturing revolutions where companies involved in the production are
integrated not only in their business processes moreover in their physical
plants. JIT has shown it success to produce the best quality product within
the shortest time frame with minimum/no wastage and cost-effective to all
parties. Careful production planning, cost-benefit analysis, adequate
outsourcing plans and customer orientation are being praises as the key
success factors of this amazing Just-In-Time concept.
General Motors
An example of the use of JIT in General Motors is given below.
General Motors (GM) in the USA has (approximately) 1700 suppliers who
ship to 31 assembly plants scattered throughout the continental USA. These
shipments total about 30 million metric tons per day and GM spends about
1,000 million dollars a year in transport costs on these shipments (1990
figures).
JIT implies frequent, small, shipments. When GM moved to JIT there were
simply too many (lightly loaded) trucks attempting to deliver to each
assembly plant. GM's solution to this problem was to introduce
consolidation centres at which full truckloads were consolidated from
supplier deliveries.
All this has been achieved without sacrificing the benefits of JIT.