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Structure
13.1 IntroductiontoJIT 13.2 CharacteristicsofJIT 13.2.1Kanbanformaterialflow 13.2.2HighQualityProduction 13.2.3SmallandUniformWorkloads 13.2.4SuppliersasPartners 13.2.5FlexibleWorkforceandTraining 13.2.6TotalProductiveMaintenance 13.3 ImplementationofJIT 13.3.1 13.3.2 13.3.3 13.3.4 PrerequisitesforImplementation ShopFloorControl Purchasing VendorManagedInventory

JustInTime

13.4 JITInventoryandSupplyChains 13.5 Summary TQs AnswertoSAQsandTQs

13.1 Introduction to JIT

JIT can be considered to be a philosophy of manufacturing

foundedontheprinciplesofeliminationofallwasteandtherebyincreasingproductivity.Whenthe philosophyisappliedatworkplace,theapproachresultsinprovidingpartsinjustrightquantitiesat therighttime.Thisresultsineconomyofmaterialandtimethusloweringthecostsandincreasing productivity. Since no extra parts are available, production of only good parts is forced on the system. JIT has been extended to mean continuous improvement. These principles are being

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appliedtoengineering,purchasing,accountinganddataprocessingalso.WewillseehowJIThelps inimplementingLeanProductionsystems.Inthesedayswhentechnologyisabletoprovideuswith highly accurate equipments which have high capacities and the business has become global meaning that both suppliers and customers are widely accessible. To remain competitive, cost efficiencieshavebecomecompulsory.JIThelpsinthisprocess.Itisextendedtotheshopfloorand inventory systems of the vendorsalso. One of the main challengesfor JIT isfrequent changes in production schedules owing to the changes in demand. This causes the procurements plans to change.Inthepresentdayscenariowheremostmanufacturingconcernsdependuponanumberof suppliers, who in turn may outsource parts and services, disruptions have a cascading effect. However,thereisalimittotheagilitythatacompanycanbuildintothesystem.Communicationright throughthesupplychainhelpsinreducinginventoriesandkeeptheflowlinessmooth.Successof JITdependsuponalotofpreparationandcommittedimplementation.

LearningObjectives
1.YoushouldbeabletoidentifythekeyelementsofJIT. 2.YouwillabletodescribethekeyprocessesofJIT.

3.YoushouldbeabletoanalysekeybusinesspracticesandapplicationofJIT. 4. You will understand how JIT is implemented and how organisations fail or succeed by
implementationofJIT

13.2

Characteristics of JIT In this section, we will study different methods by which

inefficiencyisreducedandunproductivetimeisminimized.Theconsequentsavingistobeutilized forreducingcostandrenderbetterservicetothecustomer.JITconsiderseliminationofwasteas fundamentaltoanyprocesses.ShigeoShingoanauthorityonJITatToyotaclassifiesthemasunder : 1. OverProduction Theextrapartsorproductsmaynotbeneededormaynotbeavailablewhen needed.So,itisawaste. 2. WaitingTime Theoperator,themachineorthepartwillnotbeeitherworkingorworkedupon. Thedurationofwaitingisunproductiveandmaycreatemoreseriousconsequences.

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3. Movement Any unnecessary movement is a waste of energy causes blockages disrupting movementsanddelayingtheflowofotheritemscreatingdelays. 4. Process Somestepsintheprocessmaynotbenecessarytoarriveattherequiredstage.Itis wasteofalltheinputsthatgointotheprocess. 5. Inventory Excess procurement or production builds up stock of materials which are not immediatelyused,thuslockingspace,fundscarryingheavycosts. 6. Effortandmovement Thepeoplewhoworkdonotmakeastudyastohowtheseareutilizedin realizing the purpose for which they are made. Both, again use up resources which are not availablewhenneeded. 7. Defective Products these areproducedusing the same equipments, workmen and thetime thatwouldbeusedtomakegoodproducts.Thusdefectiveproductsuseupresourcesandresult inlosses. Sincethesewasteshavetobeeliminated,athoroughstudyhowtheyoccurandwhatstepswould resultintheireliminationisofparamountimportance. Wefocusonsomeofthemnow.

13.2.1

Kanban for material flow Kanban means a Visible Card and also Signal in

Japanese language. These cards are used for communicating the quantities required at the customers point for his use. This means that by the card the operator next in line, who is the customerdecideshowmanyunitsheneedsandasksforthem.Theoperatorwhoreceivesthecard should make only that many and supply. Similarly he makes a demand on his predecessor by a kanbanandreceivesonlytherequiredquantity.Thisiscalledthepullsystem.Thecontainersare designed to hold specific components in certain numbers. Kanban system is a physical control systemwhichusescardsandcontainers materialsmustnotberemovedwithoutpostingacardat thereceivingpost.

13.2.2HighQualityProduction JITProductionismeantforproductswhicharerepetitive
in nature. The system has its genesis in providing solution for manufacturing process where the finishedproducthasanumberofpartsthatgetassembled.Theproblemsinsuchsituationswillbe

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tokeepthearrivalofparts,componentsandsubassembliessothatnoshortagesoccurholdingup production. So, it becomes very vitalthat allparts thatform theflow in many streamsareof high qualitysothatassemblydoesnotgetheldup.ForJITtobesuccessful,whereinventoriesarekept to the minimum every component has the highest quality. It is relevant to mention Taguchis insistenceonachievingthetargetvaluetorealizequality.Thepermittedtolerancesdonotensure highquality.Controllingvariabilitybystrictadherencetobestprocesseswithbuiltinrobustnessto achievesixsigmastandards,ensureshighquality.ThesehelpinrealizingJIT,whichhaseconomy infocusandprovideanadditionalfactorforcompetitiveness.

13.2.3SmallandUniformWorkloads Manufacturingfacilitieshavetoproduceanumber
ofpartstomeettherequirementsofanumberofproducts.Offeringvarietyintermsofproductsisa strategy that most businesses practice. Manufacturing all the products in large volumes and maintainingstocksatvariousdistributioncentresishighlyuneconomicalandnoorganisationwould contemplate such a plan. If we move up the supply chain and see, the input resources raw materials,boughtoutitems,transportation,storage,funds layaheavyburdenonthesystem.Add tothattheoperationsinvolvedinthetransformationprocess,thecostsinvolvedbecomeunthinkable. The solution is to be able to produce the products in their variety in small numbers and plan the production schedules in such a way that the production facilities become agile to cater to market demands.Theaimistoreduceinventories,butatthesametimenotlosebusiness.So.Smallloads on the various work centres, both at inhouse facilities as well as those of subcontractors is the answer. Achieving uniformity of loading is important to avoid up piling up of work in process. Softwares specially developed to tackle these problems helps in achieving the desired result. However,anydecisionwillhaveatradeoff.Thesacrificesmadewillbelostutilizationbecauseof frequentchangesinsetups,increasedtransportation,productionholdupsowingtomismatchofthe productionofdifferentpartsandperhaps,evenafewunsatisfiedcustomers.Thecostsinvolvedon bothcountshavetobeweighedanddecisionstaken.

13.2.4

SuppliersasPartners Suppliersarethosecompanieswhichundertaketomake

supplies of products they manufacture, or they are dealers for or conduct some transformation activityonthematerialsdeliveredbyustothem.Inallcases,sincewedobusinesswiththem,they

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willhaveaprofitfortheservicerenderedbythem. Ifthetechnologytheyhaveissuperior,iftheir equipmentstheyuseareoptimalandtheworkforceefficient,thebenefitswouldincreaseforthemat a cost to our company. If there are a number of suppliers, we would exploit the situation and decrease our cost by choosing the one supplier who charges the least. In this exploitative environment,commitmenttomeetourneeds,givingusthebenefitoftheirlearningortransferringour knowledge for improved service would be absent. There is a likelihood of quality suffering. As explained earlier to be able to implement JIT, we need to change schedules quite often either delayingorhasteningtheproductionofsomeitemsalmostonadailybasis,ifnothourly.Themain concern in such situations will be a build up of inventory or stock out positions. Problems of communication add to the difficulties. Treating suppliers as a part of our business and sharing information, providing technical and financial assistance, seeking their help in improving process, buildingup rapportbetween theemployees of the supplierorganisation andassuringbusiness will ensure cooperation and ensures timely delivery of supplies with good quality. Many times, the supplier, owing to his specialized operations may contribute to our organisations productivity. Qualityenhancementprogrammescanbeimplementedsimultaneouslyforfasterandbetterresults. 13.2.5 Flexible Workforce and Training Flexible workforce consists of workmen who are capableofperformingmanytasks.Itmaybeattheirspecifiedworkstationsoratotherworkstations thattheskillsrequiredmaybequitedifferentfromthosewhichtheyuseregularly.Theoperational managerscanlookforpersonnelwhohaveanattitudeforlearningotherskillsandgivethemtraining sothatwhenshortagesoccurtheycanbeutilizedforadvantagetogetoverstoppagesofworkand disruptioninworkflow.Thisflexibilityensuresreliablecustomerserviceandovercomebottlenecks. Part time and temporary employees also enable the company to overcome surges in demand. In such cases specially trained regular workers can be asked to take over tasks which require high skills and the nonregular employees can be given jobs which are simple and can be handled by themwithoutcausinganydisturbanceintheproduction. 13.2.6 Total Productive Maintenance

Maintenance of equipment is a fundamental

requirement that planned capacities are realisable only when parts are manufactured in required quantitieswithhighquality.ThepresumptionthatmachinesdelivertheseisbasictoJITphilosophy.

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Generally, periodic and preventive maintenance is conducted by the operator and sometimes with thehelpofthesupervisor.Theseactivitieshelpthemtounderstandthemachinebetterandgivean opportunitytosensewhentheequipmentmayneedmajorrepairorreconditioning,tobringbackthe machine to give the required quantities and not have any impermissible variations. Break downs generally occur as the symptoms are neglected. In TPM, the worker is trained to maintain the machine,keeprecordofthepartstobereplacedonperiodicbasis,makearrangementstoprocure themormakethem.Thiswillhelphimtomaintainhismachineinperfectorderwithoutbreakdown. The responsibility to maintain the machine will be his and all assistance by others should be available. With this responsibility, he also has the autonomy to undertake measures to ensure productivityandquality.

SelfAssessmentQuestions1.
1.______________generallyoccurasthesymptomsareneglected.

13.3ImplementationofJIT JIT,likeTQMandotherdevelopmentalmeasuresispossible
only with top management commitment and a learning culture in the organisation. The main handicaptoanyprogrammeistheresistancebytheorganizationalmembers evenatthetop,to makechanges.Thisresistancemaytaketheformofnoncooperationandmayenlargetobecome sabotage. These show up at the implementation stage. So, communication of the goals to be realisedandtheobjectivesofeachteamshouldbemakeeffectively.Initially,amilestonechartwill helpinestablishingthevariousstepstobetakenandcorrectingtheactivitiesastheprocessisonis thebestwayofensuringsuccess.Itiswelltoremindatthisstage,thatJITisnotadestination,but an ongoing continuous improvement programme in the process of achieving Total Quality Management. 13.3.1 Prerequisites for Implementation

Like any advanced method of production and

qualityimprovementsomeprerequisitesareneededtobeinplacesothatimplementationiseasy andtheresultsidentifiable.Thefollowingtablegivestherequirementsfromthedesignprocesstothe measurementofperformance. a) Designflowprocess

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1.Linkoperations 2.Balanceworkstationcapacities 3. Relayoutforflow 4. Emphasisepreventivemaintenance 5. Reducelotsizes 6. Reducesetupandchangeovertimes b) TotalQualityControl 1. Workerresponsibilityforquality 2. MeasureSQC 3. Enforcecompliance 4. FailsafeMethods 5. Automaticinspection c) Stabiliseschedule 1. LevelSchedule 2. Underutilisecapacity d) KanbanPull 1. DemandPull 2. Backflush 3. ReduceLotsizes e) Workwithvendor 1. Reduceleadtimes 2. Frequentdeliveries 3. Projectusagerequirements 4. Qualityexpectation f) ReduceInventories 1. Lookforotherareas 2. Stores 3. Transit 4. Carousels 5. Conveyors

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g) ImproveProductDesign 1. StandardProductConfiguration 2. Standardiseandreducenumberofparts 3. Processdesignwithproductdesign 4. QualityExpectations Theaboveactivitiesleadto A.Solvingproblemsconcurrently (i) (ii) RootCause SolvePermanently

(iii) Teamapproach (iv) Lineandspecialistresponsibility (v) Continualeducation

B.MeasuringPerformance (i) (ii) Emphasiseimprovement Tracktrends. Source:RichardB.Chase,NicholasJ.Aquilano,FRobertJacobsProuctionandOperations Management,EighthEdition,IrwinMcGrahHillPublciations

Youwillobservethatwhenaboverequirementsaremet,weareverynearlyachievingJIT. 13.3.2 Shop Floor Control Realistic planning and scheduling taking into consideration the frequency with which set ups have to be changed to manage material flow without building up inventories,leadstoJITmanufacturing.SMEDsingleminuteexchangeofdiesgivesflexibility forproductionprocess.AdvocatedbyShigeoShingo,thismethodcallsfordesigningandmaking fixturesandtoolingswhichareinstrumentalinchangingsetups sothatchangestobeeffected within a minute. The declamping and clamping elements should be made for this purpose. Application of Kanban, wherever suitable is another mechanism for controlling flow of material.

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Maintenanceof machines and periodic shopfloor inspectionto verify that processesaredelivering componentswithinthetolerancesspecified. 13.3.3 Purchasing TheessenceofJITpurchasingliesintreatingthepurchaserasaparticipant in your activities. Cooperative relationship leads to the development of the supplier who understandsourrequirementsandinsituationswhereheconfrontsanydifficulty,heshouldbeina positiontoapproachthecompanyforitssolution.Beingopenandtrustinghelpstheorganisationsto identify the problems and go to the source which is like implementing TQM. Every problem or discovery of a defect is considered an opportunity which the supplier and the company to geta deeperunderstandingoftheproblemandthesolutionswillsolvenotonlythatproblem,butalsoones thatwerehidden.Itisalsothepracticeofmanycompanieswhoprocurealargenumberofparts manufactured fromtheirvendorstohavesuppliesmadetotheassemblyinspecificquantitiesto meettheneedsjustintime.Selfcertificationbythevendorisresortedtoforensuringqualityofthe material.Theactualusersaregivenautonomytodemandfromthesupplierthequantitiesrequired as well as thetime of its need. Any change indemand is conveyedand complied. This requires cooperationandtrustbetweenhesupplierandthecustomer.ThisishowJITpurchasingworks. 13.3.4 Vendor Managed Inventory The very purpose of JIT is to reduce inventory at all placesinthesupplychain.Inventoryisconsideredawastebecauseinventoryiscreatedbyusing materials, machines and efforts of persons. All of these are resources which have already been usedupandthatportionofitwhichisnotconsumedandsentupthevaluechaincausesadragon thesystem.However,inventoriesareinevitablebecauseuncertaintiesexistateverystage,makingit necessarytoprovideabuffersothatdemandsdonotgounfilled.Thechallengeistokeepittothe minimum. To make this happen the calculations involving forecasts of the market demand, the capacitiesoftheequipments,workerabsenteeism,suppliersleadtimes,thequalityoftheproduced components, etc. Each of these will have many factors which affect them. JIT depends upon accurate assessment of them and based on the decisions taken, activities are initiated. These should result in holding materials as small a number of components or products as feasible to maintain flow of material without disruption. Many companies make their suppliers hold their inventoriesandrequestthemtomaketimelysupplies.Thismaycomeatacost.

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SelfAssessmentQuestions2.
1. TheverypurposeofJITistoreduceinventoryatallplacesinthesupplychain.(True/false) 13.4 JIT Inventory and Supply Chains Supply chain consists of a number of entities of

organisations,departments,workstations,counters insequencethatproduceanddeliverproducts or services. Sequence starts from the basic suppliers of raw materials and runs through the sequence of transporters, warehouses, stores, substores, machining centres, packaging department, wholesale dealers, retailers and finally consumers. The supply chain creates a value chain along its path. The functions and activities that moves the material along the chain are forecasting, purchasing, inventory, production scheduling, inspection, distribution and retailing. These are the subjects of study and management. Note that information flows along with the materials and is the content for collection, dissemination, analysis and decision making. The purposeistomeasurethevaluethatgetsaddedandthecostsinvolvedintheprogression.Oneof the factors that adds cost and not value, is the hold ups that occur along the path. This is the inventory cost. Forecasting determineshe quantities to beproducedat specified intervalsoftime. All otherfunctions get initiated and managers concerned try toderive maximum value at the least cost.Soproductionschedulingismeticulouslydonetakingintoconsiderationandaccommodating for the uncertainties. Thebetter the informationhe has,better theanalysis and more efficient the implementation,greaterthevalueaddedforlessercost. Theidealsituation,whichJITenvisages,is thatthereshouldnobottlenecksandnoextramartiallyingatanyofthepointsinthesupplychain. Differentcompaniesadoptdifferentstrategiesdependingontheirproducts,thetypeofoutsourcing theyareabletodevelopandmanage,theextentofreachtheyhaveforcustomersandcompetition theyface.ManagingthesupplychainefficientlyhelpsinachievingJITorasmuchofitaspossible.

SelfAssessmentQuestions3
1.Thesupplychaincreatesa_______alongitspath. 2.Thereshouldnobottlenecksandnoextramartiallyingatanyofthepointsinthe__________.

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13.5Summary:
1. JIT is a system that laysemphasis inachieving costefficienciesby the principlesof waste reduction. 2. JIT depends on the pull system of supply, manufacture and delivery to reduce inventory stage. 3. JIT requires the use of a flexible force to overcome production hold ups, even with lesser numberofworkers. 4. JITispossibleonlywhenpartsandproductsareofhighqualitysothatallthoseproduced arefitforuse. 5. TPMisoneoftheessentialrequirementsforJIT. 6. Economy of movement is necessary ensuring smooth throughput which helps in reducing inventory. 7. Cooperation of customers is vital for the success of JIT and they help in managing inventories. 8. Informationflow isan inseparable activity ofthesupply and itsefficient management is the basisforsuccessfulimplementationofJIT.

TerminalQuestions

1. WhataretheconditionsforimplementationoftheJITsystemwithsuccess? 2. WhatarethecharacterticofJIT. 3. WhatdoyouunderstandbyVendorManagedInventory(VMI)?

AnswerforSelfAssessmentQuestions
SelfAssessmentQuestions1 1.Breakdowns SelfAssessmentQuestions2 1. True SelfAssessmentQuestions3 1. Valuechain

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2. Supplychain

AnswerforTerminalQuestions
1. Refertounit13.3 2. Refertounit13.2 3. Refertounit13.3.4

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