JIT is about doing the simple things well, and gradually doing them better and it is about developing competence and simplification in the way we do things. In addition to this, it is also about squeezing out waste every step of the way. Generally, JIT manufacturing seeks to achieve the following goals:
1. To produce the required quality or zero defects. In manufacturing, traditionally people thought that zero defects producing was not possible because of the fact that people thought that at some level of production it would be no longer be possible to produce without defects. Also despite there were defects, the product did reach customers expectation. With the aim of JIT there will be no longer any cause of a defect and therefore all products will meet more than the expectations. This is also related to a part of quality management.
An approach to quality control that starts from the premise that if quality cannot be built into the process, then the only way to ensure that no defective products are passed on to the customer (down- stream process) is to inspect every part made.
In a Just-in-time environment where waiting for an inspector would be intolerable, the alterna- tives are self-inspection and error proofing. Inspection at source also improves the likelihood of dis- covering the root cause of the problem so it can be eliminated.
Each individual and function involved in the manufacturing system must, therefore, accept the responsibility for the quality level of its products. Traditional companies believe quality is costly, de- fects are caused by workers, and the minimum level of quality that can satisfy the customer is enough.
Companies practicing the JIT believe quality leads to lower costs, than systems cause most defects, and that quality can be improved within the Kaizen framework. This concept introduces the correction of the problem before many other defective units have been completed.
2. Zero set-up time. Reducing the set-up times leads to a more predictable production. No set- up time also leads to a shorter production time/production cycle, and less inventories.
To effectively implement a low inventory system, the common practice of lot sizing through the economic order quantity model must be forgotten. Therefore, the time to set up for a different product in the line needed to be significantly reduced. Innovative designs and changeover techniques are criti- cal.
3. To produce the required items or zero inventories. Inventories, including work-in-progress, finished goods and sub-assemblies, have to be reduced to zero. There will be no sub-assemblies, no work-in-progress and no finished goods. This means a different view than in traditional manufacturing, where inventories are seen as a buffer against a fluctuating demand, or as a buffer against non-reliable suppliers. Also, in traditional manufacturing inventory was built up to make sure expensive machines were running for full capacity, because only then the hourly costs were as low as possible.
In JIT, the inventory is minimized and thus, throughput and cycle times improved significantly.
Also, through elimination of large inventories, huge space savings are realized because there is no need for large warehouses.
4. Zero handling. Zero handling in JIT means eliminating all non-value adding activities. So, zero-handling means reducing (by redesigning) non-value adding activities.
5. Zero lead-time. Lead time is the time between ordering a product and receiving it. The time taken to process orders, order parts, manufacture goods, store, pick and dispatch goods all impact the customer lead-time.
Just-In-Time Approach 177 Zero lead-time is a result of the usage of small lots and increases the flexibility of the system.
When there are no lead times, the possibility to make planning which do not rely on forecasts becomes bigger and bigger. The JIT philosophy recognizes that in some markets it is impossible to have zero lead-times, but makes clear that when a firm focuses on reducing lead-times, this firm can manufacture in the same market.
6. Enable Productivity in Diversified Small-Quantity Production. With every customer de- siring a customized product, diversity is extremely important. Many product variations can be made on a single line, with short changeover times.
7. Reducing Manufacturing Cost. Designing products that facilitate and ease manufacturing processes. This will help to reduce the cost of manufacturing and building the product to specifications.
One aspect in designing products for manufacturability is the need to establish a good employer and employee relationship. This is to cultivate and tap the resources of the production experts (production floor employee), and the line employees to develop cost saving solutions. Participatory quality pro- grams utilize employee knowledge about their job functions and review the department performance, encouraging with rewards for suggested cost saving solutions.
8. Jidohka (automation with a human touch). Technological advancements needed to be taken advantage of along with improving worker skill level, without sacrificing employee morale.
10 20 30 40 50 60
10 20 30 40 50 60 70 80 90 Traditional manufacturing
JIT manufacturing
% Capacity utilization Production
lead times (days)
Figure 8.5. Relationship between Traditional and JIT Manufacturing.
Increasing production capacity reduces manufacturing lead times. Only slight increases in pro- duction capacities can lead to:
• Significant reduction of manufacturing lead times
• Significant reduction of work-in-process inventory
Generally, today’s manufacturing environment requires greatly increased product diversity, re- duced product life cycles and greatly enhanced customer expectations in terms of quality and delivery lead time. Therefore, production managers need to look at product lead times and seeking to reduce them to the absolute minimum.
178 A Modern Approach to Operations Management 8.7.1 IMPORTANT ASPECTS IN JIT MANUFACTURING
People
JIT has influence in ordering, scheduling and producing sides of a manufacturing firm. This influence in the manufacturing firm depends on employees, suppliers or customers. They are the ones on which the JIT-principle is relying. This results in a well known quote: “It is the people that make JIT work”
[Roger B. Brooks]. Manufacturers put a large element of training in the JIT to reach to the following goals:
• Mutual trust and team work: When managers and workers see each other as equal, com- mitted to the organization and its success, they are more willing to cooperate with each other in order to find the problems and solve these problems.
• Empowerment of the workers: A firm which empowers its workers gives its workers the authority to solve problems on their own. When this is done, workers have the authority to stop production to solve problems instead of first waiting for guidance from the above. The objective of worker empowerment is having workers involved in problem solving at the shop floor level.
JIT is a total system, which means that all company members work towards improvement goals.
If only some of the members are involved, then only some of the problems will be solved. It is on this aspect of JIT that another Japanese idea - total quality - most closely impacts. Total quality is used here to describe the organization development (OD), or culture changes, needed to support development into the excellent company.
Quality
Quality within JIT-manufacturing is necessary and must be inherent in the process. Without high qual- ity standards, JIT will fail. Here we will think about JIDOKA (Quality at the source), POKA YOKE (Error proofing) and plan do check action, with its statistical process control.
To make the output right the first time by employing quality at source, line stop and fool proof devices. According to the Japanese philosophy, “quality is built-in, not inspected-in”[Jack Byrd et al].
Therefore,
• Workers are responsible for their own works.
• An operator can stop an assembly line if something goes wrong (Jidoka).
• Automated inspection devices are installed wherever appropriate.
Techniques
The JIT-technique is a “pull system”, based on not producing units until they are needed. The well known kanban card is used as a signal to produce. A number of core techniques are used to attack waste across a broad front. It is the combined effect of applying these techniques which makes JIT such a formidable competitive weapon. The whole is greater than the parts.
JIT manufacturing techniques include using the smallest possible machine, putting away every- thing that is not needed, arranging things in the best possible way, and jidoka, the stopping of the production line when abnormal conditions occur.
Integration
Integrated Process Control (IPC) achieves the goals of JIT manufacturing by optimizing production to meet both manufacturer and customer requirements. In IPC, two concepts control the process of con- tinual improvement. They are:
Just-In-Time Approach 179
• First, the process of continual improvement is directed toward producing product of quality at low cost.
• The second concept is that customers needs have to be continually monitored since they change regularly.
The development of an IPC system is based on understanding these two requirements and com- bining them into a single system.
JIT integration can be found in following points of JIT manufacturing firm:
Management and Labor Responsibilities: Decision-making and communications are generally associated with inefficiencies in a company. Problems with communications include ambiguity in the interpretation of the requirement and failure to specify the requirement. To allow employees to contrib- ute to the decision-making cycle requires changes. IPC reduces the involvement of management but increase the involvement of production line supervision and production workers.
The Role of Other Functions in Process Control (PC): PC is improving the production process by continual improvement. In manufacturing, production would seem to be the function responsible for PC. However, the action or lack of action of functions outside of production can influence production.
The production function: Productions responsibility to a company is to minimize the cost of manufacturing and provide product that meets customer requirements. Integrating quality into produc- tion is a priority in a competitive market.
The Engineering Function: Engineering’s responsibility in PC is to design for customer re- quirements and product production requirements. To satisfy a customer’s need is just as important as designing a product using top production technology.
The purchasing function: The responsibility of the purchasing function is to ensure that the required materials are available at the proper quality level, on time, and at a fair price. The sales func- tion provides most of the information on a customer’s needs and requirements that are used by engi- neers to determine product specification and configuration.
8.7.2 ADVANTAGES AND DISADVANTAGES OF JIT Advantages of JIT
Advocates of JIT claim it is a revolutionary concept that all manufacturers will have to adopt in order to remain competitive [Marc L. Songini]. JIT encompasses the successful execution of all production activities required to produce a product, from designing to delivery. Its benefits are many:
1. Shortened lead time.
2. Reduced time spent on non-process work.
3. Eliminate waste and rework and consequently reduce requirements for raw materials, person, power and machine capacity
4. It increases worker motivation and teamwork.
5. Reduced inventory. As a result:
• Frees up working capital for other projects.
• Less space is needed.
• Customer responsiveness increases.
180 A Modern Approach to Operations Management 6. Reduce or eliminate setup times
7. Reduce lot sizes (manufacturing and purchase): reducing setup times allows economical pro- duction of smaller lots; close cooperation with suppliers is necessary to achieve reductions in order lot sizes for purchased items, since this will require more frequent deliveries.
8. Problem clarification.
9. Cost savings
(a) Materials Cost Savings: Materials cost savings is basically the reduction of costs incorpo- rated with purchasing, receiving, inspection, and stockroom costs. Elements in Materials Cost Saving are:
• Reduction of Suppliers
• Long-term Contracts
• Reduce Order Scheduling
• Simplify Receiving Systems
• Eliminate unpacking
• Eliminate Inspection
• Eliminate inventory Stocking
• Eliminate Excess Material.
(b) Manufacturing Cost Savings: Manufacturing cost savings identifies saving in the engineer- ing, production, and the quality control activities. A major part of manufacturing cost sav- ings is keeping a high level of quality, quality reduces cost and increases revenue.
(c) Sales Cost Savings: Sales cost saving comes in the form of reducing overlap between the supplier and the customer, which is inspection and testing. The most effective situation that the sales department can establish is finding customers that also use JIT systems.
10. Total product cycle time drops.
11. Product quality improved.
12. Reduced scrap and rework 13. Smoother production flow
14. Less inventory, of raw materials, work-in-progress and finished goods.
15. Higher productivity
16. Higher worker participation
17. More skilled workforce, able and willing to switch roles 18. Reduced space requirement
19. Improved relationships with suppliers Disadvantages of JIT
There are often a number of barriers that also have to be overcome to achieve the final goal.
• The JIT method demands a much disciplined assembly-line process. The entire factory has to be in sync to successfully exploit its methods. Manufacturers can afford fewer errors in the delivery of the supplier’s component; if a part isn’t there, the assembly line stops, and that can result in the loss of manpower and cash.
Just-In-Time Approach 181
• Changes in production planning, inaccurate forecasting procedures resulting in under or over forecasting of demand, equipment failures creating capacity problems and employee absen- teeism all create problems in implementing JIT.
• JIT requires special training and the reorganization of policies and procedures.
• The organizational cultures vary from firm to firm. There are some cultures that tie to JIT success but it is difficult for an organization to change its cultures within a short time.
• Difference in implementation of JIT. Because JIT was originally established in Japan, the benefits may vary.
• Resistance to change. JIT involves a change throughout the whole organization, but human nature resists changing. The most common resistances are emotional resistance and rational resistance. Emotional resistances are those psychological feeling which hinder performance such as anxiety. Rational resistance is the deficient of the needed information for the workers to perform the job well.
• JIT requires workers to be multi-skilled and flexible to change.
Some more modern ideas are discussed in the following section. This new concept is known as the ‘Theory of Constraints’ or TOC.