Just-In-Time Approach 169 of doing this is to keep taking away one more container each day (or week) until you reach the point where production is interrupted because the next full container doesn’t arrive in time (i.e. it’s ‘just-too- late’!); replacing one container should then bring the supply back into balance with the rate of use. If you use this method, make sure you keep one or two full containers somewhere out of sight, ready to slip into the line quickly so that the interruption to production doesn’t cause a problem. This trial and error method of finding out how many Kanban containers are needed is popular because in practice Kanban are usually introduced gradually, in parallel with the old method of supply; if the same contain- ers are used as previously, some will become surplus to requirements anyway when the faster Kanban supply is implemented, so you might as well take advantage of this to reduce the number in use gradu- ally, in the way described.
If this trial and error method worries you, or if you’ve decided to buy a new type of container for your Kanbans, there is a way of working out in advance exactly how many containers will be needed;
using a ‘simulation’ model will enable you to test the effects of different demand levels and a different mix of production with a high degree of confidence.
From the above you will realize that Kanban is not just another name for just-in-time: it is only part of a JIT implementation. The ‘true’ Kanban system is normally only suitable for high turnover components, which are in regular use, and you should generally avoid using Kanbans on high-cost components. However, you can get some of the benefits of a Kanban system, even with high-cost components, by using the shelf-space or floor grid method.
If you decide to use the Kanban concept in your own factory, don’t constrain yourself by trying to conform too rigidly to what I have referred to as the ‘true’ Kanban system. Be flexible: adapt the basic concept to your own circumstances in whatever way you think appropriate, remembering that the prime considerations are minimizing material and work-in-progress stocks, simplifying re-ordering paperwork, and empowering the actual users of the material to call for supplies as and when they need them.
In the sections to follow, we will discuss some more features of JIT:
170 A Modern Approach to Operations Management
• Companies carry out extensive background checks on prospective employees, including in- terviews with family members, neighbors and teachers, and genealogical research to ensure that the candidate has the proper ancestry.
• Lifetime employment is not available to women; even for men the lifetime ends, in many cases, with mandatory retirement at age 55.
• Employees are strongly socialized to conform to company norms, which often discourage religious or social activities.
• The Japanese govt. subsidizes industry through tax breaks and incentives, and provides bar- riers to protect Japanese industry.
8.3.2 JIT MANUFACTURING SYSTEM OVERVIEW
The main idea behind the principle of JIT is to exclude the roots of manufacturing waste by getting just the right quantity of raw materials and generating just the right quantity of products in the right place at the right time. In other words JIT is a process aimed at increasing value added and eliminating waste by providing the environment to perfect and simplify the processes.
JIT works as a pull system and applies to generally every level in a multi-level production system. A pull system is actually “the subsequent process that pulls its requirements from the preceding processes in question”. One useful and effective way to implement this “pull” production is a kanban system [Cralg Felder].
Companies are beginning to turn to internet based technologies to communicate with their sup- pliers, making the JIT ordering and delivering process speedier and more flexible. Although applied mostly to manufacturing, the concepts are not limited to this area of the business. Indeed JIT concepts are always applied to non-manufacturing areas in the same way as in manufacturing areas in the excel- lent company.
The philosophy of JIT is a continuous improvement that puts emphasis on prevention rather than correction, and demands a company wide focus on quality [Matt Schemidt]. It is about developing competence and simplification in the way we do things by squeezing out waste every step of the way.
But there are no short cuts to excellence. We can learn from, and so avoid the pitfalls of, companies which have already embarked on the JIT journey. It is not necessary to make the same mistakes[S.M Thacker].
The requirement of JIT is that equipment, resources and labor are made available only in the amount required and at the time required to do the job. It is based on producing only the necessary units in the necessary quantities at the necessary time by bringing production rates exactly in line with mar- ket demand [Marc L. Songini]. In short, JIT means making what the market wants, when it wants it, while using a minimum of facilities, equipment, materials, and human resources.
The relationship of JIT to manufacturing strategy development can be considered in terms of both its impact on customer needs and of matching or improving or competitor activities. Table-8.1 shows how JIT benefits can be used to provide different forms of competitive advantage. For example, an improvement in flexibility helps to make the facility more responsive to changes to customer de- mand, and shortens lead time.
Just-In-Time Approach 171 Table 8.1. JIT and Competitive Advantage
JIT capability Competitive advantage derived from JIT capability WIP reduction Lower-cost manufacture
Increased flexibility Responsive to customer demands: volume, short lead time, product change Raw materials reduction Lower-cost manufacture
Increased quality Higher-quality products Lower-cost manufacture Increased productivity Lower-cost manufacture
Reduced space requirements Lower-cost manufacture Lower overheads Lower-cost manufacture
A JIT system is designed to expose errors (Figure 8.4) and get them corrected rather than cover- ing them up with inventory because a perfect quality is required for the successful functioning of a JIT system. A company implementing the JIT system must attend to several important details such as:
Problem-solving activities by workers
& management Ideas for
reducing setup times Ideas for
improving qualities
Ideas for changing the process (equipment,
training, etc.)
Reduce inventories and/or workers Small-lot
production
Stable master
schedule Multi function workers
Equipment and layout
Kanban pull system
Supplier prettification
Company O.C.
Increase of revenue
Just-in-time production
Cost reduction by eliminating waste
Return on investment increase
Less investment
Figure 8.4. JIT System.
Smooth material flow-simplify material flow patterns: Requires a total rearrangement of the production lines and direct access to and from receiving and shipping docks. By doing this, uninter- rupted material flow from receipt, directly through each production stage, than to delivery is possible.
172 A Modern Approach to Operations Management Reduction of setup times-prior to JIT: Many discrete part manufacturing had machine setups that sometimes required several hours that is intolerable in a JIT system.
Reduction of vendor lead Times: Instead of receiving large shipments of purchased parts every 2 or 3 months, under JIT we want to receive parts “Just in time” for the needed production operation.
Zero-Defect components: A JIT system cannot tolerate defective components, either manufac- tured or purchased.
Disciplined shop floor control: In a JIT system, it is desired to keep inventories very low and to maintain an ‘unclogged,’ responsive operation. This requires that strict adherence to precise order release times be adhered to at all times which means that machines and machine operators are some- times idle.
8.3.3 THE SEVEN WASTES IN JIT
Shigeo Shingo, a recognized JIT authority and engineer at the Toyota Motor Company identifies [Everette E. Adam et al.] seven wastes [Hall R.] as being the targets of continuous improvement in production processes.
• Waste of overproduction: eliminate by reducing setup times, synchronizing quantities and timing between processes, compacting layout, visibility, and so forth. Make only what is needed now.
• Waste of waiting: eliminate through synchronizing work flow as much as possible, and bal- ance uneven loads by flexible workers and equipment.
• Waste of transportation: establish layouts and locations to make transport and handling un- necessary if possible. Then rationalize transport and material handling that cannot be elimi- nated.
• Waste of processing itself: First question why this part or product should be made at all, then why each process is necessary. Extend thinking beyond economy of scale or speed.
• Waste of stocks: Reduce by shortening setup times and reducing lead times, by synchronizing work flows and improving work skills, and even by smoothing fluctuations in demand for the product. Reducing all the other wastes reduces the waste of stocks.
• Waste of motion: Study motion for economy and consistency. Economy improves productiv- ity, and consistency improves quality. First improve the motions, then mechanize or auto- mate. Otherwise there is danger of automating waste.
• Waste of making defective products: Develop the production process to prevent defects from being made so as to eliminate inspection. At each process, accept no defects and make no defects. Make process failsafe to do this. From a quality process comes a quality product- automatically.
8.3.4 VALUE-ADDED MANUFACTURING
A method of manufacturing that seeks to eliminate waste in processing. Any step in the manufacturing process that does not add value to the product for the customer is wasteful. Some examples of wasteful steps are: process delays, material transport, storages, work-in-process (WIP) inventories, finished goods inventories, excessive paper processing, etc that do not add value to the product.
Professor Robert W. Hall, Indiana University, suggests these points to the Japanese manufactur- ing system.
Just-In-Time Approach 173
• Produce what the customer desires.
• Produce products only at the rate the customer wants them.
• Produce with perfect quality.
• Produce instantaneously—with zero unnecessary lead time.
• Produce with no waste of labor, material, or equipment; every move has a purpose so there is zero idle inventory.
• Produce by methods that allow people to develop.
JIT system cannot be implemented overnight. It should be a gradual process. It may be practical to have a hybrid model in the early phase. According to Shingo, Toyota Motor Company took 20 years [S. Shingo] to implement JIT system. We also need to note the following points:
• Not all Japanese companies practice JIT.
• There are several versions of JIT. Each company that practices the JIT philosophy does so a little differently.
• Variations in cultures account for variations in JIT philosophies and techniques. For exam- ple, the kanban card system is natural to the Japanese, who generally enjoy playing cards. In USA, the cards are often spurned and kanban squares, kanban lights, or yelling ‘ Hey, Jack!
Send me some more materials!’ are used instead.
• JIT is less a set of techniques and more an umbrella encompassing several techniques such as the total quality control, total employee involvement, kanban, setup time reduction, zero inventories, and pull coordination.