112002South-Western/ThomsonLearning2002South-Western/ThomsonLearningTMTMSlidespreparedSlidespreparedbyJohnLoucksbyJohnLoucks2Chapter12Just-In-TimeandLeanManufacturing3OverviewTheJust-in-TimeManufacturingPhilosophyPrerequisitesforJITManufacturingElementsofJITManufacturingBenefitsofJITManufacturingSuccessandJITManufacturingJITinServicesWrap-Up:WhatWorld-ClassCompaniesDo4APICSDefinitionofJIT“Aphilosophyofmanufacturingbasedonplannedeliminationofwasteandcontinuousimprovementofproductivity……”5APICSDefinitionofJIT“TheprimaryelementsofJust-in-Timeare:tohaveonlytherequiredinventorywhenneeded;toimprovequalitytozerodefects;toreduceleadtimesbyreducingsetuptimes,queuelengths,andlotsizes;toincrementallyrevisetheoperationsthemselves;andtoaccomplishthesethingsatminimumcost”.6JITSynonymsIBM-ContinuousFlowManufacturingHP-StocklessProduction-RepetitiveManufacturingSystemGE-ManagementbySightMotorola-ShortCycleManufacturingJapanese-TheToyotaSystemBoeing-LeanManufacturing7APICSDefinitionofLeanManufacturing“Aphilosophyofproductionthatemphasizestheminimizationoftheamountofalltheresources(includingtime)usedinthevariousactivitiesoftheenterprise.Itinvolves:…identifyingandeliminatingnon-value-addingactivities,…employingteamsofmulti-skilledworkers,…usinghighlyflexible,automatedmachines”AmericanProductionandInventoryControlSociety(APICS)isanorganizationforprofessionalsworkinginthefieldofOperationsManagement8TraditionalViewofManufacturingKeyobjectivewastofullyutilizecapacitysothatmoreproductswereproducedbyfewerworkersandmachinesHow?Withlargequeuesofin-processinventorywaitingatworkcentersWorkersandmachinesneverhadtowaitforproducttoworkon,socapacityutilizationwashighandproductioncostswerelowResult:Productsspentmostoftheirtimeinmanufacturingjustwaiting,anarrangementthatisunacceptableintoday’stime-basedcompetition9JITPhilosophy10Time-BasedCompetitionItisnotenoughforfirmstobehigh-qualityandlow-costproducersToday,theymustalsobefirstingettingproductsandservicestothecustomerfastTocompeteinthisnewenvironment,theorder-to-deliverycyclemustbedrasticallyreducedJITistheweaponofchoicetodaytoreducetheelapsedtimeofthiscycle11Order-to-DeliveryCycleDistri-butionandCustomerServiceCusto-merPlacesOrderOrderEntryEngi-neeringDesignSched-ulingManufacturingLeadTimesPurchasingLeadTimesManufacturingCumulativeLeadTimeOrder-to-DeliveryCycle12CustomersFinalAssySubSubFabFabFabFabVendorVendorVendorVendorJITLogic13JITManufacturingPhilosophyThemainobjectiveofJITmanufacturingistoreducemanufacturingleadtimesThisisprimarilyachievedbydrasticreductionsinwork-in-process(WIP)Theresultisasmooth,uninterruptedflowofsmalllotsofproductsthroughoutproduction14•Managementphilosophy•PullsystemthoughtheplantWHATITIS•Employeeparticipation•Industrialengineering/basics•Continuingimprovement•Totalqualitycontrol•SmalllotsizesWHATITREQUIRES•Attackswaste•Exposesproblemsandbottlenecks•AchievesstreamlinedproductionWHATITDOES•StableenvironmentWHATITASSUMESJITProduction15SuccessfulJITApplicationsMostsuccessfulJITapplicationshavebeeninrepetitivemanufacturing,wherebatchesofstandardproductsareproducedathighspeedsandinhighvolumes.SuccessfuluseofJITisrareinlarge,highlycomplexjobshopswhereproductionplanningandcontrolisextremelycomplicated.Smaller,lesscomplexjobshopshaveusedJIT,butoperationshavebeenchangedsothattheybehavesomewhatlikerepetitivemanufacturing.16ElementsofJITManufacturingEliminatingwasteEnforcedproblemsolvingandcontinuousimprovementPeoplemakeJITworkTotalQualityManagement(TQM)ParallelprocessingKanbanproductioncontrolJITpurchasingReducinginventoriesWorkingtowardrepetitivemanufacturing17(1)Wastefromoverproduction(2)Wasteofwaitingtime(3)Transportationwaste(4)Inventorywaste(5)Processingwaste(6)Wasteofmotion(7)WastefromproductdefectsWaste--Operations18JIT:APullSystemInapushsystem,suchasanMRPsystem,welookatthescheduletodeterminewhattoproducenextInapullsystem,suchasJIT,welookonlyatthenextstageofproductionanddeterminewhatisneededthere,andthenweproduceonlythatAsRobertHallstates,“Youdon’tnevermakenothingandsenditnoplace.Somebodyhasgottocomeandgetit”19ChangesRequiredforJITJITrequirescertainchangestothefactoryandthewayitismanaged:StabilizeproductionschedulesMakethefactoriesmorefocusedIncreaseworkcentercapacitiesImproveproductqualityCross-trainworkersReduceequipmentbreakdownsDeveloplong-termsupplierrelations20CapacityUtilization102030405060708090100301020%CapacityUtilization60ProductionLeadTimes(days)4050TraditionalManufacturingJITManufacturing21IncreasingProductionCapacityReducesManufacturingLeadTimesOnlyslightincreasesinproductioncapacitiescanleadto:SignificantreductionofmanufacturingleadtimesSignificantreductionofwork-in-processinventoryQueuingtheorycanbeusedtoanalyzewaiting-lineproductionproblems22Weknowfromqueuingtheory(Chapter9)thattheaveragetimeinthesystem(manufacturingleadtime)is:Ifwehaveanaverageleadtimeinmind,wecansolvefortherequiredproductionrate:NecessaryProductionCapacity1()st1st23Work-in-ProcessInventoryWealsoknowfromqueuin