Just-In-TimeSystems(LeanProduction)OriginsofJITandLeanProductionPioneeredbyToyotaAdoptedbyotherJapanesemanufacturersDiscoveredmuchlaterbyWesternmanufacturersKnownbymanynames:–ToyotaProductionSystem–JustInTime–Leanproduction–FlowproductionLeanProductionBenefitsDoublelabourproductivity90%reductioninthroughputtimes90%reductionininventoryImprovedqualityReducedtimetomarketHowLongdoesitTake?WomackandJonesdocumentmanycaseswheremajorimprovementsareachievedinamatterofdaysHowMuchdoesitCost?ThecostisusuallyverylowInmanycases,companiesreplaceexpensiveequipmentwithmuchsimplerandcheaperequipmentLeanproductiondoesnotemphasizetechnologyorautomationHewlettPackard’sCupertinoCaliforniaplant1982(beforeJIT)1986(afterJIT)15days11.3hours$670,000$20,000leadtimeworkinprocessno.ofbackorders2002TheLeanTransformationatLantechBatchandQueue/1991Flow/1995ProductDevelopmentTime3-4years1yearEmployeehourspermachine16080Manufacturingspacepermachine100sq.ft.55sq.ft.Delivereddefectspermachine80.8Dollarvalueofinventory(withdoubledsales)$2.6million$1.9millionThroughputtime16weeks14hours–5daysDeliveryleadtime4–20weeks1-4weeksFrom:WomackandJones,LeanThinking,p.121RelativePerformanceinAutoIndustryToyotaJapan(average)USA(average)Europe(average)ProductivityAssembly1st-tiersuppliers100100838565715462Quality(delivereddefects)Assembly(per100cars)1st-tiersuppliers(PPM)2nd-tiersuppliers(PPM)3054005519390061263610061137347231993-94,fromWomackandJones,LeanThinkingRelativePerformanceinAutoIndustryToyotaJapan(average)USA(average)Europe(average)Deliveries(percentlate)1st-tiersuppliers2nd-tiersuppliers0.040.50.22.60.613.41.95.4Stocks(1st-tiersuppliers)HoursStockturns(peryear)Na248378113569138451993-94,fromWomackandJones,LeanThinkingPorsche’sLeanTransition1991199319951997TimeConcepttolaunchWeldingtofinishedcar7years6weeks---5days3years3daysInventoriesDaysonhand17.04.24.23.2EffortHourstoassemble120957645Source:WomackandJones,LeanThinkingPorsche’sLeanTransition1991199319951997ErrorsSuppliedparts(PPM)Finishedcars(index)10,0001004,000601,0004510025Sales3,1021,9132,607-ProfitsHourstoassemble+17-239+2-Source:WomackandJones,LeanThinkingWhatisJIT/LeanProduction?Producingonlywhatisneeded,whenitisneededAphilosophyAnintegratedmanagementsystemJIT’smandate:EliminateallwasteExamplesofWasteWatchingamachinerunWaitingforpartsCountingpartsProducingpartsthataren’tneededMovingpartsoverlongdistancesStoringinventoryLookingfortoolsorpartsMachinebreakdownReworkandscrapProductsthatdon’tmeettheneedsofcustomersLeanPrinciplesSpecifyvalue–definedbythecustomerIdentifyvaluestream–eliminateallactivitiesthatdon’taddvalueFlow–productsshouldflowalongvaluestreamLeanPrinciplesPull–letthecustomerpullproductstheywant,ratherthanpushingproductstheymaynotwantPerfection–striveforperfectionthroughcontinuousimprovementTargetsforEliminatingWasteZerodefectsZerosetuptimeZeroinventoriesZeroparthandlingZerobreakdownsZeroleadtimeLotsizeofoneMatchproductstocustomerneedsZeroDefectsThetraditionalassumptionisthatacertainlevelofdefectsisunavoidableTraditionalmanufacturingmeasuresdefectratesandcomparesthemtoacceptablequalitylevels–acceptancesampling–averageoutgoingqualityJITstrivestoeliminateonceandforallthecausesofdefectsZeroInventoriesIntraditionalmanufacturing,inventoriesareseenasassetsInventoriesprovideasafetybuffer,andresultfrommaximizingmachineutilizationJITviewsinventoryaswasteInventoryisevidenceofpoordesign,poorcoordination,andpooroperationofamanufacturingsystemInventoryHidesProblemsPoorQualityUnreliableSupplierMachineBreakdownInefficientLayoutBadDesignLengthySetupsLowerLevelsOfInventoryToExposeProblemsPoorQualityUnreliableSupplierMachineBreakdownInefficientLayoutBadDesignLengthySetupsZeroSetupTimeTraditionalthinkingconsidersthesetuptimetobegivenandirreducible–TraditionalEconomicOrderQuantityandEconomicProductionLotformulasfindatradeoffbetweensetupcostandinventorycostJITthinkingrecognizestheimportanceofreducingthesetuptime–Ifthesetuptimeiszero,theoptimallotsizeisoneZeroLeadTimeShortsetupsandsmalllotsleadnaturallytoshortleadtimesTheplanninghorizoncanbecloser,andtheforecastsmoreaccurateThesystemcanchangequicklyinresponsetochangingdemandTheflexibilityisthusimprovedZeroPartsHandlingJITconsidersallparthandlingtobeawaste,sinceitdoesnotaddvalueParthandlingincludes–componentfeeding–componenthandling–partsinspection–shippingandtransportationZeroPartsHandlingUnnecessaryhandlingcanbeeliminatedbycarefuldesignoftheproductandtheprocess–designforassembly–designformanufacturability–cellularmanufacturing–JITdeliveriestopoint-of-useZeroBreakdownsMaintainequipmentintopconditionImplementTotalProductiveMaintenanceDon’twaitforproblemstooccurTheoldsaying“Ifitain’tbroke,don’tfixit”iswrong!ZeroLeadtimes,LotSizeofOneIfsetuptimesarezero,lotsizeofoneisfeasibleLotsizeofoneallowscontinuousflowinsteadofbatch-and-queueWIPandleadtimeswillbeslashedasaresultMatchingProductDesigntoMarketDemandConcurrentengineeringreducesthedesigncycleGreaterproductvarietyisachievedthroughmodulardes