LEAN OPERATIONS AND JUST IN TIME (JIT) MANAGEMENT

LEAN OPERATIONS AND JUST IN TIME (JIT) MANAGEMENT
Objectives:
By the end of the chapter the student should be able to:
(i) Highlight the main objective of lean management
(ii) Discuss the key elements of lean operations
(iii) Describe the concept of just in time
(iv) Explain the key elements of just in time
Lean operations
Lean operations aims to meet demand instantly, deliver perfect quality and eliminate waste in all its forms. five key elements of Lean Operations are:
(i) eliminate waste,
(ii) involve everyone and
(iii) continuous improvement.
(i) Eliminate Waste
Waste is considered as any activity which does not add value to the operation. There are 7 classified types of wastes, the priority should be to avoid these wastes.
Types of waste
– Overproduction – making too much too early
– Waiting – Need to keep a low of material/customers
– Unnecessary Motions – ergonomics and layout
– Transporting – unnecessary movements/handling
– Processing – Too much capacity in one machine instead of a number of smaller ones
– Inventory – Raw material, work in progress and inished goods
– Defects – costs of defects tend to escalate the longer they remain undetected
The 7 service customer wastes can be the basisfor an improvement programme:
– Delay on the part of customers waiting for service, for delivery, in queues, for response, not arriving as promised.
– Duplication. Having to re-enter data, repeat details on forms and answering queries from several sources within the same organisation.
– Unnecessary movements. Queuing several times, poor ergonomics in the service encounter.
– Unclear communication and the wastes of seeking clarification.
– Incorrect inventory. Out-of-stock, unable to get exactly what is required, substitute products or services.
– Opportunity lost to retain or win customers, failure to establish rapport, ignoring customers, unfriendliness, and rudeness.
– Errors in the service transaction, product defects in the product-service bundle, lost or damaged goods.
(ii) Involvement of Everyone
Some organisations view the lean approach as consisting almost exclusively of waste elimination. However effective waste elimination is best achieved through changes in staff behaviour. Lean aims to create a new culture in which all employees are encouraged to contribute to improvement efforts through generating ideas. In order to undertake this level of involvement the organisation will provide training to staff in a wide range of areas, including techniques such as statistical process control (SPC) and more general problem
solving techniques.
(iii) Continuous Improvement (CI)
Continuous Improvement or Kaizen, the Japanese term, is a philosophy which believes that it is possible to get to the ideals ofLean by a continuous stream of improvements over time. Continuous Improvement is needed because customer‟s views are continually
changing and standards are rising. Kaizen is about moving tacit knowledge to explicit knowledge.
Tacit – „Know-How‟ based on years of experience but may not be written down. Explicit – Written down in principles and procedures. CI enables ideas held tacitly to be explicitly incorporated by the organisation. Principles for implementing a continuous improvement effort include:
Implementing Lean operations
As stated earlier the „lean‟ approach aims to meet demand instantly, deliver perfect quality and eliminate waste in all its forms. One of the ways it does this is through replacing the traditional push production system with a pull production system sometimes called „lean synchronisation‟. Other techniques include setup reduction and total preventative maintenance.
Push Production Systems
In a push production system a schedule pushes work on to machines which is then passed through to the next work centre. At each production stage a buffer stock is kept to ensure that if any production stage fails then the subsequent production stage will not be starved of material. The higher the buffer stocks kept at each stage of the line, the more disruption can occur without the production line being
halted by lack of material.
Advantages
• Buffers insulate stages against disruption in other stages.
Disadvantages
• Because buffers insulate system from problems the problems are not visible so no one takes responsibility for
f i xing them.
• Buffer stock leads to high inventory and slower lead times
• Production is not connected to demand
Pull production system
In a pull system the process starts by an order for the finished product (e.g. car) at the end of the production line. This then triggers an order for components of that item which in turn triggers an order for further sub-components. The process repeats until the initial stage of production and the material lows through the system as in the push approach.
Advantages
 No buffers so problems visible (whole line stops) so people take responsibility for ixing them.
 No or low buffer stock leads to low inventory and faster lead times
 Production is connected (pulled) to demand
Disadvantages
 No protection against unforeseen disruption sto supply chain
One system for implementing a pull system is called a kanban (Japanese for „card‟ or „sign‟) production system. Each kanban provides information on the part identiication, quantity per container that the part is transported in and the preceding and next work station. Kanbans in themselves do not provide the schedule for production but without them production cannot take place as they authorise the production and movement of material through the pull system. Kanbans need not be a card, but something that can be used as a
signal for production such as a marker, or coloured square area
Setup Reduction
In order to operate with the small batch sizes required by lean it is necessary to reduce setup time (the time taken to adjust equipment to work on a different component) drastically because of the increased number of setups needed with small batches. Originally some
operations such as stamping car door panels with a press die were done in very large batch sizes, and the output stored in inventory, because the setup time for the press could be measured in hours or even days. Shigeo Shingo developed a system for setup reduction
which became known as the Single Minute Exchange of Dies (SMED)
Total Preventative Maintenance (TPM)
This anticipates equipment failures through a programme of routine maintenance which will not only help to reduce breakdowns, but also to reduce downtime and lengthen the life of the equipment. TPM includes the following activities:
– Regular Maintenance activities such as lubricating, painting, cleaning and inspection. These activities are normally carried out by the operator in order to prevent equipment deterioration.
– Periodic Inspection to assess the condition of equipment in order to avoid breakdowns. These inspections are normally carried out at regular time intervals by either operator or maintenance personnel.
– Preventative Repairs, due to deterioration, but before a breakdown has occurred. Normally carried out by maintenance personnel but ideally by the operators.
Just-In-Time (JIT) Production
Just-in-time (JIT) is defined as “a philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity”. It also has been described as an approach with the objective of producing the right part in the right place at the right time (in other words, “just in time”). Waste results from any activity that adds cost without adding value, such as the unnecessary moving of materials, the accumulation of excess inventory, or the use of faulty production methods that create products requiring subsequent rework. JIT (also known as lean production or stockless production) should improve profits and return on investment by
reducing inventory levels (increasing the inventory turnover rate), reducing variability, improving product quality, reducing production and delivery lead times, and reducing other costs (such as those associated with machine setup and equipment breakdown). In a JIT system, underutilized (excess) capacity is used instead of buffer inventories to hedge against problems that may arise.
JIT applies primarily to repetitive manufacturing processes in which the same products and components are produced over and over again. The general idea is to establish flow processes (even when the facility uses a jobbing or batch process layout) by linking work centers so that there is an even, balanced flow of materials throughout the entire production process, similar to that found in an assembly line. To accomplish this, an attempt is made to reach the goals of driving all inventory buffers toward zero and achieving the ideal lot size of one unit. The basic elements of JIT were developed by Toyota in the 1950’s, and became known as the Toyota Production System (TPS). JIT was well-established in many Japanese factories by the early 1970’s. JIT began to be adopted in the U.S. in the 1980’s (General Electric was an early adopter), and the JIT/lean concepts are now widely accepted and used.
Key Elements of JIT
1. Stabilize and level the MPS with uniform plant loading (heijunka in Japanese): create a uniform load on all work centers through constant daily production (establish freeze windows to prevent changes in the production plan for some period of time) and mixed model assembly (produce roughly the same mix of products each day, using a repeating sequence if several products are produced on the same line). Meet demand fluctuations through end-item inventory rather than through fluctuations in production level. Use of a stable production schedule also permits the use of backflushing to manage inventory: an end item‟s bill of materials is periodically exploded to calculate the usage quantities of the various components that were used to make the item, eliminating the need to collect detailed usage information on the shop floor.
2. Reduce or eliminate setup times: aim for single digit setup times (less than 10 minutes) or “one-touch” setup — this can be done through better planning, process redesign, and product redesign. A good example of the potential for improved setup times can be found in auto racing, where a NASCAR pit crew can change all four tires and put gas in the tank in under 20 seconds. (How long would it take you to change just one tire on your car?) The pit crew‟s efficiency is the result of a team effort using specialized equipment and a coordinated, well rehearsed process.
3. Reduce lot sizes (manufacturing and purchase): reducing setup times allows economical production 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.
4. Reduce lead times (production and delivery): production lead times can be reduced by moving work stations closer together, applying group technology and cellular manufacturing concepts, reducing queue length (reducing the number of jobs waiting to be processed at a given machine), and improving the coordination and cooperation between successive processes; delivery lead times can be reduced through close cooperation with suppliers, possibly by inducing suppliers to locate closer to the factory.
5. Preventive maintenance: use machine and worker idle time to maintain equipment and prevent breakdowns.
6. Flexible work force: workers should be trained to operate several machines, to perform maintenance tasks, and to perform quality inspections. In general, JIT requires teams of competent, empowered employees who have more responsibility for their own work. The
Toyota Production System concept of “respect for people” contributes to a good relationship between workers and management.
7. Require supplier quality assurance and implement a zero defects quality program: errors leading to defective items must be eliminated, since there are no buffers of excess parts. A quality at the source (jidoka) program must be implemented to give workers the personal responsibility for the quality of the work they do, and the authority to stop production when something goes wrong. Techniques such as “JIT lights” (to indicate line slowdowns or stoppages) and “tally boards” (to record and analyze causes of production stoppages and
slowdowns to facilitate correcting them later) may be used.
8. Small-lot (single unit) conveyance: use a control system such as a kanban (card) system (or other signaling system) to convey parts between work stations in small quantities (ideally, one unit at a time). In its largest sense, JIT is not the same thing as a kanban system, and a kanban system is not required to implement JIT (some companies have instituted a JIT program along with a MRP system), although JIT is required to implement a kanban system and the two concepts are frequently equated with one another.
Review questions
1. Distinguish between lean operation and just in time
2. Describe the main elements of lean operations
3. Explain the process of implementing lean operations
4. Highlight the benefits of JIT
5. Enumerate the key elements of JIT approach to management
References
Christopher, M. and Towill, D. (2001) An integrated model for the design of agile supply
chains, International Journal of Physical Distribution and Logistics Management, 31(4), 235- 246.
Krafcik, J.F. (1988) Triumph of the lean production system, Sloan Management Review, Fall, 41-52.
Ohno, T. 1988 Toyota Production System: Beyond Large-Scale Production, Productivity Press.
Bicheno, J.(2008) The Lean Toolbox for Service Systems, PICSIE Books.