JIT

Just in Time JIT Implementation Roadmap - to achieve a balanced rapid flow from planning to scheduling Anand Subramaniam

“ Management is the organ of institutions, the organ that converts a mob into an organisation, and human efforts into performance.” - Peter F. Drucker

Highlights JIT - Overview JIT Relationship Kanban Pull System JIT - Implementation Roadmap

JIT Philosophy JIT Lower inventory levels / small lots sizes Streamlined with no waste or variability in production system A “Pull” system thru the plant Fewer suppliers (keiretsu) with long-term guaranteed contract Employee empowerment Guaranteed delivery times A management philosophy Works well in high-volume production with minimal inventory (RM, WIP, FG) Exposes problems & bottlenecks, requires TQM

JIT - Big Vs. Little Big Broad focus Vendor relations Human relations Technology management Materials and inventory management Little Narrow focus Scheduling materials Scheduling services of production

JIT Objectives Objectives Zero lead time Zero failures Flow process Flexible manufacture Eliminate waste Zero Inventory

JIT – Building Blocks JIT Product Design Process Design Manf Plan & Control Human Resource / Organisation

JIT – Building Blocks Product Design Few BOM levels Achievable quality Appropriate quality Standard parts Modular design Manufacturability in production cells Process Design Limited WIP No stockrooms Reduced setup / lot size Quality improvement Manufacturing cells Service enhancements HR / Org Cross training / job rotation Flexible labor Continual improvement Limited direct / indirect distinction Cost accounting / performance measurement Information system changes Leadership / project management MPC Pull systems Rapid flow times Small container sizes Paperless systems Visual systems Level loading MRP interface Close vendor relationships Reduced production reporting / inventory transaction processing Factory cost reductions

JIT Requirements People Involvement Supportive unions Hands-on manager style Quality commitment Inventory Reduce # of stores, in-transit, carousels Calculate from MRP & EOQs Product DFM / Modular & fewer parts Quality standards Clarify process flows Maintain process & technologies Operation Balance work centre capacities Flow layout Preventive maintenance Reduce lot sizes, setup times Suppliers Quality defined Frequent deliveries Reduce lead times Project usage requirements Leveling Level schedule Under utilise capacity Establish freeze windows Kanban Back flush Demand pull Reduce batch / lot sizes Quality Worker responsibility SQC / compliance Fail-safe methods Auto inspect Requirement

JIT in Manufacturing Planning & Control

MRP vs. JIT MRP Rigid MRP schedule Slow between schedules Structured to support complex BOM’s Centralised Forecast driven (Inaccurate) Supports long lead-times beyond MRP run frequency Infinite capacity Complex JIT High flexibility Fast response Flattened BOM’s & reduce transaction Decentralisation Consumption driven Supports lead-times inside of MRP run frequency Planned capacity Simple (Usually)

JIT & TQM Jidoka (authority to stop line) Build quality into all processes Poka-yoke (fail-safe all processes) Preventive maintenance - scheduled Quality at the source - sequential inspection Focus on continuous improvement – Kaizen Work environment - everything in its place, a place for everything

Supplier / Buyer Partnership Buyer Focus on core competencies Develop long term relationships Share customer preferences and demand forecasts Support supplier innovation & price competitiveness Minimise product specifications and encourage innovation Process orders with minimal paperwork (use EDI / Internet) Supplier Locate near buyer Detailed routing labels Focus on core competencies Include packaging & routing details Extend JIT techniques to their suppliers (tier 2) Quantities Produce small lots Produce with zero defects Deliver with little coverage & underage Meet mutually developed quality requirements Shipping Consider 3PL Ship frequently – small orders Use ASN (Advance Shipping Notice) Seek joint scheduling & shipping efficiencies Build Trust

Supplier – Partnership & Concerns Partnership Eliminate poor suppliers Eliminate in-plant inventory Eliminate in-transit inventory Eliminate unnecessary activities Concerns Diversification Small lot sizes Quality assurance Physical proximity Poor customer scheduling Frequent engineering changes

What is Kanban Kanban Kan=card Ban= signal Cards to signal & communicate reorder information Minimise storage in the production area Workstations only produce / deliver components when a card PLUS empty container is received Toyota in 1950s developed it to manage line / material flows Authorisation to produce more inventory Limits the amount of inventory in process To deliver components to a work station as & when needed (pull) Work-station produces enough to fill the container

Kanban System Machine Centre Assembly Line Bin Part A Bin Part A Material Flow Card (signal) Flow Withdrawal kanban Production kanban

Kanban Card # of containers released Name / location of preceding process Routing process Store bin / location Units of measure Part # Container type & capacity Name / location of next process Supplier Part # Supplier Name Reorder / Lot Qty Description Kanban #

Kanban - Rules Each container of parts must have a kanban card Production started only on receipt of a production kanban No parts may be obtained without a withdrawal kanban Only standard containers are used that contain standard quantities The parts are always pulled where, the using department must come to the providing department & not vice versa

Kanban Card Calculation Each container = minimum replenishment lot size Calculate lead time required to produce a "container" k = No. of kanbans in card set d = Average No. of units demanded over the period L = lead time to replenish order (same units of time as demand) S = Safety stock as % of demand during lead time C = Container size C S dL ) (1   k Container capacity Expected demand during lead time + safety stock 

Example A switch is assembled in batches of 4 units at an “upstream” work area. It is delivered in a bin to a “downstream” control-panel assembly area that requires 5 switch assemblies / hour. The switch assembly area can produce a bin of switch assemblies in 2 hours. Safety stock = 10% of needed inventory.   C dL (1  S ) 4 5(2)(1.1) 2.75 or 3  k size of container Expected demand during lead time + safety stock 

Kanban Challenges Challenges Assumes stable repetitive production Gets complex when upstream w/station makes several parts, each with separate signaling card Poor quality (scrap & rework) affect functioning Doesn't eliminate variability and / or lengthy down times Less suited to industries where mix & volumes fluctuate Buffer stocks may be needed

JIT – Phased Implementation Phase 1 Phase 2 Phase 3 Design Flow Process Review product design, TQC & SPC Kanban Pull Review inventory policies Work & build trust with Vendors Manage Stakeholder Expectations JIT Implementation Inventory reduction Skill / Capability Development Measure performance Business Improvement Improve product design 1 2 3 4 5 6 7 Months Baseline & Stabilise schedules Project / Change Management

JIT – Implementation Steps Design Flow Process Total Quality Control Baseline & Stabilise Schedule Demand / Kanban Pull Inventory Review & Reduction Build Skills & Capabilities Improve Product Design Continuously Improve Work & Build Trust with Vendors Measures & Metrics

JIT – Implementation Steps (Contd.) Design Flow Process Review JIT building blocks Review & align MPC operations Balance work-centre capacities Review flow layout Educate on preventative maintenance Review and reduce lot sizes Review and reduce setup / changeover time Total Quality Control Review & define worker role & responsibilities Define & measure statistical quality control Analyse & improve compliance Define and implement face safe methods Review & automate inspection process Stabilise Schedules Review load & capacity schedules Level schedules Underutilise capacity Establish time fences (frozen and liquid) Kanban Pull Educate on production & withdrawal Kanban methods Define and implement Kanban rules Review demand pull process Implement back-flush process Review lot size policies and reduce lot sizes

JIT – Implementation Steps (Contd.) Vendors Review vendor lists and rationalise Educate and build trust Review lead time and negotiate reduction Negotiate for small lot size & frequent deliveries Review usage metrics and measures Project usage requirements Define quality expectations and measures / metrics Inventory Review inventory policies and controls Reduce inventory movements Product Design Review & standardise product configuration Educate on JIT building blocks Standardise & reduce number of parts Review & redesign production process Define and implement quality measures & metrics Continuous Improve / Measure Root cause analysis Team education & empowerment Skills development Introduce few meaningful measures Define measures and metrics Emphasise improvement Track trends

JIT – Continuously Improve Design Flow Process Total Quality Control Baseline & Stabilise Schedule Demand / Kanban Pull Inventory Review & Reduction Build Skills & Capabilities Improve Product Design Work & Build Trust with Vendors Measures & Metrics

“ There are two ways of exerting one’s strength; one is pushing down, the other is pulling up .” - Booker T Washington

Good Luck http://www.linkedin.com/in/anandsubramaniam

JIT

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