JIT system
Just in time was developed by the Japanese in the nineteen seventies as a philosophy for problem solving. One of the reasons the Japanese created the JIT system was related to “the lack of space in their country” (Aghazadeh). Just in time has evolved from a specific manufacturing and production method to a comprehensive management philosophy. The first major corporation to adopt and implement a Just In Time system was Toyota. At that time Toyota was under the control of Taiichi Ohno who has become known as the father of JIT(Aghazadeh). Evolution
The popularity and benefits of using a JIT system significantly increased by the mid 1980’s and is still being introduced for the first time in companies today. Although JIT was originally established as a method to be used by Japanese manufacturers, today corporations around the world such as Ford, General Electric, Best Buy, Wal-Mart and Toyota are realizing the benefits of this system. The JIT philosophy was built on the belief that “waste can be eliminated by cutting unnecessary inventory and removing non-value added activities in operations.
A JIT system is the organization of resources, information flows, and decision rules that enable an organization to realize the benefits of a JIT philosophy” (Aghazadeh). In essence, operating under a true JIT system a means that a corporation should have just the right amount of inventory or raw materials to satisfy production and customer demands. Once the company has successful adopted and implemented a JIT system their operations will become more efficient, cost effective and customer responsive.
The bottom line is once a JIT system is successfully implemented the corporation will realize both time and monetary savings. JIT facilitates a more effective and efficient use of funds. These savings are derived from a reduction in the amount of capital tied up in raw materials, inventories, storage and carrying costs and additional costs related to writing off obsolete goods. Key Elements There are three key elements essential to the successful implementation of a JIT inventory system. These elements include people, plants and systems.
The people component relates to the need for all employees and suppliers to be fully committed to JIT. In order for a JIT system to be implemented properly there must be support for this system from all levels in the corporation. Acquiring the commitment of all employees will minimize the chance of implementation problems and conflict with management, and result in a smooth and timely transition to a JIT system. In a factory, plant or any other production environment the structural layout plays an important role in the efficiency of the corporation. The layout must be conducive to employee and production flexibility.
The production facility must also be able to react in a timely manner and produce orders when received. In addition management must keep accurate records of orders and inventory levels in an accessible database to ensure that the appropriate quantity of goods is being produced and supply levels reflect the orders on hand. Another key component to maximizing production efficiency is regular maintenance and inspections of machinery by employees. These inspections will assist in identifying opportunities for improvement, calibration issues, and reasons for product defects.
One of the fundamentals elements of a successful JIT system is continuous improvement. Once a factory or plant is built management and employees alike should continuously be looking for incremental opportunities to improve production efficiency. When we talk about systems in a JIT setting we are talking about “the technology and process that links all levels of the production and corporate function” (Davis). There are two major types of systems, material planning requirements and manufacturing planning requirements.
Material planning requirements involves the development of a production plan and related schedules. The production plan is the management and planning of resources. The outcome of a production plan is the master production schedule. This schedule identifies which products to produce and when they will be produced. By combining the efforts and efficiencies of these three key elements a corporation is able to realize the primary goals of a JIT system. Theses goals include reducing operating costs, achieved by minimizing inventory levels, and reducing lead times.
By successfully implementing stringent quality control procedures, corporations can improve product quality as a result of reducing the number of defective goods. In turn, by reducing the number of defective goods a company can minimize unnecessary waste and the related costs associated with write-offs. Five Steps to JIT Implementation In order to successfully implement a JIT system the company must have the commitment of all participants. Furthermore precise planning, constant monitoring and coordination and cooperation from the various levels in supply chain channels are essential (Milligan).
It is important to recognize the significant role the transportation industry plays in successfully implementing a JIT system. This would include cooperation from the transportation companies selected. The various transportation sources include trucks, air cargo and rail. Additionally a corporation must be capable of making quick and accurate decisions with regard to ordering supplies and inventory. The following five steps must be followed to successfully implement a JIT system (Aghazadeh). Step One: Awareness Revolution This step includes redesigning old management techniques and implementing new techniques and styles.
Furthermore, management should review all new concepts with all interacting employees to build confidence and a belief that the new method will work. It is important that employees are fully engaged in the implementation process and assist in identifying and correcting all noticeable mistakes immediately. Employees should also be informed about new developments and changes within the system and an emphasis should be made on continuous improvements. Continuous improvements can also be defined as improvements with no limits. Step Two: Concepts for Workplace Improvement
This step requires an evaluation and prioritization of corporate requirements and a disregard for corporate needs that do not promote efficiency. Employees must maintain a clean and orderly work environment by placing inventory or raw materials, supplies and tools in a logical, orderly manner. For example, items that are used most frequently should be located in a convenient location. Employees can further ensure production efficiency by maintaining all equipment on an ongoing basis. Additionally, rules and employee codes of conduct should be established, practiced and monitored to ensure compliance.
Employee compliance can be monitored through one on one meeting, observation of employees while at work and check-listed inspections. Step Three: Flow Manufacturing Step three is the production of a single piece of product at a given time. This can be achieved by hiring and training multi skilled workers. In addition the production manager should follow a strict cycle time to ensure production deadlines are achieved. Furthermore compact machinery should be used in the production facilities to ensure the facilities space is being used most efficiently. Step Four: Standard Operations
Step four of the implementation phase includes following efficiency rules to ensure that quality products are produced as economically as possible. These efficiency rules may suggest arranging people, products and machines in a way that maximizes production efficiency. Furthermore operations charts, work sequence, and maintaining a standard stock of high volume production components have been identified as tools and methods that can be used to improve efficiency. Step Five: Multiprocessor Handling Step five suggests that one worker is responsible for several processes in a work cell.
This can be facilitated by hiring multi skilled workers. These employees should be properly trained so that they are able to perform on several different machines and be capable of handling various production processes. JIT Strengths and Weaknesses While JIT works for some businesses, for others it can be detrimental. If an auto manufacturer is using JIT production methods, someone somewhere down the line has to hold some amount of inventory as a contingency. Not every supplier in the manufacturing chain has the luxury of only ordering exactly the materials they need.
If inclement weather, strikes or supply shortages were to cause a supplier to not be able to provide an item needed in the manufacturing process, more than likely the supplier would be penalized fairly severely. So, we can see that the burden of inventory control is passed down the line to other suppliers from the JIT manufacturer. (BBC). JIT can lead to some environmental problems and additional costs as well. While less space and materials for storage facilities are needed, in some cases there is a greater cost, both monetarily and environmentally, in moving parts quickly from supplier to manufacturer.
(BBC). As mentioned previously, shocks further down the supply chain can roll “uphill” to the manufacturer. If a supplier that provides seating for a vehicle were to have a catastrophe requiring the shut down of the plant, then the JIT manufacturer at the top of the chain would be without seats until the supplier either came back on-line, or another supplier could be found. This would more than likely result in a slowdown or even stoppage of production at the JIT manufacturer. (Wikipedia). In some instances there can be quality control issues.
Since the quality of each part isn’t usually inspected at assembly time, defects may not be noticed right away in the streamlined JIT environment. (BBC). While I have been pointing out the negatives, there are positives for the JIT manufacturer. A decrease in storage space and the costs associated with it would be a sizable benefit to a company. Another benefit would be an increase in capital due to the fact that it’s not tied up in physical inventory costs. Basic Elements of JIT – Small lot production. – JIT vs EOQ – Set-up time reduction and SMED. – Batch Process vs. Continuous Flow. – Value streams
– Work force agility. – Pull Production, Kanban. – Kaizen, Jidoka. – Focused Factories and Group Technology. – Workcell design and Cellular Manufacturing – Takt-time, Leveling. – Combination of MRP and Kanban systems Traditional vs. JIT View of Manufacturing • Fully utilize capacity so that more products were produced with fewer workers and machines. • Leads to large queues of in-process inventory waiting • Large queues mean resources never wait for product to work on, so capacity utilization high and production costs low. • Products spend most of their time in just waiting, unacceptable in today’s time-based competition.
• The main objective of JIT manufacturing is to reduce manufacturing lead times. • This is primarily achieved by drastic reductions in work-in-process (WIP). • 100% capacity utilization is not the predominant objective. • The result is a smooth, uninterrupted flow of small lots of products throughout production. Operational Benefits of JIT • Reduced space requirements • Reduced inventory investment • Reduced manufacturing lead times • Increased productivity • Increased equipment utilization • Reduced paperwork • Simplified planning systems • Better production scheduling • Work force participation • Increased product quality
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