JIT

Just-In-Time

The (JIT) technique referred as Zero Inventory Production System (ZIP). In these case, the firm may hold absolutely no inventory at any stage of product. The exact

Just-in-time (JIT) is an inventory strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs. To meet JIT objectives, the process relies on signals or Kanban between different points in the process, which tell production when to make the next part. Kanban are usually 'tickets' but can be simple visual signals, such as the presence or absence of a part on a shelf. Implemented correctly, JIT can dramatically improve a manufacturing organization's return on investment, quality, and efficiency.

Definition

• A strategy for inventory management in which raw materials and components are delivered from the vendor or supplier immediately before they are needed in the manufacturing process.

• Uses a systems approach to develop and operate a manufacturing system

• Organizes the production process so that parts are available when they are needed

• A method for optimizing processes that involves continual reduction of waste

• Central Themes

Ø Simplicity

The goal of JIT manufacturing is to identify the perfect process, making the process as simple and efficient as possible.

Ø Quality

Quality is one of the main concepts. JIT implicitly assumes that input parts quality remains constant over time. If not, firms may benefit from hoarding high quality inputs.

Ø Elimination of Waste

Waste is defined as “any activity that increases cost but does not add value to the product. The end result should be a manufacturing process with no wasteful actions.

• Just-In-Time Techniques

Ø Inventory Reduction as a Tool for Improvement

means that if you reduce inventory many good things can happen along with it. Costs are reduced greatly if inventory is reduced, also a large inventory usually does not get rid of problems it just hides them.

Ø Supplier relationships is a big part of the JIT process, the main goal is to have suppliers deliver raw materials and components exactly when they are needed on the shop floor, skipping inspection and storage. This requires a great deal of trust between the supplier and the customer, this can be achieved through sole-sourcing, and long term contracts to promote loyalty.

Ø Inventory pull is the opposite of the traditional technique, inventory push. Inventory pull means that each manufacturing center pulls the work from the previous site as space becomes available. This keeps the WIP low because there is no build up of work at any specific work station. The only WIP needed is the work on the floor being currently manufactured.

Ø Reduced setup times are achieved in JIT by keeping batch sizes as small as possible, the ideal batch size is said to be one. Companies spend a lot of time in setup time reduction, with the implementation of JIT setup time are usually reduced thirty or fifty percent.

Ø Preventive maintenance is needed to reduce variation in the process and also to keep a high level of quality. This requires a comprehensive examination of all machines on a regular basis.

• Goals of Just-In-Time Systems

Ø Design for Optimum Quality and Cost

Design of a product is one of the most important phases of a products development because it integrates the quality and cost immediately. Designing a product with high manufacturability is an important step because it shows the efficiency at which a product can be manufactured. To minimize the resources that go into a product is just good business practices; however, it is a key to success in JIT systems.

Ø Minimize resources needed for Design and Manufacturing

Capital, equipment, and labor are the key elements of a product and the reduction of these will minimize cost and time in the production process, but the important thing is that the product remains at a high level of quality. Being responsive to the customers needs is also very important in JIT systems because you must be able to understand how your customers internal systems and requirements.

Ø Be Responsive to the Customers Needs

Being responsive to the customer can include; producing various sizes of lots, reducing manufacturing costs, reducing lead time, reducing the customers internal costs, working with the customers management on future products.

• Advantages of JIT Manufacturing

Ø Materials cost savings

is basically the reduction of costs incorporated with purchasing, receiving, inspection, and stockroom costs. Manufacturing cost savings identifies saving in the engineering, production, and the quality control activities.

Ø Manufacturing Cost Savings

A major part of manufacturing cost savings I keeping a high level of quality, quality reduces cost and increases revenue.

Ø Sales Cost Savings

Sales cost saving comes in the form of reducing overlap between the supplier and the customer, which is inspection and testing. The most effective situation that the sales department can establish is finding customers that also use JIT systems.

• Elements in Materials Cost Saving

Reduction of Suppliers

Long-term Contracts

Reduce Order Scheduling

Simplify Receiving Systems

Eliminate unpacking

Eliminate Inspection

Eliminate inventory stocking

Eliminate Excess Material

• How Just-In-Time Systems Work

Ø Requirements for JIT Manufacturing

There are many requirements for JIT systems that will be covered in the upcoming slides but the main requirements are organizational commitment to the company’s internal structures related to JIT techniques, and customer and supplier support systems.

Ø Firm-wide Commitment

Firm-wide commitment and knowledgeable management run hand in hand because first you need knowledgeable management to have firm-wide commitment.

Ø Knowledgeable Management

The management must be able to teach the employees about JIT and support the effort completely. They must know everything about JIT so that they can inform everyone of what is going on at all times.

• Requirements for JIT

Respond to Customer Requirements

Integrate all Processes in the Manufacturing System

Employee Participation in Meeting Commitments

Company wide Commitment to education

Eliminate redundancy

Reduce all Inventories

Establish Continuous Improvement Goals

Use a pull Production System

Design products for Manufacturing

Develop Controllable Production Processes

Have a Defect Prevention Program

Reduce Setup Times

Build Products to Specification

· The Toyota Production System

The Toyota production system has been called the “kanban system” and the “Toyota System”, but they are just other labels referring to the Just-In-Time system. Toyota has gone through an evolution of sorts, They have evolved into a comprehensive system that is a single unit with no separate parts. The Toyota system first attracted attention in 1973 when Japan was going through an oil crisis and it companies had to manage to do well with less. They began to closely scrutinize the relentless pursuit of total elimination of waste that Toyota swore by. Many people criticized this method but they could have just been making excuses because it is a very difficult and time consuming process to implement such a serious change in an organization. The times are changing from “if we make it, we can sell it” to a time where society views quality and value as the most important aspects of a product. Toyota implemented JIT in a time where most people had never even heard of it, and they did it with near perfection.