Production Operations Management Just-In-Time Manufacturing

Production Operations Management

• Just-In-Time Manufacturing

• U. Akinc

Just-in-Time (JIT)

• Just in time is a philosophy of management that transcends inventory management, indeed manufacturing management

• Predicated on eliminating all waste from manufacturing

• Waste to be eliminated includes anything that does not add value to the product or service

Examples of Waste

• Inventory

• Inspection

• Set-up Time

• Data Processing

• Most Indirect Labor

• Rework

• Scrap

• Customer Returns

JIT & Competitive Priorities

• Reduces costs via waste elimination

• Increases conformance quality

• Improves flexibility due to small inventory

• Improves delivery performance due to shorter lead times

JIT makes problems Visible

Functions of Inventories Revisited

• Safety Stocks

• Lot Size Inventories

• Anticipation Stocks

• De-coupling

• Transit

• Speculation

Pillars of JIT

• Set-up Time reduction

• Total Quality Management

• Vendor Relations

• Flexible Resources

• Employee Involvement

• Meticulous Maintenance

• Pull vs. Push System of Scheduling

• KANBAN

JIT works best with...

• Uniform production rate

• Flexible workforce

• Limited product variety

A KANBAN

Two-card Kanban

Typical Benefits of JIT

• 5 Companies Surveyed:

• Lead time down by 90%
• Inventory down by 35-73%
• Set up time down by 75-95%
• Material costs down by 6-11%
• Quality costs down by 26-63%

• Harley Davidson

• Inventory turns 7 to 20
• Direct labor prod. up 50%
• Rework reduction 80%
• Warranty costs down by 90%’