“JIT & Lean Manufacturing” by
Best Performing Consulting Organization Adding Value In Totality !!
Session Topics • • • • • •
What is JIT? Benefits of JIT Value Added Management Push vs. Pull Buffered vs. Lean Manufacturing Performance Measures
What is Just-in-Time? • Management philosophy of continuous and forced problem solving • Supplies and components are ‘pulled’ through system to arrive where they are needed when they are needed.
What Does Just-in-Time Do? • Attacks waste –
Anything not adding value to the product • Customer’s perspective
• Exposes problems and bottlenecks –
Caused by variability • Deviation from optimum
• Achieves streamlined production –
By reducing inventory
What is Waste Waste is ‘anything other than the minimum amount of equipment, materials, parts, space, and worker’s time, which are absolutely essential to add value to the product.’ — Shoichiro Toyoda President, Toyota
Just-In-Time Manufacturing JIT seeks to reduce waste. Waste is viewed as a symptom of some unsolved problem. Types of waste include: – Overproduction – Waiting Time – Movement – Inventory – Product Defects – Process Waste
Just-In-Time Manufacturing JIT is used for many activities including: • Inventory Reduction • Quality Improvement • Lead Time Reduction • Continuous Improvement (Kaizen) • Preventive Maintenance
Major Objective of JIT Identify the causes of system variance (waste) and eliminate or control these causes. By attacking the causes of variance, JIT can reduce the dependency of the manufacturing process on wasteful buffers like excessive inventory, long lead times, and idle capacity.
Variability Occurs Because • Employees, machines, and suppliers produce units that do not conform to standards, are late, or are not the proper quantity • Engineering drawings or specifications are inaccurate • Production personnel try to produce before drawings or specifications are complete • Customer demands are unknown
Benefits of JIT • • • •
Shorter Lead Times (Faster Response) Lower Defect Rates Reduced Inventories Enhanced Flexibility
Advantages Of Faster Response Times – Increased Productivity – Increased Quality – Reduced Risk – Increased Profitability – Increased Market Share – Increased Product Variety
Value Added Management A Strategy for Time-Based Competition
s on:
educing Lead Times ocess Flow Analysis iminating or Reduce Non-Value Adding Activities IP Storage aterial Movement spection ework nscheduled Maintenance hangeovers
Value Added Management Value-Added Activity Time The time required to perform those activities essential to the production of a product, or the delivery of a service.
Value Added Management Non Value-Adding Activities Any activity that does not add value to the product being built, or the service being offered. Non value-adding activities are waste.
Value Added Management Examples of Non-Value Added Activities – Administrative Processes & Paperwork – Process Delays – Material Movement – Material Storage – Inspection – Rework – Unscheduled Maintenance – Machine Changeovers
Value Added Management Cycle Time Improvements Improvements to cycle times are achieved by reducing or eliminating non valueadding activities
Value Added Management Identifying Non Value-Adding Activities The key to identifying non value-adding activities is process flow analysis.
Value Added Management Value-Added Time Analysis Worksheet Process Activity
Total Time
Value Non Value Added Time Added Time
Total Mfg. Lead Time 95%
5%
Non Value-Adding
Value Adding
Traditional Response
2%
98% Value Adding
Non Value-Adding
VALUE ADDED MANAGEMENT Value-Adding Response
50%
50%
Non Value Adding
Lead Time Reduced Non Value-Adding Time Reduced
Value Adding
Value Added Ratio V.A.R. = Value Added Time Total Cycle Time Improved By: • Eliminating or Reducing Non Value-Adding Time WIP Storage/FGI Storage Increase V.A.R. by Reducing Cycle Time Material Movement Forces Continuous Process Rework Flow Analysis Unscheduled Maintenance Drives Quality Improvement Changeover Time ANYTHING THAT DOES NOT ADD VALUE FOR THE CUSTOMER
Value Added Management Results – Oregon Cutting Systems
Output Per Hour Up 55% Lead Time from 21 to 1 day
– Abbott Laboratories
Production Cost Down 40% Lead Time Reduced > 80%
– Lockheed
Defect Rate Reduced 80% Rework Down 91% Lead Time Down by 95%
– Texas Instruments
Lead Time Down 15.8 to 3.7 days
JIT & Inventory • Why do companies hold inventories? • What are some advantages to holding inventories? • What are some problems with holding inventories?
Inventory • Traditional: inventory exists in case problems arise • JIT objective: Reduce inventory • JIT requires Small lot sizes – Low setup time – Containers for fixed number of parts –
• JIT inventory: Minimum inventory to keep system running
Inventory Hides Problems Machine downtime Scrap Work in process queues (banks)
Paperwork backlog
Vendor delinquencies Change orders
Engineering design redundancies
Inspection backlogs
Design backlogs Decision backlogs
14
Lowering Inventory Reduces Waste
Work in process inventory level (hides problems) Unreliable Vendors
Scrap
Capacity Imbalances
Lowering Inventory Reduces Waste Reducing inventory reveals problems so they can be solved.
Unreliable Vendors
WIP Scrap
Capacity Imbalances
Lowering Inventory Reduces Waste Reducing inventory reveals problems so they can be solved.
Unreliable Vendors
Scrap
WIP
Capacity Imbalances
JIT Inventory Tactics • • • •
Use a pull system to move inventory Reduce lot size Reduce setup time Develop Just-in-Time delivery systems with suppliers • Deliver directly to point of use • Perform-to-schedule • Use group technology
Reducing Lot Sizes Increases the Number of Lots Customer orders 10
Lot size = 5 Lot 2 Lot 1
Lot size = 2 Lot 1 Lot 2 Lot 3 Lot 4 Lot 5
…Which Increases Inventory Costs Cost To
st o C tal
t s o C
g n i d Hol Setup Cost Smaller Optimal Lot Size Lot Size
Lot Size
Unless Setup Costs are Reduced Cost st o C l a t t s o o T C g n di l o H
Setup Cost New optimal lot size
Original optimal lot size
Lot Size
Minimizing Waste: Reducing Setup Times • What are the consequences of long setup times? • What are the advantages of short setup times?
20
Steps to Reduce Setup Time Step 1
Separate setup into preparation, and actual setup, doing as much as possible while the machine/process is running
Step 2
Move material closer and improve material handling
Step 3
Standardize and improve tooling
Step 4 Step 5
Use one-touch system to eliminate adjustments Training operators and standardizing work procedures
Push versus Pull • Push system: material is pushed into downstream workstations regardless of whether resources are available • Pull system: material is pulled to a workstation just as it is needed
Push Scheduling Moves an order to the next operation or work center in its route immediately on completion of the current activity whether or not that work center can begin processing it.
Traditional Push System M A T E R I A L
Process
Process
Process
Inv. Work-In-Process Staging Area
Work-In-Process Staging Area
F I N I S H E D G O O D S Inv.
Material Is Moved Down Stream After Processing at Each Stage Work-In-Process Inventories Develop Traditional Efficiency Measures Encourage Overproduction
Push Scheduling Benefits • Implementation is relatively simple • Eliminates the need to coordinate between work centers • Keeps a work center busy as long as work remains in its queue
Push Scheduling Problems • • • •
High WIP Levels Higher Quality Problems Hides Processing Problems Requires dispatching rules to sequence orders
Pull Scheduling Orders are processed and transferred in response to signals from downstream work centers
Alternative Pull System Signal Supplier
Signal
M A T E R I A L
Process
Process
Process
Inv.
Signal Signal
Signal FGI
C U S T O M E R D E M A N D
Pull Systems Move Material In Response To A Signal From a Downstream Process Minimal WIP Buildup/Reduced Space Requirements Reduced Material Inventory/ More Frequent Supplier Deliveries Minimal Finished Goods Inventory Emphasis on Throughput Not Efficiencies
Pull Scheduling Benefits • Simplifies scheduling—each center builds only what is required when needed • Orders are driven by real demand thus minimizing inventory accumulation • Makes problems immediately apparent • Prevents additional load from piling up extra work at the bottleneck in the event of some problem
Pull Scheduling Problems • Challenging to implement • Success requires coordination among related work centers • Requires good planning • Must limit interventions requesting changes in product mix, quantity, or due dates.
Layout • JIT objective: Reduce movement of people and material –
Movement is waste!
• JIT requires – – – – –
Work cells for product families Moveable or changeable machines Short distances Little space for inventory Delivery directly to work areas
Work Cell versus Process Layout Process Layout Lathe Lathe 5
4
1
Press
Saw Saw
2 Heat Treat 3
Press 6
Work Cell 2 Saw
Press
Lathe
Lathe
Grinder Grinder Grinder
1
Heat Treat
Layout Tactics • Distance reduction –
Build work cells for families of products
• Increased flexibility –
Flexible or movable equipment
• Impact on employees Cross-training; immediate feedback – ‘Poka-yoke’ self-testing functions –
• Reduced space and inventory –
Design little space for inventory
Just-In-Time Manufacturing WHAT IT IS • Management philosophy • Pull system though the plant
WHAT IT REQUIRES • • • • •
Employee participation Industrial engineering/basics Continuing improvement Total quality control Small lot sizes
WHAT IT DOES • Attacks waste • Exposes problems and bottlenecks • Achieves streamlined production
WHAT IT ASSUMES • Stable environment
Just-in-Time People Management Housekeeping Control Through Visibility Total Quality Problem Solving Employee Involvement
Technology Management Structured Flows Set-Up Reduction Small Lot Sizes
JIT
Systems Management Balanced Lines TPM Supplier Partnerships Pull System
Buffered Manufacturing Buffered Manufacturing Has Limited Goals: – Acceptable Number Of Defects – Acceptable Inventory Levels – Limited Product Variety – Acceptable Levels Of Waste
Lean Manufacturing Lean Manufacturing Seeks Perfection – – – – – – –
Strives To Reduce Costs Strives For Zero Defects Strives To Reduce Inventory Strives For Greater Product Variety Strives To Reduce Cycle Times Seeks To Eliminate Waste Seeks Continuous Process Improvement
Lean Manufacturing Key Features Of Lean Manufacturing – Transfers Tasks To Workers Adding Value – Quickly Uncovers & Solves Problems
Employee Empowerment • Getting employees involved in product & process improvements –
Know job best
• JIT requires Empowerment – Cross-training – Training support – Few job classifications –
© 1995 Corel Corp.
Lean Manufacturing Basic Tenets of Lean Manufacturing – – – – –
Produce Only What Is Demanded Produce At The Market Rate Of Demand Produce With Perfect Quality Produce With No Waste Develop Employees’ Productive Potential
Traditional Performance Measures Traditional Measures Focus On Outputs. This Leads To – Long Production Runs – Large Inventories – Large Buffers – Long Lead Times – Poorer Quality – Lack Of Responsiveness
Time-Based Performance Measures Time-Based Measures Track Process Improvements
• Value-Added Ratio • Setup Times & Number • Throughput Times • Quality • Delivery Speed & Reliability
New Management Measures
Customer Focused
Drivers Drivers of of Competitive Competitive Mfg. Mfg.
Production Focused
Process Focused
On-Time Delivery Defects Customer Satisfaction
Throughput WIP FGI Lead Time
Value Added Ratio Changeover Times
Measures Measures are are Stable Stable Capable Capable Improving Improving
New Business Paradigm New Performance Measures Time-Based - Quality Based - Customer Focused
Value-Added Management Process Flow Analysis - Focus on Time
Competing Through Manufacturing Just-In-Time - Pull Manufacturing Philosophies
Total Quality Leadership - Culture- Customers- Suppliers - Process Improvement People- Business Planning - Communication - Recognition
Homework Assignment • Estimate the value added ratio for some process in your organization. • Identify 3 sources of waste in your operation? Is it possible to eliminate the waste? • What performance measures do you use? Do the measures help or hinder your continuous improvement efforts? Can you suggest better performance measures?
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