businessStudiesoverviewJIT

1BusinessStudiesJust-in-Time(JIT)SystemsTotalQualityManagement(TQM)2ThreeElementsofJIT3OutlineJust-in-TimePhilosophySuppliersGoalsofJITPartnershipsConcernsofSuppliersJITLayoutDistanceReductionIncreasedFlexibilityImpactonEmployeesReducedSpaceandInventory4Outline-continuedInventoryReduceVariabilityReduceInventoryReduceBatch/LotSizesReduceSetupCostsSchedulingLevelSchedulesKanbanQualityEmployeeEmpowermentJITinServices5LearningObjectivesWhenyoucompletethissupplement,youshouldbeableto:IdentifyorDefine:TypesofwasteVariabilityKanbanDescribeorExplain:Just-in-Time(JIT)philosophyPullsystemsPushsystemsThegoalsofJITpartnershipsTheimpactofJITonlayoutHowJITaffectsqualityandemployees6Wasteis‘anythingotherthantheminimumamountofequipment,materials,parts,space,andworker’stime,whichareabsolutelyessentialtoaddvaluetotheproduct.’—ShoichiroToyodaPresident,ToyotaIntroductoryQuotation7ManagementphilosophyofcontinuousandforcedproblemsolvingSuppliesandcomponentsare‘pulled’throughsystemtoarrivewheretheyareneededwhentheyareneeded.WhatisJust-in-Time?8AttackswasteAnythingnotaddingvaluetotheproductFromthecustomer’sperspectiveExposesproblemsandbottleneckscausedbyvariabilityDeviationfromoptimumAchievesstreamlinedproductionByreducinginventoryWhatDoesJust-in-TimeDo?9•The5S’sstandfor:•Seiri-ProperArrangementSeiton-OrderlinessSeiso-CleanlinessSeiketsu-CleanupShitsuke-Discipline10OverproductionWaitingTransportationInefficientprocessingInventoryUnnecessarymotionProductdefectsTypesofWaste11WasteReduction(%)82%50%50%30%30%20%40%0%20%40%60%80%100%Work-in-ProcessInventoryRawMaterialInventoryLeadTimeSpaceFinishedGoodsInventoryScrapSetupTimeJITReducedWasteatHewlett-Packard12VariabilityOccursBecauseEmployees,machines,andsuppliersproduceunitsthatdonotconformtostandards,arelate,orarenottheproperquantityEngineeringdrawingsorspecificationsareinaccurateProductionpersonneltrytoproducebeforedrawingsorspecificationsarecompleteCustomerdemandsareunknown13PushversusPullPushsystem:materialispushedintodownstreamworkstationsregardlessofwhetherresourcesareavailablePullsystem:materialispulledtoaworkstationjustasitisneeded14SuppliersreducednumberofvendorssupportivesupplierrelationshipsqualitydeliveriesontimeLayoutwork-celllayoutswithtestingateachstepoftheprocessgrouptechnologymovable,changeable,flexiblemachineryhighlevelofworkplaceorganizationandneatnessreducedspaceforinventorydeliverydirecttoworkareasJITContributiontoCompetitiveAdvantage15InventorysmalllotsizeslowsetuptimesspecializedbinsforholdingsetnumberofpartsSchedulingzerodeviationfromscheduleslevelschedulessuppliersinformedofschedulesKanbantechniquesJITContributiontoCompetitiveAdvantage-continued16JITContributiontoCompetitiveAdvantage-continuedPreventiveMaintenancescheduleddailyroutineoperatorinvolvementQualityProductionstatisticalprocesscontrolqualitybysuppliersqualitywithinfirm17JITContributiontoCompetitiveAdvantage-continuedEmployeeEmpowermentempoweredandcross-trainedemployeesfewjobclassificationstoensureflexibilityofemployeestrainingsupportCommitmentsupportofmanagement,employees,andsuppliers18ResultsQueueanddelayreduction,speedsthroughput,freesassets,andwinsordersQualityimprovement,reduceswasteandwinsordersCostreductions,increasesmarginorreducessellingpriceVariabilityreductionsintheworkplace,reduceswasteandwinsordersReworkreduction,reduceswasteandwinsorders19YieldingFasterresponsetothecustomerandhigherqualityAcompetitiveadvantage!20SuppliersPreventiveMaintenanceLayoutInventorySchedulingQualityEmployeeEmpowermentJITJust-in-TimeSuccessFactors21IncomingmaterialandfinishedgoodsinvolvewasteBuyerandsupplierformJITpartnershipsJITpartnershipseliminateUnnecessaryactivitiesIn-plantinventoryIn-transitinventoryPoorsuppliersSuppliers22FewNearbyRepeatbusinessAnalysistoenabledesirablesupplierstobecomeorstaypricecompetitiveCompetitivebiddingmostlylimitedtonewpurchasesBuyerresistsverticalintegrationandsubsequentwipeoutofsupplierbusinessSuppliersencouragedtoextendJITtotheirsuppliersCharacteristicsofJITPartnershipsSuppliers23CharacteristicsofJITPartnershipsQuantitiesSteadyoutputrateFrequentdeliveriesinsmall-lotquantitiesLongtermcontractagreementsMinimalpaperworkDeliveryquantitiesfixedforwholecontracttermLittleornopermissibleoverageorunderageSupplierspackageinexactquantitiesSuppliersreducetheirproductionlotsizesorstoreunreleasedmaterial24MinimalproductspecificationsimposedonsuppliersHelpsupplierstomeetqualityrequirementsCloserelationshipbetweenbuyers’andsuppliersqualityassurancepeopleSuppliersuseprocesscontrolchartsinsteadoflot-samplingtechniquesCharacteristicsofJITPartnershipsQuality25CharacteristicsofJITPartnershipsShippingSchedulingofinboundfreightGaincontrolbyuseofcompany-ownedorcontractshippingandwarehousing26GoalsofJITpartnershipsEliminationofunnecessaryactivitiesEliminationofin-plantinventoryEliminationofin-transitinventoryEliminationofpoorsuppliers27DiversificationPoorcustomerschedulingFrequente