JIT and SCM

JITandSCM•JITcanbedefinedasanintegratedsetofactivitiesdesignedtoachievehigh-volumeprocessesusingminimalinventories(rawmaterials,workinprocess,andfinishedgoods).•BIG-JITistheeliminationofallformsofwaste.•JITalsoinvolvesthetimingofproductionresources(e.g.,partsarriveatthenextworkstation“justintime”).MinimizingWaste:Just-In-TimeProduction•Managementphilosophy•“Pull”systemthoughtheplant•ContinuousFlowofMaterialsWHATITIS•Employeeparticipation•Industrialengineering/basics•Continuingimprovement•Totalqualitycontrol•SmalllotsizesWHATITREQUIRES•Attackswaste•Exposesproblemsandbottlenecks•AchievesstreamlinedproductionWHATITDOES•Stableenvironment•ContinuousFlowofMaterialsWHATITASSUMESJohnDeereValueCenteredManufacturingIllustrates....90%LEADTIMEREDUCTION90%WORK-IN-PROCESSREDUCTION50%SPACEREDUCTION87%LOTSIZEREDUCTION33%PRODUCTIVITYINCREASE0%STOCKOUTS....andsignificantincreasesincustomerserviceandreturnoninvestment.STYROJ-I-TPRESENTATIONRUNNUMBERCYCLETIME-SECONDSLOTSIZETHROUGHPUTTIMEMINUTESQUALITYRISKW-I-PINVENTORYFINISHEDINVENTORYTABLES(SPACE)PRODUCTSTOCKOUTUNITS&MINUTES116.785.14043642.4/436/10214.042.416191031.2/126/6311.01.5441620/022/4StyroResultsAchievedthrough....GROUPTECHNOLOGYSTATISTICALPROCESSCONTROLUNIFORMFACTORYLOADSETUPREDUCTIONPREVENTIVEMAINTENANCMAXIMUMMACHINEAVAILABILITYWORKERFLEXIBLITYVALUEANALYSIS/ENGINEERINGSTABILIZEDSCHEDULEWASTEELIMINATION....convertingajobshoptoaflowshop.J-I-TPERFORMANCETheinsuranceprovidedbybufferinventorieswasreplacedwithlessprocessvariationin....QUALITYMACHINEAVAILABILITYELIMINATIONOFBOTTLENECKSBETTERDESIGNEDOPERATIONSJ-I-TPERFORMANCEWORLDCLASSSUPPLYCHAINBeingthebestat....CUSTOMERSATISFACTIONPRODUCTCOSTTOTALQUALITYFLEXIBILITYSPEEDSERVICE....allatthesametime!BullwhipEffectTimeRetailer’sOrdersTimeWholesaler’sOrdersTimeManufacturer’sOrdersThemagnificationofvariabilityinordersinthesupply-chain.Alotofretailerseachwithlittlevariabilityintheirorders….…canleadtogreatervariabilityforafewernumberofwholesalers,and……canleadtoevengreatervariabilityforasinglemanufacturer.3SupplyChainManagement•Applyatotalsystemsapproachtomanagingtheentireflowof–Inventory–Transportation–Facilities–InformationRawmaterialsuppliersFactories&warehousesEndcustomerCONSIDERUNCOORDINATED,LARGEBATCHESNOINFORMATIONSHARINGEXCEPTORDERSSUPP.MANUFACTURERRETAILERCUSTOMERd=100U/DAY,D=25000U/YEAR,OrderQuantitiesQs=2500,Qm=1250,Qr=1250,Qc=100U/DAYTimeBetweenShipmentsANDInformationLag:Ts=2500/25000=1/101monthTm=1250/25,000=1/20year2weeksTr=1/20year2weeksTotalnetworkshipmentandinfo.leadtimesABOUT2monthsRetailerchangewilltakeabout2monthstobefeltbackattheSupplierCONSIDERCOORDINATED,SMALLBATCHESFULLINFORMATIONSHARINGFROMRETAILON-LINE,REALTIMESUPP.MANUFACTURERRETAILERCUSTOMERd=100U/DAY,D=25000U/YEAR,OrderQuantitiesQs=100,Qm=100,Qr=100,Qc=100U/DAYTimeBetweenShipments:Ts=Tm=Tr=1DAYInformationLag=0time.Totalshipmentleadtime=3DAYSAchangeatretailwillbefeltbackattheSupplierimmediately.MatchingSupply-ChainswithProductsEfficientSupply-ChainResponsiveSupply-ChainFunctionalProductsInnovativeProductsMatchMatchMismatchMismatch