JIT

Just-In-Time(business)JITisaninventorystrategyimplementedtoimprovethereturnoninvestmentofabusinessbyreducingin-processinventoryanditsassociatedcarryingcosts.InordertoachieveJITtheprocessmusthavesignalsofwhatisgoingonelsewherewithintheprocess.Thismeansthattheprocessisoftendrivenbyaseriesofsignals,whichcanbeKanban,thattellproductionprocesseswhentomakethenextpart.Kanbanareusually'tickets'butcanbesimplevisualsignals,suchasthepresenceorabsenceofapartonashelf.Whenimplementedcorrectly,JITcanleadtodramaticimprovementsinamanufacturingorganization'sreturnoninvestment,quality,andefficiency.QuickcommunicationoftheconsumptionofoldstockwhichtriggersnewstocktobeorderediskeytoJITandinventoryreduction.Thissaveswarehousespaceandcosts.However,thecompletemechanismformakingthisworkisoftenmisunderstood.Forinstance,itseffectiveapplicationcannotbeindependentofotherkeycomponentsofaleansystemoritcan,asitsacademicfoundernoted,...endupwiththeoppositeofthedesiredresult.Inrecentyearsmanufacturershavecontinuedtotrytohoneforecastingmethods(suchasapplyingatrailing13weekaverageasabetterpredictorforJITplanning),howeverresearchoftoday'sleadingcorporationsdemonstratesthatbasingJITonthepresumptionofstabilityisinherentlyflawed.HistoryThetechniquewasfirstusedbytheFordMotorCompanyasdescribedexplicitlybyHenryFord'sMyLifeandWork(1922):Wehavefoundinbuyingmaterialsthatitisnotworthwhiletobuyforotherthanimmediateneeds.Webuyonlyenoughtofitintotheplanofproduction,takingintoconsiderationthestateoftransportationatthetime.Iftransportationwereperfectandanevenflowofmaterialscouldbeassured,itwouldnotbenecessarytocarryanystockwhatsoever.Thecarloadsofrawmaterialswouldarriveonscheduleandintheplannedorderandamounts,andgofromtherailwaycarsintoproduction.Thatwouldsaveagreatdealofmoney,foritwouldgiveaveryrapidturnoverandthusdecreasetheamountofmoneytiedupinmaterials.Withbadtransportationonehastocarrylargerstocks.Thisstatementalsodescribestheconceptofdocktofactoryfloorinwhichincomingmaterialsarenotevenstoredorwarehousedbeforegoingintoproduction.Theconceptneededaneffectivefreightmanagementsystem(FMS);Ford'sTodayandTomorrow(1926)describesone.ThetechniquewassubsequentlyadoptedandpublicizedbyToyotaMotorCorporationofJapanaspartofitsToyotaProductionSystem(TPS).However,ToyotafamouslydidnotadopttheprocedurefromFord,butfromPigglyWiggly.AlthoughToyotavisitedFordaspartofitstourofAmericanbusinesses,FordhadnotfullyadoptedtheJust-In-Timesystem,andToyotaexecutiveswereappalledatthepilesofinventorylayingaroundandtheunevenworkscheduleoftheemployeesofFord.ToyotaalsovisitedPigglyWiggly,anditwastherethatToyotaexecutivesfirstobservedafullyfunctioningandsuccessfulJust-In-Timesystem,andmodeledTPSafterit.ItishardforJapanesecorporationstowarehousefinishedproductsandparts,duetothelimitedamountoflandavailableforthem.Beforethe1950s,thiswasthoughttobeadisadvantagebecauseitforcedtheproductionlotsizebelowtheeconomiclotsize.(Aneconomiclotsizeisthenumberofidenticalproductsthatshouldbeproduced,giventhecostofchangingtheproductionprocessovertoanotherproduct.)Theundesirableresultwaspoorreturnoninvestmentforafactory.ThechiefengineeratToyotainthe1950s,TaiichiOhno,examinedaccountingassumptionsandrealizedthatanothermethodwaspossible.ThefactorycouldimplementJITwhichwouldrequireittobemademoreflexibleandreducetheoverheadcostsofretoolingandtherebyreducetheeconomiclotsizetofittheavailablewarehousespace.JITisnowregardedbyOhnoasoneofthetwo'pillars'oftheToyotaProductionSystem.Thereforeoveraperiodofseveralyears,Toyotaengineersredesignedcarmodelsforcommonalityoftoolingforsuchproductionprocessesaspaint-sprayingandwelding.Toyotawasoneofthefirsttoapplyflexibleroboticsystemsforthesetasks.Someofthechangeswereassimpleasstandardizingtheholesizesusedtohangpartsonhooks.Thenumberandtypesoffastenerswerereducedinordertostandardizeassemblystepsandtools.Insomecases,identicalsub-assembliescouldbeusedinseveralmodels.Toyotaengineersthendeterminedthattheremainingcriticalbottleneckintheretoolingprocesswasthetimerequiredtochangethestampingdiesusedforbodyparts.Thesewereadjustedbyhand,usingcrowbarsandwrenches.Itsometimestookaslongasseveraldaystoinstallalarge,multi-tondiesetandadjustitforacceptablequality.Further,thesewereusuallyinstalledoneatatimebyateamofexperts,sothatthelinewasdownforseveralweeks.SoToyotaimplementedastrategynowcalledSingleMinuteExchangeofDie(SMED),developedwithShigeoShingo.Withverysimplefixtures,measurementsweresubstitutedforadjustments.Almostimmediately,diechangetimesfelltohoursinsteadofdays.Atthesametime,qualityofthestampingsbecamecontrolledbyawrittenrecipe,reducingtheskilllevelrequiredforthechange.Furtheranalysisshowedthatalotoftheremainingtimewasusedtosearchforhandtoolsandmovedies.Proceduralchanges(suchasmovingthenewdieinplacewiththelineinoperation)anddedicatedtool-racksreducedthedie-changetimestoaslittleas40seconds.Todaydiesarechangedinaripplethroughthefactoryasanewproductbeginsflowing.AfterSMED,economiclotsizesfelltoaslittleasonevehicleinsomeToyotaplants.Carryingtheprocessintoparts-storagemadeitpossibletostoreaslittle