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LEAN MANAGEMENT GUIDELINES FOR CHECK POINT 78

JUST-IN-TIME METHODOLOGY

Business owners and operations managers must become fully familiar with Just-In Time management principles and procedures designed to ensure successful company performance in a highly competitive business environment.

Just-In-Time represents a methodology for eliminating or minimizing waste throughout all stages in any operational value stream within an organization.

Just-In-Time Methodology is another critical building block for transforming any traditional business organization into a Lean Organization. This methodology is applicable to small, medium-sized, and large manufacturing, service, merchandising, contracting and project management companies providing products and services to customers. You may also find just-in-time methodology useful in improving your company's operational performance and profitability.

The main purpose of JIT methodology is "to produce only what is needed, when it is needed, and in the amount needed!". JIT methodology was envisioned by Kiichiro Toyoda, the president of Toyota Corporation between 1941 and 1950 and developed by Taiichi Ohno in 1950's. JIT methodology is an integral part of the Toyota Production System (TPS).

THE TOYOTA PRODUCTION SYSTEM

Just-In-Time represents one of the main building blocks of The Toyota Production System (TPS) which was developed by Toyota Motor Corporation in Japan about seventy years ago.

The Toyota Production System provided the foundation of Lean Manufacturing, which gradually evolved into Lean Management during the last seven decades and became applicable to a broad range of small, medium-sized, and large organizations. Today, lean management principles, values, methods, and guidelines are equally important to manufacturing and non-manufacturing companies alike.

The Toyota Production System is based on several well-known Japanese management methodologies, including Kaizen, Just-In-Time, Jidoka (Autonomation), and Total Productive Maintenance (TPM) presented below.

Note:

The term "Just-In Time" is replaced by the term "Lean" in some sources.

MAIN PILLARS OF THE TOYOTA PRODUCTION SYSTEM

ELEMENTS OF JUST-IN-TIME METHODOLOGY

LEAN MANAGEMENT

The basic objective of Lean Management is to maximize the overall performance and profitability of an organization by providing maximum value to customers based on best possible product and service quality, reliability, price, warranty, and after-sales service while minimizing waste and costs.

The main focus of lean management is to satisfy customers' needs, to identify value-added and non-value-added activities, to eliminate waste, to develop a continuous and uniform workflow, to reduce operational costs, to improve quality of products and services, to develop more efficient delivery of products and services to customers in a timely manner, and to provide respect to employees.

As a result of implementing Lean Operational Guidelines, the company's management can expect a continuous improvement in operational performance and increased profitability in a highly competitive market environment. For this reason you and your management team should study lean management principles, methods and guidelines and implement them in your organization.

Lean Management is discussed in detail in Tutorial 1.

ADDITIONAL INFORMATION ONLINE

IMPORTANCE OF JIT METHODOLOGY

Just-In-Time Methodology represents an integral part of Lean Organization and it can be visualized as a pyramid as illustrated below. 

At the top of JIT Pyramid is JIT Philosophy. This philosophy applies to the quality of five key elements in any manufacturing process, as illustrated below.

The underlying foundation of JIT Philosophy is unconditional commitment by management to the implementation of JIT Methodology within the organization and continuous cooperation between managers and employees.

 KEY ELEMENTS OF JIT METHODOLOGY

JUST-IN-TIME PYRAMID

ADDITIONAL INFORMATION ONLINE

MAIN OBJECTIVES OF JUST-IN-TIME METHODOLOGY

Since Waste Elimination represents the prime objective of JIT methodology, it is essential that you and your management team have good understanding about different types of waste as outlined below.

WHAT IS WASTE?

One of the most important objectives of JIT Methodology is to minimize or eliminate waste throughout all stages of the operational process. This applies to any manufacturing or non-manufacturing type of organization.

Toyota defines Waste as: "Anything other than the minimum amount of equipment, materials, parts, and working time absolutely essential to production."

Everything in excess of such a minimum is considered by JIT methodology as additional and unnecessary expense. According to JIT methodology, it is essential to achieve a situation in which the manufacturing process will utilize minimal resources as outlined below. 

THREE TYPES OF WASTE

NINE BASIC FORMS OF WASTE

ADDITIONAL INFORMATION ONLINE

WHAT IS VALUE-ADDED ANALYSIS?

One of the most important managerial tasks prior to implementation of JIT Methodology is to complete Value-Added Analysis.

Value-added analysis is applicable to all manufacturing and non-manufacturing organizations alike. This analysis will help to establish what JIT methodology can do for a company. The prime purpose of value-added analysis is to identify areas of inefficiency related to the existing manufacturing or non-manufacturing procedures within your organization.

Value-added analysis is usually carried out by selecting a set of existing Operational Activities and recording in detail every single activity that takes place. When the description of all activities is completed, it is necessary to establish which activities actually add value to the finished product or service. All those activities which do not add value should be carefully examined, reduced, and, if possible, eliminated.

TWO TYPES OF ACTIVITIES IN VALUE-ADDED ANALYSIS

A typical example of value-added analysis is illustrated below.

VALUE ADDED ANALYSIS

The above example illustrates that out of 15 operations related to a particular product only 4 operations actually add value. This represents only 26% of the total number of operations, which indicates that a certain amount of waste is taking place. It is necessary at this stage to evaluate the time and cost element of all Non-Value-Added Operations in order to quantify the potential waste.

Once the Potential Waste is identified and quantified, it is essential to develop a plan for reducing or, if possible, for eliminating certain operations, thereby minimizing the total cost of the finished product and increasing productivity.

Value-Added Analysis is discussed in details in Tutorial 1.

ADDITIONAL INFORMATION ONLINE

JIT METHODOLOGY IMPLEMENTATION

If you and your management team decide to consider Just-In-Time Methodology, you may expect to accomplish a number of important results outlined below.

 EXPECTED RESULTS FROM JIT METHODOLOGY IMPLEMENTATION

ADDITIONAL BENEFITS FROM JIT METHODOLOGY IMPLEMENTATION

Reduction of Non-Productive Activities associated with manufacturing operations and improved overall productivity subsequently adds real value to the final product. 

This process ultimately results in Elimination Of Waste and its proper implementation may yield positive results for your company's "bottom-line". Such results may include a number of advantages, as illustrated below.

POSSIBLE RESULTS OF MINIMIZING NON-PRODUCTIVE ACTIVITIES

Just-In-Time Implementation is discussed in detail in Tutorial 1.

BASIC PRINCIPLES AND TASKS OF JIT METHODOLOGY

Just-In-Time Methodology is based on principles largely associated with assembly line processes. In fact, JIT philosophy suggests that Assembly Line Principles should be applied to all manufacturing and related operations in JIT manufacturing environment.

Basic management tasks related to Just-In-Time Methodology include a broad range of activities which correspond to Lean Operational Guidelines outlined below.

AREAS OF APPLICATION OF JUST-IN-TIME METHODOLOGY

BASIC MANAGEMENT TASKS RELATED TO JIT METHODOLOGY

ADDITIONAL INFORMATION ONLINE

JIT OPERATIONS PLANNING

A successful JIT Manufacturing effort in a lean organization usually depends upon a company's ability to standardize product design, and ability of its design department to reduce the number of components and simplify the nature of operations. 

Once the design of each product or operation is fully optimized in terms of manufacturing requirements, JIT Methodology has a better chance of providing a positive contribution to the company's overall success.

A JIT Manufacturing Process or Lean Manufacturing Process, is generally planned in accordance with the customers' requirements, who in essence, "pull" the operational process in a reverse sequence from the finished products' assembly line to the first manufacturing operation.

For example, if a customer needs 100 units of product A per day, the planning process should consider all operations in reverse sequence and determine an optimal Cycle Time for the entire operational process. In accordance with JIT Methodology, cycle time measures the rate of requirement for products as dictated by a customer and not by the manufacturing ability of the production facility.

Hence, effective Operations Planning in JIT Manufacturing Environment, also known as Lean Manufacturing Environment can be achieved only if the company is fully prepared for such a task as outlined below.

REQUIREMENTS FOR EFFECTIVE OPERATIONS PLANNING 
IN JIT MANUFACTURING ENVIRONMENT

JIT PLANT LAYOUT

Plant Layout represents a critical task in JIT Manufacturing Environment.  Basic principles of JIT Plant Layout are different in comparison with three traditional types of plant layout principles. Traditional types of Plant Layout, outlined below, are discussed in details in Tutorial 4.

JIT Plant Layout is generally developed in accordance with specific JIT Manufacturing Guidelines outlined below.

THREE TRADITIONAL TYPES OF PLANT LAYOUT

JIT MANUFACTURING GUIDELINES

ADDITIONAL INFORMATION ONLINE

TRADITIONAL PLANT LAYOUT

A typical example of Traditional Plant Layout and its comparison with JIT Plant Layout, based on a fastener manufacturing company, is presented below.

The company is manufacturing various types of screws, bolts, and special fasteners. Each product must undergo a number of manufacturing steps in order to turn raw materials into the finished product. A typical breakdown of operations, related to fastener manufacturing is presented below.

Note:

Arrows on both plant layouts indicate the direction of the Product Flow.

PLANT LAYOUT OF A FACTORY
 USING TRADITIONAL MANUFACTURING OPERATIONS

The above plant layout indicates the location of all relevant manufacturing, maintenance, storage, administrative and other related Production Facilities outlined below.

PRODUCTION FACILITIES SPECIFIED BY PLANT LAYOUT

Furthermore, this plant layout includes the detailed location of all Administration Facilities and support departments outlined below.

ADMINISTRATION FACILITIES SPECIFIED BY PLANT LAYOUT

JIT PLANT LAYOUT

JIT Plant Layout consists of two basic sub-plants:
Sub-Plant A and Sub-Plant B, as illustrated below.

SUB-PLANT A

Sub-Plant A consists of two individual JIT Work Cells.

Each cell consists of a series of machines (H, S, T, P) located in a very close proximity from each other.

The raw material is fed into the First Machine (H) and from there it is routed to the next machine to complete each operation in accordance with the specifications. Upon completion, the product is fed into the washing plant and from there it may go to heat treatment and plating, if required, or directly into the packaging section. Finally, the product goes into the finished goods store until it is shipped to customers.

Similarly to the Sub-Plant A, there are one or two multi-skilled operators who are responsible for all activities within their work cell.

JIT plant layout also includes the administrative and support departments, similar to those illustrated in the traditional plant layout.

SUB-PLANT B

Sub-Plant B consists of two Flexible Manufacturing Systems (FMS).

Each FMS Work Center represents a mini-assembly line with four individual work stations (H, S, T, P).

The raw material is fed to the First Station (H) and thereafter it proceeds to the next stations in a completely automated manner. The entire process is pre-planned and controlled by a computer. At the end, the finished product is fed into the heat treatment section, from there it proceeds to plating section and washing plant, and from there proceeds through the packaging section into the finished goods inventory stores. From there the finished product is shipped to customers.

One multi-skilled operator is allocated to each work station and he has several responsibilities outlined below.

OPERATOR'S RESPONSIBILITIES IN SUB-PLANT B

PLANT LAYOUT OF A FACTORY IN A JIT PRODUCTION ENVIRONMENT

IMPORTANCE OF SYNCHRONIZATION AND
BALANCING OF JIT PRODUCTION FLOW

In order to implement an effective Just-In-Time Manufacturing Methodology within the operations department it is essential to synchronize and balance the entire production flow.

The process of Synchronization and Balancing of a production flow in a just-in-time, or lean, manufacturing environment entails a number of steps that are summarized below.

LEVEL LOADING OF MANUFACTURING OPERATIONS

Just-In-Time Methodology suggests that all manufacturing operations should be geared to accommodate specific customer needs at short notice. Products should be manufactured to meet the demand rather than being produced for stock irrespective of the available operational capacity and human resources.

Furthermore, JIT Methodology prescribes level-loading and scheduling of all operations at a frequency dictated by customer requirements. As a result of Level-Leveling of manufacturing operations, the company may expect to receive certain advantages outlined below.

ADVANTAGES OF LEVEL LOADING OF MANUFACTURING OPERATIONS

REDUCTION OF MACHINE SET-UP TIME

One of the key issues in Level-Loading Of Manufacturing Operations is reduction of machine set-up times. 

The process of Set-Up Time Reduction, similar to the process of waste elimination, requires an in-depth examination of all activities associated with setting a particular machine, as outlined below.

Just-In-Time Methodology includes a number of steps which lead to an effective reduction of time during the Machine Set-Up Procedure. JIT philosophy also suggests that such time savings should be applied to level-loading of manufacturing operations, thus gearing production facilities toward immediate customer needs.

EXAMINATION OF ACTIVITIES FOR MACHINE SET-UP TIME REDUCTION

ADDITIONAL INFORMATION ONLINE

THE DIFFERENCE BETWEEN JIT 
AND TRADITIONAL OPERATIONS CONTROL

The operations control in a Lean Manufacturing Environment, or JIT Operations Control, is very different to operations control in a traditional Western-type manufacturing company.

The traditional Operations Control is discussed in detail in Tutorial 4.

Traditionally, machinery and equipment are laid out in accordance with their functional designation within the operations department. This type of plant layout is called Process Layout and it is discussed in detail in Tutorial 4.

Many small and medium- sized companies that operate as Job Shops or manufacture products in Batches utilize process layout principles. Here a batch of products undergoes the first operation in one section, thereafter it is moved to another section for the second operation, and so on. This procedure entails a continuous scheduling of all manufacturing activities and usually does not provide much operational flexibility.

JIT operations control is based on highly Flexible Manufacturing Operations and Level-Loading Of Plant And Machinery in a lean manufacturing facility.

BASIC GUIDELINES FOR JIT OPERATIONS CONTROL

LINKING OF OPERATIONS IN LEAN PRODUCTION ENVIRONMENT

One of the major differences between an ordinary manufacturing approach and lean management approach is the actual Method Of Linking Various Operations.

Traditionally, each step of a particular manufacturing process is identified during the process design stage and recorded in an appropriate Route Sheet. Thereafter the information contained in the route sheet is used as a prime source for scheduling and controlling of manufacturing activities. Ordinary manufacturing approach is frequently termed a "Push System" since all operations are pushed through the operations department in accordance with master production schedule requirements.

Just-In-Time Methodology, conversely, prescribes that all manufacturing operations should be linked into a uniform production process on a "Pull System" basis, where the customers’ specific orders generate the “pull”.

THE SUPERMARKET PROCEDURE IN JIT OPERATIONS CONTROL

WHAT IS KANBAN?

The Japanese experts carefully studied the "Supermarket Procedure" and introduced it into the lean manufacturing environment. This procedure contains two prime types of signals called Kanbans*, which are used to "pull" all manufacturing operations.

A Kanban in Japanese means" Signboard", "Card", or "Chit".

In Just-In-Time production environment, a worker from the following process goes to collect parts from the previous process leaving a Kanban signifying a delivery of a given quantity of specific parts. When all parts have been used, the same Kanban is sent back, at which point it becomes an order for more parts. 

Since it is a center part of Just-In-Time Production, a Kanban has become synonymous with the just-in-time production system, which was first introduced by Toyota with an objective to minimize inventories, waste, and subsequent costs.

The basic idea behind this system is that required parts should be received "just-in-time" for the manufacturing process.

Thus, the supermarket procedure provides the basis for JIT Scheduling and JIT Operations Control of manufacturing activities and is described below.

PRODUCTION SCHEDULING AND CONTROL BY KANBAN

HOW DOES JIT OPERATIONS CONTROL REALLY WORK?

ADDITIONAL INFORMATION ONLINE

JUST-IN-TIME PURCHASING

Purchasing of raw materials and components plays a critical role in balancing and synchronization of a Just-In-Time manufacturing process. 

The prime objective of Just-In-Time Purchasing, or JIT Purchasing, is to develop firm relations with suppliers and to ensure that minimal quantities of materials are delivered "just in time" for production. JIT Purchasing plays a crucial role in the JIT Supply Chain in a lean organization.

Prime characteristics of JIT Purchasing are outlined below. (35)

KEY FACTORS IN JUST-IN-TIME PURCHASING

ADVANTAGES OF JIT PURCHASING

The JIT Purchasing Procedure presents several benefits to the purchasing organization and suggests that suppliers should be viewed as Outside Partners who can contribute to the long-term welfare of the purchasing organization, rather than as outside adversaries.

The effectiveness of JIT purchasing strongly depends upon the Quality Of Materials being supplied. In fact, Just-In-Time Philosophy states that quality at the source is of a paramount importance in a successful waste elimination program. 

Hence, it is essential to ensure that quality of all materials supplied to the company is always maintained on an acceptable level. Ideally, every supplier should guarantee the quality of his products, thus minimizing inspection requirements of incoming goods.

ADDITIONAL INFORMATION ONLINE

JIT QUALITY CONTROL

The element of Quality Control in JIT Manufacturing Environment plays a key role in the entire process of JIT methodology implementation.

The quality control procedures in JIT manufacturing environment are developed in accordance with the basic principles of Kaizen, which are discussed in detail in Tutorial 4. These principles, similar to Total Quality Management also discussed in detail in this Tutorial, prescribe a Zero Defect Policy and early identification of defected parts and components.

For this reason, operators in JIT manufacturing environment are cross-trained not only in terms of operating several machines at the same time, but also to maintain continuous and steady quality control of the manufactured products.

In order to maintain high quality of operations and products in JIT manufacturing environment, specific quality requirements are defined well in advance. All production quality control activities are generally maintained on a continuous basis to provide immediate feedback to management.

Just-In-Time Philosophy also suggests operating the production equipment at lower speeds so that the process can be stopped at any time when problems occur.

ADDITIONAL INFORMATION ONLINE

JUST-IN-TIME PREVENTIVE MAINTENANCE

Planned Maintenance of machinery and equipment also plays an important role in JIT manufacturing environment.

According to Edward J. Hay, Just-In-Time Preventive Maintenance, or JIT Plant Maintenance, is based on Total Productive Maintenance (TPM) and entails the following six elements illustrated below.

ELEMENTS OF JUST-IN-TIME PREVENTIVE MAINTENANCE

Machine Operators play an increasingly important role in total production maintenance in JIT manufacturing environment as outlined below.

ROLE OF MACHINE OPERATORS IN JIT PLANT MAINTENANCE

IMPORTANCE OF RECORD-KEEPING IN JIT PLANT MAINTENANCE

Record-Keeping Of Plant And Machinery Maintenance activities becoming an increasingly important part of operators' responsibilities.

Through their personal involvement, Operators learn to "respect" their machines and take a personal care, thereby increasing the useful period of plant and machinery, and contributing to the overall cost reduction within the operations department.

Total Productive Maintenance (TPM) is discussed in details in Tutorial 1.

ADDITIONAL INFORMATION ONLINE

IMPLEMENTATION OF JIT METHODOLOGY

The crucial factor in the successful implementation of Just-In-Time Methodology is probably total commitment by the company's management toward JIT philosophy. Although this philosophy proved to be effective for larger manufacturing corporations, small and medium-sized organizations may also benefit from JIT Methodology.

Once you decide to transform your company into a Lean Organization, you and your management team must make full commitment to the implementation of basic Just-In-Time Guidelines within your organization. These guidelines are summarized below.

BASIC JUST-IN-TIME GUIDELINES

Implementation Of Just-In-Time is discussed in details in Tutorial 1.

IMPORTANCE OF JIT MANUFACTURING

As you can sense, JIT Manufacturing Methodology has a number of important advantages in comparison with the traditional manufacturing methodology used in the Western World so far. Some of these advantages are summarized below.

ADVANTAGES OF JIT MANUFACTURING
IN COMPARISON WITH TRADITIONAL MANUFACTURING OPERATION

EFFECTS OF JIT METHODOLOGY

You and your management team can expect several effects as a result of JIT Methodology implementation in your company. These effects have been summarized by Richard J Schonberger in his remarkable book titled Japanese Manufacturing Techniques: Nine Hidden Lessons In Simplicity in 1982.

According to Richard J Schonberger, these effects illustrate real advantages of JIT methodology implementation. Finally, when various elements related to JIT manufacturing activities are implemented, it is imperative to stimulate a spirit of Cooperation and Teamwork between management and employees. (36)

EFFECTS OF JIT METHODOLOGY

DOES JIT MANUFACTURING MEET YOUR NEEDS?

Obviously, JIT Manufacturing can’t provide equally effective answers to all manufacturing companies. However, you and your management team should give JIT Methodology a very careful consideration and make your own determination as to which process will be most beneficial to your company's long-term success in the competitive business environment.