Just-in-time
Just-in-Time (JIT) is a production strategy that strives to improve a business' return on investment by reducing in process inventory and associated carrying costs. Just in Time production method is also called the Toyota Production System. To meet JIT objectives, the process relies on signals or Kanban between different points in the process, which tell production when to make the next part. Kanban are usually 'tickets' but can be simple visual signals, such as the presence or absence of a part on a shelf.
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Implemented correctly, JIT focuses on continuous improvement and can improve a manufacturing organization's return on investment, quality, and efficiency. To achieve continuous improvement key areas of focus could be flow, employee involvement and quality. Quick notice that stock depletion requires personnel to order new stock is critical to the inventory reduction at the center of JIT. This saves warehouse space and costs. However, the complete mechanism for making this work is often misunderstood.
For instance, its effective application cannot be independent of other key components of a lean manufacturing system or it can "...end up with the opposite of the desired result."
- Environmental concerns - During the birth of JIT, multiple daily deliveries were often made by bicycle. Increased scale has required a move to vans and Lorries (trucks). Cusumano (1994) highlighted the potential and actual problems this causes with regard to gridlock and burning of fossil fuels. This violates three JIT waste guidelines:
- Time—wasted in traffic jams
- Inventory—specifically pipeline (in transport) inventory
- Scrap—fuel burned while not physically moving
- Price volatility - JIT implicitly assumes a level of input price stability that obviates the need to buy parts in advance of price rises. Where input prices are expected to rise, storing inventory may be desirable.
- Quality volatility - JIT implicitly assumes that input parts quality remains constant over time. If not, firms may hoard high quality inputs. As with price volatility, a solution is to work with selected suppliers to help them improve their processes to reduce variation and costs. Longer term price agreements can then be negotiated and agreed-upon quality standards made the responsibility of the supplier. Fixing up of standards for volatility of quality according to the quality circle
- Demand stability - Karmarker (1989) highlights the importance of relatively stable demand, which helps ensure efficient capital utilization rates. Karmarker argues that without significantly stable demand, JIT becomes untenable in high capital Supply Stability
- Supply Stability - In the U.S., the 1992 railway strikes caused General Motors to idle a 75,000-worker plant because they had no supply.
JIT Implementation Design
- F (Design Flow Process)
- F Redesign/relay out for flow
- L Reduce lot sizes
- O Link operations
- W Balance workstation capacity
- M Preventive maintenance
- S Reduce setup Times
- Q (Total Quality Control)
- C worker compliance
- I Automatic inspection
- M quality measures
- M fail-safe methods
- W Worker participation
- S (Stabilize Schedule)
- S Level schedule
- W Establish freeze windows
- UC Underutilize Capacity
- K (Kanban Pull System)
- D Demand pull
- B Back flush
- L Reduce lot sizes
- V (Work with Vendors)
- L Reduce lead time
- D Frequent deliveries
- U Project usage requirements
- Q Quality expectations
- I (Further Reduce Inventory in Other Areas)
- S Stores
- T Transit
- C Implement carrousel to reduce motion waste
- C Implement conveyor belts to reduce motion waste
- P (Improve Product Design)
- P Standard production configuration
- P Standardize and reduce the number of parts
- P Process design with product design
- Q Quality expectations
Benefits of JIT
- Reduced setup time. Cutting setup time allows the company to reduce or eliminate inventory for "changeover" time. The tool used here is SMED (single-minute exchange of dies).
- The flow of goods from warehouse to shelves improves. Small or individual piece lot sizes reduce lot delay inventories, which simplifies inventory flow and its management.
- Employees with multiple skills are used more efficiently. Having employees trained to work on different parts of the process allows companies to move workers where they are needed.
- Production scheduling and work hour consistency synchronized with demand. If there is no demand for a product at the time, it is not made. This saves the company money, either by not having to pay workers overtime or by having them focus on other work or participate in training.
- Increased emphasis on supplier relationships. A company without inventory does not want a supply system problem that creates a part shortage. This makes supplier relationships extremely important.
- Supplies come in at regular intervals throughout the production day. Supply is synchronized with production demand and the optimal amount of inventory is on hand at any time. When parts move directly from the truck to the point of assembly, the need for storage facilities is reduced.
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