Just-in-Time is a proven management innovation which is assuming international importance for achieving industrial excellence. It is necessary to understand JIT for improving the efficacy of your own industrial policy and management.
Almost all successful companies develop and implement strategies that will give them a competitive and strategic advantage. Any company that improves performance on a regular and continuous basis certainly will gain the competitive edge. Companies seek competitive advantage by emphasizing on performance factors such as flexibility, quick responsiveness, cost, efficiency, quality and reliability and service. Just In Time manufacturing is a philosophy rather than a technique. By eliminating all wastes and seeking continuous improvement, it aims at creating a manufacturing system that is responsive to market needs. The phrase "Just-In-Time" is used because this system operates with very low WIP (work in process) inventory and often with very low finished goods inventory. Products are assembled just before they are sold, subassemblies are made just before they are assembled and components are made and fabricated just before subassemblies are made. This leads to lower WIP and reduced lead times. To achieve this, organizations have to be excellent in other areas, e.g., quality.
The goal of JIT manufacturing system is to optimize processes and procedures by constantly pursuing waste reduction.
According to Voss, JIT is viewed as a "Production methodology which aims to improve overall productivity through elimination of waste and which leads to improved quality." JIT provides for the cost efficient production in an organization and delivery of only the necessary parts in the right quantity at the right time and place using the minimum of facilities.
JIT enables one to conceive, design, implement and operate a manufacturing and supporting systems, as an integrated whole based on the principles of continuous improvements and elimination of all kinds of waste.
JIT History
It was only a decade ago that the world came to know of a management innovation that had taken the Toyota Motor Co. the previous twenty five years to develop. Known as JIT (for Just-in-Time), the system embodied a simple but radical pulsed approach to manufacturing. Its logic had the remarkable power of inducing organizational excellence in engineering industry. This revolution was started by Mr. Taichii Ohno, who was an employer of Toyota Motor Co. during that time.
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Mr. Taichii Ohno
The interest in JIT in the last five years has regarded as a historic innovation on par with Ford's ingenious system of mass production and General Motors' pioneering approach to mass marketing. Indeed, JIT combines the best features of both these innovations to cut costs and produce diverse products from the same assembly line.
While JIT is thus helping to rejuvenate the 100-year old automobile business (hailed as the "industry of industries"), newer global businesses such as those in electronics are also taking to it in a big way in the face of acute cost/price pressures and rapid environmental changes.
Seven Wastes
The Toyota Motor Company identifies seven wastes as being the targets of continuous improvement in production processes. By attending to these wastes, improvement is achieved.
1. Waste of overproduction: Eliminate by reduction of set-up times, synchronization of quantities and timing between processes, and also make sure to eliminate layout problems. "Produce only what is required now".
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2. Waste of waiting: It is extremely important to eliminate bottlenecks and make sure to balance uneven loads by flexible workforce and equipment.
3. Waste of transportation: create layouts and locations in such a way that transportation and handling is reduced to a bare minimum. Your main aim should be to eliminate this waste.
4. Waste of processing itself: Keep asking questions regarding the existence of the product and then why each process is necessary.
5. Waste of stocks: Reduction of all types of other wastes reduces stocks.
6. Waste of motion: Motion needs to be studied for consistency and economy. Economy enhances productivity and consistency enhances quality. Primarily enhance the motions, then mechanize or automate. Or else there is a continuous danger of automating the waste.
7. Waste of making defective products: Build up the production process to stop defects from being produced, so as to eliminate inspection completely. Do not accept defects at each process this will ensure that there will be no defects. Make the process fail safe. A quantify process always yields quality product.
JIT Philosophy
The roots of the JIT system can probably be traced to the Japanese environment. Japan has inherent limitations of lack of space and lack of natural resources. Japanese have developed an aversion towards all kinds of wastes. They view scrap and rework as waste and hence strive for perfect quality. They strongly believe that inventory storage wastes space and results in locking up of valuable materials and capital. Anything that does not contribute value to the product is viewed as waste. Thus, it is quite natural for JIT philosophy to develop in Japan. Apart from eliminating wastes JIT has another important feature utilizing the full capability of the worker. Workers in JIT system are charged with responsibility for producing quality parts just in time to support the next production process. The objective of JIT system is to improve profits and return on investment through cost reductions, inventory reduction and quality improvement. Involvement of workers and eliminations of waste are the means of achieving these objectives. So, JIT manufacturing is a broad philosophy of continuous improvement that includes three mutually supportive components such as,
1. People participation and involvement
2. Total quality control
3. Just in time flow
The People Involvement
The stock less production or zero inventories have created an impression that JIT is only an inventory program. JIT has a strong human resource management component that must be recognized in order to exploit the full potential of technology component. The success of JIT depends upon how the companies train their human resource to have on appropriate skill, responsibility and co-ordinate and motivate people JIT seeks to fully utilize the creative talents of employees, suppliers, subcontractors and others who may contribute to the company's improvement. Teamwork, discipline and supplier involvement are the important components that contribute to the success of JIT.
Total Quality Control (TQC)
Total Quality Control refers to the achievement and improvement in quality in a JIT company, which involve every department and each employee in the company. All employees should seek ways to serve the final customer better so that the company can remain competitive.
Internal customer Concept:
JIT companies believe in broad definition of a customer. The traditional organization define that customer is a person outside the company who buys and uses the products and services. JIT companies add to these definition the concept of immediate customer.(or internal customer) who is the next person or department or process who uses or further processes them. If each worker sends only defect free items to his immediate customer, no defective final products will be produced.
Quality at Source:
Each employee is given the responsibility for quality his workstation. Employees are trained in quality principles and testing procedures. They inspect their own work to ensure that the defectives are not passes to the next process. The defective element is more easily detected by the immediate customer than by the person who is responsible for it e.g. a part may not fit into the assembly if it is not properly made. A procedure called "JIDOKA" is brought into effect. Any employee who senses that a process is producing defects or is to go out of proper specification has the authority and the responsibility to stop the process. The concept behind this is that it is better to stop the production rather than producing defects.
TQC is culture not a program:
The TQC philosophy aims at the culture continuous improvement in which people always strive to do better. Companies continue to look for incremental product improvements and process refinements. The objective here is to reduce variability in processes and in parts because it is the variation, which makes the product deviation from quality. Total quality efforts extend to suppliers. When suppliers' quality reaches a consistently high quality, there is no need for the supplier to go through incoming inspection.
Conceptual Innovations
View of Inventory:
Prime conceptual innovation of JIT is its view of the inventory. Traditionally, stocks were used to separate the successive steps of a manufacturing process uncertainties (such as poor forecasts, supply disruptions, rejects, etc) Today, the inventory approach is called as just-in-Case1.Problems in manufacturing are sought to be avoided by having safety stock. However, problems persist. A chaotic environment that almost always prevails, because the unexpected shortage of certain items occur even when there are large stocks of others. Customer requirements are satisfied in some way, usually in an emergency, using more than the minimum amount of men, materials and machinery needed, with schedules disrupted.
JIT for the controlled reduction of safety stock as a way to expose production problems underlying the exhibition floor at the workshop this becomes the basis of a systematic attack through-put time in a manufacturing organization. When the workflow steps between two interconnected stabilized, a marginal reduction in safety stock creates new problems involved. Dramatic reductions in safety stock and through-put times have resulted from these repeated efforts.
Unlike the traditional economic order quantity (EOQ) model, JIT does not place a lower limit on stocks. Not only did he avoid any accumulation of inventory and storage on the principle, but it also minimizes the need to amortize the cost of installing the transition from one job to another by reducing the time to put in place. The aim of JIT is instantly established and produce (no safety stock) only one unit of the product actually required. The process must not only produce an exit fee of 100 percent, after setting up perfect, but it should stop automatically when done and also be able to report if something is wrong. Many ingenious production techniques for many years are needed to achieve such control, flexibility, and terms of manufacturing error free.
Production Scheduling:
The second major conceptual innovation in JIT production planning. In JIT, the much larger low-cost product is available on request. Thus JIT is based on a "pull" production. steps downstream to upstream producers go eat to meet their specific needs, without the benefit of all safety stocks at each end. In such a situation, schedules should not be prepared for all production units then go ahead and push their production to the next stage on schedule. Only final assembly is given a production schedule of companies. Its production requirements to drive back upstream units. Their outflow downstream to replenish stocks consumed. Every day, a unit of production need to make the amount that will be used the next day to the next step. The exit rate for all stages are synchronized connected like pieces of a clock.
Leveling the Loads:
If demand is very variable, and fluctuations in orders and hence the gap between the timing and actual demand at the stage of final assembly are amplified as they are worked back to the first stage of the production. During the peaks and valleys occur in production, and workers lose their rhythm, errors occur, and many buffers are needed in the system are desirable. This gives rise to the third conceptual innovation, namely. leveling the load on all the related steps. The daily production is not only equalized (within a small range), but the daily mix of products is regularly repeated. For example, Toyota mixture daily production of two-door coupe, four-door sedan and station wagon (which tail) in a repeating pattern to create a uniform charge on suppliers of doors, handles, locks, etc.
Employees are able to acquire extensive experience in their production process when there is no sudden stops, unplanned interruptions or ad hoc changes. This enables the continuous improvement of manufacturing processes, accelerates the realization of the "experience effect" and results in a greater rate of decline in costs with a cumulative volume of production. It also minimizes the need for centralized production scheduling.
Operation:
Implement the JIT concept requires the introduction of a system of signaling requirements for production step to another. This is embodied in the system called Kanban system or the mailing of cards. These cards (or tickets, coupons, tokens) are used to allow either (a) the movement of a container production or (b) Kanban uses paperless, even without a computer-information system that has great advantages in the repetitive, multi-step manufacturing processes involving small batches.
Provided that some simple rules are followed to the letter, ie. "No container without kanban" and "No Kanban, no production" and "zero defects", the withdrawal of a kanban card traffic creates a minor "crisis" and triggers the process of seeking improvement. Although that the kanban system itself is fairly simple to understand and relatively inexpensive to install, it is the creation and improvement of the research of crisis is not only complex but ultimately feature of the organization. Kanban plays a catalytic role in JIT, but only one at that. No standard model of organizational transformation process that results can be presented. But our goal is simply an introduction to three basic management implications can be exposed briefly to guide the implementation effort.
Management Implications
The three key managerial implications of JIT are:
Suffusion of Strategy:
As already explained, JIT is designed to expose problems in the workshop and reduce their recurrence. This is done by giving workers the responsibility not only a search function but also improve it in future. Execution of a function is a relatively simple problem. It is simply the application of routines known. But improvements in research (such as quality, safety, economy, ease of use, etc.) at the same time it becomes a complex problem. Innovations invariably involve intensive interactions for the effective incorporation. Thus, complex problems require sound strategies for their resolution.
Traditionally, responsibility for dealing with complex issues has been delegated by management to middle management level through financial controls such as liability profit center or divisionalization. But it tended to stop at the wall of the plant. JIT-quarters of the use of the strategy all the way down to the workshop. I propose to call this strategy at the micro level. In the process, each trainee. enthusiastic search for solving problems and a healthy allergy to apologize are the hallmarks of these employees. The flexibility and versatility backed by expertise in a variety of operations makes it essential for the organization.Teams of employees could be called micro business units or MSU. They are crucibles for the development of future entrepreneurs and leaders of the organization.
Suffusion with good strategy across the organization, its activities become very strategic for a company. Coherence between the day of action day and long-term interests is constantly maintained. As the overall business strategy is becoming more focused on cost, quality, variety, and delivery factors in a particular industry, organization as an entity becomes strategic for the nation because of increasing its international competitiveness.
Quest for Quality:
In JIT, synchronization of the stages of production and upgrading of charges on minimizing concerns about the volume of production. Any malfunction receives prompt and effective action. Thus, the organization is free to concentrate on quality issues. It is the lack of quality in materials, components, machinery, labor, and management problem, an inventory of the necessary buffer, which impede progress towards agreement JIT.Casse, rejects, rework, downtime, negligence, absenteeism, etc. are all symptoms of poor quality.
On the other hand, technology is a valuable ally in the quest for quality, reliability, flexibility and speed are key dimensions of competitiveness advantage.
In a JIT environment, the importance of quality is demonstrated in several ways. Workers are allowed to stop the line when they see problems.The machines are equipped to stop automatically in abnormal situations. At the same time, parts and components from a trusted provider of proven ability are introduced directly into the final assembly without any inspection whatsoever.When the operations and improving operations are integrated into the employment of each employee, then quality becomes a way of life in the organization. Each activity is asked to make the best possible way every time. The interest grows gradually in the means to conduct international operations of the industry. With "premium" as the goal, reductions in unit costs and productivity gains, which are usually very resistant to direct attack, are made simply as the byproduct of a process for producing high quality and indirectly automatically.
Acute Sense of Humanity:
It seems remarkable that its effect on productivity, JIT could be used to drive the organization to operate without pity gains that result. Such a conclusion would be a terrible mistake. work intensification simple (adding work time or speed line) will reduce the process time only to a certain extent. In addition, employees have to find technical innovations to achieve reductions in time required. It can only flourish in a climate of trust and mutual respect. When employees are accustomed to working with the security of stocks of high security, a sudden reduction can be upsetting and can be a serious setback to the progress JIT yet. Moreover, since workers are expected to contribute to ways to reduce process time, they run the real risk of making themselves redundant. How such dismissals and productivity gains-are handled will give them important clues to the real intention of the management. In a JIT environment, people will have to deal effectively and consistently as the most important assets. Interest in physical fitness and morale must be demonstrated within the parameters of available resources. The technology can be regarded as the solution to "problems of people." Instead, people create technology to solve practical problems. Shared understanding and concerns are needed to facilitate and focus efforts on multiple concurrent problem solving within the organization. The organization must be welded into a coherent unit through a wide use of education, communication, consultation and cooperation. A common vision must be anchored in an appeal to higher needs humans. Only when all members truly believe they share a common destiny, they are individually and collectively in a better position to face the inevitable obstacles and challenges in organizational life.
JIT Flow:
A queue in front of the work center represents the WIP. Any form of inventory is a waste as per the JIT philosophy. When the queues are long, the cost of hiding the WIP becomes high and the time required for the job to flow through the required work center becomes excessive. The major objective of JIT is to have only the right item at the right place at the right time. This practice reduces the WIP and hence the working capital requirement but also the floor space and the flow through time. Thus the important aspects that support the JIT flow are:
• Uniform production rate and mixed model assembly.
• Pull method of coordinating work centers.
• Quick and inexpensive setups.
• Multi skilled workforce and flexible facilities.
• High quality levels with no rejects or reworks.
The JIT system is represented in the following figure.
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As shown in the above figure, the JIT process starts when the customer initiates the order. The order is then processed and manufactured, the raw materials being purchased after the order is being placed. Thus saving money invested in inventory and storage place. This is a pull system which is much more efficient and cost effective as compared to the previously used push system.
Transformation from push based to pull based system
Before all the lean manufacturing philosophies started being followed widely around the world, most of the industries followed the push based system where the products are made and then pushed to customer to buy whatever is available. But now techniques and philosophies like just in time, six sigma, etc. the manufacturing world has shifted or transformed to a pull based system. Pull based system means that it is a customer driven system where the product is produced after the customer has placed the initial order. This reduces the storage of raw materials and semi finished goods and also allows you to provide the customer more options to customize his order.
An example of this would be DELL, which follows this system.http://t1.gstatic.com/images?q=tbn:ANd9GcQVATIY6x3eF8zivM7nJ_iWE9UIbb5oXJLLUJoOT3ZDvutpag81ZA
Major Elements of Just in Time
1. Flow Layout:
The physical layout of production facilities is arranged, so that the process flow is streamlined, i.e., for each component, the proportion of value-added time should be more, there should be minimum queuing and non-value-added items.
2. Smoothed build up rate:
The buildup rate should be smooth over a monthly cycle. To achieve this, under capacity scheduling is resorted to so that they can respond to demand changes.
3. Mixed Model Scheduling:
JIT objective is to match the production rate to demand as closely as possible. One way of doing this is to increase the flexibility of production lines to allow concurrent assembly of different models on the same line.
4. Small lots and minimum setup time:
The objective of minimizing setup times is to reduce the batch sizes to the minimum possible. This reduces the minimum cycle time and inventory.
5. Buffer stock removal:
Constant elimination of buffer stocks is emphasized to highlight production problems scheduled by high inventory levels.
6. Kanban card:
It is a pull system of managing material movement comprising of "Kanban card" based on information system. It helps to trigger the movements of material from one operation to another (next). Merely by alternating the frequency of circulating Kanban, the production system can be made to adjust to demand fluctuations within limits. The number of cards in the system determines the total inventory. Hence, the objective is to minimize the number of kanbans.
7. Quality:
The achievement of high quality levels is a prerequisite of successful JIT. Zero defect, statistical process control, process data collection and worker centred quality are commonly used quality programs.
8. Product and process simplification:
This is achieved through:
(i) Rationalization of product range
(ii) Simplification of methods of manufacture
(iii) Simplification through component item standardization
9. Standardised container:
JIT emphasizes small standardized containers. This simplifies material movement.
10. Flexible workforce:
Flexible workforce is developed through cross-functional training. It is necessary to match the production rate and demand rate as closely as possible.
11. Continuous improvement:
JIT is not one time effort. It is a philosophy of continuous improvement.
12. JIT purchasing:
Materials and components are purchased in accordance with well defined requirements in terms of quality, quantity and delivery.
Benefits of Just in Time
The benefits of JIT are:
• Improved quality products
• Every worker is responsible for the quality of the product and not only the quality inspectors
• Decrease scrap and rework
• Drastic reduction in cycle times
• Reduces setup times
• Controlled and smoothened production flow
• Reduced inventory viz. a.) raw materials
b.) work in progress (WIP)
c.) finished goods
• Cost and time savings
• Increased productivity
• Superior worker participation
• More skilled workforce which is able and willing to switch roles
• Reduction in space requirements
• Better relationships with suppliers
Even thought just in time provides so ma y benefits to the industry, implementing a JIT system is a job that cannot be taken lightly. It will require a great amount of time for any industry to successfully implement JIT. The efforts to be put in by the employees will be immense, specially to continue the implementation for a long time.
Challenges faced to implement Just in Time in India.
Lack of skilled workers
Stubborn workers
Strikes/bandhs etc
Lack of connecting transport facilities
Non availability of facilities in the industry
Bad conditions of roads/transport vehicles
Non flexible workforce
Workers only interested to make money and not interested to enhance companies performance
Formation of union amongst the workers and suppliers and their resistance to excel
Case study on Hewlett Packard
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As seen in the diagram, Hewlett Packard reduced the manufacturing time for assembling 31 circuit boards from 15 days to 11.3 hours.
The implementation of Just in Time in HP reduce their value of inventory from $670000 to $20000.
Thus, successful implementation of JIT not only improves the operational efficiency but also reduces the associated overhead costs.
Summary and Conclusion
Many companies are adopting and implementing JIT to optimize their manufacturing process.
Implementing a JIT system requires a company to manage the following technical and procedural specifications:
Thus, JIT not only establishes good organizational work culture values and philosophies of better production management but also sets targets for the various processes so that they perform well and give better levels of performances. JIT also facilitates cooperation between company officials ensuring proper exchange of information through all departments to strength and support the process of critical decision making.
This immense success of JIT can be contributed not just to the external (environment) and internal (culture and organizational structure) factors, but also to the planned course of actions that it seeks to establish across various operational activities.
The continuous endeavor to achieve improvement, the detailed understanding of various JIT disciplines and the confidence which such a system gets into the organization, makes JIT so successful.
