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The philosophy of JIT goes far beyond inventory control but encompasses the entire system of production. It aims
to eliminate all sources of waste, anything (e.g. inward material inspection cost) which does not add value, in production/trading activities by providing the right parts/goods at the right place at the right time. Parts/goods are therefore produced/purchased just in time to meet manufacturing/selling requirements rather than by the traditional Just-in-case approaches such as those discussed above. The JIT system results in much less inventory, lower cost (including both holding cost and ordering/setup cost to be lower at the same time) and better quality than those traditional approaches.
Another important characteristic of JIT philosophy is utilization of the full capacity of the worker. Workers, in the JIT system, are charged with the responsibility for producing quality parts just in time to support the next production process. They are also charged with improving the production process through quality circles, suggestion systems and any other forms of participation.
Although the major application to date of JIT has been in repetitive manufacturing (i.e. mass production of standardized products), the JIT concept is equally applicable to job lot production or trading business.
In a JIT system, the final assembly schedule must be stabilized and leveled as that the demand on preceding work centers and vendor schedules becomes nearly constant. For example, in Toyota’s factory, the final assembly line of Corona has to produce 20,000 units in a month of 20 operating days. This means that 1,000 Coronas must be produced per day and so just sufficient numbers of different parts (e.g. engines, transmissions, accelerators, doors and tires) have to be produced each day and the just sufficient quantities of different materials have to be delivered to the factory each day by the vendors for the production of the different parts.
JIT uses a simple parts withdrawal system (called Kanban) to pull parts from one (preceding) work centre to the next (starting from the final assembly line as described in the Toyota example). A fixed number of containers is provided for each part required. When these containers are full, no more parts are produced, thus limiting the inventory of each part. Constant improvement activities are encouraged to reduce the number/size of the containers and so the inventory.
The objective is to produce parts in a lot size of one. As discussed above, this is not economically feasible because of the high setup cost compared with inventory holding cost. The JIT solution to this problem is to lower the setup cost by reducing the setup time as much as possible, ideally to zero. One of the ways to achieve low setup time is to separate setup procedures into external and internal ones. Internal setups can be carried out only when the machine has been stopped, while external setups can be done when the machine is operating. After separating internal and external setups, as much of the setup as possible is converted from internal to external by having quick change adjustments modified to the machine and/or by employing cleverly designed tools and fixtures. When setup time is reduced, the production lead time is also shortened and so less material and WIP are in the process.
With an emphasis on quick changeovers and smaller lots, multifunction workers are required. Cross-training is needed so that each worker can operate several machines and perform setup, maintenance and inspection activities. JIT also affects the plant layout by requiring much less space (due to much less inventory and elimination of stockrooms) and encouraging movement toward group technology layouts.
As mentioned in the Toyota example above, vendors are required to make deliveries after receiving Kanban cards in every operating day. New vendor relationships are established. Vendors are treated much like internal work centers. Deliveries are made directly to the production lines without receiving or inspection. This requires complete confidence in the vendor’s quality. Thus, long-term single-source contracts will often be negotiated with vendors.
The last thing to be mentioned is that a JIT system involves problem-solving activities by management and workers who drive the whole system to eliminate inventory (the root of all evil). Therefore, intensive education of workers and management at all levels is needed in order to have a successful implementation of the JIT system.
Published: September 01, 2007