10.1 JIT & JIC and 10.2 Lean Production

Just in Time Production (JIT)

A situation where a firm does not allocate space for storage of components or completed products. Parts are ordered when needed and shipped as as soon as completed. 

Cells

Splitting up the production process into small groups. E.g. packaging, electricals, etc.

Just in Case (JIC)

Keeping a stock of components or complete products just in case of a rush order or higher demand.

Advantages of JIT

Cheaper, no storage costs, requires less staff/admin/security, less waste, frees up cash flow, efficiency is flexible

Disadvantages of JIT

Lacks diseconomies of scale, failure in supply chains have large impacts, not easy to react to changes in demand, increased transport costs, distribution may have delays.

Advantages of JIC

Gain economies of scale discounts, easy to fulfill changes in demand, changes in supply chain have less effect, decreased transport costs, no delay in distribution.

Disadvantages of JIC

Higher storage costs, requires more staff/admin/security, can lead to overstock or waste, ties up cash in raw materials

Lean Production

Aims to eliminate waste and maximize the value (lowest cost) of a product based on the perspective of the consumer.

Characteristics of lean production

JIT supplies/materials, highly trained workforce/labour, quality control and continuous improvement, zero defects, zero inventory.

Value stream mapping

Tool used to analyze current and future processes for the production of a product through to delivery to the customer.

Workflow Analysis

The review of processes in a workflow in order to identify potential improvements

Product Family

A group of products using similar processing methods.

Role of Workforce

Focuses on training and kaizen.

Kaizen

A strategy of continuous improvement. Employees give suggestions of how to improve production in their respective fields.

Kanban

Sign board. A way of managing knowledge, stock, orders, and quality. 

Lead time

The amount of time quoted to customers for their orders to be fulfilled. Date of purchase to date of delivery.

The 5 S’s

Sort (remove unnecessary items), Set in order (customize work area to maximize efficiency), Shine (Clean/fix work area, tools, etc), Standardize (Assign tasks for responsibilities), Sustain (keep the practice going)

The 7 wastes

Overproduction (materials), waiting (time), transporting, inappropriate processing, unnecessary inventory, excess motion, defects

Advantages of Lean Production

Minimizes waste, less impact on environment, lower costs, increased productivity for workers.

Disadvantages of Lean Production

Supply problems stop the whole process, more suitable for large scale production.