Chapter 14: JIT and Lean Operations

Just-in-Time (JIT)

a way of managing inventory and production so that materials and products are made or delivered only when they are needed, not before.

Just-in-Time (JIT) example

Instead of keeping large inventories of car parts like engines, tires, or seats, Toyota only orders and receives these parts as they are needed in the manufacturing process.

Lean Operations

means running a business in a way that uses fewer resources (like time, money, or materials) while still delivering high-quality products or services.

Lean Operations Example

If a restaurant preps only the ingredients it needs for the day (instead of making too much and throwing food away),

1. eliminate waste

2. remove variability

3. improve throughput

What are the issues that good production systems require managers to address?

Toyota Production Systems (TPS)

emphasis continuous improvement, respect for people, and standard work practices in an assembly line environment

• greater productivity

• lower costs

• shorter cycle times

• higher quality

What do lean operations achieve?

achieve a balanced system with a smooth rapid flow of materials to make the process time as short as possible by using resources in the best possible way

What is the ultimate goal of Lean Operations?

Waste (muda)

Represents unproductive resources and anything that doesn’t add value to the customer

8 Wastes in Lean Systems

1.Excess inventory.

2.Overproduction.

3.Waiting time.

4.Unnecessary transporting.

5.Processing waste.

6.Inefficient work methods.

7.Product defects.

8.Underused people.

Small Lot Sizes

mean producing or ordering a small number of items at a time instead of making or buying a large batch all at once.

Benefits of small lot size

•Reduced inventory, lower carrying costs.

•Less space required to store inventory.

•Less rework if defects occur.

•Less inventory to ‘work off’ before implementing product improvements.

•Increased visibility of problems.

•Increased production flexibility.

•Increased ease of balancing operations.

Push system

as soon as a worker finishes their part, the product is sent to the next step—whether it’s ready for it or not. If it's the last step, the product is sent straight to storage, even if no customer has ordered it yet.

Push System Example

a bakery makes 100 loaves of bread in the morning because they think that’s how many they’ll sell. Each baker finishes their part and sends the bread to the next step, even if it’s not needed yet. When the bread is done, it goes on the shelf, even if no one has bought any yet. Some of it might not sell and go to waste.

Pull system

is based on customer demand where each step only starts when it's needed, based on what the previous step produces. The final product is made when the customer wants it or based on a schedule.

Pull system example

the bakery only makes bread when a customer orders it. So, when someone asks for a loaf, the bakers start working. Each step happens only when it’s needed. This way, they don’t make too much, and there’s less waste.

if there are big changes in how many products are needed, what types of products are required, or how the products are designed.

What are the situations where pull systems don’t work well

Hidden Factory

Lean systems try to reduce hidden costs—these are things businesses do that don’t add value for the customer, but they still spend time and money on them. These costs are often called the ————— because they're like extra work behind the scenes.

Logistical Transactions

Moving things around unnecessarily, like shipping parts back and forth that could be handled more efficiently.

Balancing Transactions

Adjusting work processes to keep everything moving, but not really improving the product or service.

Quality Transactions

Checking and re-checking products that might already be good, just because the system isn’t working perfectly.

Change Transactions

Making frequent changes that don’t add value, like changing product designs or processes over and over without improving customer satisfaction.

Preventive Maintenance

Maintaining equipment in good operating condition and replacing parts that have a tendency to fail before they actually do fail.

Housekeeping

Maintaining a workplace that is clean and free of unnecessary materials. It involves the following 5 behaviors to make the workplace effective.

Housekeeping 6S

1.Sort.

2.Straighten.

3.Sweep.

4.Standardize.

5.Self-discipline.

6. Safety

Lean

is all about making processes faster and more efficient by cutting out waste—activities that don’t add value to the customer.

Lean Example

it might focus on eliminating extra steps or unnecessary waiting times.

Six Sigma

focuses on making processes more consistent and accurate by reducing variations (or mistakes) in how things are done. It aims to make sure that things are done right every time.

Six Sigma Example

Imagine a factory that makes smartphones. They want to make sure almost every phone they make is perfect, with no mistakes.

To do this, they look at each step of making the phone and check for any problems that might cause defects. For example, if one part of the phone is often put together wrong, they figure out how to fix it so it’s done correctly every time.

Throughput

is the amount of work or product that a system can produce in a certain amount of time and measures how fast something gets done or produced

Throughput Example

if a factory makes 100 toys in one hour, then its throughput is 100 toys per hour. The higher the throughput, the more products or work can be completed in a given time.

How to improve Throughput

Pull Method and Small Lots

How to NOT improve Throughput

a push system, products are made or moved ahead of time and sent to the next step, even if it’s not needed yet. This can cause unnecessary delays and slow down the whole process.

minimize

Lean Systems are designed to ———— inventory storage

Little Inventory Storage

inventory (like extra stock or supplies) can hide problems in the process.

For example, if there’s a problem in the production line, extra inventory might cover it up because you don’t notice it right away. People might think everything is fine since there’s enough stock to keep things running.

Benefits of JIT

•Rapid throughput frees assets.

•Quality improvement reduces waste.

•Cost reduction adds pricing flexibility

•Variability reduction

•Rework reduction.

•Less investment in tying up assets in inventory.

•Less space required for inventory.

Kanban

Japanese word for card: The card is an authorization for the next container of material to be produced

Kanban Example

If a workstation is running low on parts, it might send a Kanban card to the supplier, signaling that more parts need to be delivered.

If a task is completed, a card is moved to the next step in the process to show it's time to start the next part of the work.

First Advantage Kanban

Small containers require tight schedules, smooth operations, little variability

Second Advantage of Kanban

Shortages create an immediate impact

Third Advantage of Kanban

Places emphasis on meeting schedules, reducing lead time and setups, and economic material handling

Fourth Advantage of Kanban

Standardized containers reduce weight, disposal costs, wasted space, and labor

TPS Elements

1. Assembly Components

2. Respect for people

3. Empowered Employees

4. JIT

5. Level Schedules

6. Jidoka

7. Kaizen Area

8. Minimal machines

9. Standard Work Practices

10. Pull system

11. Kanban

Andon

problem display board that communicates abnormailites

Jidoka

machines with built-in devices for monitoring performance and making judgments

Toyota Production System (TPS)

Known for….

1. continuous improvement

2. respect for people

3. standardized work practice

Kaizen area

an ware where suggestion are tested and evaluated

Continuous Improvement

Build an organizational culture and value system that stresses improvement of all processes, kaizen

Part of everyone’s job

Standardized work practice

means that everyone does a task the same way, using the best and most efficient method that’s been agreed upon.

If someone wants to make an improvement, they must test it carefully like a small experiment—using the scientific method (plan, test, check, and adjust).