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Just-In-Time (JIT) Manufacturing :

Just-In-time manufacturing, or JIT, is a management philosophy aimed at eliminating manufacturing wastes by producing only the right amount and combination of parts at the right place at the right time. This is based on the fact that wastes result from any activity that adds cost without adding value to the product, such as transferring of inventories from one place to another or even the mere act of storing them.

The goal of JIT, therefore, is to minimize the presence of non-value-adding operations and nonmoving inventories in the production line. This will result in shorter throughput times, better on-time delivery performance, higher equipment utilization, lesser space requirement, lower dpms, lower costs, and greater profits.

History
The technique was first used by the Ford Motor Company as described explicitly by Henry Ford's My Life and Work (1922): "We have found in buying materials that it is not worth while to buy for other than immediate needs. We buy only enough to fit into the plan of production, taking into consideration the state of transportation at the time. If transportation were perfect and an even flow of materials could be assured, it would not be necessary to carry any stock whatsoever. The carloads of raw materials would arrive on schedule and in the planned order and amounts, and go from the railway cars into production. That would save a great deal of money, for it would give a very rapid turnover and thus decrease the amount of money tied up in materials. With bad transportation one has to carry larger stocks." This statement also describes the concept of "dock to factory floor" in which incoming materials are not even stored or warehoused before going into production. This paragraph also shows the need for an effective freight management system (FMS) and Ford's Today and Tomorrow (1926) describes one. The technique was subsequently adopted and publicised by Toyota Motor Corporation of Japan as part of its Toyota Production System (TPS).

It was developed and perfected by Taiichi Ohno of Toyota, who is now referred to as the father of JIT. Taiichi Ohno developed this philosophy as a means of meeting customer demands with minimum delays. Thus, in the olden days, JIT is used not to reduce manufacturing

wastage, but primarily to produce goods so that customer orders are met exactly when they need the products.

Effects
JIT is also known as lean production or stockless production, since the key behind a successful implementation of JIT is the reduction of inventory levels at the various stations of the production line to the absolute minimum. This necessitates good coordination between stations such that every station produces only the exact volume that the next station needs. On the other hand, a station pulls in only the exact volume that it needs from the preceding station. The JIT system consists of defining the production flow and setting up the production floor such that the flow of materials as they get manufactured through the line is smooth and unimpeded, thereby reducing material waiting time. This requires that the capacities of the various work stations that the materials pass through are very evenly matched and balanced, such that bottle necks in the production line are eliminated. This set-up ensures that the materials will undergo manufacturing without queueing or stoppage. Another important aspect of JIT is the use of a 'pull' system to move inventories through the production line. Under such a system, the requirements of the next station is what modulates the production of a particular station. It is therefore necessary under JIT to define a process by which the pulling of lots from one station to the next is facilitated. JIT is most applicable to operations or production flows that do not change, i.e., those that are simply repeated over and over again. An example of this would be an automobile assembly line, wherein every car undergoes the same production process as the one before it. JIT has likewise been practiced successfully by some semiconductor companies. Still, there are some semiconductor companies that dont practice JIT for the simple reason that their operations are too complex for JIT application. On the other hand, thats precisely the challenge of JIT creation of a production set-up that is simple enough to allow JIT.

Problems
Just in Time production allows companies to reduce both inventory and the entire production chain. It encourages the removal of all surplus, including surplus factories. Under normal

business conditions this is not a problem. However, if there is any disruption at any given point in the supply chain, then all production grinds to a halt. Hurricane Katrina and Hurricane Rita both hit the US Gulf coast in August and September of 2005. At that time, no new oil refineries had been built in the US since 1976. Between 1976 and 2005, companies actually shut down several refineries to reduce excess capacity. The remaining refineries still operating ran at full capacity, so no new refineries were needed since they would only produce surplus gasoline. However, most of these refineries were clustered around the Gulf coast. When Katrina hit, 15 oil refineries in Mississippi and Louisiana, representing 20% of US refining capacity, were shut down. Rita damaged another 16 refineries in Texas, accounting for 2.3 million barrels per day of capacity shut down. US regular grade gasoline prices spiked at $3.09 on September 19 in the immediate aftermath of Hurricane Katrina and retreated to $2.154 per gallon by November 28, 2005.

KAIZEN:
Kaizen (, Japanese for "change for the better" or "improvement", the English translation is "continuous improvement", or "continual improvement.") is an approach to productivity improvement originating in applications of the work of American experts such as Frederick Winslow Taylor, Frank Bunker Gilbreth, Walter Shewhart, W. Edwards Deming and of the War Department's Training Within Industry program by Japanese manufacturers after World War II. The development of Kaizen went hand-in-hand with that of quality control circles, but it was not limited to quality assurance. The goals of kaizen include the elimination of waste (defined as "activities that add cost but do not add value"), just-in-time delivery, production load leveling of amount and types, standardized work, paced moving lines, right-sized equipment, etc. In this aspect it describes something very similar to the assembly line used in mass production. A closer definition of the Japanese usage of Kaizen is "to take it apart and put back together in a better way." What is taken apart is usually a process, system, product, or service. Kaizen is a daily activity whose purpose goes beyond improvement. It is also a process that, when done correctly, humanizes the workplace, eliminates hard work (both mental and physical), and teaches people how to do rapid experiments using the scientific method and how to learn to see and eliminate waste in business processes. "Kaizen" is the correct usage. "Kaizen event" or "kaizen blitz" are incorrect usage.

Kaizen is often misunderstood and applied incorrectly, resulting in bad outcomes including, for example, layoffs. This is called "kaiaku" - literally, "change for the worse." Layoffs are not the intent of kaizen. Instead, kaizen must be practiced in tandem with the "Respect for People" principle. Without "Respect for People," there can be no continuous improvement. Instead, the usual result is one-time gains that quickly fade. Importantly, kaizen must operate with three principles in place: process and results (not results-only); systemic thinking (i.e. big picture, not solely the narrow view); and nonjudgmental, non-blaming (because blaming is wasteful). Everyone participates in kaizen; people of all levels in an organization, from the CEO on down, as well as external stakeholders if needed. The format for kaizen can be individual, suggestion system, small group, or large group. The only way to truly understand the intent, meaning, and power of kaizen is through direct participation, many, many times.

Applications:
The Toyota Production System is known for kaizen, where all line personnel are expected to stop their moving production line in the case of any abnormality, and suggestions for improvement are rewarded. Kaizen often takes place one small step at a time, hence the English translation: "continuous improvement", or "continual improvement." Yet radical changes for the sake of goals, such as just in time and moving lines, also gain the full support of upper level management. Goals for kaizen workshops are intentionally set very high because there are countless examples of drastic reductions in process lead time to serve as proof of their practicality. Kaizen is one of the most commonly used words in Japan. In the newspapers and on radio and TV, we are bombarded daily with statements by government officials and politicians regarding the Kaizen of our trade balance with the United States,the Kaizen of diplomatic relations with country X, and the Kaizen of the social welfare system. Both labour and management speak of the Kaizen of industrial relations. The cycle of kaizen activity can be defined as: standardize an operation -> measure the standardized operation (find cycle time and amount of in-process inventory) -> gauge measurements against requirements -> innovate to meet requirements and increase

productivity -> standardize the new, improved operations -> continue cycle ad infinitum. This is also known as the Shewhart cycle, Deming cycle, or PDCA. The "zen" in Kaizen emphasizes the learn-by-doing aspect of improving production. This philosophy is focused in a different direction from the "command-and-control" improvement programs of the mid-twentieth century. Kaizen methodology includes making changes and looking at the results, then adjusting. Large-scale preplanning and extensive project scheduling are replaced by smaller experiments in improvement, which can be rapidly adapted as new improvements are suggested. Kaizen means improvement. Morever, Kaizen means ongoing improvement involving everyone, including both managers and workers. The Kaizen philosophy assumes that our way of life be it our working life, our social life, or our home life deserves to be constantly improved. Masaaki Imai made the term famous in his book, Kaizen: The Key to Japan's Competitive Success. An appendix to that book includes a reference to the 5S strategy of disciplined cleanup

KANBAN:
Kanban (in kanji also in katakana , where "kan " means visual, and "ban " means card or board) is a concept related to the Lean or Just In Time (JIT) production, but these two concepts are not the same thing. (The Chinese word "kanban" is a common everyday term meaning "sign" or "card" and utterly lacks the specialized meaning which this loanword has acquired in English.) According to Taiichi Ohno, the man credited with developing JIT, kanban is the means through which JIT is managed. Kanban is a signaling system. As its name suggests, Kanban uses cards to signal the need for an item. Other devices such as plastic markers (Kanban squares) or balls (often golf balls) can also be used to trigger the movement, production, or supply of a unit in a factory. For example, in the production of a widget, the operator has two shelves, one on either side of the workplace. The raw materials arrive on one shelf and the finished article on the other. These shelves act as kanbans. The outgoing kanban signals the customer's need so that when it is empty, the operator must produce one more widget. The Kanban is sized so that it can only hold however many the customer needs (usually one). When the operator begins work, he takes the raw material from the incoming kanban, thus signalling to the supplier that he needs more.

Kanban is frequently known as a "pull" system, as everything is pulled in response to past demand. Demand forecasts are not used in kanban systems. This is the opposite of the traditional "push" manufacturing philosophy, in which everything is made to forecasted future needs. With this in mind, it is not surprising that an important determinant of the relative merits of "push" and "pull" is the quality of the demand forecast. If forecasts are good, then the kanban system will effectively waste useful information, whereas a good "push" system will produce just the right quantities at the right times. In contexts where demand is difficult to forecast, on the other hand, the best one can do is to quickly respond to observed demand. This is exactly what a kanban system does, as a demand signal immediately propagates through the entire chain. "Push" systems often encounter serious difficulties when demand forecasts turn out to be inaccurate. The Kanban system might be visualised as a "Three bin system" for the brought out parts ( where there is no inhouse manufacturing)- one bin on the factory floor, one bin in the factory store and one bin at the Suppliers' store. The bins usually have a removable card that contains the product details and other relevant information - the Kanban card. When the bin on the shop floor is empty, the Kanban card is removed and given to the store. The store then replaces the bin on the factory floor with a full bin which also contains a removable Kanban card. The store then contacts the Supplier and indicates the need to replenish the Kanban card. The product also containing a Kanban card is delivered into the factory store completing the final step to the system. So it will never run out of product, providing of course, the cards are reliably collected from empty containers. It is a perfect "push-pull" that could also be described as a "loop", providing the exact amount required, with only "one" spare so there will never be an issue of "over-supply". The secret to a good Kanban system is to calculate how many Kanban cards are required for each product. Most factories use the coloured board system (Heijunka Box). This consists of a board created especially for the purpose of holding the Kanban cards.

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