Just in Time PDF

JUST-IN-TIME
MANUFACTURING
Just-In-Time Manufacturing
JUST-IN-TIME MANUFACTURING
Table of Contents
I.
JUST-IN-TIME MANUFACTURING.......................................................................1
A. INTRODUCTION.........................................................................................1
B. JIT PHILOSOPHY........................................................................................1
1. History of Just-In-Time......................................................................2
From Supermarket to Shop Floor.....................................................2
2. What to Expect..................................................................................3
C. VALUE-ADDED ANALYSIS.........................................................................4
Figure 1-1 Value-Added Analysis......................................................5
Figure 1-2 Value-Added Analysis......................................................6
1. Don't Forget The Office.....................................................................7
D. UNDERSTANDING WASTE........................................................................7
1. Evils of Inventory...............................................................................8
Figure 1-3 High and Low Levels of WIP...........................................9
E. JIT AND QUALITY.....................................................................................11
1. The Chicken or the Egg..................................................................11
2. What If ?..........................................................................................12
3. What is Quality ?.............................................................................13
4. Preventing Quality Problems..........................................................13
Defining the Requirements.............................................................13
The Root Cause of The Problem....................................................14
Figure 1-4 Getting to The Root Cause...........................................15
Keeping Control of The Process.....................................................16
Figure 1-5 Poka-Yoke - Speaker Box Assembly.............................17
Figure 1-6 Poka-Yoke - Drilling Holes in a Side Plate....................18
F. UNIFORM PLANT LOAD...........................................................................19
1. Cycle Time......................................................................................19
Workforce........................................................................................20
2. Level Loading..................................................................................21
Figure 1-7 Level Loading...............................................................22
3. Learning Curve Improvements........................................................23
G. SETUP TIME REDUCTION.......................................................................24
1. Getting Started................................................................................24
2. Setup Reduction Teams..................................................................25
3. Videotaping.....................................................................................26
4. The SMED System..........................................................................27
The Four Conceptual Stages of SMED...........................................27
5. Clamping.........................................................................................28
6. Adjusting.........................................................................................28
AIDT - Just-In-Time Manufacturing - September 11, 2006

H. CELLULAR MANUFACTURING................................................................29
Figure 1-8 Traditional Manufacturing System................................29
Figure 1-9 U-Shaped Work Cell.....................................................30
1. U-Shaped Work Cells......................................................................31
Figure 1-10 U-Shaped Work Cells.................................................32
U-Shaped Cells versus Assembly Line Manufacturing...................33
Comparison of Assembly Line and U-Shaped Work Cell................33
Figure 1-11 Cellular Manufacturing System...................................34
I. PULL SYSTEMS........................................................................................35
1. The Push System............................................................................35
Figure 1-12 Push System..............................................................36
2. From Supermarket to Factory Floor - The Pull System...................37
Figure 1-13 Kanban Card..............................................................37
Figure 1-14 Production Control by Pull System.............................39
J. JIT PURCHASING.....................................................................................41
Figure 1-15 Typical Manufacturing Costs.......................................41
1. Partnerships....................................................................................42
2. Eliminating Procurement Wastes....................................................43
3. A Day's Worth Every Day................................................................44
K. JIT IN CONJUNCTION WITH MANUFACTURING RESOURCE
PLANNING.................................................................................................45
1. Which System ?..............................................................................45
L. MANAGEMENT'S RESPONSIBILITY.......................................................47
1. Motivation........................................................................................48
2. Training...........................................................................................48
3. Leadership......................................................................................49
M. IMPLEMENTING JIT..................................................................................49
1. Forming Teams...............................................................................50
2. Developing a JIT Startegy...............................................................50
N. GLOSSARY...............................................................................................52
O. REFERENCES AND RECOMMENDED READINGS................................56
ii AIDT - Just-In-Time Manufacturing - September 11, 2006

I. JUST-IN-TIME MANUFACTURING
A. INTRODUCTION
Why Just-In-Time manufacturing when there are dozens of other

manufacturing philosophies from which a company may choose? Just-In-
Time (JIT) manufacturing distances itself from the competition because no
large capital outlays are required. Other methods promote complexity, large
overheads, automation, and other "state-of-the-art" technologies, while JIT
advocates simplifying and streamlining the existing manufacturing process.
Since World War II, traditional American companies have developed a way
of doing business that entails top management planning, re-planning, and
more planning. Although some planning is good, it ultimately adds no value
to the end product. Customers want quality products at competitive prices
- they couldn't care less how much planning was required to get that product
to them. By implementing JIT, much of the planning disappears and a large
portion of the remaining planning is entrusted to the shop floor personnel.
The purpose of this text is to introduce basic JIT concepts and assure you
that JIT can work in your company. The transition to JIT often is not easy,
but it is almost always rewarding. All employees in the company - from top
management to direct labor - must have a clear understanding of the benefits
that JIT offers to them and to their company. JIT is not a cure-all for every
manufacturing problem. But, if implemented properly, JIT is a no-cost or
low-cost method for improving your manufacturing process.
B. JIT PHILOSOPHY
The basis of Just-In-Time (JIT) is the concept of ideal production. It centers on
the elimination of waste in the whole manufacturing environment, from raw
materials through shipping. Just-In-Time is defined as "the production of the
minimum number of different units, in the smallest possible quantities, at the
latest possible time, thereby eliminating the need for inventory. Remember,
JIT does not mean to produce on time, but to produce just in time.

1. History Of Just-In-Time
JIT is sometimes said to have been invented by Henry Ford because

of his one-at-a-time assembly line, circa 1913. This is an incorrect
conclusion since Ford's system could handle no variety and was
designed for large volumes and large batch sizes of the same parts.
JIT was invented by Taiichi Ohno of Toyota shortly after World War
II. Ohno's system was designed to handle large or small volumes
of a variety of parts. Many people are intimidated by JIT because
of its association with Japan. If these people take a broader look at
JIT, they will see that it is nothing more than good, common sense
manufacturing.
Ohno and his associates came to America to study our manufacturing

processes. They determined that our system was much like the system
that Japanese companies were using, but Japanese companies could not
afford waste in their systems due to the devastation to their economy
caused by World War II. While in America, Ohno learned much about
America's culture. One of his discoveries has transformed the world's
perspective on manufacturing.
From Supermarket To Shop Floor
Legend has it that Ohno got the idea for his manufacturing system
from America's supermarket system. Ohno learned the kanban (pull)
system from our supermarket system in which customers pulled items
from the shelves to fill their shopping carts, thereby creating an empty
space on the shelf. The empty space is a signal for the stocker to
replace that item. If an item was not bought that day, there was no
need to replace it. When item quantities become low, that is the signal
for the stockers to order more goods from their suppliers. Customers
are content to take just what they need, because they know that the
goods will be there the next time they need them.
To apply this concept to manufacturing, Ohno devised a system whereby

the usage of parts is determined by production rates. Materials are
pulled through the plant by usage or consumption of the parts in final

assembly. To obtain maximum results, Ohno decided to move the

machines closer together and form manufacturing cells.
The JIT system continued to evolve, with the central thrust being the
elimination of waste. Ohno's system has become a totally flexible
system in which production rates are determined by the end user rather
than the producer.
2. What To Expect
While the prevailing view of JIT is that of an inventory control system,

it is much more. JIT is an operational philosophy which incorporates
an improved inventory control system in conjunction with other
systems, such as:
A set-up time improvement system.

A maintenance improvement system.
A quality improvement system.
A productivity improvement system.
A properly implemented JIT system should:
Produce products customers want.

Produce products only at the rate that customers want them.
Produce with perfect quality.
Produce instantly with zero unnecessary lead time.
Produce with no waste of labor, material, or equipment. Every
move has a purpose and there is no idle inventory.
An overview of JIT literature suggests that the steps or elements of

the implementation process generally (though not always) include the
following:
Reductions in set-up time.

Utilization of a formal preventive maintenance program.
Utilization of quality circles.
Utilization of cellular manufacturing techniques.
Cross-training of employees.

Quality certification of suppliers.

Reductions in vendor lead time.
Reductions in lot sizes.
Sole sourcing.
Presence of one who "championed the cause of JIT within the
firm.
Benefits touted as results of JIT implementation include:
Reductions in down time.

Reductions in inventory.
Reductions in scrap and re-work.
Reductions in workspace.
Increased inventory turns.
Increased labor utilization.
Increased equipment utilization.
Improved service to customers.
C. Value-added Analysis

Maybe you believe that your company is efficient enough and that the benefits
of JIT are not worth the frustration and stress associated with change. At this
point you have a decision to makeyou can adopt a new company motto such
as Were no worse than anybody else, or you can take positive steps toward
improving the process. To strengthen the incentive for change, companies
should identify the inefficiencies (wastes) in their present manufacturing
processes.
To identify waste in your company, a value-added analysis should be

performed. We must always be aware that any activity that does not add value
to a product is waste. There are specific methods for performing a value-added
analysis but we will use a simplified approach for our purposes. Take a pad
and pencil and go out on the shop floor. Pick a product and follow it through
the entire manufacturing process from raw materials to shipping. Note every
activity performed on the product. Do not get a routing slip to see how the
process is supposed to go, but accurately record the process including delays,
transportation, inspection, storage, etc. Figure 1-1 on the following page is a
value-added analysis for a machined part.

FIGURE 1-1
Value-added Analysis
VALUE NON-VALUE
ACTIVITY ADDING ADDING
1 Receive aluminum from vendor
2 To storage rack via forktruck
3 Store aluminum
4 To shear via forktruck
5 Wait for shear
6 Set up shear
7 Shear aluminum
8 Stack part on pallet
9 Wait till have correct batch size
10 Wait for forktruck
11 To storage via forktruck
12 Store part
13 To CNC mill via forktruck
14 Set up CNC mill
15 Clamp part in vise
16 Mill inside recess
17 Change tool
18 Drill pilot holes
19 Change tool
20 Drill finished holes
21 Change tool
22 Tap holes
23 Remove part from vise
24 De-burr part
25 Stack part on pallet
26 Wait till have correct batch size
27 Wait for forktruck
28 To storage via forktruck
29 Store part
30 Sell part
31 To shipping dock via forktruck
32 Ship part
TOTALS 8 24

Figure 1-1 showed us that 32 total activities take place before the customer
receives the part. Only eight of these activities add value, therefore all other
activities must be considered waste. Even though some of these wasteful
activities are absolutely necessary, they are still waste and should be viewed
as such.
We will now streamline the manufacturing process, using JIT techniques

that will be discussed in-depth later. Figure 1-2 shows that non-value-added
activities have been reduced to nine instances.
FIGURE 1-2
Value-added Analysis
VALUE NON-VALUE
ACTIVITY ADDING ADDING
1 Receive aluminum from vendor
2 To shear via forktruck
3 Set up shear
4 Shear aluminum
5 Set up CNC mill
6 Clamp part in vise
7 Mill inside recess
8 Change tool
9 Drill pilot holes
10 Change tool
11 Drill finish holes
12 Change tool
13 Tap holes
14 Remove part from vise
15 De-burr part
16 Sell part
17 Ship part
TOTALS 8 9

Perhaps nonvalue-added activities can be reduced further and perhaps they

cannot. The concept is to keep an open mind as to how you can continuously
improve the process. All remaining steps are now optimized to produce the
part as efficiently as possible.
1. Don't Forget The Office
Evaluating a process using a value-added analysis should not be limited

to the shop floor. All processes in an organization can benefit from
eliminating waste. Everything from purchase orders to typing memos
should be streamlined. How long does a purchase order sit on someones
desk awaiting a signature, only to be changed, retyped, and submitted
again? It may then stall at a higher level in the organization and so
on up the ladder. Not only will the techniques of JIT manufacturing
help eliminate some of the nonvalue-added steps in your process, but
in doing so they will reduce lead time, improve throughput time and
increase quality.
D. UNDERSTANDING WASTE
Ask almost any shop floor employee the definition of inventory and the likely
answer will be you know all this stuff stacked up around here and all that stuff
in the warehouse. Many employees (and some supervisors and managers) do
not understand that Work-In-Process (WIP) is also inventory. Pure and simple
inventory is waste. Another way to describe inventory is money loaned out
of a companys pocket that has yet to be repaid.
JIT is much more than a plan for decreasing inventory, it is a manufacturing

philosophy for eliminating waste. For our purposes, waste can be defined
as something other than the essential resources of people, machines, and
material needed to add value to the product. Anything else, such as inventory,
scheduling, meetings, warehousing goods, management, and moving stock
can be considered wasteful because these actions do not directly add value to
the product. All waste cannot be purged from the system, however, we must
strive toward that ideal goal. Above all it must be ever present in the attitudes
of our manufacturing system that cost without value is waste.

A typical company produces excess inventory with the idea that we can use
this stuff when the next order comes in." Routinely these parts are forgotten
when the next order is placed. Other than initial costs of the products, they are
also paying for moving the product, warehouse space, fork trucks, warehouse
personnel, tracking the products, and moving the products again, etc. One
company that we visited was constantly plagued with the problem of misplaced
inventory. They had numerous storage bins, plus inventory was sometimes
temporarily placed on the shop floor in different places. More often than
not, new parts would be made when the internal customer needed the parts,
because nobody knew the parts already existed. Another company we visited
wastes money on rust preventatives and the time-consuming task of removing
rust from parts in storage solely for the benefit of excess inventory.
1. Evils Of Inventory
Although inventory has long been accepted as a necessary evil we must

remember that it is still an evil. Why is inventory evil? Traditional
manufacturing processes build in safety stock at every station throughout
the entire system, from extra raw materials to warehouses full of
completed products. This superfluous WIP provides manufacturers with
a means to endure the problems, rather than solving the problems at the
root cause. Figure 1-3 shows how some problems can be disguised by
excess inventory. The water shown in the graphic is inventory and the
rocks depict manufacturing problems. As the water level drops, more
and more rocks begin to surface.

FIGURE 1-3
High and Low Levels of WIP

Lets take a hypothetical look at a company that is reducing inventory.

ACME manufacturing produces roller skates for a major toy company.
In one process, bearings are pressed into the skate wheels. Frequently
a wheel does not run true because the bearings are inserted at an angle.
This problem can only be detected after the wheel has been assembled.
When such a problem does occur the entire wheel assembly must
be discarded. This problem was undetected for years because the
manufacturing line never slowed down due to these defects. Extra
wheels and bearings were always available to the assembler.
After inventory was reduced, the wheel assembler had difficulty

meeting demand. He no longer had the inventory cushion to hide the
quality problems. There was not enough extra WIP to allow him to
continually produce bad parts. Now that the quality problem is evident,
a concentrated effort must be made to solve it.
Do not make the mistake of raising WIP to allow the line to flow
smoothly. We need the problems to surface so that we can solve them.
Remember, the WIP is not the solution to the problems it is only a
means to wade through them. Inventory must first be reduced, then
you can solve the problems.
Inventory must be decreased using a systematic approach. A methodical

approach is to cut inventory by one half then solve the problems then
cut half of that inventory and solve the problems. Continue this process.
See Xenos paradox mentioned in Section E.
10 AIDT - Just-In-Time Manufacturing - September 11, 2006

E. JIT AND QUALITY

The single most substantial ingredient of JIT is quality. It is impossible for JIT
to be successful until the company has drastically improved its attitude toward
quality. In the language of the Malcolm Baldrige National Quality Award,
quality is a race with no finish line." The ultimate aspiration is to satisfy
all customers (internal and external) all the time. The Wallace Company, a
past winner of the Baldrige Award, installed a buzzer on the shop floor that
sounded anytime a customer called their customer service hot line. Instantly
all workers knew they had a dissatisfied customer. Can you imagine installing
such a device in a traditional manufacturing company?
1. The Chicken Or The Egg
Analogous to the familiar chicken or the egg question, it is often asked,

Which comes first, quality or JIT? Quality is a two way street; JIT
is impossible without quality, but quality is directly enhanced by JIT.
Although quality is possible without JIT, it requires the use of wasteful
procedures such as inspection and rework. JIT proposes the idea of
do it right the first time rather than inspecting in quality. In a JIT
environment, each internal customer (the next operator down the line)
must be completely satisfied by the previous operation. Any problems
in quality are resolved immediately, rather than allowing them to
contaminate the system further.
To produce quality you must install quality. Quality must evolve from
both sides at the same time. To allow operators to satisfy their internal
customers, quality procedures, materials, machines, and mindset must
be present. JIT is not possible without quality, but JIT is a means by
which quality is achieved.
A mathematics riddle known as the Xenos paradox asks if a person

walks toward a wall, each step being one half as large as the previous
one, when will that person reach the wall? The answer is "never", but
that person is continuously getting closer and closer to his or her goal.
Continuous improvement in quality must be viewed in the same way.
If you set a standard at 95 percent, people figure that they are doing
fine as long as they are at or near that objective. Companies have to
AIDT - Just-In-Time Manufacturing - September 11, 2006 11

be motivated to advance quality to increasingly higher and higher

standards. Ultimately the goal should be perfection.
2. What If?
The alternative to setting standards at the highest possible level becomes

clearer when you look at the consequences of almost, but not quite.
If 99.9 percent is good enough, then...
Two million documents will be lost by the IRS this year.
22,000 checks will be deducted from the wrong bank accounts

in the next 60 minutes.
1,314 phone calls will be misplaced by telecommunication

services every minute.
12 babies will be given to the wrong parents each day.
291 pacemaker operations will be performed incorrectly this

year.
315 entries in Websters Third New International Dictionary

of the English Language (unabridged) will turn out to be
misspelled.
Incidentally, 99.9 percent accuracy would be a remarkable improvement

in the context of current performance levels in most of todays traditional
manufacturing companies. Employees should be producing by the
following code:
Defect-free output is more important that output itself.
Defects, errors, and breakdowns can be prevented.
Prevention is cheaper than rework.

3. What is Quality?
One of the great gurus of quality, Phil Crosby, says that companies
often have a misconception of quality. He says that the true definition
of quality is meeting requirementsnot an intuition for aesthetics,
roundness, or perfectionbut something that can be truly measured.
If a Yugo (economy car of the the early 1970s) meets its customer's
requirements as well as a Rolls Royce meets its customer's requirements,
then it can be argued that the Yugo is as much a quality car as a Rolls
Royce.
Now that we understand what quality is and what it can do for us, how do
we get quality? The key is to obtain quality at the source. The sources
for quality are the manufacturers and vendors processes, machines,
and operators. Contrary to traditional beliefs, the source of quality is
not the inspection bench.
4. Preventing Quality Problems
To dismantle the inspection bench mentality, we must take positive

steps in prevention of quality problems. Specific guidelines and
rigorous procedures must be established. The steps toward attaining
a quality product are to first define the requirements, get the process
under control, and then keep the process under control.
Defining the Requirements
Many manufacturing companies do an inadequate job of defining

quality requirements. If you are looking at a part or a process, and
say thats good enough then you have not sufficiently defined your
requirements. The real definition of quality is meeting both internal
and external customer requirements. Employees and vendors should
have strict guidelines that distinguish good parts (quality) from rework
or rejected parts so 100 percent customer satisfaction can be reached.
Let us look back at our ACME manufacturing example. The assembler

had no specific requirements for pressing the bearings into the wheel.
He was told that the wheel must run true. What is true? How much

leeway does he have? Can the bearings be somewhat angled or must

they be exactly straight? The assembler should be supplied with strict
criteria for quality such as each bearing should be pressed into the
wheel at a perpendicular angle plus or minus one degree. He now
knows what is expected and what is considered good enough.
The Root Cause of the Problem
To get the process under control, you must first find the root cause of
the problem. This can be accomplished by running the gamut from
simple methods such as pareto and matrix analysis to complicated
design experiments. A common problem is to attack the symptom
and not the problem. For example, if a breaker tripped at your house,
you could reset the breaker and hope for the best, replace the breaker
box, or you could check for an overloaded plug (too many appliances
plugged into one outlet). In your manufacturing process, dont make
the mistake of rewiring the whole house before the actual problem is
diagnosed.
Everyone has worked on a problem that magically went away, although

you were not exactly sure why. It could be any one of the solutions
you tried or a combination of any two. In this case, you do not know
if you have gotten to the root cause or not. You must be able to turn the
problem on and off to ultimately conclude that the problem has been
solved. If you can not turn the problem on and off it is likely that you
have solved a symptom rather than a problem. At this point you should
ask why and continue to ask why until you find the root cause.
Figure 1-4, shown on the following page, illustrates the problem of
bad service at a restaurant.

FIGURE 1-4
Getting To The Root Cause

Obviously you cannot turn the problem of the owners offspring on and
off, but asking why did get you to the root cause. Disciplining the
waitress will not solve the real problem. The root cause of this problem
is a bad promotion policy. The long-term solution is a change in that
policy. If you ask why enough times you will get to the root cause.
Keeping Control of the Process
Once you have found the solution, keeping the process under control
is an easier task. Statistical Process Control (SPC) is a method of
managing a process by gathering information about it and using that
information to adjust the process to prevent problems from occurring.
Using SPC is one way to keep your process under control. Poka-yoke,
a Japanese word for fail-safing, should also be applied. In the Poka-
yoke theory, parts and processes are designed so that doing the job
right is easier than doing it wrong. An example of this is to design a
part that is asymmetrical so that it fits only one way, thus eliminating
misinstallation. Machines can be fitted with limit switches that will not
allow it to cycle if all processes are not completed in the correct order.
These methods should not only be used by your company but by your
vendors as well. The following are such examples (Hirano, 131):

FIGURE 1-5
Poka-Yoke - Speaker Box Assembly
Description of Process: Front plates were attached to speaker boxes.
Before Improvement: After Improvement:
It was difficult to determine the correct The positions of the mounting holes were
orientation of the speaker boxes because made asymmetrical on the top so that
the mounting holes were symmetrical at incorrect mounting is impossible. Upside
the top and bottom. Correct mounting down mounting is completely eliminated.
depended exclusively on the worker's
vigilance, with the result that the speaker
boxes were sometimes mounted to the
front plates upside down.

FIGURE 1-6
Poka-Yoke - Drilling Holes in a Side Plate
Description of the Process: A workpiece, a side plate, is set into position on a drill press
and dowel holes are drilled. The workpiece is essentially symmetrical, and back and front
are difficult to distinguish at a glance, although two edges are grooved along their length.
Before Improvement: After Improvement:
The workers, when setting the workpiece The grooved edges of two sides of the
into position, checked to see whether the top workpieces are used as guides for setting
and bottom of the plate were in the correct up the plates correctly. A limit switch is
position. They then drilled the dowel holes. mounted on the jig and interlocked with
Inexperienced workers sometimes confused the start switch so it is impossible to start
top for bottom and drilled the holes in the drill press if the side plate is set in the
the wrong places. Even veteran workers wrong position. Defects due to defective
sometimes mounted the part backwards. holes are completely eliminated.
These defects were discovered only at
assembly.

F. UNIFORM PLANT LOAD

The diversion between traditional manufacturing philosophy and JIT becomes
apparent when discussing the concept of Uniform Plant Load. Everyone will
agree that we need to eliminate waste and strive for quality to receive the
most benefit from our manufacturing systems, but there are two views on how
to go about this. The traditional system calls for production at the machine
rate while JIT advocates production at the customer requirement rate. The
JIT concept of Uniform Plant Load states that balance between operations is
more important than speed, and ideally we should never produce faster than
the customer requirement rate.
The concept of Uniform Plant Load incorporates two radically different

facets of production. They are rate of production (cycle time) and frequency
of production (level loading). It must be remembered that neither of these
concepts will achieve maximum results until the process is under control and
quality has been improved to world-class or near world-class standards.
1. Cycle Time
Traditional definitions of cycle time include the time it takes a machine

to cycle through its process or the time from start to completion of
a product (throughput time). Under JIT, cycle time is the total time
required for a worker to complete one cycle of operations, including
walking, load/unload, inspect, etc. Cycle time should equal the customer
requirement rate, or better stated the sales rate. We should view the last
step in the manufacturing process as when the product gets sold, not
when the product is completed. This rate is also expressed in terms of
takt time. Takt time is the total daily operating time divided by the
total daily requirement. Takt time tells you how many hours, minutes,
or seconds are required for each part.
Takt is a German word for baton. In comparing a manufacturing process

to an orchestra, the rate at which the orchestra leader moves the baton
is the rate at which the orchestra plays, just as the rate of customer
requirement is the rate of company production.

Companies that have produced as fast as possible (machine rate) for

many years often struggle with the concept of slowing down individual
machines so as to achieve perfect balance between operations. If your
customer requirement rate is 20 parts per month, then why would you
want to produce 30 parts per month? This would lead to the evils of
inventorythe consumption of space, waste in motion, and materials
that hide problems. Conceptually, each machine should run as if a
rheostat were attached. The rheostat could be dialed up or down as
needed to produce at the exact rate required. If the requirement rate
changed from month to month then the production rate could be altered
to meet these requirements. If you set the last operation to the sales rate
then each preceding operation should feed the last operation at that rate.
This system can then be exploded backwards throughout the plant until
the first operation (usually raw materials) is reached.
Workforce
If ten people are producing 20 parts per month in August, but only
ten parts are needed in September, five people should then be capable
of producing the needed ten parts so that labor costs remain constant.
This reduction can only be accomplished with a good physical plant
layout (to be discussed later) and a well-trained, flexible workforce.
The logical questions at this point are: Where do the five people go?,
and Where do they come from when production goes back to 20?
It must be made abundantly clear that the purpose of implementing
JIT is not to reduce the workforce. You can now use this idle time
to cross-train employees for even more flexibility. When not on
the production line employees can perform other tasks, attend team
meetings, do preventative maintenance, make plans to further improve
the process and so forth. Rather than producing extra parts and dealing
with inventory, you are now optimizing employee time. That leads us
to the golden rule of JIT: Machines can be idle but people cannot.
We should not make the mistake of trying to find the perfect balance
between parts produced and manpower required. There is no perfect
balance. We must decide how many parts the line should produce that
month, week, or day and balance to that number. Remember, the answer
is not to run the line as fast as possible, but to produce to the customer

requirement rate by deciding how fast the line must run to meet the
particular deadline and how many people are needed for this rate.
2. Level Loading
The second facet of Uniform Plant Load is level loading. Level loading
suggests that if you sell a product every month, then make the product
every month. Ideally, if you sell a product every day, then make the
product every day. You must make your products as frequently as your
customers require them.
Let us assume that your company produces three productsalphas,

betas, and deltasfrom the same line. Cycle time has been implemented,
therefore, your equipment is running at the right speed. For example,
we will say that in the month of March we will need 25 percent alphas,
50 percent betas, and 25 percent deltas. In a traditional manufacturing
environment alphas would be produced for 25 percent of the month.
We would then change over (setup) and run betas for 50 percent of the
month; change over again and run deltas for the remaining 25 percent
of the month. Do your customers buy alphas the first week, betas the
next two weeks, and deltas the last week?
The next logical step may be to produce a weeks worth every week.
You have instantly gone from setting up 3 times a month to 12 times a
month. Traditional manufacturing will be quick to note that valuable
time will be spent setting up with no time to produce. Increased number
of changeovers can be accomplished only after setup time has been
reduced to allow this. We will address the subject of setup time in the
next chapter. In a nutshell, if we are to change over four times more
often, then we must reduce setup time to 25 percent of its original time.
To meet these goals you must take a structured step-by-step approach.
A lofty goal may be to produce a days worth every day. It is true this
is a very high standard but Toyota is currently producing two hours
worth every two hours.

FIGURE 1-7
Level Loading
Setup reduction has a direct correlation to batch size. If setups are

reduced by 50 percent then batch sizes can be reduced by 50 percent.
Additional direct benefits of level loading are learning curve improve-
ments, increased mix flexibility, reduced inventory, shorter lead times,
and quality improvements.

Let us look at our original process of producing alphas for one week,
betas for two weeks and deltas for the remaining week. If a customer
calls in a change order for more alphas the third week of the month; a
three-week delay occurs before alphas are being produced again. If you
are on a daily or even weekly production schedule, reaction to changes
in mix can be almost immediate. Production of alphas can begin the
next day or you could change over the same day if requirement rate of
betas and deltas would allow.
As the system begins to produce at the customer requirement rate and

reduced setup times are translated into smaller batch sizes, lead times
are also reduced. When a product is being manufactured monthly, lead
times are expressed in months. Weekly manufactured parts require
lead time in terms of weeks and daily parts in terms of days. There is
now no need for extravagant scheduling and tracking systems. If the
requirement rate changes, parts can be put into the queue at the next
changeover period.
As stated earlier there is a direct correlation between setup reduction

and batch sizes. The same can be said for batch sizes and potential cost
of failure. If a batch size is cut in half, the potential cost of rework or
scrap is cut in half. A streamlined manufacturing process dictates that
quality problems will be less likely and if they occur will be much easier
to detect and correct. Smoother production runs need fewer adjustments,
therefore quality becomes more predictable.
3. Learning Curve Improvements
Learning curve improvements are achieved when virtually every day

is the same. If you are producing all of your products at the customer
requirement rate each day then the days become more complex but each
day is the same as the day before. Setups occur every day, therefore
there is not time to forget the setup procedure as was the case with
infrequent setups. There is no time to fall into a pattern for weeks only
to have abrupt changes that require relearning the setup and production
process for the next product. Once the employee gets into the rhythm of
daily production, the day-to-day learning curve virtually disappears.

Uniform Plant Load allows us to produce at the exact rate and frequency
that the customer requires. Other aspects of JITsetup reduction,
machine cells, pull systems, JIT purchasing, and schedulingare
methods used in achieving plant balance.
G. SETUP TIME REDUCTION

Setup time is the interval between the production of one good part and
the production of another good but dissimilar part. Setup reduction is a
prerequisite to implementing many aspects of JIT by directly or indirectly
influencing cycle time, level loading, work cells, pull systems, cost, WIP,
purchasing, floor space, quality, operator numbers, and batch sizes. Everyone
will agree that a two-hour setup reduced to two minutes is a great productivity
improvement, but this saved time should not be applied to longer production
runs that increase batch sizes. An hour saved that is transferred to the production
of parts simply puts those parts in inventory, which is the exact opposite of
what we are striving for. Our objective is to apply this hour to more frequent
setups, thus giving us more flexibility to better implement JIT.
1. Getting Started
Our mission is to reduce setup time by 75 percent on a low-cost or

no-cost basis. Some machines will require a little more setup time and
some a little less, but 75 percent reduction is our initial goal. This may
not be accomplished in a week or a month, but can be achieved through
continuous improvement.
You must first decide which setup to work on. A good rule of thumb
is to select your most complex setup. Typically this is the setup that
causes the largest bottleneck (takes the most time), and therefore offers
the opportunity for the largest time savings. After a particular setup
has been chosen, a Setup Reduction Team must be formed. The next
problem that arises is who should be on the Setup Reduction Team.

2. Setup Reduction Teams
Traditional management behavior seems to indicate a belief that the

managers and the engineering staff have all the solutions. In recent
years new management approaches, specifically TQM (Total Quality
Management), have disproved the myth that management best knows
how to solve all manufacturing problems. The new Setup Reduction
Team should consist of the real expertsthe operators and setup
people. Contrary to traditional managements beliefs, these people
have superior knowledge of their machines and the process. The typical
Setup Reduction Team should have three to five shop floor personnela
combination of operators and setup people, one to two engineers and
possibly a manager.
You will notice that the single largest component on the Setup Reduction
Team is the shop floor personnel. They probably have all the answers to
reduce setup time but until now had no avenue to impart their wisdom.
The reason more engineers are not involved with the group is that
most setup problems are not engineering problems. Engineers tend to
emphasize the mechanics of the setup, but the real reasons time is lost
are lack of preparation, lack of organization, and operator error. Such
problems may include not knowing what the next job is, setting up for
the wrong job, inability to find a forktruck driver or the forktruck is
in use, inability to find or not having the right tools, broken tools, not
remembering the exact setup procedure, not having the right bolts, or
having no nuts for those bolts. The mechanics of the setup may or may
not need to be modified or, if so, only after other improvements have
been enacted.
After the team has been selected, proper training in team concepts must
take place. The team should know its mission and act on its findings,
not just study and make recommendations. Team training is a separate
subject in itself and space does not allow us to pursue the topic here.
There are many good texts and seminars offered in this area that will
allow you to learn team training concepts.

3. Videotaping
If a picture is worth a thousand words, a videotape is worth at least a

million. The single best way to document and analyze a setup is with
videotape. A verbal description or written account of a setup will not
give you the detail of a video. Many nonvalue-added steps can be
uncovered that would otherwise remain camouflaged by other means
of documentation.
Obtaining a credible videotape is often not easy. One major dilemma

that occurs is a phenomenon known as the Heisenberg principle. Simply
stated this idea is the belief that something that is being observed is
changed merely by the fact that it is being observed (Hay, 63). If
workers know that they are being taped they will perform the setup with
a much greater sense of urgency. Outside preparations may occur that
are not normally done. These actions lead to a misrepresentation of
the true time and steps involved in a setup, thus defeating the purpose
for videotaping.
Another problem that may occur is apprehension about being videotaped.

Operators may fear that management will use the tape to place blame
for productivity problems, or to teach others how to do their job, or
that other team members will ridicule their performance. The number
of rumors that can surface when a video camera appears is infinite.
The best deterrent to these problems is prevention. Operators should
be briefed on the reasons for documentation prior to any videotaping
with all questions being answered then. It should be abundantly clear
that no additional actions should be taken in the documented setup
and that safety will never be neglected to gain speed. At no time will
any guards be removed, parts fastened less securely, work be done on
moving equipment, etc.
One method to obtain more true documentation is to do videotaping

without announcement. Place the video camera in position just prior
to the setup, thus allowing no time for special preparations. The
documentation should include the last part from the previous job
coming off the machine. The timer should then be set and everything
should be taped from that point on. Tape continuously even if no work

is being done on the machine. When the first good part from the new
job is finished, the documentation is complete.
Once the videotape is complete, the Setup Reduction Team begins

a detailed analysis of the setup procedure. The primary focus of the
analysis is to reduce machine downtime. Team members generate a list
of problems to solve and possible solutions for the problems.
4. The SMED System
One proven technique for optimizing setup time is the Single-Minute

Exchange of Die (SMED) system. The SMED system was founded
by Shigeo Shingo while consulting with Toyota in 1969. No man has
revolutionized setup reduction philosophy as much as Shingo. He has
won numerous productivity improvement awards in Japan, the United
States, and the world over. The basis of SMED is the performance
of setup operations in under ten minutes, i.e., in a number of minutes
expressed in a single digit.
The Four Conceptual Stages of SMED:
Internal setup and external setup are not distinguished.

Internal setup and external setup are distinguished.
Internal setup is converted to external setup.
Streamline all aspects of the setup.
The concept behind the SMED system is distinguishing internal setup

(performed while the machine is off) from external setup (performed
while the machine is producing) and converting internal to external
setup. This is accomplished by examining the true functions of setups.
Once this step has been successfully applied, only internal activities are
left. An example of this would be to locate and organize all the bolts
needed for the next setup while the previous job is running instead of
rushing around looking for bolts after the machine is off.
After the activities of the setup have been corrected, the mechanics of
the setup need to be addressed. Or as Shingo states, all aspects must
be streamlined". Two major categories in this area are clamping and
adjusting. Numerous texts have been written concerning quick die

change, Poka-yoke (fail-safing), fixtures, setup reduction, and similar
topics. Although we will deal with setup mechanics in general terms,
further study in this area is recommended.
5. Clamping
Video documentation will often reveal that substantial time is spent

loosening and tightening nuts and bolts. Threads are a very inefficient
method for speed in a setup, because only the last half turn of a bolt
or nut gets the job done. The first fifteen, twenty or twenty-five turns
are a useless waste. Another problem with threads is the use of tools.
Picking up a wrench if you can find itis also a waste; therefore
we must look for alternative methods for clamping. Do not make the
mistake of trying to buy the solution. While it is true that hydraulic
or pneumatic clamps save much time and wasted motion, they violate
our no-cost or low-cost policy. Look for methods that require only
one or two motions such as cams, levers, or pins. You can explore
purchasing high-tech clamping systems after all other avenues have
been exhausted or continuous improvement has stagnated.
6. Adjusting
The videotape may also show large amounts of time is being spent to
get the job to run right. Traditional thoughts have been that adjustments
are necessary, therefore no energy has been expended to eradicate the
problem. Our aim is to have quality parts produced the first time, every
time. Bad parts should never be produced due to setup. The problem
with adjustments arises because most machines are infinitely adjustable.
For example, something on a machine is measured, or tightened down,
then a part is run. Then the machine is adjusted, tightened down, then
another part is run. This continues until a good part is produced. After
analyzing the videotape you may conclude that the machine needs to
be adjusted to a few set positions. At this point the machine should
be converted to positive stops for those positions rather than endlessly
measured positions or better yet the machine can be designed to be
self-positioning.

Reducing setup is a crucial step toward accomplishing JIT manufacturing

goals. Setup reduction is considered a high priority because it affects
so many facets of JIT. Setup reduction is much easier than most people
think after traditional methods have been purged. It is extremely
important to adopt new perspectives that are not bound by old habits.
H. CELLULAR MANUFACTURING
The traditional method of arranging a manufacturing facility is by departmental
specialitythat is, each department houses specialized equipment or
technology. All the lathes, milling, drilling, grinding and assembly would be
done in completely separate departments. Production in large batch sizes is
inevitable when factories are laid out in this manner. Figure 1-8 illustrates a
traditional manufacturing system. (Black, 34)
FIGURE 1-8
Traditional Manufacturing System

The JIT philosophy maintains that a manufacturing floor be laid out by product
rather than by function. All equipment should be dedicated to a product or
family of products and organized logically in the order in which the various
processes are performed on that family of products. Two characteristics must
be fulfilled before a group of machines can be deemed the optimal JIT work
cell. The first is whether the product is flowing one at a time from machine
to machine, and, secondly, whether the cell has the flexibility to produce at
different rates with varying crew sizes (cycle time). See Figure 1-9.
FIGURE 1-9
U-shaped Work Cell
Many JIT purists argue that one-at-a-time flow is a necessity in a JIT work
cell. It is true that batches of one are the optimum size for waste reduction,
but we are attempting to implement practical JIT. The end goal is to have
operation two start as soon as the part clears operation one (batch size of
one). But practical JIT champions the idea of continuous improvement. JIT

advocates batch size reduction as dictated by the setup time. Your process may
not allow for batch sizes of one. If some parts are forced to the next operation
then so be it. Continue to practice the doctrine of JIT and the batch sizes will
continue to decrease.
To dedicate the machines and physically place them together but continue
to produce in large batch sizes at the machine rate (maximum output) would
make no sense. JIT work cells must be adjustable to be able to produce at
the customer requirement rate. After the customer requirement rate has been
determined, you must ascertain the number of operators needed in the work
cell to produce the exact amount of products required.
One common concern about placing machines in cells is whether they lose
their flexibility by being dedicated to that cell. Can machines work on parts
not dedicated to that particular cell? The answer is yes. Some companies have
found that they can produce parts through the work cell part of the time while
at other times the machines can be scheduled independently as if they were
not in a work cell. Machines can also be placed on casters to form temporary
work cells to get the ultimate in flexibility. Work cells can be formed, taken
apart, or modified to satisfy customer requirements. If machines are too heavy
to be mobile a pull system can be used so each machine can function as if it
were in two or three cells.
As discussed in the Uniform Plant Load section of this text, the only way to
keep labor costs constant is to flex the crew size. Operators must be cross-
trained to perform many tasks properly in a work cell thus allowing one
operator to run many machines.
1. U-shaped Work Cells
The most flexible work cell is the U-shaped layout. The U-shaped work
cell should be large enough to allow operators to work side by side,
back to back, but not so close as to inconvenience each other. Shown
on the following page is an example of a U-shaped work cell staffed
with six operators and another with three operators.

FIGURE 1-10
U-shaped Work Cells
All the work to be done in this cell can be accomplished from a central
area inside the U-shaped cell. Every production period can have varying
numbers of operators. Six operators may be needed to produce 100
parts in March, but if 50 parts are required in April a staff of three can
theoretically produce those parts. When the operator does not have a
full work load, the traditionalists have the operator go up or down the
assembly line to the adjacent operation. In a U-shaped work cell, the
operator has a full 360 degrees of mobility, therefore, he or she can
perform all or part of tasks within the cell.
In our example with three workers we show steps 1 and 6 to have a

single operator, steps 2 and 5 have a single operator as do steps 3 and
4. Another advantage of a U-shaped work cell is instantaneous quality

control. Since parts are exiting one operation and migrating directly to
the next operation (if batch sizes are one), any deficiencies in quality
show up immediately. If a quality problem does occur it can be resolved
promptly. There are no large quantities of bad parts to sort through and
the need for separate inspection is eliminated.
U-shaped Cells Versus Assembly Line Manufacturing
Traditional manufacturing operations are laid out in long, straight

assembly lines. The operators are spread along the line, thus, spreading
out the work. Since it takes longer for the product to travel from one
operation to the next, more parts must be put in the queue to keep
everyone busy. Unlike the U-shaped work cell, people are separated
from each other by the assembly line, inventory, work benches,
etc. Studies have also shown that physiological and psychological
disadvantages can occur from separating people in the work place.
Crew size is not flexible on an assembly line because the line has
been divided into an established number of separate areas. If an area
is missing an operator, the line will not run. Operators do not have the
flexibility to perform more than one task.

Comparisons of Assembly Line and U-shaped Work Cell
Shown in Figure 1-11 (Black, 34) is the metalworking facility that

we discussed earlier in this manual. The departmental specialities
have been dropped in favor of cellular manufacturing. A much more
logical, organized approach to manufacturing is the result of this
transformation.
Assembly Line Work Cell
Uses Much Floor Space Optimizes Use of Floor Space

Operators Separated Operators Together
Large Batch Sizes Small Batch Sizes
Work Spread Out Work Condensed
Non-flexible Crew Size Flexible Crew Size
Delayed Quality Control Instantaneous Quality Control


FIGURE 1-11
Cellular Manufacturing System

I. PULL SYSTEMS
We are now ready to address pull systems, sometimes known as kanban
systems or supermarket systems. The United States is in the process of phasing
out the use of the word kanban due to its association with Japan. Kanban is
not even a universally accepted Japanese term since some plants in Japan that
compete with Toyota view it as a Toyota-coined word. For our purposes, we
will use the term pull system.
As mentioned earlier, Toyota sent representatives to the United States shortly

after World War II to analyze our production techniques. They concluded
that Americans ran their factories much the same way the Japanese ran their
factories. Every operation in the factory works independently, then forces
its parts onto the next operation. The Japanese termed this process a push
system.
1. The Push System
A push system originates with a forecast schedule. This forecast is

forced upon the previous step (assembly) in the manufacturing process,
all the while adjusting for lead times to predict which subassemblies
are needed and by when. The subassembly forecasts are then forced
upon the various component levels still maintaining lead time, thus
completing the cycle through the total manufacturing system down to
raw materials. Paperwork accompanies this system informing operators
what is needed and by when.
Each operation then begins to manufacture parts and push them on

to the next operator. That operator receives the parts, does his work
and pushes them along the line. Operator 1 continues to work even if
operator 2 stops or is producing slower than operator 1. This extra
inventory creates buffers that hide manufacturing problems. (See
Figure 1-12). The expectation is that all this inventory will be pushed
along and will reach the predetermined places at the right time so as to
be shipped on schedule. Schedules are then analyzed to see what was
not on time and future schedules are adjusted accordingly.

FIGURE 1-12
Push System
OPERATOR 1
(50 PARTS PER HOUR)
OPERATOR 2
(30 PARTS PER HOUR)

2. From Supermarket To Factory Floor - The Pull

System
While in America assessing our manufacturing processes, the Japanese

visited some of our supermarkets in their spare time. What they
learned and took back to Japan has revolutionized manufacturing. A
supermarket is managed very differently from a factory. Shoppers come
to a supermarket knowing that there will always be a small stock of
needed inventory. Customers feel no pressure to buy large quantities
because they know that the goods will be available when they need
them. Every night a stocker replenishes the inventory that has been
removed. Empty spaces on the shelves are the stockers signal to
produce more goods (restock). Exactly what has been taken is what is
replaced. The customers have directly told the store what to replace
by what has been purchased.
The Japanese converted this supermarket system for use in their

factories. No operation can produce goods until it has received a
signal from its customers. When the operator gets a signal from the
customer, he then has authorization to produce a certain number of
parts in a specific time period. The most effective pull (kanban) signals
are visual indicators such as empty containers or empty floor space. If
you have an empty container, fill it up; if you have no container then
do not produce that part. Other types of signals are limited only by the
imagination. They may include such things as color-coded golf balls,
washers, different shaped cards, flashing lights, or kanban cards. A red
golf ball may signal an operation to produce 10 alphas while 2 blue
golf balls may indicate 20 betas are needed. The most used signal is
a kanban card:
FIGURE 1-13
Kanban Card
Part number 29AJ 087

Container 3 x 2 x 6 Box
20 Pieces per container
Location Cell 2
Card 3 of 5
The card tells what type of part to build, what to put the parts in, how
many parts to build, where to send the parts and how many cards of
these parts are required to maintain a smooth flow. Paper work is limited
in a pull system.
Imagine a company that makes a product line of alphas, betas, and

gammas. Every day this company ships 20 percent alphas, 60 percent
betas, and 20 percent gammas. Suppose the market (customer) demands
more alphas and fewer betas on any given day. The only paperwork that
needs to be changed is the shipping schedule. Shipping sends a signal
to assembly to produce more alphas, while assembly sends a signal to
subassembly for more alpha components, and on through the system to
more alpha raw materials. No paperwork needs to be revisedit did
not exist in the first place. Each previous operation is waiting to find
out what parts to produce depending on customer needs.

In an ideal JIT system, a pull signal is a compromise. If a true, one-at-

a-time flow has been implemented, no signal is needed. Figure 1-14
is what a model JIT pull system could look like.
FIGURE 1-14
Production Control by Pull System

In the illustration, parts are flowing one at a time from the outside
supplier (vendor) to the work cells. In these work cells there is no need
for pull signals since the parts move one at a time from machine to
machine. In an ideal JIT system the machines would be producing at
the exact customer requirement rate (cycle time) and could change over
as often as needed (level loading) for this rate. Parts would be pulled
from cell to cell and then pulled to the subassembly cell. Subassembly
would then have its parts pulled to assembly then to shipping and on
to the final customer. This is a completely integrated manufacturing
system where all parts are moving one at a time. Theoretically, this
should be your end goal. But, while implementing JIT you will have a
definite need for pull signals.
When pull signals are needed, the key to making them work is making
sure that the inventory is replenished frequently and quickly. This can
only be accomplished after smaller batch sizes have been implemented
through the use of Uniform Plant Loading. We must also remember
that the smaller the batch sizes, the faster the setup must be. Just as in
a supermarket, customers will be satisfied with taking small amounts
if they know that there will be ample quantities available on the next
shopping trip.
Up to this point we have been talking about pull systems for repetitive
manufacturing systems. Invariably the question comes up, What about
job shops? To run a pull system in a job shop, where a completely
different product is produced daily, monthly or yearly, the system must
be managed differently. If a pull system is broken down to its purest
form, the signal is an authorization to produce whatever is next in the
queue. In a job shop the signal may stand for an hours worth of work.
In effect, cell workers are saying, An hours worth of work has been
used upso I am authorizing you to give me another hours worth of
work. Regardless of how you express it, the customer is telling the
supplier what to do next.

J. JIT PURCHASING

Purchasing cost is a critical factor for a JIT manufacturing system, but it lags
behind quality and delivery lead time in importance. Vendors must deliver
quality products on time (just in time) before a JIT system can work, regardless
of cost. JIT purchasing offers a framework for a true partnership between
vendors and companies that helps to solve the problems of cost, quality and
lead time.
1. Partnerships
Traditional relationships between companies and vendors do not allow

for partnerships to be formed. Companies send out bids for purchased
materials with the contract going to the lowest bidder. Six months down
the road another bid is let with the lowest bidder getting that contract.
If the current vendor is not the lowest bidder that vendor may lose six
months of business. Companies want vendors to cut their profits, but
vendors need to be assured of a good profit now because they may not
be here six months from now.
The new JIT partnership that we are striving for is a long-term, mutually
beneficial relationship with fewer but better vendors. Mutual trust
must be developed between companies and vendors. This cannot be
accomplished if vendors change every time new bids are sent out. For
this reason a company should have few suppliers (preferably one) for
each purchased material or component. This idea of single sourcing is
as troublesome to traditional purchasing people as slower run speeds
and smaller batch sizes are to traditional manufacturing people.
Traditional purchasing people question whether the company is getting

the best price possible by using only one supplier. As a company is
reducing its vendors, it is obtaining the best price due to traditional
competition. Vendors embrace the idea of a long-term relationship
because it allows their sales to remain more constant. Strict criteria
concerning dependability (quality and lead time) should be placed
upon vendors by companies. When this criteria is satisfactorily met,
the vendor will become certified. Ideally certified vendors deliver
products just in time, every time, with 100 percent quality. A partnership
is then formed between the company and the vendor so that they can
actively work together to continually lower the cost of purchased
material. It would be impossible to form such relationships with several,

ever changing vendors.
2. Eliminating Procurement Wastes
Three areas of waste need to be recognized before a company can

successfully implement JIT. First is the waste in a companys own
manufacturing process: the moving, counting, rework, storing,
scheduling, setup times, and inspection. Secondly, waste within the
purchasing process itself should be eliminated. A third area that is
often overlooked is the manufacturing philosophy of a companys
vendors. Since an average of 70 percent of a companys costs come
from purchased materials, every company should aid its vendors in
eliminating waste in the vendors manufacturing process. However, it
should be stressed that a company must first get its own house in order
(eliminate waste) before the company can help its vendors to improve
their processes.
Lets look at a few nonvalue-added steps (waste) in a typical component

before a value-adding process happens. A purchase order does not add
value, an amendment to a purchase order does not add value, reports
and invoices do not add value, taking something off a truck and putting
it in a holding area does not add value, inspecting it does not add value,
moving it to a stockroom does not add value, taking it from a large
container and placing it in a small container does not add value, and
moving it to where it is going to be used does not add value. The way
to eliminate waste is to eliminate all steps that do not add value to the
product.
The initial phase should be to delete inspection of all incoming raw

materials, parts, and components. This can be accomplished by
working with vendors to make sure they understand the process and
how to solve problems in the process. They should have a thorough
understanding of the standards that you require and have competent
inspection procedures so they can deliver 100 percent quality materials
and components. The eventual goal is for vendors to monitor rather
than inspect, with all operations done right the first time.

3. A Days Worth Every Day
In a repetitive manufacturing environment, the same amounts of

inventory should be used up every day. Ideally materials and components
will be delivered in the afternoon, used the next production day, and
shipped the day after in the form of finished products. Packaging in this
process does not add value, therefore reusable containers should be used
to ship goods if possible. The vendor delivers goods to the production
line and picks up empty containers for the next days shipment. These
containers are the pull signal that tells the vendor to produce more, thus
eliminating the need for purchase orders. Eliminating packaging cuts
cost for the vendor and the company, causing the partnership between
the two to be strengthened.
Since these vendors are certified, there is no need for incoming

inspection. A central holding dock or receiving area is not needed.
There is no need for a stockroom or an inventory tracking system.
There is no need for picking up and transporting. Purchase orders
have been deleted. There are no corrugated boxes or excess paper to
be ripped open and thrown away. And finally, no incoming invoices
to be processed.
Traditional purchasing personnel are probably yelling What! No

incoming invoice? How do we know what to pay and how do we know
that we received everything? Although a partnership must be built on
trust, there is often no trust pertaining to money matters. The main proof
of goods received is the shipping records. If two vendor components
are needed for each product manufactured, you must deduce that if you
shipped 100 products, you owe the vendor for 200 components. If the
product was shipped, the components must have been in it.
Of course, eliminating incoming invoices only works for a repetitive

manufacturing facility, but all companies should question the way
business is being conducted now. Every process in the purchasing
department should be optimized through the use of JIT/TQM principles
(teams, value-adding analysis, cross-training, etc.). Companies must
strive to form a long-term, mutually beneficial partnership with vendors
that is built on trust. Traditional methods of purchasing will no longer
apply in the new JIT environment.
K. JIT IN CONJUNCTION WITH MANUFACTURING

RESOURCE PLANNING
JIT and MRPfriends or foes? Many have debated the comparative benefits
of JIT and MRP. To put this controversy to rest, we must have a better
understanding of what MRP is and how it can be used with JIT to achieve
greater results than if either technique were used alone. MRP I (Material
Requirement Planning) and MRP II (Manufacturing Resource Planning)
evolved in the United States in the early 1960s. MRP II is the combination of
various manufacturing tools collected to form the most sophisticated planning
and scheduling strategy developed to date. These tools are Reorder Point
(ROP), Economical Order Quantity (EOQ), Material Requirement Planning
(MRP I), Distribution Requirement Planning (DRP), Capacity Requirement
Planning (CRP), Shop Floor Control (SFC), and others. For the purpose of
this manual, MRP will refer to Manufacturing Resource Planning (MRP II).
Many MRP software companies fail to comprehend the overall picture,

resulting in the misconception that JIT will cut into their market share. The
MRP gurus tend to view only parts of the whole so that they fail to address
the manufacturing process and master the usefulness of both systems. JIT and
MRP can and do work well together, but we must be conscious of the fact that
MRP wants to work with the scheduling system while JIT wants to radically
alter the manufacturing process.
1. Which System?
Many companies question whether to use JIT or MRP or both and if they
use both, which strategy should they implement first. If your company
has deteriorated greatly, it may be easier to implement a MRP system.
The MRP system will allow you to get your process under control
without radically changing your manufacturing process. If the company
is fundamentally sound, a JIT system should be implemented first. If
after JIT is in place it is decided to have a more formal scheduling
system, less time and money are required to implement a simplified
MRP system. This hybrid system can then be used to form an enhanced
manufacturing system.

Under a traditional MRP system there are three levels of scheduling

(Hay, 155):
Master Schedule quantity and date for completion of end
items.
Material Requirements Planning scheduling the completion

and start dates of the components and raw materials dependent
on the master schedule.
Shop Floor Control scheduling the operations performed on
a component between MRP start and finish dates; often called
priority sequencing.
The hybrid system where JIT and MRP are working together eliminates
the need for Shop Floor Control since parts flow from start to finish
without being warehoused. MRP I becomes more basic since parts go
directly to the next user without traveling in and out of stock. Also,
remember that batch sizes are smaller or nonexistent, safety stock has
been eliminated, throughput has been speeded up and production rate
equals the customer requirement rate via the JIT segment of this hybrid
system.
No matter how complex the manufacturing process, as lead time

diminishes, the need for MRP reduces. MRP becomes increasingly
simplified and acts as the transition tool until its scheduling function
disappears as linking operations become feasible. In some job shop
situations implementing JIT fully may be impossible, thus opening the
door for this hybrid system. Even in an ideal JIT system, the benefits
of MRP cannot be ignored.

L. MANAGEMENT'S RESPONSIBILITY
The predominant reason for JIT failure is lack of commitment by top
management. JIT must be launched where there is absolutely no skepticism
about managements long-term commitment to JIT success. Employees recall
managements past track record on flavor of the month plans that died quietly
with little or no fanfare. The first time management compromises quality in
favor of quantity it will devastate the morale of the shop floor personnel. They
sense that managements main emphasis is money for products shipped, not
customer satisfaction, thus relegating JIT to a quiet death.
JIT must have a champion for its cause within every organization. Ideally, this
advocate would be the highest ranking person who applies to your situation,
i.e., the CEO at the corporate level, the division manager at the division level
or the plant manager at the plant level. Typically, the consciousness of JIT
penetrates the organization somewhere below this top level of management.
For the greatest chance of success, JIT should be presented to the top manager
as soon as possible. By initially teaming up with the top manager, he or she
will perceive ownership of the JIT concept, thus he or she will have a stronger
commitment to JIT. If the top management does not embrace the concept of
JIT, but rather it develops at the middle management level, the chance for
failure increases.
There are two key elements that are management's responsibility: motivation
and education. Management must use these elements to overcome the
reluctance to change by the employees and the natural fear that accompanies
change. Each level of the organization has different fears about JIT so each
level requires a different motivational approach. Management must understand
the apprehensions of people at every level and what actions can be taken to
gain their trust and commitment to join the JIT venture.

1. Motivation
Top managers should already be motivated by what they see as JITs

ability to produce more efficiently.
Upper and middle managers often feel they are caught between a
rock and a hard place. Top management is angry because JIT is not
progressing fast enough and the shop floor employees are mad because
they cannot perform the JIT miracles that middle management expects
of them. Middle managers have worked hard to gain the status that
they now have and feel threatened by the new JIT style. The means
to conquer these fears is trust. Middle management can be motivated
by knowing that top management is 100 percent dedicated to JIT, and
that top management is aware of the problems and will help solve
these problems. Finding these solutions often is not easy, but can be
accomplished by a motivated management staff working closely with
top management.
Why is motivating the shop floor personnel so difficult? Isnt JIT

involving them more in the decision making process and making
their jobs much easier? Until now shop floor personnel have made no
decisions, therefore have taken no risk of making the wrong decision.
Management must motivate these people by assuring them that
making a wrong decision is permissible as long as they learn from it.
Shop floor personnel also have major concerns about job security. If
operators are doing their own setups, where do the setup people go?
If top management says that everyone is responsible for quality, do the
quality control people lose their jobs? Top management should calm
these fears through a no-layoff guarantee. Management should also
form a partnership with all employees to earn their trust and motivate
them by communicating to them that the whole organization must
change, not just the shop floor personnel.
2. Training
Management must convey to all employees why the organization is

being restructured. If the company is in trouble, management should
be honest with the employees. All employees should be trained in

the reasons for and methods of JIT. Employees are more receptive
to JIT if they understand how pull systems, setup reduction, reduced
inventory, plant loading, shorter lead times, better quality, etc., can
lead to a larger market share, higher sales, and increased customer
satisfaction. Management should devise a structured approach for
training all employees in the principles of JIT. An employee in
purchasing may not need to know how to reduce setup time on a
particular machine but must know why this time must be reduced.
Management must also participate in training. Other than a complete

understanding of JIT principles, managers will need training in
modern management techniques, such as Total Quality Management
(TQM). Managers must develop the total quality mindset that will
allow them to lead the organization into JIT.
3. Leadership
Management must realize that actions speak louder than words. Any
conflict between managements words and managements actions
will be noticed by employees. If management feels that training is
important but misses a training session in favor of a higher priority,
it has sent a negative message to the employees. Top management
must demonstrate its commitment to JIT through long hours and hard
work. Managements actions should build employee trust, and trust is
the most important element of any plan.
M. IMPLEMENTING JIT
JIT implementation must start by creating a suitable environment for JIT to
flourish. A structure must be established whereby responsibility for problem
solving is appropriated to all levels of the organization. Shop floor personnel
will be asked to find solutions for shop floor problems and so on throughout
the organization. This reversal from traditional management style to a Total
Quality Management (TQM) style can only be accomplished through Total
Employee Involvement (TEI) and employee teams. TQM is a prerequisite to
JIT.

1. Forming Teams
The first team that should be established is the quality team sometimes
called the Executive Council or Quality Steering Committee. No matter
what you call it, the objectives of the top team will be the same. The
Steering Committee will address the issues with TQM implementation
(you are not ready for JIT yet) while attending to everyday organizational
issues as well. If possible, Steering Committee members should be
removed from the interruptions of everyday organizational decisions.
It is a proven fact that companies that allow their Steering Committees
to dedicate all their time to solving TQM/JIT implementation problems
have higher success rates and shorter implementation times.
The Steering Committee will be made up of high ranking officials

within the organization. They will assign teams from the workforce to
solve various implementation problems. The employees that constitute
these teams now have the power to make decisions that directly affect
productivity at their level. Team logistics will not be discussed in this
manual.
2. Developing A JIT Strategy
Now that you understand the basics of JIT, a specific implementation

strategy must be developed. There are no cookbook solutions for JIT
implementation. Each Steering Committee has a different vision
and each company goes about implementation differently. Below are
examples of how JIT has been successfully applied in various types
of organizations.
Company 1 concentrated on finding the bottleneck in its

manufacturing process and worked to eliminate it through
reducing setup times, forming machine cells, removing
nonvalue-added steps, or whatever means required. After each
bottleneck had been eliminated, the company found the next
largest bottleneck and eliminated it, and so on, throughout the
entire organization. Employees are still finding bottlenecks
(albeit much smaller ones), and will continue to do so through
the process of continuous improvement.

Company 2 implemented JIT at its final operation and progressed

in reverse order throughout the plant until reaching incoming
raw materials. The idea behind this strategy is that as you
implement JIT, you eliminate the need for excess inventory for
the succeeding process or processes down the line. Suppose a
plant has nine operations to perform before a part is shipped. If
you optimize step nine first, parts can be pulled from step eight
to step nine after eight has been optimized. When you reach step
five, parts will flow from five to nine in a true JIT fashion.
Company 3 started by removing as many nonvalue-adding steps

from the manufacturing process as possible without moving any
machines. Employee teams solved as many problems as they
could while leaving machines in the traditional configuration.
Machines were then relocated into cells and the teams went
back to work to eliminate waste in the new configuration. The
teams will now continually move machines and optimize the
process.
Opposite to company 3, company 4s Steering Committee

moved machines into cells to improve product flow. Employee
teams were then tasked with removing as much waste from the
process in the current configuration. When teams recommended,
machines were moved again. Company 4 moved machines
frequently while company 3 rarely moved machines.
Company 5 used what we will call the shotgun approach.

Teams were tasked with implementing JIT as fast as possible
with no visible structured approach. Machines were moved and
inventory reduced and then it was up to the teams to implement
JIT. Problems were solved on a priority basis as determined
by the Steering Committee. A word of warning: this approach
cannot happen if quality will not allow smaller inventories.
On the positive side, employees were assured of managements
commitment because the conversion to JIT happened fast.

Similar to company 2, company 6 initiated JIT one cell at a

time, but not at the last operation. Pilot projects were selected
by the Steering Committee on the basis of success probability.
Since the pilot project set the tone for the entire JIT effort, a
project was chosen that would get the best results. Company
6 continued to add projects until the entire organization was
converted to JIT.
These six companies used six comparable but different approaches

to achieve the same results. You may choose a method similar to one
of these, a combination of these, or a completely different method to
implement JIT. How you accomplish JIT is not as important as when
you do it.
N. GLOSSARY
Batch Size The number of duplicate parts, components or finished goods
produced before a process is changed to produce different parts. Also known
as Lot Size.
Changeover Time The time it takes to go from production of one product to

production of a different product with acceptable quality, i.e., Setup Time.
Cross-training Educating employees to perform more than one job,

therefore, increasing flexibility in the workforce.
CRP Capacity Requirement Planning
Cycle Time The total time for a worker to complete one cycle of operations,
including walking, loading/unloading, inspecting, etc.
EOQ Economical Order Quantity
External Customer A person who has purchased a product from a company;

usually the end user of a product.
External Setup Setup steps done while the machine or system is

producing.

Flexible Changeover The capability to manufacture what you want, when

you want, in whatever batch size you require.
Heisenberg Principle The idea that a phenomenon that is observed is

changed merely by the fact that it is being observed.
Internal Setup Setup steps done only when the machine or system is
idle.
Internal Customer The next person or process that receives product from
a preceding process within an organization, i.e., the next person down the
line.
JIT (Just-In-Time) Producing the minimum number of units in the smallest

possible quantities at the latest possible time, which in turn eliminates the need
for inventory. Such production reduces waste and improves quality.
Job Shop An organization that produces short runs of similar parts and
specialized one-of-a-kind parts.
Kanban Any visual device that strictly limits length of a waiting line
(inventory) and authorizes work. An example of this is a kanban card.
Level Loading The production of products at the proper frequency. Products

are made at the customer requirement rate. In theory, if a product is sold every
day, it should be made every day.
Machine Cell Machines grouped together for the purpose of producing a

product one at a time from machine to machine while having the flexibility
to produce different products and operate at different output rates and with
different crew sizes (cycle time). Also known as work cells.
Malcolm Baldrige National Quality Award Annual award recognizing U.S.

companies that excel in quality achievement/management. Founded in 1987 and
administered by Department of Commerces Technology Administration.

MRP I (Material Requirement Planning) Scheduling the completion and

start dates of components and raw materials.
MRP II (Manufacturing Resource Planning) Arranging material

requirements while maintaining the due date for each component supply order
so that each order will arrive just in time for the next process.
Nonvalue-adding Operation A function that adds cost to a product, not

value; such as inspecting or moving.
Pareto Chart A bar chart that arranges data in order of importance. The bar
representing the item that occurs or costs most is placed on the left-hand side
the horizontal axis. The remaining items are placed on the axis in descending
order. Typically a few causes account for most of the output; hence the phrase
vital few and trivial many.
Poka-yoke Devices used to prevent defects from occurring in the

manufacturing process. Also known as fail-safing or fool-proofing.
Process Any set of conditions or causes working toward an outcome.
Pull System The manufacturing process whereby each operation uses parts as
needed, therefore releasing a production authorization signal to the preceding
operation. No parts are produced until needed and no extra parts are produced.
Also called the supermarket system or kanban system.
Push System The manufacturing process by which each operation works

independently and pushes its parts on to the next operation by a certain
date.
Quality Fitness for use. Product performance resulting in customer

satisfaction. Freedom from product deficiencies which avoids customer
dissatisfaction.
Repetitive manufacturing The process in which large numbers of the same

parts or family of parts are made.
ROP Reorder Point

Setup Time The interval between the production of one good part and the
production of another good but dissimilar part.
SFC (Shop Floor Control) Scheduling the operations performed on

a component between MRP II and finish dates; often called priority
sequencing.
SMED Single-Minute Exchange of Die A procedure for performing setup

operations in less than 10 minutes, i.e., in a single-digit number of minutes.
Not all setups can be completed in single-digit minutes, but this is the goal.
SPC (Statistical Process Control) A method of managing a process by

gathering information about it and using that information to correct the process
to prevent the same problem from happening again.
System Any organizational method, procedure or function for accomplishing

work.
Takt Time The total daily operating time divided by the total daily
requirement, usually expressed in hours, minutes or seconds per part.
TEI (Total Employee Involvement) 100% of workforce is placed on teams

formed to continuously improve quality in all aspects of an organization.
TQM Organized, continuous process improvement activities involving

an entire organization, managers and workers, in a totally integrated effort
to improve performance at every level focusing on customer satisfaction
(quality).
Value-adding Operation A function that adds value to a product, such as

milling and assembling.
Value Analysis A process for evaluating the interrelationships among the

functions performed by the product features and the associated costs.
Vendor Certification The procedure by which a partnership is formed

between the buyer and seller of a product. Strict criteria are established for
the seller and when these criteria are met the seller becomes certified.

Waste Anything other than the minimum amount of equipment, materials,

parts, space and worker time, which are absolutely essential to production.
WIP Work-In-Process
Xenos Paradox A mathematical paradox which states that if a person walks

toward a wall, each step being half as large as the previous one, that person
will never reach the wall.
Zero Defects (Zero Quality Control) The objective of defect-free production

where zero defects is defined as meeting product specifications.
O. REFERENCES AND RECOMMENDED READINGS

The Design of a Factory with a Future
by J.T. Black
Director of Advanced Manufacturing/Technology Center Auburn University
Copies are available from the publisher (or by calling 1-800-334-7344):

McGraw Hill Book Company
P.O. Box 18122
Newark, N.J. 07191
Library of Congress Catalog Number: 90-19991
ISBN: 0-07-005551-3 (hard cover)
0-07-005550-5 (soft cover)
Introduction to TPM: Total Productive Maintenance

by Seiichi Nakajima

Productivity Press, Inc.
P.O. Box 3007
Cambridge, MA 02140 (617) 497-5146
Library of Congress Catalog Card Number: 88-61394
ISBN: 0-915299-23-2

Jurans Quality Control Handbook

by J.M. Juran

American Society for Quality Control (ASQC)
Customer Service Department
P.O. Box 3066
Milwaukee, WI 53201
ISBN: 0-13-1983441-1
The Just-In-Time Breakthrough

Implementing the New Manufacturing Basics
by Edward J. Hay
Copies are available from the publisher (or by calling (212)850-6354):

John Wiley and Sons
Business/Law/General Books Division
605 Third Avenue
New York, N.Y. 10158-0012
ISBN: 0-471-85413-1
Just-In-Time: Alive and Well in the South

by Dr. Anthony Inman
Article published in Southern Business and Economic Journal, April 1991,
Vol. 14, No, 3, 155-167.
Out of the Crisis

by Edward Deming

P.O. Box 3066
Milwaulkee, WI 53201
ISBN: 0-13-198441-1

Poka-yoke: Improving Product Quality By Preventing Defects

by Hiroyuki Hirano

P.O. Box 3007
Cambridge, MA 02140 (617) 497-5146
ISBN: 0-915299-31-3
Quality Without Tears

by Phillip Crosby

P.O. Box 3066
Milwaulkee, WI 53201
ISBN: 0-13-198441-1
Reinventing the Factory:

Productivity Breakthroughs in Manufacturing
by Roy L. Harmon and Leroy D. Peterson

P.O. Box 3007
Cambridge, MA 02140, (617) 497-5146
ISBN: 0-915299-31-3

A Revolution In Manufacturing: The SMED System

by Shigeo Shingo

P.O. Box 3007
Cambridge, MA 02140, (617) 497-5146
ISBN: 0-915299-03-8
Statistical Process Control Methods

by Gary K. Griffith

P.O. Box 3066
Milwaukee, WI 53201
ISBN: 0-13-198441-1
The Team Handbook

by Peter Scholtes

P.O. Box 3066
Milwaukee, WI 53201
Library of Congress Catalog Card Number: 86:18762
ISBN: 0-13-198441-1
Training: Quality Supplement. "Is 99.9% Good Enough"

by Natalie Gabel
March, 1991. 40-41.

World Class Manufacturing: The Lessons Of Simplicity Applied

by Richard J. Schonberger
Copies available from the publisher (or by calling 1-800-274-9911):

P.O. Box 3007
Cambridge, MA 02140, (617) 49705146
ISBN: 0-02-929270-0
World-Class Manufacturing Casebook: Implementing JIT and TQC

by Richard J. Schonberger

P.O. Box 3007
Cambridge, MA 02140 (617) 49705146
Library of Congress Catalogue Card Number: 86-25822
ISBN: 0-02-920340-5
JIT Factory Revolution:

A Pictorial Guide to Factory Design of the Future
by Hiroyuki Hirano

P.O. Box 3007
Cambridge, MA 02140, (617) 49705146
Library of Congress 88-29007
ISBN: 0-915299-44-5

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JUST-IN-TIME

AIDT - Just-In-Time Manufacturing - September 11, 2006 

ii AIDT - Just-In-Time Manufacturing - September 11, 2006

Why Just-In-Time manufacturing when there are dozens of other

AIDT - Just-In-Time Manufacturing - September 11, 2006 

JIT is sometimes said to have been invented by Henry Ford because

Ohno and his associates came to America to study our manufacturing

From Supermarket To Shop Floor

To apply this concept to manufacturing, Ohno devised a system whereby

 AIDT - Just-In-Time Manufacturing - September 11, 2006

assembly. To obtain maximum results, Ohno decided to move the

While the prevailing view of JIT is that of an inventory control system,

A set-up time improvement system.

A properly implemented JIT system should:

Produce products customers want.

An overview of JIT literature suggests that the steps or elements of

Reductions in set-up time.

AIDT - Just-In-Time Manufacturing - September 11, 2006 

Quality certification of suppliers.

Benefits touted as results of JIT implementation include:

Reductions in down time.

To identify waste in your company, a value-added analysis should be

 AIDT - Just-In-Time Manufacturing - September 11, 2006

AIDT - Just-In-Time Manufacturing - September 11, 2006 

We will now streamline the manufacturing process, using JIT techniques

 AIDT - Just-In-Time Manufacturing - September 11, 2006

Perhaps nonvalue-added activities can be reduced further and perhaps they

1. Don't Forget The Office

Evaluating a process using a value-added analysis should not be limited

JIT is much more than a plan for decreasing inventory, it is a manufacturing

AIDT - Just-In-Time Manufacturing - September 11, 2006 

Although inventory has long been accepted as a necessary evil we must

 AIDT - Just-In-Time Manufacturing - September 11, 2006

AIDT - Just-In-Time Manufacturing - September 11, 2006 

Lets take a hypothetical look at a company that is reducing inventory.

After inventory was reduced, the wheel assembler had difficulty

Inventory must be decreased using a systematic approach. A methodical

10 AIDT - Just-In-Time Manufacturing - September 11, 2006

E. JIT AND QUALITY

1. The Chicken Or The Egg

Analogous to the familiar chicken or the egg question, it is often asked,

A mathematics riddle known as the Xenos paradox asks if a person

AIDT - Just-In-Time Manufacturing - September 11, 2006 11

be motivated to advance quality to increasingly higher and higher

The alternative to setting standards at the highest possible level becomes

Two million documents will be lost by the IRS this year.

22,000 checks will be deducted from the wrong bank accounts

1,314 phone calls will be misplaced by telecommunication

12 babies will be given to the wrong parents each day.

291 pacemaker operations will be performed incorrectly this

315 entries in Websters Third New International Dictionary

Incidentally, 99.9 percent accuracy would be a remarkable improvement

Defect-free output is more important that output itself.

Defects, errors, and breakdowns can be prevented.

Prevention is cheaper than rework.

12 AIDT - Just-In-Time Manufacturing - September 11, 2006

4. Preventing Quality Problems

To dismantle the inspection bench mentality, we must take positive

Defining the Requirements

Many manufacturing companies do an inadequate job of defining

Let us look back at our ACME manufacturing example. The assembler

AIDT - Just-In-Time Manufacturing - September 11, 2006 13

leeway does he have? Can the bearings be somewhat angled or must

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