JIT – KANBAN - TQM

Operations Management
Waste
Waste is ‘anything other than the minimum
amount of equipment, materials, parts,
space, and workers’ time which are
absolutely essential to add value to the
product.
--Shoichiro Toyoda President, Toyota Motor Co.
If you put your mind to it, you can squeeze
water from a dry towel.
-- Eiji Toyoda, President 1967-1982
Just-in-Time

Downstream processes take parts from
upstream as they need.

Like an American Supermarket:

Get what you want

when you want it

in the quantity you want.
7 Types of Waste (Ohno
1988)

Overproduction

Time on Hand (waiting time)

Transportation

Stock on Hand - Inventory

Waste of Processing itself

Movement

Making Defective Products
Seven Elements to Eliminate
Waste
1. Focused Factories
2. Group Technology
3. Quality at the Source
4. JIT production
5. Uniform Plant Loading
6. Kanban production control system
7. Minimized setup times
1. Focused Factories

Small, specialized plants

No huge, vertically integrated plants

Small plants easier, cheaper to build

Tom Peters
2. Group Technology

Products grouped into families

Work cell can produce whole family

Cellular layout, not functional

Benefits

Much less inventory sitting around

Less material movement

Fewer workers

Cross-training

Keep skills sharp (managers too)

Reduce boredom & fatigue

Understand overall picture, more new ideas
3. Quality at the Source

Do it right the first time

Stop process, correct errors
immediately

Not a lot of parts to sift through to find
a good one

Can’t afford high defect rates

Since low WIP, get quick feedback on
errors
4. Just In Time-- What is It?

Just-in-Time: produce the right parts,
at the right time, in the right quantity

Requires repetitive, not big volume

Batch size of one

Short transit times, keep 0.1 days of supply
Lowering Inventory Reduces
Waste

WIP hides problems

Lowering Inventory Reduces
Waste

WIP hides problems

 Lowering Inventory Reduces
Waste
Reducing WIP makes
problem very visible

STOP
 Lowering Inventory Reduces
Waste

Remove problem, run

With less WIP
 Lowering Inventory Reduces
Waste

Reduce WIP again to find

new problems
Performance and WIP Level

Less WIP means products go through system
faster

reducing the WIP makes you more sensitive
to problems, helps you find problems faster

Stream and Rocks analogy:

Inventory (WIP) is like water in a stream

It hides the rocks

Rocks force you to keep a lot of water (WIP) in
the stream
5. Uniform Plant Loading
(heijunka)

Any changes to final assembly are magnified
throughout production process

Smoothing

Master production schedule: 10,000 /mo.

500 day, 250 a shift

480 minutes means 1 every 1.92 minutes

Sequencing:

If mix is 50% A, 25% B, 25% C, produce
A-B-A-C-A-B-A-C…
6. Kanban

Japanese for ‘signboard’

Method for implementing JIT

In order to produce, you need both
material to work on, and an available
kanban.

Each work station has a fixed #
kanbans.
 6. Kanban Flow of work

2 3

Worker 2 finishes a part, outbound moves over

2 has a blue tag avaliable, so 2 gets another
part to work on:

2 takes off 1’s green tag giving it back to 1, and

puts on her blue tag and moves it into position.
 6. Kanban Flow of work

2 3

When 3 finishes a part,

Finished parts move over one spot

He has to have a red tag available to put on,

He gets a part from 2’s outbound pile,

And gives the blue back to 2
 6. Kanban Flow of work

2 3

When 3 finishes a part,

Finished parts move over one spot

He has to have a red tag available to put on,

He gets a part from 2’s outbound pile,

And gives the blue back to 2

3’s production will be taken by 4, offstage right.

Tag goes back into 3’s bin
 6. Kanban
2 3

Red finishes his part next.

2 3

But 4 hasn’t freed up any of the red kanbans, so

there is nothing for 3 to work on now.

3 could maintain his machine, or see if 4 needs help
How is this Different?

Processes can become idled (blocked)
or starved

This makes you painfully aware of
problems in your system.

Material moves through the system so
quickly no in-process recordkeeping is
needed.
Importance of Flow

Ohno was very clear about this:
“Kanban is a tool for realizing just-in-time. For
this tool to work fairly well, the process must be
managed to flow as much as possible. This is
really the basic condition. Other important
conditions are leveling the product as much as
possible, and always working in accordance with
standard work methods.
-- Ohno, 1988, p. 3
7. Setup Reduction

Can’t afford to do huge runs

Have to produce in small batches

Toyota Die Change: 3 hours down to 3
SMED: under ten minutes

Techniques

Make internal setups into External

Eliminate Adjustments

Eliminate the Setup

Continuous Process Improvement, anyone?
Elimination of Waste

Knew they wouldn’t beat U.S. with product
innovation, concentrated on licensing
patents, and producing more efficiently

Costs prevented mass-production, volume
strategy of American firms.

Find ways to reduce waste, cost

Shigeo Shingo (at right)

& Taiichi Ohno, pioneers
 -- the early years

First two Toyotas imported to U.S. 1957
JIT Origins in Japan

Post-WWII Japanese industry in ruins

“Catch up to Americans in 4 years!”

Toyoda made delivery trucks and
motorcycles, and not many of either
Couldn’t Emulate GM

GM huge batches in huge factories

Japan’s area is 10% less than California
and 70% agricultural.

Put entire population of CA into 30% of
state, then add 6 times as many people.
(and you thought LA was crowded).

Land extremely expensive

Sprawling factories not an option
 Small Batches

GM’s large batches require large amounts
of storage space.

GM produces in large batches because of
significant setup costs.

If Toyota had the same large setup costs,
it could never afford small batches.

Reduce setup cost to reduce batch size.

GM didn’t think of doing this.
A contrasting opinion
“Inventory is not the root of all evil,
inventory is the flower of all evil.

- Robert Inman,
General Motors
Ask ‘Why’ 5 Times

5W = 1H
1. Why did the machine stop? Overload and fuse blew
2. Why the overload? Not lubricated
3. Why not lubricated? Oil pump not pumping?
4. Why not pumping? Pump shaft worn out.
5. Why worn out? No screen, scrap got in
Preventative Maintenance

Unexpected loss of production is fatal to
system and must be prevented

Additional maintenance can prevent
downtime, or minimize length of
interruptions, when they do occur
Capacity Buffers

System is inflexible, no inventory
buffers, so to respond, need excess
capacity

Schedule less than 24 hours per day

‘Two-Shifting’ 4-8-4-8

Cross Training
Characteristics of JIT
Partnershps

Few, nearby suppliers

Supplier just like in-house upstream process

Long-term contract agreements

Steady supply rate

Frequent deliveries in small lots

Buyer helps suppliers meet quality

Suppliers use process control charts

Buyer schedules inbound freight
Supplier Relationships

American model:

keep your nose out of my plant.

Gain info to force price cuts

Lack of trust between suppliers

Firm encourages suppliers to share
knowledge, because they don’t worry about
competing

Firm helps supplier increase quality, reduce
costs
 Lessons Learned from JIT

The environment can be a control - don’t take
setups for granted

Operational details are very important (Ford,
Carnegie)

Controlling WIP is important

Flexibility is an asset

Quality can come first

Continual improvement is necessary for
survival