Chapter 6

 The growing business concern is

shifting to more economical
methods of production and
purchasing of products in order
to be competitive in the world
market.
 This principle focuses on
people’s efficiency and the
elimination of waste and this
key business concept have
direct effects on the
 The manufacturing process is
the composition of the
different materials that go
through the process of putting
together the different
components until it is ready
for delivery to the customer.
 JIT philosophy is a goal driven
system of increased
productivity by avoiding
wastes, improved production,
 Material wastage is eliminated as just-in-time
into the production floor is made.
 There exists flexibility in materials resources
allocation as the basis of materials delivery is
based on the prepared master production
schedule (MPS) and the specific bill of
materials (BOM).
 The master production schedule specifies
time frame by which an activity could be
completed and there exists smooth flow of
materials in the production areas as the
timing of supply is based on production time
frame.
 The process develops total improvement in
terms of product quality as standards are
checked at the very source of production
section.
1. Uniform production
Uniform production means that the same
product is a process at a given period.

2. Quick setup times

It is the process of precise planning and
implementation and timing that repeated
activities are needed to perfect the delivery lead
time.
3. Small lot size delivery of materials
Coordination with the supplier is
necessary for the delivery of the needed
materials on small lot size.

4. Short lead time in production and materials

delivery
Delivery lead time should be short for
suppliers to comply with the production
requirements.
5. Schedule of preventive maintenance
The schedule of preventive maintenance
must be out in place. Machine breakdown
causes down to production and it will affect the
JIT system.

6. The need for multi-skilled workers

The just-in-time systems needs workers
with multi-skills in all aspects of the production
operations.
7 . Development of reliable suppliers
Reliable supplier is a great factor in
the JIT system. No defective materials
should go into the production line as
replacements could not be readily
available.

8. The use of cards or KANBAN system

It is a signaling system used in the
control of materials on the production
floor.
After Using Kanban
 It’s scheduling system for just in time
production.
 First used in Toyota 1953 in their machine
shop.
 Kanban refers to the posting board and the
inventory control cards posting there, where
the evolution of manufacturing process would
be recorded.
  Kanban (KAN = CARD ,BAN=SIGNAL)
 Simple Movement System
a. “Cards” to signal and communicate recorded
information.
b. Boxes/containers to take a lots of parts from
one work station to another (client/server)
c. Station as and when needed (called/pulled)
d. Workstation only produced delivery
components when called (they received card
+ empty container.
THE ROLE OF PURCHASING IN THE JIT SYSTEM

The role of raw materials that goes into the

production line has been the major concern of top
management as about 80% of the cost of the product
comes from materials components.

The just-in-time production system requires

that the right materials are provided to the work
station at the right time.
A comparison of critical elements associated with
JIT and the traditional purchasing approaches are
the following:

1. Reduce order quantities

The most crucial element of just-in-time
system is the small lot size of materials delivery.
The just-in-time concept reduces setup
times and tries to introduce clever changeover
techniques and simpler production design
through time and motion study.
2. Frequent and on time delivery schedule
The JIT purchasing approach needs frequent
delivery to the production plant and these
materials must be on time to meet production
schedules.

3. JIT reduces lead time delivery

Under the traditional purchasing practices, the
lead time delivery goes through a process of paper
works, the manufacturing lead time for suppliers,
transportation and receiving and inspection lead
time and other delays related to materials quality
and rejects.
4. High quality of incoming materials
JIT emphasis is the high quality of materials
that should go in the production line.
The supplier under the concept of JIT
purchasing system must be fully trusted o materials
quality.

5. JIT develops reliable suppliers

Reliable supplier are the backbone in the
effective implementation of the just-in-time
purchasing.
Reliability of suppliers is the critical
consideration in the selection of the supplier.
 Reduction in inventory is a critical
cost factor in all manufacturing
operation as important cash capital
could be used in some other
expenses
 Lead time reliability is considerably shorter
in the JIT purchasing unlike in the
traditional system where constant follow
up is necessary . This implies higher
customer service and lower safety stock
requirements that contribute to reduce
capita[ investment .
 JIT emphasizes scheduling flexibility by
aiming for reduced purchasing time and
shorter setup production time . This allows
the manufacturing operation to respond to
customer demend due to changes in he
business environment .
 Savings in the cost of parts in generated
when suppliers and buyers of inputs
conducted an intensive value analysis in
the production of the needed materials .
 Improved materials input in the production
of goods contributes to greater customer
satisfaction . The global competitive
advantage is making of quality products
and this would come from the supply of
quality inputs .
 Since better collaboration and cooperation
has been developed , engineering designs
and changes could easily be establish .
  Cost associated in materials inventory are the
following :
a) Insurance premiums
b) Inventory holding cost
c) Handling in storage
d) Administrative cost and clerical cost
e) Waste in materials and obsolescene
f) Depreciation of equipment use in hadling
materials
g) Other cost related to odering and inspection of
materials
 The just-in-time system of production and
purchasing could take roots in
implementation where there existed a
strong partnership between the buyer and
supplier . The culture od cooperation ,
mutual trust and confidence are great
factors to consider in its implementation .