National Conference on Advancements in Mechanical engineering and Energy environment(6-7 January 2012) SLIET, Longowal

Role & Relevance of JIT on current Industrial scenario

Mohd. Majid

(Assistant Professor)

Department of Mechanical Engineering, SLIET, Punjab, India.

Email address: mohdmajid_2004@rediffmail.com

Mrs. Khan Tarannum M. R & Mr. Anirudh Pandit

Dept. of ManagementAryabhatta College, Barnala, Punjab,Pin:148101,(India)

Email address: aaminahk70@gmail.com, anirudh_24jan2@yahoo.com

Abstract:

In today's competitive world shorter product life cycles, customers rapid demands and quickly changing business environment is putting lot of pressures on manufacturers for quicker response and shorter cycle times. Now the manufacturers put pressures on their suppliers. One way to ensure quick turnaround is by holding inventory, but inventory costs can easily become prohibitive. A wiser approach is to make your production agile, able to adapt to changing customer demands. This can only be done by JUST IN TIME (JIT) philosophy. The need to maintain a high rate of improvements led to devise the JIT system. JIT became an effective tool to support the running of the production system as a whole. In addition, it proved to be an excellent way for promoting improvements because reducing the inventory in circulation has led to increase in efficiency and reduction in waste. It has also helped tremendously in Reducing Cost, Improving Quality, Improving Delivery, Adding Flexibility, Improving Performance, Increase innovativeness. An important element of the JIT strategy is the purchasing function. The procurement of parts and materials plays a key role in the successful implementation of a JIT strategy Experts agree that supplier selection is one of the most important activities of purchasing.

Keywords: Kanbans, Jidoka, Andon, Toyota's six rules.

National Conference on Advancements in Mechanical engineering and Energy environment(6-7 January 2012) SLIET, Longowal

Introduction

Inventory management is an important part of a business because inventories are usually the largest expense incurred from business operations. Most companies will use an inventory management system that will track and maintain the inventory required to meet customer demand. Most systems used by companies are linked to the management or accounting information system, increasing the effectiveness of their operations. A more advanced and sophisticated method of reducing Inventory costs is JIT.

JIT is a Japanese management philosophy and a production strategy which has been applied in practice since the early 1970s in many Japanese manufacturing organisations. It was first developed and perfected within the Toyota manufacturing plants by Taiichi Ohno as a means of meeting consumer demands with minimum delays . Taiichi Ohno is frequently referred to as the father of JIT. JIT strives to improve a business return on investment by reducing in-process inventory and associated carrying costs.

Toyota was able to meet the increasing challenges for survival through an approach that focused on people, plants and systems. Toyota realised that JIT would only be successful if every individual within the organisation was involved and committed to it, if the plant and processes were arranged for maximum output and efficiency, and if quality and production programs were scheduled to meet demands exactly.

JIT manufacturing has the capacity, when properly adapted to the organization, to strengthen the organization’s competitiveness in the marketplace substantially by reducing wastes and improving product quality and efficiency of production.

Literature Review

The American Production and Inventory Control Society (APICS) has given the following definition of JIT: 

"A philosophy of manufacturing based on planned elimination of all waste and continuous improvement of productivity.  It encompasses the successful execution of all manufacturing activities required to produce a final product, from design engineering to delivery and including all stages of conversion from raw material onward.  The primary elements include having only the required inventory when needed; to improve quality to zero defects; to reduce lead time by reducing setup times, queue lengths and lot sizes; to incrementally revise the operations themselves; and to accomplish these things at minimum cost."

When the JIT principles are implemented successfully, significant competitive advantages are realized.  JIT principles can be applied to all parts of an organization:  order taking, purchasing, operations, distribution, sales, accounting, design, etc.

There are strong cultural aspects associated with the emergence of JIT in Japan. The Japanese

National Conference on Advancements in Mechanical engineering and Energy environment(6-7 January 2012) SLIET, Longowal

work ethic involves the following concepts.

Workers are highly motivated to seek constant improvement upon that which already exists. Although high standards are currently being met, there exist even higher standards to achieve.

Companies focus on group effort which involves the combining of talents and sharing knowledge, problem-solving skills, ideas and the achievement of a common goal.

Work itself takes precedence over leisure. It is not unusual for a Japanese employee to work 14-hour days.

Employees tend to remain with one company throughout the course of their career span. This allows the opportunity for them to hone their skills and abilities at a constant rate while offering numerous benefits to the company.

These benefits manifest themselves in employee loyalty, low turnover costs and fulfilment of company goals.

Just-In-Time Manufacturing:

JIT is a philosophy of continuous improvement in which non-value-adding activities (or wastes) are identified and removed for the purposes of:

1. Reducing Cost 2. Improving Quality 3. Improving Performance4. Improving Delivery 5. Adding Flexibility 6. Increase innovativeness

JIT is not about automation.  JIT eliminates waste by providing the environment to perfect and simplify the processes.  JIT is a collection of techniques used to improve operations. It can also be a new production system that is used to produce goods or services.

Elimination of Waste:

JIT usually indentifies seven prominent types of waste to be eliminated:

1. Waste from Overproduction 2. Waste of waiting/idle time3. Transportation Waste 4. Inventory Waste5. Processing Waste 6. Waste of Motion7. Waste from Product Defects

Role & Relevance of JIT

`Just-in-time' is a management philosophy and not a technique.It originally referred to the production of goods to meet customer demand exactly, in time, quality and quantity, whether the `customer' is the final purchaser of the product or another process further along the production

National Conference on Advancements in Mechanical engineering and Energy environment(6-7 January 2012) SLIET, Longowal

line.It has now come to mean producing with minimum waste. "Waste" is taken in its most general sense and includes time and resources as well as materials.

Elements of JIT include:

Continuous improvement.

1. Attacking fundamental problems - anything that does not add value to the product.

2. Devising systems to identify problems.3. Striving for simplicity - simpler systems may be easier to understand, easier to

manage and less likely to go wrong.4. A product oriented layout - produces less time spent moving of materials and

parts.5. Quality control at source - each worker is responsible for the quality of their own

output.6. Poka-yoke - `foolproof' tools, methods, jigs etc. prevent mistakes7. Preventative maintenance, Total productive maintenance - ensuring machinery

and equipment functions perfectly when it is required, and continually improving it.

Eliminating waste. There are seven types of waste:

1. Waste from overproduction.2. Waste of waiting time.3. Transportation waste.4. Processing waste.5. Inventory waste.6. Waste of motion.7. Waste from product defects.

Good housekeeping - workplace cleanliness and organization. Set-up time reduction - increases flexibility and allows smaller batches. Ideal batch size is

1item. Multi-process handling - a multi-skilled workforce has greater productivity, flexibility and job satisfaction.

Leveled / mixed production - to smooth the flow of products through the factory. Kanbans - simple tools to `pull' products and components through the process. Jidoka (Autonomation) - providing machines with the autonomous capability to use

judgment, so workers can do more useful things than standing watching them work. Andon (trouble lights) - to signal problems to initiate corrective action.

National Conference on Advancements in Mechanical engineering and Energy environment(6-7 January 2012) SLIET, Longowal

JIT Diagram

JIT implementation design

Based on a diagram

1) Design Flow Process – Redesign/relayout for flow – Reduce lot sizes – Link operations – Balance workstation capacity – Preventive maintenance – Reduce setup Times

2) Total Quality Control – Worker compliance – Automatic inspection – Quality measures – Fail-safe methods – Worker participation

3) Stabilize Schedule – Level schedule – Establish freeze windows – Underutilize Capacity

National Conference on Advancements in Mechanical engineering and Energy environment(6-7 January 2012) SLIET, Longowal

4) Kanban Pull System – Demand pull – Backflush – Reduce lot sizes

5) Work with Vendors – Reduce lead time – Frequent deliveries – Project usage requirements – Quality expectations

6) Further Reduce Inventory in Other Areas – Stores – Transit – Implement carrousel to reduce motion waste – Implement conveyor belts to reduce motion waste

7) Improve Product Design – Standard production configuration – Standardize and reduce the number of parts – Process design with product design – Quality expectations

An important determinant of the success of production scheduling based on "pushing" the demand is the quality of the demand forecast that can receive such "push."

Kanban, by contrast, is part of an approach of receiving the "pull" from the demand. Therefore, the supply or production is determined according to the actual demand of the customers. In contexts where supply time is lengthy and demand is difficult to forecast, the best one can do is to respond quickly to observed demand. This is exactly what a kanban system can help with: It is used as a demand signal that immediately propagates through the supply chain. This can be used to ensure that intermediate stocks held in the supply chain are better managed, usually smaller. Where the supply response cannot be quick enough to meet actual demand fluctuations, causing significant lost sales, then stock building may be deemed as appropriate which can be achieved by issuing more kanban. Taiichi Ohno states that to be effective kanban must follow strict rules of use (Toyota, for example, has six simple rules, below) and that close monitoring of these rules is a never-ending task to ensure that the kanban does what is required.

Kanban cards

Kanban cards are a key component of Kanban that utilizes cards to signal the need to move materials within a manufacturing or production facility or move materials from an outside supplier to the production facility.The Kanban card is, in effect, a message that signals depletion of product, parts or inventory that when received will trigger the replenishment of that product, part or inventory. Consumption drives demand for more. Demand for more is signaled by Kanban card. Kanban cards thus, in effect, help to create a demand-driven system. It is widely espoused by proponents of Lean production and manufacturing that demand-driven systems lead to faster turnarounds in production and lower inventory levels, helping companies implementing such systems to be more competitive.

National Conference on Advancements in Mechanical engineering and Energy environment(6-7 January 2012) SLIET, Longowal

Kanban cards, in keeping with the principles of Kanban, should simply convey the need for more materials. A red card lying in an empty parts cart would easily convey to whomever it would concern that more parts are needed.

In the last few years, Electronic Kanban systems, which send Kanban signals electronically, have become more widespread. While this is leading to a reduction in the use of Kanban cards in aggregate, it is common in modern Lean production facilities to still find widespread usage of Kanban cards.

Toyota's six rules

Do not send defective products to the subsequent process The subsequent process comes to withdraw only what is needed Produce only the exact quantity withdrawn by the subsequent process Level the production Kanban is a means to fine tuning Stabilize and rationalize the process

Electronic kanban systems

Many manufacturers have implemented electronic kanban systems Electronic kanban systems, or E-Kanban systems, help to eliminate common problems such as manual entry errors and lost cards. E-Kanban systems can be integrated into enterprise resource planning (ERP) systems. Integrating E-Kanban systems into ERP systems allows for real-time demand signaling across the supply chain and improved visibility. Data pulled from E-Kanban systems can be used to optimize inventory levels by better tracking supplier lead and replenishment times.

Benefits Of JIT

Main benefits of JIT include:

1. Reduced setup time. Cutting setup time allows the company to reduce or eliminate inventory for "changeover" time. The tool used here is SMED (single-minute exchange of dies).

2. The flow of goods from warehouse to shelves improves. Small or individual piece lot sizes reduce lot delay inventories, which simplifies inventory flow and its management.

3. Employees with multiple skills are used more efficiently. Having employees trained to work on different parts of the process allows companies to move workers where they are needed.

4. Production scheduling and work hour consistency synchronized with demand. If there is no demand for a product at the time, it is not made. This saves the company money, either by not having to pay workers overtime or by having them focus on other work or participate in training.

5. Increased emphasis on supplier relationships. A company without inventory does not want a supply system problem that creates a part shortage. This makes supplier relationships extremely important.

National Conference on Advancements in Mechanical engineering and Energy environment(6-7 January 2012) SLIET, Longowal

6. Supplies come in at regular intervals throughout the production day. Supply is synchronized with production demand and the optimal amount of inventory is on hand at any time. When parts move directly from the truck to the point of assembly, the need for storage facilities is reduced.

Conclusion

Any inventory strategy is aimed at to increase efficiency and decrease waste by receiving goods only as and when they are needed in the production process, thereby reducing inventory costs. JIT method requires that managers are able to accurately forecast demand just on the time that they are needed and maintain their inventory holding and carrying costs to a minimum level close to “zero”. This results in less working capital being blocked, less storage space required, less spoilage and minimum deterioration. This inventory supply system represents a shift away from the older "just in case" strategy where manufacturers carried large inventories in case higher demand had to be met.

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