The Migration of JIT Precepts into Non-Manufacturing Environments

JIT, Lean and Agile-

Andrew Farmer

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Lets Get Philosophical…

“A philosophy of manufacturing excellence based on the planned elimination of all waste and continuous improvement of productivity, encompassing successful

execution of all manufacturing activities to produce a final product from procurement and design to final delivery[1].”

The definition of JITAmerican Production and Inventory Control Society, 1992

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A New Definition…

“A philosophy of excellence based on the planned elimination of all waste and continuous improvement of productivity, encompassing successful execution of all activities to produce a final product from procurement and design to final delivery.”

The new definition of JITAdapted; American Production and Inventory Control Society, 1992

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Thinking outside the factory

• A 1986 study called “JIT for orders as well as parts?” showed truly successful practitioners of JIT apply its principles beyond manufacturing.

• It demonstrated to steel manufacturers in the US how they could reduce their lead time from 12 weeks to 2 weeks by applying JIT precepts to their information flow system alone.

Chase and Aquilano[2] (1992) further simplify the definition of JIT as essentially a

“process-oriented waste-elimination philosophy”

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Translating JIT from Manufacturing to Services – 6 Steps

1. Total Visibility- of equipment, people, material and processes

2. Synchronisation and Balance- of production to sales and supply to production

3. Respect for the People- who are responsible for production, problem solving and improvement

4. Flexibility- adapt production to customer needs

5. Continuous Improvement

6. Holistic Approach“JIT: not just for the factory”[3]

Adapted; Benson, R.J.(1986)

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1. Total Visibility

• All components of the processes employed to produce a good / service should be visible by all those participating in the process

• Allows learning monitoring and improvement of those processes.

• Essential in services as often customer is part of the process and may define the quality / value of the service by what they can see in the process

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CASE STUDY: Northern Telecom Inc.

• Northern Telecom Inc.’s repair shop for Circuit Boards – implemented work cells to keep all the necessary repair work within one cell and a single team of employees[4].

• Increased visibility and understanding of entire process for all team members as they worked together as opposed to production line system.

• Customer service levels rose from 85% to 100% in two years with increased perception of service quality.

• Work-in-progress inventory reduced by 75% and cycle times reduced from 1 week to 48 hours.

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2. Synchronisation and Balance• Arguably more important in services than in manufacturing

• Output must match customer demand, difficult as lead and delivery times very short for services and alternatives available.

• Even more vital as services cannot inventory their output.

• Using the Kaizen approach, hosting a series of Rapid Improvement Workshops (RIWs) the Scottish government managed to reduce customer waiting times in the health sector from 23 to 12 days

• Improved processing times by 66% in local government offices

• Achieved a whopping 105 person reduction in manpower and £31 million budget saving in 10 months[5]

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3. Respect for the People• Often direct contact between customers and employees, who have a huge role in

affecting the customers perception of service.

• The value of these employees should be recognised by the company’s management by forging collaborative relationships allowing worker focused process improvements allowing employees to work smarter not harder.

• One higher education institute of the UK was able to save 5419 recurring staff days equivalent to 24.63 Full time employees through training and RIWs

• Employees reported they were pleased to be engaged in an improvement process , and felt more aligned with the overall strategy of the organisation[6].

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4. Flexibility

• Services are highly customised and often change with trends and markets.

• Investment in employees - creating multi-skilled workers involved in decisions training and education programs

• In my local primary school when the only Special Educational Needs (SEN) teacher in the school was retiring, instead of hiring a new person, SEN training was given to two existing teachers saving £20,000 from the school budget per year.

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5. Continuous Improvement• Never satisfied with the current environment, always moving closer to the ideal situation. Service operations are ripe for continuous improvement

• Billesbach and Schneider managed to specify techniques that could be transferred to an administrative system, re-layout, merger of operations, quality control, education of employees.

Manufacturing Setting Equivalent Administrative Setting Storing Batching, Filing

Moving Mailing, Transmitting

Expediting “Rush Ordering”

Scheduling Routeing, Prioritising

Inspecting Proofing

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6. Holistic approach • JIT must be adopted throughout the all levels and in all functions of the

organisation.

• In services especially, innovations cut across departments requiring cross

functional-support

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6. Holistic approach[7] Table of Key characteristics 1. Suppliers

• Few suppliers • Nearby suppliers • Long-term collaborative relationship • Suppliers encouraged to extent JIT to

their suppliers

2. Quantities •Steady output rate •Frequent delivery •Long term contracts •Minimal release paperwork •Exact quantity supply •Suppliers to reduce production lot sizes or hold material

3. Quality •Minimal product spec imposed on supplier whilst helping suppliers to meet quality spec. •Close relationships between buyers/suppliers/quality assurance. •Suppliers encouraged to use process control instead of QI

4. Shipping •Gain control of shipping by using company owned or contract shipping /warehousing

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Recommendations

• Compile current research and tailor for the service industry

• Modify the JIT terminology

• Include service sector examples for operations management courses

• Develop research structure

• Develop better models and performance measurements for realising the success of JIT when applied[9]

With nearly 80% of the UK population working in services, it is important that more emphasis and importance is placed on optimising their operational processes[8].

Thank you for listening

Q&A

Potential problems exporting JIT to services

Organisational culture and structure that resists change. i.e. in some of the universities trying to adopt a lean strategy, an over interpretation of

academic freedom was preventing standardisation. Blame culture within industries has meant people are not motivated to improve, and

hesitant to take ownership of improvement intiative. People resisting change

Lack of ownershipPoor selection of improvement team members

Failure of leadership to drive changeCompartmentalisation or silo working

Weak link between improvement programmes and strategyLack of resources to support the programme and the changes

Poor communication of change initiatives throughout the organisation