Just-in-Time (JIT) Manufacturing
What is "Just in Time"?
Just-in-Time Manufacturing (JIT) is one of the main principles of lean manufacturing. It is the idea of producing exactly what the customer wants, in the quantities they want, where they want it, and when they want it without it being delayed or held up in inventory.
Just In Time (JIT) developed from the principles used first in Ford’s initial production lines where they tried to use the "flow principle." Toyota have then refined this flow principle as they realized that the biggest wastes in manufacturing are overproduction and inventory: making what the customer wants too late or too early and making it in quantities that the customer does not need. In postwar Japan, to use any of the scarce resources for anything other than what you needed today was a very risky move! This article "History of Lean Manufacturing" will give you some insight as to how these principles have developed.
JIT Removes Waste in Your Processes
Inventory that is created by overproduction is part of the Seven Wastes as defined within lean manufacturing. One of the major aims of implementing lean manufacturing is to reduce waste, although this should be done with an eye to creating flow within the organization. Flow that allows product to be manufactured at the pull of the customer is JIT.
Inventory is probably the biggest waste in lean manufacturing. The inventory in your system does more than just tie up your hard earned cash, it hides all the other problems that you have like the level of water in a river hides all of the rocks below.
Just-in-Time Is of the Main Pillars of Lean
JIT and the Toyota Production System
The Toyota Production System (TPS) is what lean manufacturing is based on and JIT is one of the main pillars of TPS.
Along with Jidoka (Built in Quality) and respect for people, JIT forms Lean manufacturing. Built on a stable foundation of repeatable and predictable processes these pillars help you achieve customer satisfaction and thus business success.
The Origins of JIT
Toyota management got the idea for JIT from, of all places, a supermarket they saw when they visited America. They observed that a supermarket only had to restock shelves with what the customers were actually taking; they did not keep ordering the same quantities each week and have some shelves overflowing and others empty. Each shelf had a fixed quantity of products from which the customers would select and this would then be replenished at the end of each day.
Many JIT and Kanban systems are very much based around the supermarket principle; the customer is supplied from a finished goods supermarket and the factory then works to restock that supermarket. Care is taken to maintain the stock levels within the supermarket to the minimum levels.
Together with Jidoka and Respect for People JIT is one of the main pillars of Lean and the TPS, without which Lean would fail.
Reducing the Order to a Payment Timeline
The Order to Cash Timeline
One of the biggest problems that many businesses face is cash flow. If they have to wait for their customers to pay, they then do not have cash to pay for their suppliers to build more products. Many companies have to spend a huge amount of their time balancing their cash flow and their production because of this.
Implementing JIT does not just reduce your lead times; it also reduces the time between your getting the order and the cash actually getting into your hands. This is vital if you want to reinvest that cash back into your business to satisfy more customers.
Traditional manufacturing drives the creation of inventory through the waste of overproduction; we run large batches of material on our machines before the customer wants it or in quantities in excess of what the customer wants. Why? "Because we have always done it this way" is one simple answer. Typically the main reason is due to the setup time of the machine. To ensure that we get the best efficiency out of the machine, we try to run an economical batch size.
We also produce "Just in Case": we guess (forecast) what the customer will want rather than basing our production on what they actually order.
Improvements in Production Planning
Large batches also cause problems with planning. Different batches of materials have to be coordinated to be produced at around the same time. This causes problems as things get out of synchronization and we end up with delays with large amounts of work in progress sat there waiting for other components to be processed.
We also plan to have large amounts of inventory; we plan delays between processes to allow a “cushion” or “safety” stock to build just in case there are problems between these processes. This allows each process to have other work to process should there be problems with quality, delivery, breakdowns or any other problem, the planners feel more secure that the processes will not be stopped.
One of the main aims of lean manufacturing is to remove waste, especially the waste of inventory, this is the main waste that is tackled when implementing JIT as one of the principles of lean manufacturing.
Inventory and Overproduction
The most obvious problem with inventory is the need for space. Large amounts of inventory requires large amounts of space to store it, either on the shop floor as work in progress, or within the stores as finished goods or raw materials. The physical space and the containers are all a cost to our business. Just in Time (JIT) looks to free up this space by eliminating this excessive inventory.
Inventory also needs to be moved around: extra inventory incurs the added cost of people and equipment to do this moving as well as the opportunity for damage.
The most direct impact that inventory has on our customers has to do with our lead times. these large batches and planning delays tend to ensure that our lead times are measured in weeks rather than days. Producing a value stream map of your business can demonstrate the effect of inventory on your lead times and show the level of improvement that you could gain through implementing Just-in-Time.
To implement Just In Time, the first thing we need to do is lower inventory levels. To do this we have to tackle several issues. The first to tackle is almost always the issue of setup times. In most companies the size of the batch is driven by the time taken to set up the machines, often many hours to change from one production item to the next. This time has to be paid for, so it is allowed for within the cost and an economical batch quantity is defined: normally a few weeks worth of production or more depending on the industry.
The way to tackle setups is to use a lean manufacturing tool called SMED, Single Minute Exchange of Die. The aim of SMED is exactly what it says, it tries to reduce setups to single minutes or seconds. It achieves this by eliminating all of the obvious waste in the setup and separating the “internal” and “external” factors of the setup, the aim being to have as much work done for the setup whilst the machine is still running so that the down time is minimized.
Once setups can be reduced to this level, the size of the batch can be reduced. This gives the opportunity to bring operations closer together and enable materials to flow between them. This reduces the need for transportation and excessive amounts of space. The reduction in batch sizes immediately reduces your lead times as each batch will take less time to be processed before you see finished product.
Beyond this we start to look at developing cells and flow lines, then introducing a pull system through Kanban. We can also look at smaller dedicated machines for these cells and lines instead of some of the larger “super” machines that some companies employ to do every product in the factory.
Lowering the level of inventory is like lowering the sea level, each time it gets lower we run the risk of hitting some rocks, we have to either predict which rocks we are going to hit and deal with them, or lower the level of inventory and react quickly to the problem that occurs!
One Piece Flow
The benefits of Implementing Just In Time, creating “single piece” flow at the pull of the customer using a flow line approach:
- Reduced cash tied up in inventory.
- Reduced space required.
- Reduced requirements for transportation and associated people and equipment.
- Reduced lead times.
- Reduced planning complexity.
- Problems seen sooner and reacted to, not hidden by the inventory sea!
The benefits of lean manufacturing implementation can be very significant, normally far in excess of what most people believe possible. Implementing the principles of Just In Time manufacturing along with the other main principles of Lean Manufacturing (Respect and involving all of your employees in a continual improvement drive towards perfection) will help your business not just to survive, but to flourish! It will help you to reduce costs and improve profits significantly.
Just In Time at Dell
Lean Manufacturing Principles
Lean tools for Just in Time
The other lean principles relevant to implementing Just in Time manufacturing are detailed below with links to the relevant lean manufacturing tools to give you additional information on their implementation.
The reason for implementing Just in Time is not just to eliminate the obvious waste or muda as described by the Seven Wastes but also to reduce the less known wastes of Mura - unevenness and Muri - overburden. Muri and Mura describe the problems created by production demand that varies excessively causing overburden on the operators in the system.
These problems can be tackled by implementing Just in Time principles such as Heijunka, heijunka is the process of smoothing production for JIT using tools such as the heijunka board for JIT. Work-cells can also be balanced to help you to achieve Takt time by using tools such as the Yamazumi chart.
The batch size reductions required to enable Just in Time and Heijunka are achieved through the use of SMED (Single Minute exchange of Die) to reduce change over and setup times to a fraction of the current times. We also need to improve our machine reliability through the use of TPM (total productive maintenance) and performance measurements such as OEE.
Once we have smaller batches we can work on the layout to give us flow and pull production through our manufacturing systems using Kanban to drive our JIT system.
The following are useful links for business support and lean manufacturing resources.
These links will help you to find more information regarding Just in Time manufacturing (JIT) and lean manufacturing.