Session 19 Just-In-Time Manufacturing

1
Session 19Just-In-Time Manufacturing

• JIT Impact on the MPC System
• JIT Continuous Improvement
• JIT Building Blocks
• Elements of JIT
• Kanban Systems
• Single Card Kanban
• Kanban Calculations
• JIT Impact on the MPS
• Mixed Model Final Assembly
• JIT Assembly/Component Scheduling

2
JIT Impact on the MPC System

• Eliminating discrete batches in floor of
  production rates
• Level, mixed model MPS
• Paperless, visual shop floor control
• Eliminating transactions/Backflushing
• Streamlined vendor scheduling

3
Manufacturing Planning and Control System and JIT
4
Building Blocks for Just-in-Time
5
JIT Benefit Summary

• Improvement
• Aggregate
• percentage
• (3-5 years) Annual percentage
• Manufacturing cycle time reduction 80-90
  30-40
• Inventory reductions
• Raw materials 35-70 10-30
• Work-in-process 70-90 30-50
• Finished goods 60-90 25-60
• Labor cost reductions
• Direct 10-50 3-20
• Indirect 20-60 3-20
• Space requirements reduction 40-80 25-50
• Quality cost reduction 25-60 10-30
• Material cost reduction 5-25 2-10

6
JIT Objectives

• Ultimate objectives
• Zero Inventory.
• Zero lead time.
• Zero failures.
• Flow process.
• Flexible manufacture.
• Eliminate waste.

7
JIT Building Blocks

• Product design
• Few bill of material levels.
• Manufacturability in production cells.
• Achievable quality.
• Appropriate quality.
• Standard parts.
• Modular design.

8
JIT Building Blocks

• Process design
• Setup/lot size reduction.
• Quality improvement.
• Manufacturing cells.
• Limited work-in-process.
• Production bandwidth.
• No stockrooms.
• Service enhancements.

9
JIT Building Blocks

• Human/organizational elements
• Whole person.
• Cross training/job rotation.
• Flexible labor.
• Continual improvement.
• Limited direct/indirect distinction.
• Cost accounting/performance measurement.
• Information system changes.
• Leadership/project management.

10
JIT Building Blocks

• Manufacturing planning and control
• Pull systems.
• Rapid flow times.
• Small container sizes.
• Paperless systems.
• Visual systems.
• Level loading.
• MRP interface.
• Close purchasing/vendor relationships.
• JIT software.
• Reduced production reporting/inventory
  transaction processing
• Hidden factory cost reductions.

11
Single Kanban System
12
Kanban Calculation

• Calculate the number of kanbans required for the
  following two components produced in a factory
  that works five days per week
• A B
• Usage 240/week 120/day
• Lead time 1 week 2 weeks
• Container size 20 units 30 units
• Safety stock 25 percent 0

13
Kanbans Calculations

• A B
• Usage (per week) 240 600
• Lead time 1 2
• Container size 20 30
• Safety 25 0
• Kanbans 15 40
• Number of Kanbans Usage x Lead time x (1
  safety stock) / container size
• Note that B's Usage must be converted to weeks
• A 240 u/week x 1 week x (1 .25) 15
• 20
• B 120 u/day x 10 days x (1 0) 40
• 30

14
Master Production Schedule Data

• Model
• __________________________________________________
  _____________
• 151A 151B 151C 151D
• Option configurations
• Handle Basic Basic Executive Executive
• Pan Sheet Clad Sheet Clad
• Annual forecast (units) 200,000 2,500 25,000 100,0
  00
• Possible mixed model
• master production
• schedules
• Daily batch MPS 800 10 100 400
• Hourly batch MPS 100 1.25 12.5 50
• Minimum batch MPS 80 1 10 40
• data are based on a 250-day year and an
  eight-hour work day.

15
Mixed Model Final Assembly

• 5. The Yakima Lash Company produced four models.
  The forecasts of annual demand for each of the
  four are as follows
• Model
• I II III IV
• Forecast of annual demand 500 1,500 3,500
  4,500
• a. Use a 250-day year and an eight-hour day to
  determine the mixed-model-level master schedule
  for a daily batch and hourly batch with minimum
  batch sizes.
• b. What would the schedule of production look
  like for an eight-hour day using mixed-model
  minimum batch size production?

16
Problem 5. Yakima Lash Company

• Product line I II III IV
• Forecast for year 500 1,500 3,500 4,500
• Daily batch 2 6 14 18
• Hourly batch .25 .75 1.75 2.25
• Mixed model 1 3 7 9
• Schedule for the day-order of the products'
  production and number of each produced.
• 8-12 IV,IV,IV,IV,IV,IV,IV,IV,IV,III,III,III,III,I
  II,III,III,II,II,II,I
• 12-4 IV,IV,IV,IV,IV,IV,IV,IV,IV,III,III,III,III,I
  II,III,III,II,II,II,I

17
Assembly/Component Scheduling

• Hofmann Enterprises produces three products
  using a mixed-model assembly line. This line is
  operated eight hours a day for 250 days per year,
  and produces 14 units per hour of all products.
  The forecasts of annual demand for each of the
  three products are as follows
• Product Annual
• (code names) forecast
• John 16,000 units
• Goldie 8,000 units
• Ziggy 4,000 units

18
Hoffman Enterprises Example

• Determine the mixed-model master production
  schedule for a daily batch with minimum batch
  size for all three products.
• Calculation made assuming a 250 day year
• Annual Daily Mixed Model
• Product Forecast Production Minimum Batch Size
• John 16000 64 4
• Goldie 8000 32 2
• Ziggy 4000 16 1

19
Hoffman Enterprises Example

• Prepare a daily schedule indicating the number of
  Johns, Goldies, and Ziggys to be produced each
  day.
• Hours of the Day
• 1 2 3 4 5 6 7 8
• John John John John John John John John
• John John John John John John John John
• John John John John John John John John
• John John John John John John John John
• Goldie Goldie Goldie Goldie Goldie Goldie
  Goldie Goldie
• Goldie Goldie Goldie Goldie Goldie Goldie
  Goldie Goldie
• Ziggy Ziggy Ziggy Ziggy Ziggy Ziggy Ziggy Ziggy
• John John John John John John John John
• John John John John John John John John
• John John John John John John John John
• John John John John John John John John
• Goldie Goldie Goldie Goldie Goldie Goldie
  Goldie Goldie
• Goldie Goldie Goldie Goldie Goldie Goldie
  Goldie Goldie
• Ziggy Ziggy Ziggy Ziggy Ziggy Ziggy Ziggy Ziggy

20
Hoffman Enterprises Example

• Product John requires 2 units of component X and
  one unit of component Y to make a finished unit
  of John. Component X is produced on a JIT pull
  system basis by a separate manufacturing
  department. Determine the number of kanbans
  required for component X if the lead time is 2
  days, the safety factor is 10, and the container
  size is 20 units.
• Kanbans 2 x 64 x 2 x (1 .10) / 20 15
• Usage Lead Time Safety Percent Container Kanbans
• 128/day 2 days 10 20 units 15