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Just-In-Time and Lean Systems - ADDVALUE - Nilesh Arora

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Know about Just-In-Time and Lean manufacturing system. Find benefits and difference between JIT and Lean Manufacturing by Nilesh Arora, a founder of AddValue Consulting Inc. – PowerPoint PPT presentation

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Title: Just-In-Time and Lean Systems - ADDVALUE - Nilesh Arora


1
JIT Lean Manufacturing
by
Best Performing Consulting Organization
Adding Value In Totality !!
2
Session Topics
  • What is JIT?
  • Benefits of JIT
  • Value Added Management
  • Push vs. Pull
  • Buffered vs. Lean Manufacturing
  • Performance Measures

3
What is Just-in-Time?
  • Management philosophy of continuous and forced
    problem solving
  • Supplies and components are pulled through
    system to arrive where they are needed when they
    are needed.

4
What Does Just-in-Time Do?
  • Attacks waste
  • Anything not adding value to the product
  • Customers perspective
  • Exposes problems and bottlenecks
  • Caused by variability
  • Deviation from optimum
  • Achieves streamlined production
  • By reducing inventory

5
What is Waste
  • Waste is anything other than the minimum amount
    of equipment, materials, parts, space, and
    workers time, which are absolutely essential to
    add value to the product.
  • Shoichiro Toyoda President, Toyota

6
Just-In-Time Manufacturing
  • JIT seeks to reduce waste. Waste is viewed as a
    symptom of some unsolved problem. Types of waste
    include
  • Overproduction
  • Waiting Time
  • Movement
  • Inventory
  • Product Defects
  • Process Waste

7
Just-In-Time Manufacturing
  • JIT is used for many activities including
  • Inventory Reduction
  • Quality Improvement
  • Lead Time Reduction
  • Continuous Improvement (Kaizen)
  • Preventive Maintenance

8
Major Objective of JIT
  • Identify the causes of system variance (waste)
    and eliminate or control these causes. By
    attacking the causes of variance, JIT can reduce
    the dependency of the manufacturing process on
    wasteful buffers like excessive inventory, long
    lead times, and idle capacity.

9
Variability Occurs Because
  • Employees, machines, and suppliers produce units
    that do not conform to standards, are late, or
    are not the proper quantity
  • Engineering drawings or specifications are
    inaccurate
  • Production personnel try to produce before
    drawings or specifications are complete
  • Customer demands are unknown

10
Benefits of JIT
  • Shorter Lead Times (Faster Response)
  • Lower Defect Rates
  • Reduced Inventories
  • Enhanced Flexibility

11
Advantages Of Faster Response Times
  • Increased Productivity
  • Increased Quality
  • Reduced Risk
  • Increased Profitability
  • Increased Market Share
  • Increased Product Variety

12
Value Added Management
  • A Strategy for Time-Based Competition
  • Focus on
  • Reducing Lead Times
  • Process Flow Analysis
  • Eliminating or Reduce Non-Value Adding Activities
  • WIP Storage
  • Material Movement
  • Inspection
  • Rework
  • Unscheduled Maintenance
  • Changeovers

13
Value Added Management
  • Value-Added Activity Time
  • The time required to perform those activities
    essential to the production of a product, or the
    delivery of a service.

14
Value Added Management
  • Non Value-Adding Activities
  • Any activity that does not add value to the
    product being built, or the service being
    offered. Non value-adding activities are waste.

15
Value Added Management
  • Examples of Non-Value Added Activities
  • Administrative Processes Paperwork
  • Process Delays
  • Material Movement
  • Material Storage
  • Inspection
  • Rework
  • Unscheduled Maintenance
  • Machine Changeovers

16
Value Added Management
  • Cycle Time Improvements
  • Improvements to cycle times are achieved by
    reducing or eliminating non value-adding
    activities

17
Value Added Management
  • Identifying Non Value-Adding Activities
  • The key to identifying non value-adding
    activities is process flow analysis.

18
Value Added Management
Value-Added Time Analysis Worksheet
Process Activity
Total Time
Value Added Time
Non Value Added Time
19
Value Added Management
Total Mfg. Lead Time
95
5
Non Value-Adding
Value Adding
Traditional Response
2
98
Non Value-Adding
Value Adding
50
50
Value-Adding Response
Non Value Adding
Value Adding
Lead Time Reduced Non Value-Adding Time Reduced
20
Value Added Ratio
  • V.A.R. Value Added Time
  • Total Cycle Time
  • Improved By
  • Eliminating or Reducing Non Value-Adding Time
  • WIP Storage/FGI Storage
  • Material Movement
  • Rework
  • Unscheduled Maintenance
  • Changeover Time
  • ANYTHING THAT DOES NOT ADD VALUE FOR
    THE CUSTOMER

Increase V.A.R. by Reducing Cycle Time Forces
Continuous Process Flow Analysis Drives Quality
Improvement
21
Value Added Management Results
  • Oregon Cutting Systems Output Per Hour Up 55
  • Lead Time from 21 to 1 day
  • Abbott Laboratories Production Cost Down 40
  • Lead Time Reduced gt 80
  • Lockheed Defect Rate Reduced 80 Rework
    Down 91
  • Lead Time Down by 95
  • Texas Instruments Lead Time Down 15.8 to 3.7
    days

22
JIT Inventory
  • Why do companies hold inventories?
  • What are some advantages to holding inventories?
  • What are some problems with holding inventories?

23
Inventory
  • Traditional inventory exists in case problems
    arise
  • JIT objective Reduce inventory
  • JIT requires
  • Small lot sizes
  • Low setup time
  • Containers for fixed number of parts
  • JIT inventory Minimum inventory to keep system
    running

24
Inventory Hides Problems
14
25
Lowering Inventory Reduces Waste
26
Lowering Inventory Reduces Waste
27
Lowering Inventory Reduces Waste
28
JIT Inventory Tactics
  • Use a pull system to move inventory
  • Reduce lot size
  • Reduce setup time
  • Develop Just-in-Time delivery systems with
    suppliers
  • Deliver directly to point of use
  • Perform-to-schedule
  • Use group technology

29
To Lower InventoryReduce Lot Sizes
30
Reducing Lot Sizes Increases the Number of Lots
Customer orders 10
Lot size 5
Lot 1
Lot 2
Lot size 2
Lot 1
Lot 2
Lot 3
Lot 4
Lot 5
31
Which Increases Inventory Costs
Cost
Total Cost
Holding Cost
Setup Cost
Lot Size
Optimal Lot Size
SmallerLot Size
32
Unless Setup Costs are Reduced
33
Minimizing Waste Reducing Setup Times
  • What are the consequences of long setup times?
  • What are the advantages of short setup times?

20
34
Steps to Reduce Setup Time
35
Push versus Pull
  • Push system material is pushed into downstream
    workstations regardless of whether resources are
    available
  • Pull system material is pulled to a workstation
    just as it is needed

36
Push Scheduling
  • Moves an order to the next operation or work
    center in its route immediately on completion of
    the current activity whether or not that work
    center can begin processing it.

37
Traditional Push System
F I N I S H E D G O O D S Inv.
M A T E R I A L Inv.
Process
Process
Process
Work-In-Process Staging Area
Work-In-Process Staging Area
Material Is Moved Down Stream After Processing at
Each Stage Work-In-Process Inventories
Develop Traditional Efficiency Measures Encourage
Overproduction
38
Push Scheduling Benefits
  • Implementation is relatively simple
  • Eliminates the need to coordinate between work
    centers
  • Keeps a work center busy as long as work remains
    in its queue

39
Push Scheduling Problems
  • High WIP Levels
  • Higher Quality Problems
  • Hides Processing Problems
  • Requires dispatching rules to sequence orders

40
Pull Scheduling
  • Orders are processed and transferred in response
    to signals from downstream work centers

41
Alternative Pull System
Signal Supplier
C U S T O M E R D E M A N D
Signal
M A T E R I A L Inv.
Process
Process
Process
Signal
Signal
Signal
FGI
Pull Systems Move Material In Response To A
Signal From a Downstream Process Minimal WIP
Buildup/Reduced Space Requirements Reduced
Material Inventory/ More Frequent Supplier
Deliveries Minimal Finished Goods
Inventory Emphasis on Throughput Not Efficiencies
42
Pull Scheduling Benefits
  • Simplifies schedulingeach center builds only
    what is required when needed
  • Orders are driven by real demand thus minimizing
    inventory accumulation
  • Makes problems immediately apparent
  • Prevents additional load from piling up extra
    work at the bottleneck in the event of some
    problem

43
Pull Scheduling Problems
  • Challenging to implement
  • Success requires coordination among related work
    centers
  • Requires good planning
  • Must limit interventions requesting changes in
    product mix, quantity, or due dates.

44
Layout
  • JIT objective Reduce movement of people and
    material
  • Movement is waste!
  • JIT requires
  • Work cells for product families
  • Moveable or changeable machines
  • Short distances
  • Little space for inventory
  • Delivery directly to work areas

45
Work Cell versus Process Layout
Process Layout
Work Cell
1
Lathe
Saw
2
Saw
Press
Lathe
Saw
2
Lathe
Lathe
4
5
Heat
Treat
Grinder
3
1
Grinder
Press
Heat
Treat
6
Grinder
Press
46
Layout Tactics
  • Distance reduction
  • Build work cells for families of products
  • Increased flexibility
  • Flexible or movable equipment
  • Impact on employees
  • Cross-training immediate feedback
  • Poka-yoke self-testing functions
  • Reduced space and inventory
  • Design little space for inventory

47
Just-In-Time Manufacturing
48
Just-in-Time
  • People Management
  • Housekeeping
  • Control Through Visibility
  • Total Quality
  • Problem Solving
  • Employee Involvement
  • Technology Management
  • Structured Flows
  • Set-Up Reduction
  • Small Lot Sizes

JIT
  • Systems Management
  • Balanced Lines
  • TPM
  • Supplier Partnerships
  • Pull System

49
Buffered Manufacturing
  • Buffered Manufacturing Has Limited Goals
  • Acceptable Number Of Defects
  • Acceptable Inventory Levels
  • Limited Product Variety
  • Acceptable Levels Of Waste

50
Lean Manufacturing
  • Lean Manufacturing Seeks Perfection
  • Strives To Reduce Costs
  • Strives For Zero Defects
  • Strives To Reduce Inventory
  • Strives For Greater Product Variety
  • Strives To Reduce Cycle Times
  • Seeks To Eliminate Waste
  • Seeks Continuous Process Improvement

51
Lean Manufacturing
  • Key Features Of Lean Manufacturing
  • Transfers Tasks To Workers Adding Value
  • Quickly Uncovers Solves Problems

52
Employee Empowerment
  • Getting employees involved in product process
    improvements
  • Know job best
  • JIT requires
  • Empowerment
  • Cross-training
  • Training support
  • Few job classifications

1995 Corel Corp.
53
Lean Manufacturing
  • Basic Tenets of Lean Manufacturing
  • Produce Only What Is Demanded
  • Produce At The Market Rate Of Demand
  • Produce With Perfect Quality
  • Produce With No Waste
  • Develop Employees Productive Potential

54
Traditional Performance Measures
  • Traditional Measures Focus On Outputs. This
    Leads To
  • Long Production Runs
  • Large Inventories
  • Large Buffers
  • Long Lead Times
  • Poorer Quality
  • Lack Of Responsiveness

55
Time-Based Performance Measures
  • Time-Based Measures Track Process Improvements
  • Value-Added Ratio
  • Setup Times Number
  • Throughput Times
  • Quality
  • Delivery Speed Reliability

56
New Management Measures
Customer Focused
On-Time Delivery Defects Customer Satisfaction
Drivers of Competitive Mfg.
Measures are Stable Capable Improving
Production Focused
Throughput WIP FGI Lead Time
Process Focused
Value Added Ratio Changeover Times
57
New Business Paradigm
New Performance Measures Time-Based - Quality
Based - Customer Focused

Value-Added Management Process Flow Analysis -
Focus on Time
Competing Through Manufacturing Just-In-Time -
Pull Manufacturing Philosophies
Total Quality Leadership - Culture- Customers-
Suppliers - Process Improvement People- Business
Planning - Communication - Recognition
58
Homework Assignment
  • Estimate the value added ratio for some process
    in your organization.
  • Identify 3 sources of waste in your operation?
    Is it possible to eliminate the waste?
  • What performance measures do you use? Do the
    measures help or hinder your continuous
    improvement efforts? Can you suggest better
    performance measures?

59
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60
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61
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