16

JIT, TPS, and Lean

Operations

PowerPoint presentation to accompany

Heizer and Render
Operations Management, Eleventh Edition
Principles of Operations Management, Ninth Edition

PowerPoint slides by Jeff Heyl

© 2014
© 2014
Pearson
Pearson
Education,
Education,
Inc.Inc. 16 - 1
 Outline

► Just-in-Time, the Toyota Production

System, and Lean Operations
► Just-in-Time (JIT)
► Toyota Production System (TPS)
► Lean Operations

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 JIT, TPS, & LEAN OPERATIONS
► Eliminate Waste
► Remove Variability
► Improve Throughput
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 JIT/TPS/Lean Operations

Good production systems require

that managers address three issues
that are pervasive and fundamental
to operations management:
eliminate waste, remove variability,
and improve throughput

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 Eliminate Waste
▶ Waste is anything that does not add
value from the customer point of view
▶ Storage, inspection, delay, waiting in
queues, and defective products do not
add value and are 100% waste

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 Eliminate Waste
▶Ohno’s Seven Wastes
▶Overproduction
▶Queues
▶Transportation
▶Inventory
▶Motion
▶Overprocessing
▶Defective products
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 Eliminate Waste
▶The 5Ss
▶Sort/segregate – when in doubt, throw it
out
▶Simplify/straighten – methods analysis
tools
▶Shine/sweep – clean daily
▶Standardize – remove variations from
processes
▶Sustain/self-discipline – review work and
recognize progress
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 Eliminate Waste
▶The 5Ss
▶Sort/segregate – when in doubt, throw it
out
▶Simplify/straighten
Two additional Ss – methods analysis
tools
►Safety – built in good practices
▶Shine/sweep – clean daily
►Support/maintenance – reduce
▶Standardize – remove variations from
variability and unplanned downtime
processes
▶Sustain/self-discipline – review work and
recognize progress
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 Remove Variability
▶ JIT systems require managers to
reduce variability caused by both
internal and external factors
▶ Variability is any deviation from the
optimum process
▶ Inventory hides variability
▶ Less variability results in less waste

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 Sources of Variability
▶ Poor production processes resulting
in improper quantities, late, or non-
conforming units
▶ Unknown customer demands
▶ Incomplete or inaccurate drawings,
specifications, or bills of material
i n v en to ry
t h J I T a nd o l s i n
Bo e f f e c tiv e t o
u c t i o n a r e a r i a b i li ty
red a u se s o fv
n t i f y i ng c
id e
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 Improve Throughput
▶ The rate at which units move through a
production process
▶ A pull system increases throughput
▶ processes are activated by actual, not
forecasted demand
▶ Customer get
 what they want
 when they want
 where they want

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 Improve Throughput
▶ By pulling material in small lots,
inventory cushions are removed,
exposing problems and emphasizing
continual improvement
▶ Manufacturing cycle time is reduced

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 JUST-IN-TIME
► JIT Inventory
► Level schedule
► Kanban
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 Just-In-Time (JIT)
▶ Powerful strategy for improving operations
▶ Materials arrive where they
are needed when they are
needed
▶ Identifying problems and
driving out waste reduces
costs and variability and
improves throughput
▶ Requires a meaningful
buyer-supplier relationship

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 JIT and Competitive
Advantage

Figure 16.1
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 JIT Inventory
▶ Inventory is at the minimum level
necessary to keep operations running
TABLE 16.2
JIT INVENTORY TACTICS
Use a pull system to move inventory
Reduce lot sizes
Develop just-in-time delivery systems with suppliers
Deliver directly to point of use
Perform to schedule
Reduce setup time
Use group technology

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 Reduce Variability

Inventory level

Process
Scrap downtime

Setup Quality
time problems

Late deliveries
Figure 16.3
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 Reduce Variability

Inventory
level

Process
Scrap downtime

Setup Quality
time problems

Late deliveries
Figure 16.3
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 Reduce Variability

Inventory
level

No scrap Quality
problems
Setup removed
time
reduced Process
No late downtime
deliveries removed
Figure 16.3
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 Reduce Inventory
▶ Reducing inventory uncovers the
“rocks”
▶ Problems are exposed
▶ Ultimately there will
Inventory
be virtually no
inventory and no
problems
▶ Shingo says “Inventory is evil”

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 JIT Scheduling
▶ Schedules must be communicated
inside and outside the organization
▶ Level schedules
▶ Process frequent small batches
▶ Freezing the schedule helps stability
▶ Kanban
▶ Signals used in a pull system

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 Level Schedules
▶ Process frequent small batches rather
than a few large batches
▶ Make and move small lots so the level
schedule is economical
▶ Freezing the schedule closest to the
due dates can improve performance

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 Kanban
▶ Kanban is the Japanese word for card
▶ The card is an authorization for the next
container of material to be produced
▶ A sequence of kanbans
pulls material through
the process
▶ Many different sorts of
signals are used, but
the system is still called
a kanban

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 Kanban
 A Kanban system moves parts through production
via a “pull” from a signal: output generated in
response to actual demand

Material/Parts Final Finished Customer

Supplier assembly goods order

Work
cell

Kanban card
Kanban card Kanban card (pull signal)
(pull signal) (pull signal)

Kanban Signals “Pull” Material Through the Production Process

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 More Kanban
▶ Usually each card controls a specific
quantity or parts although multiple card
systems may be used if there are several
components or if the lot size is different
from the move size

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 The Number of Kanban Cards
or Containers
▶ Need to know the lead time needed
to produce a container of parts
▶ Need to know the amount of safety
stock needed

Demand during Safety

Number of kanbans lead time + stock
(containers) =
Size of container

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 Number of Kanbans Example
Daily demand = 500 cakes
Production lead time = 2 days
(Wait time +
Material handling time +
Processing time)
Safety stock = 1/2 day
Container size = 250 cakes

Demand during lead time = 2 days x 500 cakes = 1,000

Safety stock = ½ x Daily demand = 250
1,000 + 250
Number of kanbans = =5
250
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 TOYOTA PRODUCTION SYSTEM

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 Toyota Production System
▶ Continuous improvement
▶ Build an organizational culture and value system
that stresses improvement of all processes, kaizen
▶ Part of everyone’s job
▶ Respect for people
▶ People are treated as
knowledge workers
▶ Engage mental and
physical capabilities
▶ Empower employees

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 Toyota Production System
▶ Standard work practice
▶ Work shall be completely specified as to content,
sequence, timing, and outcome
▶ Internal and external customer-supplier connection
are direct
▶ Product and service flows must be simple and
direct
▶ Any improvement must be made in accordance
with the scientific method at the lowest possible
level of the organization

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 LEAN OPERATIONS

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 Lean Operations
▶ Broader than JIT in that it is externally
focused on the customer
▶ Starts with understanding what the
customer wants
▶ Optimize the entire process from the
customer’s perspective

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 Building a Lean Organization
▶ Transitioning to a lean system can be
difficult
▶ Lean systems tend to have the following
attributes
▶ Use JIT techniques
▶ Build systems that help employees produce
perfect parts
▶ Reduce space requirements

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 Building a Lean Organization
▶ Lean systems tend to have the following
attributes
▶ Develop partnerships with suppliers
▶ Educate suppliers
▶ Eliminate all but value-added activities
▶ Develop employees
▶ Make jobs challenging
▶ Build worker flexibility

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