LEAN

MANUFACTURING

Aurel Costea

NHTI Concord’s Community College

April 2017
ABSTRACT

Just-in-time (JIT) manufacturing, also known as just-in-time

production or the Toyota production system (TPS), is a methodology
aimed primarily at reducing flow times within production as well as
response times from suppliers and to customers.
Just In Time (JIT) is an inventory strategy implemented to improve the
return on investment of a business by reducing in-process inventory
and cycle time. The process is driven by a series of signals, or Kanban,
that tell production processes to make the next part. When
implemented correctly, JIT can lead to dramatic improvements in a
manufacturing organization's return on investment, quality, and
efficiency.

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TABLE OF CONTENTS

Introduction……………………………………………………………………………………………………………………………4
Background…………………………………………………………………………………………………………………………….4
Body of Report………………………………………………………………………………………………………………………..5
I. What is Just In Time?….……………………………………………………….……5
II. Objectives of Just In Time …………………………………………………………5
III. Philosophy of Just In Time ………………………………………………………..6
IV. Components and Implementation ……………………………………………6
V. Tactics …………………………………………………………………………………….10
VI. Advantages and Disadvantages ……………………………………………….11
VII. Expects Results ……………………………………………………………………….12
VIII. Limitations ………………………………………………………………………………12
IX. Just In Time Success Factors …………………………………………………….13
Summary ……………………………………………………………………………………………………………………………..14
Bibliography and References ………………………………………………………………………………………………..15

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INTRODUCTION
Today’s manufacturing deadlines have changed dramatically; in this
ever changing market due to shorter product life cycles, customer’s
rapid demands and quickly changing business environment, the
suppliers have to produce quicker while managing the high costs of
supplies. Holding inventory is one way to ensure quick turnaround,
but this is an expensive approach. The riskier but more efficient
method would be the ability to produce fast in order to fill up the
customer’s orders in a timely manner. It has been proven that the
JUST IN TIME (JIT) philosophy is the most efficient one.

BACKGROUND

First used by the Ford Motor Company as part of "dock to factory

floor" in which incoming materials are not even stored or warehoused
before going into production.
Later, Toyota started implementing this method as part of the Toyota
Production System (TPS), or more commonly known as “lean
manufacturing”. Their idea mostly came after the Toyota
representatives saw the JIT fully implemented at Piggly Wiggly, the

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first self-service grocery chain. In the major alternative to JIT
manufacturing, inventory in excess of immediate need is managed.
Unlike the USA, Japan did not have large amount of land for storing
the cars and the parts. Toyota gave their chief engineer, Taiichi Ohno,
three years to catch up with the US (that was nine times more
productive than the Japanese factory). . Ohno not only did that, but
also created a system that was to be an enduring and living model for
efficient manufacturing all over the world.

BODY OF REPORT
I. What is JUST IN TIME?

Just In Time (JIT) is an inventory strategy implemented to improve the

return on investment of a business by reducing in-process inventory
and cycle time. The process is driven by a series of signals, or Kanban,
that tell production processes to make the next part. When
implemented correctly, JIT can lead to dramatic improvements in a
manufacturing organization's return on investment, quality, and
efficiency

II. Objectives of JUST IN TIME

JIT Manufacturing tries to smooth the flow of materials from the suppliers to
the customers, thereby increasing the speed of the manufacturing process. The
objectives of JIT is to change the manufacturing system gradually rather than
drastically:
1. To be more responsive to customers
2. To have better communication among departments and suppliers
3. To be more flexible

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4. To achieve better quality
5. To reduce product cost
6. Reduce inventory
7. Make it right the first time

III. The Philosophy of JIT

Often termed as “Lean Systems”, JIT means getting the right quantity
of goods at the right place and the right time. It also means
elimination of waste, focus on customer and on improving every
operation and install simple visible control systems while having the
flexibility to produce different features. JIT is built on simplicity – the
simpler the better.

IV. Components and Implementation

 Pull-System – This strategy only produces enough to fulfill the
orders, reducing inventory levels and the cost of storing goods.
The disadvantage of this method is the risk of the supplier not
delivering the supplies on time, putting the deadlines in
jeopardy and possibly disappointing the customer.
 Kanban – Signboard
Kanban is the Japanese word for the everyday term “signboard.”
Kanban is a signaling system to trigger action. It was out of a
need to maintain the level of improvements that the Kanban
system was designed by Toyota. Kanban became an effective
tool to support the running of the production system as a whole.
The Kanban system is a method used to control the transfer of
materials between different stages of production. They might be
used to inform employees in the previous stage of production

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 that a particular part must be taken from stocks and sent to a
specific destination.
Kanban in a manufacturing process has the equivalent of a “gas
gauge’ built in, to signal to the previous step when its parts need
to be replenished. Most businesses use processes that are filled
with waste and without the use of effective methods like
Kanban – Just-In-Time production would have never evolved.
Kanban creates a sort of “pull” system – control the flow of
resources in a production process by replacing only what has
been consumed.

 Good housekeeping
As a general rule of thumb, introducing good housekeeping can help
reduce mistakes and defects by 50%. Good housekeeping also ensures
that the workplace is safe, and that tools, parts and information
required for production are available when they are needed.
Within Just-in-Time and Lean Manufacturing philosophies, there are
five fundamental aspects of good housekeeping. These are the '5 S's'
of good housekeeping, which are:
'SORT' (Seiri)- identify things that are absolutely necessary to perform
the operation and remove everything else (e.g. remove anything that
will not be needed within the next thirty days)
'STRAIGHTEN' (Seiton) - provide a convenient, safe and orderly place
for everything and keep it there
'SHINE' (Seiso)- keep machines, tools and the working environment
clean

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'STANDARDISE' (Seiketsu) - standardize the previous four steps to
ensure that the process never ends, and create an atmosphere of
continual improvement
‘SUSTAIN’ (Shitsuke) – is when five S become a routine way of life.
Root causes are routinely identified and dealt with.
American Managers often add 2 Ss to maintain a lean workplace:
Safety and Support/Maintenance. An uncluttered workplace is a safer
workplace. A well maintained piece of equipment is a safer and more
reliable piece of equipment that can reduce variability and unplanned
downtime.

 Eliminate waste
Ohno identified eight wastes that account for up to 95% of all costs in
traditional manufacturing:
•Overproduction — producing more than a customer needs, incurs heavy
warehousing, equipment and labor costs.
•Waiting — any machine or human in a wait state, no matter what they are
waiting for, represents lost money and opportunity.
•Transportation — Materials that are transported from the supplier to any
location (e.g. warehouse) other than the point-of-use; creates unnecessary
transportation costs in time and money.
•Non-Value-Added Processing — Quality control (traditional processes of
inspecting completed products and fixing defects after production is complete)
is unnecessary in a manufacturing environment where products are produced
without defects (quality assurance).
•Excess Inventory — carrying more inventory than is needed, from raw
materials to finished goods, incurs expensive warehouse space and labor.
•Defects — Product defects incur labor, space, equipment and time costs.

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•Excess Motion — incurring more motion than is necessary to carry out a task
wastes time and labor.
•Underutilized People — Failure to leverage the skills, creativity, time and other
attributes of people results in wasted opportunities for organizational, team
and individual efficiency improvements.

 Quality – “There’s never time to do a job right but there’s always

time to do it over”
Intuitively, it's easy to understand that improved product quality
reduces the need for inventory, particularly buffer inventory of extra
components “just in case” something goes wrong. If you have fewer
defective components, after all, you don't need to keep as much
safety stock. And studies of Japanese manufacturing practices over
the past 20 years have suggested that the relationship between
quality and inventory can work the other way as well, although
researchers have been somewhat vague on exactly how lower
inventory can improve quality and by how much.

 Small Lots – “Moving Fast is not the same as going somewhere”

Small lots production refers to the proactive reduction of batch sizes
to the smallest lot possible. This reduces inventory carrying costs, and
facilitates reduced lead and cycle times which enables faster turn-
around time for customers
 Reduced set-up times
Reduced set-up times (the elapsed time between production runs
used to change over machines) aid the JIT process by making it more
feasible for manufacturers to produce small lots. The longer the setup
time, the costlier it is to produce small lots of product. In the JIT world
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is the Single Minute Exchange of Dies (SMED) method, also often
referred to as "quick changeover." This was introduced in TPS and was
applied to the changeover of dies, but today has much wider
applications. Simplistically, SMED is the practice of completing as
many steps in the changeover process as possible while a production
run is still in process, and reducing and improving the efficiency of the
steps that must be completed during the changeover.

 Group Technology
Group technology involves grouping parts that have physical
similarities or are used for similar manufacturing processes to reduce
work-in-progress and lead times. Instead of the traditional factory
layout with similar machines grouped together and work-in-progress
moving from area to area, individual factory cells (cell manufacturing)
are created with all the machines necessary to complete the
production of a particular product or group of products.
 One Piece Flow
Sometimes referred to as “single-piece flow” or “continuous flow,”
one-piece flow is a key concept within the Toyota Production System.
Achieving one-piece flow helps manufacturers achieve true just-in-
time manufacturing. That is, the right parts can be made available
when they are needed in the quantity they are needed. In the
simplest of terms, one-piece flow means that parts are moved
through operations from step to step with no work-in-process (WIP)
in between either one piece at a time or a small batch at a time. This
system works best in combination with a cellular layout in which all
necessary equipment is located within a cell in the sequence in which
it is used

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 V. Tactics

Layout tactics for a JIT environment include build work cells for
families of products, include a large number of operations in a small
area, minimize distance, design little space for inventory, improve
employee communication, build flexible or movable equipment, and
cross-train workers to add flexibility.

VI. Advantages and Disadvantages

JIT is a production and inventory control system in which materials

are purchased and units are produced only as needed to meet actual
customer demand. In just in time manufacturing system inventories
are reduced to the minimum and in some cases they are zero.
The main BENEFITS of JIT are the following
a. There should be minimal amounts of inventory obsolescence,
since the high rate of inventory turnover keeps any items from
remaining in stock and becoming obsolete.
b. Since production runs are very short, it is easier to halt
production of one product type and switch to a different product
to meet changes in customer demand.
c. The very low inventory levels mean that inventory holding costs
(such as warehouse space) are minimized.
d. The company is investing far less cash in its inventory, since less
inventory is needed.
e. Less inventory can be damaged within the company, since it is
not held long enough for storage-related accidents to arise. Also,
having less inventory gives materials handlers more room to

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 maneuver, so they are less likely to run into any inventory and
cause damage.
f. Production mistakes can be spotted more quickly and corrected,
which results in fewer products being produced that contain
defects.

Implementing thorough JIT procedures can involve a major overhaul

of business systems -it may be difficult and expensive to introduce.
JIT manufacturing also opens businesses to a number of risks, notably
those associated with the supply chain. With no stocks to fall back on,
a minor disruption in supplies to the business from just one supplier
could force production to cease at very short notice.

VII. Expect Results

General
 50-90% reduction in throughput times
 50-90% reduction in WIP (work in progress)
 60-80% reduction in scrap and rework
 50-90% reduction in setup times
 30-60% reduction in space requirements
 10-1000X improvement in quality specifics
In three to seven years
 5-10X improvement in overall quality
 4-10X improvement in inventory turns
 Improvements in return on assets

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 VIII. Limitations

JIT manufacturing requires considerable cooperation between the

management and workers, it is commonly believed that JIT
production system is very efficient but in due course of time many
demerits have been pointed out some of these are :
 Cultural differences have been cited as possible limitation on
JIT. The benefit associated with JIT may be culturally bound and
somewhat limited to Japanese environment.
 Loss of individual autonomy is another shortcoming of JIT.
Reduced cycle time forces the workers to adjust immediately
to changes of demand significantly reducing the idle time of
the workers resulting in greater amount of stress and pressure
placed upon the workers to perform.
 The success of JIT production system depends upon cooperation
between employer, employer’s daily workstation rotation,
training of operators for different kinds of jobs and system
adaptability to market function etc.
 There is no flexibility only first come first served principle is
applied by manufacturing items in order of releasing kanbans.
 There is no safety stock to offset inaccurate demand forecasts.
 JIT production is effective only when the daily demands are
fairly stable

IX. JIT Success Factors

 Commitment to quality
 Flexible Capacity
 Reliable Supplier Relations
 Smooth Production Flow
 Well trained work force
 Reduced cycle and production times
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SUMMARY

When the JIT principles are implemented successfully, significant

advantages are realized. JIT principles can be applied to all parts of an
organization: order taking, purchasing, operations, distribution, sales,
etc.
Services are much like manufacturing. Therefore, successful
implementation of JIT is vital to manufacturing as well as service
industries. JIT focuses on the process, not on product. Therefore it can
be applied to every process within manufacturing or service industry.
The American Production and Inventory Control Society (APICS) has
the following definition of JIT: “a philosophy of manufacturing based
on planned elimination of all waste and continuous improvement of
productivity. It encompasses the successful execution of all
manufacturing activities required to produce a final product, from
design engineering to delivery and including all stages of conversion
from raw material onward. The primary elements include having only
the required inventory when needed, to improve quality to zero
defects, to reduce lead time by reducing setup times, queue lengths

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ant lot sizes, to incrementally revise the operations themselves and to
accomplish these things at minimum costs.”

BIBLIOGRAPHY AND REFERENCE

Taiichi Ohno and Setsuo Mito “Just-in-Time For Today and Tomorrow”,
Productivity Press Cambridge 1986
William Miller and Vicky Schenk “All I need to know about Manufacturing I
learned in Joe’s Garage”, Bayrock Press 2001
Yasuhiro Monden “Toyota Production System” second edition, Institute of
Industrial Engineers, Georgia, 1993
Jeffrey Liker “The Toyota Way”, McGraw-Hill, WI, 2004

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Jay Heizer and Barry Render “Principles of Operations Management” ninth
edition, Pearson 2014

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