Topic: Introduction to JIT

Made by: Sagar Bhavsar

INTRODUCTION
Toyota Motors is73-years old, established on August 28, 1937 in Japan.

Toyota became the world's largest automaker in the first half of 2008, with
sales of more than 4.8 million cars and trucks,

Toyota ranked 5th of the world's largest corporations in the 2008 Fortune
Global 500.

Toyota ranked1st of the world's largest automaker corporations in the 2008
Fortune Global 500

Has53 overseas manufacturing companies, in 27 countries/regions.

Has168 distributors sell vehicles in more than170 countries/regions.




1) What is Just-in-Time (JIT
1) What is Just-in-Time (JIT)? What
kind of suppliers an organization
must have in order to practice JIT?
Just-In-Time (JIT)
Defined:
JIT can be defined as an integrated set of activities
designed to achieve high-volume production using
minimal inventories (raw materials, work in process,
and finished goods)

JIT also involves the elimination of waste in
production effort

JIT also involves the timing of production resources
(i.e., parts arrive at the next workstation just in
time)


JIT and LEAN MANAGEMENT
JIT can be divided into two terms: Big JIT
and Little JIT
Big JIT (also called Lean Management) is a
philosophy of operations management that
seeks to eliminate waste in all aspects of a
firms production activities: human relations,
vendor relations, technology, and the
management of materials and inventory
Little JIT focuses more narrowly on
scheduling goods inventory and providing
service resources where and when needed
Produce only the products that
customers want
Produce as and when the customer
wants
Produce products with perfect quality
Produce with minimum possible lead
time
Produce products only with features
that customer wants-nothing more
Produce with no wastage
Big lot sizes
Lots of inventory
PUSH material to next
stage
Lower
per unit
cost
Big purchase shipments
Big pushes of finished goods
to warehouses or customers
???
Smaller lots
Faster setups
Less inventory, storage space
PULL material to next stage
Minimal
or no
inventory
holding
cost
Smaller shipments
Goods are pulled out of
plant by customer demand
Work in
process
queues
(banks)
Change
orders
Engineering design
redundancies
Vendor
delinquencies
Scrap
Design
backlogs
Machine
downtime
Decision
backlogs
Inspection
backlogs
Paperwork
backlog
Example: By
identifying defective
items from a vendor
early in the
production process
the downstream work
is saved
Example: By
identifying defective
work by employees
upstream, the
downstream work is
saved

Close to production plant
Produce Quality components
Maintain Good labor relations
Fewer suppliers (keiretsu)
Contingency plans to cope with
disruptions like the effect of bad
weather, a truck drivers strike, blocking
roads/ports etc.


Quality Commitment
Cost Saving
Additional Resources and Capabilities
Prior Work Experience
Contract Terms
Confidentiality
Financial Stability

2) WHAT ARE THE ADVANTAGES
& DISADVANTAGES OF JIT?
LOWER INVENTORY LEVELS
LESS PRODUCTION CYCLE TIME
QUALITY OUTPUT
LESS MATERIAL HANDLING
LESS WORKER IDLE TIME
IMPROVED EMPLOYEE MORALE
Only 8 weeks required to reach full
production capacity
Automatic delivery system and aerial tunnels
are developed
There is barely any stock required as most
parts are made to order
The need of conventional truck delivery is
minimum

FORD &ITS SUPPLIERS STARTED WORKING AS
ONE TEAM
25% SHORTER TIME PRODUCTION TIME
NEEDED
SAVING $6+ MILLION PER YEAR ON
TRANSPORT
Higher amount of
machine/worker idle time.
More efficient when demand
pattern is stable.
When there is a sudden
change in the demand
pattern it will take time for
JIT system to react since
there is no central
information unit.

It may be difficult and expensive to introduce.
There is little room for mistakes as minimal
stock is kept for re-working faulty product.
Production is very reliant on suppliers and if
stock is not delivered on time, the whole
production schedule can be delayed.


It requires more training,
more consciousness, more
employee commitment.

More difficult goals to be
attained.

Coordination between
customer and suppliers need
to be much better and
disciplined.
Toyota the Developer of JIT System
Toyota, the developer of JIT, found this out
the hard way. One Saturday, a fire at Aisin
seiki Company's plant in Aichi Prefecture
stopped the delivery of all break parts to
Toyota. By Tuesday, Toyota had to close
down all of its Japanese assembly line. By the
time the supply of break parts had been
restored, Toyota had lost an estimated $15
billion in sales.

3) Explain with examples (a) Kanban (b)
Milk Run Concept. Discuss how these
two concepts a help a firm like Toyota
to be more efficient and effective.
Kan-card, Ban-Signal

Small signboard, visual card etc that is a key
control tool for JIT production

Communication signal from a downstream
process to an upstream process.

RAW MATERIAL
WORK STATION
1
FINISHED PARTS
WORK STATION
2
FINISHED PARTS
ASSEMBLY
FINISHED
PRODUCTS
The mechanics of operation consists of
moving upstream beginning with the last
operation.
When final assembly section requires parts
from work station 2, it will send a job
card/kanban to wk station 2.
This kanban becomes the job order for
workstation 2, which starts producing
replacements for the parts removed and at
the same time sends the kanban to
workstation 1 to do the same.
This finally reaches the raw material
inventory where withdrawals are also made
in small lots, hence orders are supplied
equally in small lots and frequently on a
daily basis.
With drawal kanban

Production
Kanban
Reduce Inventory

Improve work flow

Prevent Overproduction

Improves responsiveness to changes in
demand

Minimize risk of obsolete inventory, because
inventory is only created as it is needed.


Delivery method for mixed loads from
different suppliers. A transport and
logistic technique for the collection and
transport of goods from suppliers with a
defined delivery route, in which various
stops are planned and executed in terms
of quantities and timing. Milk Run is one
of the advanced delivery concepts that
can improve your transportation
management system. Milk Run Delivery
means a routing of a supply or delivery
vehicle to make multiple pickups or
drop-offs at different locations on a
regularly scheduled basis.

SAME FREIGHT COSTS DESPITE INCREASED
DELIVERY FREQUENCY AND SMALLER PARTIAL
DELIVERIES
REDUCED STOCK IN GOODS RECEIPT AND
THUS REDUCED HANDLING EXPENSES
INCREASED INVENTORY TURNOVER