JUST IN TIME AT VOLKSWAGEN

Volkswagen means "people's car”

Introduction
Type :Subsidiary of Volkswagen Group
Founded : May 28, 1937
Founder :Ferdinand Porsche
Headquarters :Wolfsburg, Germany
Area served :Worldwide
Industry: Automotive
Products: car
 Brazilian plant employs 1000 workers*
 200 work for VW and are responsible for
overall quality, marketing, research, and
design
 800 work for other contractors and do the
assembly work
 Important elements of this concept
 VW is buying not only materials, but also the labor
and related services
 Suppliers are integrated tightly into VW’s own
network, right down to assembly work in the plant
 Purchase costs in the auto industry exceed 60% of
the sales dollar, so any savings are significant
Toyota
Toyota's performance…has been stunning. The company has not lost
money in a single quarter since 1951. As U.S. automotive powerhouses are
drowning in red ink, Toyota earned its highest ever net profit in 2006—$17
billion.
Emerson
The company, which makes everything from electric motors and air-
conditioner compressors to computerized equipment that can run
an oil refinery, reported improved results in fiscal 2004 for the third
consecutive year, with sales up 12% to an all-time high of $15.62
billion. Emerson is benefiting hugely from the rebound in the U.S.
industrial economy and China's economic boom
Parker-Hannifin
Donald E. Washkewicz…was promoted to president of Parker Hannifin
(PH ), the world's No. 1 maker of motion-control products -- hydraulic and
pneumatic components for aircraft, construction equipment, and even
theme-park robots.
In the past, you had to justify your machine tool by the setup time: It takes
me 25 hours to set this thing up, at $50 an hour, so I've got to run a batch
of 1 million widgets to justify that setup time. What you ended up doing
was using all your capacity to make inventory that nobody needed. In the
meantime, your customer service suffered because you didn't want to
break in on that machine run to fill new orders. Nobody wins.
Just-in-Time
JIT philosophy means getting the right quantity of
goods at the right place and the right time
JIT exceeds the concept of inventory reduction
JIT is an all-encompassing philosophy found on
eliminating waste
Waste is anything that does not add value
A broad JIT view is one that encompasses the
entire organization
APICS Definition of JIT
“A philosophy of manufacturing based on planned
elimination of waste and continuous improvement of
productivity ……”
APICS Definition of JIT
“The primary elements of Just-in-Time are:
to have only the required inventory when needed;
to improve quality to zero defects;
to reduce lead times by reducing setup times, queue
lengths, and lot sizes;
to incrementally revise the operations themselves;
and to accomplish these things at minimum cost”.
JIT Synonyms
IBM - Continuous Flow Manufacturing
HP - Stockless Production
- Repetitive Manufacturing System
GE - Management by Sight
Motorola - Short Cycle Manufacturing
Japanese - The Toyota System
Boeing - Lean Manufacturing
Philosophy of Just-in-Time
JIT originated in Japan, post WWII
Driven by a need survive after the devastation caused
by the war
JIT gained worldwide prominence in the 1970s
Toyota Motor Co. developed JIT
The Philosophy of JIT - continued
Often termed “Lean Systems”
All waste must be eliminated- non value items
Broad view that entire organization must focus on
the same goal - serving customers
JIT is built on simplicity- the simpler the better
Focuses on improving every operation- Continuous
improvement - Kaizen
Visibility – all problems must be visible to be
identified and solved
Flexibility to produce different models/features
Three Elements of JIT
JIT ProductionWHAT IT IS WHAT IT DOES

• Attacks waste
• Management philosophy
• Exposes problems and bottlenecks
• Pull system though the plant
• Achieves streamlined production

WHAT IT REQUIRES WHAT IT ASSUMES

• Employee participation
• Industrial engineering/basics • Stable environment
• Continuing improvement
• Total quality control
• Small lot sizes
The role of inventory in traditional and JIT systems:
The water and the rocks metaphor

Water = Inventory

Material
Poor
Material quality
training Break
handling problems
downs Long
setups
The role of inventory in traditional and JIT systems:
The water and the rocks metaphor

Traditional systems use inventory (water) to

buffer the process from problems (rocks) that
cause disruption.

Material
Poor
Material quality
training Break
handling problems
downs Long
setups
The role of inventory in traditional and JIT systems:
The water and the rocks metaphor

JIT systems view inventory as waste and work to lower

inventory levels to expose and correct the problems
(rocks) that cause disruption.

Material
Poor
Material quality
training Break
handling problems
downs Long
setups
The role of inventory in traditional and JIT systems:
The water and the rocks metaphor

Lowering the level of inventory is relatively easy to do.

However, the problems that arise must be corrected
quickly … Otherwise, without decoupling inventory, the
process will flounder.

Material
Poor
Material quality
training Break
handling problems
downs Long
setups
What is kanban?
 developed at Toyota 1950s to manage line material flows.
 Kanban ( Kan=card, Ban= signal )
 simple movement system
 “cards” to signal & communicate reorder information
 boxes/containers to take “lots” of parts from one work station to another
(client-server).
 Server only delivers components to client work station as & when needed
(called/pulled).
 minimise storage in the production area.
 Workstations only produce/deliver components when called (they receive
card + empty container).
 The work-station produces enough to fill the container
 Kanban = an authorization to produce more inventory
 We thus limit the amount of inventory in process.
What does a Kanban card look
like?
Kanban No. 5678990
part No: 66789X
• accurate data: correct part nos,
description 16ga. Copper Wire quantities & measure'ts
units Ft. • visible - chart if material ordered
reorder/lot qty 20 & when
store location Row 12, Bin 6 • fool proof for no stockouts
supplier BICC • minimum inventory
supplier tel 0208-891-0121 • clear & complete info. to
supplier part RT45502 suppliers
routing process • link inventory directly to demand
Name/location of next proces • Tie in with POP: issuing orders,
orders,
Name/location of preceding process receiving & authorising accounts
payable
container type & capacity
number of containers released
The Pull System
 Traditional Process Focused Layout
Jumbled flows, long cycles, difficult to schedule
 JIT Cellular Manufacturing
Product focused cells, flexible equipment, high
visibility, easy to schedule, short cycles
Firestone Tire Company

OEM & Distribution

Warehousing &
Transportation

Tire & Inner Tube

Manufacturing

Synthetic Rubber
Natural Rubber
Processing and cord Mfg.

Chemical Processing
Shipment
Operations

Raw Material mining Rubber Refinery

Rubber Plantation
VISION 2020
Imagine a roadway completely free of accidents. How
much time would you save if you never had to search
for another parking space? What if your car truly
made life easier and at the same time caused
absolutely no harm to the environment?