JIT/Lean Production

Chapter Objectives
Be able to:
Describe what JIT/Lean is and differentiate between the Lean
philosophy and kanban systems.
Discuss the Lean perspective on waste and describe the eight
major forms of waste, or muda, in an organization.
Discuss the Lean perspective on inventory and describe how a
kanban system helps control inventory levels and synchronize
the flow of goods and materials across a supply chain.
Describe how the concepts of the Lean supply chain and Lean
Six Sigma represent natural extensions of the Lean philosophy.
Explain how a two-card kanban system works.
Calculate the number of kanban cards needed in a simple
production environment.
Show how MRP and kanban can be linked together and illustrate
the process using a numerical example.
2008 Pearson Prentice Hall --- Introduction to Opera
tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 2

Some Statistics from

1986 ...
A comparison of:
1) assembly hours
2) defects per 100 cars
3) average inventory levels
Framingham (GM)
40.7 hours
130 defects
2 weeks

Toyota Takaoka
16 hours
45 defects
2 hours

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 3

Post World War II

Growing and rebuilding world economy
Demand > Supply
US Manufacturing:
Higher volumes
Capital substitution
Breakthrough improvements
The production problem has been solved
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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 4

View from Japan

Very little capital

War-ravaged workforce
Little space
Poor or no raw materials
Lower demand levels
Little access to latest technologies

U.S. methods would not work

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 5

Japanese Approach to
Operations
Maximize use of people
Simplify first, add technology second
Gradual, but continuous improvement
Minimize waste (including poor quality)
Led to the development of the
approach known as Just-in-Time
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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 6

Just-in-Time

Repetitive production system

in which processing and movement of
materials and goods occur just as they
are needed

Pre-JIT: Traditional Mass

Production

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 8

Post-JIT: Lean Production

Tighter coordination along the supply chain
Goods are pulled along
only make and ship what is needed

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 9

JIT Goals
(throughout the supply chain)

Eliminate disruptions
Make the system flexible
Reduce setup times and lead times
Minimize inventory
Eliminate waste

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 10

Waste
Definition:
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
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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 11

Forms of Waste:
(muda in Japanese)

Overproduction
Waiting
Unnecessary movement
Wrong process
Unnecessary inventory
Excess motion
Defects
Underutilization of employees

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 12

Inventory as a Waste

Requires more storage space

Requires tracking and counting
Increases movement activity
Hides yield, scrap, and rework
problems
Increases risk of loss from theft,
damage, obsolescence
2008 Pearson Prentice Hall --- Introduction to Opera
tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 13

Lean Perspective
Process of reducing inventory leads to reduction of
the other wastes and exposes problems in
order of severity (water and rocks analogy)

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 14

Lean Six Sigma & Supply

Chain in Lean Environment
Six Sigma methodology combines well
with Lean goals, helps address the rocks
as they become exposed when reducing
inventory.
Supply chain choices affect many of the
wastes. Supplier variances such as lead
time and quality create need for safety
stock a direction opposite reduction of
inventory goals
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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 15

Examples of Eliminating
Wastes
Big Bobs Automotive Axles:
Wheels bought
from outside
supplier

Axles made and

assembled in house

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 16

BEFORE: Shipping in
Wheels

Truck Cost: $500 (from Peoria)

Maximum load of wheels: 10,000
Weekly demand of wheels: 500

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 17

AFTER: Shipping in Wheels

Truck Cost: $50 (from Burlington)

Maximum load of wheels: 500
Weekly demand of wheels: 500

What wastes have been reduced?

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 18

BEFORE: Making Axles

(Different lengths)

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Chapter 16,
Slide 19

BEFORE: Making Axles (Oops!)

What is the outcome

of detecting defective
axles at the end?
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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 20

After: Making Axles I

(Different lengths)

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Chapter 16,
Slide 21

After: Making Axles II

(More improvements)

What wastes have

been reduced?
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Chapter 16,
Slide 22

Building Blocks of JIT

Product design
Standard parts
Modular design
Quality

Process design
Personnel and organizational elements
Manufacturing planning and control

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 23

Process Design
Focused Factories
Group Technology
Simplified layouts with little storage
space
Jidoka and Poka-Yoke
Minimum setups
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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 24

Multi-Task Work Cells

500 chairs per hour
Packing
Backposts

Legs

Slats

Assembly

Seats

Planning takes place for one area:

What does the BOM look like? What about lead times?
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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 25

Personnel and Organizational

Elements
Workers as assets
Cross-trained workers
Greater responsibility at lower levels
Leaders as facilitators, not order givers

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 26

Classic Organizational View

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Chapter 16,
Slide 27

JIT Organization View

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Chapter 16,
Slide 28

Planning and Control

Systems
Small JIT
Stable and level schedules
Mixed Model Scheduling

Pull versus Push

Kanban Systems
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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 29

Kanban
Uses simple visual signals to control
production pull processing
Examples:
empty slot in hamburger chute
empty space on floor
kanban card

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 30

Kanban Example

Workcenter B uses parts produced by Workcenter A

How can we control the flow of materials so that B always
has parts and A doesnt overproduce?
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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 31

Kanban card: Signal to

produce

When a container is opened by Workcenter B, its kanban card is

removed and sent back to Workcenter A.
This is a signal to Workcenter A to produce another box of parts.
2008 Pearson Prentice Hall --- Introduction to Opera
tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 32

Empty Box: Signal to pull

Empty box sent back. Signal to pull another full box into
Workcenter B.
Question: How many kanban cards here? Why?
2008 Pearson Prentice Hall --- Introduction to Opera
tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 33

How Many Kanbans?

DT(1 x)
y
C
y
D
T
C
X

=
=
=
=
=

number of kanban cards

demand per unit of time
lead time
container capacity
safety factor

2008 Pearson Prentice Hall --- Introduction to Opera

tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 34

Example

Hourly demand = 300 units

Lead time = 3 hours
Each container holds 300 units
Assuming no variation in lead-time or
demand (x = 0):
y = (300 3) / 300 = 3 kanban cards

2008 Pearson Prentice Hall --- Introduction to Opera

tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 35

Example: 8:00 AM

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Chapter 16,
Slide 36

One Hour Later at 9:00 AM

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Chapter 16,
Slide 37

Extended Out Further . . .

2008 Pearson Prentice Hall --- Introduction to Opera

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Chapter 16,
Slide 38

Note:
For a kanban system to work, we NEED
CONSISTENT demand across the work
centers
Example - think McDonalds
How do we ensure this?

2008 Pearson Prentice Hall --- Introduction to Opera

tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 39

Mixed Model Sequencing

Product

Monthly
Demand

Daily
Requirement

800

40

800

40

200

10

Largest integer that divides evenly into daily

requirement is 10:
A: 40 / 10 = 4
B: 40 / 10 = 4
C: 10 / 10 = 1
Mixed model sequence: A-B-A-B-A-B-A-B-C
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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 40

Mini-Quiz: Mixed Model Scheduling

and Establishing Kanbans
Product

Monthly
Demand

Daily
Requirement

1200

60

400

20

600

30

What would sequence be if NO

minimum job size?

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 41

Sequence with Minimum of 5:

60 / 4 = 15 Ds
20 / 4 = 5 Es
30 / 4 = 7.5 Fs
5D - 7F - 5D - 5D - 5E - 5D - 8F - 5D - 5D - 5E
Sequence of 55 (27.52)
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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 42

Kanbans Required: Product D

Hourly Requirements = 60/8 = 7.5
Lead time = 2 hours
Container size = 2 units
Safety factor = 10%

2008 Pearson Prentice Hall --- Introduction to Opera

tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 43

Kanban Cards Required:

(7.5 units / hour ) (2 hour lead time ) 1.1
Cards
(2 units per container )
8.25 cards , or 9 cards

Implications? Impact of container size?

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 44

Implementing JIT

What about
automation?

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Chapter 16,
Slide 45

Putting the Squeeze on

Resources . . .

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tions and Supply Chain Management, 2/e --- Bozarth and

Chapter 16,
Slide 46

Case Study in JIT/Lean

Production

A Bumpy Road for Toyota