Lecture Fundamentals of operations management (4/e): Chapter 19 - Davis, Aquilano, Chase

Chapter 14 Just-in-time systems, after studying this chapter you will be able to: Introduce the underlying concepts of JIT and there Japanese approach to improving productivity; identify the differences between Japanese and U.S. companies with respect to implementing JIT, and explore why these differences exist; identify the various elements that need to be included to successfully implement JIT within an organization;...

DAVIS F   O   U   R   T   H       E   D   I   T   I   O   N AQUILANO CHASE chapter 14 Just­in­Time Systems © The McGraw-Hill Companies, Inc., 2003 PowerPoint Presentation by Charlie Cook Chapter Objectives Chapter Objectives • Introduce the underlying concepts of JIT and there Japanese approach to improving productivity • Identify the differences between Japanese and U.S companies with respect to implementing JIT, and explore why these differences exist • Identify the various elements that need to be included to successfully implement JIT within an organization • Illustrate how many JIT concepts have been implemented in services FundamentalsofOperations Management4e âTheMcGrawưHill Companies,Inc.,2003 142 ManagerialIssues ManagerialIssues ã Using JIT as a tool for controlling the flow of materials, identifying sources of error, and minimizing inventories • Developing the strong supplier relationships on which successful implementation of JIT depends • Achieving production linearity in manufacturing and service operations FundamentalsofOperations Management4e âTheMcGrawưHill Companies,Inc.,2003 143 JITLogic JITLogic ã JIT (just-in-time) –A coordinated approach that continuously reduces inventory while also improving quality –Seeks to achieve high volume production using minimal inventories of raw material, work in process, and finished goods –“Big” JIT (lean production) • Seeks to eliminate all forms of waste in production activities –“Little” JIT • Focuses on scheduling goods inventories and © The McGraw­Hill  providing service resources Fundamentals of Operations  Management 4e  Companies, Inc., 2003 14–4 Pull System Pull System Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 Exhibit 14.1 14–5 The Japanese Approach To Productivity The Japanese Approach To Productivity • Fundamental National Goal –Full employment through industrialization • Target Industries for Market Dominance –Electronics, vehicles, shipbuilding –Competitive tactics: • Imported technology rather than take R&D risks • Focused engineering on the shop floor to achieve high productivity and low cost • Improved quality beyond that of competitors • Eliminated waste in all forms • Have great respect for people © The McGraw­Hill  Fundamentals of Operations  Management 4e  Companies, Inc., 2003 14–6 Quasar Plant Productivity Quasar Plant Productivity *2 years later † Same people Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 Exhibit 14.2 14–7 The Japanese Approach to Productivity The Japanese Approach to Productivity • Elimination of Waste • Focused Factory Networks • Group Technology • Jidoka (quality at the source) • Just-in-Time Production • Uniform Plant Loading • Kanban • Minimized Setup Times Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 14–8 Group  Group  Technology  Technology  versus  versus  Departmental  Departmental  Specialty Specialty Fundamentals of Operations  Exhibit 14.3 Management 4e  © The McGraw­Hill  Companies, Inc., 2003 14–9 Just­In­Time Just­In­Time Fundamentals of Operations  Management 4e  Source: Adapted from Chris Gopal (of Price Waterhouse), “Notes on JIT. âTheMcGrawưHill Companies,Inc.,2003 Exhibit 14.4 1410 FlowofTwoKanbans FlowofTwoKanbans ã Kanban Pull System –A manual, self-regulating system for controlling the flow of material Workers produce only when the Kanban ahead of them is empty, thereby creating a “pull” system through the factory Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 Exhibit 14.7 14–13 Minimizing Setup Time Minimizing Setup Time—Hood and —Hood and Fender Press Comparison (800 ton press) Fender Press Comparison (800 ton press) *For low-demand items (less that 1,000 per month), as large as seven days Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 Exhibit 14.8 14–14 Setup Reduction Results at JKC Setup Reduction Results at JKC Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 Exhibit 14.9 14–15 Respect for People Respect for People • Lifetime Employment • Company Unions • Attitude toward Workers • Automation/Robotics • Bottom-Round Management • Subcontractor Networks ã Quality Circles FundamentalsofOperations Management4e âTheMcGrawưHill Companies,Inc.,2003 1416 JIT in the United States JIT in the United States • Problems with Implementing JIT –Geographic distances –Supplier-customer relationships –“Jumbo-Inventory-Transfer” –MRP systems Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 14–17 Implementing JIT Production Implementing JIT Production • JIT Layouts/Design Flow Process –Design must ensure balanced continuous workflow with minimum of work in process and delays –Internal and external logistics must be considered –Preventive maintenance is emphasized –Process orientation encourages the use of simple machines –Goal is a economic production lot size of one © The McGraw­Hill  Fundamentals of Operations  Companies, Inc., 2003 Management 4e  14–18 How to Accomplish  How to Accomplish  Just­in­Time  Just­in­Time  Production Production Exhibit 14.10 Fundamentals of Operations  Management 4e  Source: This diagram is modeled after the one used by Hewlett-Packard’s Boise plant to accomplish its JIT program © The McGraw­Hill  Companies, Inc., 2003 14–19 The Impact of JIT on Lot Size The Impact of JIT on Lot Size Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 Exhibit 14.11 14–20 Implementing JIT Production Implementing JIT Production • JIT in a Line Flow or Product Layout –No work done until product has been pulled from the end of the line –Completed work stays at the workstation until remove by a downstream station Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 Exhibit 14.12 14–21 Relationship between JIT and Quality Relationship between JIT and Quality Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 Exhibit 14.13 14–22 Source: Richard J Schonberger, “Some Observations on the Advantages and Implementation Issues of Just-in-Time Productions Systems,” Journal of Operations Management 3, no (November 1982), p Total Quality Control Total Quality Control • Stabilize Schedule • Kanban Pull • Work with Vendors • Continuous Inventory Reduction • Improve Product Design • Concurrently Solve Problems and Measure Performance Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 14–23 Diagram of Outbound Stockpoint Diagram of Outbound Stockpoint with Warning Signal Marker with Warning Signal Marker Fundamentals of Operations  Management 4e  Source: Robert Hall, Zero Inventories (Homewood, IL: Dow Jones-Irwin, 1983), p 51 © The McGraw­Hill  Companies, Inc., 2003 Exhibit 14.14 14–24 Company Experiences with JIT Company Experiences with JIT • JIT/TQC benefits –Average inventory reduction of about 50 percent –Reduction of throughput time of 50 to 70 percent –Reduction in setup times of as much as 50 percent without major investment in plant or equipment Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 14–25 JIT in Services JIT in Services • Application of JIT to Services –Synchronization and balance of information and workflow –Total visibility of all components and processes –Continuous improvement of the process –Holistic approach to the elimination of waste –Flexibility in the use of resources –Respect for people Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 14–26 Gizmo  Gizmo  Production  Production  Flow Flow Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 14–27 Case Exhibit 14.1 ... © The McGraw­Hill  providing service resources Fundamentals? ?of? ?Operations? ? Management? ?4e  Companies, Inc., 2003 14–4 Pull System Pull System Fundamentals? ?of? ?Operations? ? Management? ?4e  © The McGraw­Hill  Companies, Inc., 2003... linearity in manufacturing and service operations FundamentalsofOperations Management4 e âTheMcGrawưHill Companies,Inc.,2003 143 JITLogic JITLogic ã JIT (just-in-time) –A coordinated approach that... Cycle in a Japanese Assembly Plant Fundamentals? ?of? ?Operations? ? Management? ?4e  © The McGraw­Hill  Companies, Inc., 2003 Exhibit 14.6 14–12 Flow? ?of? ?Two Kanbans Flow? ?of? ?Two Kanbans • Kanban Pull System –A manual, self-regulating