AM Seminar 2003_2

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2011 Lew Hofmann1

Presented by:

ANJAN B.N

1st sem M.Tech

PEST

N.I.E, Mysore

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Topic:Just In Time Production with

Total Quality Control

Just-in-time: A definition

Uses a systems approach to develop andoperate a manufacturing system

Organizes the production process so thatparts are available when they are needed

A method for optimizing processes thatinvolves continual reduction of waste

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Just-in-time

Just-in-time system

JIT Pyramid

Just-in-time

Minimum

delay

Minimum

inventory

2

1

Minimum

defects

3

Simplicity

and

visibility

Minimum

downtime

54

6

Level 1

Level 2

Level 3

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JUST-IN-TIME SYSTEMS

Theory: Just enough material needed for the

production operation arrives when and where it is

needed,just in timeto be used. Result: Reduced inventoryespecially work-in-

process inventory.

Volkswagen Factory

Goal: Smooth/lean the production process to the

point where only minimal inventory is required
http://www.flixxy.com/high-tech-car-factory.htm

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Just-in-timeTakt time: Themaximum time

allowed to produce aproduct in order to

meet demand.

Jidoka:

Autonomation ()

Heijunka: A systemof production

smoothing designed

to achieve a more

even and consistent

flow of work.()

Kaizen:

Improvement

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Benefits of JIT

Reduction in inventories

Improved quality

Shorter lead times Lower production costs

Increased productivity

Increased machine utilization

Greater flexibility

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Limitations of JIT

Difficulty to change old ways

More pressure on workers

Employee commitment

Employee skills

Success is varied Production levels

8

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JIT and TQC- Partners

Build quality into all processes

Focus on continuous improvement - Kaizen

Quality at the source- sequential inspection

Jidoka (authority to stop line)

Poka-yoke (fail-safe all processes)

Preventive maintenance- scheduled

Work environment- everything in its place, a

place for everything

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Total Quality Control is necessary.

Product defects can stop a production line or

process that uses a Lean Systems approach. Workers are the quality control inspectors.

Thus quality is controlled at the source (TQC)

This minimizes scrap and rework, thus reducing

work in process inventory and cycle time.

TQC promotes consistently high qualityand continuous improvement efforts.

TQC is Necessary

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Operation

Reliability & durability

Conformance

Serviceability

Appearance

Perceived quality

Quality

Dimensions of Quality for

Goods

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Cut the lot sizeLots or Lot Size refers to how many items are

being made in any given production run.

Lines are set up for the production of a given lot

size.

Reduction of lot sizes will shorten the cycletimes, and as a result this reduction will free up

capital that was otherwise tied up in Inventory.

The lot size is the amount produced for eachmachine setup

Under what circumstances can we cut the lot

size without reducing throughput 12

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What encourages us to use

large lot sizes?

The lot size is the amount produced for

each machine setup

A setup uses time on the constraint

Larger lots cause fewer setups

To maximize throughput select the lot

size as large as possible

One Remedy: Reduce the setup time

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What encourages us to use

small lot sizes?

Small lots reduce cycle time

WIP is proportional to cycle time

Reducing cycle time reduces inventory

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SMALL LOT SIZES

The theoretical, ideal, lot size is one.

But, no firm can have a lot size of one and zero

inventory. You will always have some inventory being

worked on. (Work-In-Process Inventory)

The ideal lot size is generally more than one.

Cost of inefficiency in making just one itemat a time overtakes the cost savings fromhaving low inventory.

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Large Lot, High Inventory

Manufacture

.

16

(0.75hr./unit)

(0.1 hr)

(1 hr. )

(0.1 hr.)

(0.5 hr.)

1000 units

D

B

C

B

A

0 1000 2000

Operation

D

B

C

B

A

Hours

200

400

600

800

1000Inventory

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Consequences

.

17

Lot size=1000

Cycle Time=3.4 mo.

Time to complete=3.4 mo. @720hrs/mo.

WIP=1000 units

0 1000 2000

Operation

D

B

C

B

A

Hours

200

400

600

800

1000Inventory

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Small Lot, Low Inventory

Manufacture

18

(0.75hr./unit)

(0.1 hr)

(1 hr. )

(0.1 hr.)

(0.5 hr.)

1000 units

D

B

C

B

A

0 1000

Operation

D

B

C

B

A

Hours

200

400

600

800

1000Inventory

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Consequences

19

0 1000

Operation

D

B

C

B

A

Hours

200

400

600

800

1000Inventory

Lot size=200

Cycle Time=0.7 mo.

Time to complete

=1.8 mo. @720 hrs/mo.WIP=200 units

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Benefits of small lot, low

inventory manufacture

20

Better qualitycontrol

Fasterresponse toengineeringchanges

Better deliveryperformance

Smallerfinishedgoodsinventory

Shorterdeliveryquotes

Smallermanufacturinginvestment

0 1000

Operation

D

B

C

B

A

Hours

200

400

600

800

1000

Inventory

0 1000 2000

Operation

D

B

C

B

A

Hours

200

400

600

800

1000Inventory

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ECONOMIC ORDER QUANTITY

. There is an economically correct lot size- not so big

as to incur an excessive carrying cost, not so small

as to incur an excessive setup cost. The

compromise quantity is known as the economic order

quantity EOQ, or economic lot size or run size.

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The upward-slanting carrying cost

line reflects the rising cost of

larger lots; down word curing

setup line reflects the falling cost

of making parts less often in largerlot. The some of the two costs is

the total cost curve, which

bottoms out at the economically

correct lot size, the EOQ.

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Reducing Inventory Inventory is expensive (Carrying costs)

Inventory hides problems that createinefficiency and increase costs.

Capacity problems, late vendordeliveries, imbalanced lines, equipmentproblems...

Reducing inventory reveals problems sothey can be corrected.

JIT allows firms to become more efficient,more cost effective, more productive and

more competitive.

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Role of Inventory Reduction

Inventory = Lead Time (less is better)

Inventory hides problems

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Inventory hides problems in aprocess.

Water Level = InventoryRocks = Problems in the system

Boat = Company Operations

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Small Lot Sizes & Quick

Setups

Small lots mean less average inventory and shortenmanufacturing lead time

Small lots with shorter setup times increase flexibility

to respond to demand changes single digit setups- < 10 minutes

Setup reduction process is well-documented External tasks- do as much preparation while present job is

still running

Internal tasks- simplify, eliminate, shorten steps involvedwith location, clamping, & adjustments

Ultimate goal is single unit lot sizes

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SET-UPS

Set-Up Costs are the costs of changing a

production line from making one type of product to

making a different product. Changing machine programming, dies, and

generally getting the production line reconfigured.

Set-Up Timerefers to the time it takes to changethe line for the next production run.

Reducing the set-up time saves money by reducing

the time the line is idle.

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Reducing Set-Up Time and Cost

JIT requires low set-up costs and times.

Short Set-up Times

Small lot sizes require more frequent set-ups

If you have to do 20 set-ups a day, you must be able to

do them quickly and cheaply to reduce the idleness.

The Japanese goal for set-up time is called Single-Digit

Set-up. (They strive for set-up times of less than 10minutes.)

The longer the set-up time, the more you need

to produce (lot size) to justify the setup time & cost.

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Just-in-time Purchasing

JIT in time manufacturing process makes

sure the seam less integration of

manufacturing floor JIT manufacturing toreadily be effective purchase patterns must

also be aliened this so JIT purchase is

another essential component of JIT

environment. An approach to purchasing that requires long-

term agreements with few suppliers

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Wh i ti JIT

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Why organizations use JIT

Purchasing

Reduce waste

Increased cycle times

Higher quality in products

Fewer suppliers

Reduction in warehouses

Dependable delivery

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Differences between JIT and

Traditional Purchasing

JIT Purchasing

Smaller lot sizes

More frequent deliveries

No rejection from the supplier Long-term contracts

Buyer decides delivery

schedule

Minimal paper work

Less formal communication

Innovation encouraged

Traditional

Relatively large lot sizes

Less deliveries at higher

quantities 2% rejection from supplier

Lowest price is main

objective

Supplier decides deliveryschedule

Time consuming, formal

paperwork

Formal communication30

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Demands on JIT Purchasing

Reduced number of suppliers

Stable and good communication

throughout a firm Locating suppliers nearby

Long-term relationships

Helping suppliers to increase quality

Not to get hung up by single sourcing

Buying from small firms31

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Cutting Purchase Order Costs

One way to cut purchase order costs is by

simplifying the buying process

American buyers have a bag of well known

tricks for cutting purchasing cost:Blanket orders

Stockless Purchasing

Vendor Contracting

Petty cash

Approved supplier list

32

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Are There Different Types?

JIT

Yes, but basically they all strive to achieve the

same principles.

Different Companies use different names, but thegeneric name is Just-In-Time Production.

Stockless Production (HP)

Material as Needed (Harley Davidson)

Continuous Flow Manufacturing (IBM)

Zero Inventory(.)

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Inventory & Scheduling

Set-ups:small lot sizes must be used, and short set-up times are essential to reduce inventory costs and

reduce the idle time for production lines.

Purchasing and Logistics: Iffrequent, smallshipments of purchased items cannot be providedby suppliers, then inventory costs go up as more

inventory is needed and is sitting idle.

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Zara case

AM Seminar 2003_2

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