Page 306 - DMGT501_OPERATIONS_MANAGEMENT

Operations Management

Notes 13.9 Just-in-Time and Lean Operations

Just-in-Time (JIT) is a term that has often been used interchangeably with Lean Manufacturing.
Some say it is a predecessor to Lean Manufacturing, but in any case, it is an essential part of lean
manufacturing.
JIT is a management philosophy that strives to eliminate sources of manufacturing waste by
producing the right part in the right place at the right time. Waste results from any activity that
adds cost without adding value such as moving and storage. JIT improves profits and return on
investment by reducing inventory levels, reducing variability, improving product quality and
reducing production and delivery lead times. In a JIT system, underutilized (excess) capacity is
used instead of buffer inventories to hedge against problems that may arise.
Just-in-time is a movement and idea that has gained wide acceptance over the past decade. As
companies became more and more competitive and the pressures from Japan's continuous
improvement culture mounted, other firms were forced to find innovative ways to cut costs and
compete. The notion of pushing materials in large quantities no longer made sense. Both the
financial costs and the required resources of doing so are counter productive in the long run. It
is wiser to deliver materials only just before they are needed and only in the quantity required.
A firm cannot implement a JIT system by itself; it must have the complete cooperation of its
entire Supply Chain. A large amount of information is needed for a JIT system to operate well.
It demands partnerships to be formed and nurtured, almost to the point at which an entire
supply chain operates as one firm. Examples of these kinds of partnerships are everywhere in
today's business world.
Kanban is a Japanese word meaning flag or signal and is a visual aid to convey the message that
action is required. The Kanban inventory control system was an integral part of TPS. JIT uses a
Kanban system. It works on the basis that each process on a production line pulls just the
number and type of components the process requires, at just the right time. Kanban is usually a
physical card but other devices can be used. A Kanban is a card that is attached to a storage and
transport container. It identifies the part number and container capacity along with other
information. There are two common types of Kanban systems used; the one-card system and the
two-card system.

The Two-Card System: The two-card system is the more popularly used Kanban system. It uses
two kinds of Kanban cards:
1. Conveyance Kanban (C-Kanban), signals the need to deliver more parts to the next work
center. It specifies the kind and quantity of product which a manufacturing process should
withdraw from a preceding process. The C-Kanban in Figure 13.7 shows that the preceding
process which makes this part is forging, and the person carrying this Kanban from the
subsequent process must go to position B-2 of the forging department to withdraw drive
pinions. Each box of drive pinions contains 20 units and the shape of the box is ‘B’. This
Kanban is the 4th of 8 issued. The item back number is an abbreviation of the item.
2. Production Kanban (P-Kanban), signals the need to produce more parts. It specifies the kind
and quantity of product which the preceding process must produce. The P-Kanban on the
right in Figure 13.7 shows that the machining process SB-8 must produce the crankshaft for
the car type SX50BC-150. The crankshaft produced should be placed at store F26-18. The
production-ordering Kanban is often called an in-process Kanban or simply a production
Kanban.

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