Chapter 7: Just-in-Time and Lean Systems

Overview

This chapter examines the core beliefs of just-in-time systems (JIT). The goal of reducing waste is important in JIT. JIT uses a pull system, which is different than the push system. The key elements of JIT are described. The critical role of TQM in JIT is explained. The role of the employees in JIT is explained. Finally, we gain an understanding of the impact of JIT on all functional areas within both service and manufacturing organizations.

Answers to Discussion Questions in Textbook

1. Describe the core beliefs of the JIT philosophy.

The core beliefs of JIT are the elimination of waste, the ability of the employees to see the “big picture,” simple solutions, continuous improvement, visibility and flexibility. JIT strives to produce the right products at the right time in the right quantities. Continuous improvement and flexibility are important beliefs that help us achieve this goal.

2. Identify the three major elements of JIT.

The three major elements of JIT are just-in-time manufacturing, total quality management (TQM) and respect for people.

3. Explain how JIT manufacturing works and its key elements.

JIT manufacturing focuses on value-added processes in order to produce high volumes of high quality, low cost products that meet the customer needs. Its key elements are the pull system, kanban production, small lot sizes, short setup times, uniform plant loading, flexible resources and a streamlined layout.

4. Find an example of successful JIT manufacturing.

Toyota is a company that has successfully used JIT. It is the company that developed JIT. JIT has resulted in short lead times, high quality, low costs and flexible production.

5. Explain the importance of total quality management in JIT.

TQM is critical in JIT since poor quality would cause us to not deliver the right products at the right time in the right quantities. Poor quality would cause us to have to either spent time fixing the product or to scrap it if it can not be fixed.

6. Find an example of successful TQM implementation.

Motorola, a winner of the Malcolm Baldrige National Quality Award, has successfully implemented TQM. Motorola is also known for focusing on achieving six sigma quality, which translates into about 3 defective parts per million.

7. Explain the importance of respect for people in JIT.

Respect for people is important in JIT because everyone must be involved in managing and improving production. The employees must work together effectively in order to successfully implement JIT.

8. Find an example of a company that has high respect for people.

Southwest Airlines is known for its high respect for people. They make a great team, where everyone lends a hand to help where needed.

9. Describe the JIT implementation process. Why should some things be changed before others?

The JIT implementation process consists of the following steps, which are listed in order:

• Make quality improvements.
• Reorganize the workplace.
• Reduce setup times.
• Reduce lot sizes and lead times.
• Implement layout changes.
• Switch to pull production.
• Develop relationships with suppliers.

Some steps must be done before others to allow us to be successful. For example, we can not effectively and efficiently reduce lot sizes until we first reduce the setup times.

10. Find examples of JIT in services. Which aspects of JIT are easiest to apply in services?

McDonald’s has implemented JIT in their program “Made for You.” This program, which was implemented a few years ago in the restaurants, consists of a making food to order. It consists of computerized kitchens with the use of some robotic technology (Edwards, 1998). For example, Edwards points out that machines dump fries into a basket, lower the basket into the oil and then remove the fries when done. Doucette (1998) states that the company revamped its point of service software, toasters, prep tables and holding bins. According to Doucette, the prep tables were redesigned for a smooth, more efficient, work flows.

The easiest aspects of JIT to apply in services are the use of multifunction workers, cycle time reductions, setup time reductions, parallel processing, and workplace reorganization.

11. Explain how you would use JIT to make your life more efficient.

I can focus on eliminating waste. The wastes that JIT focuses on are time, energy, space or human activity that does not contribute value. I live in a townhouse where my office is upstairs, while the kitchen is downstairs. So, I try to reduce the number of trips up and down the stairs. I leave items on the stairs that need to go up to wait until I really need to go upstairs.

Answers to Textbook Case – Katz Carpeting

1. What suggestions do you have for implementing JIT at Katz? Should specials and standards be produced on the same line? (Hint: Do they require the same type of operation?)

Specials and standards should not be produced on the same line since they do not require the same type of operation. JIT uses cells for manufacturing. We could easily divide these two areas into lines or cells of their own, and even have more than one cell per area.

2. If production of standards and specials is separated, how different will JIT implementation be for production of the different products? Explain what would be needed in JIT implementation for both products.

JIT implementation will not differ much for these two types of products. The main difference is the critical need of reducing setup times for the production of specials. To implement JIT for both products, we will need to perform the following steps:

1. Make quality improvements. In order to produce the right number of products at the right time, without waste, we need to improve quality.
2. Reorganize the workplace. The layout, cleanliness and organization of the environment must be improved.
3. Reduce setup times. Setup times must be reduced in order to allow us to be flexible in production, and reduce waste since setup time does not generate income. Setup time takes away from the production time available to produce product. In addition, we need short setup times in order to be able to justify production in small batches to be flexible. It is much more important to reduce the setup times for special products since these times are quite high.
4. Reduce lot size and lead times. Once setup times are reduced, we can reduce the lot or batch size. Reducing the setup times and batch sizes cause the lead times to significantly decrease.
5. Implement layout changes. The layout needs to change in order to improve the process. We should form line flows and create cells of these lines.
6. Switch to pull production. The customer orders pull the products through the production process.
7. Develop relationships with suppliers. We need to develop relationships with suppliers in order to improve quality and receive frequent deliveries of raw materials.

3. What suggestions do you have for improving the way the production schedule is currently made?

JIT uses frozen schedules for manufacturing for some period of time before allowing changes. This is what needs to be done in order to improve production scheduling. Making frequent changes to the schedule is disruptive.

4. How would you characterize Josh’s view of JIT? What challenges do think a consultant will face in implementing JIT at Katz? If you were a consultant how would you approach these problems?

Josh does not have a positive view of JIT. A consultant would need to overcome the resistance that Josh would show concerning a JIT implementation. I would approach these problems using the TOC approach for buy-in (which is discussed in the TOC Tips section of chapter 2 of this manual). It is important to help Josh figure out what his current problems are and to gain a better understanding of how JIT is beneficial. We will need to help him understand that idle time is not bad. The goal of the company is not to keep everyone busy. It is, in many cases, to make money now and in the future. We can demonstrate how keeping everyone busy can actually hurt our financial performance.

Answers to Textbook Case – Dixon Audio Systems

1. Identify the pros and cons of a JIT relationship from a supplier’s point of view.

A supplier such as D&S can obtain several benefits from establishing a JIT relationship with a buyer such as Dixon. Usually, such relationships are longer term, more cooperative, and with a small set of vendors. D&S will then have a more certain, steady demand for their product. They should also have more accurate forecasts further into the future. Besides these demand benefits, D&S could improve its production and distribution efficiency. Better knowledge of the size and timing of orders would allow them to plan operations more efficiently. As they are responsible for much of the ordering, they can better coordinate their operations with the order cycles.
However, D&S does have some reasons to be concerned also.. The relationship shifts supply responsibility to D&S. The guaranteed business would be at risk if D&S were to forecast or perform poorly. Further, the responsibility for placing orders in now a D&S paid employee.

2. Identify the pros and cons of a JIT relationship from a buyer’s point of view.

A buyer, such as Dixon, can obtain many relationships from a JIT relationship with a supplier. Order timing becomes the responsibility of the vendor. Quality should improve and deliveries should become more reliable. Through better coordination, the supplier’s costs should improve, which may eventually be reflected in their price.
Buyers often have several concerns of such an arrangement. For one, seldom does a supplier have only one customer in a market. Buyers worry that sensitive information, such as upcoming product promotions, may become known to their competitors through the information they share with the supplier. Buyers are also often reluctant to give up the ability to play one vendor against another in search for the lowest price.

3. What factors should Dixon and D&S consider before making a decision on this relationship?
Dixon should be concerned with whether D&S has the capacity to deliver all that they need. They also need assurance that D&S can meet their quality and timing requirements consistently. Dixon should also make certain that sensitive company information will not fall into the wrong hands. Finally, they should make sure they are not committing to a price that may evolve to a higher than market price if conditions change.
D&S need to protect themselves also. What are their liabilities if they are responsible for poor quality or missed orders at Dixon? What assurance do they have that the agreed price will remain competitive? Also, Dixon is not their entire customer base. Does this commitment limit their freedom to accept other, possibly more profitable, orders?