Pull and JIT PDF

Pull Manufacturing and Just In Time
Lean Manufacturing Series
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Contents
1.  Introduction
2.  Background and History
3.  Components and Implementation
4.  Knowledge Check

Introduction
•  Just In Time (JIT) is an inventory strategy implemented
to improve the return on investment of a business by
reducing in-process inventory and cycle time. The
process is driven by a series of signals, or Kanban, that
tell production processes to make the next part. When
implemented correctly, JIT can lead to dramatic
improvements in a manufacturing organization's return
on investment, quality, and efficiency.

Background and History
•  First used by the Ford Motor Company as part of "dock to
factory floor" in which incoming materials are not even
stored or warehoused before going into production.
•  Subsequently adopted by Toyota as part of its Toyota
Production System (TPS).
•  Japanese corporations cannot afford large amounts of land
to warehouse finished products and parts. Before the 1950s,
this was thought to be a disadvantage because it reduced
the economic lot size.
•  Taiichi Ohno, examined accounting assumptions and realized
that another method was possible. The factory could be
made more flexible, reducing the overhead costs of
retooling and reducing the economic lot size to the available
warehouse space.
•  Toyota engineers redesigned car models for commonality of
tooling.

Background and History
•  Toyota engineers then determined that the remaining
critical bottleneck in the retooling process was the time
required to change the stamping dies used for body parts.
•  Toyota implemented a strategy called Single Minute
Exchange of Die (SMED), developed by Shigeo Shingo.
Almost immediately, die change times fell to about half an
hour. Procedural changes (such as moving the new die in
place with the line in operation) and dedicated tool-racks
reduced the die-change times to as little as 40 seconds.
•  After SMED, economic lot sizes fell to as little as one vehicle
in some Toyota plants.
•  This made it possible to store as little as one part in each
assembly station. When a part disappeared, that was used as
a signal to produce or order a replacement.
Components and Implementation
•  Pull vs. Push Scheduling
•  The Problem of Inventory
•  Just In Time
▫  Principles
▫  Benefits and Limitations
•  Implementing JIT
▫  Kanban
▫  Pull Systems
▫  Quality
▫  One Piece Flow
▫  Continuous Flow
▫  Takt Time
•  JIT and Suppliers
Lean Manufacturing
•  Lean manufacturing is really about minimizing the need
for overhead
•  which is about concentrating precisely on only what is
necessary
•  which is about linking interdependent supply system
decisions, and actions
•  which needs to be visual, responsive and simple to
manage

Push Vs. Pull Scheduling
•  Push Scheduling
▫  traditional approach
▫  “move the job on when finished”
▫  problems - creates excessive inventory
•  Pull scheduling
▫  coordinated production
▫  driven by demand (pulled through system)
▫  extensive use of visual triggers
▫  (production/withdrawal kanbans)

Inventory: Root of All Evil
•  If the meaning of production control is truly
understood, inventory control is unnecessary.
-- Taiichi Ohno

Inventory Hides Problems
Work in process inventory level

(hides problems)
Unreliable Capacity
Scrap
Vendors Imbalances

Lowering Inventory Reveals Problems
•  Accommodate lower inventory levels by:
▫  Reducing variability
▫  Eliminating waste
▫  Streamlining production and material flows
▫  Accurate information
Unreliable WIP Capacity

Scrap
Vendors Imbalances

What is Just-in-Time?
•  Management philosophy of continuous and forced
problem solving (forced by driving inventory out of the
production system)
•  Supplies and components are ‘pulled’ through system
to arrive where they are needed when they are needed
•  Goal: Achieve the minimal level of resources required
to add the necessary value in the production system.

The Philosophy of JIT
•  JIT means getting the right quantity of goods at the
right place and the right time
•  Often termed “Lean Systems”
•  All waste must be eliminated- non value items
•  Broad view that entire organization must focus on
serving customers
•  JIT is built on simplicity- the simpler the better
•  Focuses on improving every operation- Kaizen
•  Install simple visible control systems
•  Flexibility to produce different models/features

Elements of JIT Manufacturing
•  JIT Manufacturing is a philosophy of value-added
manufacturing
•  Achieved by
▫  Inventory reduction - exposes problems
▫  Kanbans & pull production systems
▫  Small lots & quick setups
▫  Uniform plant loading
▫  Flexible resources
▫  Efficient facility layouts

The Objective of JIT
•  To eliminate waste
•  by
•  Producing the needed item
•  at the right time
•  and the exact quantity

JIT Principles
•  Produce only the products the customer wants
•  Produce products only at the rate that the customer
wants them
•  Produce with perfect quality
•  Produce with minimum lead time
•  Produce products with only those features the customer
wants
•  Produce with no waste of labor, material or equipment
-- every movement must have a purpose so that there is
zero idle inventory
•  Produce with methods that allow for the development
of people
JIT Principles
•  Create flow production
▫  one piece flow
▫  machines in order of processes
▫  small and inexpensive equipment
▫  U cell layout, counter clockwise
▫  multi-process handling workers
▫  easy moving/standing operations
▫  standard operations defined
•  Establish “TAKT” time
▫  rate at which the customer buys a product
•  Build Pull Product
▫  use of kanban system

JIT Tactics
•  Single Minute Exchange of Dies (SMED)
•  Statistical Process Control
•  Use of standard containers
•  Doable stable schedules with adequate visibility
•  TAKT-Time
•  5-S Program
•  Kaizen Event
•  Visual control
•  Flexible workers
•  Tools at the point of need
•  Product redesign
•  Group Technology
•  Total Productive Maintenance
Benefits of JIT
•  Smaller inventories
•  Shorter lead times
•  Improved quality
•  Reduced space requirements
•  Lower production costs
•  Increased productivity
•  Greater flexibility

Benefits of JIT
•  Unpleasant surprises eliminated
•  Less computerization
▫  visual control
•  Improved quality
•  WIP reduced
•  Better communications
•  Less pressure on receiving docks and incoming
inspection areas
•  Lower costs
•  Change in attitude
▫  Defects are treasures

Expected Results of JIT
•  General
▫  50-90% reduction in throughput times
▫  50-90% reduction in WIP
▫  60-80% reduction in scrap and rework
▫  50-90% reduction in setup times
▫  30-60% reduction in space requirements
▫  10-1000X improvement in quality specifics
•  In three to seven years
▫  5-10X improvement in overall quality
▫  4-10X improvement in inventory turns
▫  improvements in return on assets

Limitations of JIT
•  Preconditions to JIT
▫  trust must be present
  labor/management
  suppliers/consumers
▫  recognition of processes
▫  familiarity with problem solving
▫  quality at the source
▫  agreement over value and waste

Limitations of JIT
•  Right Settings
▫  Applicable in growth to maturity phases of Product Life Cycle
▫  Standard product
  Steinway and JIT
▫  Standard/fixed pay-rate
  Problems with piece-rate scheme
•  Universal agreement that change needed

Just-in-Time Success Factors
Flexible/ Suppliers Flexible

Empowered Layouts and
Employees Processes
JIT Small Lot

Quality Production/
Short Setup
Total Productive Demand/Pull

Maintenance Scheduling

Quality Enables JIT
•  Processes are easy to understand—visible
•  Quality issues are apparent immediately
•  Scope of problems are limited because of lower
inventory levels
•  TQM management methods are very important
•  Quality of execution typically determines how low
inventories can be reduced!

JIT Production, AKA…
•  ZIPS (Zero Inventory Production System) -- Omark industries
•  MAN (Material As Needed) -- Harley Davidson (Also: “Quality
Machine Through Jelly-Beans,” where jelly beans refers to running
one-piece lots, or mixed models, in final motorcycle assembly)
•  MIPS (Minimum Inventory Production System) -- Westinghouse
•  Stockless Production -- Hewlett Packard, Greeley Div.
•  Continuous Flow Manufacturing (CFM) -- IBM
•  Kanban -- Many companies both in North America and Japan
•  Toyota System -- Many companies in Japan
•  Ohno System (after Taiichi Ohno, a Toyota vice president and
master-mind of the system) -- Many companies in Japan
•  Just-In-Time (JIT) Production -- Most popular term both in North
America and Japan

JIT Logic - Formulas
•  Formula 1: Little’s Law
=
Average Throughput Average Production
WIP Rate
X Lead Time
•  Formula 2: Average Production Lead Time

Average Average Measure of
Production
Lead Time = Processing
Time
X System
Utilization
X (C 2
S +C 2
A )
Measure of variance in the Measure of variance of
processing times of jobs interarrival times of
customer orders

Effects of JIT production
(F)
Heightened (H)
awareness of Reduced buffer
Ideas for problems and inventories and/or
cutting lot problem causes workers
sizes (E) Deliberate
Ideas for Fast feedback withdrawal of
Ideas for
improving on defects buffer
controlling
JIT delivery inventories /
defects
performance workers
(G)
Lot size JIT (B) Smoother
reductions production Scrap/quality output rates
control
(I)
(A) Less indirect cost for:
Less interest on idle inventory,
space and equipment to
inventory handle inventory, inventory (D)
(C)
in the accounting, physical Fewer rework Less material
system inventory control labor hours waste
Less material, labor, and indirect inputs for the same of higher output = higher productivity
Less inventory in the system = faster market response, better forecasting, and less administration.
Implementing JIT
•  Implementation needs a designated “Champion”
•  Make quality improvements- all processes O-P
•  Reorganize workplace
▫  Remove clutter & minimize storage
•  Reduce setup times
•  Reduce lot sizes & lead times
•  Implement layout changes
▫  Cellular manufacturing & close proximity
•  Switch to pull production
•  Extend methods to suppliers

JIT Implementation
1) Design Flow Process
7) Improve Product Design -Link operations
-Standard product configuration -Balance workstation
-Standardize and reduce capacities
number of parts 2) Total Quality Control
-Re-layout for flow -Worker responsibility
-Process design with -Emphasize preventive
product design -Measure: SQC
maintenance
-Quality expectations -Enforce compliance
-Reduce lot size
-Fail-safe methods
-Reduce setup/changeover time
-Automatic inspection
6) Reduce Inventory More

-Look for other areas Concurrently
-Stores Solve Problems 3) Stabilize Schedule
-Transit -Root Cause -Level schedule
-Carousels -Solve permanently -Underutilize capacity
-Conveyors -Team approach -Establish freeze
-Line and specialist windows
responsibiity
-Continual education
5) Work with Vendors
-Reduce lead times
Measure Performance 4) Kanban Pull
-Frequent deliveries
-Emphasize -Demand pull
-Project usage
improvement -Backflush
requirements
-Track trends -Reduce lot sizes
-Quality expectations
JIT Scheduling Tactics
•  Build products to stock or order
•  Plan level schedules (Constant rate of production)
•  Produce in small lots/mixed model production (dictated
by set-up and thru put times)
•  Demand initiates lower level production/supplier
deliveries—Use of kanbans
•  Suppliers plan to forecast/build to demand

Dealing with Variance
•  Four major stances:
▫  Buffer against it
▫  Ignore it
▫  Manage it
▫  Eliminate it
•  All forms of variance create cost

JIT & Variance
•  Variance a fact of life
•  Comes from many sources
•  Internal
•  scheduling changes, scheduling practices, manufacturing planning
& control systems, absenteeism, process variability
•  External
•  changes in forecasts, actual demand, customer requested changes,
government, competition, vendors

Kanban
•  Japanese word for card
•  Authorizes production from downstream operations
based on physical consumption
•  May be a card, flag, verbal signal etc.
•  Used often with fixed-size containers
•  Kanban quantities are a function of lead-time and
consumption rate of the item being replenished (min
qty=(demand during lead-time + safety stock)/
container quantity)

Kanban Production Control Systems
Production Withdrawal
Kanban Kanban
Machine Center Assembly Line
Storage

Kanban Squares
X X X
X
X X
Flow of work
Flow of information

Kanban Card
Unique Part #
46-281247p1 Description
27” Al Rim
Qty
Where to find
part when bin 23 Kanban Qty
is empty
Where to return
Stock Loc: Line Loc: filled Kanban
RIP 1 Asm. 1

Number of Kanbans Required
DT + S
N=
C
N = number of containers
D = demand rate at the withdraw station
T = lead time from supply station
C = container size
S = safety stock

Kanban Calculation Example
•  An aspirin manufacturer has converted to JIT manufacturing using kanban
containers. They wish to determine the number of containers at the bottle filling
operation which fills at a rate of 200 per hour. Each container holds 25 bottles, it
takes 30 minutes to receive more bottles, safety stock is 10% of demand during LT.
Solution :
D = 200 bottles per hour
T = 30 minutes = .5 hour
C = 25 bottles per container
S = 0.10(deman d)(T) = 0.10(200)(.5) = 10 bottles
DT + S (200)(.5) + 10
N= = = 4.4 kanban containers
C 25
N = 5 kanban containers (round up)
Quality at the Source
•  For JIT & Kanban to work, quality must be high
▫  There can be no extra inventory to buffer against the
production or use of defective units
•  Producing poor-quality items, and reworking or
rejecting them is wasteful
•  The workers must be responsible for inspection &
production quality
•  The philosophy is, “NEVER pass along defective item”

One Piece Flow
•  A philosophy that rejects batch, lot or mass processing
as wasteful
•  States that product should move (flow) from operation
to operation, only when it is needed, in the smallest
increment
•  One piece is the ultimate (one-piece-flow)

Continuous Flow
•  Line up all of the steps that truly create value so they
occur in a rapid sequence
•  Require that every step in the process be:
▫  Capable – right every time (6 Sigma)
▫  Available – always able to run (TPM)
▫  Adequate – with capacity to avoid bottlenecks
(right-sized tools)

Continuous Flow
•  Linking manual and machine operations into the most
efficient combinations to maximize value-added
content while minimizing waste
•  Elimination of work stagnation in and between
processes
•  Ideal creation of one piece flow: making one part and
moving one part (in contrast to batch and queue
material handling)
•  In order to really get and hold the benefits of flow
production the organization must transition from a
functional structure to a product-focused, cross-
functional structure

Pull Production
•  Actual customer demand drives the manufacturing
process
•  It creates a system of cascading production and
delivery instructions from downstream demand to
upstream production in which nothing is produced by
the upstream supplier until the downstream customer
signals a need
•  The rate of production for each product is equal to the
rate of customer consumption

Pull Production
•  Through lead time compression & correct value
specification, let customers get exactly what’s wanted
exactly when it’s wanted:
▫  For the short term: Smooth pull loops to reduce inventory
▫  For the near term: Make-to-order with rapid response time
▫  For the long term: Diagnostics and prognostics in a stable
relationship to take out the surprises for consumers and
producers

Pull System
Leveled assembly
instructions
Production A Fab Vendor
C
Schedule A
B Sub
A
Fab Vendor
Customers Final Assy
Sub Fab Vendor

Vendor
Fab Vendor

Work Balancing / TAKT Time
•  Work balancing maximizes operator efficiency by
matching work content to TAKT time
•  TAKT time is the rate at which customers require your
product
•  TAKT time is calculated as follows:
Available work time per day

Daily required customer demand in parts per day

TAKT Time Example
•  Net Available Operating Time
▫  Time per shift 480´ (minutes)
▫  Breaks (2 @ 10´) - 20´
▫  Clean-up - 20’
▫  Lunch - 30’
▫  NAOT/shift 410´
•  Customer Requirements
▫  Monthly 26,000 units/month
▫  No. Working Days 20 days/month
▫  CR/Day 1,300 units/day
•  TAKT Time
▫  410’ x 60” x 3 shifts (73,800) divided by 1,300
▫  57.769 seconds per part or 57"

JIT and Suppliers
•  Few
•  Nearby (if possible)
•  Repeat business/Longer Term Agreements
•  Analysis to enable desirable suppliers to become or stay
price competitive
•  JIT Logistics:
▫  Frequent Deliveries/Smaller Quantities
▫  Exact Quantities
▫  Consumption initiates deliveries
▫  Deliveries directly to the point of use
•  Perfect Parts
•  Concurrent engineering design practices
JIT and Suppliers
•  Use single-source suppliers when possible
•  Build long-term relationships
•  Work together to certify processes
•  Co-locate facilities to reduce transport if possible
•  Stabilize delivery schedules
•  Share cost & other information
•  Early involvement during new product designs

Small Lot Sizes & Quick Setups
•  Small lots mean less average inventory and shorter
manufacturing lead time
•  Small lots with shorter setup times increase flexibility
to respond to demand changes
•  Strive for 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 involved with
location, clamping, & adjustments
•  Ultimate goal is single unit lot sizes

JIT in Services
•  Most of the JIT concepts apply equally to Service
companies
•  Cellular layouts, product focused, & flexible employees
shorten response times
•  Service inventory, “paperwork”, should be eliminated,
simplified, examined for “waste”
•  “Fail-safe” all processes from Orders-Payment
•  Team based organizations

Knowledge Check
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What company first used Just-in-Time?
o A) Toyota
o B) Ford
o C) General Motors
o D) Honda

Inventory hides problems.
o A) True
o B) False

What assists in accomodating low inventory
levels? (Mark all that apply)
1.  Increasing variability
2.  Eliminating waste
3.  Streamlining production

and material flows
4.  Accurate information

What are the key elements of Just-in-Time
manufacturing? (Mark all that apply)
1.  Increase Inventory
2.  Kanbans & pull

production systems
3.  large lots
4.  Uniform plant loading
5.  Flexible resources

What are some of the principles of Just-in-Time
1.  Produce only the
products the customer
wants
2.  Produce products only at
the rate that the
customer wants them
3.  Produce with perfect
quality
4.  Produce with minimum
lead time
5.  Produce products with
only those features the
customer wants

What are some of the benefits of Just-in-Time
1.  Smaller inventories
2.  Longer lead times
3.  Improved quality
4.  Reduced space

requirements

What are the general results of implementing
Just-in-Time manufacturing? (Mark all that apply)
1.  50-90% reduction in
throughput times
2.  50-90% reduction in WIP
scrap and rework50-90%
reduction in setup
times
space requirements

What are some of the keys to using Just-in-Time
with suppliers? (Mark all that apply)
1.  Use single-source
suppliers when possible
2.  Build long-term
relationships
3.  Work together to certify
processes
4.  Co-locate facilities to
reduce transport if
possible

What are the advantages of small lots? (Mark all that
apply)
1.  Less average inventory
2.  Shorter manufacturing

lead time
3.  Increase flexibility to

respond to demand
changes

Explain the differences between “push” and “pull” systems.

How can JIT and Pull be implemented in your organization?

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Pull Manufacturing and Just In Time

Lean Manufacturing Series

Gemba Academy provides over 750 online Lean and Six

© 2013 Gemba Academy LLC. All rights reserved.

• Current contact information can be found at: GembaAcademy.com

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Work in process inventory level

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Unreliable WIP Capacity

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Flexible/ Suppliers Flexible

JIT Small Lot

Total Productive Demand/Pull

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• Formula 2: Average Production Lead Time

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6) Reduce Inventory More

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Machine Center Assembly Line

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Sub Fab Vendor

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Available work time per day

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2. Eliminating waste

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•  Formula 2: Average Production Lead Time

2.  Eliminating waste

3.  Streamlining production

4.  Accurate information

2.  Kanbans & pull

3.  large lots

4.  Uniform plant loading

5.  Flexible resources

2.  Longer lead times

3.  Improved quality

4.  Reduced space

1.  Less average inventory

2.  Shorter manufacturing

3.  Increase flexibility to

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