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JIT Manufacturing
"Just -in-Time"
(Lean Manufacturing and Stockless Production)

Scott C. Frazier
Undergraduate Student, Ball State University

Spring 2004

Introduction

Just-in-time (JIT) manufacturing is a way of managing manufacturing

systems that could reduce waste, and lower cost, thus increasing profit. In its
most basic explanation and principle JIT is every component in the
manufacturing system arriving just in time for it to be used. Since the products
arrive just in time there is no need for stock holding facilities of any kind. The
most common industry using JIT manufacturing is the automobile industries.
However, many other companies of all sizes and products are currently using
and transitioning to just-in-time manufacturing. Although just-in-time
manufacturing sounds like a very simple application, implementing it can be a
very costly and difficult task.
History

JIT manufacturing can be traced back to the late 1700’s (Just In Time,
Toyota). Eli Whitney contributed his concept of interchangeable parts to the
idea of JIT manufacturing in 1799. This concept was developed when Whitney
took a contract from the United States Army to manufacture 10,000 muskets at
the low price of $13.40 each (Just In Time, Toyota). Over the next several
years manufactures overall focused on the development of individual
technologies. Through these years few people were concerned with the
processes that each product went through during production (Just In Time,
Toyota).

Early industrial engineers in 1890 began to be concerned with individual

work methods, applying science to management, and all work elements.
Frederick Taylor contributed the idea of standardized work (Just In Time,
Toyota). Frank Gilbert conducted a motion study, which led to the
development of process charting and organized labor tasks (Just In Time,
Toyota).

In 1914 Henry Ford introduced the idea of the moving assembly line to the
world while producing his Model-T Ford, this revolutionized manufacturing
(Henry Ford, n.d.). By 1916, Ford began to implement the idea of JIT
manufacturing (Wren, 1999). This reduced the inventory needed from $60
million to $20 million dollars to produce the same number of vehicles (Wren,
1999).

The present idea of JIT manufacturing can be traced to Toyota motor

company in Japan. However, to begin use of JIT manufacturing in Japan, they
first researched American production methods focusing on Ford’s practices
(Just In Time, Toyota). In Japan JIT manufacturing is referred to as the Toyota
Production System (Beasley, J. E., n.d.). The realization for the new
system came after World War II when the Japanese automotive manufactures
knew they were far behind the American motor companies. The president of
Toyota made a comment about the gap, "Catch up with America in three years,
otherwise the automobile industry of Japan will not survive." (Beasley, J. E.,
n.d.) JIT manufacturing is a result of limited demand, space, and resources in
Japan compared to America. By assessing and solving these problems Toyota
was able to increase efficiency and keep up with American auto
manufacturing. Ten years after the first introduction of the new production
system Toyota successfully implemented this technique across the company.
This began started to be implemented into the western world during the late
1970's to early 1980's.

Toyota Production System

Toyota realized that they could not follow the same manufacturing technique
as American manufacturing because of the their relatively low space, resources,
and demand. At the time the American auto manufacturers used the traditional
way such as to make a batch of certain products (Beasley, J. E., n.d.). To do
this they ordered enough parts to complete the batch, so they have to stock or
store the materials. So Ohno came up with a system that would better fit
Japan's capabilities. The whole system is based on the elimination of waste
principle. Time, resources, and materials were all areas where waste could be
found according to Ohno. The following are more specific areas that could be
corrected to improve efficiency:

• "overproduction - waste from producing more than is needed

 • time spent waiting - waste such as that associated with a worker being
idle whilst waiting for another worker to pass him an item he needs (e.g.
such as may occur in a sequential line production process)
• transportation/movement - waste such as that associated with
transporting/moving items around a factory
• processing time - waste such as that associated with spending more time
than is necessary processing an item on a machine
• inventory - waste associated with keeping stocks
• defects - waste associated with defective items"(Beasley, J. E., n.d.)

Ohno discovered two ways to reduce waste, just-in-time and autonomation.

The theory of just-in-time is the basic principle for the majority of his
manufacturing system (Beasley, J. E., n.d.). Stock is seen as unnecessary and a
waste using this method. Materials and resources are provided only when they
are ready to be used in the production system. Autonomation is technique that
regulates the amount of human interaction concerning inspections of parts or
products. The goal is to limit the human involvement and make the system as
automated as possible. A device will be implemented into the system to detect
defects, and only when that device detects a defect is there a human inspection.
However, when a defect is detected the system stops and will not start again
until the problem is recognized and fixed.

Toyota used the kanban to control the flow of inputs and output in the
production system. Kanban is a Japanese word that basically means sign. This
was a "rectangular piece of paper within a transparent vinyl envelope, (Beasley,
J. E., n.d.)" that gave instructions on what needed to be done. It gave
instructions such as things that needed to be withdrawn from the system, items
that needed to be produced, and amounts of materials need and when. There
are two main types of kanban, the production kanban and the conveyance
kanban (Just In Time (JIT), n.d.). The production kanban lets the workers
know that more of a certain part needs to be produced. The conveyance kanban
lets them know that parts need to be transported to another center. This type
can also be called a move or withdrawal kanban. The kanban is classified as a
pull system in production, which means that when parts are need they are
pulled and sent to the location in need (Just In Time (JIT), n.d.). The starting
point for a pull system is the customers and then it works it way backwards all
the way to the original resources (Glenn, T. 2001). This differs from a push
system in that a push system has a set schedule and all the parts are moved
when the schedule is complete. However the kanban did not allow or take into
account defects. So it an item was found to have a defect the end production
quantity would not be achieved. There are three key rules when using the
kanban (Just In Time (JIT), n.d.). First, no part can be manufactured with
authorization from the kanban. Second, each container has a production and
conveyance kanban. Third, all containers used are standard. The number and
type of containers used is determined by the management. In America this is
generally referred to as kitting and has basically the same concepts, limitations,
and rules (Ideal Manufacturing Scene).

Limiting setup time is also a key factor in the Toyota Production System.
Since setup time is also down time which means the production line has
stopped and employees are getting paid for waiting. To decrease setup time the
machines were reengineered so that optimal setup time could be achieved thus
saving money (Beasley, J. E., n.d.).

Implementation and Integration

 Implementing or integrating JIT into a company is not a decision made
lightly. It must be thought through and planned very carefully. Implementing
JIT will not happen in a overnight it takes time and commitment. Commitment
must be made at all levels within the company to successfully implement it into
the system.

Objectives

An overall objective is to limit resources used in the manufacturing system to

only those needed (Just-In-Time Manufacturing). There are six other
objectives that are a key part to obtain the overall objective. The first is to
optimize each individual step of the manufacturing system. In other words
make part as efficient as possible to get the most from the least. Second is to
make a a product with no flaws or defects. This ensures that each part of the
production line will go as planned. Third is to reduce the manufacturing cost,
the cheaper it is to make the product the larger the profit for the company.
Fourth is to make a product that is demanded by consumers. If there is no
demand then then there is only money lost. Fifth there needs to be flexibility in
the system. Things will not always go as planned and there needs to be a
flexible enough system so that it can be modified easily. Sixth, there needs to
be a strong and reliable relationship between customers and suppliers. Since
JIT technique has virtually no extra stock or materials the companies need to
rely on each other to be reliable and on time. These objectives need to be taken
into consideration by any company looking to integrate JIT, and are crucial to
being successful in the integration.

Keys to Implementation and Integration

 Just-in Time manufacturing is difficult to setup because each company needs
to personalize for their type of company to fit their specific needs. Although
many companies seek help from consultant firms for the difficult task ahead,
there are many key points that they they can address themselves (Just-In-Time
Manufacturing). Changing over the current output production in the companies
factories to limited or constant quantity is a good start in the process to
determine exactly how many resources are going into making a certain amount
of products. setup time is an issue that each company can look to improve its
efficiency. A good rule is to be able to change the setup in a single digit time
frame. Schedule meetings on a regular basis with the workers to gather
information on problems as well as a possible possible solutions, and other
suggestions (Beasley, J. E., n.d.). This will make the workers feel involved in
the implementation, and may result in a positive attitude about the change
over. This could mean redesigning several areas such as the product or the
process itself. Once a reduced setup time is achieve the system now has the
ability to more efficiently produce smaller batches of products. However, this
will require deliveries of materials to be more often. Reducing time in between
the transportation of the individual parts can also improve the efficiency. To
accomplish this, work stations can be moved closer together. As well as the
amount of time a part is waiting to be processed at an individual station can be
lowered. Finding a supplier closer to the factory or convincing one to relocate
closer will also reduce lead time. Using down time is also another way to help
with productivity and efficiency. While a worker or machine is waiting for
other parts of the system to be used maintenance can be performed on the
machinery. This makes the most of the workers time and can help to prevent
future breakdowns do to lack of maintenance. Provide the workers with more
responsibilities and training. This can include training on several machines,
ability to maintain the machines, and perform correct inspection This will
make the the companies work force more versatile and can help with issues of
absences. Although the kanban system is not required in a JIT system it is a
good organizational tool to help eliminate misunderstandings and increase
communication. These points are things the company can control and improve
to help the successful integration of the JIT system.

Suppliers

Since JIT is a stockless production and does not allow room for defects or
error having trustworthy reliable suppliers is an important factor. When
choosing a reliable supplier consider their location and prior occurrences with
labor issues such as strikes. Once a reliable supplier is found creating a good
relationship is the next step. This is a two way relationship in that both the
company and supplier get some positive out of it (Just-In-Time
Manufacturing). The company gets products or material with no errors or
defects, a quality partnership, and gets everything on time according to delivery
schedules. Also the supplier must have a back-up plan incase for emergencies
such as strike, weather conditions, and any other problem that many arise. The
supplier gets a long term contract, constant demand for their product, and a
good constant price.

Non-Automotive Companies

When discussing JIT manufacturing usually it is being applied to the

production of a tangible item, more specifically automotive manufacturing.
Strategy Manufacturing Inc. is an example of an non-automotive company that
explored the option of JIT as an manufacturing technique (Glenn, T. 2001).
Strategy specializes in printing publications, such as manuals, book, and
manuscripts. They originally printed in large batches and that was a problem
because they could not keep up with consumer demand because of switching
from one publication to the next took to long. They tried implements JIT with
their current technology but this was not sufficient to there needs. It increased
their efficiency when printing low volumes of publication, but with higher
volumes it was more expensive and placed limitations on the companies
output. After updating their system and purchasing an on demand printing
system they were better able to implement several components of JIT. Some of
the components being shorter setup times, smaller cycle times, and fewer
defects. The most influential component being setup times which gave them
the ability to change printing one publication to another rather fast. Now their
system is suitable for both high and low volume batches and is very efficient
and cost effective. This also allowed them to switch to a pull system where
they produce publications according to consumer demands. This especially
helped with printing manuals because the companies required high volumes
that were switched about five times a year. Before this left Strategy with
outdated and useless manuals in inventory. The company now runs it
production all day. Implementing JIT gave Strategy a huge advantage over its
competitors, and quadrupled its annual revenue since it fully implemented the
system in 1999. Although this was a successful story about implementing JIT
into a non-automotive company a huge risk was taken by Strategy. To
completely integrate the JIT system they had to spend large amounts of money
to update there facilities with no guarantee of a larger profit.

American Automotive Industries

American automotive companies such as Ford and General Motors have

implemented JIT into their production, however, not as smoothly as Toyota.
They came across several problems including strikes and the suppliers inability
to supply the materials demanded (Glenn, T. 2001). Since JIT is a stockless
production system it leaves the company at the mercy of the suppliers. Ford
experienced a problem with a JIT supplier that may have cost them tens of
millions of dollars. They had to shut down six plants leaving many workers
with nothing to do. So the plant was still costing money to run, but nothing
productive was taking place. A similar problem took place with General
Motors in 1996 resulting in them temporarily closing over two-thirds of their
plants. Their supply company had a seventeen day strike and without having
any emergency or back-up materials there was nothing that could be done to
correct the problem. Even after the strike was over there were still
complications for some time. After the strike was over the supplier had to
speed up production to meet General Motors needs resulting in a large amount
of defective products. This seventeen day strike resulted in General Motors
loosing between 600-800 million dollars in profits. A statement by Keith Crain
of Automotive news sums up these problem very well, "JIT manufacturing,
along with single source suppliers, creates terrific manufacturing efficiencies,
quality improvements, and lower costs. Unfortunately, the downside is it
creates and Achilles' heel for manufacturers. any natural or unnatural disaster
at any critical supply plant whether it's a flood, fire, or strike- that shuts off the
flow of materials from that critical plant to the assembly process can shut down
a manufacturing operation in a matter of hours."(Glenn, T. 2001)

Barriers for Small Manufacturing Enterprises (SME)

Small manufacturing enterprises have just as much to gain as large

enterprises from implementing JIT into their company. They also a few
advantages by being smaller than the larger companies. However, There are
more barriers for them to overcome and they are taking a larger risk. An
accepted measurement of a small manufacturing enterprises are fewer than 100
employees having a sales volume of no more than 5 million dollars (Johnston,
R. B. n.d.). Some advantages that SMEs have are they can be owned privately
which means the decision to switch does not have to be held up in an approval
process. Also with fewer employees it is easier to communicate the new
system to the employee. Since they have fewer employees many SMEs train
their employees on several machine in case of sudden absences. That gives
them one less component to worry about. They also are used to making smaller
batches of products and switches over so thus makes them more flexible. Many
SMEs do not have union contracts to worry about which makes it much easier
to make the change over. Although SMEs have several advantages their risks
are much greater and there size creates several barriers. The first is money is
always an issue with smaller companies, and implementing JIT can cost a
relatively large amount of money without any short time returns. Since smaller
companies do not have a large amount of free cash and are less susceptible to
get loans, coming up with appropriate funding can be a huge issue. Also since
SMEs do not use as large an amount of materials they do not have any
bargaining power over the larger manufacturing companies. This can restrict
them form getting a good price ordering only small amounts at a time.
Although SMEs implementing JIT into their manufacturing system can have
positive result it can be a risk. Unlike large manufacturing having an
unsuccessful attempt could cost the smaller manufacture enough most to result
in bankruptcy. To be successful a SME needs to look at the different
components of JIT and choose which one will fit. An SME trying to
implement the who concept has a smaller chance of succeeding because certain
components are not designed for them.

Advantages
There are many advantages of that a manufacture can receive from JIT.
However they can differ from company to company. Listed below are some of
the advantages overviewed throughout this paper:

• Possible increase in profits

• Quality products
• Quicker setup
• Eliminates costs of storage facilities
• More flexible employees
• Quality relationships with suppliers
• Elimination of waste
• No down time

Disadvantages

Although the advantages outweigh the disadvantages, the disadvantages can

have a negative effect on the company. Listed below are some of the
disadvantages overviewed throughout the paper:

• Long term commitment

• Possible large initial cost with no short term returns
• Problems with supplier can cost company large amounts of money
• Risk of never successfully implementing JIT

Conclusion

Just-in-time manufacturing can be a positive influence on a company.

However there are many risks associated with attempting to implement JIT
manufacturing techniques. When looked at it appears to be a very simple,
quick, and easy thing to do. In reality it is a very complicated technique that
takes long term commitment and a initial cost with no guarantee of success. If
implemented successfully it would eliminate waste, make the company more
productive and more efficient. It does this through shorter transportation and
increased communication. Although there are many companies that are
successful, many companies are not. Even though there are enormous risks
many still consider implementing JIT for it many advantages.

Companies Currently using JIT

• Harley Davidson
• Toyota Motor Company
• General Motors
• Ford Motor Company
• Manufacturing Magic
• Hawthorne Management Consulting
• Strategy Manufacturing Inc.

Figure 1 Traditional System of Stock Inventory (Beasley, J. E.)

Figure 2 JIT System of Stock Inventory (Just-In-Time Manufacturing)

Figure 3 JIT Flow Chart (Wong, S.)

Introduction
Overview The objective of this report is to introduce the basic concepts of a Just-in-Time
(JIT) manufacturing system. This report is compiled in a way to provide the reader with
a basic overview of JIT manufacturing. The following issues are covered in the report:

Just In Time (JIT) Manufacturing

Just in Time manufacturing is a systems approach to developing and operating a
manufacturing system. It is based on the total elimination of waste. JIT is not a new
concept. It has been part and parcel of the Japanese manufacturing industry adopted
approach for quite some time. It requires that equipment, resources and labor are made
available only in the amount required and at the time required to do the job. It is based on
producing only the necessary units in the necessary quantities at the necessary time by
bringing production rates exactly in line with market demand. In short, JIT means
making what the market wants, when it wants it. JIT has been found to be so effective
that it increases productivity, work performance and product quality, while saving costs.

Fig.1 JIT improvements to manufacture

Topics :

Planning for JIT.

Requirements for JIT manufacturing
Critical elements in JIT manufacturing
Integrated Process Control
Detect Defects before they Affect...
Purchasing
Quality Control (QC)
Conclusion
The Authors
References
Disclaimer
Planning for JIT
It is impossible to establish a new JIT system that can be used successfully without
modification. Since each manufacturing process is different (e.g. in terms of Goals,
Product requirements, Customer requirements etc.), it is up to the individual company to
determine the degree of appropriateness and the final application of JIT. However, it is
very important to define the plan and objectives before setting up a JIT manufacturing
system.

Defining the Planning

Defining the planning process for a JIT manufacturing system requires an understanding
of the objectives of JIT, and the goals and objectives of the JIT system. After the
objectives are established for the manufacturing, the process of planning becomes one of
determining what is required to meet those objectives.

The goal of a JIT approach is to develop a system that allows a manufacturer to have
only the materials equipment and people on hand required to do the job. Achieving this
goal requires six basic objectives:

Integrating and optimizing every step of the manufacturing process

Producing quality product
Reducing manufacturing cost
Producing product on demand
Developing manufacturing flexibility
Keeping commitments and links made between Customers and Suppliers

It should be noted that obtaining these objectives does not automatically make a company
a JIT manufacturer, on the other hand failing to achieve even one of these objectives will
prevent a manufacturer from establishing a successful JIT system.

" A company cannot decide to implement JIT; they must earn the right to use JIT by
revising their quality procurement systems."

Integrating and Optimizing

The manufacturing system is a continual process of reducing the number of discrete steps
required to complete a particular process rather than plateaus of steps. Removal of
bottlenecks in the manufacturing process is a critical step in integration. One of the best
ways to accomplish this objective is to plan for 100 % defect free quality.Integrating and
optimizing will involve reducing the need for unnecessary functions and systems such as
inspection, rework loops and inventory.

Producing a Quality Product

"Total Quality Control" is one of the fundamental goals in JIT manufacturing. Total
Quality Control (TQC) emphasizes the quality at every stage of manufacture including
product design down to the purchase of raw materials. Quality control is carried out at
every stage of the manufacturing steps; from the source to the final step rather than
relying on a single processing stage which implements quality control on the final
product. Each individual and function involved in the manufacturing system must,
therefore, accept the responsibility for the quality level of its products. This concept
introduces the correction of the problem before many other defective units have been
completed.

Reducing Manufacturing Cost

Designing products that facilitate and ease manufacturing processes helps to reduce the
cost of manufacturing and building the product to specifications. One aspect in designing
products for manufacturability is the need to establish a good employer and employee
relationship. This is to cultivate and tap the resources of the production experts
(production floor employee), and the line employees to develop cost saving solutions.
Participatory quality programs utilize employee knowledge about their job functions and
review the department performance, encouraging with rewards for suggested cost saving
solutions.

Producing product on demand

The fundamental principle of JIT is the concept of producing product only as needed or
on demand. This implies that product is not held in inventory, and production is only
initiated by demand. Adopting the produce-on-demand concept will ensure that only
materials that are needed are processed and that labour will be expended only on goods
that will be shipped to a customer. At the end of the production cycle, there would be no
excess inventory.

Developing Manufacturing Flexibility

Manufacturing flexibility is the ability to start new projects or the rate at which the
production mix can be adjusted to meet customer demand. Planning for manufacturing
flexibility requires the understanding of the elements in the manufacturing process and
identifying elements in the process that restrict flexibility and improving on these areas.
The unique feature of JIT is the change from a PUSH to a PULL system. The idea
behind this concept is that work should not be pushed on to the next worker until that
worker is ready for it. As such manufacturing flexibility requires production managers to
consider the following aspects in scheduling and manufacturing flexibility improvement:
supplier lead time
the need to ensure fast and reliable delivery of finished goods to the customer
production process time
process setup time
bottlenecks in production process should be reduced and resources (e.g.
workers, machines should be fully utilized.
Keeping Commitments and Links made between Customers and Suppliers

The corporate commitment to developing the internal structures and the customer and
supplier bases to support JIT manufacturing is the primary requirement for developing
the JIT system. Trust and commitment between the supplier and the customer is a must,
because every Just-in-Time operation relies on it. Failure to keep the commitments is a
serious form of break-down in a JIT system.

Requirements for JIT manufacturing

Requirements for JIT Manufacturing

The corporate commitment to developing the internal structures and the customer and
supplier bases to support JIT manufacturing is the primary requirement for developing a
viable JIT system. To be able to establish a JIT manufacturing system, every department
should have some commitment to align with a common goal. This goal must also be
supported by the company's top management in order to have resources and time
allocated to developing the necessary systems and procedures.

A significant financial commitment is necessary during the early stages of development

and implementation to change over to a JIT system. This system, however, needs to be
methodically developed on a scale that is within the employer's means from both a
financial and an applications standpoint. Ultimately, the operation of a JIT system will
require the unwavering support and commitment of the entire company.

Management needs to come with grips during the early transition phase of implementing
JIT. The prospect must be faced of some production loss and changes to management
procedures and operation policies while existing operations and manufacturing problems
are being concurrently resolved. Just-in-Time will require every department in a company
to contribute to the overall success of the system and patience is required as results are
not instantaneous. In the long term, the rewards are worth the initial setbacks.

Trust and commitment between the supplier and the customer is a must, and it is essential
to keep these commitments as this is to ensure that customer's confidence in a supplier's
ability to meet production schedules.

Critical elements in JIT manufacturing

Critical Elements in JIT manufacturing

Partnerships
Commitments
Contracts Supporting Partnerships
Developing JIT Suppliers
 Partnerships - A Mutually Beneficial System
Customer-Supplier proximity

Partnerships
In the past companies were capable of remaining independent and competitive when they
had the capability and resources necessary to produce a product. This is no longer
possible. As technology increases in complexity, companies overcome capital limitations
or labor intensive requirements by becoming dependent on suppliers to provide services.
Many services and Original Equipment Manufacturing (OEM) suppliers have evolved as
the result. Companies now appreciate that long-term success relies on the quality of the
customer-supplier relationship established so that they will develop successful
partnerships. Hence, successful partnerships require the development of mutually
beneficial programs.

Commitments
To enable suppliers to deal with customers in a confident manner, they must be backed
by the level of commitment given by manufacturers. Without a partnership between the
customer and supplier, there will always be hesitation instead of trust. The concept of
trust and commitment in JIT is used to build partnerships and to reduce the needs for
materials-production control, receiving inspection or inventory buffers that many
companies have constructed. Contracts used by JIT manufacturing company to record
the details of an agreement usually stress the level of commitments.

Contracts Supporting Partnerships

By ensuring fair and equitable contracts, many of the problems in developing customer-
supplier relationships are overcome by JIT manufacturers. The goal of JIT is to make
long-term contracts with suppliers. A long-term contract gives the supplier a job security
for as long as the supplier remains competitive and committed. Long-term contracts
usually extend for one or more years and can consist of one or more part requirements.

Developing JIT Suppliers

It is important to develop a link between the companies so to ensure a long-term business
relationship. This will provide both companies with the stability required to optimize the
profit potential. There are four needs that affect the supplier's ability to perform : trust,
communications, linearity of production, and time and visibility to make changes.

Trust

The most basic need of suppliers is to be able to trust that the customer will provide
stability if the supplier meets requirements. This will allow the two organizations to work
much more closely than they would based just on a contract.

Communications
To successfully manage the communication link between customers and suppliers can be
done in two ways:

Supplier contacts: To overcome the complexity of the communication problem, some

companies assign a buyer-quality engineer team to be the contact for each supplier. The
advantage of this solution is that it provides a formal communication channel for the
supplier and reduces the potential for miscommunications.

Supplier programs: Supplier programs keep the supplier informed on topics of mutual
interest and ensure the supplier access to information that will have an effect on the
supplier's production. These programs strengthen supplier relationships by opening
communications and providing an understanding of one anothers needs.

Linear Production Schedules

Linear production schedules contribute to improving the performance of manufacturing.

In a JIT system, the need for the supplier to track the customers needs closely is
important. For this to occur, the supplier must reduce lead time to the minimum. This
consists of isolating the bottlenecks in the operation, balancing the production system,
and reducing setup-time.

Time and visibility to make changes

Most suppliers can respond to changes in customer demand, but they must have enough
time to make the changes. The types of changes suppliers must make are purchasing
materials, adding equipment, establishing work shifts, and hiring and training labor. With
better schedule visibility, suppliers could react more quickly to changes in production
requirements.

Partnerships - A Mutually Beneficial System

A mutually beneficial system requires that the supplier and customer work in cooperation
to achieve a greater benefit than they would have individually. Three mutually beneficial
systems are :
Early supplier involvement
Just-in-Time materials shipment
Invoicing systems

Early supplier involvement

Involving the supplier early in the design phase of a new product can obtain the best
performance from a supplier. Suppliers will often make suggestions that can improve the
design of the product. Supplier feedback provides avenues for improvement in cost,
quality, and scheduling.

Just-in-Time materials shipments

Deliveries can cause traffic problems. In addition, there are the problems of unloading
material, unpacking it, and moving it to the production-line. Several systems have been
developed to improve the efficiency of deliveries to customer. An example is the "Bus
Route" system installed by Xerox Corporation. The bus routes system improves material
flow, communications, and the interaction of companies.

Invoicing systems

JIT requires frequent deliveries. There are solutions to handling increased invoice load.
Electronic invoicing will work where compatible equipment transmits customers
accounts directly. Another solution is to pay suppliers based on purchasing records that
have completed the assembly process. A third possibility is to batch invoices and submit
them on a bimonthly or monthly schedule. A company can also invoice the monthly
deliveries on one invoice, hence decreasing the amount of paperwork.

Customer-Supplier Proximity

Customer-supplier partnerships can be formed irrespective of the physical distance

between two companies. Close proximity, however, offers three advantages : early
supplier involvement, line problems are easier to resolve, and communications are easier.
The criteria for determining supplier selection are based on suppliers ability, location and
price.

Integrated Process Control (IPC)

In most cases, the typical goals of manufacturing consist of meeting production
schedules, cost projections, and product specifications. However, two key points are
usually overlooked : optimizing the production process and meeting customer
requirements concurrently. The company must be aware of changes in requirements and
continually improve the production process. Integrated Process Control (IPC) achieves
the goals of JIT manufacturing by optimizing production to meet both manufacturer and
customer requirements. In IPC, two concepts control the process of continual
improvement. They are:

First, the process of continual improvement is directed toward producing

product of quality at low cost.
The second concept is that customers needs have to be continually monitored
since they change regularly.
The development of an IPC system is based on understanding these two requirements and
combining them into a single system.

Management and Labor Responsibilities Decision-making and communications are

generally associated with inefficiencies in a company. Problems with communications
include ambiguity in the interpretation of the requirement and failure to specify the
requirement. To allow employees to contribute to the decision-making cycle requires
changes. For instance, too often employees think of most `job' as a single job
responsibility. With the decision-making level moved to the production line, IPC reduces
the involvement of management but increase the involvement of production line
supervision and production workers.

The Role of Other Functions in Process Control (PC) PC is improving the production
process by continual improvement. In manufacturing, production would seem to be the
function responsible for PC. However, the action or lack of action of functions outside of
production can influence production.

The production function: Productions responsibility to a company is to minimize the cost

of manufacturing and provide product that meets customer requirements. Integrating
quality into production is a priority in a competitive market.

The Quality Assurance function The responsibility of the quality assurance function in
IPC utilizes statistical process control (SPC) in the production system and to train
production personnel in its use. To retain the responsibility for failure analysis, process
and product audit, and reliability testing of product.

The Engineering Function Engineering's responsibility in PC is to design for customer

requirements and product production requirements. To satisfy a customers need is just as
important as designing a product using top production technology.

The purchasing function The responsibility of the purchasing function is to ensure that
the required materials are available at the proper quality level, on time, and at a fair price.
The sales function Sales provides most of the information on a customers needs and
requirements that are used by engineers to determine product specification and
configuration.

Detect Defects before they Affect...

Improving the production process is streamlining and integrating the production system
to achieve an efficient and simple product flow. Continuous improvement implies that the
manufacturing system will continue to include both process and product improvement.
The process of continual improvement is aimed at reducing the need for gate inspection,
rework, scrap, and test. IPC is an economical tool to minimize these costs. The results of
using IPC is the prevention of defects before they occur.

Planning the production process

A valuable tool in planning the production process is to isolate and define the elements
that make up a production system as building blocks.

Product flowchart
In a flowchart, the building blocks of the production process can be analyzed for
significance of impact to the production system and points requiring improvements.
Performance measures
To achieve continued improvement, a company must measure the performance levels of
its smallest processes against its optimum values. This is accomplished by having
performance measures visible to all levels in a company. The use of control charts is one
of the best ways to show the collected performance measures.

Floor plan layout

The design or layout of the production line can be considered after the specification has
been evaluated and matched to the required production process. A JIT production line
uses multi machine manning. The advantage is not actually the reduction in labor cost
rather to reduce the number of support systems.

Balancing production capacity and setup-time.

The setup-time can be minimized by the use a fast production process and only produce
parts on demand. If the setup-time is a factor, the preferred process is to apply a smaller
and slower production method that has the ability to produce the daily requirement in a
more continuous production movement.

Material delivery

By delivering material directly to the production line on at least a daily basis optimize
materials delivery for a JIT system. Two primary requirements that influence material
delivery and inventory concerns are material quality and availability.

JIT and Purchasing

The most challenging area for most manufacturers in achieving JIT is the purchasing of
raw materials and parts. This is important because an internal JIT system can only be
operated successfully when the material being fed into it are of sufficient quality and
delivered on time. Therefore, unless the quality and delivery of purchased material are
not production issues, the purchasing function should begin to establish a JIT supplier
base. In JIT purchasing several tactics are being used to achieve certain goals and
objectives.

Goals
Secure a steady flow of quality parts.
Reduce the lead time required for ordering product.
Reduce the amount of inventory in the supply and production pipe lines.
Reduce the cost of purchased material.

Objectives
Improve purchasing efficiency.
Improve quality and delivery performance of suppliers.
Isolate factors that influence the cost of material.
Remove unnecessary cost factors in the materials supply system.
Tactics
Regard suppliers as an extension of the internal manufacturing process and
cultivate them as long term business partners.
Establish long term purchasing and supply commitments.
Improve communication with suppliers.
Involve suppliers in early stages of new product planning.
Use supplier expertise to improve design manufacturability and reduce product
cost.

Purchasing Requirements
Material purchased in a JIT system should meet three requirements:
An acceptable level of quality,
On time delivery schedule, and
A reasonable cost.

Quality for JIT

Quality is an integral part of a JIT program. Quality control concentrates on quality at
every stage of manufacture including the purchase of raw material. To increase the
supplier quality two methods are used in a JIT system; supplier quality engineering
(SQE) and receiving inspection (RI).
Supplier quality engineering is used to evaluate supplier capability, help suppliers
develop process control, resolve quality issues with suppliers, and certify that suppliers
qualify for JIT production. Receiving inspection provides an inspection service for
purchasing.

Delivery of Purchased Material

On time delivery, frequency of delivery, and receiving and stocking the material are three
major aspects that are important in purchasing.

On-time material delivery means that the work stations receive the material just before it
is required. A suppliers ability to deliver on time is a combination of factors ;
transportation, raw material availability, price, holidays, etc. If a factor arises that could
affect the delivery schedule, the company should be able to increase production schedules
and establish enough inventory to see them past the expected disruption.

Frequent delivery is required if dependency on inventory is to be minimized. The

suppliers' ability to make frequent deliveries depends on the suppliers ability to produce
product at the rate the customer requires delivery. Local suppliers usually have an
advantage in being able to deliver daily. Frequent delivery means that a loss of one small
shipment will have less significance than the loss of a large shipment in on time delivery.
Material shipping and handling requirements: Costs associated with material shipping
includes packaging and handling costs. Packaging costs mainly include material
handling, shipping damage, and the cost of packaging materials. Handling costs include
receiving, unpacking, counting, repacking, stocking, kitting and moving the material to
the production area. Reusable packaging material, packing containers that can be used on
the production line, and standardised containers that eliminate counting are ways to
reduce costs and damage in transporting. These cost reducing methods are then reviewed
with the supplier to determine how the supplier can best meet these needs.

Scheduling : A major concern of purchasing managers is the process of coordinating the

manufacturing need for materials. The process is complicated by periodic changes in
product mix and volume requirement and the continual introduction of new products.
Companies solve the problem of how much material to order and when to order by
placing contracts based on order requirements supplied by material control. Material
control makes its decisions based on the master schedule less current inventory. In a JIT
system the supplier picks up the information on the next production requirements every
time a delivery is made.

Reasonable Cost Price of purchased material is an important issue. Material that cause or
require additional production costs reduce company profits. Every extra inspection or test
step, rework requirement or item scrapped represents a reduction in company profit.
These additional costs are remedied by purchasing products that meet both specification
and production needs.

Conclusion
Hence we can see that to have a Total JIT manufacturing system, a company-wide
commitment, proper materials, quality, people and equipments must always be made
available when needed. In addition; the policies and procedures developed for an internal
JIT structure should also be extended into the company's supplier and customer base to
establish the identification of duplication of effort and performance feedback review to
continuously reduced wastage and improve quality. By integrating the production
process; the supplier, manufacturers and customers become an extension of the
manufacturing production process instead of independently isolated processes where in
fact in clear sense these three sets of manufacturing stages are inter-related and dependent
on one another. Once functioning as individual stages and operating accordingly in
isolated perspective; the suppliers, manufacturers and customers can no longer choose to
operate in ignorance. The rules of productivity standards have changed to shape the
economy and the markets today; every company must be receptive to changes and be
dynamically responsive to demand. In general, it can be said that there is no such thing as
a KEY in achieving a JIT success; only a LADDER; where a series of continuous steps
of dedication in doing the job right every time is all it takes.

The Authors

Submitted: October 1994

 Gihan Perera Galhenage
Michael Lazuardi
Arion Lee
Chin Teck Lim
Henry Nyi Nyi Lwin
Submitted: October 1995
Gregory Kim

http://kernow.curtin.edu.au/www/jit/jit.htm