module 9: jit & lean systems operations management as a competitive weapon

Module 9:

JIT & Lean Systems

Operations Management as a Competitive Weapon

2Module 9: JIT & Lean Systems

OM Course Framework

TOC

JIT

MRP

Operational Issues

AggregatePlanning

Inventory

Location

Capacity

Tactical Issues

Manufacturing Design & Selection

Process Analysis

Operations Strategy

Strategic Issues

3Module 9: JIT & Lean Systems

Planning & Control Strategies

Flexibility (High)Unit Cost (High)

Flexibility (Low)Unit Cost (Low)

Flexibility (High)Unit Cost (High)

Flexibility (Low)Unit Cost (Low)

IV.Continuous Flow

III.Assembly Line

II.Batch

I.Job Shop

IV.Continuous Flow

III.Assembly Line

II.Batch

I.Job Shop

Factory Physics

TOCTOC

MRPMRP

J I TJ I T

LowVolume,One of aKind

MultipleProducts,LowVolume

HighVolume,HighStandard-ization

FewMajor

Products,HigherVolume

LowVolume,One of aKind

MultipleProducts,LowVolume

HighVolume,HighStandard-ization

FewMajor

Products,HigherVolume

Product

Process

Product

Process

4Module 9: JIT & Lean Systems

Learning Objectives

At the end of this module, each student will be able to:

1.Discuss Just-In-Time philosophy

2.Discuss JIT elements

3.Compare JIT and MRP

5Module 9: JIT & Lean Systems

1. APICS definition of JIT

A philosophy of manufacturing

based on waste elimination and

continuous improvement of

productivity.

6Module 9: JIT & Lean Systems

2. Primary Elements

A. Manufacturing have only the required inventory when

needed, reduce lead times by reducing setup times,

queue lengths, and lot sizes,

B. Total Quality Management improve quality to zero defects, incrementally revise the operations

themselves, and

Accomplish these activities at minimum cost.

7Module 9: JIT & Lean Systems

Inventory Hides Problems

Work in

process

queues

(banks)

Change

orders

Engineering design

redundancies

Vendor

delinquencies

Scrap

Design

backlogs

Machine

downtime

Decision

backlogsInspection

backlogs

Paperwork

backlog

Example: By identifying defective items from a vendor early in the production process the downstream work is saved.

Example: By identifying defective work by employees upstream, the downstream work is saved.

8Module 9: JIT & Lean Systems

Economic Order QuantityCOST

Total Cost

Q*

TC*

Optimal Order Quantity = =Q DSH

2

Q**

TC**

9Module 9: JIT & Lean Systems

Total Quality Management

Quality system involving entire organization from supplier to customer

Objective: Meet or exceed customer needs

through company-wide continuous improvement

Early proponents W. Edwards Deming - natural variability Philip B. Crosby - Quality is Free

10Module 9: JIT & Lean Systems

Deming: Natural variability

All process are subject to variability

Natural causes

Assignable causes

Objective: Identify assignable

causes

11Module 9: JIT & Lean Systems

Crosby: Quality is Free

ImprovedQuality

IncreasedProfits

Lower CostsProductivityRework/ScrapWarranty

Market GainsReputationVolumePrice

12Module 9: JIT & Lean Systems

3. Comparison

•MRP – Backward scheduling

•BOM

•Workcenter

•MRP schedule

13Module 9: JIT & Lean Systems

Comparison (cont.)

• JIT – Reduce lead time and WIP

•Repetitive manufacturing (assembly

line)

•Production level

•Products

•WIP

•Vendors

14Module 9: JIT & Lean Systems

Comparison (cont.)

Assembly Line Variable demand

Assembly Line Level demand

High Low

Long Short

Dimension MRP J I T

Where used

WI P

Cycle time

15Module 9: JIT & Lean Systems

Comparison (cont.)

Frozen Level

Terrible Balanced

Larger lot sizes Rejects

Balanced capacity No

rejects

Dimension MRP J I T

Sched. Flex.

Regard f or

capacity limits

Quality