What is Just in Time?
Just in Time (JIT), as the name suggests, is a management philosophy that calls for the production of what the customer wants, when they want it, in the quantities requested, where they want it, without it being delayed in inventory.
So instead of building large stocks of what you think the customer might want you only make exactly what the customer actually asks for when they ask for it. This allows you to concentrate your resources on only fulfilling what you are going to be paid for rather than building for stock.
Within a Just in Time manufacturing system, each process will only produce what the next process in sequence is calling for.
The Origins and History of JIT
JIT is generally accepted as being a concept invented by Taiichi Ohno of Toyota; after World War2 resources were very scarce in Japan so using them to create something that the customer did not actually want right now was not a good idea.
On a visit to the US the management team of Toyota were inspired by, of all things, how they saw a supermarket (Piggly Wiggly) handle their inventory. Only what was removed from the shelves by the customers was actually replenished and ordered from suppliers. In this way shelves never became empty, nor did they end up overflowing with excessive inventory.
Taiichi Ohno was tasked by Eiji Toyoda to make production more efficient through implementing these ideas and pull production with just in time concepts was developed. It took more than 15 years for Toyota to perfect their ideas and it was not introduced into western manufacturing until the end of the 1970’s.
With a JIT system each process pulls from the preceding process’ “supermarket” and that process will then work to replenish those shelves.
How does JIT differ from traditional manufacturing?
In traditional manufacturing we try to predict what the customer will want and we will create a forecast (or guess) against which we will produce our products. We will also try to produce those products in large batches as the belief is that will make machines and processes more efficient, especially if those machines require a long time to setup. This will typically result in long lead times through our processes, huge amounts of Work In Process (WIP) stocks and also large quantities of finished goods stocks that have not yet been ordered by our customers. This is what many now call “Just in Case” manufacturing.
If the customer does order something that is not in our current stocks they will either have to wait many weeks or even months for the product to be manufactured or work will be hurried through the system by progress chasers causing a huge amount of disruption to the production schedule.
These systems are often run by Manufacturing Resource Planning (MRP2) programs that will try to schedule each and every process within the facility. These software packages will seek to control every step and everything requires careful and often complex planning.
A Just in Time system on the other hand will seek to use simple visual tools known as Kanbans to pull production through the processes according to what the customer actually takes. It massively reduces the amount of stock held and will reduce lead times by a significant amount, often from weeks to just a few hours or days.
The benefits of a JIT system
The following are some of the many benefits that you could gain through the implementation of just in time:
- Reduction in the order to payment timeline; cash, as they say is king in business. Many businesses will suffer with cash flow problems as they will often have to purchase large amounts of raw materials prior to manufacturing and subsequent payment by the customer. Often this gap is many months. Through implementing JIT you are able to considerably reduce that time period.
- Reduction in Inventory costs; one of the main aims with any JIT implementation is to improve stock turns and the amount of stock being held. Personal experience has seen reductions of more than 90% stock in some industries. Along with the reduction in the stock come many other associated benefits.
- Reduction in space required; by removing large amounts of stock from the system and moving processes closer together we will often see a significant reduction in the amount of floor space being used. Results from 100’s of projects run within companies in the UK through the Manufacturing Advisory Service saw average reductions of 33% for simple 5 day implementation projects.
- Reduction in handling equipment and other costs; if you don’t have to move large batches there is less need for complex machinery to move them and all of the associated labor and training.
- Lead time reductions; one of the most significantly impacted areas is that of the time it takes for products to flow through the process. Instead of weeks or months most JIT implementations result in lead times of hours or a few days.
- Reduced planning complexity; the use of simple pull systems such as Kanban, even with your suppliers, can significantly reduce the need for any form of complex planning. With many implementations the only planning is the final shipping process.
- Improved Quality; the removal of large batch manufacturing and reduction in handling often results in significant quality improvements; often in the region of 25% or more.
- Productivity increases; to achieve JIT there are many hurdles that must be overcome with regards to how the process will flow. These will often result in productivity improvements of 25% upwards.
- Problems are highlighted quicker; often this is cited as being a negative aspect of JIT in that any problems will often have an immediate impact on your whole production process. However this is the perfect way to ensure that problems are highlighted and solved immediately when they occur.
- Employee empowerment; one requirement of JIT as with most other aspects of Lean manufacturing is that employees are heavily involved in the design and application of your system.
Many definitions of Just in Time and Lean itself will state that waste reduction is the aim; waste reduction, however, is actually something that you achieve through trying to implement the flow and other improvements required to achieve just in time and not an end in itself.
Requirements for implementing Just in Time
Just in Time is just one of the pillars of a lean manufacturing system and as such it cannot be implemented in isolation and without a firm foundation on which to build. Trying to reduce batch sizes without tackling setup times for instance cannot be done. The following are some of the things that must be implemented for JIT to be able to work:
- Reliable Equipment and Machines; if your machinery is always breaking down or giving you quality problems then it will frequently manifest in big issues with any JIT flow. The implementation of Total Productive Maintenance is required to ensure that you can rely on your equipment and to minimize the impact that any failures have on your processes.
- Well designed work cells; poor layout, unclear flow, and a host of other issues can all be cleared up by the implementation of 5S within your production. This simple and very easy to implement lean tool will make a significant improvement in your efficiencies all by itself.
- Quality Improvements; an empowered workforce that is tasked with tackling their own quality problems with all of the support that they need is another vital part of any lean and JIT implementation. Setting up kaizen or quality improvement teams and using quality tools to identify and solve problems is vital.
- Standardized Operations; only if you know how each operation is going to be performed can you be sure what the reliable outcome will be. Defining standard ways of working for all operations will help to ensure that your processes are reliable and predictable.
- Pull Production; Just in time does not push raw materials in at the front end to create inventory (push production), it seeks to pull production through the process according to customer demand. It achieves this by setting up “supermarkets” between different processes from which products are taken or by the use of Kanbans which are signals (flags) to tell the previous process what needs to be made.
- Single piece Flow; the ideal situation is one in which you will produce a single product as ordered by the customer. This for some industries is not immediately possible but should always be your end goal. To achieve this you will need to work on reducing batch sizes significantly through the use of Single Minute Exchange of Die (SMED) which seeks to significantly reduce the time taken for any setup. It will also often require the use of smaller dedicated machines and processes rather than all singing all dancing mega machines.
- Flow at the beat of the customer; the demand of your customer is often referred to as your Takt time. You need to ensure that your cells and processes are organized, balanced and planned to achieve the pull of the customer. This is achieved through Heijunker and Yamazumi charts.