The supply chain is the portion of the value chain that focuses primarily on the physical movement of goods and materials, and supporting flows of information and financial transaction through the supply, production and distribution processes (Evans, 2007)
JIT IN SUPPLYCHAIN: One of the crucial and key activities in JIT implementation is supplier management. Suppliers play an extremely critical role in a JIT environment, and particularly in production, with regard to reliable delivery and quality of parts and materials
JUST IN TIME (JIT):
Potts defines JIT as:
A philosophy directed towards the elimination of waste, where waste is anything which adds cost but not value to a product Voss claims:
JIT is a disciplined programme for improving overall productivity and waste. It provides for cost-effective production and delivery of only the necessary quality parts, in the right quantity, at the right time and place, while using a minimum amount of facilities, equipment, materials and human resources Wallace (1990) defined JIT as an approach to achieving excellence in a manufacturing company based on continuing elimination of waste and consistent improvement in productivity [v]
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The concept of Just-in-Time (JIT) was first introduced by Taiichi Ohno, Executive Vice-President of Toyota Motor Company [vi] . He developed this idea when the Toyota management system wants to reduce the waste which doesn't adds to the quality, but added to the cost of production and to meet the customer demand with reducing the waiting time. In late 1970s and in early 1980s was the time of robotics which was in high peak in industry for automated manufacturing, at this time the Toyota introduced and started to implement JIT technique which saw high productivity and recognised as popular manufacturing system; the western countries invested billions in automated equipment to beat Japanese technology but found themselves to be in second position, Later the western countries understands the need and found JIT is the best solution for effective manufacturing [vii] .
Just-in-Time systems (JIT) have also been adopted in the
USA under several different names, such as ZIPS (Zero
Inventory Production System) by Omark Industries,
MAN (Material as Needed) by Harley Davidson, MIPS
(Minimum Inventory Production System) by
Westinghouse, Stockless Production by Hewlett-Packard,
and Continuous Flow Manufacturing by IBM [viii]
The JIT concepts
adopted by many manufacturing organizations are process-oriented and can be
summarized, following Benson (1986) [ix] , as:
l total visibility - of equipment, people, material and processes;
l synchronization and balance - of production to sales and supply to
l respect for people - line operators are responsible for production,
problem solving and improvement;
l flexibility - adapt production to customer needs;
l continuous improvement - never satisfied with the process;
l responsibility for the operation's environment - those who design,
manage and operate the processes are responsible for the outcome;
l holistic approach - company-wide philosophy of elimination of waste.
Each of these JIT themes may be applicable to service organizations. Benson
(1986) argues that, in fact, service operations are "organized systems of
production processes" with the same potential for improvement through implementation
of JIT precepts as manufacturing operations. Distinct differences do
Differences exist not only between manufacturing and service operations, but
between various service operations as well. Silvestro et al. (1993) [x] proposed a
framework for classifying service processes. Three service processes were
proposed: professional, service shop and mass. These three types are
characterized in terms of six different dimensions.
Always on Time
Marked to Standard
As the number of customers
processed by the service increases, the focus changes for each of the six
dimensions. These six dimensions were defined as follows:
(1) equipment/people focus: the core element in the service delivery is
provided primarily by equipment or people;
(2) customer contact time per transaction: the amount of time the customer
is involved in the transaction;
(3) degree of customization: the amount of customization available or
required in the delivery of the service to the customer;
(4) degree of discretion: the amount of discretion available to the person
delivering the service to alter the service package or process;
(5) location of value added processes: the proportion of customer contact
staff (frontline staff) to the total staff requirements;
(6) product/process focus: the degree of emphasis on "what" is purchased
versus "how" it is provided.
Elimination of waste in production and material (Tesfay,
Improving communication internally (within the organization) and
externally (between the organization and its customers and vendors)
(Inman and Mehra, 1991). [xii]
Reducing lead-time, decreasing throughput time, improving production
quality, increasing productivity and enhancing customer responsiveness
(Arogyaswamy and Simmons, 1991) [xiii]
Reducing purchasing costs which is a major cost to most organizations
(Ansari and Modarress, 1990) [xiv]
Foster organizational discipline and managerial involvement (Francis,
Integration of the different functional areas in the organization. It
especially bridges the gap between production and accounting
(Johansson, 1988) [xvi]
Taiichi Ohno [xvii] , identifies seven
types of waste, and recommends methods for their
(1) Over-production: Reduce set-up time, compact
layout and improve shopfloor visibility.
(2) Waiting: Synchronize work flow and balance loads
through flexible workers and equipment.
(3) Transportation: Establish layout to minimize
transport and handling.
(4) Processing: Use value analysis production.
Processing may be totally or partially unnecessary
and capable of being eliminated.
(5) Storage: Reduce the waste of stocks in all
production areas (raw material, work in progress,
(6) Motion: Study motion for improved economics,
productivity and quality.
(7) Making defective products: Build in processes to
eliminate defects in the process.
Younus [xviii] , similarly to Ohno, identifies 12 types of
waste in his research:
(4) Scrap and rework.
(5) Idle time.
(6) Set-up times.
(8) The process itself.
(9) Material or sub-assemblies.
(11) Improper order and arrangement.
Kanban and MRP
Industrial material flow systems can be classified into
two types: "pull" or "push" systems. The Kanban system
is a typical "pull" system, while most conventional
systems are "push" systems. The basic difference
between "pull" and "push" is that a "pull" system
initiates production as a reaction to current demand,
whereas a "push" system initiates production in response
to expected, forecasted, future demand[96 [xix]
Kanban is a Japanese word meaning placard or visible
card. It serves as an information system for JIT practice.
Kanban authorizes, by a visual signal of a card, a square,
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a disc, or a slot in a bin, the production or delivery of
more material as required[97 [xx]
The literature on kanban systems suggests that the
two kanban card methods have proved the most popular
for JIT environments; these cards are withdrawal kanban
and production order kanban [xxi] A withdrawal kanban
authorizes the movement of one standard container,
holding a certain number of parts, from one work centre
to the next. Accordingly, a withdrawal kanban is used as
an information processing tool; it flows physically in the
reverse direction to the material flow. On the other hand,
the production order kanban authorizes a work centre to
produce one container of parts to replace the container
MRP (materials requirement planning) was developed in
the mid-1960s and is described in detail by Orlicky[109 [xxii]
requires the co-ordination of three key functional
(1) Master planning and scheduling.
(2) Inventory and material planning.
(3) Capacity planning.
MRP determines period-by-period plans for all
component parts and raw materials requirements in
order to formulate a master production schedule. It
assumes that all parts pass through the stages of
production in a fixed-size batch mode. Because of the
assumption of economic batch quantities, computerplanned
batch sizes are larger than necessary to offset the
costs incurred by a large set-up time. All MRP systems
are highly oriented towards data processing and require
intensive computational processing[ [xxiii]
For full implementation, just-in-time requires the
commitment and involvement of every employee at all
levels of the organization. Everyone is required to work
towards the common goals of elimination of waste and
the continuous improvement of production and quality.
According to Imai [xxiv]
Monden provided a mathematical model for
computing the total number of kanbans in JIT systems,
which contains the formula,
NK - Number of kanbans.
Cn = Container capacity.
D = Demand per unit time.
S = Safety period (this corresponds to the stock
kept at the store for determining the level of
Tp = Lead times.
Tw = Waiting time for kanban.
The above model is very useful if it is possible to obtain
the data for elements such as Tw, S, TP, D, before the
implementation of JIT systems. Because several elements
are involved in the production and manufacturing
process, such as process sequence, set-up and lead times,
breakdown period, maintenance policy, and number of
machines in a cell, the model is only applicable in firms
which have already implemented JIT and have the
required data [xxv]
Grout and Seastrand developed a mathematical
model similar to the classical optimal order quantity for
reducing the holding cost, set-up cost, and optimum lotsizing
Grout's model is described by,
D - Daily schedule.
L = The labour time.
M = Cost of material.
N = The number of lots in queue.
P = The number of lots in process.
Q = The lot size.
R = The holding cost rate.
S = The set-up time.
V = The value of parts. [xxvi]
Sumichrast et al. have developed procedures for
sequencing products on mixed-model assembly lines in
JIT production systems. Their model is based on
heuristics developed at Toyota that focus on constant
component usage to achieve a uniform production rate.
The basis for the Toyota procedure is as follows:
Aj(k - 1) = Quantity of the fabricated component part;
required to assemble the first (k -1) units of
actual sequence of end items.
bij = Quantity of component; required to
assemble one end item, i.
c = Number of different components.
k = Current position in the sequence.
M' = Set of models which require production,
then scheduled in the sequence to position
k - 1. M' is updated each time an item is
added to the sequence.
Nj = Total quantity of the fabricated component
part; required to produce all Q items in the
Q = Total production of all models.
Sumichrast et al. developed a time-spread method
that smooths the work-load at each assembly-line station and a batch sequencing procedure frequently used in
practice. The mathematical expression for Sumichrast's
improved procedure is:
ATl(k - 1) = Actual time required at station 1 to
assemble the first k - 1 units of the
s = Number of assembly stations.
til = Assembly time required by model i at station 1.
T = Total time to assemble all items in the
sequence at all stations.
Tl = Total time to assemble all items in the
sequence at station [xxvii]