The definition and goals of the JIT principle

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Just in Time (JIT) has often been considered as a survival strategy for the manufacturing industry against fierce global market competition. The three words say it all, everything happens just in time. For example, consider my journey to college this morning, I could have left my house, just-in-time to catch a bus to the college, just-in-time to arrive at my college, just-in-time to pick up my lecture notes, just-in-time to walk into the lecture room, just-in-time to attend the lecture. Theoretically there is no problem about this; however achieving this in practice is likely to be difficult.

Similarly in a manufacturing process materials could theoretically arrive just-in-time to be picked up by a worker and used. This eliminates any inventory of materials; they would simply arrive just-in-time. In the same way finished goods could be produced just-in-time to be handed to a customer who wants them. So, at a conceptual extreme, JIT has no need for inventory or stock, either of raw materials or work in progress or finished goods.

Obviously this is not as easy as it sounds. It might well be difficult, or impossible, or extremely costly affair, in real-life. However we could move an existing system towards a system with more of a Just in Time element. For example, consider a manufacturing process - in terms of handing finished goods to customers, we would still require some inventory of finished goods. It might be possible to arrange raw material deliveries so that, for example, materials needs for one day's production arrive at the start of the day and are consumed during the day - effectively reducing/eliminating raw material inventory.

The approach is known by different names, including zero inventory, stockless production, Toyota system, Japanese manufacturing, World-class manufacturing and continuous flow manufacturing.

How Just in Time evolved?

Understanding where Just in Time (JIT) came from, and how it was originated, helps in understanding what it is and how it works.

Most of us who have heard of JIT also know that it is a Japanese philosophy dating from the late 60s and the very first name that strikes everybody's mind while recalling the concepts of JIT production philosophy is Tai-ichi Ohno, the ex-senior vice president of Toyota Motors. It was the genius of Tai-ichi Ohno that conceived, developed, exploited and polished this simple philosophy into a means of meeting consumer demands with reduced costs, minimum wastes and minimum delays. He was motivated by his first visit to an American supermarket where he saw customers getting just what they wanted, when they wanted it [13]. He is frequently regarded as the father of JIT.

JIT is not a new concept. It has been part and parcel of the Japanese manufacturing industry [8]. JIT philosophy evolved in Japan some time after World War II, as a result of their diminishing market share in the auto industry and their desire to catch-up with Western Companies. Although some components of JIT were already present in Ford's assembly line in the 30s, JIT as a production philosophy was not refined until the early 70s by Toyota Motors [7]. However, until late 70s, the system was limited to Toyota and the Toyota family of key suppliers and was known as the Toyota Production System [2]. Their main aim then was to increase product quality and reliability. However, Toyota realised that JIT would only be successful if every individual within the organization was involved and committed to it, if the plant and processes were arranged for maximum output and efficiency, and if quality and production programs were scheduled to meet demands exactly. Toyota was able to meet the increasing challenges for survival through this approach that focused on people, plants and systems.

During and after the oil crisis of 1976, the Japanese companies began to realise that their 25-year model of continuous economic and manufacturing growth had been broken, and that in the future they would face ups and downs in manufacturing just like the Western nations do. As a result, a need for finding ways to increase the flexibility of their manufacturing processes arose, and only then was close attention paid by other industries to the potentials and utilities of the Toyota Production System [6], now known to all of us as the Just in Time production philosophy.

Since then there was no looking back. Just in Time production philosophy has been spreading as an epidemic, not just through the Japanese manufacturing industry but also through more and more of its western counterparts. There has been a considerable interest in JIT in the past few years. The reason that so much attention has been given to JIT is undoubtedly the success of Japanese manufacturing. Consequently, almost every major company through out the world has shown interest in JIT and explored its true potential.

What is Just in Time?

Just in Time is a management philosophy and not a technique [9]. In its simplest form JIT requires that non-value-adding activities are identified and removed for the purpose of reducing cost, improving delivery, adding flexibility and increasing innovativeness.

Various authors [19; 9; 10; 12; 26] put it as a philosophy with a very simple goal, i.e. produce the required items, at the required quality, and in the required quantities, at the precise time they are required. It is a philosophy of continuous improvement in which non-value-adding activities are identified and removed.

Just in Time manufacturing is a systems approach to developing and operating a manufacturing system [25]. It strives to reduce or eliminate wastes by producing only the required units in required quantities at the required time. In short, JIT means making what the market wants, when it wants it [8].

GOALS OF JIT:

JIT is a continuous commitment to improve the manufacturing systems design and operation. It seeks to produce the required items, at the required time, and in the required quantities by eliminating wastes. It strives to achieve following:

Zero defects

Zero set-up time

Zero inventories

Zero handling

Zero breakdowns

Zero lead time

Lot size of one

ELEMENTS OF JIT:

Kanban based pull production

Waste elimination is guide philosophy

Continuous improvement as a daily strategy

An emphasis on consultation and co-operation rather than confrontation.

Modify machinery to reduce set up times.

Reduce inventory by integrating suppliers into the planning process

Total Quality Management (TQM)

Expose problems, rather than have them covered up and reveal bad practices.

JIT Implementations:

Some other things that must be taken into consideration about JIT are what it involves to get it operational. For instance one must consider applications for Layouts and Flow lines, Flow design, and Job shops. Then one must also consider Total Quality Control (TQC). JIT Layouts and design flows involve a balance of workflow with minimum of work in process inventory. It also initiates preventive maintenance that ensures that everything flows very well and nothing is down for very long times if down at all. JIT line flows involve the employees themselves. During this stage it makes sure that every employees know all stations of work. It keeps the employees interested in what they are doing and possible better salaries down the line for them. Then Job Shops for JIT is how the product flows through their facilities, and out to their customers.

PROBLEMS IN IMPLEMENTING JIT:

Although JIT can eliminate many wastes, it also has problems in the implementation:

Repetitive production.

Standard products.

Bad management.

Stable demand, level production.

Co-operation and trust between people.

BENEFITS FROM JIT:

JIT have a number of important benefits that are attracting the attention of many companies. The main benefits are:

Reduced inventory - through the use of pull technique workers will only use the amount of materials required based on the customer demands.

Reduced space requirements - through reduction in inventory and smaller lot size.

Increased product quality and reduced scrap and rework - smaller lot size will enable identification of any quality problems that are hidden.

Cost savings - savings through reduction in inventory and improved quality.

Reduced manufacturing lead times - through pulling the actual customer demands through the system.

Greater flexibility in changing the production mix.

Worker participation in problem solving - giving ownership for the upkeep of the manufacturing process.

Good relationships with vendors - through integrating the vendors into the manufacturing processes.

Increased productivity levels and utilization of equipment - through quality improvements and maintaining the machinery properly.

Success Stories

Case Study 1: JIT at ICL LETCHWORTH

J. McKean, ICL.

Case Study 2: Just-in-Time Manufacturing Cells: Suspensions Made Easier (and Better!)

Dale Schudel, K R Precision, Ayutthaya, Thailand.

Described below are some of the typical benefits that JIT philosophy has brought to these two companies.

ICL LETCHWORTH:

25% Reduction in Inventory.

Letchworth engineers developed a novel system, which gave them most of the benefits of a totally automated store without its inherent inflexibility. Called RATS (Random Access Toting System), the new system is used extensively to control parts movements in and out of the stores. This simplified the stock control and ordering procedures.

Moreover, thorough understanding of the production schedule meant planning of the purchase and manufacturing of certain parts only when they are required. This reduced the lead-time for the purchase of raw material, which in turn reduced stocking up of raw materials.

Up to 40% Improvements in Quality.

Quality control at source meant quality check at every stage of the manufacturing steps rather than relying on quality control on the final product. This not only improved the quality of the finished product but also eliminated wastes.

Space Savings of 60%.

Reduction in work in progress meant reduced stock holdings, which directly meant less space required both for the raw materials and finished products.

Apart from these, there has been increase in annual stock turns, reduction in work in progress, lower set up times and good housekeeping.

K R PRECISION:

WIP reduced by 90%.

Implementing Kanban system and controlling it at each individual operation meant fine-tuning the production system, thereby minimizing the inventory and supplying parts along the production lines as and when they are needed, so that there is no storage in the production area. This closely monitored the work in progress thereby reducing it.

Scrap reduced by 65 %.

Automated inspection along the production lines and responsibilities on the part of operators may have been a reason for reducing the wastes.

Implemented barcode tractability to strip level, throughout the process.

Implementation of barcode technology meant efficient data capture. All material tracking was linked to Oracle manufacturing modules. This gave them a better control of material flow cycle thereby reducing waste, inventory, space and recording errors.

Short lead times (production).

This was achieved through better planning and process reengineering. A new concept of a "JIT manufacturing cell" by the KR team made use of group technology to support various current and future suspension configurations thereby reducing lead times.

JIT cell operator headcount reduced by 60% per shift, compared with the headcount required for the same capacity in a conventional production line.

Implementation of JIT manufacturing cell added flexibility and did a job with fewer staff thereby saving money by saving time in turn increasing turnover.

JIT in the West

Although JIT has been considered as the Japanese brainchild, one should not forget Ford's version of JIT that was present in its assembly line way back in 1930s, well before the Japanese concept came into existence. Many have doubted so far whether it is equally applicable in the Western manufacturing companies but the truth is that JIT production is spreading like an epidemic not only throughout the corporate America but also throughout other Western countries. JIT is no longer thought of as a Japanese manufacturing technique as it was before.

Manufacturers in the west are increasingly under pressure to make them more competitive, effective and efficient. The threat from the Global manufacturers exporting products and components into the West is now well established and having dyer consequences on the local manufacturers. In the early 90s the MIT commission in US observed that [11]:

A large continental economy like the United States will not be able to function primarily as a producer of services in the foreseeable future. One reason is that it would have to rely on exports of services to pay for its imports, and this does not seem realistic. In 1987 gross US exports of services, excluding income from overseas investments and overseas sales of government services, were worth $57 billion, whereas the total value of goods and services imported into the US was about $55 billion. --, The US thus has no choice but to continue competing in the world market for manufactures. The ultimate scale of American manufacturing is not known, but it will not be trivial. The important question is not whether the US will have a manufacturing industry but whether it will compete as a low-wage manufacturer or as a high productivity manufacturer. (Dertouzos et al. 1989, 39-40)

These considerations led many companies in the US, Canada, and other Western countries to examine successful manufacturing practices not only in the West but also throughout the world to identify and implement such practices [11]. In order to survive the fierce competition and to transform themselves into world-class competitors, the Western manufacturing companies have a limited number of options. They can either work harder at the traditional methods of cost cutting to get a less expensive manufacturing system or they can increase automation, which requires large capital outlays and brings with it the risks of inflexibility, complexity, and large overheads [2]. Or they can revolutionise their existing manufacturing system using the JIT philosophy. Of course JIT is the way forward. With its philosophy and tools & techniques, well established, JIT must now be included in the Western manufacturing strategy.

Western businesses were too often mystified by JIT before because of its perceived association with Japan [2] and were often hesitant in applying this philosophy to manufacturing processes. But with Western companies like Apple Macintosh, Ford, Chrysler, Bendix, IBM, Hewlett-Packard, G D Mountfield and others proving successful in implementing JIT philosophy has made more and more Western companies to go forward in implementing JIT. Western companies applying JIT have reported the following results [11]:

The Apple Macintosh factory, is months into JIT, reported that rejects were reduced from 28 percent to

1 percent, inventory turns were twice the industry average, space requirements were reduced 35 percent, labour productivity was increased 60 percent.

Omark Industries, in the first year, reduced inventory by 25 percent ($20 million), increased productivity by 30 percent, reduced lot sizes, shortened lead times, and improved quality. Later into the program, raw material was reduced by 95 percent and WIP by 96 percent. In the case of WIP the reduction was from 100,000 pieces on the floor at any given time to 4,000 pieces, with an eventual goal of 1,000. The consequences of this reduction to material scheduling and control are that material can be much more tightly controlled.

Harley-Davidson reports a 50 percent inventory reduction, a 50 percent reduction in scrap and rework, a 32 percent productivity increase, an increase in inventory turns from 5 to 17, and a decrease in warranty claims despite a longer warranty period.

IBM's plant in Raleigh, North Carolina, which makes terminals for mainframe computers, while not reporting numeric results did report that manufacturing costs were greatly reduced, inventory turns increased, mean time between failures was reduced, and cycle time from production inception to customer availability was reduced.

JIT's applicability is not limited to discrete parts manufacturers or to large companies. ChemLink, a small petroleum processor, reports that inventory was reduced by 21 percent, sales grew by 9 percent, obsolete inventory was reduced by 30 percent, and transportation cost was reduced by 8 percent.

All these examples shows that JIT has not at all slowed down or lost its touch in the West because of its Eastern culture origin. There has been much progress on regaining competitiveness in recent years in the West. Many Western companies are once again competing as before through the implementation of JIT. Though JIT may seem at first blush to be antithetical to traditional Western notions of manufacturing [2], I believe it would prove out to be a winner for the Western companies.

Who may not benefit fully from using JIT?

Just in Time has always been considered as a saviour for manufacturing industries against the fierce global competition. It has been an effective system for reducing wastes and increasing productivity. However, most of the success stories of JIT implementation have been found in large manufacturing industries having stable demand. Although JIT is equally applicable to small manufacturing enterprises (SMEs), certain characteristics unique to SMEs may create barriers to implementing JIT [22]. This is because, unlike large companies, SMEs has got limitations of its own. They have reduced bargaining power with customers' suppliers and trading partners and often short of resources to get involved in pilot projects. Therefore certain components of the JIT may be inaccessible to SMEs and inter-dependence of various components may further restrict JIT implementation [22].

Barriers to implementing JIT in SMEs:

Lack of bargaining power with suppliers and customers.

SMEs lack bargaining power with their suppliers. They normally do not give enough sales to their vendors [22]. As a result they have to order in large batches thereby piling up inventory of raw materials in order to avoid extra cost to get the materials just in time.

Also most SMEs are dependent on a few major customers [5]. They normally suffer from an unstable demand from these key customers. Hardly having any bargaining power with their customers, it is hard for them to compel their customers to order on a stable demand rate.

Difficulties in implementing group technology.

Group technology could be difficult to implement in SMEs. This is due to limited availability of machines and workers, limiting rearrangement of machines into cells according to the product family tree [22]. There is a possibility that they may end up having several incomplete cells, or sharing a machine for different cells.

Limited resources.

As compared to large manufacturing companies, SMEs normally have limited capital to invest in new production concepts or technologies. Hence, forward planning is constrained by cash flow maintenance. Consequently, there is a little chance that they get involved in innovative projects at all.

Also, resources like machinery and people are limited. With limited staff and machinery it may be difficult and sometimes impossible to make a change in production without affecting the entire plant. Finch [1] asserts that small companies may have to change their entire operation into JIT. This is another barrier for SMEs to improve their operations, as they have to risk the whole factory in order to know whether a certain technique is appropriate or not to the company [22].

Management Commitment and Decision Making.

As most authors put it - "Top management support is the most important factor in achieving long-term and complete implementation of JIT" [2; 16; 18], full acceptance by top management is required to empower middle management to overcome the inevitable roadblocks in implementation [2]. However as small firms only have one or two managers who are always busy with their daily operations, it is difficult for them to sit back and think about the whole operations and the ways to improve it.

Also, decision-making is one of the factors that could affect proper implementation of JIT. It requires a new way of management thinking and new attitudes toward operations on the part of management [17] to risk taking big decisions.

Planning.

It is necessary that the whole operations be planned out before the implementation of JIT. It may prove costly and may maximise the chances of failure, if mistakes are made during planning and implementation [1; 17]. However, managers in small businesses are often very busy with their daily operations and therefore do not get enough time to engage in both strategic and operational planning of the implementation of JIT.

Formal training for the employees.

Training is another problem in successfully implementing JIT in SMEs. Normally they do not have an education and training department and also limited funds make hiring an outside consultant infeasible [22]. Therefore without sufficient understanding about JIT, there will not be a strong commitment from both the top management and the employees on JIT and so implementation may not reach its fullest completion.

It is clear that some barriers exist of JIT implementation in SMEs. The biggest limitation is the lack of bargaining power with the suppliers and customers [22]. For some, KANBAN implementation is not appropriate because of lack of awareness and commitment whereas for others JIT purchasing seems impossible. Forcing implementation of these may lead to frustration and worse performance [22]. However, this is not always the case. If planned and implemented properly, it has been already proven that JIT brings success to the SMEs.

Technologies and Concepts that originated from JIT

There are some emerging technologies and concepts that have originated from JIT. Two of them are Kaizen and Lean Manufacturing.

KAIZEN:

Kaizen is a Japanese term meaning continuous improvement, taken from words 'Kai' meaning continuous and 'Zen' meaning improvement [14]. "It is both rigorous, scientific method using statistical quality control (SQC) and an adaptive framework of organization values and beliefs that keep workers and management alike focused on zero defects." (Morris, 1995) It uses teamwork and extensive employee participation. It is a philosophy of never being satisfied with what was accomplished before. It concentrates at improving the process in terms of time required, resources used, resultant quantity and other relevant aspects to the process rather than at achieving certain results.

Some of the main objectives of Kaizen are:

To reduce waste

Improve quality

Reduce delivery time

Assure a safer work area

Increase customer satisfaction.

The Kaizen cycle has four steps:

Develop a plan to change whatever needs to be improved

Carry out changes on a small scale

Observe the outcomes

Evaluate both the outcomes and the process and determine what has been achieved

The link between Kaizen and JIT is clear. Kaizen is central to the philosophy of JIT. In Kaizen, JIT is a collection of concepts and techniques for improving productivity [12]. JIT is a process aimed at increasing value-added and eliminating waste by providing the environment to perfect and simplify the processes. Quality circles within the team framework decentralise responsibility for improving processes

LEAN MANUFACTURING:

Lean Manufacturing is a manufacturing system and philosophy that was developed by Toyota and has its roots in JIT. Lean manufacturing meshes today's information technology with Toyota's much-lauded JIT approach, which has been adopted by many manufacturers. Lean manufacturing means to apply the JIT concept to meet the customer demands efficiently and cost effectively. But lean manufacturing goes beyond JIT; it strives to reduce inventory through better communication about production processes and their inherent problems and by tapping into the knowledge of floor personnel to make them part of the solution.

It is a philosophy of continuously reducing waste in all forms. It is all about doing more, more with less time, less inventory, space and money. JIT became Lean Manufacturing when it was recognised that parts arriving only when required and only in the quantities required is only a part of the story [12].

Lean manufacturing, in its simplest form, is the systematic elimination of the seven wastes: waste due to overproduction, waiting, transportation, inventory, motion, over-processing and defective units and the implementation of the concepts of JIT.

Basic Tenets of Lean Manufacturing:

Customers can have what they want, when they want it without a penalty.

Improvement is always possible and necessary.

Customers are the reason for existence, and they must always have a perfect product or service.

All buffers are wasteful and need to be eliminated.

Lean Manufacturing Strategy:

Know customers and their needs, identify value-added activities and functions.

Focus all the businesses' processes around the value stream of activities.

Align the company to the needs of customers.

Activities that take time, resources and space but do not to the customer's requirement are non-value added and must be reduced or eliminated.

Establish performance measurements in all aspects of the value stream.

References

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Hay, E.J. (1988) The Just-in-Time Breakthrough. New York, John Wiley & Sons Ltd.

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Hirano, H. and Black, J. T. (1988) JIT Factory Revolution: A Pictorial Guide to Factory Design of the Future. Cambridge, Productivity Press.

Inman, R. A. and Mehra, S. (1990) The Transferability of Just in Time concepts to American Small Businesses. Interfaces 20(2): 30-37

Japan Management Association (1986) Kanban, Just-in-Time at Toyota. Cambridge, Productivity Press.

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