The JIT and lean is a philosophy and method of operations in planning and control. In this topic we have to focus on planning and control issues. These issues have been in prominent use from the last 2-5 years. The main implications discussed in this essay are to deliver goods and services to either internal or external customers.
Twenty years ago the lean philosophy was relatively less used than the present situation. In the period of 2-5 years the JIT and lean philosophies are adopted by various industrial sectors. The key principle of lean operations is to eliminate all the waste in order to develop a faster, dependable, high-quality products and services at low cost.
The JIT philosophy means just-in-time, which literally means producing the goods and services when they are needed, where the customers do not need to wait for a product or service. This can also add efficiency and quality to the service. The definition of JIT is as follows
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JIT aims to meet demand which is instantaneous, which has high quality and less waste.
The JIT is a perfect approach in improving the overall production and waste. It provides the customers cost-effective production and delivery at the right quality, at the right place at the right time.
In this approach, when a problem occurs in delivering a product at one stage then the staff of that stage try to solve the problem and the consequences of the problem will be prevented from spreading to the whole process.
In the JIT approach items are worked and then passed to the next on just in time. Problems at any stage would have different effect in such a progress. For example if a problem exists at stage 1 then all the staff of all stages would come together and solve the problem. This would increase the flexibility of problem solving.
Three elements of JIT:
The three important elements of JIT are
Just in time manufacturing
Total quality management
Respect for people
JIT manufacturing mainly focuses on production system to achieve value added manufacturing.
Total quality management (TQM) is an effort to improve the quality at all levels.
The human resources are an essential part of JIT philosophy.
Elements of JIT manufacturing:
JIT Manufacturing is a philosophy of value-added manufacturing achieved by
Inventory reduction - exposes problems
pull production systems
Small lots & quick setups
Uniform plant loading
Efficient facility layouts
Let us now discuss about these elements in detail.
Role of inventory reduction:
The main aim is reduce the inventory and this happens when
Inventory= lead time (less time is better)
Large inventory hides the problems like machine breakdowns, poor vendors, poor design, poor quality etcâ€¦.
Reducing the inventory exposes many problems as shown in the figure
Small lot sizes and quick setups:
Â‡this is less average inventory and short manufacturing lead time
Â‡less lots with short setup times increasing the flexibility to respond to demand changes
Â‡Strive for single digit setups is less than 10 minutes
Â‡ Well-documented reduction setup process
The external tasks include doing as much of preparation before the setup.
Internal tasks try to simplify, eliminate the problem solving for any given time.
Uniform plant loading:
A level schedule is developed so that the same mixÂ of products is made every day in small quantities.
Whole supply chain can create a big impact on leveling the supply chain
Movable, general purpose equipment:
a) Portable equipment with plug in power/air.
b) Capable to do many different things with minimal setup time.
Workers are assumed to have considerable responsibility.
Workers are cross trained to perform several other duties
The well trained staff is also sometimes problem solvers.
Effective facility layouts:
a) Workstations in close physical proximity to reduce transport & movement.
Always on Time
Marked to Standard
b) Streamlined flow of material.
They often use
Cellular manufacturing- instead of process focus.
The U-shaped lines allow material handler to do its job quickly (drop off & pick up).
Now let see the figures of traditional process and JIT.
These are some details on JIT and lean philosophies at 2 levels.
JIT and lean in manufacturing sector:
The JIT philosophy is for optimizing performance of a manufacturing system. The JIT philosophy basically originated from Toyota in Japan. After the Second World War there was an industrial revolution in the US, it needed mass production to satisfy demands for customers. So they needed a strategy for its manufacturing units.
Then after many years, Toyota established the JIT strategy, the strategy involves
Value of quality
Improvement to happen continuously
Emphasizing on the setup on all machines
Integrating suppliers and material acquisition into the planning process.
The basic categories of lean and JIT in production and manufacturing are
Improving production environment.
To improve production environment we have to make necessary changes like
Eliminating the waste, means the waste of production. The employee cross, means training must be given to employees and also job rotation must be done.
The third factor is employee involving in the job and empowerment. The next factor is JIT purchasing where the materials are to be purchased just in time. There involves a reduction of variability the unit. The last factor is reducing the setup times of the production process.
There are three concepts in quality engineering:
Quality standards will set high standards for manufacturing. There are certain good proposals for some business where there are business standards are appropriate.
Quality assurance is means that there is a guarantee in the products made by the manufacturing unit. This involves staff training and equipment, the management must take care to review and purchase the new equipment wherever necessary. This would involve direct and indirect costs.
Quality performance indicators specify certain business metrics which are needed to identify the business goals. New goals must be satisfied.
Improve material flow: this is used to improve the flow at JIT, this is often used to measure the flow of raw materials inbound to the manufacturing unit. This kind of material flow involves in all manufacturing units. These help in mass production of the products and deliveries at JIT.
JIT in the service industry:
Although JIT was best suited for manufacturing environments its nature may also be used in service environments. In spite of having a big difference between service and manufacturing there are many benefits of applying JIT to service industry. In manufacturing units JIT can be measured in inventory and lead times whereas in the service industry they are measured by quality of service and customer satisfaction.
The foremost points that JIT used in the service industry was to identify how JIT was worked in manufacturing industry. Then it was implemented for service industry with the similar ideas. One of the first applications about how JIT was used was in the healthcare sector. The case study was done to apply JIT technique with the doctors and the staff to avoid danger. In the hospitals there were intensive care units to treat patients; the patients were moved from the operation theatre to intensive care unit which was at a far distance in the hospital. In some emergency cases it was difficult for the doctors to move the patient from ICU's to operation theatres so they came up with JIT philosophy of giving the patient JIT service by moving the operation theatre next to the ICU.
The other case is package and Delivery Company fed-ex which implemented JIT. The main aim was to reduce the inventory and at the same time it must give exceptional service. They started implementing JIT at various levels with a good plan in hand. This helped fed-ex to improve its quality of service and became a tough competition to its rivals.
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There is another case study for applying a loan in the bank. Customers had to wait for a long time to get the loan approved, the loan process had 2 phases, and the first was evaluation of the documents and credit checks. The second phase was to sign the documents and approve the loan. This was a 15 days process and customers were having problems. The bank then applied JIT and now bank loans just take about 4-5 days for approval.
Another service industry is hotel industry. The hotel industry used to face several problems with its customer service. Some hotels had a poor level of service; JIT completely changed the scenario of introducing interactive kiosks and online reservations which improved the level of service.
JIT was implemented in telephone industry in the US. The customer service of the company faced problems with the phones repair and when the cell concept was applied and the staff could also work and repair as per needs of the customer. There were also additional staffs that were trained to repair phones. This improved the customer service of the company and the service levels improved from 85-98 percent.
Continuous improvement of process must be done in the service sector. The service operations are ripe and give productivity that can be achieved from process improvements. The continuous improvement can also be observed through comparison of the manufacturing unit with the administrative unit. The operations which are done in this sector can be progressive when there is a room for improvement. Special tasks which take time can be adjusted by applying JIT so that the flow is more.
JIT is also implemented in the purchasing environment like suppliers, quality, quantity, and shipping.
The suppliers who are involved must be few and nearby the business.
The business must be repeated with the same suppliers.
The group of suppliers, bidding must be limited to only some suppliers.
The suppliers are encouraged to JIT buying.
The quantities involved are
Steady output rate.
Small deliveries to be done more frequently.
Contract agreements must be long-term.
Suppliers are encouraged to pack in exact quantities.
Product specifications should me minimum.
Help suppliers to meet quality.
Relationships between buyers and suppliers with quality assurance.
Suppliers are encouraged to use the process control charts than sampling.
Scheduling inbound freights.
Taking control by company owned contractors for shipping, storage where possible.
These are some of the purchasing features.
Respect for the people:
Since the service industry involves the facing the customers directly, employees need to provide exceptional customer service. Management must assist the employees with necessary training. There employees must be able to respect the customer's requirements. This also means that employees must work smarter, not harder when dealing with customers. The case study which shows the respect of people is done in a transportation carrier company. The customers were provided with a questionnaire about the quality of service; the level of services was then analyzed and improved.
Flexibility in using the resources:
The company must be keen in observing whether the employees are flexibly using the resources. Training and development classes must be held to enhance their customer service skills.
Wal-mart retail stores concentrated on resource flexibility and there was a good result of strong market share and profits in the competitive retail industry. The stores use a automatic replenishment system which allows the exact deliveries of each store to a minimum. There was a pull type system involved in ordering as when the customer picks a product the product was arranged an order. This helped Wal-mart to review its sales of their products through every store. By using such kind of systems there is a quicker option in meeting the customer demands.
This kind of flexibility is implemented in hospitals for scheduling nurses, which was used for the improvement of timing and staff resources. The algorithm developed used to provide shift scheduling for nurses on a 10 hr basis. This included day and night shifts. This made easy for the hospitals; the nurse's availability was more and helpful during emergency times. So JIT was one of the techniques used in hospitals.
Advantages and disadvantages of JIT and lean:
There are a lot of strengths and weaknesses in the manufacturing industry when JIT is incorporated.
JIT makes production, operation more cost effective and reliable. They are also customer responsive.
The orders and purchases in JIT can be done only when they are in immediate need. This helps them to save a place to store the material.
It also helps many companies to prevent inventory and go obsolete.
JIT was first developed to justify the cost reduction and quality improvement but these days JIT is also used in waste reduction and has been responsive to short term customer demands.
JIT also helps the manufacturers save money as they are more responsive to customers and have a less capital tied up in the raw materials and finished goods industry.
The overall achievement of JIT was used to reduce the costs and improve the product quality. It can reduce the inventory to almost 50 percent.
Although JIT has several strong points they also have weaknesses too.
The weakness occurs because the JIT system is independent and hence it can cause problems in the supply chain. It can be a risk in certain business where there are situations of strikes, market fluctuations, stock loss, lack of communications between the supplier and buyer and some other interruptions.
Labor strikes, lockouts in a company may result in supply chain failures. This could increase the costs of production.
The markets every year have some typical conditions where the products are sold. Sometimes there could be a heavy demand in the market and there are times when the market is down. This would influence the retailers and the manufacturers badly.
Technology plays a major role in the supply chain system. There could be communication between the customers and retailers and this should never breakdown. In such events companies need backup or they have to lose the customer relationship. This also applies to the supplier and manufacturer category also.
Weakness in the JIT system must be quickly recognized or else they let the manufacturing systems down. Companies have to evaluate the pros and cons of implementing the JIT system. The risks, weaknesses in most cases are to be considered for a company. Everyone has to overcome the weaknesses for vital success of the company. if the JIT systems are implemented correctly it could earn profits for the company.
From all the information taken from the above scenarios we could propose that JIT and lean philosophies can help a manufacturing unit in many ways. It is used to reduce the cost of inventory, production, and reducing the cost of other expenses. In certain scenarios we could say that the JIT and lean philosophies are helpful to develop certain manufacturing units. Many manufacturing units have solved their problems of mass production, cost are reduced.
The service industry also takes help of JIT systems in their business. Many service sectors like hospitality, healthcare and customer services have enhanced their performances by using these systems. The customer service standard levels have risen to a maximum in these sectors
Hence JIT and lean philosophies help the companies in improvement of their business. Although it has several weaknesses they can be solved very easily.