Just-in-Time (case problem).

AS and A Level Business Studies

ASSIGNMENT 2

Just-in-Time (case problem)

SCHOOL OF COMPUTING & TECHNOLOGY

BEng Manufacturing Systems Engineering

Unit: ME209 Production Management & Control (ipp)

Assignment 2 - Just-in-Time (case problem)

You should tackle all questions in this assignment.

Date Set: 15th November 2002

Hand-in-date: 13th December 2002

You should tackle all questions in this assignment

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Question

JIT WOES - CASE PROBLEM

B&B Electronics, a supplier in the telecommunications industry, has a problem. Demand is down; but competitive pressures for better quality at a reduced price are up. Customers who used to order in large lots with plenty of lead-time now want daily deliveries of small quantities. Contracts use terms such as "statistical evidence of quality" and "just-in-time delivery". More and more customers are requiring supplier certification with standards that B&B cannot meet. More and more customers are requiring supplier certification with standards that B&B cannot meet. Plant manager John Walters has to take action.

"If JIT is good enough for our customers, it's good enough for us," he declared, and called in one of his managers, Kelly Thompson.

"Kelly, I can always rely on you to get us out of a jam, so don't let me down this time. I want you to implement JIT on the circuit board assembly line. Create a success story to show other employees how great this JIT stuff is. You've got free rein...not much money, but free rein to change anything you want in the system. Oh, and I want some results by next month."

"Okay, boss," replied Kelly shakily. "What's your philosophy on JIT? I mean what do you consider its most important points?"

"My philosophy? JIT is cutting inventory, squeezing your suppliers, and using those kanban card things. My philosophy is just do it!"

"I get the picture," said Kelly as she retreated to her office cubby to study up on JIT.

What do you think of the plant manager's view of JIT?

The manager of this organization is obviously unaware of the whole JIT philosophy, thinking that it is a system that can be implemented and then forgotten about, “Just-in-time” is a management philosophy and not a technique. To employ JIT the whole organization has to be aware and actively involved, especially the manager and his management team. They needs to understand more of what is involved in this philosophy, and some history behind it - it’s originally referred to the production of goods to meet customer demand exactly, in time, quality and quantity, whether the `customer' is the final purchaser of the product or another process further along the production line.

It has now come to mean producing with minimum waste. "Waste" is taken in its most general sense and includes time and resources as well as materials. Elements of JIT include:

Continuous improvement.

Attacking fundamental problems - anything that does not add value to the product.
Devising systems to identify problems.
Striving for simplicity - simpler systems may be easier to understand, easier to manage and less likely to go wrong.
A product oriented layout - produces less time spent moving of materials and parts.
Quality control at source - each worker is responsible for the quality of their own output.
Poka-yoke – Error-Proofing `foolproof' tools, methods, jigs etc. prevent mistakes
Preventative maintenance, Total productive maintenance - ensuring machinery and equipment functions perfectly when it is required, and continually improving it.

Eliminating waste. There are seven types of waste:

waste from overproduction.
waste of waiting time.
transportation waste.
processing waste.
inventory waste.
waste of motion.
waste from product defects.

Good housekeeping - workplace cleanliness and organisation.
Set-up time reduction - increases flexibility and allows smaller batches. Ideal batch size is 1item. Multi-process handling - a multi-skilled workforce has greater productivity, flexibility and job satisfaction.
Levelled / mixed production - to smooth the flow of products through the factory.
Kanbans - simple tools to `pull' products ...

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Eliminating waste. There are seven types of waste:

waste from overproduction.
waste of waiting time.
transportation waste.
processing waste.
inventory waste.
waste of motion.
waste from product defects.

Good housekeeping - workplace cleanliness and organisation.
Set-up time reduction - increases flexibility and allows smaller batches. Ideal batch size is 1item. Multi-process handling - a multi-skilled workforce has greater productivity, flexibility and job satisfaction.
Levelled / mixed production - to smooth the flow of products through the factory.
Kanbans - simple tools to `pull' products and components through the process.
Jidoka (Autonomation) - providing machines with the autonomous capability to use judgement, so workers can do more useful things than standing watching them work.
Andon (trouble lights) - to signal problems to initiate corrective action.

The managers commitment and understanding is essential to the success of the implement of JIT, if the manager is not seriously committed then, it is unlikely that the employees will be. JIT is a process that will not just happen overnight, and it seems as if the manager wants results immediately, it a seen as a method to quickly improve the companies profitability, this means there is a lot of pressure on Kelly, These changes will not be effective because it has not got full management backing, because of the managers lack of understanding, Kelly will be held responsible. Also if he doesn’t see the results he may abandon the idea completely, again this would be bad as the company would go back the old way of working which could lead to their downfall in the future. As covered in some of the other questions the manager must not misinterpret some of the elements of JIT. If he doesn't see the same level of work in progress as before he may see this as not much work being done – this would not be the case. Without JIT the company is unlikely to survive on global scale, so the importance of the manager fully understanding, and committing himself is the most important aspect of the whole project.

2. If you were Kelly, how would you go about the task ahead of you?

Firstly before any actions are taken I would have to ensure that the manager and the whole management team is completely aware of every aspect of the JIT philosophy, he must realise that this may not be something that will happen over night it will take time to implement JIT, and it has to be done in the correct manner. I would look at how JIT has been implemented successfully in similar environments to try and foresee any problems and to develop a plan.

The following points need to be considered:

Inventories are stratified;
Sales and inventory management co-operate;
The company is interested in more than simply squeezing the lowest possible price out of its suppliers;
Suppliers become part of the team.

The following steps are a good guide to what is needed.

Stabilise and level the MPS with uniform plant loading: create a uniform load on all work centres through constant daily production (establish freeze windows to prevent changes in the production plan for some period of time) and mixed model assembly (produce roughly the same mix of products each day, using a repeating sequence if several products are produced on the same line). Meet demand fluctuations through end-item inventory rather than through fluctuations in production level.
Reduce or eliminate setup times: aim for single digit setup times (less than 10 minutes) or "one-touch" setup - this can be done through better planning, process redesign, and product redesign.
Reduce lot sizes (manufacturing and purchase): reducing setup times allows economical production of smaller lots; close cooperation with suppliers is necessary to achieve reductions in order lot sizes for purchased items, since this will require more frequent deliveries.

Reduce lead times (production and delivery): production lead times can be reduced by moving work stations closer together, applying group technology and cellular manufacturing concepts, reducing queue length (reducing the number of jobs waiting to be processed at a given machine), and improving the coordination and cooperation between successive processes; delivery lead times can be reduced through close cooperation with suppliers, possibly by inducing suppliers to locate closer to the factory
Preventive maintenance: use machine and worker idle time to maintain equipment and prevent breakdowns
Flexible work force: workers should be trained to operate several machines, to perform maintenance tasks, and to perform quality inspections. In general, the attitude of respect for people leads to giving workers more responsibility for their own work.
Require supplier quality assurance and implement a zero defects quality program: errors leading to defective items must be eliminated, since there are no buffers of excess parts. A quality at the source (jidoka) program must be implemented to give workers the personal responsibility for the quality of the work they do, and the authority to stop production when something goes wrong. Techniques such as "JIT lights" (to indicate line slowdowns or stoppages) and "tally boards" (to record and analyze causes of production stoppages and slowdowns to facilitate correcting them later) may be used.
Small-lot (single unit) conveyance: use a control system such as a kanban (card) system to convey parts between work stations in small quantities (ideally, one unit at a time). In its largest sense, JIT is not the same thing as a kanban system, and a kanban system is not required to implement JIT (some companies have instituted a JIT program along with a MRP system), although JIT is required to implement a kanban system and the two concepts are frequently equated with one another

The plan mentioned in the previous question, should take into account all off the above elements, they should not be put in place all at one time, Kelly shouldn’t worry if improvements are not immediately evident, and her manager should support this. Each point should be studied carefully, and tested to see if it is effective in that particular situation. It may need fine tuning and this could take time, it is important to ensure the process works the way it should, and that everybody is educated to keep it working that way, only then can she move on to the next step.

3.What parts of JIT would you try to implement first? Last?

It is no good starting the system from an unbalanced state. It is unlikely to recover. The system must be primed. This will include building the required buffers. This may take some time. It can take up to 20 weeks to build an adequate buffer from a depleted state because of capacity constraints. If the system is to retain its credibility it cannot be allowed to fail. So its important that Kelly takes the time to get the buffers in position.

I would advise Kelly to implement JIT by following these five steps in this order:

Step 1: Awareness Revolution

This means giving up old concept of managing and adopting the JIT way of thinking. There are 10 principles for improvement:

Abolish old tradition concepts.
Assume that new method will work.
No excuses are accepted.
It is not seeking for perfection, absolutely zero-defect process, few defects is acceptable.
Correct mistakes immediately.
Do not spend money on improvement.
Use you brain to solve problem.
Repeat to ask yourself 5 times before any decision.
Gather information from several people, more is better.
Remember that improvement has no limits.

The main is to have an awareness of the need of throwing out old system and adopting a new one.

Step 2: 5S’s For Workplace Improvement

The 5S’s stand for:

Seiri - Proper Arrangement

Seiton - Orderliness

Seiso - Cleanliness

Seiketsu - Cleanup

Shitsuke - Discipline

This 5S’s should be implemented company-wide and this should be part of a total improvement program.

Seiri - Proper Arrangement means sorting what you have, identifying the needs and throwing out those unnecessary.

One example is using red-tags. This is a little red-bordered paper saying what the production is, how many are accumulated and then stick these red tags onto every box of inventory. It enhances the easiness to know the inventory status and can reduce cost.

Seiton - Orderliness means making thing in order. Examples include keeping shelves in order, keeping storage areas in order, keeping workplace in order, keeping worktables in order and keeping the office in order.

Seiso - Cleanliness means having a clean workplace, equipment, etc.

Seiketsu - Cleanup mean maintaining equipment and tools.

Shitsuke - Discipline means following the rules and making them a habit.

Step 3: Flow Manufacturing

Flow manufacturing means producing one single piece of product at a time but multi-handling which follows the process sequence.

There are several main points concerning flow manufacturing:

Arrange machines in sequence.
U-shaped production line (Cellular Manufacturing).
Produce one-piece at a time. Train workers to be multi-skilled.
Follow the cycle time.
Let the workers standing and walking around while working.
Use small and dedicated machines.

The following table shows a comparison of production with flow manufacturing.

It can be seen that there was a need to change from large lot production to flow manufacturing.

Step 4: Standard Operations

Standard Operation means to produce quality safely and less expensively through efficient rules and methods of arranging people, products and machines.

The basis of standard operations are:

Cycle time It means how long it would take to "carry out part all the way through the cell". Following are the equations for calculating cycle time.

Daily Quantity Required = Monthly Quantity Needed / Working Days per month

Cycle Time = Working Hours per day / Daily Quantity Required

Work sequence
Standard stock-on-hand
Use operation charts

Step 5: Multi-Process Handling

Multi-process handling means one worker is responsible for several processes in a cell.

Some points that should be aware:

Clearly assign jobs to machines and workers.
Make a good use of U-shaped cell manufacturing.
Multi-skilled workers
Operation should be able to perform multi-machine handling and multi process handling.

Multi-machine handling - a worker should handle several machines at once, this is also called "horizontal handling".

Multi-process handling - a worker should handle several different processes at once, this is also called "vertical handling" and this is the basis for JIT production.

Uses casters extensively As author written, "Floor bolts are our enemies - Machines must be movable."

The above 5 steps are the basis for introducing JIT. Only after these are completed can JIT be implemented.

4.How would you gain worker support?

Without a doubt the hardest part of implementing JIT is getting the operators on board. Employing the JIT philosophy does require a change of mindset on behalf of the operator. Good method of getting the operators on board is to empower the workforce, listen to there ideas and suggestions, also, remember is to keep the workforce informed of all changes, if she does this then they are more likely to be dedicated to the JIT philosophy.

It is no longer acceptable to produce unwanted items or to leave the work at your workplace rather than where it is needed next. In practice it is often difficult to implement. Once understood and in particular the benefits of pull systems over push systems are understood, they can become a way of life.

Operators used to work with lots of work in process lots of unfinished work cluttering the work area, therefore, he or she believed there was plenty of work about. The initial view of the workplace is that it is empty. This can be very disconcerting to the operator who now thinks there is no work about.

To overcome these problems education of all operators is essential. There are a number of games designed for this purpose that will make this task easier, and more fun for the employee. Kelly should choose an operator/worker that she can relate to readily. The most powerful method of conveying this message is by allowing operators to discover for themselves the benefits of Pull systems in an environment, which is relevant to their own.

The information gathered from implemented areas of JIT should be passed on to the workers, who should know the implications of JIT, and that there job security if JIT is not implemented correctly could be at risk. The company cannot stay competitive without this method therefore something has to change. If they can work as a team to keep the company profitable, the have more chance of keeping there job secure, and even improving conditions in the future. It is essential that the knowledge of all workers, both office, and the shop floor is used. From experience the people on the shop floor who actually do the job often have the best understanding of it, and can give the best ideas to improve the process.