Operation Management JIT: An Overview

Operation Management

JIT: An overview

Just-in-time (JIT) manufacturing was developed and implemented by the Toyota automotive company in the 1950s. It became so associated with the company's name it was also known as the Toyota Production System (TPS). By the 1970s JIT was ubiquitous in many other types of Japanese factories, and eventually many aspects of the system were adopted by some American companies, most notably General Electric, which patented its own form of 'error free' managerial philosophy known as Six Sigma. But ironically, JIT itself, although it has spawned many 'spinoff' concepts bears a great deal of resemblance to the principles of efficiency created by Henry Ford. Toyota made these standardized strategies uniquely 'Japanese' in their orientation, stressing collective responsibility for the product and a fanatical attention to detail. And just as Ford capitalized upon the most innovative types of technology available to him, to create the moving assembly line, Toyota used factory automation and computerized inventory-keeping to improve upon its own processes.

JIT is defined as "a philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity," partially by producing the right part in the right place just at the right time" hence the name 'Just in Time' manufacturing ("JIT Lecture Notes," 2006). JIT is designed to improve profits by reducing inventory build-up (ideally to zero) and increasing the inventory turnover rate. It is also called 'lean' manufacturing because of its emphasis on eliminating waste from the production process. Waste is defined not simply as misspent profits, but even from wasted efforts, such unnecessary moving of materials, excess inventory, and faulty production methods that ultimately add cost to the product. The assumption of JIT is that production must be close to error-free to be successful. Unused production facilities hedge against unexpected problems or increases in demand, not excessive inventory build-up. Errors are dealt with, not by anticipating that mistakes will occur, but through maintaining equipment and improving processes to ensure that they do not occur ("JIT Lecture Notes," 2006.

JIT is not really applicable to higher-level processes, as it was designed to improve repetitive manufacturing. Its emphasis is on flow and linking work centers to the point where inventory buffers are zero and defects are zero ("JIT Lecture Notes," 2006). The seamlessness is created through a kanban or "pull" production control system uses simple, visual signals to control the movement of materials between work centers. A kanban sign on a factory floor might be as simple as a sign or an empty bucket to indicate the need to "pull parts to the next production stage only when they are needed" ("JIT Lecture Notes," 2006). In contrast, a traditional push system has predetermined production schedules based upon past experiences to determine the quotas for different parts -- although these may vary due to changes in the external environment. In a push system, preexisting inventories rather than process needs drive production, which makes the system more inflexible as opposed to a pull production system. Thus, another acronym for the JIT approach is that of FMS or flexible manufacturing systems a term that indicates how JIT systems can respond to shifts and changing needs.

Some of these techniques, of course, seem like classic assembly line strategies, as derived from the American Ford Motor Company, and Ford's use of interchangeable parts. However, the notion of interchangeable parts in the Ford system "was built around a single, never changing product," and the Ford system "did not cope well with multiple or new products," ("Lean Manufacturing History, Stratagos, 2009). Resistance to innovation was anathema to lean manufacturing and the Toyota philosophy "Reducing setups to minutes and seconds allowed small batches and an almost continuous flow," which the original Ford concept lacked. Also, Toyota "introduced a flexibility that Henry Ford thought he did not need" ("Lean Manufacturing History, Stratagos, 2009). Ford emphasized standardization, famously proclaiming that a Model T. was available in every color, so long as the buyer wanted black. The flexibility and quick changes of JIT created an assembly line that could, at a moment's notice, adopt with seemingly infinite creativity and alter even the most ingrained procedures.

Toyota was also able to use developing computer technology, such as CAD (Computer-aided designs) to greater effect early on. While early FMS systems required complicated programming, transport of the program files and supervision by workers "by 1981, the Japanese machine tool builder Yamazaki had a factory in Osaka that ran a complete 8-hour night shift with a staff of just a handful of people. The machine tools were all linked by DNC, there were wire guided vehicles that traced their routes from tracks laid under the floor, automatic tool changers, detecting sensors, and automatic parts pickers in the warehouses were all in place. Impressive enough today, but to put things in perspective, back then most people had yet to use their first PC!" (Houston 2004).

Of course, merely being efficient and technologically forward-thinking is not enough -- accuracy is also important. Hence the development concept of engineer Shigeo Shingo at Toyota of the poka-yoke, another part of the Toyota JIT philosophy called Zero Quality Control (ZQC). Poka-yokes are essentially devices that make it impossible for workers to make mistakes, fail-safe mechanisms. An example from everyday life might be an outdoor electrical plug with a relay that automatically shuts the power off during a rainstorm, to prevent a foolish potential user from becoming electrocuted. In a factory, such a 'fail safe' to ensure production quality might be to require workers to put all of the components for the device in front of them in a small dish. If they assemble the part, and there are still components left in the dish, they know that the part was assembled in an incorrect fashion (Grount & Downs 2009).

While this example of a poka-yoke is fairly low-tech, many technologically sophisticated innovations made JIT processes easier to implement than ever before in the 1980s. For example, computer-integrated manufacturing (CIM) and factory automation made it easier to monitor inventory levels and track market demand, and thus create shorter lead times. "JIT uses computer-aided stock control in which materials are delivered from outside, just before they are needed at each stage of manufacturing. Automated stock-control ensures that materials and components are well stocked and available on demand ("just in time") when they are needed, thus reducing waste and dead capital" ("Health and safety," Sideboom, 2009). Greater automation of factory processes reduced worker errors and safety risks as well through fail-safe mechanisms.

Poka-yokes, computer automation of factory processes, and other computerized manufacturing and record-keeping devices all enabled greater accuracy and fulfilled one of the core principles behind JIT, that of Total Quality Management (TQM) also known as Total Quality Control (TQC), a management tool for improving total performance. "TQC means organized Kaizen activities involving everyone in a company -- managers and workers -- in a totally systemic and integrated effort toward improving performance at every level. It is to lead to increased customer satisfaction through satisfying such corporate cross-functional goals as quality, cost, scheduling, manpower development, and new product development" ("Kaizen," 1000 Ventures, 2006). Kaizen activities are founded upon company philosophies of "teamwork, personal discipline, improved morale, quality circles, and soliciting worker suggestions for improvement" ("Kaizen method," Value-Based Management, 2009). In short, every person at the company is committed to improving company processes, and because every worker can add potential value to the company, every worker is valued. Kaizen ideals combined with TQM, in a sort of Zen attitude towards production, stress that quality rather than profit is the focus of a successful company, as by improving quality, profits should be improved by definition: "to steer the corporation toward higher profitability through such measures as improved work procedures, fewer defects, lower costs, lower debt service, and more advantageous order filling" is better than traditional competitive strategies (Kaizen, 1000 Ventures, 2006).

JIT processes can be broken down as follows: First, the company strives to create a stable and level manufacturing demand schedule through "back-flushing to manage inventory: an end item's bill of materials" is periodically calculated, along with the various components that were used to make the item, "eliminating the need to collect detailed usage information on the shop floor" ("JIT Lecture Notes," 2006). Next, JIT tries to reduce or ideally eliminate setup times through planning, and product and process redesign. Reducing setup times allows economical production of smaller lots, as does moving work stations closer together. Closeness in every sense of the word is of the essence -- for example, close cooperation with suppliers is necessary since JIT low inventory requirements increase the need for more frequent but smaller deliveries from suppliers. Toyota's close relationships with its suppliers have remained one of the hallmarks of the company's business plan. It should be added that flexibility of all components of the manufacturing chain demand a similar commitment to quality by suppliers to a zero defects quality program. Suppliers have been willing to comply with more rigorous standards of quality control, given the special relationship they enjoy with Toyota. Exclusive and symbiotic relationships with suppliers are valuable, especially suppliers located close to the factory.

A JIT company strives for preventive maintenance so no time is wasted, and errors are reduced or eliminated because all aspects of the production process are kept in 'tip-top' shape. Above all JIT requires a flexible workforce with workers trained "to operate several machines, to perform maintenance tasks, and to perform quality inspections" ("JIT Lecture Notes," 2006). A flexibly trained and loyal workforce has several advantages. Despite its emphasis on the benefits of innovative computer technology during certain aspects of the production process, Toyota has been commended for the great respect it showed for its workforce. "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" for JIT to be successful ("JIT Lecture Notes," 2006). Workers must report inefficiencies and act quickly when defects in production occur. Workers felt and continue to feel more valued by Toyota because of their added skills and their greater utility as employees, given to them by the company's rigorous educational training. The JIT approach also ensures that workers' extensive knowledge itself functions as a kind of fail-safe mechanism. Worker flexibility and high levels of training and education also mean that workers can be more easily rotated to meet shifts in demand.