|JIT is an approach to manufacturing that endeavours
to satisfy customer needs by manufacturing as late as possible. In the
production of foodstuffs or newspapers, for example, product shelf life is
limited, and so the 'product' has traditionally been produced close to
consumers. In the case of foodstuffs, for centuries man has endeavoured to
find effective preservatives/storage methods in order to extend shelf life
and even out literal feast and famine circumstances.
In the case of manufactured goods the situation is different: deterioration is not so fast, enabling goods to be stockpiled or transported long distances to markets. Until the last quarter of the 19th century a 'sellers market' enabled producers to sell all they could make; if products were stored in semi-finished or finished condition, no matter, this would be reflected in the price. At its extreme, this approach was represented by Henry Ford's statement, 'You can have any colour car you like, as long as its black!'
Although this remained true only until General Motors offered mass markets a wider range of colour, producers held the upper hand for many years to come. Circumstances started to change in the 1970's. Increasing energy prices and various uncertainties made consumers more reluctant to part with their money, and at the same time trade barriers were falling. producers New ways had to be found to overcome this hesitation - new products, more variety, more discretionary options, etc. Consumers will pay for something they regard as special - especially if it is fashionable - although of course fashions can change very quickly! For the more run-of-the-mill product, features and quality are taken as 'givens', and price becomes very important.
The result is that a producer of 'fashionable' items cannot afford to take too long to get to market, in case tastes change; a mass-market producer has to minimise any non-value-added cost burdens such as storage costs in order to compete.
|If we consider variety for a moment, the figures can
be frightening! If we make ourselves a cup of coffee we have a few
|If we were to pay a little more and buy a cup in a
coffee shop, there may be more choices of coffee bean; perhaps cream
...and it may be that we could consider iced as opposed to hot coffee, or a topping perhaps? Its relatively easy to meet an individual's specific requirements quickly - the 'point of differentiation' of the product is late; individual ingredients are not committed to a specific cup of coffee until the last moment.
|In the case of motor cars we have similar options:
In reality, not every body shape will be offered with every type of engine, or every level of trim with every colour. On the other hand it might be that some features may be optional to all models - perhaps air conditioning, a sunroof, CD player, passenger airbags, etc. The manufacturer will also have to cater for different national markets with LH / RH drive; different emission standards; different requirements for lighting, etc.
The manufacturer will probably have at least a couple of hundred suppliers. There may be one specialising in door mirrors, for example. This supplier has to provide mirrors in a full range of colours, with the options of manual or electric adjustment, heated or unheated glass, and different shapes to suit the left or right-seated driver's optical requirements.
|How best to meet all these requirements? Holding stock of every item would be the easy answer: producing big batches of components to meet every possible model variant and holding stocks at Assembly; producing big batches of, say, red cars with sunroofs one week, blue sports models the next...etc. and supply all these from stock?
|Predicting Market Requirements
|The traditional approach has been to try and forecast market requirements. Delivery dates are assigned to finished products, and a bill of materials for all components, sub-assemblies, etc. derived from this. The lead times (including manufacturing, storage, transportation, etc.) are calculated for these components and instructions are issued for their manufacture by a 'due date'. Sophisticated systems known as MRP (Manufacturing Resource Planning) exist to make all these calculations so that everything can come together at the right time, in the right place to meet the predicted requirement.
|If everything happened as planned, then we could envisage a system with minimum inventory where everything is made on time, and at the next stage of the process is carried forward towards ultimate completion.
|Unfortunately there are several flaws with this system:
|...so we hold stock or make extra 'just in case': but this increases costs and extends lead times!
|...efficiency savings have to be offset by storage costs.
|..and the longer the lead time, the more difficult the prediction comes!
|So the ideal is somehow to avoid
prediction by producing when the customer has made his/her mind up - and
yet do this without incurring all the cost penalties associated with
holding stock or producing inefficiently.
This is where a host of techniques associated with JIT or 'lean manufacture' are required. The main elements are:
|Flow: Keep the product moving; avoid storage (or stagnation). Bring separate parts of the process together. Group value-adding activities by product rather than process.
|Pull: At each process stage, produce only when there is an explicit demand. Where processes are separate, use a system such as kanban to trigger supply or production.
Sometimes spelt the German way, 'takt'; sometimes TACT (Total Available Cycle Time)
|Tact: Produce at the same rate all along the process - a rate which exactly meets customer demand. This may vary from time to time - seasonal demands, perhaps. Not to be confused with cycle time 'the time to do a job'.
|In turn, these three major elements place demands on the 'factors of production':
|Everyone is a 'link in the chain'; people must be able to perform consistently according to standards. They need to be trained and motivated and recognise they are part of a bigger team working together to meet customer needs. Wit, inventiveness and individuality needs to be applied to the elimination of waste in standards.
|Must be of good quality and exact quantity and delivered on time, i.e. as specified by the customer. Any less would interrupt the smooth working of the system; any more is waste. Where items share a common process (e.g. moulded parts) changeovers need to be fast and frequent to keep stocks minimal and 'fresh'.
|Must be reliable in terms of speed (cycle time) regularity (no breakdowns) and consistency (product quality) of output.
|These are exacting demands: a lean production system has no place for unreliable equipment, sub-standard material, or people who are not sure what they're doing! In turn, a lean system which can meet customer requirements can expect to be a competitive one, and the business prosper, providing is it geared to making attractively designed and marketed products.
|JIT, TPM and TQC are all, in fact, requirements of a lean production system. The 'system' is that which binds all the various tools and techniques into a coherent whole, bringing emphasis to those which are most appropriate to the manufacturer's particular circumstances.
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