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© 1997 Prentice-Hall, Inc.
Principles of
Operations Management
Just-In-Time Systems
Chapter 11
11- 1
Learning Objectives
© 1997 Prentice-Hall, Inc.
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Explain Just-in-Time (JIT)
Compare ‘pull’ & ‘push ’ systems
List the types of waste
Describe the 7 JIT requirements
State at least 5 characteristics of JIT
vendor partnerships
Explain the relationship between
lot size, setup cost, & inventory
11- 2
What is Just-in-Time?
© 1997 Prentice-Hall, Inc.
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Management philosophy of continuous
& forced problem solving
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‘Pull’ system of production &
purchasing
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Downstream work centers request
delivery from upstream work centers
11- 3
© 1997 Prentice-Hall, Inc.
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Attacks waste
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Anything not adding value to the product
 Customer’s perspective
Exposes problems & bottlenecks
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What Does
Just-In-Time Do?
Caused by variability
 Deviation from optimum
Achieves streamlined production

By reducing inventory
11- 4
Types of Waste
© 1997 Prentice-Hall, Inc.
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Overproduction
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Waiting
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Transportation
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Inefficient processing
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Inventory
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Unnecessary motion
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Product defects
11- 5
© 1995
Corel
Corp.
Streamlined Production
© 1997 Prentice-Hall, Inc.
Traditional Flow

Production Process
(stream of water)
Suppliers
Flow with JIT
Suppliers
Customers
Inventory
(stagnant ponds)
Material
(water in
stream)

Customers
11- 6
Just-in-Time
Success Factors
© 1997 Prentice-Hall, Inc.
Employee
Empowerment
Suppliers
Quality
Preventive
Maintenance
11- 7
Layout
JIT
Inventory
Scheduling
Suppliers
© 1997 Prentice-Hall, Inc.
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Incoming material & finished goods
involve waste
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Buyer & supplier form JIT partnerships
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JIT partnerships eliminate
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Unnecessary activities
In-plant inventory
In-transit inventory
Poor suppliers
11- 8
© 1997 Prentice-Hall, Inc.
Characteristics of
JIT Partnerships
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Few, nearby suppliers
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Long-term contract agreements
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Steady supply rate
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Frequent deliveries in small lots
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Buyer helps suppliers meet quality
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Suppliers use process control charts
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Buyer schedules inbound freight
11- 9
Supplier Worries
© 1997 Prentice-Hall, Inc.
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Lack of flexibility
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Long-term contract with 1 customer
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Poor customer scheduling
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Frequent engineering changes
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Strict quality assurance
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Small lot sizes
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Close physical proximity
11- 10
Layout
© 1997 Prentice-Hall, Inc.
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JIT objective: Reduce movement of
people & material
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Movement is waste
JIT requires
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Work cells for product families
Moveable or changeable machines
Short distances
Little space for inventory
Delivery directly to work areas
11- 11
© 1997 Prentice-Hall, Inc.
Work Cells vs. Process
Layout
Process Layout
Lathe
Lathe
5
4
1
Saw
Saw
2
Heat
Treat
3
Press
11- 12
2
Saw
Press
Lathe
Lathe
Grinder
Grinder
6
Press
Work Cell
Grinder
1
Heat
Treat
Inventory
© 1997 Prentice-Hall, Inc.
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Traditionally, inventory exists in case
problems arise
JIT objective: Eliminate inventory
JIT requires
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Small lot sizes
Low setup time
Containers for fixed number of parts
JIT inventory: Minimum inventory to
keep system running
11- 13
© 1997 Prentice-Hall, Inc.
Customer
orders 10
Reducing Lot Sizes
Increases # Lots
Lot size = 5
Lot 2
Lot 1
Lot size = 2
Lot 1 Lot 2 Lot 3 Lot 4 Lot 5
11- 15
... Which Increases
Inventory Costs
© 1997 Prentice-Hall, Inc.
Cost
Total Cost
Holding Cost
Setup Cost
Smaller Optimal
Lot Size Lot Size
11- 16
Lot Size
Scheduling
© 1997 Prentice-Hall, Inc.
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Involves timing of operations
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JIT requires
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Communicating schedules to suppliers
Level material use schedules
Freezing part of schedule nearest due
date
 May freeze monthly output rate
Small lots
Kanban techniques
11- 17
© 1997 Prentice-Hall, Inc.
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Level Material Use
Schedules
Reduce ripple effect of small variations
in schedules (e.g., final assy)
Production quantities evenly
distributed over time (e.g., 7/day)
Build same mix of products every day
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Results in many small lots
Item Monthly Quantity Daily Quantity
A
40
2
B
60
3
11- 18
Small vs. Large Lots
JIT produces same
amount in same time
if lower setup time
© 1997 Prentice-Hall, Inc.
JIT Small Lots
A
A
B
B
B
C
A
A
B
B
B
C
B
B
B
C
C
Time
Large-Lot Approach
A
A
A
A
B
B
B
Time
11- 19
Kanban
© 1997 Prentice-Hall, Inc.
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Japanese word for card
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Authorizes production from
downstream operations
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Pronounced ‘kahn-bahn’ (not ‘can-ban’)
‘Pulls’ material through plant
May be a card, flag, verbal signal etc.
Used often with fixed-size containers

Add or remove containers to change
production rate
11- 20
© 1997 Prentice-Hall, Inc.
Preventive Maintenance
(PM)
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All activities involved in keeping
equipment in working order
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Done to prevent failure
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JIT requires
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Scheduled & daily PM
Operator performs PM
 Knows machines
 Responsible for product quality
11- 21
Quality
© 1997 Prentice-Hall, Inc.
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JIT exposes quality problems by
reducing inventory
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JIT limits # defects with small lots
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JIT requires TQM
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Statistical process control
Worker involvement
 Inspect own work
 Quality circles
Immediate feedback
11- 22
Employee Empowerment
© 1997 Prentice-Hall, Inc.
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Getting employees involved in
product & process improvements
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Know job best
JIT requires
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Empowerment
Cross-training
Training support
Few job classifications
11- 23
© 1995 Corel Corp.
Conclusion
© 1997 Prentice-Hall, Inc.


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Explained Just-in-Time (JIT)
Compared ‘pull’ & ‘push ’ systems
Listed the types of waste
Described the 7 JIT requirements
Stated at least 5 characteristics of JIT
vendor partnerships
Explained the relationship between
lot size, setup cost, & inventory
11- 24
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