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JUST IN TIME PRODUCTION SYSTEMS:Secondary Goals, Tiered Supplier Network

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Production and Operations Management ­MGT613
VU
Lesson 38
JUST IN TIME PRODUCTION SYSTEMS
Just In Time system provides an organization a robust structure by improving the relationship between
the organization and the supplier by constituting a strategic alliance network between the organization
and the suppliers. At the intra organization level, JIT forms a healthy alliance between the management
and the workforce, all this contributes in elimination of waste.
JUST IN TIME
Just-In-Time (JIT): JIT can be defined as an integrated set of activities designed to achieve
high-volume production using minimal inventories (raw materials, work in process, and
finished goods).
JIT also involves the elimination of waste in production effort.
JIT also involves the timing of production resources (i.e., parts arrive at the next
workstation "just in time").
Just-in-time (JIT): A highly coordinated processing system in which goods move through the
system, and services are performed, just as they are needed. As operations managers we should
remember this point onwards that
1. JIT is also known as lean production
2. JIT is the true pull (demand) system
3. JIT operates with very little "fat"
.
Summary JIT Goals and Building Blocks
Goal of JIT: The ultimate goal of JIT is a balanced system. JIT achieves a smooth, rapid flow of
materials through the system. The ultimate as well as supporting goals are represented below in the
form of a pyramid.
Ultimate
A
Goal  balanced
rapid flow
Supporting
Goals
Eliminate disruptions
Eliminate waste
Make the system flexible
Building
Product
Process
Personnel
Manufactur-
Blocks
Design
Design
Elements
ing Planning
We need to pay special attention on building blocks along with secondary blocks as absence of one
or more objectives can seriously harm the JIT production structure for any manufacturing or service
based organization.
Secondary Goals
1. Eliminate disruptions
2. Make system flexible
3. Eliminate waste, especially excess inventory
Big vs. Little JIT
1. Big JIT ­ broad focus ( Includes Internal as well as External)
a. Vendor relations
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Production and Operations Management ­MGT613
VU
b. Human relations
c. Technology management
d. Materials and inventory management
2. Little JIT ­ narrow focus Internal to organization
a. Scheduling materials
b. Scheduling services of production
JIT Building Blocks
1. Product design
2. Process design
3. Personnel/organizational elements
4. Manufacturing planning and control
The Lean Production System
Based on two philosophies:
1. Elimination of waste
2. Respect for people
Traditional Supplier Network
1. The organizations make its suppliers compete against each other.
2. Also the suppliers can supply the same component or raw material to the organizations
competitors thus harming the organizations business.
3. Organizations tend to waste resources and a lot of time looses its suppliers to the competitors.
4. Suppliers too end up absorbing poor order placement from the organizations.
5. The whole network faces sluggishness or inertia.
Buyer
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Tiered Supplier Network
Buyer
First Tier Supplier
Supplier
Second Tier Supplier
Supplier
Supplier
Third Tier Supplier
Supplier
Supplier
Supplier
Supplier
1. The suppliers work as a strategic alliance to provide components to the organization.
2. Inventory costs as well as the overall time involved are reduced.
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Production and Operations Management ­MGT613
VU
3. Order execution is improved and organizations do not face the challenge of loosing its suppliers
to the competitors.
4. There is little or no rivalry between the suppliers
Transitioning to a JIT System
1. Get top management commitment
2. Decide which parts need most effort
3. Obtain support of workers
4. Try to reduce scrap material
5. Start by trying to reduce setup times
6. Incorporate quality
7. Gradually convert operations
8. Convert suppliers to JIT
9. Prepare for obstacles
Obstacles to Conversion
1. Management may not be committed
2. Workers/management may not be cooperative
3. Suppliers may resist
JIT in Services
The basic goal of the demand flow technology in the service organization is to provide optimum
response to the customer with the highest quality service and lowest possible cost.
1. Eliminate disruptions
2. Make system flexible
3. Reduce setup and lead times
4. Eliminate waste
5. Simplify the process
JIT in Services (Examples)
1. Upgrade Quality
2. Clarify Process Flows
3. Develop Supplier Networks
4. Introduce Demand-Pull Scheduling
5. Reorganize Physical Configuration
6. Eliminate Unnecessary Activities
7. Level the Facility Load
JIT II
JIT II: a supplier representative works right in the company's plant, making sure there is an
appropriate supply on hand.
Benefits of JIT Systems
1. Reduced inventory levels
2. High quality
3. Flexibility
4. Reduced lead times
5. Increased productivity
Summary
JIT systems allow an organization to achieve a balanced smooth flow of production, more system
flexibility with reduction in wastes and lead time. Proper emphasis on the process and product design
along with personnel management can provide the necessary control and reward of achievement of JIT
or Lean Production systems.
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Table of Contents:
  1. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT
  2. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:Decision Making
  3. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:Strategy
  4. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:Service Delivery System
  5. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:Productivity
  6. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:The Decision Process
  7. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:Demand Management
  8. Roadmap to the Lecture:Fundamental Types of Forecasts, Finer Classification of Forecasts
  9. Time Series Forecasts:Techniques for Averaging, Simple Moving Average Solution
  10. The formula for the moving average is:Exponential Smoothing Model, Common Nonlinear Trends
  11. The formula for the moving average is:Major factors in design strategy
  12. The formula for the moving average is:Standardization, Mass Customization
  13. The formula for the moving average is:DESIGN STRATEGIES
  14. The formula for the moving average is:Measuring Reliability, AVAILABILITY
  15. The formula for the moving average is:Learning Objectives, Capacity Planning
  16. The formula for the moving average is:Efficiency and Utilization, Evaluating Alternatives
  17. The formula for the moving average is:Evaluating Alternatives, Financial Analysis
  18. PROCESS SELECTION:Types of Operation, Intermittent Processing
  19. PROCESS SELECTION:Basic Layout Types, Advantages of Product Layout
  20. PROCESS SELECTION:Cellular Layouts, Facilities Layouts, Importance of Layout Decisions
  21. DESIGN OF WORK SYSTEMS:Job Design, Specialization, Methods Analysis
  22. LOCATION PLANNING AND ANALYSIS:MANAGING GLOBAL OPERATIONS, Regional Factors
  23. MANAGEMENT OF QUALITY:Dimensions of Quality, Examples of Service Quality
  24. SERVICE QUALITY:Moments of Truth, Perceived Service Quality, Service Gap Analysis
  25. TOTAL QUALITY MANAGEMENT:Determinants of Quality, Responsibility for Quality
  26. TQM QUALITY:Six Sigma Team, PROCESS IMPROVEMENT
  27. QUALITY CONTROL & QUALITY ASSURANCE:INSPECTION, Control Chart
  28. ACCEPTANCE SAMPLING:CHOOSING A PLAN, CONSUMER’S AND PRODUCER’S RISK
  29. AGGREGATE PLANNING:Demand and Capacity Options
  30. AGGREGATE PLANNING:Aggregate Planning Relationships, Master Scheduling
  31. INVENTORY MANAGEMENT:Objective of Inventory Control, Inventory Counting Systems
  32. INVENTORY MANAGEMENT:ABC Classification System, Cycle Counting
  33. INVENTORY MANAGEMENT:Economic Production Quantity Assumptions
  34. INVENTORY MANAGEMENT:Independent and Dependent Demand
  35. INVENTORY MANAGEMENT:Capacity Planning, Manufacturing Resource Planning
  36. JUST IN TIME PRODUCTION SYSTEMS:Organizational and Operational Strategies
  37. JUST IN TIME PRODUCTION SYSTEMS:Operational Benefits, Kanban Formula
  38. JUST IN TIME PRODUCTION SYSTEMS:Secondary Goals, Tiered Supplier Network
  39. SUPPLY CHAIN MANAGEMENT:Logistics, Distribution Requirements Planning
  40. SUPPLY CHAIN MANAGEMENT:Supply Chain Benefits and Drawbacks
  41. SCHEDULING:High-Volume Systems, Load Chart, Hungarian Method
  42. SEQUENCING:Assumptions to Priority Rules, Scheduling Service Operations
  43. PROJECT MANAGEMENT:Project Life Cycle, Work Breakdown Structure
  44. PROJECT MANAGEMENT:Computing Algorithm, Project Crashing, Risk Management
  45. Waiting Lines:Queuing Analysis, System Characteristics, Priority Model