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As we know, Lean
Manufacturing is about reducing the Lead Time and cost, while complying with
customer specifications. This is achieved by eliminating waste wherever it is. One of the most
important steps in the implementation of Lean Manufacturing is JIT.
Just in
time is about not having anywhere in the plant or outlet, more row
materials, sub-assemblies or products than the minimum required for a fluent
operation. Toyota considers this as One of the Two most important strategies
for their success. The other being:
"Jidoka"
= "Zero Quality Control or Autonomous Quality"
Storage is
usually a hidden enemy of a healthy operation. When raw materials,
sub-assemblies or finished products stay anywhere they represent a part of
the capital of a company that is NOT generating any profits. In addition to
that loss of profit, it is at risk. Floods, fires, market depreciation, and
design obsolescence, are just some of those risks. In some cases, raw
materials used in products that have not moved, could have been used to
manufacture other products that would've sold faster.
A giant
manufacturer in the U.S. West Coast used to produce large volumes of pipe
spools for their products, with apparent big savings because of the
"serial" production of these sub-assemblies. It was quite
frequent, though, that they had to modify the spools because the main design
had changed, other cases were even worse, when the spool was obsolete all
together. Today they are working on a day by day basis, finishing a spool
just a few hours or even minutes before it has to be integrated into the
main product. Other problems that were solved at the same time, were:
storage space, transportation, eventualities like scratches or other kinds
of damages, plus savings of the money invested in the raw materials and
labor that in the past was not being immediately cashed into the main
product.
Unless you
are in the business of storage and wholesale, buying large volumes of raw
material may not be the best that you can do with your money. Your suppliers
can become more efficient and give you the same good prices if you reach an
agreement of buying all your requirements from them. The automobile industry
has established in many cases agreements for hourly or daily delivery of
some materials and parts. This can allow for them to operate in more compact
areas, reducing time and movement in the process.
A
manufacturer of medical equipment in California had a receiving and storage
system in a traditional warehouse of more than 20,000 square feet, in
average a quarter mile distance to the diverse production lines. Now they
operate with five mini-receiving areas of just 400 square ft. each, located
just a few yards from each production line. The average storage time for the
raw materials came down from 48 days to a little less than two days, they
are still thinking of reducing that time. It is just a matter of developing
a very good relationship and assure the reliability of the suppliers and
scheduling the deliveries in a very precise manner. This is easy with the
computer systems now so accessible.
This
concept, when continued throughout the full operation will also allow for
each work cell and department of the the plant to deliver products at the
right pace to the customer, (some times another department within the same
facility).
We can see
today's supermarkets operating with practically no storage areas. The
manufacturers of the products take care of shelving their products at the
pace required by the consumers. The manufacturers or distribution companies
are the ones who take care of the storage and distribution, while the
supermarket is in the business of promoting the sales and collecting the
cash from the customers. The JIT process gives them the advantage of having
fresh products all the time, delivered where, when and in the amount they
are needed. This is true in all the extent of the supply chain. By the way,
this is the most clear understandable example of a "pull" system,
since there is room on the shelf just for a number of pieces per product, so
only when it has been sold it will be replaced. Although in this particular
case it is JIT delivery, but with imagination the concept can be transferred
to JIT production.
The JIT
process has to be thoroughly coordinated with all the involved parties, and
its implementation should be done gradually. This planning and coordination
will take most of the effort, but the results will be impressive. No
Production Cell or Lean Manufacturing implementation will be complete
without JIT.
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