Just in time product

JUST IN TIME PRODUCTION : 

JUST IN TIME PRODUCTION

DEFINITION: : 

DEFINITION: Just-in-time (JIT) is an inventory strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs.

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Or JIT is a ‘pull’ system of production, so actual orders provide a signal for when the product should be manufactured. Demanding ‘pull’ enables a firm to produce only what is required, in the correct quantity and at the correct time.

HISTORY: : 

HISTORY: The technique was first used by the Ford Motor Company. Toyota Motor Corporation of Japan subsequently adopted and publicized JIT as part of its Toyota Production System (TPS).

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Toyota famously did not adopt the procedure from Ford, but from the Piggly Wiggly grocery store chain.

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INVENTORY: is a list for goods and materials, or those goods and materials themselves, held available in stock by a business.

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In traditional production, if the inventory, goods are left after being sold in the market, or left or surplus materials, they will be put in warehouse. STOCK: an amount of something that you keep, so that you can use it when you need it.

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INVENTORY COST: is the cost that you have to pay for the rent of warehouse or insurance cost. Just in time systems are designed to keep inventory costs at a minimum, unlike the ways of old, with large warehouse loaded with back inventory.

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JIT production is the system that enables a firm to produce only what is required, in the correct quantity and at the correct time.

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To JIT, Inventory is seen as incurring costs, or waste, instead of adding and storing value.

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 the just-in-time inventory system focus is having “the right material, at the right time, at the right place, and in the exact amount”.

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Ex : a car manufacturing plant might receive exactly the right number and type of tires for one day’s production, and the supplier would be expected to deliver them to the correct loading bay on the production line within a very narrow time slot.

PROCESS: : 

PROCESS: In dictionary, process means a series of action that have a particular result. Ex : soy sauce manufacturing process

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The firm's work in process includes those materials from the time of release to the work floor until they become complete and ready for sale to wholesale or retail customers.

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TRANSPORTATION: the flow of the materials from the suppliers to each section of the manufacturing process.

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“We buy only enough to fit into the plan of production, taking into consideration the state of transportation at the time. If transportation were perfect and an even flow of materials could be assured, it would not be necessary to carry any stock.

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The carloads of raw materials would arrive on schedule and in the planned order and amounts, and go from the railway cars into production. That would save a great deal of money, for it would give a very rapid turnover and thus decrease the amount of money tied up in materials. With bad transportation one has to carry larger stocks."

LEAN PRODUCTION : 

LEAN PRODUCTION As waste is eliminated, quality improves while production time and cost are reduced. Focus on getting the right things to the right place at the right time in the right quantity to achieve perfect work flow, while minimizing waste and being flexible and able to change.

Stockless production : 

Stockless production Maintaining an effective production line while minimizing inventory cost.

TRADITIONAL PRODUCTION: : 

TRADITIONAL PRODUCTION: There are 3 basic reasons for keeping an inventory: Time - The time lags present in the supply chain, from supplier to user at every stage, requires that you maintain certain amount of inventory to use in this "lead time”.

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Uncertainty - Inventories are maintained as buffers to meet uncertainties in demand, supply and movements of goods.

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Management may be tempted to keep stock to hide production problems. These problems include backups at work centers, machine reliability, process variability, lack of flexibility of employees and equipment, and inadequate capacity.

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QUALITY QUANTITY HOW GOOD OR BAD SOMETHING IS AMOUNT OR NUMBER OF SOMETHING IN JIT PRODUCTION, EACH SECTION OF THE PRODUCTION PROCESS MAKE NECESSARY QUANTITY OF THE NECESSARY UNITS AT THE NECESSARY TIME AND REQUIRING QUALITY ASSURANCE

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Ex: Toyota ‘ quality control during production ensures that the correct materials and parts are used, are fitted with precision and accuracy

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DEFECT: fault in product or in the way it has been made which means that is not perfect Eliminating production of defective part require a quality control system that achieves perfect first time quality

DIFFERENCES BETWEEN QUALITY CONTROL SYSTEM OF MASS PRODUCTION & JIT PRODUCTION : 

DIFFERENCES BETWEEN QUALITY CONTROL SYSTEM OF MASS PRODUCTION & JIT PRODUCTION

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Toyota recalls 3.8 million cars for defective floor mats; 128316 Camrys because the side air bags may not inflate properly Toyota and Honda recall close to 20,000cars in US for steering, light defects News alert on recall

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Honda is recalling

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DISTRIBUTOR: a person or business that supplies goods produces by other companies to shops/ stores or directly to the public

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Toyota distributor LLC in USA is the world’ largest distributor of Toyota vehicles

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Toyota Vietnam

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FPT securities Joint Stock Company

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Exceed: to be greater than a particular number or to do more than order Extra: more than usually, expected Schedule: the plan that lists all the works that you have to do and when you must do each thing quota: the limited amount of people or things that is official allowed

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JIT THE EUROPEAN & AMERICAN LOGIC Producing only what is needed, in necessary quantity and at necessary time Encouraging greater productivity Welcoming production that exceeds the agreed schedule or quota and stocking extras in case of future problem

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_ Component : any of the pieces / parts that make up a product or machine etc.

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Car’s steering engine ( the machinery that you use to control the direction it goes in )

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_ Asset : economic resources owned by a person or company which can be used/ sold to pay debts.

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* 2 types : .tangible asset : asset that can be clearly seen to exist.

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Ex : inventories, buildings, equipment…

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.intangible asset : nonphysical resources & rights that have a value to the firm b/c they give advantage in the market place.

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Ex : goodwill, copyrights, trademarks, patents & computer programs, stocks …

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. Liability : the amount of money that a person or company owes.

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_ Facilities : sth. designed, built, installed, etc., to serve a specific function affording a convenience or service.

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Buildings

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equipment

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Service Coca-Cola vending machines

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_ location : the geographical situation of a factory or other facilities. Ex : Thu Duc district, HCM city

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_ plant : the buildings, machines, equipments & other facilities used in the production process. Ex : Coca-Cola Beverages Vietnam (CCBV) 3 plants : _ Ha Noi (North) _ Da Nang (Central) _ Ho Chi Minh City (South)

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_ capacity : the (max.) rate of output that can be achieved from a production process. Ex : 3 plants of CCBV produce 14,8 million physical cases ( 2004)  capacity of CCBV 14,8 million physical cases.

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_ lead time : the period of time b/w the initiation of any process of production and the completion of that process. Ex : the lead time for ordering a new car from a manufacturer is from 2 weeks to 6 months.

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_ Half-finished item : a unfinished products in production process.

OUTSOURCING : 

OUTSOURCING - Outsourcing is contracting with another company or person to do a particular function

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WHY OUTSOURCING : - Achieving a lower production cost - Making better use of available resources - Lack of in-house resources - Getting work done more effectively

Long-term relationship and mutual trust : 

Long-term relationship and mutual trust

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The whole production process is sabotaged If a single supplier fails to deliver a component on time Firms should build and rely on long-term relationship and mutual trust

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In JIT production, relationships are ideally describe as cooperative partnerships in which one of the main goals is to obtain MUTUAL BENIFICIAL RESULTS

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- Cost reduction - Coordination and problem solving - Deliver on time and arrive in an equitable price

Multi-skilled employee and idle worker : 

Multi-skilled employee and idle worker Multi-skillling is the fact of a person being trained in several different job which require different skills. Idle – means not working hard

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In order to ensure a smooth production process, it is necessary that workers be skilled in a number of function

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Operate different type of machines required for different job Help his neighbor in time of trouble Carry out routine maintenance Be his own quality inspector

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Developing multi-skilled employees: - Reduce cost - Improve productivity - Enrich employee’s jobs

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In just-in-time production, this avoid all the waiting and moving time involved in sending haft-finished items for one department for another and this increases productivity in manufacture

OVERPRODUCTION : 

OVERPRODUCTION it means produce more of something than is wanted or needed

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Overproduction is the exact opposite of Just-in-time production JIT ensure that there is no waste from overproduction

ADVANTAGES: : 

ADVANTAGES: Set up times are significantly reduced in the factory: Cutting set up time allows the company to improve their bottom line, be more efficient, and focus on other areas that may need improvement.

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The flow of goods from warehouse to shelves improves: Having employees focus on specific areas allows them to process goods faster and not become fatigued from doing too many jobs at once. Small or individual piece lot sizes reduce lot delay inventories.

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Lower stock holding means a reduction in storage space which saves rent and insurance costs. As stock is only obtained when it is needed, less working capital is tied up in stock.

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Avoids the build-up of unsold finished product that can occur with sudden changes in demand.

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Less time is spent on checking and re-working the product of others as the emphasis is on getting the work right first time.

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Employees who possess multiple skills are used more efficiently: Having employees trained to work on different parts of the inventory cycle allows companies to move workers where they are needed.

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JIT provides better scheduling and work hour consistency. If there is no demand for a product at the time, workers don’t have to work.

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There is an increased emphasis on supplier relationships : This makes supplier relationships extremely important.

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Supplies come in around the clock, which keeps workers productive and businesses focused on turnover: Focusing management on deadlines makes employees work hard to meet company goals, in pursuit of job satisfaction, promotion, or even higher pay.

Disadvantages of JIT production : 

Disadvantages of JIT production There is little room for mistakes as minimal stock is kept for re-working faulty product Production is very reliant on suppliers and if stock is not delivered on time, the whole production schedule can be delayed

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There is no spare finished product available to meet unexpected orders, because all product is made to meet actual orders – however, JIT is a very responsive method of production

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THANK YOU!