Chapter 16: JIT & Lean Operations

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Department
Food Agricultural and Resource Economics
Course Code
FARE 3310
Professor
Getu Hailu

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Chapter 16: JIT and Lean Operations  JIT is about matching supply and demand  Goal: create supply process that forms a smooth flow with its demand (giving customers exactly what they need WHEN then need it What are JIT, TPS and Lean Operations?  Philosophies of continuous improvement focus on driving all waste out of production process  Just-in-Time: philosophy of continuous and forced problem solving via focus on throughput and reduced inventory o Emphasizes forced problem solving  Toyota Production System: philosophy emphasizes continuous improvement, respect for people and standard work practices o Emphasizes employee learning/empowerment in assembly-line environment  Lean Production: focus on elimination of waste in all forms, and smooth, efficient flow of materials/information throughout value chain to obtain faster customer response, higher quality and lower cost o Supplies customer with their exact wants when want it without waste o Emphasize understanding consumer JIT/Lean Operations  Good production systems require managers to address three issues that are pervasive and fundamental to operations management 1. Eliminate Waste: waste is anything that doesn’t add value from the customer POV a. Storage, inspection, delay, waiting in queues and defective products do not add value and are 100% waste 2. Remove Variability: variability is any deviation from optimum process that delivers perfect product on time, every time (less variability = less waste) 3. Improve Throughput: throughput = time takes to move order from receipt to delivery a. Pull System: concept that results in material being produced only when requested and moved to where needed just as needed (increases throughput) b. By pulling material in small lots, inventory cushions are removed, exposing problems/emphasizing continual improvement Ohno’s Seven Wastes 1. Overproduction: producing more than the customer orders 2. Queues: idle time, storage, waiting 3. Transportation: time/efforts spent in moving product around factory as a resul
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