CASE STUDY OF TOYATA’S JIT REVOLUTION

A LEGENDARY PRODUCTION SYSTEM

(MSD 6205 Production & Operation Management)

Submitted By
Name: U.M. Mohamed Rilwan Hasan
RRN: (200292601101)

20th July 2021

1.Explain the philosophy of JIT production
system?
Toyota and the development of Just-in-Time and Toyota
Production System:
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 . This philosophy was first developed and
perfected within the Toyota Corporation by Taiichi Ohno as a means of meeting
consumer demands with minimum delays. Taiichi Ohno is frequently referred to
as the father of JIT.

After JIT introduced by Toyota, many companies followed up and around mid-
1970s’, it gained extended support and widely used by many companies.
Besides that, one motivated reason for developing JIT and some other better
production techniques was that after World War II, Japanese people had a very
strong incentive to develop a good manufacturing technique to help them
rebuilding the economy. They also had a strong working ethnic which was
concentrated on work rather than leisure, seeks continuous improvement, life
commitment to work, group conscious rather than individualism and achieved
common goal. These kinds of motivation had driven Japanese economy to
succeed.

Conclusion:
Just in Time (JIT) is a Japanese invented competition survival production
philosophy aimed at reducing total production cost by minimizing waste and at
the same time continuously improving total product quality. JIT as an integrated
production and control system with interdependence of components has had a
lot of benefits to large manufacturing companies like Automobile and
Electronics where it was first developed and implemented. Its success in Japan
has been partly due to the unique culture, character, orientation and work ethic
of Japanese workforce on one hand and workers centered management style,
positive and cooperative industrial relations, dependability and proximity of
suppliers, geographical features and size on the other. The introduction and
implementation of JIT in the rest of western world, despite the enthusiasm, has
not been without difficulties. Unlike in Japan, Industrial relations in the United
States, United Kingdom, Canada and Australia to mention but a few, is
dominated by adversarial relationships between the major unions, state and
employer making it difficult for employers to introduce multi-skilling, job
rotation practices and team work. Furthermore, unlike a Japanese worker with a
positive attitude to work, western workers generally do not feel obligated to
contribute to the economic performance of an enterprise. They look at labour
negatively. This cultural difference causes a lot of difficulties. The dispersion of
suppliers significantly increases logistics barriers and cost, unlike Japanese
industries whose suppliers are in close proximity to the respective factories they
supply.

2. What are the components of JIT?

Explain
JIT Just-in-Time manufacturing
`Just-in-time' is a management philosophy and not a technique.
 
It originally referred to the production of goods to meet customer demand
exactly, in time, quality and quantity, whether the `customer' is the final
purchaser of the product or another process further along the production line.
 
It has now come to mean producing with minimum waste. "Waste" is taken in
its most general sense and includes time and resources as well as materials.
Elements of JIT include:

 Continuous improvement.
 Attacking fundamental problems - anything that does not add value
to the product.
 Devising systems to identify problems.
 Striving for simplicity - simpler systems may be easier to
understand, easier to manage and less likely to go wrong.
 A product-oriented layout - produces less time spent moving of
materials and parts.
 Quality control at source - each worker is responsible for the
quality of their own output.
 Poka-yoke - `fool proof' tools, methods, jigs etc. prevent mistakes
 Preventative maintenance, Total productive maintenance - ensuring
machinery and equipment functions perfectly when it is required,
and continually improving it.

 Eliminating waste. There are seven types of waste:

  waste from overproduction.
 waste of waiting time.
 transportation waste.
 processing waste.
 inventory waste.
 waste of motion.
 waste from product defects.

 Good housekeeping - workplace cleanliness and organisation.

 Set-up time reduction - increases flexibility and allows smaller batches.
Ideal batch size is 1item. Multi-process handling - a multi-skilled
workforce has greater productivity, flexibility and job satisfaction.
 Levelled / mixed production - to smooth the flow of products the factory.
 Kanbans - simple tools to `pull' products and components through the
process.
 Jidoka (Autonomation) - providing machines with the autonomous
capability to use judgement, so workers can do more useful things than
standing watching them work.
 Andon (trouble lights) - to signal problems to initiate corrective action.

JIT - Background and History

JIT is a Japanese management philosophy which has been applied in practice
since the early 1970s in many Japanese manufacturing organizations. It was
first developed and perfected within the Toyota manufacturing plants by Taiichi
Ohno as a means of meeting consumer demands with minimum delays . Taiichi
Ohno is frequently referred to as the father of JIT.
Toyota was able to meet the increasing challenges for survival through an
approach that focused on people, plants and systems. Toyota realized that JIT
would only be successful if every individual within the organization was
involved and committed to it, if the plant and processes were arranged for
maximum output and efficiency, and if quality and production programs were
scheduled to meet demands exactly.
 
JIT manufacturing has the capacity, when properly adapted to the organization,
to strengthen the organization’s competitiveness in the marketplace
substantially by reducing wastes and improving product quality and efficiency
of production.
3. According to you, what could be the
barriers for the implementation of JIT in
any organization?
Many manufacturing firms adopted just-in-time (JIT)
concepts for more than three decades to enhance competitive strength through
cost reduction, on time-in full delivery, lead time reduction etc. Extension of
JIT production philosophy to purchase and distribution (or with a broader scope
throughout the supply chain) is essential to achieve these objectives. The
survival of many firms depends on the effectiveness of the inventory
management. JIT faces many problems like lack of involvement of employees
and workers resistance for continuous improvement, cultural difference, high
inventories, long lead time, market volatility, forecasting errors etc. Some
critical implementation issues are to be identified and resolved to encourage
firms to adopt JIT. The objective of this paper is to explore and discuss the
barriers for successful JIT implementation.
Twenty-two barriers have been identified after reviewing
relevant literature. This can be a guide for taking suitable action to deal with
barriers in the successful JIT implementation.

To simplify this task, Shingo (1992) established the concept of

seven deadly wastes. This identifies seven different categories of manufacturing
wastes as follows: overproduction, over-processing, transportation, inventory,
motion, defects and waiting time. This was further emphasized through a
particular suggestion that not all Just in Time (JIT) practices can be a suitable
solution to be applied in SMEs (Shah & Ward, 2003). It should be noted that
according to Akhoondi & Morshedi (2012) the companies having less than 100
employees fall into the SME category in Iran whereas this number is different in
other countries.

In order to undertake the interviews, an open-ended

questionnaire was used in 9 different companies in Iran.The demographic
information of the companies that were visited and interviewed. This approach
has been recommended by various authors such as Ribeiro Fernandes(2009) and
Powella et al., (2013) who have carried out similar studies to this investigation.
Planning exploratory interview questions can only be achieved after obtaining a
good understanding of the recent literature about the lean techniques and the
relevant tools that support Therefore to minimize the misinterpretations, the
generalized questions were asked to cover wider areas and the results were then
extracted from the recorded or written documents during the interviews.

4.What are the criticisms towards the

implementation of JIT philosophy?
Criticism on JIT:
During the last decades, Just-In-Time has been criticized from
different authors1. Indeed, certain specific conditions – which, though,
are not uncommon in manufacturing companies – can put in evidence
some well-known weak points of the Japanese approach. Specifically,
un-steady demand in multi-product environments where differences
in processing lead times are not negligible represent a scenario where
JIT would miserably fail, despite the commitment of the operations
managers.
First, we have to keep in mind that one pillar of Lean Production is
the “one-piece-flow” diktat. A one-piece batch would comply with
the Economic Production Quantity theory2 only when order cost (i.e.
setup time) is zero. Having non-negligible setup times hampers JIT
implementation and makes the production levelling problem even
more complicated. It is peculiar that, originally, operations
researchers concentrated on finding the best jobs sequence
considering negligible setups time. This bound was introduced into
the mixed model Kanban scheduling problem only since 2000. Setups
are inevitable in the Lean Production philosophy, but are considered
already optimized as well. Given that setup times are Muda, TPS
approach focuses on quickening the setup time, e.g., through technical
interventions on workstations or on the setup process with SMED
techniques, not on reducing their frequency: the increased
performance gained through setups frequency reduction is not worth
the flexibility loss that the system may suffer as a consequence.
Indeed, the standard Kanban management system, ignoring the job
sequencing, does not aim at reducing setup wastes at all.
Analogously, the Heijunka box was developed for levelling
production and can only assure that the product mix in the very short
term reproduces that in the long term; in its original application, the
decision on the job sequence is left to the operator. Only in some
enhanced version, the sequence is pre-defined applying some
scheduling algorithm.
Given the fact that JIT is based on stock replenishment, constant
production and withdrawal rates should be ensured in order to avoid
either stock outs or stock proliferation. Mixed-model production
requires a levelled Master Production Schedule (MPS) 3, but this is not
sufficient to smooth the production rate in a short time period. While
it is easy to obtain a levelled production in a medium or even
medium-short period, it is difficult to do it in each hour, for each
workstation and each material.
Indeed, demand is typically unstable under two points of view:
random frequency, which is the chance that production orders are
irregularly received, and random quantities, which is related to
product mix changes. Indeed, since TPS assume minimal stock levels,
the only chance to cope with demand peak is to recur to extra
production capacity. However, available production capacity should
be higher than required as the average (as TPS requires), but for sure
cannot be limitless. Thus, the JIT management system should anyway
be able to consider the opportunity of varying the maintenance plan as
well as the setup scheduling, in case of need. On the other hand, if the
production site faces a levelled production, changes in product mix
should not represent a problem; however, they increase sequencing
problem complexity. Most of the operational research solutions for
JIT scheduling are designed for a fixed product mix, thus its changes
can greatly affect the optimality of solutions, up to make them
useless.
On the contrary, Kanban board mechanism is not influenced by
demand randomness: as long as demand variations are contained into
a certain (small) interval, Kanban-managed workstations will handle
their production almost without any problem. Therefore, in case of
 unstable demand, in order to prevent stock-outs, inventory managers
can only increase the Kanban number for each product: the greater are
the variations, the greater is the need of Kanban cards and, thus, the
higher is the stock level. In order to prevent stock level raise, some
authors4, 5 proposed to adopt a frozen schedule to implement JIT
production in real companies, where demand may clearly be unstable.
Anyway, this solution goes in the opposite direction compared to JIT
foundations.
Moreover, one-piece-flow conflicts with demand variability: the batch
size should be chosen as its processing time exceeds the inter-arrival
time of materials requests. Thus, the levelling algorithm must find the
proper sequencing policy that, at the same time, reduces the batch size
and minimize the inter-arrival time of each material request. This
sequence clearly depends on the total demand of each material in the
planning horizon. However, JIT does not use forecasting, except
during system design; thus, scheduling may be refreshed daily. From
a computational point of view, this is a non-linear integer
optimization problem (defined mixed-model just-in-time scheduling
problem, MMJIT), which has non-polynomial complexity and it
currently cannot be solved in an acceptable time. Thus, reliable
suppliers and a clockwork supply chain are absolutely required to
implement JIT. Toyota faced this issue using various approaches6:

 moving suppliers in the areas around the production sites, in order to

minimize the supply lead time;
 collaborating with the suppliers and helping them to introduce JIT in
their factories;
 always relying on two alternative suppliers for the same material, not
to be put in a critical situation.

In the end, it should be noted that, considering that at each stage of

the production process at least one unit of each material must be in
stock, in case of a great product variety the total stock amount could
be huge in JIT. This problem was known also by Toyota 7, who
addressed it limiting the product customization opportunities and
bundling optional combinations.