MS 9612 - Manufacturing and Service Operations

JIT : Just in Time

Matching Supply with Demand

Group 4
Team Members

● SenthilNayagam (ms23w038 )
● Manigandan Gopalakrishnan ms23w019 )
● Ramaswaminathan Ganesan (ms23w029 )
● Girish T V (ms23w012 )
● Shivansh Puri (ms23w040)
Introduction

❑ Toyota Production System (TPS), originally called “Just-in-Time production”, was developed by Toyota to organize
their manufacturing operations including logistics, supplier management, up to customer delivery. Its basic
concept is the reduction of cost through elimination of waste and optimization of machine and human capabilities.

❑ Just-in-Time (JIT) is an inventory management system intended to increase production efficiency and profit by
controlling inventory and associated costs. Products are produced when they are needed and in the quantity needed.

❑ The Kanban methodology is a critical element in implementing the Just-in-Time inventory system. Kanban works
hand-in-hand with JIT. Kanban serves as the control method that signals when it is time to pull raw materials or
parts, in the right quantity or amounts. Kanban used as the “go-signal” for upstream processes to work on the parts
and make it available for the downstream processes.

❑ The Kanban system fundamentally facilitates the implementation of Just-in-Time. It serves as the guide within the
production floor on what and when to work on an item. With Kanban’s visual manner of relaying information,
companies are able to better monitor and manage the flow of work-in-progress, goods, and demand requirements
within the process.
Just-in-time (JIT)
Matching supply with Demand

The Goal

To create a supply process that forms a smooth flow with its demand, thereby giving customers exactly what
they need, when they need it

Three Steps

Achieve One-Unit-at- Produce at the Rate of

a-Time Flow Implement Pull
Customer Demand Systems
 Achieve One-Unit-at-a-Time Flow

● keep people moving toward their

● Wait for Elevator to arrive
destination
● Elevator Stops at every
● No Waiting
floor
● No Jamming

Elevator Escalator

People Wait/stand in elevator like batches in production setting

In TPS
● Production plans are designed to avoid large batches of the same variant.---> By Reducing Setup Time to make small batch
economical
● Instead, product variants are mixed together on the assembly line (mixed-model production, heijunka)
● Create a physical layout for our resources that closely mirrors the process flow
○ two resources that are close to each other in the process flow diagram also should be co-located in physical space.
○ avoids unnecessary transports and reduces the need to form transport batches.

This way flow units can flow one unit at a time from one resource to the next (ikko-nagashi)
 Produce at the Rate of Customer Demand

Once we have created a one-unit-at-a-time flow, we should make sure that our flow rate is in line with demand.

Historically, most large-scale

Forecasts have the ERP
operations have operated Inventory in
negative property of not Next Month Plan
their processes based on System
being right (Taking Inventory
forecasts ( MRP / ERP)
into account)

In the day-to-day operations, extensive periods of substantial inventories or customer back

orders exist

In TPS
● Reducing finished goods inventory by operating its production process in synchronization with customer orders
○ Both the overall number of vehicles produced as well as with respect to the mix of vehicles
● We translate customer demand into production rate (flow rate) using the concept of takt time
● A JIT process should follow the tact imposed by demand
Implement Pull Systems

Use “Pull” Systems to avoid overproduction”

“The more inventory a company has …the less likely they will have what they need— Taichi Ono

Inventory not only exists at the finished goods level, but also throughout the process (work-in-process inventory).

● We now have to design a coordination system that coordinates these resources by controlling the
amount of inventory in the process

● In a pull system the resource further to the downstream is paced by the market demand.In
addition to its production, It also relays the the demand for the next station upstream thus
ensuring the upstream station is also paced by the demand.

● Demand driven pull system is contrast to push systems where the flow units are allowed to enter
the process independent of the current amount of inventory in process.
 Push Vs Pull systems

Pull
Push
Production precise
Production approximation

Anticipated use Actual use

Large inventory Low inventory

Risk of waste Lower waste

Poor communication Better communication

 Kanban pull systems

“Kanban” means sign,signboard,poster billboard,but it is taken more broadly as a signal of some kind.

The kanban system can be thought of as a signal and response system. When an item is running low
at an operational station, there will be a visual cue specifying how much to order from the supply

● In Kanban based pull the upstream replenishes what demand has withdrawn from
downstream.
● The use of Kanban cards between all resources between process is an effective
mechanism for trying the demand of the process (downstream) with production of the
resources(upstream) and enforce a match between supply and demand.
● The main advantage of a Kanban system is that there can never be more inventory
between 2 resources than what has been authorized by the Kanban cards.
Make-to-order-process

● As an alternative Kanban system in make-to-order process , the resources in such a process only
operate after receiving an explicit customer order.
● The product corresponding to these orders then flow through the process on first-in, first-out
basis (FIFO)
● Each flow unit in make to order is process is thereby explicitly assigned to one specific customer
order

Factors to be considered implementing the two types of pull systems

➢ Kanban to be used for products and parts that processed in high volumes and limited
variety . The lead time is short and the costs and efforts related to storing the
components are low.

➢ Make-to-order to be used for products processed in low volume and high variety. The
customers are willing to wait and it is expensive and difficult to to store the flow units.