Just In Time
Just in time is not only a major principle of lean manufacturing, it should also be one of your company’s main goals. The idea behind JIT is that parts are produced or moved only when needed and in the quantity required. The ideal just in time facility would carry zero finished goods and build them only when they are ordered. Of course this is not practical in most, if not all repetitive manufacturing facilities, as there are delivery time lines that need to be met and customer orders that will fluctuate from day-to-day. Three major areas will be reviewed on this page; finished product, sub-assemblies, raw components, and how they fit into JIT.
Your customer’s biggest concern will be the timely delivery of the product they ordered and in the correct quantity. Their preference will be high inventory levels at your faciltiy to ensure the product they require is always available when they require it. They will not care about your inventory targets. They expect 100% accurate and timely delivery from you. Period!
As a lean manufacturing facility, it is your goal to maintain finished product inventory at the lowest levels possible while ensuring delivery does not suffer. As your requirements vary greatly from your customer’s requirements in this aspect, your ability to manage your finished product levels will determine how well you perform in a just in time environment.
The key to a happy medium is using the correct tools. In facilities where short lead time is essential, it is nearly impossible to carry zero inventory, so you will need to carry a store of parts to pull from when required. This can be controlled through the use of kanbans. When using kanbans, the build time and amount of parts built is controlled through the timely delivery of kanbans. The amount of parts stored is controlled through the level of kanbans in the system. Without a kanban system, builds will have to be scheduled at specific times in order to provide inventory as required. This would be a push system. JIT functions best when using a pull system.
The final area to consider for finished product is staging of shipments. In a lean environment, the idea of standardized work not only applies to manufacturing, but shipping as well. If shipments are left until the last minute to stage, the workload of the people in this area may be very unbalanced. The target is to have the finished product staged at a steady pace so that making a shipment is not an “event”, but planned work.
Sub-assemblies should follow the same methodology as finished product if they are built in house. A small bank of inventory should be kept to ensure the proper subs are available as they are required. A kanban system works great for sub-assemblies in a just in time environment. As subs are pulled to be used in finished goods, the kanban dictates which ones to rebuild and only that product is rebuilt.
Sub-assemblies built outside your facility should be treated similar to raw components as stated below.
Raw components or outsourced sub-assemblies will need to be scheduled. The pull concept will still be the same, however the shipment schedule will need to be predicted in order to allow suppliers time to prepare product. Replenishment can still be based on what was pulled from downstream processes, but the frequency will be based on your delivery schedule of the incoming goods.
Raw component and outsourced sub-assemblies will require a higher level of inventory due to the delivery lead time, but don’t use this an excuse for carrying excess inventory. Minimal inventory should still be your major focus. Just in time is a philosophy that must be embedded into every member of the company. Decisions need to be made quickly in order to ensure delivery times are met. With JIT should come a sense of urgency throughout the company. Without this sense of urgency, just in time at your facility will surely fail.