Managing Just-In-Time production systems

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Just-in-Time was first proposed within the Toyota Production System (TPS) by Taiichi Ohno after the 50’s when he conceived a more convenient way to manage inventory and control production systems1. Lean Production – the un-branded name of TPS – is a mix of a philosophy for production systems management and a collection of tools to improve the enterprise performances2. Its cornerstones are the reduction of muda (wastes), mura (unevenness) and muri (overburden). Ohno identified seven wastes3 that should be reduced to maximize the return of investment of a production site:

The TPS catchphrase emphasizes the “zero” concept: zero machine changeovers (“set-ups”), zero defects in the finished products, zero inventories, zero production stops, zero bureaucracy, zero misalignments. This result may be reached through a continuous improvement activity, which takes cue from Deming’s Plan-Do-Check-Act cycle4: the kaizen approach.

Just-In-Time is the TPS solution to reduce inventory and waiting times. Its name, according to5, was coined by Toyota managers to indicate a method aimed to ensure “the right products, in the right quantities, just in time, where they are needed”. Differently from Orlicky’s Material Requirement Planning (MRP) – which schedules the production run in advance compared to the moment in which a product is required6 – JIT approach will replenish a stock only after its depletion. Among its pillars there are:

Indeed, generally speaking, processing a 10 product-batch requires one tenth of the time needed for a 100 product-batch. Thus, reducing the batch value (up to “one piece”) would generate benefits in reducing either time-to-market or inventory level. This rule must come along with mixed-model production, which is the ability of manufacture different products alternating very small batches on shared resources. Demand-pull production indicates that the system is activated only after an order receipt; thus, no semi-finished product is processed if no downstream workstation asks for it. On top of this, in order to smooth out the material flow, the process operations should be organized to let each workstation complete different jobs in similar cycle times. The base reference is, thus, the takt time, a term derived from the German word taktzeit (cycle time), which is computed as a rapport between the net operating time, available for production, and the demand in terms of units required. These are the main differences between the look-ahead MRP and the look-back JIT system. For example, the MRP algorithm includes a lot-sizing phase, which results in product batching; this tends to generate higher stock levels compared to the JIT approach. Several studies have been carried out on MRP lot-sizing7 and trying to improve the algorithm performance8, 9, 10; however, it seems that JIT can outperform MRP given the heijunka condition, in case of leveled production both in quantity and in mix. The traditional JIT technique to manage production flow is named kanban.