In this article let us now take a look at a revolutionary concept in operations that is fast catching up in the industrialized world.
Think of a situation where we produce the required goods only at the time when they are needed and in the quantity that is needed; and where this holds good for finished products and semi-finished products or both. If such a situation materializes, the inventories of the finished goods and work-in-progress would be almost nil. Now, if we make our raw materials suppliers agree that they should deliver their goods only at the time and in the quantities we need them to, then we are almost eliminating raw materials inventories as well. We shall then have virtually zero inventories (or near about zero). This is called the Just-in-Time (J-I-T) production system founded by Taiichi Ohno ( a Vice President at Toyota) and first successfully implemented at the Toyota Motor Company’s plants in Japan and now being tried at various manufacturing industries all over the world.
Single Unit Production and conveyance:
The J-I-T concept may have been borrowed from the inventory systems of American Supermarkets, i.e. only the units that are sold are replaced. It is actually a production-and-materials planning system where the production and procurement closely follow the actual demand. And this system is carried down the line from the final product to the basic component. It can be perceived as a job order production carried to the extreme of single unit job ordering yet retaining the conveyor line system and its advantages. There are no lot-size productions anywhere (if inevitable, they are minimized). As and when the item is produced it is conveyed to the next process so that there is no ‘waiting’ involved at any place. Of course, the operations times at each workplace are also equalized. In short, in J-I-T we have: (1) no delay – either due to lot size production or due to unequal production times of different work places; and (2) conveyance times are also balanced. J-I-T is a combination of single unit production and the conveyor system and is called ‘Ikko Nagare’ in Japanese meaning Single Unit Production and Conveyance.
It is obvious that J-I-T can be more easily used for continuous mass production of a variety of finished products. It may not be that easy to apply it to the totally customized intermittent production.
Smoothing: The other important aspect of J-I-T is the smoothing of production. Since inventories are to be avoided at all places including the finished goods and to have uniform workload at all work places, it is essential to convert the demands for the final products into a sequence of single unit productions, the sequence repeating itself in time. For instance, if the monthly demand for Maruti vans is: 1000 flat-tops, 500 dome tops and 500 ‘tops’ (at this juncture imaginary), then under J-I-T we need to reduce it equi-proportionately to the daily demand of 40 flats, 20 domes and 20 tops (assuming 25 days per month).This demand needs to be further micronized to the single unit production sequence of Flat, Flat Dome Tops/Flat-Flat-Dome-Tops. This type of sequencing to the single unit of product level helps in eliminating the lot sizes, in facilitating smooth withdrawals from preceding processes and in the even-balancing of the work flow through the various work spots.
It may be noted that for such smooth production flow, a monthly (depending upon various lead times) fairly stable production plan is necessary.
Short Setup Times:
However, what such a ‘smoothed production’ needs is short setup times because it assumes that there is very little time lost between the different changeovers. The reader may easily understand that the single unitization (or at the worst, small lot production) implies that the setup times be small. For cost economy, the smaller the lot size the smaller the setup time should be; otherwise, what is saved on the waiting time between processes will be wasted on the increased production time. It may be easily understood that if the setup time is lowered to, say, 10% of its earlier value, then the lot size can also be lowered proportionately; because for optimal costs, the setup and carrying costs have to balance.
In the Toyota Motor Company in Japan there have been continuous efforts to reduce the setup times. For example, the setup time of the pressing department which was 2-3 hours during1945-64 was reduced to 3 minutes after 1965. Such setups which have single which single digit (in minutes) setup times are called single setups. Through the use of Quality Circles, setup times of even less than a minute have been achieved in some cases at the Toyota Motor Company, Japan.