As we've known that, Toyota Firm is one of the very most successful brands using "Just in Time" idea today. Their success is dependant on low production costs, preserves high quality, producing a whole lot of different vehicle types, while as having very competitive price environment and high profit margins. Smaller amounts of raw materials inventory must be kept at each node in creation, so that development can take place for any product. These parts are then replenished when they are used. Reliability of forecasting is important so the accurate amount of raw materials can be stocked. So, what's Just with time? And exactly how Toyota applied this beliefs in their development process?
Just-in-time (JIT) can be an inventory strategy that strives to boost a business's profits on return by lowering in-process inventory and associated carrying costs. This viewpoint was initially developed and perfected within the Toyota Organization by Taiichi Ohno as a way of get together consumer needs with minimum amount delays. Taiichi Ohno is generally known as the father of JIT.
After JIT unveiled by Toyota, many companies followed up and around mid 1970s', it gained prolonged support and extensively utilized by many companies. Besides that, one enthusiastic reason for growing JIT and some other better creation techniques was that after World Battle II, Japanese people had a very strong incentive to develop a good making technique to help them rebuilding the economy. They also got a solid working ethnic that was concentrated on work somewhat than leisure, looks for ongoing improvement, life determination to work, group conscious somewhat than individualism and achieved common goal. These varieties of motivation possessed driven Japanese current economic climate to achieve success.
Quick respond to the market empowers and sustains competitive benefits of Toyota and other leading companies. Application of JIT can decrease the elapse time of the order-to-delivery routine. Gaither and Frazier declare that Just-in-Time is a weapon of choice in speeding market responsiveness (2002). Two main the different parts of JIT philosophy are organizing elimination of most waste and constant improvement of productivity. Just-in-Time primarily requires inventories when needed; improve quality without any defect; cut off unnecessary elements of manufacturing lead times; revise the businesses themselves to make advancements. Additionally it is very important to achieve those things at the very least cost (Gaither & Frazier, 2002).
Figure 1: Rules of Just-in-Time Manufacturing
JIT Production Benefits:
With the progress of current economic climate JIT, many modern companies use JIT as a competitive advantages. It also helps service organizations are more efficient and its benefits. Gaither and Frazier (2002) state that, these are benefit of JIT:
Avoid throwing away inventory in development as well as reduce the expense of scarp.
Find out the issues and correcting the causes of production problems to produce a problem-free zone.
Facility that arranging development most effective
Product quality satisfies the typical and makes improvement.
Inventory levels are significantly reduced
Lead time and Setup time are substantially reduced. Toyota can indulge time-based competition, using quickness as the tool to capture the market share.
Saving cost of storage area and materials controlling equipment.
Workers work deeper and can talk more easily, workout problem effectively, study from each other, and switch careers when needed.
At Toyota Motor unit Company, Taichii Ohno and Shigeo Shingo are fathers of Toyota Development System or Just-in-Time school of thought which emphasises the central role of employees and inventories.
In 1950 Toyota firm in Japan they cannot predict what size their warehouse to store their end products, parts which undesirable consequence made Toyota in big trouble and caused drawback. That is reduced amount of Toyota their financial lot size. The reason behind this reduction is the fact that, before shipping and delivery their product to customer, they have to use large warehouse to store that could be required a lot of money.
If Toyota has applied JIT in their development system earlier prior to the start of development which could have changed their economic whole lot size increase and take the competitive advantages. Those advantages we will discuss later in this part.
Avoid overproduction: They just produce what they are required through the agreement or the order list.
Purchase or order enough material from suppliers that may save their budget anyway levels
Take competitive benefits: by keeping budget they can use the source of this budget to invest or research new technology to apply for their products.
After inability, Toyota has gained experience and JIT was applied by Toyota Electric motor Firm of Japan as part of its Toyota Creation System (TPS).
Toyota's goal is producing a lot of autos in the most effective production process. The development process designed to avoid any waste products that not essential from overproduction, product problems, employees' miscalculation or safe-keeping of unneeded inventories.
Toyota decided use 2 pillars in Toyota Development System: Just with time (JIT) and "jidoka". Both of these are committed to the common goals of Toyota production system are highest quality, most reasonably priced and shortest lead time.
They use Just with time (JIT) solution to produce what are needed at the right time, right place, and right amount to eliminate wastes.
Jidoka is including "build in quality", which means focusing on development quality and identifying abnormalities to improve; and "flexible man power", which relates the right of employees to point out the condition of creation process and allowance to stop it. To be able to perform "jidoka", Toyota must encourage their worker to not hesitate to stop development processes if there is any problem happens (respects of people). That means workers are allowed to press the alarm "andon" if they finds any error in their process. After that, leaders and sets of engineers begins "procedure for 5 why" by asking why, they'll known directly the reason why cause problem that unpredictable and those step make their plan success than expected.
Figure2: Toyota Development System Concept Composition (Hiranabe, 2008)
In this case, Toyota very imagination, plus, through the use of JIT in addition they can design their own several technical engineers of "procedure for 5 why" to locating error and handling by requesting "5 why". Another method "jidoka" helps their employee to find problems at the earliest opportunity. When there is any problem, they will press the security alarm and the process of production will immediately stop and "searching "begin following the "ring ring". Those step is complex but very necessary, they can prevent to create "defective products". However, those steps are required large amount of time to finding and solving. Moreover, they can interrupt the Production process and impact to the output of Toyota and take more delaying/ waiting around time.
Just-In-Time School of thought is applied in the manner Toyota factories are managed to achieve its goals. These changes in Toyota factories ensure JIT will benefit the final results.
Figure 3: Prerequisites for JIT Manufacturing (Gaither & Frazier, 2002)
In Toyota Electric motor Company, the production schedule is set up steady and levelled by the get good at production agenda (MPS). MPS provides that the same products are produced in the same volumes in the same series every day of the month (Gaither& Frazier, 2002).
Gaither and Frazier (2002) declare that another requirement of Toyota JIT is reducing manufacturing business lead times by increasing development capacities in two ways:
Increasing creation rates
Reducing installation times at work centres.
Reducing installation time is lowering the elapse time for adjusting machine settings, upgrading materials, changing tools, and all functions of changing over from producing one product to a different one at the job center.
Cross-training is put on enable Toyota personnel to perform competently in several jobs and grasp different required skills.
Toyota can reduce equipment breakdowns by adopting total preventive maintenance program to avoid interruption to development.
Toyota establishes and strengthens its company relations to truly have a secure and reliable material flows from dealer. Therefore, interruptions to production are minimized.
Customer expectation establishes the specs standard of new Toyota products and services.
Materials are analyzed to ensure that they deal with appropriate specifications that are dependant on customer prospects: advantages, sizes, colours, carry out, appearance, chemical content, weight, and so on.
Monitoring the creation process helps Toyota improve product quality and accurate undesirable developments to meet
Studying completed products and service to ensure that Toyota products and services meet customer expectation.
Figure 4: Product quality control (Gaither and Frazier, 2002)
In Toyota Production System, the worthiness of people's trust is more important than physical strength (Gaither and Frazier, 2002). Additionally, JIT philosophy stresses that employees, suppliers and customers determine the movement and quality of production processes. They also are great impact on reducing cost and time and in all phases of TPS. Therefore, Toyota builds up a culture of shared trust and teamwork to invest in Toyota's success.
Loyalty of staff raises when Toyota manages to take care of employment duration of employees. That means Toyota focuses on increasing job security for employees besides guarding their protection under the law and benefits. Also, the payroll levels are equal. Because of this, employees can improve productivity when they completely are dedicated toward Toyota.
Subcontractor network: Toyota desires to stabilize and develop long-term relationships with specialize customers and suppliers. That is difficult but is necessary in today strong competition.
Bottom-round management pertains decentralization in decision making in Toyota. This implies Toyota allows its employees from lower levels to higher levels contribute to make decisions for company's tasks. Workers are also inspired to suggest better solutions and options for Toyota's assignments from small suggestion to strategic issues.
Behavioral pattern: JIT is focused on empowering people. In factories with JIT system, workers are permitted to stop the development lines using the Andon system under the concept of Jidoka (Jason Perez, 2010). Toyota needs employees who've adequate skills to recognize problems in the production process and liable enough to call a stop to correct problems. Group of employee are encouraged to interact to quickly make the production working again.
JIT philosophy focuses on teamwork. Toyota employees are the best example for how they see one another as a coworker to organize for Toyota's success. Regarding to Gaither and Frazier (2002), workers, suppliers, managers and customers must all be devoted and motivated to teamwork for the most effective perform of JIT making.
Figure 5: Respect for folks in JIT viewpoint in Toyota
Sevens wastes in creation are indentified by Shigeo Shingo (Gaither and Frazier, 2002). JIT production involves directing out and cut off non- value- adding activities in designs, productions, supply chain management and working with customers to save lots of all learning resource (including time). Obviously, Toyota successfully works reduction of seven wastes to be where it is today, including: overproduction, ready time, travelling, unneeded development, WIP inventories, pointless motion and effort, and defective products. This component focuses how Toyota handles its production performance from the beginning of the functions to avoid problems and easily to identify problems and correct at the earliest opportunity. Following shape illustrates how JIT can defeat and eliminate those wastes.
Figure 6: The Seven Wastes in JIT Philosophy (Leansigmavn Website, 2008)
In our point of view, these are advantages of elimination of seven wastes in TPS.
. Shape 7: Elimination of seven wastes in Toyota Lean Manufacturing
Toyota JIT is something of enforced problem handling. Corresponding to Gaither and Frazier (2002), all materials, functions, workers are anticipated to meet quality and number standard at the right place, right time with exact amount, without the safety net. Additionally, WIP inventories are reduced incrementally in small steps, in order to discover different creation problem (Shareslide website, 2010). From then on, Toyota professionals and personnel can correct problems and get rid of the problems.
Toyota also practices Kaizen continuous improvement in every phase of making. Employees are encouraged to reduce in-process inventories to see if any problem can occur. Thus, those problems are aim for to be taken out.
Figure 8: Uncovering Creation by reducing in-process inventories (Shareslide Website, 2010)
Furthermore, Toyota uses single minute exchange of dies (SMED) to own all initiated take significantly less than one minute. SMED can reduce amount of learning resource (stock, inventories, time, movements) and increase production capacity and overall flexibility as well as improve quality of creation.
According to Hubpages Website, in article "Trim Creation: SMED and JIT Production", "Shigeo Shingo created 8 techniques that require to be used if you are utilizing SMED:
Separate your internal and external operations
Convert interior steps to external setup
Standardize function instead of shape
Use functional clamps and eliminate fasteners altogether
Use intermediate jigs
Adopt parallel operations
There are 4 conceptual periods that also would have to be used as you implement SMED. First, you must be sure that the exterior set up applications are performed as the machine is within process. Second, All the internal and exterior actions need to be separated to ensure that the parts function properly and are useful in carrying the die and other necessary parts. Third, you must convert internal setup actions to be external ones. Fourth, the final stage is to boost all the set up actions. "
Figure 9: Great things about SMED in enforced problem dealing with of Toyota JIT (Hubpages, 2008)
JIT manufacturing is determined by something of total quality management (TQM) being in place (Gaither and Frazier, 2002). We are able to consider that JIT developing in Toyota must be loyal friend with TQM. Which means Toyota is very focused on producing products of perfect quality as well as producing products for fast delivery to customers. Clearly, in TPS, the execution of TQM and JIT try to an overall goal of satisfied customer.
Toyota procedure is made in parallel (simultaneously) can save massive amount manufacturing business lead time.
There is a parallel between standard processing and JIT. By perform many businesses can be produced simultaneous through scheduling, as creation is scheduled that occurs at the same time at a number of businesses. However, significant decrease in manufacturing business lead times can offset the excess costs.
Just-in-Time is a pull system of development planning and control. In a very yank system, we concentrate on forecasting every next level of production in support of produce what we are in need of. Therefore, batches of products go straight from upstream stages of production to downstream levels without having to be stored in inventory. But in a large production, it will be hard to know when the downstream workstation is ready for the upstream place to produce another batch of parts (Hiranabe, 2008). In Toyota, they have a system called Kanban.
Kanban (cards Creation control) in Japanese means greeting card or marquee. In Toyota, group of signs which is also known as Kanban drive the procedure by informing development processes to help make the next part. Kanban greeting card which is the most typical use usually performs as simple visible signals including the presence or absence of a part on a shelf.
There are 2 types of Kanban:
A conveyance greeting card is C-Kanban
A production greeting card is P-Kanban.
Because Toyota employed kanban signs instead of the credit cards for use in development processes, the method had become called the "kanban system". At Toyota, when a process would go to the preceding process to get parts, it runs on the kanban to talk what parts have been used.
Figure 10: Move of Kanban Cards and Storage containers between Two work Centers (Gaither$ Frazier, 2002)
Figure 11: Conceptual Diagram of the Kanban System in TPS (Toyota Website, 2010)
According to Gaither and Frazier (2008), this is how Kanban in Toyota runs. When a worker on the shop floor at downstream Work Centre #2 needs a box of parts for his procedure, he does the following:
He discovers a C-Kanban in the pocket on the side of box that he just emptied at his work middle; this card is his authorization to replace the empty box with a full one from the storage space.
Next, he requires the C-kanban and locates a full pot of the needed parts in storage space.
Then he places the C-Kanban in the entire container.
Next, he remove the P-Kanban from the entire box and places it over a post or marquee at the upstream Work Center #1; this P-Kanban is the authorization for Work Middle #1 to create another box of the parts.
Finally, he can take the full container of parts using its C-Kanban to his downstream Work Middle #2.
With Kanban system, the quantity of product is produced exactly match with the needed. This is the reason why Toyota talks about Kanban as a competent pull system to reduce in-process of parts between workstations.
JIT Purchasing is a same pull-type way in JIT but it is applied to purchasing shipments of parts from suppliers. By apply the same basic principle of JIT to suppliers, JIT not only reduces in process inventories, but raw-materials are also reduced (Gaither & Frazier, 2002).
Because the quality of Toyota's product depends on outdoors suppliers for almost all of the parts and materials in the vehicles we make, so Toyota is very demanding in choosing their suppliers. Toyota established high standards because of their suppliers. They try to looking for suppliers who have the will and the capability to become active partners with them and posses world-class competiveness in term of quality, cost, delivery and technical capacities (Toyota Suppliers website, 2010)
Suppliers have to offer materials which have a competitive cost with high quality. Furthermore, relating to Toyota Suppliers website (2010) they not only have to remain the reduced cost but also continually reduce costs and to convert their reductions into lower prices. Moreover, their materials and energy aren't harmful to the surroundings.
Price is important but quality is the most basis thing for supplier selection. If product has low quality, Toyota will lose client satisfaction. When customers do not believe in quality of products any more, it'll hard for Toyota to get back their fame. This is the reason Toyota want to get rid of defective raw materials. Defect-free materials will lead to perfect products. Toyota's suppliers have to prevent defects of the product.
Delivery is another important condition that suppliers need to have. The order amount always varies, so Toyota needs their companions to be adaptable. If suppliers want to delivery exactly match the use rate of buying firm, they need to produce product with small whole lot sizes so that they can more versatile and delivery shipments match the quantity the buying organization require, forget about no less. Furthermore, producing products in small great deal sizes, the quality of purchased materials tends to be higher (Toyota Company Website, 2010). Suppliers need to have a reliable and well-timed delivery. That is why location of suppliers have to be nearby the buying firm's production to reduce enough time of shipments make it more reliable. And we can see in this map, the majority of suppliers of Toyota are located near from Toyota's makes to delivery shipments more timely and reliable
Figure 12: Map of Toyota distributions and suppliers
In addition, provided materials is of near-perfect quality if suppliers have a long-term marriage with the buying companies (Gaither & Frazier, 2002). This is why why Toyota has a community interconnection program that named "Toyota and Suppliers TRYING" to make the relationship with the suppliers more unshakeable. The primary objective of this program is donating to local charities in their suppliers' neighborhoods. Since 1999, they may have donated $1, 006, 500 at 58 different occurrences in 21 state governments (Toyota Dealer Website, 2010). Through "Toyota and Suppliers TRYING", the goodwill of Toyota is promoted so that Toyota can build more new human relationships with local communities and authorities where their suppliers are located. And the main things Toyota gain in this program is the partnerships with its suppliers are deepened.
Technology not only makes our life far more convenient but it also creates an obvious advance in operation and quality management. Technology helps develop products and translate principles into products more quickly (Toyota Company Website, 2010). Today, we can order a big level of product with on "click" using the pc mouse. Technology reduces paper-works and through this, makes transactions faster and much more accuracy. That's why technology is also considered as a competitive gain to choose suppliers. Furthermore, e-commerce transaction is automated process, so labor cost are reduced as well. Because of the dramatic reduction in this cost, the price of products can be more competitive.
Central notion of JIT is aiming at the reduced amount of production great deal sizes so that inventories are reduced (Gaither & Frazier, 2002). Toyota invests large sums of money in JIT systems to lessen set up times to avoid problems of small whole lot size. Toyota designers develop programs for lowering setup times; staff are trained to master more efficient and flexible in performance; and automated device are attached to the machines. Consequently, the setup time in TPS is reduced.
According to Gaither and Frazier (2002), many JIT businesses like Toyota use the same EOQ formulation to analyze great deal sizes, nevertheless they turn it around. Eventually, Toyota can placed the production whole lot sizes suprisingly low and use the consequence of setup times as aim for for engineers to study and develop programs.
Moreover, setup decrease is carrying on process in Toyota, and the role of workers at each work place is very important in this process. Because these personnel are the end user of the machines, they can provide the best ideas for setup time reduction. That is very near the central value of culture of Toyota "respects for people".
Toyota vehicle factories are carrying out as JIT repetitive processing. In these factories, the ongoing flow of products makes planning and control rather simple, and JIT works best in these shop-floor situations (Gaither & Frazier, 2002).
Toyota targets standardized production. This technique intends to make constant flow of creation with a primary route until completed, with the least interruption in process.
Toyota is successful in reducing installation time and creation lot sizes. They also install flexible creation system (FMS) to support product variety without the need of worker-performed machine changeovers. Standardized parts in Toyota design to reduce the amount of parts and the number of changeovers. Toyota adopts cross-training for worker to boost their capacity and versatility to perform in various jobs when needed, as well as that can help Toyota balance the work load in the manufacturing plant. Furthermore, Toyota installs effective quality control programs so that defective products do not interrupt production flows. Precautionary maintenance programs are installed and effective in prevent machines from breakdowns. Finally, Toyota grows an effective subcontractor network to support in-house schedules and prevent interruption in development process.
Just-in-time has benefits and its main benefits include:
Setup time is reduced.
The move of goods from warehouse to racks improves.
Employees with multiple skills are used better.
Production arranging and work hour uniformity synchronized with demand.
Emphasis on company human relationships is increased.
Supplies come in at regular intervals throughout the production day.
With above benefits that Just-in-time brings, it seems to be a perfect system. Many auto companies about the world are making use of Just-in-time in their developing operation currently. Besides its advantages, Just-in-time still has many big disadvantages that people have to say that. Being difficult to use is the largest downside of Just-in-time production.
One of major components of Just-in-Time is to own only the mandatory inventory when needed. It requires sources and programs of suppliers have to be reliable, dependable and timely delivery at all times. We only have a competent network of suppliers when we have a long-term source contracts and romantic relationship with this suppliers and besides, our suppliers need to increase Just-in-Time methods to their own business. Inside the absence of good supplier relations, Just-in-Time increased the chance of inventory scarcity because we just buy more inventories when we need, if our suppliers cannot delivery promptly, the operation of company can be interrupted.
People will be the core of all business and Just-in-time is not any exception to this guideline. Just-in-Time is a system of enforced problem resolving, employees in this system have to interact to solve creation. Therefore, company have to have a particular training and reorganization of plans and types of procedures to use Just-in-Time. This is why why installation cost of Just-in-Time is high.
JIT also depends upon the culture of company. To Toyota, a Japanese company, JIT is suitable with the tradition of Japanese. The main of JIT is people. Japanese employers are extremely faithful. If they have a job, they try their work to keep it. It is not peculiar when you noticed three generation of an Japanese family work with only 1 company. Every one employer has experience in their job in order to know evidently about their process. Within an environment like American, employers usually change their job. It will hard for the new ones to work effectively in a fresh make, new environment and new process.
In our judgment, with these disadvantages we mentioned above, only large company such as Toyota, IBM, GE, Motorola, etc have enough condition to overcome and apply Just-in-Time because of their operation. In addition, with the condition of culture difference, JIT is hard to use popular. In addition, with the development of technology, we think that JIT will be improved upon its weaknesses. E-Kanban (Kanban with help of technology) is faster, better and exactness.
Toyota uses JIT manufacturing as an integral to successful in the motor unit market on the planet. Quick reaction to the marketplace empowers and sustains competitive features of Toyota and other leading companies. Two main the different parts of JIT philosophy are organizing elimination of most waste and constant improvement of output. Undeniable, the viewpoint has been rooted in the working culture and idea of Toyota. These changes that JIT bring going to Toyota also happen to many leading company in the world. However, you may still find many problem and mistakes in JIT system. Therefore, JIT is examined to make development and improvement in the future. A company who can hold the future of JIT in the industry can go beyond its market show in global market.