Just-in-Time Production Can Improve Businesses Beyond Manufacturing

Just-in-Time Production Can Improve Businesses Beyond Manufacturing

By Discovery Lean Six Sigma

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One of the attributes of Just-in-Time (JIT) manufacturing is that it achieves efficiency by requiring higher quality. The system rewards businesses that apply continuous process improvement to their operations, always looking for errors to eliminate and waste to cut.

That’s one of the reasons JIT has caused something of a revolution since its creation. But if you haven’t noticed it, you’re not alone. It’s been a bit of a slow burner, gradually moving to other manufacturers and now to organizations outside of manufacturing.

Created at Toyota in the 1950s, Just-in-Time manufacturing helped build the car company into global giant. Sometimes referred to as a Pull System, the JIT approach addresses many of the challenges businesses face. They include:

  • A buildup of inventory
  • The costs of warehousing that inventory
  • Lag time between steps in a process
  • The ability to pivot quickly and make products and services that consumers demand
  • Degradation of inventory that is stored in a warehouse for too long

It’s a system any business can consider. It’s also one of the strategies professionals learn when they seek certification in Lean Six Sigma.

The Creation of Just-in-Time

Toyota invented JIT for its manufacturing production systems in post-World War II Japan. As is often the case, necessity drove invention.

After the war, Japan had scarce supply of cash and land to expand industrial operations. At Toyota, Taiichi Ohno slowly implemented changes throughout the 1950s and 1960s to deal with these issues.

Just-in-Time was part of the company’s innovative approach. It creates a production system that only works with what it needs. It also focuses on minimizing wait times between steps in a process. Inventory is where organizations typically see the most impact. Without JIT in place, businesses had to fill warehouses with every type of part or product that it would need in the manufacturing process.

With JIT, they simply made smaller orders based on demand, eliminating the need to maintain a warehouse full of materials.

This addressed both the cash and space problem. Companies no longer had to maintain massive warehouses, saving costs on space, employees, security, etc.

Does JIT Add Value?

In Lean Six Sigma, JIT provides a process for evaluating the effectiveness of every phase in an operation. Businesses look at each area of production and ask, “Is this adding value?” If not, why keep doing it? Maybe there is a better way.

Every operation is reduced to the “bare bones,” only what is needed to create the product.

The obvious risk is that suppliers will not deliver the materials on time, making it impossible to fill orders. The other risk is that it leaves little to no room for error. Having no spare parts available means not having a “back up” if things go wrong.

The risk is worth the reward, however, in costs saved in housing inventory and paying staff to manage it. Also, by its very nature, JIT forces a business to make sure its processes are as error-free as possible. That means they are encouraged to make better processes and quality products to become more efficient. The reward comes from doing things right.

Just-in-Time Beyond Manufacturing

The underlying philosophy of Just-in-Time translates into other areas of business. Anything that involves a process can be improved with JIT.

A simple example are the supplies for an office. Most office managers have a stockroom filled with extra supplies, just in case someone runs out of something. However, costs could be saved by looking at the past needs of employees, then only ordering enough to fill those needs for a specific time, such as a financial quarter.

The just-in-case approach is one often used. It creates a buffer zone for mistakes or unforeseen events. It can lead, for example, to overstaffing certain areas of a business because in the past the work demands have been high. Or a company might continue to produce a service or product that only a few customers buy.

JIT requires that organizations not plan for mistakes and errors, but rather look at the process and find ways to reduce the chances of those errors happening in the first place. The focus moves from contingency to quality.

It requires a commitment to quality control. It also offers a level of respect to employees, as the business is willing to switch to an approach that relies on them performing well consistently.

Examples of Just-in-Time

An Oregon nursery put JIT methods into place to address shipping times. They focused on the lag time between the harvesting of trees and the loading onto trucks for delivering. They found simply moving a machine helped drastically cut down the overall shipping time.

The nursery also provided an example of One Piece Flow, a strategy that works well with Just-in-Time. One Piece Flow involves making products when consumers request them, rather than building up inventory. But this cannot be done without first optimizing Takt Time, which refers to the overall time it takes to make a product and get it to consumers.

Again, the emphasis is on quality improvement. In this case, it was making Takt Time as short as possible with an error-free process where waste is eliminated.

A smokeless fire pit company in Pennsylvania also adopted Lean and JIT, cutting down on inventory and moving away from batches. In batches, large amounts of a product are built and then shipped. In the case of the fire pit company, they had done this to fulfill Amazon orders. Now, they make the fire pits as the orders come in, cutting down on inventory costs.

Just-in-Time has become so widespread that businesses in Britain are worried about whether they can keep doing it if the plans for Brexit continue and limit access to European Union suppliers, according to the New York Times.

JIT provides businesses with a fresh approach to challenges. With an emphasis on quality that leads to more efficiency, it’s a methodology that makes sense no matter what the industry sector or business model.

The post Just-in-Time Production Can Improve Businesses Beyond Manufacturing appeared first on Six Sigma Daily.

Original: https://www.sixsigmadaily.com/just-in-time-production-can-improve-businesses-beyond-manufacturing/
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Posted: March 12, 2019, 1:40 pm

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