Lean Thinking and Methods - JIT/Kanban

• Introduction
• Method and Implementation Approach
• Implications for Environmental Performance
• Useful Resources

Introduction

Just-in-time production, or JIT, and cellular manufacturing are closely related, as a cellular production layout is typically a prerequisite for achieving just-in-time production. JIT leverages the cellular manufacturing layout to reduce significantly inventory and work-in-process (WIP). JIT enables a company to produce the products its customers want, when they want them, in the amount they want.

Under conventional mass production approaches, large quantities of identical products are produced, and then stored until ordered by a customer. JIT techniques work to level production, spreading production evenly over time to foster a smooth flow between processes. Varying the mix of products produced on a single line, sometimes referred to as "shish-kebab production", provides an effective means for producing the desired production mix in a smooth manner.

JIT frequently relies on the use of physical inventory control cues (or kanban) to signal the need to move raw materials or produce new components from the previous process. In some cases, a limited number of reusable containers are used as kanban, assuring that only what is needed gets produced. Many companies implementing lean production systems are also requiring suppliers to deliver components using JIT. The company signals its suppliers, using computers or delivery of empty, reusable containers, to supply more of a particular component when they are needed. The end result is typically a significant reduction in waste associated with unnecessary inventory, WIP, and overproduction.

Method and Implementation Approach

Key elements of JIT, and techniques for achieving JIT, are discussed below.

Load leveling. This technique involves determining appropriate quantities and types of products needed in a given day to meet customer orders. This technique allows organizations to produce products with a variety of customer specifications each day (using a daily schedule), in a smooth sequence that minimizes inventory and delay. Takt time is critical to the daily scheduling required in leveled production described above. It is the rate at which each product must be completed to meet customer needs, expressed in amount of time per part.

Production Sequencing. This involves calculating the pattern for making each product type in the required amount for any given day, by calculating the takt time for the daily quantity of each type.

Kanban. Often referred to as the "nervous system" of lean production, kanban is a key technique that determines a processes production quantities, and in doing so, facilitates JIT production and ordering systems. Contrary to more traditional "push" methods of mass production which are based on an estimated number of expected sales, kanban's "pull" system creates greater flexibility on the production floor, such that the organization only produces what is ordered.

More specifically, a kanban¹ is a card, labeled container, computer order, or other device used to signal that more products or parts are needed from the previous process step. The kanban contain information on the exact product or component specifications that are needed for the subsequent process step. Kanban are used to control work-in-progress (WIP), production, and inventory flow.

In this way, kanban serves to ultimately eliminate overproduction, a key form of manufacturing waste. Different types of kanban include: supplier kanban (indicate orders given to outside parts suppliers when parts are needed for assembly lines); in-factory kanban (used between processes in a factory); and production kanban (indicate operating instructions for processes within a line).

Kanban are a critical part of a JIT system. In implementing a kanban system, organizations typically focus on four important "rules".

• Kanban works from upstream to downstream in the production process (i.e., starting with the customer order). At each step, only as many parts are withdrawn as the kanban instructs, helping ensure that only what is ordered is made. The necessary parts in a given step always accompanies the kanban to ensure visual control.
• The upstream processes only produce what has been withdrawn. This includes only producing items in the sequence in which the kanban are received, and only producing the number indicated on the kanban.
• Only products that are 100 percent defect-free continue on through the production line. In this way, each step uncovers and then corrects the defects that are found, before any more can be produced.
• The number of kanban should be decreased over time. Minimizing the total number of kanban is the best way to uncover areas of needed improvement. By constantly reducing the total number of kanban, continuous improvement is facilitated by concurrently reducing the overall level of stock in production.

Implications for Environmental Performance

Potential Benefits:

• JIT/kanban systems help eliminate overproduction. Overproduction affects the environment in three key ways:
  • increases the number of products that must be scrapped or discarded as waste;
  • increases the amount of raw materials used in production;
  • increases the amount of energy, emissions, and wastes (solid and hazardous) that are generated by the processing of the unneeded output.
• JIT/kanban systems reduce the amount of necessary in-process and post-process inventory, thereby reducing the potential for products to be damaged during handling and storage, or through deterioration or spoilage over time. Such damaged inventory typically ends up being disposed of as solid or hazardous waste. Frequent inventory turns can also eliminate the need for degreasing processes for metal parts, since the parts may not need to be coated with oils to prevent oxidization or rust while waiting for the next process step.
• JIT typically require less floor space for equal levels of production ("this is a factory, not a warehouse"). Reductions in square footage can reduce energy use for heating, air conditioning, and lighting. Reduced square footage can also reduce the resource consumption and waste associated with maintaining the unneeded space (e.g., fluorescent bulbs, cleaning supplies). Even more significantly, reducing the spatial footprint of production can reduce the need to construct additional production facilities, as well as the associated environmental impacts resulting from construction material use, land use, and construction wastes.
• JIT/kanban systems also help facilitate worker-lead process improvements, as workers are more motivated to make product improvements when there is no excess inventory remaining to be sold.
• Excess inventory results in increased energy use associated with the need to transport and reorganize unsold inventory.

Potential Shortcomings:

• JIT can result in more frequent "milk runs" for parts and material inputs from sister facilities or suppliers, leading to an increased number of transport trips. This can contribute to traffic congestion, as well as environmental impacts associated with additional fuel use and vehicle emissions. Through efficient load planning, however, the environmental implications of increased milk runs can be significantly reduced or eliminated.
• JIT/kanban may not succeed at reducing or eliminating overproduction and associated waste if the products produced have large and/or unpredictable market fluctuations.
• JIT, when not implemented throughout the supply chain, can just push inventory carrying activities up the supply chain, along with the associated environmental impacts from overproduction, damaged goods, inventory storage space heating and lighting, etc.

Useful Resources

Productivity Development Team. Just-in-Time for Operators (Portland, Oregon: Productivity Press, 1998).

Productivity Press Development Team. Kanban for the Shopfloor (Portland, Oregon: Productivity Press, 2002).

Footnotes

¹ Kanban means card or sign in Japanese.