JIT

Just-in-Time (JIT) is a manufacturing and inventory control system in which raw materials, components, and finished products are delivered to the production line exactly when they are needed. The goal of JIT is to minimize inventory levels and reduce lead times, while maintaining high levels of production efficiency.

JIT is a pull-based system, which means that production is driven by customer demand rather than by a production schedule. This is achieved by using Kanban, a signaling system that alerts the supplier to send more materials or components when the inventory level of a specific item reaches a predetermined minimum level.

The origins of JIT can be traced back to the manufacturing practices of the Toyota Motor Company in the 1950s. It was developed by Taiichi Ohno, an engineer at Toyota, as a response to the inefficiencies he observed in the company's production processes. Ohno recognized that by reducing the amount of inventory and increasing the flow of materials, Toyota could improve its production efficiency and responsiveness to customer demand.

One of the key principles of JIT is the elimination of waste, or "muda" in Japanese. Ohno identified seven types of waste in manufacturing: overproduction, waiting, unnecessary motion, overprocessing, defects, excess inventory, and unused human potential. JIT aims to eliminate these forms of waste by creating a smooth and efficient flow of materials and products through the production process.

JIT also relies on the concept of "one piece flow", which is the production of one item at a time, rather than producing large batches of items. This allows for better control of the production process, as well as the ability to quickly identify and correct any problems that may arise.

Another important aspect of JIT is the use of visual management tools, such as Andon boards and Kanban boards. These tools allow for real-time monitoring of the production process, and can alert workers to potential problems before they become major issues.

JIT also requires a high level of collaboration and communication between suppliers, manufacturers, and customers. This is necessary to ensure that materials and components are delivered to the production line exactly when they are needed, and that finished products are delivered to customers in a timely manner.

JIT has a number of benefits for manufacturers. One of the most significant is that it can help to reduce inventory levels, which can free up valuable floor space, reduce storage costs, and minimize the risk of stockouts. JIT can also help to improve production efficiency by reducing lead times and minimizing downtime caused by waiting for materials or components.

JIT can also help to improve product quality by reducing defects, and increasing the ability to quickly identify and correct any problems that may arise in the production process.

JIT also helps companies to be more responsive to customer demand by reducing lead times and increasing the speed of delivery. This can help to improve customer satisfaction, and increase the chances of repeat business.

JIT also helps companies to be more flexible and adaptable to changes in customer demand. It allows companies to more easily shift production to different products or product lines, which can help to maintain profitability during periods of slow sales.

However, it's worth noting that JIT is not suitable for all industries and companies, it's best applied in companies where the production process is well-defined, the demand is stable and predictable, and the lead times are short. Implementing JIT can also be challenging and requires a significant investment of time and resources to establish an effective system.

Additionally, JIT requires a high level of coordination and communication with suppliers and customers, which can be difficult to achieve. This is particularly true for companies that have a large number of suppliers or customers, or those that operate in

Kanban

In this article we want to talk about another classic from Lean Management Kanban or the so called Pull System.

The word Kanban itself has its roots in the Chinese Japanese language and means card, label or sticker. In industrial manufacturing planning systems or general in logistics control Kanban describes a replenishment system for consumed parts according to the amount used steered by cards that give the signal following the Pull Principle.

The material in the Kanban System is exclusively oriented to the consumption of your production process. The cards are a key element of this kind of control system and provide proper information transfer. Kanban control loops from the work station of flexible production control and serves to smooth material flow through your inbound or even outbound logistics. In addition Kanban serves you to implement a sustainable reduction of material stocks, increases the ability to deliver and saves you pure cash.

In an ideal world Kanban would control your entire value chain from the supplier to the end customer. In this way you would have installed an complete smooth supply chain with almost no chance of interruption and massive stocks. And now comes the but – to steer production with Kanban – a continuous monitoring is required for a smooth material supply. To make it short: it requires discipline from all involved parties along the supply chain.

Lets have a look to the development of Kanban.

The first Kanban System was developed by none other than Taiici Ohno (of course) at Toyota Motor in the 1940s. One of the main reasons for the implementation of Kanban was the low productivity and efficiency of Toyota compared to western competitors. With the Kanban System, Toyota achieved a significant change towards flexible and efficient production control that had a massive impact on productions output while at the same time reducing the costs for inventory in raw material, work in progress (WIP) and finished goods.

To give the complete picture it wasn’t implementing the Kanban system itself to drive the success of Toyota, there are other key factors that together where making the difference. Just to name Just in time as an example of key elements of the Toyota Production System. It is and always will be a combination of different methods and philosophy that brings you forward.

In the 1970s the Kanban Concept was adapted in the industry in the USA and Germany. As they haven’t known better, they pretty much copied the complete Toyota Production System (TPS) in order to get the principles running.

Pull or Kanban System

Either way you call it, the material flow is controlled by boxes or cards. Kanban Cards serving in a simple way all information needed to identify what parts are needed in what quantity at what place. The amount typically is defined by the replenishment time at the work station. With the so called two box principle you make sure that the operator never runs short on components. Nowadays there are also digital version of it called eKanban, but the principle behind is the same. The trigger of supply is the Kanban Card starting of the pull chain of material.

To use Kanban efficient, it is not suitable for all parts. Kanban is perfect for small parts with a small amount of variants and a consistent demand. For this reason, you’ll see Kanban Systems in the industry mostly used for C-Parts management. The rest of the components are steered with the support of MRP. Only in rare cases you find that even the supply of big components are controlled with the Kanban methodology.

One nice side effect with Kanban, you can set up the way you can steer your bottleneck. That means, when you have done a proper value stream analysis you know the capacity for your bottleneck and will only order what this process step can handle.

Milkrun

The Milkrun is the preset intralogistics concept to bring raw material, semi finished and finished goods to the place they belong at the time they are needed. The Mikrun is implemented based on existing consumption values, an internal supply cycle is defined in which deliveries on fixed routes are installed with specific times.

Based on these current consumption values, a logistic supply cycle is defined wherein raw material, semi and finished goods are delivered and picked up by a fixed route at a specific time. With this you will also optimize your intralogistics concept in general taking on action for a Milkrun concept.

So what is the idea behind the Milkrun concept.

The term Milkrun comes from the traditional milkman that was supplying milk to homes on a fixed route in a specific time. The milk delivery was based on the consumption of the households, by this only the amount of milk needed was delivered. Empty bottles have been picked up at the same time and brought back to the distribution center. So quite simple full bottle(s) delivered, empty bottle(s) picked up.

The cross company Milkrun
Nowadays the material management got a little bit more complex. Speaking in the external way of logistics a Milkrun is a supplier concept where customers ask for one or more shipping companies to manage different suppliers or customers on after the other in the form of a shipping cycle. In this way, goods and empty containers can be delivered and received at the same time without the need of centralization. The main goal is to have as less as possible empty trucks and at the same time being under full control of external material flow. Tours and deadlines are the guard rails on these cycles, reducing storage space is the nice to have side effect.

The benefits of the Milkrun concept

• With installing a Milkrun you will be able to reduce shipping times, processing processes and therefore handling costs.

• Just in Time and Just in Sequence deliveries are possible

• Your planning is more structured as you will have fixed time frames

• Less capital needed due to decreasing inventory/stock/WIP

• You can integrate waste and empty container management

• Increase of sustainability due to ecologically smarter transportation routes

Of course there are also some challenges with the Milkrun concept

• Time consuming planning as quantity, duration, replenishment time, etc. needs to be considered

• Processes and products need constant supply

• Outbound Milkruns can be delayed by traffic or weather conditions

• Economically relevant for larger business or higher demands of goods

• Reliable supplier for products and transport needed

One last note for the internal Milkrun

Inbound the concept can be used in both ways, intralogistics and manufacturing. E.g. certain raw materials or semi-finished goods can be delivered on a regular basis to predefined workstations where the consumption can simply calculated. And on the fixed route the Mizusumashi can collect empty container and waste from production. This reduces internal ways of operators and guarantees a continuous supply of workstations. The next level would be to interlink all workstations or cells with your internal supply cycles to create an intralogistics flow, reducing the manual replenishment work. To find out what the Mizusumashi is just go here. In short: he/she is the guy who supllies goods on the shop floor in a structured process.

6R

Let’s have a look on the logistics in operation. Everybody crossing the way with logistics will hear about the famous 6Rs the “six right ones” they say.

1. The right components

2. in the right amount

3. at the right place

4. in the right quality

5. at the right costs

6. at the right time

To summarize logistics this is it. The 6 Rs show that the main task of logistics is to make material/goods/components available.

You might have heard about the 7th R > the right customer.

So we think 6R are perfectly known as they got taught for decades. But with the lean transformation all over the 7th R becomes key on hitting lean mindset in logistics. It is all about customer centric orientation of the complete supply chain. It doesn’t matter where, how and why in the end you have to start with your customer and build along the upstream your logistics set up.

And here is the most valuable point, your customers are not only outside your organization, they are among your complete organization. If everyone along the process chain sees the next step as a customer, they also have to meet the customer expectations. This gives you a great pull effect throughout the complete process chain and in addition every employee is responsible as supplier and customer, two roles in one person. With this continuous focus on the customers demand or needs, all signs from the market result in a kind of resonance throughout your complete organization and causes an effect.

Logistics made up his way from simple material supply over optimizing material flow to become a crucial part of operations. Nowadays logistics are the arteries of manufacturing industries.

The traditional way to see logistics is seen in the 6R’s as shown in the beginning. For most of the business cases the 6R’s are enough and suitable in practice. But for real operational excellence and an impact on your lean journey keep always your customers in mind.

Following the 6(7)R’s will affect 4 main areas of your production system 

1. Smoothed production

2. Warehouse organization

3. Production synchronous material flow

4. Cell production