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Operations ManagementJust-in-Time SystemsSupplement 12 Outline Just-In-Time Philosophy. Role of inventory. Suppliers. Layout. Scheduling. Quality. Lean Production. What is Just-in-Time? Management philosophy of continuous and forced problem solving. Supplies and components are ‘pulled’ through system to arrive where they are needed when they are needed. Originated in Japan; developed over 40 years. Popularized by Toyota; now used globally. Why is Production Difficult? Demand is uncertain and variable. Same equipment and people are used to make a variety of products. Switching products takes time. Things go wrong: Materials are defective. Deliveries are variable (late). Equipment fails, people make mistakes, etc. One Solution: Inventory Use inventory to: Match supply with varying demand. Allow production of a variety of products on the same equipment. Overcome defective materials, late deliveries, equipment failures, mistakes, etc. “Traditional” Production Forecast demand. Produce in large lots (to reduce expensive setups). PUSH product to customer. Large lot sizes mean: Large work-in-process inventories. Large final product inventories. Slow response to changes and defects. Another Solution: Just-In-Time Use just-in-time to identify and solve problems that create inventory. Reduce setup costs to switch products. Eliminate defective materials, late deliveries, equipment failures, mistakes, etc. “Just-in-Time” Production Produce in small lots to replenish stock actually sold. Sales PULL product (and parts) through plant. Small lot sizes mean: Small work-in-process inventories. Small final product inventories. Quick response to changes and defects. Push versus Pull Push system: material is pushed (according to forecasts) downstream (along assembly line, to warehouses, etc.). Pull system: material is pulled (by sales to customers) downstream (along assembly line, to warehouses, etc.) just as it is needed. What Does Just-in-Time Do? Reduces waste and improve
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