A JIT system comprises of a number of sub components.A complete JIT system begins with production, includes deliveries to a company’s production facilities, continues through the manufacturing plant, and even includes the types of transactions processed by the accounting system.
(i) To begin with, a company must ensure that it receives products/spare parts/materials from its suppliers on the exact date and at the exact time when they are needed.
For this reason the purchasing staff must investigate and evaluate every supplier, eliminate those which could
not keep up with the delivery dates. In addition, deliveries should be sent straight to the production floor for immediate use in manufactured products, so that there is no time to inspect incoming parts for defects. Instead, the engineering staff must visit supplier sites and examine their processes, not only to see if they can reliably ship high-quality parts but also to provide them with engineering assistance to bring them up to a higher standard of product.
(ii) As soon as suppliers certify for their delivery and quality, the concern must install a system, which may be as simplistic as a fax machine or as advanced as an electronic data interchange system or linked computer systems, that tells suppliers exactly how much of which parts are to be sent to the company. Drivers then bring small deliveries of product to the company, possibly going to the extreme of dropping them off at the specific machines that will use them first. So far, we have discussed a process that vastly reduces the amount of raw materials inventory and improves the quality of received parts.
(iii) Next, we shorten the setup times for concern’s machinery. In most of the factories equipment is changed over to new configurations as rarely as possible because the conversion is both lengthy and expensive. When setups take a long time, company management authorises long production runs, which spreads the cost of the setup over far more units, thereby reducing the setup cost on a per-unit basis.
However with this approach too many products are frequently made at one time, resulting in product obsolescence, inventory carrying costs, and many defective products (because problems may not be discovered until a large number of items have already been completed). But under JIT system a different approach to the setup issue is followed which focuses on making a video tape of a typical set up, instead of reducing the length of equipments setups and thereby eliminating the need for long production runs to reduce per unit costs. A team of industrial engineers and machine users examines this tape, spotting and gradually eliminating steps that contribute to a lengthy setup. It is not unusual, after a number of iterations, to achieve setup times of minutes or seconds when the previous setup times were well into hours. By taking this step a company reduces the amount of work-in-process, while also shrinking the number of products that can be produced before defects are identified and fixed, thereby reducing scrap costs.
(iv) It is not sufficient to reduce machine setup times because there are still problems with machines not being coordinated properly so that there is a smooth, streamlined flow of parts from machine to machine. In most of the companies there is such a large difference between the operating speeds of different machines that work-in-process inventory builds up in front of the slowest ones. Not only does this create an excessive quantity of work-in-process inventory, but defective parts produced by an upstream machine may not be discovered until the next downstream machine operator works his way through a pile of work-in-process and finds them. By the time this happens the upstream machine may have created more defective parts, all of which must now be destroyed or reworked.
