What JIT is and what JIT is not...
Just-In-Time, three little words that strike fear in the hearts of American manufacturing. Site Leaders, Production Control & Logistics Managers, Team Leads, Purchasing Directors, and the list goes on of people who thought JIT meant that we could close our warehouses and just order parts we need when we need them and not have to worry about anything else.
Sorry, but that is just not right. We have seen the results; late parts that causes the lines to stop, creates new positions in the company called expeditors, generation of new reports on shortages with special color codes and plenty of columns of useless information. People get fed up with this thinking and go rogue. We "find" parts outside of the supply chain, usually in someone's "safety stock" in their desk. But that will not sustain the system for long.
Now that the rant is over let's talk about what JIT really is. Using Just-In-Time thinking requires alignment of all activities on the "thing" going through the process to the final (paying) customer. JIT is a future state of thinking, a result of implementing the 5 steps of Lean Transformation. Remember, Lean is not a program, but how we run the business.
As waste and variation are removed, you are left with a stable and predictable flow where the work can be loaded equally through the different value-added teams. This gives you the chance to measure the material required to produce your product. How much paper do you go through in a month? What is the cost of office supplies? How often do you need to archive data to keep your servers available? Are your teams spread out randomly, only where you could find space, or are they strategically located near the customers? What is the $$ value of your work in process?
Yes, those are a lot of questions! Important questions, and you should be asking more, even snotty questions. And don't forget to ask the team if there are any roadblocks that need to be knocked down. The intent is to guide the improvement teams to think outside of their "safe" places.
But we are not harassing the team to implement your idea of how the process is supposed to operate in your head, but enable the teams to succeed. These questions may push the team to create break-through process redesign. In the end we are looking for processes that operate to customer needs at the lowest possible cost.
As your internal operations begin flowing predictably, it's time to look at your suppliers. Do they really provide the items you need, when you need it, at the amount your need it, and the right quality? More questions? Yes!
Time to reliably replenish is the metric for suppliers. It captures quality, on-time delivery, and order delivery levels. Use this information to know if you need to work supplier development opportunities as they should pay off in the long-term. And make sure you include your engineers, supply chain pros, and quality.
JIT is a great result to achieve. Lower WIP costs (WIP = Labor + Material), and lower overhead because we are holding the right amount of stuff we need in stores to support our activities. Don't just think of it as a factory target, but as one that pays back to the bottom line and increases shareholder value.
Just-In-Time, three little words that strike fear in the hearts of American manufacturing. Site Leaders, Production Control & Logistics Managers, Team Leads, Purchasing Directors, and the list goes on of people who thought JIT meant that we could close our warehouses and just order parts we need when we need them and not have to worry about anything else.
Sorry, but that is just not right. We have seen the results; late parts that causes the lines to stop, creates new positions in the company called expeditors, generation of new reports on shortages with special color codes and plenty of columns of useless information. People get fed up with this thinking and go rogue. We "find" parts outside of the supply chain, usually in someone's "safety stock" in their desk. But that will not sustain the system for long.
Now that the rant is over let's talk about what JIT really is. Using Just-In-Time thinking requires alignment of all activities on the "thing" going through the process to the final (paying) customer. JIT is a future state of thinking, a result of implementing the 5 steps of Lean Transformation. Remember, Lean is not a program, but how we run the business.
As waste and variation are removed, you are left with a stable and predictable flow where the work can be loaded equally through the different value-added teams. This gives you the chance to measure the material required to produce your product. How much paper do you go through in a month? What is the cost of office supplies? How often do you need to archive data to keep your servers available? Are your teams spread out randomly, only where you could find space, or are they strategically located near the customers? What is the $$ value of your work in process?
Yes, those are a lot of questions! Important questions, and you should be asking more, even snotty questions. And don't forget to ask the team if there are any roadblocks that need to be knocked down. The intent is to guide the improvement teams to think outside of their "safe" places.
But we are not harassing the team to implement your idea of how the process is supposed to operate in your head, but enable the teams to succeed. These questions may push the team to create break-through process redesign. In the end we are looking for processes that operate to customer needs at the lowest possible cost.
As your internal operations begin flowing predictably, it's time to look at your suppliers. Do they really provide the items you need, when you need it, at the amount your need it, and the right quality? More questions? Yes!
Time to reliably replenish is the metric for suppliers. It captures quality, on-time delivery, and order delivery levels. Use this information to know if you need to work supplier development opportunities as they should pay off in the long-term. And make sure you include your engineers, supply chain pros, and quality.
JIT is a great result to achieve. Lower WIP costs (WIP = Labor + Material), and lower overhead because we are holding the right amount of stuff we need in stores to support our activities. Don't just think of it as a factory target, but as one that pays back to the bottom line and increases shareholder value.
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