Lean Thinking and Just in Time

Analysis of Lean thinking and Just in Time (JIT)

- Kailash Dhakal

Student ID # 15903906

Dubai, 05 Jun 2012

The Evolution and successful implementation of Lean and Just in time (JIT) approach is solely credited to Japan. It is just a few years since evolutions, it has been accepted globally and many organizations benefited applying Lean and JIT improvement initiatives in their strategy. Fundamentally both systems focus on operational efficiency by eliminating waste of the process. Over the years the ideas and the concept of lean thinking has been changed by not just focusing on eliminating waste and process efficiency , and gone far beyond by adding real value to the customer and long term growth (Wang Y . and Huzzard T. - Lund University ). In general Lean thinking and JIT aims to transfer input into output quicker and faster.

The main concept of the lean is to higher customer value and maximizes operational efficiency by reducing waste (Gecevska V. et al -2012). In 1960s Toyota started Lean approaches as Kanbans, it has come a long way to mapping the whole process, eliminating waste , reduced cost, improved quality and exchanging of information for the ultimate benefit to customer. The main elements that lean thinking focused on are:

A) Mapping & integration of process: One of the main areas that Lean looks after and gained the popularity these days is Value steam of the process. Lean philosophy map out the whole process to find out the waste and non value adding activities in the process and then integrate the end to end process.

B) Eliminating waste: Another main area, lean strongly looks by removing the waste identified while mapping the process. Waste can be anything e.g. resources, time, space, inventory, cost that does not add value to the customer.

C) Adding value to customer: Finally lean philosophy highly focused on creating ultimate value for customer. What makes customer happy and how that can be achieved? By providing consist and long term customer value.

Just in time (JIT) approach also started from Japan, formally called as "Toyota production system". There is much more similarities between Lean thinking and JIT system. JIT is also about reducing inventory, producing in smaller lot size and eliminating waste in the process. JIT has direct contrast with mass or batch production of US, which produces items as per economic order quantity (EOQ) in a mass. After implanting JIT system, Toyota is able to reduce the cost and produce the same quality product. The three key elements JIT comprise are:

A) Inventory reduction: As JIT focused on customer pull system demand, it reduces the inventory in all level of operations, from raw material, work in progress to finished goods as JIT system produces the items in small lot as per requirements.

B) Eliminating waste: JIT also focused on eliminating waste on the process by improving quality, vendor performance and continuous improvement.

C) Flexible work force: JIT system also target on flexible resources by making them all rounder, who can perform job in different machine, different area at a time.

The success of these improvement systems depends on how effectively implemented in the organization which means, The long term collaboration with supplier, well communication, sharing and exchanging of data and eliminating waste from over all process for the mutual benefit of both parties (Johns R., et al - 2002). An organization would accomplish huge benefit by achieving operational efficiency if it has been systematically evaluated considering internal & external factor e.g. culture, fashion, investment etc. As the key elements of both LEAN and JIT system are the integration of whole process to make it efficient, reducing inventory and time and eliminating waste. This will certainly help to have effective planning and control over the operation. As these system focuses on mapping & integration of process, data sharing & information exchanging which in turn organization will have clear visibility over the process, required minimum lead time, required resources, space and inventory. That gives enough possibility for operations to execute the plan accordingly and control the operations directed towards customer responsiveness. The success story of Toyota, Porshe, Boeing, HP etc are due to effective implementation and continuous improvement on JIT/LEAN concept, which provides them clear visibility over the operation, healthy supplier relation, empowered employees and customer focused business concept.

Although these two concepts, Lean thinking and JIT