Lean Operations and Just In Time

The lean philosophy was originated by the Toyota Company in the 1950s. It was implemented based on prior ideologies at the same company such as total quality management and just-in-time production (JIT), which aimed at facilitating the production of high quality goods and services at relatively lower prices (Chen & Taylor, 2009 , p.826). The lean system is essentially a pull system of manufacturing that is characterized by three main objectives, which include improving the flow of the system, eliminating steps that do not add value to the organization and eliminating waste. The lean paradigm, helps to solve several challenges associated with the push manufacturing system such as overproduction, which results in unnecessarily high inventory levels, motion or transportation that does not add value to the final product, over processing or additional steps that do not increase the overall value of the product, delays in resource allocation in the production process and poor production processes that force the company to incur extra costs in correcting or repairing a product. An organization should be in a position to identify the system activities that result in value addition and wastage in the organization and the strategies that need to be developed and implemented to enhance its overall efficiency.

Just-in-time (JIT) manufacturing began as a method of reducing inventory and developed into a comprehensive philosophy. The JIT philosophy involves “having the right items of the right quantity and quality in the right place and at the right time” (Cheng, Podolsky & Jarvis 1996, p. 2). The basic idea behind the philosophy is to produce only what is needed instead of initiating a production run in anticipation of demand (Rangarai, Raghuram & Srinivasan 2009). This calls for a shift from traditional batch manufacturing to lean manufacturing (Brown, Collins & McCombs 2006).

Traditional batch manufacturing emphasized on running a large batch, which was considered economically feasible, in order to avoid changing of equipment. The major shortcoming with this philosophy was that the products did not often meet the requirements of the customers. Poor quality, rework and scrap were therefore inherent in batch manufacturing. The lean manufacturing system on the other hand focuses on providing the customer with exactly what they want, “at the price they are willing to pay and at the time they want it” (Brown, Collins & McCombs 2006, p. 4). The philosophy is customer oriented and mainly aims at eliminating wasteful processes and improving the quality of products and efficiency of production.

Closely related to JIT is the Kanban system, which also originated at Toyota. The latter is however a scheduling system for lean production as opposed to an inventory control system. It facilitates the control of the logistical system by helping organizations to determine what, when and how much to produce. As such, it is a critical element in the implementation of JIT. JIT particularly utilizes Kanban as a means of preventing inventory based costs and in tandem the two systems put an organization in a position to have the right set of materials, at the right time and place and in the most optimal amounts. `

One of the major shortcoming of JIT and lean production is that they result in an overall decrease in the innovativeness of an organization. Because lean management focuses on eliminating all forms of waste, a company is forced to outsource a greater proportion of new product designs from other companies as opposed to conducting internal R&D (Chen & Taylor, 2009 , p.828). This was the case for the Toyota Production System (TPS). Apart from that, it emphasizes on simplification of product designs and minimization of the parts count. Innovation on the other hand requires different designs and changes in linkages between the core concepts and components of the production process. Using existing technology therefore greatly curtails innovation.

Additionally lean management aims at minimizing buffer stock and therefore discourages correction of finished products to eliminate waste. On the other hand, innovation calls for flexibility, which is achieved by the ability to respond quickly to unexpected occurrences including necessary corrections. Moreover, while lean management exclusively adheres to the current customers’ requirements to assess value in product design, innovation follows the requirement of the existing customers with an aim coming up with better designs. Finally, lean management more often than not leads to employee dissatisfaction because of reduced autonomy and skill utilization, less informal communication and undue pressure to meet tight deadlines, which amounts to stress. Innovation on the other hand emphasizes on motivation and expertise, encourages autonomy and informal communication and avoids stressors, which are counterproductive to creativity.

The strategic importance of JIT is that it increases an organization’s ability to compete with rival firms and remain competitive in the long-run. This is achieved when the organization develops optimal processes for manufacturing its products by responding and adapting to environmental changes. JIT also serves as an integrated system of manufacturing characterized by cooperation and shared organizational values, which further enhance the degree of efficiency in the production process and reduce the level of materials, time and effort wasted in the production process (Cheng, Podolsky & Jarvis 1996). Nevertheless, there are many pitfalls in the application and implementation of lean production. Before it can be successfully implemented, it is crucial to change the mindset of the employees in the organization by raising their awareness on the importance of lean production (Skaf, 2007; Franco, et al., 2010). Notwithstanding, the JIT production system is very useful in the production process. As such, production managers should abandon the traditional batch system and adopt the lean system

References

Brown, C. B., Collins, T. R. & McCombs, E. L., 2006. Transformation From Batch to Lean Manufacturing: The Performance Issues. Engineering Management Journal, 18(2), pp. 3-13.

Cheng, T. C. E., Podolsky, S. & Jarvis, P., 1996. Just-in-time manufacturing : an introduction. 2 ed. London: Chapman and Hall.

Chen, H. & Taylor, R., 2009. Exploring the Impact of Lean Management on Innovation Capability. In PICMET 2009 Proceedings, August 2-6. Portland, Oregon, PICME.

Franco, P. C., Marins, F. A. S. & Silva, M. B., 2010. The Key Success Factors in Choosing and Conducting a Lean Six Sigma Project. Vancouver, s.n.

Rangarai, N., Raghuram, G. & Srinivasan, M. M., 2009. Supply chain management for competitive advantage : concepts & cases. New Delhi: McGraw-Hill.

Skaf, K. M., 2007. Application of Lean Techniques for the Service Industry: A Case Study, Illinois: ProQuest informattion and Learning Company .