Introduction
The 1980s witnessed unprecedented changes in industrial matters by Western countries. In a significant number of industries, entrepreneurs and managers took note of their inability to match in quality, costs and services to new "world-class" competitors.
Motorola CEO William Weisz defined these new competitors "as those who actively strive for perfect quality, cutting-edge technology, just-in-time manufacturing and cost-competitive service."
The approach used by these new global competitors is to face at the same time “just in time” production (just in time), total quality management and total staff involvement (participatory policy), which is called "The triple offense."
The manufacturers of end products that have faced this triple offensive find themselves in need, in order to capture the benefits, of having suppliers that are world class. Because the manufacturers of final products cannot be above the levels of quality, cost and effective response of their suppliers of parts, components, supplies and services.
In such a way, the need to become a company whose strategy is the pursuit of excellence has spread and continues to spread due to the highly competitive markets.
A little history
In the aftermath of World War II American companies were overwhelmingly winning the game in the markets. On the one hand, a demand repressed by the war, and on the other, being the only country that, having participated in the conflict, suffered no damage to its productive structure, gave it the privilege of satisfying a large part of that internal and external demand.
The productive systems of Europe and Japan were rebuilding from what happened a while ago. To this should be added in the case of Japan, that its products had a very bad reputation in terms of quality, to which must be added the fact that its entrepreneurs were completely unaware of the characteristics of the North American market.
Companies like General Motors, Ford, United States Steel, General Electric, and others had access to abundant and quality labor, materials, and financial resources. At that time there was no one who would stop the development of American companies.
But in the mid-1960s, the global environment would begin to see the first changes as the game spread beyond national borders. At the end of the 1950s, the German automaker Volkswagen made a presence in the United States with an attack on the economy car segment. Toyota tried to emulate the strategy but failed as a result of the poor quality and design of its units.
But after a few years and after the accumulated lessons, Toyota made a second attempt in the mid-60s in the company of Nissan, achieving optimal results this time. Detroit auto companies responded with vehicles that were comparatively larger and more expensive than the Germans and Japanese.
Japanese firms began to quietly insert themselves into various markets in the United States during those years. They did so in the copier market, and more specifically in the segment of customers requiring low-volume copiers. Thus, companies such as Canon, Minolta, Ricoh and Sharp entered the segment of high quality and low cost machines. While Xerox took note of this situation, it did not view the Japanese companies as a threat. Considering that the low-volume market had little potential, Xerox concentrated its fight with companies such as IBM and Kodak for the high-volume market.
Honda entered the motorcycle market in 1960 in the United States with small and light vehicles. Harley-Davidson enjoying an almost hegemonic dominance did not see in Japanese vehicles a danger to its position in the market.
Honda was joined in its entry into the North American market by Suzuki, Yamaha and Kawasaki, strongly pushing back Harley-Davidson in its market position, even in high-displacement motorcycles.
As the Japanese cut back a piece of the United States market, American corporations became concerned with the largest and most lucrative customers and their main competitors in the United States.
Since the mid-70s and with an epicenter in the mid-80s, North American corporations, as well as European ones, began to feel the impact of Japanese competition. Competition that not only occurred in terms of prices, but also quality and services. Brands such as Sony and Panasonic became synonymous with quality and reliability in terms of household appliances, creating the basis for imposing higher prices ("premium").
Joining the Japanese, very careful producers from South Korea, Taiwan, Singapore and Hong Kong were also present; whereupon electronics producers such as Sylvania, Warwik, Admiral, Motorola, and Philco were either displaced or stayed by the wayside. In the 1980s, Japanese firms came to dominate the color TV market by setting aside a heavyweight like RCA, and cornering General Electric and Zenith.
The North American automobile industry, but also the European one, have been the main victims of the relentless advance of Japanese companies and their new way of managing production.
Different Western countries suffered his disdain for change and innovation, both in products and in industrial processes. Suffice it to mention as examples the Swiss watch industry, the camera industry in Germany, and American machine tools.
It must be borne in mind that the world's leading quality experts, Joseph Juran and W. Deming, began to work with Japanese industrialists when they found no interest from North American executives in improving quality standards.
It should be noted that the lower costs of Japanese products, beyond the exchange rate, do not depend on low wages, they originate and take place as a result of a more efficient use of productive resources, such as labor, raw materials and money. The scarcity of these resources has generated in the Japanese a clear conscience of the waste, concentrating for this reason in their systematic elimination. In this way, they constantly increase their productivity levels by focusing processes and technology on maximum production with minimum inputs.
Following the patterns set by the Japanese, companies in Malaysia, Thailand, Indonesia, Mainland China and India are now striving to generate the next big leap. Mainland China is not only growing, but it is doing so by taking care to generate and develop high-quality processes in order to increase the added value of its products. To do this, they are hiring the best quality consultants from Japan and the United States.
The reaction of the West
In 1981 Xerox together with its Japanese subsidiary Fuji Xerox launched the now famous benchmarking methodology, a program of competitive benchmarks, which it defines as the continuous process of measuring its products, services and practices, in relation to its most competitive competitors. difficult, as well as with the leading companies in certain processes. Xerox observes what its main competitors are doing and obtaining, thus projecting their objectives to be covered. So between 1980 and 1986, Xerox made huge strides in the quality, cost, and lead times of its products. The rejection rate on the supplier-delivered parts line dropped from 10,000 to 450 defective parts per million, and set a new benchmark of 125.Quality defects per 100 machines dropped from 91 to 12, and a new benchmark of four was set. The cost of raw materials was reduced by 50% and the company set a goal of reducing another 50% as a new benchmark. It also reduced operating cost rates from 380% to 189%; manufacturing lead time dropped from nine to five months; and the inventory was reduced from 99 to 33 days, with a goal of nine days.setting a goal of nine days.setting a goal of nine days.
Harley-Davidson responded in much the same way as Xerox, which implied, as in the case of this company, adopting the Japanese “Just in Time” management systems.
Ford Motor, General Motor, Hewlett-Packard, 3M, Black and Decker, John Deere, Johnson Control, Omark and Motorola are some of the most prominent North American companies that, faced with global competition, chose to face it with the triple offensive of Just in Time + TQM + ITP (total staff involvement). It is this triple offensive that has come to be called Lean Production, which is focused on the systematic elimination of waste and waste. Achieving this implied, in order to try to shorten the distances with its foreign competitors, especially Japanese, applying reengineering in business processes. In this way, they managed to eliminate unproductive activities in production, commercial and administrative processes.
In the case of Motorola, in 1981 its Policy Committee set itself the objective of improving its quality levels 10 times in all sections of the company, in a period of five years, and included even departments whose existing quality levels were already the same. best in the industry. By 1986, the company had achieved and still exceeded its goals. The goal for 1992 was to achieve a quality level of 99.9997% defect-free parts, or 3.4 defects per million opportunities. This has come to be called the Six Sigma System.
At the end of the 70s and the beginning of the 80s, what would later be called the Theory of Limitations, the starting point for synchronized production systems, began to be built. The Theory of Limitations was first introduced in 1984 in The Goal, written by Eliyahu Goldratt and Jeff Cox. This unusual book presented a management theory in the style of a novel about a factory manager. The factory in question is in serious trouble and as a result runs the risk of being closed by the top management of the company, but ultimately it can be saved by overturning the respected and time-honored management practices that were creating tremendous problems.
In The Goal, traditional cost accounting and deviation information systems appear to be responsible for many of the problems the factory is experiencing. Instead of concentrating on activities that can increase profits, the traditional management accounting system focuses primarily on counterproductive efforts to reduce costs per unit of product. If real improvements in operations had been made, the management accounting system would almost invariably have sent inappropriate signals in the form of unfavorable cost deviations. From there, a new methodology for continuous improvement is developed, based on the systematic elimination of "bottlenecks" for the purposes of better synchronization of production processes.reducing waiting times and inventory levels, increasing turnover levels, improving compliance with delivery times, and increasing profitability levels.
The power of "Just in Time"
Just in time implies a way of thinking and reasoning about business as production processes. Thinking just in time means focusing on systematic waste detection and elimination. Hence the power of just in time as a system that leads companies to achieve surprising results. Suffice it to say that the companies that apply the system in question have achieved annual levels in double-digit inventory turnover, in some cases exceeding thirty turns, when traditional Western companies oscillated between 2.5 and 5 turns yearly. This was achieved by reducing the level of inventories to a minimum, thanks to reducing preparation times and tool change, reducing product failures to parts per million levels, eliminating breakdowns,and improve the layout in the production plant.
These notable increases in turnover levels reduced their financial needs, while increasing their profitability.
The system that began being developed in the automotive company Toyota thanks to the vision of Toyoda and Taiichi Ohno, later spread to other Japanese companies. Added to Ohno's ideas were the contributions of other impressive quality and productivity managers and consultants from Japan, such as Imai, Ishikawa, Karatsu, Mizuno, and the revolutionaries Taguchi and Shigeo Shingo.
The system was put to the test in terms of its ability to react during the crisis of 1973/74, a time in which most companies and especially the automobile companies had enormous problems, caused by the large increase in the price of oil later. to the Yom Kippur War. It was at this time that the other Japanese companies became aware of the capacity of what came to be called the Toyota Production System (TPS).
The philosophy of just in time operations
Just in Time is a business philosophy that focuses on eliminating waste in all internal activities of the organization and in all external exchange activities. This definition establishes the key idea of just in time –the elimination of waste-, which requires the elimination of all resource inputs that do not add value to the product or service.
The goal is to provide customer satisfaction while minimizing the total cost. This is the essence of the just in time process, which is integrated with the total commitment to quality.
The just-in-time philosophy has to be filtered from the top down because it often requires a complete change in company culture. To successfully implement a just-in-time system, the company needs an environment in which employees are intimately and continually committed to executing the game strategy and the details of the game plan. To point the way, senior management must understand the fundamentals of the just-in-time process, full quality control, and full people's involvement.
The most critical aspect of total people involvement is allowing all employees to work to their full potential. By providing incentives for innovative solutions, management can help employees find creative ways to do their jobs. The really important people in this process are the front-line employees.
JIT / CTC (just in time / total quality control) education develops these people's skills and encourages their creativity. In addition to training and educating employees, top management must reform the culture of the company. The goal is to break down the obstacles that hinder communication and prevent workers from cooperating and trusting each other and trusting their customers and suppliers.
Product or service design
The activity that offers more opportunities to eliminate waste and waste (changes) is the design of the product or service. Products or services are very wasteful when they are designed by the Research and Development department to meet what the Engineering department believes to be customer requirements, and then handed over to the manufacturing department for manufacturing.
In the design process to which traditional companies usually grant them 5% of the budget, they end up committing up to 70% of production costs. Therefore doubling the resources for design work can lead to massive cost savings, both in terms of materials and processing.
Simplifying the product or service allows, in turn, to simplify the processes for its preparation. Greater simplicity also means reducing the number of parts, which reduces the cost of inventories, acquisition and management.
Prepare the Work Center
Only those elements necessary to carry out tasks and activities efficiently and effectively should be accommodated in the workplace, which means getting rid of those unnecessary elements. In the first place, you must ask yourself the question, Why is this here ?, and then ask, Does this add value to the product? If the item in question doesn't add value, it shouldn't be in the work center, and if it can't add value elsewhere, get rid of it.
After identifying those elements considered essential, they must be assigned to specific places. This involves analysis to determine where they can provide the most value at the least cost. Thus, once they are assigned a certain place or space, they must remain there until a more convenient place is identified.
When planning the work center, it should be simple, eliminating all those unnecessary elements, while conveniently placing those that are required for the best development of activities. In addition to wasting space, poorly arranged work areas hamper the efficient flow of materials, wasting time as workers have to search for materials, tools and equipment when they need it.
The quality of the workplace is a fundamental basis for a quality production process. A quality working environment gives all materials and processes high visibility and provides shorter distances for the movement of materials, workers, as well as a more homogeneous flow of materials and supplies during the process. Not less important is all that has been mentioned when it comes to reducing risks of accidents or safety problems.
The work team has direct responsibility for the proper preparation and good condition of the work center, reflecting in this the attitude regarding the quality of the team members. This attitude and good maintenance of the space are decisive for the quality of just in time.
Maintenance of equipment and facilities
In the case of equipment maintenance, the goals of prolonging their useful life and guaranteeing the quality of the products they process are pursued at the same time. While the maintenance of the facilities allows not only to extend their useful life, but also to improve safety and the work environment, something that can also be extended to the maintenance of equipment.
The just in time system does not accept the generation of defective products in any way, which means that the preventive maintenance of the processing equipment, accessories and instruments used for measurements and checks are critical.
Preventive maintenance should be performed, except for major repairs, by the line operators using the equipment. This contributes to the elimination of waste. The line operators responsible for the maintenance of their equipment and the quality of the goods it produces treat the machines with special care, helping to reduce maintenance needs. They are also available when required, which eliminates the delay caused by waiting for a maintenance specialist (wait times). This maintenance work by the operators themselves contributes to increasing their esteem and motivation.
Plant organization
The traditional factory is distributed by departments specialized in different types of activities such as: stamping, punching, metal cutting, milling, etc. In the search for lower costs and based on Taylorian paradigms, they are produced in batches of optimal size that justify the work of setting up the machines, in addition to the storage costs. Despite this, this approach generates enormous waste, as materials and work in process must be transported and handled frequently. Raw and in-process materials travel great distances to go from one department to another. The quantities moved are considerable, requiring special equipment. Important spaces are required for the storage, transport and movement of the material,All of which is not a generator of added value and only consumes resources.
Each department also maintains a reserve inventory, precisely in the event that a preceding process interruption or an arrival of defective materials disrupts the supply chain. Because this work-in-process inventory takes up too much space, the processing units are too far apart, making it difficult to detect faults or failures during the production process.
On the other hand, the lack of flexibility of the system must be recorded, since the equipment is prepared to process large batches, with operators being trained to carry out very specific activities or operations.
As an alternative to the system described above, and based on the ideas and philosophy of just in time, cellular approaches known as "group technologists" have been adopted.
The cellular or cell arrangement groups the production kits by families. All the equipment that is needed to manufacture a certain part or piece for assembly is usually assembled in a “U” shape. Materials pass from one station to another around the U, and a specific operation is carried out at each station. This approach is especially useful when parts or assemblies are small and can be passed by hand from station to station. The machines are positioned close enough to each other for hand transport. Each manufacturing cell becomes a mini-factory, concentrating on the production of families of products (parts, pieces or final products) that share configurations, materials, technologies or skill requirements.
This cellular approach generates the reduction of inventories of work in process, reduces both the transport and the handling of materials and also the storage time. To this must be added the increase in flexibility in processing and improvement in quality.
Thanks to the cellular approach, the workstations are close to each other, eliminating reserve inventory space and minimizing the distance that materials, work in process and personnel have to travel. The recommended approach is a continuous process, in which each station processes a single unit and passes it on to the next station, thus eliminating the need for in-process inventory. If the finished units are components or parts for assembly, workers transport them in very small batches to the next cell for final processing or preparation for dispatch.
The approach reduces transportation and handling by locating production materials and tools close to the cell. By delivering materials to suppliers directly to the point of use, the circuit path from the materials warehouse to the process department is eliminated. The direct flow of materials to and through the cell minimizes travel distance and repeated handling during the manufacturing process.
An important goal is to eliminate any time during which value is not added to the product. Receiving material at the exact time it is needed is a big step toward this goal. Adding value to the product without interruption is also a goal of the cellular approach, because with this method, materials do not stop between operations, and finished units go quickly to external or internal customers.
Thanks to the cellular approach, both teams and staff achieve flexibility. To maintain this condition, each cell must be autonomous. Your equipment should be simple, standard, easy to start up, have a short cycle time, and should not be limited by a complex power system.
With regard to personnel, all its members must know how to carry out all the tasks of the cell. To allow such learning the number of cell members must be kept to a reasonably small number. The company can adjust the production of the cell by adding or subtracting members from it.
As a natural consequence of the cell layout, a continuous improvement is achieved in the quality of the parts or products generated in it. As the existence of reserves is limited, and because the units are fully processed, quality problems become immediately apparent. By inspecting all team members in their own production, the cellular approach reduces the number of defective units.
If a problem or inconvenience is detected, the processing by the cell is stopped, its members proceeding to search for and detect the root cause of the problem for the purpose of solving it. Thus, the size of the defective items is reduced to one unit and not one hundred or one thousand, which is what conventional systems usually produce. In this way, much reprocessing work is avoided as well as waste. Reaching this ideal implies receiving supplies and parts in optimal conditions of quality and quantity.
Quality problems are quickly detected as they cannot be hidden in large batches of received materials, or in excess work in progress.
Variation of models
Having production lines for specific products is too expensive, as long as there is no continuous production of each good. Due to this, traditional factories produce in "cheap" batches in order to overcome the high costs generated by the long periods of downtime of the machines due to the preparation times.
Today the market demands a variety of products, both in design and size. It is no longer feasible to apply the famous and famous phrase of Henry Ford “you can ask me for cars of any color as long as they are black”.
Overcoming these drawbacks led the Toyota automotive company to apply the system today known worldwide as Smed. The forerunner of this methodology aimed at reducing tool preparation times is the famous Shigeo Shingo. This is how, between 1972 and 1973, a tool work preparation time was reduced from two hours to less than ten minutes; and in 1975 it reduced it still to less than a minute, which is a reduction of more than 100: 1, allowing Toyota to handle different products with the existing equipment.
Shingo's creative efforts in reducing setup time destroyed many long-held industry paradigms. Making such reductions feasible implies meeting a series of guidelines:
- Workers must be convinced that dramatic reductions are possible Engage machine operators in the process, using their ideas. Train them and make staff a part of the setup process Make parts fit together, without having to adapt Setup changes should produce fault-free products from the first unit
To carry out the reduction of times, five steps must be followed according to Shingo:
- Separate internal set-up activities, which require machine downtime, from external set-up tasks Shift as many internal activities as possible to external activities Minimize the time required to do internal set-up Minimize the time required for do external preparation Repeat the first four steps to ensure continuous improvement.
The use of these techniques allows both American and European companies to achieve results similar to those obtained by Toyota and other Japanese companies.
A good example is that of the North American firm Omark Corporation, which reduced the preparation time of press dies from six and a half hours to just forty seconds.
Another case is FMC Corporation, which managed to reduce preparation times in its cargo hold workshop by between 60 and 90%.
Stable schedules
A stable production schedule is essential in order to make the Just in Time system feasible.
As the just-in-time system adapts to final demand, a solid forecast of it is essential. Companies must give their suppliers fixed schedules and give them notice equal to the time of the suppliers' manufacturing process. If there is a considerable difference between the schedule time set and the supplier's production process time, it will be necessary to focus the effort on reducing it.
It is therefore of fundamental importance:
- Improve scheduling system Reduce uncertainties in transportation Develop more reliable forecasts Reduce uncertainty in manufacturing Reduce delays in communication between plants and suppliers Improve coordination of engineering modifications Reduce complexity of product.
CTC - Total Quality Control
You cannot actually separate the quality from the just in time process, as the two are interdependent. This is due to the fact that just-in-time processes require quality inputs and pursue the generation of fault-free products and services.
Each just-in-time process, such as product design, work center preparation, equipment and facility maintenance, plant organization, rapid tool changes and preparation, and demand scheduling, they depend on the concept of total quality.
The implementation of Statistical Process Control, Quality Control Circles, Poka Yoke, the control and analysis of Quality and Poor Quality Costs, the deployment of the quality function (DFC), the use of the seven classic tools For quality management and new management tools, they make lean production feasible in Japanese and Western companies, since only with an optimal level of quality is it possible to eliminate the need for inventories.
When inventories are reduced, the inconveniences generated by the lack of support and security inventories are visible. This is usually exemplified as a lake that by reducing the level of its waters (inventories) hinders and hinders the normal navigation (manufacturing processes) of vessels. The only way to eliminate these difficulties is by eliminating these rocks (quality failures, as well as high preparation times, machine breakdowns, poor distribution of machines and sectors, problems with suppliers, among others).
Today, talking about quality implies talking about a quality level of six sigma, that is, reaching a level of 3.4 defects per million opportunities. This is the new level that world-class companies have set themselves, such as General Electric, Xerox, Motorola, which is nothing more than matching the levels already reached by companies such as Toyota, Nissan, Honda, and Casio among many other Japanese companies.
Conclusions
Technology in terms of development, is part of a world historical process, where various companies, industries, research centers and countries interact with each other to give shape and content to new and continuous advances. In such a way, what began as a Western development as in a post race was taken by Japanese companies, to be taken up again by the most advanced companies in the United States and Europe. Just in time is being deployed to other latitudes where it takes a special boost from current competitive needs. Thus, both Latin American and Southeast Asian companies are striving to improve their performance day by day in search of better levels in relation to costs, quality, productivity, and production cycle times.
In a framework marked by global competition, no company is left out of its obligation to compete, the question is whether it is in real conditions to do so, especially in a competitive framework where the minimum requirements are increasing. Lower costs and response times, lower levels of defects per million opportunities, higher levels of productivity, are some of the measures that companies must cover in order to gain market share.
Competing with possibilities implies eliminating waste, leaving all that unnecessary and seeking to generate real added value for customers and consumers. The search for lean organizations implies eliminating unnecessary processes and activities, while strengthening all those that constitute their reason for being.
Only the application of Just in Time can save Western companies from making the Matsushita sentence come true when it says "We are going to win and you are going to lose, because defeat is in your minds." Today, more than ever, a radical paradigm shift is necessary on the part of the employer if he still intends to continue competing.
The short-term profit criterion is obviously inappropriate when it comes to developing and introducing new processes. Compared to Japan, for example, where banks and corporations have a longer-term perspective, Western financial institutions and shareholders are notable for their short-termism. This shortsighted way of thinking and policy cannot encourage industry to innovate.
On the other hand, many of the organizations suffer from hardening of the arteries and stiff joints. Some of these victims are still young when attacked by this progressive disease of organizational arthritis. They gradually become stiff and inflexible. Addicts to the well-rehearsed formula, permanently and unconsciously, they are increasingly averse to the new and little known. The increasing inflexibility of attitudes and practices ultimately makes any kind of improvement initially seem too costly. The subsequent lack of positive change that stems from this attitude can generally be rationalized into excuses such as "that's too costly" or "if we're already successful, why change?" It is important to emphasize that this organizational disease is caused by the same company.
Flexibility is becoming the key quality of the truly innovative organization. People, teams, and organizations that are flexible are able to respond to or adjust to new or changing situations. For this, it is essential to minimize barriers between personnel from different areas, keeping communication channels open between different sectors.
Just in time requires and at the same time generates the aforementioned levels of flexibility, which allow continuous and consistent improvement to changes in demands and in the environment.
It is necessary to manage change to implement and make just in time viable, but at the same time this production system facilitates change due to its philosophy and methodology.
Bibliography
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To complement, we suggest the two videos that you find below. The first (12 minutes) is a theoretical approach to the just in time philosophy, the second (23 minutes) is a documentary that shows the JIT implementation in a British car production company.
