INTRODUCTION
The present theoretical investigation aims to provide some of the necessary concepts that allow the understanding of what the "just in time" technique encompasses.
This technique has been considered a very helpful tool for all types of companies, since its philosophy is definitely oriented towards continuous improvement, through efficiency in each of the elements that make up the company system (suppliers, production process, staff and clients).
The philosophy of "just in time" is based mainly on reducing waste and of course on the quality of products or services, through a deep commitment (loyalty) of each and every one of the members of the organization as well as a strong orientation to their tasks (involvement in work), which in one way or another will lead to higher productivity, lower costs, quality, higher customer satisfaction, higher sales and, most likely, higher profits.
Some of the JAT applications include: reduced inventories, improved quality control, product reliability, and the use of personnel, among others.
However, the application of "just in time" requires discipline and prior to discipline requires a change of mentality, which can be achieved through the implementation of a quality-oriented culture, which prints the seal of continuous improvement as well as well as flexibility to the various changes, ranging from commitment to the objectives of the company to investment in equipment, machinery, training, etc.
HISTORICAL REVIEW
The just-in-time system began as the Toyota company production system.
This system was restricted to this company until the end of the 70s, since around 1976 the Japanese, specifically the business leaders, began to look for ways to improve the flexibility of the manufacturing processes, due to the decline that the curve began to suffer. of economic and industrial growth, which had been on the rise for more than 25 years; But it was deeply affected by the second world oil crisis in 1976.
This is how the Japanese, in their quest to improve flexibility, discovered the system used by Toyota and from that moment on it began to spread to the different manufacturing companies in Japan.
'JAT' is considered not to be a Japanese thing in itself but to be made up of a set of universal manufacturing principles that have been well managed by some Japanese.
Later, Westerners began to analyze the success of the main Japanese companies, finding around 14 points, 7 of these were directly related to respect for people and the other 7 more focused on the technical part, in which it was pointed out the "elimination of waste."
In this study, 7 of the 14 points were determined as the most appropriate to apply in the western environment. These essential elements make up what we call "just in time."
Known by the name of Japanese production at first and later with the name of "JUST IN TIME" because many of the principles or elements on which it was based had their origin in the United States.
CONCEPT
"It is an industrial philosophy, which considers the reduction or elimination of everything that implies waste in the activities of purchasing, manufacturing, distribution and support for manufacturing (office activities) in a business"
Waste is conceived as "anything that is different from the absolute minimum resources of materials, machines and labor necessary to add value to the product."
Some examples of absolute minimum resources are as follows:
- A single supplier, if the supplier has sufficient capacity No dedicated people, equipment or spaces to redo defective parts No safety stock No excess production time No one dedicated to non-value-adding tasks
For its part, adding value implies increasing the value of the product in the eyes of the customer. Some examples that add value are mentioned below:
Assemble, mix, melt, mold, weld, weave, pack.
Other things that generally occur in the manufacturing process are counting, moving, storing, scheduling, inspecting and transferring a product, activities that do not add value in themselves.
Just in time implies producing only exactly what is necessary to meet the goals requested by the client, that is, producing the minimum number of units in the smallest possible quantities and at the last possible moment, eliminating the need for storage, since minimum stocks and Enough arrive just in time to replenish the newly used ones and the elimination of finished product inventory.
Excess stock is considered to:
- Absorbs unnecessary capital that could be better invested Generates higher warehousing costs Increases the risk of damage and obsolescence May obscure opportunities for operational improvements
This “in and out” or in-transit inventory concept leaves static warehousing aside and emphasizes dynamic warehousing. Although it is considered that it is not appropriate to speak of storage because the merchandise or raw material that enters is dispatched or used immediately, without entering any warehouse or warehouse.
ELEMENTS OF THE PHILOSOPHY OF JUST IN TIME
There are seven elements, six of them are internal to the company and the last is external.
The third, fourth and fifth elements are related to production engineering.
- The JAT philosophy itself. Quality at the source. Uniform factory load. Coincident operations (machine cells or group technology). Minimal machine setup time. Control system known as a pull system or kamban. JAT purchases
The first element considers the elimination of waste, considered this as the core point of the entire JAT phenomenon.
The remaining six elements are technical or ways of how to eliminate waste, however not all are equally important, since quality is considered as the second important element, which constitutes a basic component for JAT.
The remaining five elements are classified as flow techniques, that is, the way the manufacturing process progresses from one operation to the next.
There is another fundamental element that should be present in each and every one of the aforementioned elements: the intervention of people, the human resource.
For this, it is necessary to develop a culture of people's intervention, teamwork, people's involvement with the tasks they perform, and employee commitment or loyalty to the company's objectives, so that the JAT works.
This is how the technique called "just in time" (JAT) is much more than a system that aims to reduce or eliminate inventories, it is a philosophy that governs the operations of an organization. Its purpose is continuous improvement, in order to obtain maximum efficiency and, in turn, eliminate excessive spending in any way in each and every area of the organization, its suppliers and customers.
The "expense" is considered as any activity that does not add value to the product or service. Hence, its application requires the total commitment of management and employees at all levels, particularly the operator of the production line.
Basic components:
- Balance, Synchronization and Flow Quality: “Get it right the first time” Employee participation
When talking about the JAT philosophy, it is viewed as a technique whose mission is to reduce the cost of inventories, however, it has a broader scope, since it drives the improvement of the entire production process.
The foundation of this philosophy is to design the necessary strategies to maintain inventories only when they are needed, which leads to a careful analysis of purchases, production and sales. This process of relating from the delivery department backwards to returning to the supply department, from where the company is fed with inputs to transform them into a finished product, is known as pulling the system, which implies that nothing is done until required by the next department.
The opposite vision is to push the system, where production is programmed in order to occupy all capacity, which produces long production days and inventories of finished products. This way of working generates bottlenecks, when you want to make several products and have to face different restrictions.
Instead, when the system is pulled, the delivery date is the starting point and the entire process is coordinated so that the date is met. The philosophy of producing all that the capacity can, usually generates an unnecessary inventory that affects the cash flow which is vital because it is the most scarce resource and with a very high cost.
This JAT technology supported by the pull culture, allows a better utilization of the company's capacity, by managing a correct balance of the different lines. By implementing this technology, investment funds are released not only from inventories, but also from capital investments and human resources. In addition, it allows obtaining very reliable cost information, as administrators focus on monitoring resources and their allocation.
BENEFITS AND ADVANTAGES
These benefits are derived from the experience of various industries, which have applied this technique.
- Reduces production time Increases productivity Reduces quality cost Reduces prices of purchased material Reduces inventories (purchased materials, work in process, finished products) Reduces setup time Reduces spaces Reduces the trajectory of the product between the manufacturer, the warehouse and the customer It can be applied to any type of company that receives or dispatches merchandise It is based on the principle that the ideal level of inventory is the minimum that is viable It is a methodology rather than a technology that has gained wide acceptance, yet few companies have created the discipline and systems necessary to apply it effectively.
Flow:
- Fundamental Principle of Philosophy Confirms Henry Ford's assembly line Minimum quantity possible at the last possible moment and elimination of stock The most efficient way to produce things
Quality:
- It consists of doing things right the first time, in all areas of the organization. Related to the elimination of stocks. They are not eliminated because they cost but because they hide problems.
Uniform Factory Load:
Flow is of primary importance, and this is obtained through balance.
Enter:
- cycle time, load level Production rate Frequency.
Requires training, workforce, and retraining
Continuous improvement is key to flexibility.
Enlistment Time:
- It is the time that is required to go from a quality product to another quality product. It paves the way for the other elements of the JAT. You need to know:
- What is being done, why is it being done, who is doing it?
Coincident operations
- It is a type of organization by products. Multiple machines. Operator in motion. Ordering online "U".
Pull Systems:
- It is a way of conducting the manufacturing process in such a way that each operation, starting with the dispatch dock and going back to the beginning of the process, is pulling the product only when it is needed.The customer is the one who determines what is going to happen next due to a that indicates a specific demand to the business. Just-in-Time Purchases: They differ from traditional purchases as the philosophy itself. Elimination of waste in the purchasing process. Eliminate costs that do not add value. Single supplier. Price does not influence due to that you have only one provider.
Quality at the Source:
- In JAT production, the quality that is demanded is quality at the source. This emphasizes quality where the operator is, in front of the machine and in the process. It does not mean perfection but compliance with requirements. Control is required in The process is achieved only when the operator is his own inspector.
"Just-in-time" applications, internally and externally within the company.
The JAT applications are explained as follows:
- Production or production processes.
- Use multipurpose machines, where you can easily switch from one component production to another. Apply group or cell techniques, where series of components can be produced together, this reduces planning periods. U-shaped scheme, in which materials are placed on one side of the U, and finished products on the other side, allowing the reduction of material movement Use general purchase orders, which authorize a supplier to supply a certain quantity of material over a period of time, this avoids individual orders, saving time and effort. Reducing operating costs.
- Use a system to make materials flow according to production / work requirements, also known as an inflow system before a storage system.
- Insist on quality details from suppliers or sources Adopt a total quality control system, starting with the quality of the items supplied by the supplier, with an emphasis on quality in the production line of manufactured items and in the quality of the service provided by the collaborator.
- Design quality and reliability in the product. Use value engineering techniques, design for manufacturing, and design for assembly. The goal is to eliminate scrap and all defects, so customers receive superior quality with fewer warranty repairs.
- The lesser amount of work in process allows a greater ability to respond quickly to changes in consumer demands for different items.
- By using the affluence system and total quality control, it allows giving a better response to customers, in terms of a timely distribution of quality products and services.
- Reduce capital investment. By reducing inventories and having more efficient management, fewer assets are required for current processes. This allows you to reduce the operating expenses of current facilities or provides more space for business expansion.
- Promote cross-training of personnel to work in different areas of production. Employees familiar with the process contribute to continuous improvement; as they have a greater sense of ownership with respect to the product or service.
- Reduce inventory Reduce material waste and wasted labor due to defects Establish simplified work quotas that mean lower premium costs Reduce costs by improving preventive maintenance Simplify administrative processes to reduce work per employee.
FINANCIAL BENEFITS OF JAT.
- Fewer investments in inventories Reductions in the costs of maintaining and managing inventories Reductions in the risks of inventory disuse Less investments in factory space for inventories and production Reductions in the total cost of production
Direct materials
- Quantity Discounts, a Better Quality Supplier
Other costs
- Lower labor costs due to higher overall efficiency despite increased downtime Reductions in waste and faulty units Reductions in routine office work
ACCOUNTING FOR JUST-IN-TIME OPERATIONS
The accounting system will have the following characteristics:
Fewer Transactions: In this system there is no accumulation or transfer of costs as products move through the production process. Instead, reverse flow accounting is used, which records costs in combined accounts as costs are "pulled" from finished production throughout a plant.
Combined Accounts - Just-in-time attempts to eliminate inventory, including raw materials, so there is no need for a separate account for materials. Direct labor cost classification is almost never used, from an accounting perspective, labor cost is combined with another cost to make up the total product conversion cost.
Non-financial measures of performance: A non-financial measure is information on operations that has not been expressed in monetary terms. Non-financial measures are used for decision-making as non-financial data can often be provided more quickly than accounting data. The accounting data should be translated into quantitative monetary terms and then summarized while it is not necessary to restate the financial data.
Indirect Cost Tracking: Just-in-time practice often assigns many indirect tasks to a product process. It is possible to assign a person from the maintenance department to the process of a certain product and give him cross-functional training to perform other operations
JAT AUTOMATED PROCESS.
This process has substantially reduced the volume of labor for the products. Indirect or fixed manufacturing costs resulting from the introduction of automated equipment have increased significantly. This has had two implications:
- The traditional approach to cost accounting that considers direct labor as the factor that "drives" costs and therefore uses it as the basic activity to allocate manufacturing overhead is debatable. Indirect Manufacturing Costs A large segment of manufacturing companies in the US has adopted a policy to maximize output generated with labor and equipment. This policy spreads the indirect manufacturing costs over a larger number of units produced.
PROCESS
They analyze the elements in this manufacturing process that explain the time between the start of the product production process and the time it is ready to ship to a customer.
This interval is known as Production Time and consists of:
- Processing Time.- Time in which the product works Inspection time.- Time it takes to check that it adapts to the standards Waiting time or queuing time.- Time a product waits for Storage Time.- Time in which the PM, Work in process and finished products remain in storage before being used by a production department.
MAIN DIFFERENCES BETWEEN TRADITIONAL SYSTEMS AND JAT TECHNOLOGY.
The main differences that arise from the Just in Time model and the traditional production methodology are summarized below:
Decrease in inventories
The Just in Time system seeks to reduce inventories to very low levels, while in the traditional system, materials are supplied and transferred to the next process regardless of the level of existing demand.
Production cells
In traditional production, products are moved from a group of identical machines to another department with machines that perform other specific work, Just in Time replaces this pattern with one of production cells in which the machines are grouped into families and They are arranged in such a way that a series of sequential operations can be carried out. Each cell is installed to produce a group of products or one in particular.
Interdisciplinary workforce
In the traditional methodology, workers specialize in managing a single machine in a single department, the JIT model seeks that all workers know how to operate the entire set of machines creating an interdisciplinary environment.
Total quality management
The Just-in-Time system cannot be implemented in a company that does not have a clear commitment to Total Quality Management, because if a productive process is not found without deficiencies, the reliability on which the model is based cannot be created..
Decentralization of services
For the application of Just-in-Time, easy and fast access to support services is required, which means that service departments must be decentralized and their personnel assigned to work directly to support production, which is not the case in the traditional system.
The following table summarizes the above.
Differences between just-in-time and traditional production
| JUST IN TIME | TRADITIONAL PRODUCTION |
| 1. Pull-through system. | 1. Push-through system. |
| 2. Negligible inventories. | 2. Significant inventories. |
| 3. Production cells. | 3. Departmental structure. |
| 4. Interdisciplinary workforce. | 4. Specialized workforce. |
| 5. Total Quality Control. | 5. Acceptable Quality Level. |
| 6. Decentralized services. | 6. Centralized services. |
JIT AND INVENTORY MANAGEMENT
Due to the great competitiveness and pressure from high quality companies and competitive pressures has led many companies to abandon the LEO model in favor of a JIT approach, this model has two competitive objectives: to increase profits and improve the competitive position of the company. business. They are achieved by controlling costs and improving delivery and quality conditions. In addition to offering greater cost efficiency, JIT has the flexibility to respond to customer needs.
Manufacturing and purchasing in a JIT system represent the continual pursuit of productivity by eliminating waste. Activities that do not add value are a basic source of waste. The elimination of activities that do not add value is a main element of JIT, and a basic objective of any company that follows the path of continuous improvement, from the perspective of JIT, inventories are a waste, since they trap cash, space and hand working; They erase inefficiencies in production and increase the complexity of a company's information system.
JIT does not accept assembly costs, it tries to bring them to zero. If they become insignificant, all that remains is to minimize the cost of handling, which is achieved by reducing inventories to very low levels. Ordering costs are reduced by developing a close relationship with suppliers. Negotiating long-term contracts to supply external materials lowers the quantity of orders and the costs associated with them. Reduction of assembly times, this objective requires that a company look for new and more efficient ways to achieve assembly, experience indicates that they can achieve surprising reductions.
PRACTICAL CASE
A manufacturer of medical products in California had a receiving area with a traditional warehouse occupying more than 2,000 square meters, the average distance to the production lines was more than 400 meters. Today, they operate based on five mini-receipt areas of about 40 square meters each and are located on the same floor just a few meters from the production lines. Average raw material storage time has dropped from more than 48 days to just under two days, and they are still thinking of reducing it. It is simply about developing a good relationship and ensuring the reliability of the suppliers and scheduling deliveries accurately. This is facilitated by the very accessible computer systems that now exist.
When this concept is continued throughout the entire operation, it will allow each workstation and department to deliver their products at the required rate to their customer, (sometimes another station or department within the same plant). We can see in today's supermarkets that the operation is practically free of warehouses. The manufacturers of the products are responsible for placing them on the shelf at the rate that consumers require them. It is the manufacturers and distributors who take care of the storage and assortment, while the supermarket is dedicated to promoting and making the sale and receiving money from consumers. The JIT process gives them the advantage of always having fresh products, delivered at the place, time and quantity they are required. This extends to the entire supply chain.By the way, this is a clear and understandable example of a "pull" or "pull" system since there is only space on the shelf for a certain number of pieces per product, and only when the product has been sold is there room for more. Even though this particular example refers to JIT deliveries, imaginatively we can transfer the same concept to JIT manufacturing.
CONCLUSION
In Japan, the Just-in-Time system has been an achievement of that nation on the world market, since compliance with the delivery deadlines of its products is one of the characteristics that make it leaders in the contemporary economy. The Just in Time is not a function only of the companies, nor a campaign indicating that the time is up, it is a true management philosophy.
It is the most efficient inventory management system currently used in large companies such as HP and IBM without excluding small and medium-sized companies. It requires an efficient organization as well as accuracy and precision in all its operations, since with the presence of an error it can be ruined in the process.
We were able to observe some of its most significant advantages, among which are the elimination of costs due to the maintenance of unnecessary inventories in the organization, which results in an increase in profits and an improvement in the quality of products due to precision and care. thorough with which each of the stages of the process must be carried out.
On the other hand, this system also has negative aspects to consider, of which the ones that can most affect a company are: the lack of inventories since if there is any contingency of orders, there is no safety inventory to be able to comply with these, which causes a loss of the customer. The second is that it is essential that both the suppliers and the customers and companies with which they have a relationship handle this same inventory system, since otherwise, said system would not meet its objectives and would not work.
BIBLIOGRAPHY
- http://www.gestiopolis.com/que-es-justo-a-tiempo/
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As a culmination the following couple of videos in which the just-in-time production philosophy and the main elements that make it up are presented. The first video (12 minutes) is a theoretical approach to the system and the second (23 minutes) is a documentary that shows how JIT has been applied in a British car producer. Good material to complement and deepen your learning.
