Just in time - An inspiration started from a casual trip to the American supermarket

<Image source: http://www.papermasters.com/jit.html>

Everyone knows how the term “Just in time”, known as JIT, changed the world of manufacturing dramatically, but not many people know that the inspiration was developed in a very casual visit to an American supermarket by Taiichi Ohno, machine shop manager at Toyota Motor Corporation, in 1965. This article will tell you the story about how JIT was born, answering the question how it helped to improve the supply chain of Toyota. Now, let’s start with an interesting story of JIT’s birth.

How was it born?

This was slightly more than ten years after World War II, and Japan was still struggling to develop from the depth of post-war poverty. During that time, Japan regularly sent their managers and engineers to the United States to learn whatever they could from American manufacturers. The CEO of Toyota Motor Corporation, Kiichiro Toyoda, had travelled to America to tour around the Ford’s factory before the war, and was especially eager to learn from the American automotive industry. He returned to Japan with an understanding of conveyor-fed lines, a key element to Ford’s mass production system. He intended to implement the new technology on his own automobile factories.

However, Toyota faced some challenging obstacles. Factories in Japan had less floor space than American counterparts, so he could not simply copy Ford’s layouts. Another problem was the supply of raw materials. Although the entire world suffered from the Great Depression of the 1930s, Japan was far worse off than the United States.

Kiichiro therefore adapted Ford’s methods of supplying the manufacturing lines. Rather than stockpiling huge quantities of materials, Toyoda provided each manufacturing process with small amounts, often saying just ahead of the production schedule. The practice of providing small, frequently replenished quantities to a factory process is the predecessor of “Just-in-time-manufacturing”.

 Toyota Production System

<Image source: http://www.toyota.eu/about/Pages/toyota_production_system.aspx>

This predecessor’s concept was not quite ready for primetime. A fundamental insight was still missing until Mr Ohno’s visit to American supermarket in 1965. But why was the American supermarket? If you were used to the Japanese alternatives of the era, that is: there simply were no mass-market, self-service retail establishments. The consumer economy was served by small, mom-and-pop retailers who waited on customers one at a time. Japanese consumers did not have any places to go to buy all the groceries on a single receipt like the American supermarket. Ohno was impressed by the efficient way in which the shelves in the American supermarket were replenished. Stockers circulated around the store, replacing items as they were removed by the consumers. Inventory level in the supermarket aisles were carefully controlled with a predetermined range. The shelves were neither empty nor overflowing with excess goods. This system allowed the supermarket to keep track of the inventory level of thousands of items. 

Taiichi Ohno

 <Image Source: http://www.sdr.com.br/professores/sdr/Ohno_e_seu_sistema_jit.htm>

Ohno returned back to Japan and apply the missing puzzle to Toyota’s production system. “Just-in-time” philosophy gained prominence from that point and defined as “getting the right quantity of goods at the right place and at the right time”.

How does it help?

The key components of JIT are:

• Elimination of Waste
• A broad view of operations 
• Simplicity 
• Continuous improvement 
• Visibility 
• Flexibility

Waste is defined as anything that does not add value to the process like, for example, inventory, waiting, excess motion, scrap, rework, etc… There are a lot of benefits for a corporation using JIT manufacturing. One of those is reduction in inventory, which helps the company improve the company’s finance performance. Other benefits can be listed such as improved quality, reduced space requirements, shorter lead times, lower production costs, increased productivity, increased machine utilization, etc…

JIT production aims for seven zeros: zero defects, zero (excess) lot size, zero setup, zero breakdowns, zero handling, zero lead time, zero surging. It also uses a few different tools, described as Pull System, Levelling Production, Flexible Resources, Cell Manufacturing, and Total Quality Management System.

Conclusion

“Just-in-time” sounds really simple for any other companies which want to imitate the Toyota Production System. However, to achieve success like Toyota, there are still a lot more factors and rules that support and maintain the JIT production. JIT was considered cutting-edge when it was “discovered” in the West, but Toyota and other Japanese companies had been practicing JIT for decades.

By Phong Nguyen

Reference source:

Lean Manufacturing and Total Quality Management, Lecture Note - week 4 by Professor Tim Zak

Decoding the DNA of the Toyota Production System by Steven Spear and H.Kent Bowen

<www.japanese123.com> viewed on 14th February 2012

<http://www.toyota.eu/about/Pages/toyota_production_system.aspx> viewed on 14th February 2012

< http://www.youtube.com/watch?v=CBFKBf1rOyo> listened on 13th February 2012