Kanban & Just In Time (JIT)
What are pull systems, Kanban and JIT and how will they help my workplace?
Push systems describes a traditional manufacturing process where the factory makes product before the next process or customer is ready for it. The product is pushed onto the next process or into the market, as opposed to being made to order. Lean encourages pull systems through Kanban control, with JIT (Just In Time) being a perfect goal to strive towards.
Push systems come from the view that machines and processes should always be kept as busy as possible, as a priority over the actual volume demanded by the customer. The downside to this approach is excessive inventory and Work in Progress (WIP).
Pull systems provide the ability to respond to customer demand by taking a signal – a Kanban – from an upstream process to produce. If no signal is received – ie no product is required – then nothing is produced.
Make only what the customer wants, when the customer wants it.
The advantages of reduced inventory and WIP are:
- Reduced clutter – a workplace that requires less searching, walking, moving.
- Freed up cash – less money invested in material and/or value added processes completed.
- Reduced transport – less inventory, the less transport required shifting in and out of storage, also a smaller footprint for the value stream.
- Reduced storage costs – more inventory requires more space, more staff and more equipment
- Shorter lead times – more inventory means there are more jobs in the system so it takes longer for a single job to flow from start to finish.
- Quicker reaction to quality problems – inventory increases lead times so quality issues are buried for longer.
- Reduced stock damage – the more inventory, the more transport, and so the more stray forklift tines, dropped boxes, incorrect stacking, etc. Also more inventory increases likelihood of damage from water, rodents, temperature, etc.
- Increased shelf life – shorter lead times mean quicker stock turnover.
- Reduced stock obsolescence – shorter lead times mean quicker stock turnover.
- Increased visualisation of process demand – less clutter, less lead time, less work-in-progress, and defined kanban systems mean demand levels can better be matched with process capacity.
- Improved process deviation escalations and root cause rectification – less inventory, less work-in-progress and better matching of production demand and capacity, problems such as variation are highlighted quickly and can be rectified.
Just in Time (or JIT) is the ultimate evolution in inventory control. In a JIT system such a low level of inventory is kept that the next shipment of material arrives “just in time” or just before it is required. This concept was perfected by Toyota, who recognised the cost of keeping inventory, but also recognised that inventory does form an important function of smoothing out variation in demand, to avoid the cost of stock shortages. As a result, Toyota worked on the root cause of the problem and optimised their production system to draw materials as smoothly and predictably as possible, hence reducing variation in demand, and hence reducing inventory levels to JIT.
To move away from push systems and realise the benefits of inventory reduction, the correct planning and systems improvements are required. A poorly planned and inexperienced implementation will result in disorganisation and stock outs which cause enormous costs and can scar an organisation’s views on Lean improvements.
It is important that your inventory reduction and pull systems work correctly the first time. Vative has extensive experience in implementing pull systems through Kanban control across a number of different industry sectors. Vative can assist in setting up a high-performing Kanban system.
But what if I can buy cheaper in bulk?
This is a very common question:
- The real savings of buying in bulk need to be weighed up with all the costs of keeping excessive inventory;
- Lean and the Value Stream Mapping tool teaches you to look at the entire value stream. The Toyota JIT system could not have been developed without full cooperation and the close coordination and respect of suppliers. An agreed supply arrangement of smaller quantities over a longer period of time is often a better result for a supplier, so potentially an even lower price could be agreed upon.
Can pull systems and JIT be applied to service industries?
Service industries suffer similar issues with work in progress build up, with increased lead times becoming the biggest cost.
Do you have a paperwork process in your business which takes much longer than it should? Are tasks being overlooked? Is the customer not completely satisfied?
Through our Lean Practitioner course you can learn more about push systems, pull systems, Kanban and JIT (Just In Time). In addition to covering the theory behind how to implement these tools, our simulations allow you to take part in a practical demonstration of how these and other Lean tools work and are set up.
Download our Free PDF to learn more about Kanban and Just In Time. Contact us to find out how we can help you implement Kanban and Just In Time to help you achieve your business improvement goals.