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Week 9 Student Discussion - Lean and JIT

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Steve Prevette

Deming Disciple
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#1
“Lean” and “Just in Time” are definitely current concerns of American corporations. What is meant by these two terms, and what advantages do they propose to bring to a corporation? What is meant by “push” versus “pull” with relation to JIT?
 
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mark child

#2
By using Aggregate planning and paying attention to details several businesses, e.g. Wal-mart, have been able to maximaize just-in-time and lean production. They stay lean by keeping inventory to a bare minimum and focusing on what the customer wants and when they want it. If they make an order and merchandise does not arrive on time they have identified a problem and use the just in time philosophy, (an ongoing problem solving process), to make the necessary corrections.
Wal-mart has used the pull system by having materials produced only when they need them. This is totally the opposite from the push method where suppliers would be pushing materials on Wal-mart regardless if they needed them or not, thereby driving up inventory costs and creating situations where they have things they don't need. We have seen this with K-mart.
The advantages are obvious in the case of wal-mart. They have capitalized on these processes to get ahead of the competition and now use their overwhelming size squeeze them out of business.
 
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Jamie Morris

#3
Sipoc

Steve Prevette said:
“Lean” and “Just in Time” are definitely current concerns of American corporations. What is meant by these two terms, and what advantages do they propose to bring to a corporation? What is meant by “push” versus “pull” with relation to JIT?
The basic supply chain model consists of suppliers, input, process and/or transformation, output, and customer (SIPOC). Just in time can be applied to each step in this supply chain model. Using a just in time approach, supplies and components are pulled through the system and arrive at each point in the supply chain where they are needed and when they are needed. From a supplier standpoint, this requires and implies supplier integration into the production supply chain. From a customer standpoint, the implication of just in time and lean is that the customers receive exactly the product that they want and when they want it, without waste. Just in time management also can be applied to the inputs (materials, components that feed the process), the process itself (just in time labor and materials when they are needed), the outputs (work-in-progress and inventories). The advantages of just in time and a pull process are; attacks anything that does not add value to the process (waste), exposes problems and bottlenecks in the process caused by variability, identifies deviations from the optimum utilization and capacity, streamlines production, and reduces inventory levels. Application of lean production methodology is just a variation of just in time. The same ideas apply with slightly different twists. The key differences are more focus on developing systems that help the employees produce a perfect product every time and developing close and lasting relationships with suppliers. Just in time and lean production reinforce that continual analysis and improvement must be implemented throughout each step of the SIPOC model.

The push system forces material downstream through the system to next workstations regardless of whether the materials are needed or wanted. Steve used a very good example in class of a push system. The image of Lucy working in the candy factory with the candy bars continuing to pile up on the assembly line while Lucy struggles with the packaging process. "Lucy you got some 'splaining to do".
 
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ssagreen

#4
From the research that I did on Dell and what we saw in the book they are a good example of a pull system. They do not start the assembly process for your computer until after you make your customized order. I believe three times a day they tell their suppliers what parts they need and pull in their supplies off of demand. That is how I see the pull system working. It is built off of the real demand and the push system is built off of the forcasted demand or the capabilities of the plant. The pull system can eliminate the waste or shortage when the forecast does not match the real demand.
 
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Mary Davenport

#5
mark child said:
By using Aggregate planning and paying attention to details several businesses, e.g. Wal-mart, have been able to maximaize just-in-time and lean production. They stay lean by keeping inventory to a bare minimum and focusing on what the customer wants and when they want it.
This points out how/why K-mart lost business in our area. As one of their former merchandising managers I was perplexed every time special merchandise and promotional goods were pushed on to the stores without regard to what would sell in each area. Wal-mart's system is very effective (at least from a merchandising perspective), if you go to their stores across the country you will see some similarities, but you will also see some very obvious local and regional differences. The merchandise mix in Kennewick is different from that across the highway in West Richland and extemely different from that in Amarillo, TX.
 

Steve Prevette

Deming Disciple
Staff member
Super Moderator
#6
Mary Davenport said:
The merchandise mix in Kennewick is different from that across the highway in West Richland and extemely different from that in Amarillo, TX.
In China, Wal-Mart sells live chickens and several other local food items that you won't see in a Wal-Mart in the USA.
 
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Mary Davenport

#7
Steve Prevette said:
In China, Wal-Mart sells live chickens and several other local food items that you won't see in a Wal-Mart in the USA.
And we in the US are grateful for that too!!!
 
#8
ssagreen said:
From the research that I did on Dell and what we saw in the book they are a good example of a pull system. They do not start the assembly process for your computer until after you make your customized order. I believe three times a day they tell their suppliers what parts they need and pull in their supplies off of demand. That is how I see the pull system working. It is built off of the real demand and the push system is built off of the forcasted demand or the capabilities of the plant. The pull system can eliminate the waste or shortage when the forecast does not match the real demand.
It is important to realize that there is some point in the supply chain where "Pull" doesn't work in a real world.

Some of you students work in an agricultural mileu. If you grow grain, you have to "predict" how much grain you'll sell to plan amount of seed to sow. A Granary has to plan how many storehouses to build to accommodate projected need for storage of grain. Mills have to plan how much grain to buy to make flour. Bakers have to plan how much flour to order to make bread to put on the shelf for the retail customer to come in and "demand" a loaf of bread. The only one in the entire chain who can be a "pull" buyer based on demand (his stomach growls) is the retail buyer.

Similar disconnects in the supply chain abound in every industry.

Cars? - mines for ore, steel mills for ingots or billets, rolling mills and foundries for sheet metal and engine blocks, manufacturers to have showroom samples in dealerships, all so consumer can walk in and "demand" one off the lot or wait a long lead time for one to be built.

Computers? Consumer and Dell may pull, but chip makers, motherboards, cases, wires, solder, manufacturing plants, etc. ALL have to plan and purchase ahead based on estimate of future demand. All those folks Dell orders from have merely had the burden of holding inventory transferred to them from Dell. There is still pre-made inventory sitting on someone's shelf waiting to ship to Dell for final assembly.
 
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Roberta

#9
So the question can be posed, can only one member of the supply chain utilize the JIT system? If everyone in the chain lived by the JIT method, then would there not be enough slack in the system to weather an unforeseen spike in demand, causing a domino-effect backup that would fall exponentially upon the raw material supplier? The company should only instate the JIT concept after much research, modeling, and simulation of worst and best case scenarios of the entire system. Corporations that do not have “just-in-case” inventory and work on a JIT system usually have a known and predictable demand schedule that allows it to correlate its ordering schedule accordingly or it can control its demand, such as when it is the only manufacturer of a patented product. Perhaps an example of this could be Harley-Davidson. I do not know if it is still true now, but a few years ago certain models had to be ordered up to 2 years in advance because the production rate was so slow and the demand was high. Of course, such a low output can in some cases add to the desirability of the product, especially in cars and motorcycles. Once quantity and ownership increases, the products demand may actually decrease.
 
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jlowens

#10
Lean and JIT

Dell definititely used the lean and JIT approach. Dell has carries very little inventory so they don't have to discount any product. Inventory part tend to depreciate just sitting on a shelf so Dell doesn't have to deal with trying to get rid of unused parts. I think that Dell uses the pull system as well.They only order from vendors what they need at that time for that computer.
 
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