I’m not sure exactly when the metamorphosis happened, but I indelibly remember when I started reading that JIT (Just-in-time) was an inventory management system. To make matters worse, Production Planning and Purchasing managers were saving their companies very large bucks by moving their inventories to the books of their suppliers. Wasn’t this great! Instant cash! And some managers were really brilliant in that their future inventories were now in a supplier owned warehouse just across the street from them. This was lauded as JIT inventory. What more could you ask for!
That metamorphosis made me really sad. I had spent almost a decade recognizing that JIT wasn’t an inventory management system, but a very powerful, innovative production management system. To quote the Toyota global website of today:
“Just-in-Time” means making “only what is needed, when it is needed, and in the amount needed.”
The key word there is “making”. They evidently missed out on the metamorphosis.
To revisit what my understanding of JIT is and was, please go to the first two parts of my “What is Lean” series here and here. JIT is all about “flow” of materials and information. And this “flow” is measured by “time”. But inventory is a consumer of “time”. Time should be used to make what you need, not to store what you don’t need.
This is not a new problem, but a problem that unfortunately keeps getting forgotten.
“The easiest of all wastes, and the hardest to correct, is the waste of time.” – Henry Ford (Today and Tomorrow)
Yes, it is very easy to waste time. All you have to do, is do nothing. To correct it requires work.
But a focus on flow will point everyone in the right direction. As Bob Emiliani has said:
“Flow focuses problem-solving, to achieve the desired outcomes: higher quality, shorter lead-times, and lower costs.”
And that is where the combination of JIT and Jidoka, the two pillars of the basic TPS House, plays such a pivotal role in making Lean work.
JIT involves the constant development and optimization of the processes embedded within your production system to maximize flow and minimize time. These processes are there for only one reason, to create value. And if some processes do not add value, they are waste and need to be eliminated. But remember that all processes consume time. Therefore, eliminating these non-value added processes – this waste – reduces the time consumed. And voila! Your lead time is shortened. See the roof of the TPS House to see why this is so very important.
Thus the ultimate goal of JIT is to reduce time. While time does not necessarily identify the waste (but it can), time is the correct measure for identifying/measuring waste reduction. This applies no matter the type of waste, since all waste is a consumer of time.
Reducing waste reduces lead time which improves flow. And the ultimate objective is continuous flow. That’s why it is in the center of the JIT pillar of the basic TPS House. Continuous flow leads to the shortest lead time – which is one of our ultimate goals. And the shortest lead time leads to the highest quality and lowest cost – our other ultimate goals.
And this brings us to the second pillar of the TPS House – Jidoka. (I covered Jidoka in some detail in “What is Lean – Part 2”).
Jidoka is a signal that makes visible any excess variation or interruption of flow. It may also interrupt flow if defects are detected. More importantly, Jidoka makes time waste visible. Whether it uses andon cords and lights, or a poka-yoke device, or bells, whistles, sirens, etc., etc., Jidoka tells you there is a flow problem that is imperiling JIT. And that problem must be fixed NOW!
Jidoka is a GPS device for knowing where to do kaizen.
There are two kinds of work that must be carried out in a production system:
- Work done by the system to create value
- Work done to the system to eliminate waste
Kaizen is the work done to the system to eliminate waste. And jidoka points you to where that waste is hiding.
Inventory is probably the most notorious hider of waste that we can experience in any production system. It is a waste that hides other waste. It is sometimes politely called a “buffer”. But a buffer to what? A buffer to process instability and variability. So rather than deal with this instability and variability we just hide it with inventory. We buffer it! We purposely waste time in order to hide other waste. Double trouble!
So a good place to start in a new Lean transformation is to start by reducing inventory. Start uncovering the hidden waste that is always there. That is where jidoka comes in. When a critical inventory level is reached, flow becomes unstable or stops completely. (Of course flow stopped a long time ago when the inventory was created in the first place. But nobody was there in the warehouse to notice the stoppage). But with jidoka, we know where to apply kaizen.
There are two ways to reduce inventory: gradually or all at once.
If you do the reduction gradually, the flow disruptions may be minimized, but the kaizen part becomes more difficult. The problems are usually experienced by the process downstream from the inventory buffer, but the problem usually originates in the upstream process. Jidoka is not always visible where the problem originates. The processes are independent spatially, but interdependent with respect to flow. Problem solving can become time consuming. Sounds a little wasteful?
Then there’s the more exciting approach. Eliminate the inventory overnight. Maybe “scary” is a more appropriate word than “exciting”. But there is a way to do this successfully. I have done it many times. I am talking about forming manufacturing cells. This involves moving several independently located processes close together to form a unified interdependent cell with little or no inventory between the various processes. A “U” shape layout is typical where everyone can observe all process steps and communicate freely.
But won’t this result in total chaos? Maybe, at least for a short time. But the Jidoka signals are visible to everyone at all times. Problem solving is much easier since it is occurring in real time. And everyone is involved because the problems are affecting everyone at the same time. Flow disruptions are not minimized, they are maximized – for a while. But flow and time are visible to everyone. They can see it firsthand. There is little theorizing – everyone is dealing with cold hard facts – and I mean everyone. This is kaizen at its max.
Try it, you may like it. I do. But that is a decision that has to be made after considering many specific factors such as process complexity, process stability and overall preparedness to move quickly. It will always be a local decision.
But to sum it all up, Jidoka is the key to making JIT happen and allow it to move closer and closer to the ultimate nirvana of continuous flow. Jidoka makes time waste visible – it’s about “time”. And don’t forget:
The underlying principle behind TPS/Lean is the systemic creation of the shortest possible lead time for the continuous flow of materials and information in order to generate the highest quality and lowest cost.
I would like to end this three part series on “time” with a few quotes that I have gathered together from various readings. These also overlap to some extent with my posts dealing with systems, ROI and how to think differently.
This first set of quotes comes from a book I have mentioned previously. This would be Demand Driven Performance by Debra and Chad Smith.
“Once we realize the importance of flow, a few key principles emerge:
- Time is the ultimate constraint. Time is the most precious resource employed in the manufacturing process. …What we must always keep in mind is that the important time is the time it takes to move through the system. Without this in the front of our mind, we can misuse and distort behavior around time (particularly at the resource level).
- The system must be well-defined and understood. Clear definition about how materials and information should move will determine whether the system is even capable of maximizing flow.
- Linkages or connections between points in the system must be smooth. Materials and information need to smoothly pass from one point to the other. …
Putting these principles together gives us an elegant point. A company’s ability to better manage time and flow from a systemic perspective will determine their success in relation to ROI.”
“…the speed of flow of relevant information and materials directly corresponds to a for-profit company’s ultimate goal – maximizing the return on shareholder equity. This connection between flow and return on investment (ROI) has always existed. …Shareholders should be asking fewer questions about costs and instead demand answers about flow.”
“Companies have lost their connection to flow over time and replaced it with a mathematically inappropriate equation of unit cost over time.”
“Prioritize improvement efforts based on identifying and then removing whatever blocks flow.”
“Touch time labor today averages less than 7% of the product cycle time (meaning parts and product are waiting to be worked on 93% of the time) and direct labor accounts for less than 10% of total product cost in most manufacturing organizations. The opportunity for supply chains is not labor or machinery productivity gains but to focus on getting rid of the “wait time” that impedes flow.”
These two quotes are from a Linkedin discussion forum discussing the importance of flow within TPS. My saved link to this discussion no longer works so I can’t direct you to it – at least not yet.
“The world would be different if managers would not go to work every day trying to find ways to decrease costs but instead, they would FOCUS on ways to reduce TIME. The only thing that the world must change is a single word: replace cost by time and this whole thing would be really different.” – David Poveda
“Lean’s strategy is to ‘reduce time-to-cash’, and its tactic is ‘eliminate waste’.” – Eduardo Moura
These quotes are from a 1977 paper published by the Toyota Production Control Department entitled Toyota Production System and Kanban System Materialization of Just-in-time and Respect-for-human System. I have included these to illustrate how today’s Lean has, in many ways, strayed from the original philosophy of TPS. By the way, the F. Cho listed as a co-author later became Toyota’s President, CEO and Chairman.
“The just-in-time production is a method whereby the production lead time is greatly shortened by maintaining the conformity to changes by having “all processes produce the necessary parts at the necessary time and have on hand only the minimum stock necessary to hold the processes together”
“The underlying concept in just-in-time production systems is that the value of existence of inventory is disavowed.”
About jidoka: “Control of abnormality becomes easy. It will only be necessary to make improvements by directing attention to the stopped equipment and the worker who did the stopping. This is an important requirement when making up the system of ‘full utilization of workers’ capabilities’.”
As a footnote, this paper may have marked the first time the terms “Just-in-time” and “Jidoka” were used in an English publication. A Google search indicates their origin as 1977.
And I can’t think of a better way to wrap things up than to include this quote from Russell Ackoff, one of our foremost “systems thinkers”.
“Managers who don’t know how to measure what they want, settle for wanting what they can measure.”