Just-in-Time: A Case Study of the Grind Behind the Glamour

INTRODUCTION It has now been more than a decade since the active propagation of just-in-time (JIT) manufacturing techniques began in the United States.[1] Yet, in spite of all its stated advantages, not many companies outside Japan can claim to have embraced these methodologies extensively and successfully. One easy explanation for this would be to describe just-in-time manufacturing as a phenomenon heavily based on culture. However, this reasoning is too simplistic, for it ignores the other components involved in JIT implementation. Many other factors have also contributed to the lack of success with JIT methods, most of them relating to "commitment" to the concept. One reason for this lack of success is the confusion of the means with the end. One researcher, for example, points out that inventory reductions (a hallmark of JIT) should not prompt factory reform, but be the result of it.[2] In other words inventory reduction is the end result and not the means for improvement, though many seem to have confused the two. Short-term inventory reduction can be achieved by fiat, although this effect will not last long without having a permanent adverse impact. Long-term inventory reduction can come about only through careful and painstaking improvements in the manufacturing and planning process. Theoretical studies show that reducing set-up times and making other process improvements are very effective methods of cutting inventory levels and improving yield rates. They show that improving the manufacturing process may be of more importance than the manufacturing system used.[3] Some describe JIT systems in which systematic process improvements have been carried out as "pragmatic" JIT, as opposed to "romantic" JIT. Romantic just-in-time paints grand visions of efficient and coordinated manufacturing, without really emphasizing the effort required to achieve it.[4] While there are many books and articles on Japanese manufacturing, most of them do not sufficiently stress the intensity of the planning effort required to operate JIT systems effectively. This article, based on observations at Fuji Electric, a large Japanese manufacturer, describes some of the grind behind the glamour of JIT. It details some practical strategies adopted by Fuji to ensure effectiveness in manufacturing. The next section of the article describes the planning emphasis, while the final section deals with the company's approach to supplier control. PLANNING EMPHASIS Romantic JIT considers the manufacturing process, both in the factory and with outside suppliers, analogous to the water system in a community. The supplier pipeline can be turned on or off at a moment's notice. This vision is impractical in most cases because it ignores the effect of capacity. A city water system has the capacity to hold an immense amount of inventory at various stages, including reservoirs, pumping stations, and pipelines. The amount of inventory far exceeds the periodic demand. The result is that water is available at the turn of the tap. If a manufacturing system had similar capacity characteristics, with infinite resources, the pipeline analogy would be a good one. The system could hold inventory at all stages, and any demand could be met instantaneously. In reality, organizations face resource constraints. Capacity is finite, although there is still the pressure to reduce delivery times and be responsive to changes in customer demand. Inventory, whether held at the supplier's shop or the buyer's site, eventually costs the buyer money. An essential element in achieving zero inventory is therefore careful and exhaustive planning, so that the supplier produces and delivers the item just when necessary. This presentation describes how a Japanese manufacturer maintains minimum inventory through a combination of better planning and progressive supplier management. The study described here was conducted at one Japanese plant of Fuji Electric, a large electrical equipment manufacturer. …