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Using Just In Time manufacturing

barrels41840423.jpgTo keep up with customer demands, companies are turning to shorter cycle times. With all the pressure to have shorter cycle times, manufacturers put additional pressure on their equipment and on their suppliers. Companies have found that holding inventory ties up their cash reserves and they actually lose more money than they make. Inventory forces companies to find a warehouse to house the inventory not to mention the cost of delivery to and from the warehouse. A smart way to gain control of your inventory is to implement just-in-time manufacturing.

To understand how just-in-time manufacturing works, think of it like flying. You arrive at the airport, check-in your bags, go through security, check into the gate, and walk right onto the plane only to have it take off just seconds after you sit down. Just-in-time manufacturing works similar to this in that product is produced on demand so valuable time is not wasted. Employees and equipment are not being paid to sit by idly. They are being paid to produce a product at exactly the right time to maximize their job duties and improve productivity.

With just-in-time manufacturing, companies eliminate costs that have no value to the company or to the final product. Typically the waste you will eliminate includes carrying too much inventory, faulty machinery, improper production methods, and unnecessary movement of goods.

Typically just-in-time is used by companies with repetitive processes that produce the same product on a consistent basis. Just-in-time will zero out inventory and hold only one of each product you sell. This will reduce inventory waste and it improves company costs because of the long-term maintenance of your products.

Since you are not holding inventory, you can focus on daily production. This helps you avoid paying employees to stand by a machine that isn't being run. They will always have a job to perform.

Just-in-time also reduces set-up costs since you no longer need to worry about setting up the assembly line for one product at a time. You will designate certain machines and times and it will cut down the set-up times by 50 percent. Establish goals for set-up times and try to keep them under 10 minutes. This helps everyone on the line to communicate effectively and it helps for people to have better planning and search for ways the product can be re-designed to save more time and money. While this may sound like you are spending more time on set-up, it is actually less if you calculate in how much time you spent controlling inventory and dealing with machine changeover times.

Since people are required to communicate more, it helps to keep the machines on consistent schedules. This will directly impact your labor costs because you can determine how many people you need on-site and which ones can be transferred to other jobs while certain products are being produced. Training your employees to have multiple skills will save the company thousands of dollars on wasted compensation. Employees that have more training find that management assigns them with more responsibility, which helps to increase employee morale and job satisfaction.

Just-in-time helps companies to find the problems and fix them before they become worse. This can help you cut back on the number of employees you need to run the equipment and it can help you to regulate your cash flow better. By producing only what you need, when you need it, you eliminate the room for errors to occur. The only errors that may occur should happen from your employees and their poor decision-making skills. To improve their behavior, you will need to address the way they perform their job using other programs like behavior-based safety.

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Posted by DF
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