So let's talk about just in time. Just in time synchronizes production with customer demands. That means that products should be supplied to the right place, the right quality, and for sure quantity, at the right time. The limitation of just in time is a combination of three key elements, its pull, its flow, and its takt. Pull means that customer demand triggers production to be pulled through the system. Material is replenished based on consumption only, there is no production in advance, and stock is limited. So for example, there are pull systems where stock is limited by defined space for products. In the pull system, each process step informs the previous process steps of its needs. This reduces dramatically inventory, so that means a reduction of raw material, work in progress, and final product. And the result is for sure a reduction of lead time as well. Pull can be implemented by applying the Kanban principle. A Kanban is a signal telling the supplier, or the supply process, to produce and deliver a defined quality of products. Originally, the Kanban was a label containing information on a production batch. Like the item reference, its origin and destination, references of upstream and downstream processes, and the position of the manufacturing process. In addition to that, there were also some information like the quantity of products, and for sure, the number of Kanban costs. Do you know why number of Kanban costs is important? The thing is, that people exactly wanted to know how much inventory in the whole process is. But what the Japanese like to do is to remove some of the Kanban costs to remove inventory and see what happens, if the process still works. And if it still works, perfect, then they have produced inventory, and have a significant impact also on. The Kanban helps to adapt production to consumption, what is consumed is replaced. When the whole batch has been consumed, the Kanban goes back to the upstream part of the production process. There is one easy example for a Kanban, it's called two-bin system, or a two-bin Kanban. So you need to imagine you have two bins, at the beginning, both of them are full. Now I take something away, so it means I have an empty one and a full one. And the empty bin is a signal for the replenishment product to start to produce and replenish the product. That's an easy thing, do you know McDonald's, quite sure you do. So how many hamburgers do they have, have you seen it? Yeah, there's always a certain amount of hamburgers left. As soon as one of the burgers is taken off the shelf, it must replaced from the kitchen. That's the easiest form of a Kanban. The second important thing is flow. Flow focuses on smoothing workload and workstation and in between, so the goal is to have an equal workload at each station. Sometimes if you walk to different companies and you see people working, some of the workers, they work harder than the others in production. Do you think it's good, no, it's not, and we want to level that. Ideally, between all those operators or stations, there are no buffers of inventory in between. So that means that the small size of batches is crucial to minimize buffers. The ultimate objective is to reach a one-piece flow, so that means such as no buffers between the stations. And there's just one item is moved from one station to the other one at the same time, so, in total, the batch size is one. For example, in a factory for electronic components, you have to imagine there are three employees. Employee A puts the CPU in the casing, employee B who will attach it properly, and employee C will close this casing. Instead of having lots of semi-assembled products at each of the steps, each employee is working on one item at a time. After he finishes his work, he passes it to the next employee. In a one piece flow, it's necessary that the materials always move forward, that's something you need to remember. So whenever you have the chance to visit a Toyota plant, look at the material flow, it's perfect, it's a perfect example. You should note that flow requires all processes and logistics to be linked. Which means that all work processes need to be harmonized. Ideally, there's a clear takt between each of the production steps. Takt means to harmonize the system speed, and to synchronize it with customer demand, so the customer is always a trigger point. Now imagine, you have a sandwich shop and there are about 30 customers entering your shop per hour. So that means if you want to calculate the takt, you need to take 60 minutes divided by 30 customer, which gives you a required takt time of 2 minutes. So that means your sandwich making process should produce one sandwich every two minutes. However, now the situation is, you now produce one every six minutes. So the result is, your customers will have to wait, you like the situation? No, so we should change that, but how do we do that? So, first thing, we need to measure the cycle time, that is, the time for all activities at each of the steps of the process. In this sandwich making process, there are currently four employees, and three workstations. Workstation A, you have one employee, and this guy he needs two minutes to do his job. You have workstation B, there's another employee, who needs four minutes to his job. And you have workstation C, so there are two people, and they need together just one minute to do their job. Do you see already the issue? Well, workstation B, that's the bottleneck, so that means finally that's the reason why your customers have to wait. Because the whole value stream cannot work according to the required takt time of two minutes. So that means in addition to that, in front of B, you will find a lot of sandwiches waiting. And that's something we need to remember anyhow. So whenever you see a lot of inventory in front of a process compared to the others, it's a typical sign for a bottleneck. It is obvious that there is a redesign needed, so important that you remember the takt time, we need two minutes, so what do we now? Let's start to think through, workstation A is fine, because it works according to takt. How about workstation B, it's too slow, right? So workstation B needs an additional employee to cut workload and process time by half, in order to work according to takt, two minutes. And you have workstation C, which is way too fast. So that means what you can do, you reallocate the additional employee to workstation B. After that, he works according to takt, which means two minutes. Now, the result is that your customer is happy, because the customer doesn't need to wait anymore, and is served fast. So that means in total, the extent of production, the whole value stream, it works according to customer demand. The process of eliminating bottlenecks Is also called debottlenecking. That's something you might want to remember. And it's very, very critical to the whole just in time approach. To conclude, just in time avoids inventories, and ensures that customers are delivered with reliability by applying pull, flow, and takt.
