BUS300 Study Guide

Unit 5: Just-In-Time and Lean Systems

5a. Discuss the origin of the "just-in-time" (JIT) philosophy

  • What is the basic principle behind just-in-time manufacturing?
  • How has JIT evolved from its origins to current business practices?

JIT focuses on the elimination of waste in a management or production system. This waste can be in the form of actual material, work, or time.

JIT was first used by the Japanese corporation Toyota. Today, this practice is utilized in many manufacturing industries. For example, a company may seek to reduce waste in how material goes from one step to another, making each step reliant on the needs of the next step or internal customers in the system. This process is known as KANBAN and enables wastes to be identified by programs that point out deficiencies or needs.

To review, read JIT.


5b. Apply continuous quality improvement strategies to improve organization processes

  • What are some of the characteristics of continuous quality improvement?
  • What factors contribute to a culture of continuous quality improvement?
  • What are the stages for change to a continuous quality improvement culture?
  • What are the core competencies of an organization that uses a continuous quality improvement strategy?

Continuous quality improvement recognizes that this is a process of ongoing learning, training, and applying new ways to make change. It requires a commitment to incremental revisions, rather than a quick-fix, by skilled and knowledgeable workers.

For continuous quality improvement to be a successful part of an organization's operations, a culture of curiosity must exist. People must be open to asking "how" and "why". There must be a practice of reflection, where feedback is sought and desired. There must be a tolerance for failure and an understanding of when corrections are needed. Feedback received must be used, and an evaluation of an entire system should be considered, as well.

The stages an organization goes through to change to one of continuous quality improvement include: dormant, where the organization is not sure where to begin, and members tend to feel overwhelmed; testing and coordinating, where the organization collects data, which is not yet connected to goals or plans; empowering, where performance indicators are widely used throughout the organization, with individual members taking responsibility for analyzing and applying results.

Organizations with a culture of continuous quality improvement tend to measure outcomes, as well as their efforts. They can identify the indicators used for measuring outcomes. They are clear about what they want to accomplish and have the skills and knowledge to reach their goals. They have a culture of learning and gathering information and can communicate their findings both internally and externally. There is leadership support and the support of staff members, and changes can be made as needed.

To review, read Continuous Improvement, What is a Kaizen Event?, and Creating a Culture of Continuous Improvement Based on Data.


5c. Categorize non-value-adding activities into eight types of waste

  • What are the eight types of waste as identified by both lean and six-sigma practices?

Both lean and six-sigma identify the same types of waste that can impact sustainability. Inventory waste addresses the inefficient uses of finances and resources. Talent waste refers to an organization's inefficient use of their internal talent and dissatisfaction among workers. Waiting waste occurs when machinery is idle or at low-capacity, resulting in increased costs and inefficient use of resources. Motion waste is when workers expel more energy than is needed, resulting in injuries and exhaustion. Defects waste results in excess refuse from packaging or materials and can decrease employee morale. Transportation waste can reduce opportunities for sales and can also increase distribution costs. Overprocessing waste causes unnecessary work and creates the potential for injury. Overproduction waste decreases profitability and increases overhead.

Review these resources. SBDC Lean Manufacturing Success, Operational Efficiency, and The Eight 8 Wastes of Lean.


5d. Explain the use of "kanbans" in JIT pull systems

  • How does the Kanban method process facilitate efficient manufacturing processes?
  • Why are materials for each step held back until they are needed?

Kanban is a method of manufacturing that incorporates visual signs and signals to help visualize the workflow. This helps teams see how their work is moving and make adjustments for greater efficiency.

This process also reduces the time it takes for an item to travel through the system by limiting the amount of unfinished work there is in the process. As a result, teams can work more quickly to produce a quality item in a more sustainable environment.

Since Kanban processes control the rate at which merchandise is produced, raw materials are delivered only when needed or "just in time". Products that are required for each step are identified only when the previous process has been completed.

Kanban can be applied to both for-profit businesses as well as for non-profits. The process can also be used in manufacturing goods, as well as in the delivery of services.

For more details, watch Open Kanban and read Kanban.


5e. Describe the strategic elements in Lean for use in manufacturing and service organizations

  • What are the characteristics of a lean system, and how can managers benefit from this system?
  • What are the five core principles of lean?

Lean control involves the non-financial aspects of a business's operations and focuses on improving quality and decreasing waste. While this process was originally used only in manufacturing, it is now used for all product and service development and related processes.

To gain the most from a lean system, managers must first understand what they seek to accomplish and identify the specific tools and techniques that will be effective for achieving their business goals and which tools are not appropriate.

The first core principle of lean control is to always look at the value being provided from the customer's viewpoint. Managers must understand how a product meets customer needs and seek to meet those needs by providing value at a price the customer is willing to pay.

The next step is to describe the activities required to bring a product to the customer. This is known as the value stream and includes both manufacturing processes and other activities such as purchasing and materials management. A manager's responsibility includes ensuring that only activities that provide value are performed.

The third step is to ensure that the process moves smoothly from one stage to another. This is referred to as "flow" in each value stream and seeks to increase flexibility and lower costs.

Lean control also requires that production takes place at the customer's demand, known as a "pull" strategy. This helps reduce lead times, increases flexibility, and seeks to meet customer demand rather than predict it in advance.

Finally, a lean process seeks continuous improvement, known by the Japanese word Kaizen. This mindset accepts that improvement is always possible, with companies launching kaizen events from time to time to improve specific activities or processes.

To review, read. Lean Manufacturing and Lean Control.


Unit 5 Vocabulary

This vocabulary list includes terms that might help you with the review items above and some terms you should be familiar with to be successful in completing the final exam for the course.

Try to think of the reason why each term is included.

  • just-in-time (JIT)
  • continuous quality improvement
  • corporate culture
  • curiosity
  • tolerance
  • feedback
  • Kaizen
  • lean
  • Six Sigma
  • sustainability
  • inventory waste
  • talent waste
  • waiting waste
  • motion waste
  • defects waste
  • transportation waste
  • overprocessing waste
  • overproduction waste
  • five core principles of lean
  • customer satisfaction
  • value stream
  • flow
  • pull strategy