The traditional approach to manufacturing management promotes a strong focus on machine and labor utilization.The view was that if managers make sure that workers and machines are always busy, then surely the factory will be productive and efficient.This approach is called the "push" system of manufacturing, where raw material and work-in-process is continuously pushed through the factory in the pursuit of high utilization.The problem with this approach is that it usually produces high levels of inventories, long lead times, overtime costs, high levels of potential rework, and workers who are competing with one another rather than working cooperatively.
In contrast to the push system, JIT espouses a "demand-pull" system that operates on the rule that work should flow to a work center only if that work center needs more work.If a work center is already occupied with work activity, the upstream work center should stop production until the downstream work center communicates a need for more material.The emphasis on maintaining high utilization is removed in a JIT environment.The focus of a JIT environment is on addressing the challenges that affect the overall effectiveness of the factory (setup time reduction, quality improvement, enhanced production techniques, waste elimination, etc. ) in meeting its strategic goals, rather than allowing excess inventory to cover up inefficiencies that reduce the factory's competitiveness.
Quick setups to reduce lot sizes
The longer it takes, and the more expensive it is to setup equipment and labor to produce an item, the greater the quantity of items that have to be produced in a given production run. Traditional production management philosophy promoted the notion that long production runs of the same item were the key to driving down unit costs. The problem was that large production runs created large quantities of WIP and finished goods inventory that far exceeded the demand. These items would consequently cause high levels of inventory costs, long lead times, high potential rework, low flexibility in responding to customer needs, etc.
Driving down setup costs and setup times are key to dramatically improving factory competitiveness in a JIT environment. In the 1980s, the 3M company converted a factory that made a few adhesive products in long production runs into a factory that made over 500 adhesive products in small production runs. To keep unit production costs under control, 3M studied the setups on its coating machines. Since the cost of chemical waste disposal was a major part of the cost of changing over a coating machine to make another product, 3M shortened the length of hoses that needed purging and redesigned the shape of the adhesive solution holding pan on the coating machine to be shallower. 3M also used quick-connect devices, disposable filters, and work teams to speed up setups. The result was that 3M could maintain low unit costs on its coating machines while producing small lots of hundreds of products to meet market demand quickly.