There’s nothing new or mysterious about “just-in-time” or JIT manufacturing. The idea has been around since the 1970s, and all it means is that you receive what you need just when you need it -- hence the popular term just-in-time delivery.
Yet, when it first came into practice, it shook up manufacturing. Why?
How Does JIT Manufacturing Work?
Good question. Before answering, it should be said that, when everything that goes into supply system management, including JIT, is looked at together, it’s not so simple.
Now, to answer the question of why JIT shook up manufacturing: On the manufacturer’s side, JIT cut inventory drastically. No longer did raw materials or parts sit around waiting to be used and piling up, stealing valuable space and representing little but expense.
The stuff had to be paid for, whether used in a week or 10 years or never. And, of course, that cost had to be passed along to customers.
On the customers’ side, JIT meant their parts or finished products would arrive as they were needed, so they wouldn’t stack up and cost money before they could be used. In other words, the whole supply stream benefited as customers became suppliers and so on down the line.
What’s so Great About JIT?
Essentially, JIT, as part of an overall approach to manufacturing efficiency, reduces costs and boosts productivity.
That’s great. But it’s important to remember that JIT is just one component of a much larger supply system management program -- a very important component, yes, but still only a part.
What JIT Means to Us
At Dahlstrom Roll Form, JIT manufacturing is essential to a system that has one purpose: to make sure the company doesn’t make too many components for a customer or run out of product when it’s needed. So, essentially, it’s a production system based on inventory management at both ends of the process -- raw materials and finished goods -- which, in turn, become the customer’s raw materials.
It’s easy to see how things could go wrong with a system that doesn’t have a lot of give to it. One miscommunication about what product should be where when can screw everything up and make the system collapse like a line of dominoes. That’s why the real key to successful JIT and supply system management is customer service.
What's Love Got to do With It?
(Photo courtesy InSapphoWeTrust)
Another good question. The answer is easy: Good, loving customer service is mostly good communication. Dahlstrom conducts quarterly reviews with customers to:
- Look at consumption data and answer questions about the parts Dahlstrom makes for the customer. The information allows customers to conduct their own investigation into their usage and needs.
- Adjust the estimated annual usage (EAU) data used to run the system. Trigger points for releasing additional materials are based on the amount taken the previous time versus the ‘live” EAU plan.
- Determine customer plans or changes for the future.
These quarterly get-togethers are helpful from the start, but after a couple of years, they become extremely valuable in understanding customers’ inventory use in peak and slow seasons.
How Do JIT & Supply System Management Work at Dahlstrom?
With good customer communication in place, inventory management techniques can function at their best. Here’s a quick look at two operating techniques that help us control our inventory yet still allow us to respond to customer needs.
Part prices are determined by looking at the setup time vs. the number of pieces you order. If it takes 5 hours to prepare the machine, setup costs are a large part of the total.
Consider this scenario. For a run of 1,000 parts for inventory, it takes one person 6 hours to set up a machine. Two people can do it in 3 hours.
In the first case, 6 hours are spread out over 1,000 parts per cost. In the second case, 3 hours of machine time is spread over 1,000 parts.
But beyond that, there’s another option. Either make the 1,000 parts (and gain 3 hours of machine run time) or make just 500 of them (equal to your 6-hr./1,000 parts cost, but you gain the 3 hours PLUS your inventory is cut in half PLUS the actual run time to make the parts is halved!).
In other words, cut the inventory in half or run the full 1,000. It all depends on your need.
Having a shorter run time does provide opportunities to do more. It might be to fit another customer’s urgent order into the 3-hour opening; or, just advance the schedule up 3 hours, creating a lead-time advantage for all scheduled Dahlstrom customers.
Maximizing Capacity With Smaller Runs
In roll forming and all manufacturing, a direct relationship can be shown between setup time and maximizing capacity by managing run size. The option to run smaller amounts should always be on the table.
There’s a myth out there that claims roll forming is ill-suited for smaller runs. Dahlstrom actually specializes in small- and mid-sized runs, so this is simply not true. Larger, dedicated runs are nice, but we can manage mid-sized runs just as well.
Learn More About JIT in Roll Forming
The best way to see how JIT and supply chain management work is to talk to a roll forming manufacturer who uses them. It’s the first step toward enjoying the benefits of consolidated costs and smooth deliveries!
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