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Job shops in the JIT era.

Job shops in the JIT era

There is concern among industry leaders that the progress made in implementing Just-In-Time (JIT) is getting stalled at the job-shop level. For the last eight years America's leading OEMs have been laying the foundation for JIT in their own plants. But total JIT cannot be achieved without incorporating the supplier network into the JIT fold.

Contract shops supplying precision sheet-metal parts manufacture over half of all the sheet-metal components used in the industry. However, despite clear indications that OEMs must cut their prices, reduce their lot sizes, and improve their quality to remain globally competitive, job shops remain reluctant to implement the techniques that can help their OEM customers meet the challenge.

Recently, I visited a precision sheet-metal job shop in Arizona that had taken a proactive approach to implementing JIT. Instead of waiting for their customers to force them to JIT, they implemented it on their own. Once they had laid a good foundation, they began to use JIT as a marketing tool to increase the volume, and especially the quality, of their business. After winning several long-term contracts they carried JIT implementation to even higher levels through cellular manufacturing. This JIT strategy differs from that taken by most job shops, who simply acquire extra warehouse space and then inventory their customers' parts until ship date.

Unfortunately, most job shops will not consider implementing JIT unless they have the long-term contracts and funding to help in the implementation process. But is it reasonable to expect a world-class OEM requiring JIT to provide long-term commitments to a supplier who has not demonstrated any JIT expertise?

I recently met a buyer from Hewlett-Packard. His plant had extensively implemented JIT and had made much progress in a JIT supplier network. However, they had not made any progress toward establishing a JIT sheet-metal supplier. He said that many companies claim they do JIT, but when their operations are scrutinized they are found lacking in even basic JIT technologies. This buyer had surveyed over 50 firms in the US and Europe, and found only two that manufactured in a JIT mode. He asked if I knew of any job shops who were doing real JIT. I mentioned the shop in Arizona.

I followed up with this buyer. He still had not found any local shops that could do what his division was looking for, but he was impressed with the Arizona shop and was considering establishing a working relationship. It is HP's policy to have as few suppliers as feasible for each commodity, so this job shop stood to get a substantial portion of the division's business. To help take total advantage of JIT, HP was willing to provide, in addition to a long-term contract, a stable forecast for 12 weeks.

The surprising thing, however, was that this Hewlett-Packard plant is in the Mid-Atlantic region, yet they're considering a long-term relationship with a job shop in the Southwest. That's how important JIT is to them! Would it have been better for them to gamble on a local job shop, which had good intentions but no prior experience with JIT? This particular buyer did not think so.

Both of these companies demonstrate the kind of attitude and thinking necessary to carry JIT successfully to the supplier level. The job shop made an investment in JIT without coaxing, and the OEM was willing to make a long-term commitment to help further the JIT process.

If JIT is the answer to the manufacturing reformation so badly needed in this country, and the job shops are seen as the major obstacle to JIT implementation, what then needs to be done? As I see it, two changes are necessary.

First, OEMs who are interested in JIT must be willing to provide high-volume, long-term contracts to suppliers. This allows the suppliers to implement the focused layouts, or machine cells, that are so effective in improving quality, boosting productivity, and reducing setup time necessary for quick turnaround. Long-term contracts also allow the job shops to make arrangements with their own suppliers to get the best terms and availability.

Similarly, job shops must be willing to implement basic JIT techniques on their own initiative and then learn how to market this expertise to their clients.

The road to manufacturing reform in this country lies through Just-In-Time manufacturing. It is the only manufacturing strategy broad enough to encompass the needs of the global markets that we compete in.

Jerry Rush Director of Marketing US Amada Ltd Buena Park, CA
COPYRIGHT 1991 Nelson Publishing
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:just in time
Author:Rush, Jerry
Publication:Tooling & Production
Date:Jul 1, 1991
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