Prepared by Abdul Qadir, for Proj Procurement and Contracts Subject taken by Sir Usman Khalid, if anyone needs its report in document form can approach me at abdulqadirmail@gmail.com

1. Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

2. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

3. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
Introduction and History of Toyota
Toyota Production System (TPS)
JIT and other TPS Terms
JIT Philosophy
JIT Process & Principles
Questions......
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

4. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
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Sakichi Toyoda (1867-1930)
Automatic Loom
Kiichiro Toyoda (1894- 1952)
Used chain conveyor into the Assembly line
Eiji Toyoda (1913)
Implementation of Jidoka and JIT
Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

5. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
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6. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
ANDON
JIT
GENCHI GENGUSTU
KANBAN
HEIJUNKA
KAIZEN
OSHIN
MUDA
JIDOKA
NEMAWASHI
JISHUKAN
POKAYOKE
YOKOTEN
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

7. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
One of the two main pillars of TPS. It
refers to the manufacturing and
The
pull system
conveyance of only “what is needed,
when is needed, and in the amount
needed in the system”.
Take time
Continuous
Fow
1. The Pull System
2. Continuous Flow Processing
3. Take time
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

8. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
JIT is a philosophy of continuous improvement in which non-valueadding activities (or wastes) are identified and removed for the
purposes of:
◧ Reducing Cost
◩ Improving Quality
◨ Improving Performance
◪ Improving Delivery
♦ Adding Flexibility
▬ Increase innovativeness
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

9. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
“A philosophy of manufacturing based on planned elimination of all
waste and continuous improvement of productivity. It encompasses
the successful execution of all manufacturing activities required to
produce a final product, from design engineering to delivery and
including all stages of conversion from raw material onward. The
primary elements include having only the required inventory when
needed; to improve quality to zero defects; to reduce lead time by
reducing setup times, queue lengths and lot sizes; to incrementally
revise the operations themselves; and to accomplish these things at
minimum cost."
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

10. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

11. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
⋑ Higher amount of machine/worker idle time
⋑ More efficient when demand pattern is stable
⋑ When there is a sudden change in the demand pattern it will take
time for JIT system to react since there is no central information
unit
⋑ It may be difficult and expensive to introduce
⋑ There is little room for mistakes as minimal stock is kept for reworking faulty product
⋑ Production is very reliant on suppliers and if stock is not delivered
on time, the whole production schedule can be delayed
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

12. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
⋑ Higher amount of machine/worker idle time
⋑ It requires more training, more consciousness, more employee
commitment
⋑ More difficult goals to be attained
⋑ Coordination between customer and suppliers need to be much
better and disciplined
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

13. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
A small time that is the key control for JIT production
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

14. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
A unique production control method
It can be based on supermarket method
Taiichi Ohno ,promoted the idea of JIT, applied this concept
KAN= card
BAN=signals
It is a Japanese word for card & the use of card is central to many
Japanese control systems including one at Toyota whose kanban
system has received
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

15. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

16. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
Non-value added. Muda is translated as waste
There are Seven types of muda
OVER
PRODUCTION
MOTIVE
WAITING
MUDA
CONVEYANCE
CORRECTION
INVENTORY
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PROCESSING
Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

17. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
Reduce Setup Times
All setup practices are wasteful because they add no value and they tie up
labor and equipment. By organizing procedures, using carts, and training
workers
Small-Lot Production
Producing things in large batches results in huge setup costs, high capital
cost of inventories. Because Toyota has found the way to make setups short
and inexpensive
Employee Involvement and Empowerment
Toyota organized their workers by forming teams and gave them the
responsibility and training to do many specialized tasks
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

18. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
Quality at the Source
To eliminate product defects, they must be discovered and corrected as
soon as possible. If a defect cannot be readily fixed, any worker can halt the
entire line by pulling a cord (called Jidoka)
Equipment Maintenance
Toyota operators are assigned primary responsibility for basic maintenance
since they are in the best position to detect signs of malfunctions
Pull Production
To reduce inventory holding costs and lead times, Toyota developed the
pull production method wherein the quantity of work performed at each
stage of the process is dictated solely by demand for materials from the
immediate next stage
Supplier Involvement
Toyota treats its suppliers as partners, as integral elements of Toyota
Production System (TPS)
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

19. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
A system of continuous improvement in which instances of Muda (waste)
are eliminated one-by-one at minimal cost. This is performed by all
employees rather than by specialists
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

20. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan

21. Impact of JIT Inventory on procurement function in Perspective of Toyota Motor Corporation
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Project Procurement and Contracts, MSPM, Riphah International University, Islamabad, Pakistan