JIT and the job shop

Modern Machine Shop, April, 1992 by Tom Beard

Most people think just-in-time production is impractical in the unpredictable environment of a job shop. But this sheet metal fabricator shows how the smaller shop can do it too.

Is just-in-time (JIT) manufacturing just for larger, product line manufacturers? Although some people may think so, Matt Thul stands ready to prove them wrong. As vice president of manufacturing, Mr. Thul has overseen the successful implementation of JIT at Arizona Precision Sheet Metal, a 120-person job shop in Phoenix. He knows it works, and that other shops can do it too. But he also knows that successful implementation takes a major commitment and a lot of hard work. And it takes a more pragmatic approach than some JIT purists would prefer to sustain a program in the unpredictable environment of a job shop.

The first target of Arizona's JIT program was to reduce inventory, and they have surpassed even their own expectations. The eight weeks worth of cushion that they used to keep has been shrunk to less than one, and average sheet metal inventory is now less than three days. Overall, Mr. Thul estimates that they have removed better than fifty percent of the work-in-process from their shop floor, and the reduction in finished goods is even larger yet.

They've also found a host of other benefits. Quality is better. Leadtimes are way down, and as a consequence, they are much more flexible to customers' changing needs. Best of all, throughput has dramatically increased. The proof: In 1988, Arizona Precision had 160 people and did some $6 million in sales. Last year they did twice the business with a little more equipment, the same space and 40 fewer people. Mr. Thul credits most of these gains to JIT.

Managing the change, however, has been no simple matter. JIT has changed virtually every aspect of how Arizona Precision conducts business both on and off the shop floor. Technology is part of the formula, but only a part. It also involves changing the way the shop is structured, the way people approach their work, and the ways the company deals with their customers and suppliers. Here is how it all fits together.

Getting Started

Unlike many companies which launch full scale manufacturing improvement programs, Arizona Precision was not coerced into action by drastically deteriorating business conditions or obtrusive customers. Founded by John Thul (Matt's father) 26 years ago, the company had been a successful manufacturer of precision sheet metal parts of all types, and developed a strong niche in producing cabinets for gaming equipment such as slot machines.

What did get the ball rolling was education. In 1988, Matt Thul and engineering manager Dick Doyle attended a JIT seminar put on by Technical Change Associates, a consultant in Salt Lake City that specializes in the management of both technical and behavioral change in manufacturing organizations. (Though intrigued, Mr. Thul hardly new that he himself would one day be an instructor, along with TCA President David Dixon, in traveling JIT workshops sponsored by U.S. Amada of Buena Park, California). After John Thul attended the seminar, and Matt attended several more, Arizona Precision's top management became fully committed to effecting change in their own organization to ensure its competitiveness with any like manufacturer in the world, as that was the standard to which they ultimately would be compared.

At first they were thinking about reducing inventory and setup. After a few early successes convinced the managers they were on the right track, they decided to spread out the program. Mr. Dixon was brought in to stage an introductory JIT seminar for suppliers, customers and lead men. This act of inclusion would prove an essential component in the plan, as it would be difficult to achieve Arizona Precision's JIT objectives without the understanding of customers, and impossible without the cooperation of suppliers. Then the training was expanded to include all people in the shop, 16 at a time, in two-day workshops.

Restructuring The Shop

Early on, Messrs. Thul and Doyle seized the opportunity to make some bold strokes in the shop. The plant had been laid out largely in functional groupings, with press brakes in one area, welding in another, and so on, For JIT, they rearranged all equipment into three cells where products are produced complete in one continuous process. This layout makes particular sense for the gaming products, since there is a high degree of similarity among the pans. The first cell is dedicated to large cabinet parts. The second is for a family of small parts which typically are geometrically intricate with multiple angles. The third is what Mr. Thul calls their "cats and dogs" cell. A concession to the nature of job shop manufacturing, it handles anything that doesn't fit into the first two cells, and consequently is more traditionally batch-oriented in its scheduling and operation.

Within the other two cells, however, work is managed with a "kanban" pull system designed to inherently produce a balanced work flow. A typical part path through a cell is: raw material to a punch press, to fastener insertion, to press brake, to welding and assembly, and then on out to shipping. Rather than trying to push as much material through a workstation as possible, and let it stack up if the next station is behind, the idea here is only to make what the next process needs. The press brake operator, for instance, will not go ahead and process a job until he sees that the assembly kanban .square--the designated staging area for that subsequent operation--is empty and thus ready for the next order. He may, however, go over and help the assembler catch up if that operation is slowing down the flow through the cell, and then return to the brake when the timing is right. This methodology works all the way back through the cell so that a balanced operation-to-operation flow is controlled from within the cell by its work team, rather than through an externally imposed scheduling system.