Benefits of JIT/Lean

A discussion of the benefits of JIT/Lean must include four very important topics: inventory and work-in-process, cycle time, continual improvement, and elimination of waste. The discussion could be expanded to include such topics as re­duced time-to-market, improved employee work life, flex­ibility, and employee ownership. All of these are definite benefits of JIT/Lean, but this discussion will be confined to the critical four mentioned. These are the usual targets of a JIT/Lean implementation.

1. Inventory and Work-in-Process

Just-in-time/Lean attempts to drive inventory to zero. But remember that this is a philosophical objective—an aiming point, if you will. In reality, zero inventory makes no sense. Without some inventory, you have nothing from which to produce your goods. The real objective is to minimize the inventory to the maximum possible extent without shutting down production. It is also important to recognize that there are at least three kinds of inventory. First, there is the inven­tory of raw materials and parts needed to make the product. Traditionally, these have filled warehouses, with enough on hand for several weeks of production, or longer. Second, there is the work-in-process inventory of semifinished goods. WIP includes all materials and parts that have been put into the production system, including the various stages from the first process to the last within the factory. WIP may be at a workstation undergoing one of the value-adding produc­tion processes, or it may be in storage between processes. In a mass production plant, the stored WIP can be substantial. Job shops—low-volume, high-variety shops not involved in mass production—are also notorious for their WIP inven­tory. Third, there is the finished goods inventory. These fin­ished goods are ready for customers, but the customers are not ready for them. Therefore, they are typically stored in warehouses, although some (most notably automobiles) must be stored in yards, unprotected from the elements.

One might ask, “What is wrong with inventory?” Having materials on hand allows you to produce without worrying about on-time material deliveries. Lots of WIP lets the assembly lines continue when a machine breakdown or some other problem occurs. Having an inventory of stored finished goods means that you can be responsive to custom­ers. If those are positives (and we’ll come back to that in a minute), there are also negatives. First, there are the costs of inventorying raw materials and parts, and finished goods. There are the costs of the materials and goods; the labor costs for the storage, handling, and protection of the materi­als and goods; and the cost of warehouses, real estate, and capital equipment used in the inventorying of the materials and goods. Second, there is the cost of spoilage while in in­ventory. Spoilage can be due to damage, deterioration, cor­rosion, obsolescence, and so on. Third, there is the cost of taxes. While the product is in inventory, the manufacturer owns it, it has value, and the various levels of government want their share in the form of taxes.

Now go back to the suggestion made earlier that the three positives associated with inventory might not be so positive after all. The costs discussed earlier are all tangible costs. There are also intangible costs that, while difficult to measure precisely, are nevertheless significant. Foremost among the intangibles is the fact that as long as the manufacturer holds inventory of ma­terials and WIP at high levels, it is not solving the problems and making the continual improvements that can bring efficiency. The very presence of these inventories masks the problems, so they go unnoticed and unresolved—being repeated over and over, consuming unnecessary labor, and preventing prod­uct quality improvement. Unmasking the production systems problems through the elimination of inventories is a major strength of JIT/Lean. Many North American and European companies still tend to see the elimination of inventories as a generator of problems. In reality, the problems are already there, and they are costing a great deal in terms of money and qual­ity, but they are just not apparent with big inventories. Through inventories maintained, tons of money is spent, but no value is added, and needed improvements are not made in the produc­tion processes. The inevitable net result is loss of competitive position and market share as enlightened competitors use JIT/ Lean and total quality to improve their positions.

If a plant could get its production processes under con­trol to the point that they could be relied on to perform as intended, it would be logical to reduce WIP and material and part inventories. However, until the processes are well un­derstood and in control, reducing inventories substantially will certainly result in production stoppages. One philoso­phy of reducing WIP and lot sizes is to do so in steps. By incrementally lowering WIP and lot sizes, the problems be­come apparent in a gradual, manageable stream rather than in a torrent, and they can be dealt with. Once through that process, the next logical step is to work with suppliers to de­liver materials and parts in smaller, more frequent lots, until finally there is no need for warehousing at all. This clearly requires that the production processes be capable and reli­able and that the suppliers be similarly capable and reliable.

This leaves only the finished goods inventory. As the processes and suppliers become more proficient, and the JIT/Lean line takes hold, production will be geared to cus­tomer demand rather than to sales forecasts. The ability of the JIT/Lean line to respond quickly to customer require­ments means that it is no longer necessary to store finished goods. The only stored goods should be those in the distri­bution system, and that level will typically be far less than has been the case under mass production.

JIT/Lean strives for zero inventory of any kind. Achieving zero inventory is not a realistic intent, but by aim­ing at zero and continually reducing inventories, not only do manufacturers cut costs by significant numbers, but also the whole continual improvement process comes to life, result­ing in even more savings and improved product quality.

2. Cycle Time

Production cycle time is defined as the period bounded by the time materials are sent to the manufacturing floor for the making of a product and the time the finished goods are dis­patched from the manufacturing floor to a customer or to finished goods storage. Generally speaking, the shorter the production cycle time, the lower the production cost. That may be reason enough to pay attention to cycle time, but there are other benefits. Short cycles improve a factory’s abil­ity to respond quickly to changing customer demands. The less time a product spends in the production cycle, the less chance there is for damage.

We are accustomed to thinking of a mass production line as having the shortest of cycle times, and there have been startling examples of this. Henry Ford’s Model T lines (producing up to 2 million cars per year, all the same, all black) achieved remarkable cycle times even by today’s stan­dards. For example, Ford’s River Rouge facility took iron ore in the front door and shipped completed cars out the back door in four days.¹⁰ When one considers that the Ford cycle included making the steel, in addition to stamping, casting, machining, and assembly, it is all the more amazing. One of his secrets was no variability in the product. Modern lines have the complication of different models and virtually un­limited options.

A modern auto assembly line cannot be compared with Ford’s Model T line because the complexity and variability of the contemporary car are so much greater. However, the best lines beat Ford’s cycle time for assembly. The differences in JIT/Lean lines and mass production lines are substantial. For example, comparisons between JIT/Lean plants and tra­ditional mass production plants reveal that JIT/Lean plants can assemble automobiles in 52% of the time it takes tra­ditional plants. Because there is very little waiting in a JIT/ Lean line, one can assume the cycle time is one-half of that for traditional lines. Interestingly, though not directly related to cycle time, traditional lines produce three times as many defects and require nearly twice the factory space. In addi­tion, JIT/Lean plants can operate with a two-hour parts in­ventory, while traditional plants typically need a two-week supply.¹¹

Consider the following example, which helps bridge the issues of inventory and cycle time. The product was a line of very expensive military avionics test systems. The factories (two) were rather typical electronics job shops. Before being converted to JIT/Lean, they were struggling with a produc­tion schedule requiring the assembly of 75 large, complex printed circuit boards per day. They rarely met the goal, usually achieving about 50. The attempted solution involved pushing more parts into the front end of the assembly pro­cess, hoping that would force more out the other end as fin­ished, tested boards. The computer system revealed that, at any point in time, about 3,500 boards were in the process. At the rate of 50 completed boards per day and 3,500 boards in WIP, simple arithmetic showed that the cycle time for the average board was 13 weeks. Common sense said that 13 weeks was much too long for assembling these boards, but checking with others in the industry revealed that this was a typical cycle time. The company also found that it made absolutely no difference in final output rate to force more materials into the front of the process. This merely increased the number of boards in WIP.

With a production rate of 50 boards a day and 3,500 boards in process, one can imagine the difficulty in keep­ing track of where the boards were, scheduling them into and out of the various processes, and storing, retrieving, and safeguarding them. Such tasks were nearly impossible. More than 100 people were charged with handling and track­ing the boards, adding no value whatever to the product. Further, because the assemblers were being pushed to their limits, quality suffered. The net result was that nearly half of total direct labor was spent repairing defects. That did not add value either. Once again, however, checking with other manufacturers revealed that this was typical. A critical factor was that customer delivery schedules could not be met un­less a solution was found. Initially, the company had to sub­contract a great many boards, but that was a work-around, not a solution.

The eventual answer was to implement JIT/Lean tech­niques on the production floor. After a couple of quick pilot runs, in which it was discovered that the most difficult of the boards could be assembled and tested in eight days (versus 13 weeks), management was convinced, and JIT/Lean was implemented at both plants, following the WIP reduction and lot-size scheme outlined in the previous section. In very short order, the board cycle time fell to about five days, and board quality improved dramatically. That enabled the com­pany to eliminate the 100-plus positions that had handled the boards and eventually many other non-value-adding po­sitions as well. The system delivery on-time rate went to 98% (unheard of for this kind of product), customer satisfaction improved, and a respectable profit was made.

The thing to remember about cycle time is this: any time above that which is directly required by the manufac­turing process is not adding value and is costing money. For example, assume we use two processes to manufacture a product, and the total time consumed within the processes is two hours. It is determined that the actual cycle time is three hours. That means that two hours of the cycle is adding value and the other hour is not. Invariably, this means a bottleneck is preventing the product from flowing from one process di­rectly into the next without delay. The key is to detect the bottleneck and do something about it. It may be that a plant procedure requires inspection, logging, and a computer data entry. Are these tasks really necessary? Can they be elimi­nated? If they are necessary, can they be streamlined?

The extra hour may be the result of a problem in one of the processes. For example, it may be that the second process is no longer one hour in duration but 2. If the latter is the case, in a traditional production plant, the product flowing out of the first process will stack up at the input of the sec­ond process because process 1 will continue to crank out its product at the rate of one unit per hour—whether process 2 is ready for it or not (see Figure 21.7). The surplus product at the input to process 2 will have to be stored for safety and housekeeping reasons, thus obscuring the fact that there is a problem.

As long as the problem persists, WIP will build, output will stay at one unit every two hours, but cycle time will in­crease as backlog builds up in front of process 2; the first unit went through the production system in three hours, and one unit per hour was expected after that, but the process is actu­ally achieving one unit every two hours. Cycle time increases by one hour for each piece—for example, eight hours later the sixth unit into process 1 will come out of process 2. Such an imbalance would not escape notice for long, and it would be corrected, but by then, several pieces of WIP would be between the processes.

Suppose that the problem in the second process was corrected as the sixth unit was completed. Everything is back to the original two-hour process time, but by now, there are seven more units through process 1, on which the cycle time clock has already started. If stable from this point for­ward, the cycle time will remain at eight hours. We started with a process that had two hours of value-adding work and a three-hour cycle. We now have a two-hour value-adding process time and an eight-hour cycle. If some means is not taken to cause the second process to catch up, every time there is a glitch in process 2, the cycle time will grow. In a traditional plant, with literally dozens of processes, such conditions could go on forever. As observed earlier, some would hold that having the seven units from the first process sitting on the shelf means that process 1 could be down for a complete shift without causing a problem for the second process—it would merely draw from the seven.

In a JIT/Lean plant, the situation described here would never happen. Process 1 would not produce an additional piece until process 2 asked for it (kanban). At the start, pro­cess 1 produces one unit to enable process 2. When process 2 withdraws it, process 1 is signaled to produce another. If for any reason, when process 1 completes its second unit, pro­cess 2 is not ready to withdraw it, process 1 goes idle. It will stay idle until signaled to produce another—be it a few min­utes or a week. No WIP inventory is produced. By process 1 going idle, alarms go off, quickly letting the appropriate people know that something has gone wrong. If there is a difficulty in the second process, causing it to consume too much time, it gets attention immediately. Similarly, if there is a delay getting the output of the first process to the second because of an administrative procedure, that, too, will be dealt with quickly because it will cause problems throughout the overall process until it is solved.

Any contributor to cycle time is apparent in a JIT/Lean environment, and JIT/Lean philosophy calls for continual improvement and refinement. Wait time in storage is simply not a factor in JIT/Lean because nothing is produced in advance of its need by the succeeding process. That single factor can easily remove 80 to 90% of the cycle time in a tra­ditional factory. In the earlier example of the printed circuit board factories, the initial reduction of cycle time from 13 weeks (65 working days) to eight days was simply the elimi­nation of storage time. That was a reduction of 88%. Further refinement, made possible because of the visibility afforded by JIT/Lean, brought the cycle to four days, or only 6% of the original cycle. Taking it further was restricted by pro­cedural and governmental requirements. In a commercial setting, however, the same boards could probably have been produced in a two-day cycle with no new capital equipment.

Before JIT/Lean, manufacturers tried to cut cycle time with automation. But that was not the answer. The solution was found in better control of production, and that was ob­tained with JIT/Lean. JIT/Lean is the most powerful concept available for reducing cycle time.

3. Continual Improvement

Continual improvement has been discussed in several other chapters and sections of this book. By now, you should have a good understanding of its meaning as applied in a total quality context. Continual improvement seeks to eliminate waste in all forms, improve quality of products and services, and im­prove customer responsiveness—and do all of this while also reducing costs. A note of caution should be added in regard to interpretation of what constitutes improvement: Problem solving is not necessarily improvement. If a process that had previously been capable of producing 95 out of 100 good parts deteriorates to a level of 50 good parts and the problem is found and corrected to bring the process back to where it had been—that is maintenance not improvement. Maintenance is restoring a capability that previously existed. On the other hand, if a process was capable of 95 good parts out of 100 produced and a team developed a way to change the process to produce 99 good parts—that would be improvement. It is important to differentiate between maintenance and improve­ment. Maintenance is important, and it must go on, but in the final analysis, you end up where you started. Improvement means becoming better than when you started. Continual im­provement is to repeat that improvement cycle, in W. Edwards Deming’s words, constantly and forever.¹²

The discussion of continual improvement in this chap­ter explains how JIT/Lean supports continual improvement. The traditional factory effectively hides its information through inventories of parts, WIP, and finished goods— people are scurrying about, everybody busy, whether any value is being added or not. The JIT/Lean factory is visual: its information is there for everyone to see and use. Quality defects become immediately apparent, as do improper pro­duction rates—whether too slow or too fast. Either of these, for example, will result in people stopping work. While that is not acceptable behavior in a mass production factory, in a JIT/Lean plant it is encouraged and expected.

A true story from Toyota tells of two supervisors, one from the old school and unable to adapt to JIT/Lean and the other ready to try JIT/Lean even if it did seem strange.¹³ The first supervisor refused to allow his line to be stopped, whereas the second didn’t hesitate to stop his. At first, the line operated by the second supervisor was producing far fewer cars than the other line because it was stopping for every little problem. These problems had been common knowledge among the workers but not among the super­visors. The problems were solved one by one as a result of stopping the line for each. After three weeks, the second su­pervisor’s line took the lead for good. The first supervisor believed that stopping the line would decrease efficiency and cost the company money. As it turned out, the reverse was true. By stopping the line to eliminate problems, efficiency and economy were enhanced. The only reason for stopping a line is to improve it, eliminating the need for stopping again for the same reason.

In a mass production plant, the sight of idle work­ers will draw the ire of supervisors in no uncertain terms. But in a JIT/Lean situation, the rule is if there is a problem, stop. Suppose that a preceding process has responded to a kanban and provided a part to a succeeding process. The succeeding process finds that the part is not acceptable for some reason (fit, finish, improper model, or something else). The succeeding process worker immediately stops, report­ing the problem to the preceding process and to supervision. Perhaps an andon (a Japanese word meaning “lamp”) signal will be illuminated to call attention to the fact that his pro­cess is shut down. The problem is to be solved before any more work is done by the two processes, which means that downstream processes may soon stop as well because their demands through kanban cannot be honored until the prob­lem is fixed and the processes are once again running. This is high visibility, and it is guaranteed to get the proper attention not only to solve the immediate problem but also to improve the process to make sure it does not happen again.

Consider the following example. A few weeks after JIT/ Lean was implemented in a New York electronics plant, there was a line shutdown. At the end of this line was a test station that was to do a comprehensive functional test of the prod­uct. There was an assembly all set up for test, but the techni­cian had stopped. The line’s andon light was illuminated. A small crowd gathered. The problem was that the test instruc­tions were out of date. Over time, the test instruction docu­ment had been red-lined with changes and had, up until that point, been used without apparent difficulty. But a company procedure required that any red-lined document be reis­sued to incorporate the approved changes within one year of the first red line. The one-year clock had expired months earlier, and the technician, with guidance from quality as­surance, properly stopped testing. When management asked why the document had not long since been updated, it was found that the documents seldom were updated until the entire job was completed. In many cases, jobs lasted several years. Holding all formal revisions until a job was completed meant that documentation was revised just once, thereby saving considerable expense. Of course, in the meantime, manufacturing was using out-of-date or questionable infor­mation. The standard work-around seemed to be that when a system couldn’t be completed for delivery, waivers were generated, allowing the tests to be conducted with the out­dated red-lined procedures. This had been going on for years but never became apparent to the levels in manufacturing and engineering that could solve it. In this case, it took about 20 minutes to solve the problem. Without JIT/Lean to high­light it, the problem would, in all probability, still exist.

What had happened because of JIT/Lean was a stop at the test station. That also shut off kanbans through the pre­ceding processes. In short order, the line stopped, getting the attention needed to eliminate the problem. If the plant had been operating in the traditional (non-JIT/Lean) way, the assemblies would have piled up at the test station for a while and then the production control people would have carted them off to a work-in-process storage area—out of sight. Eventually, the inventory of previously tested assem­blies would have been consumed, and there would have been a “brushfire” from which a procedural waiver would have emerged to enable the test technician to pull the untested assemblies from WIP stores and quickly get them tested so system deliveries could be made. This would have been re­peated time and again, just as had been happening surrepti­tiously in the past.

This is not an uncommon scenario. Fundamentally, it is the result of departments not communicating. Engineering is trying to save money by reducing the number of documenta­tion revisions. Meanwhile, manufacturing may be producing obsolete and unusable product because the documentation is not up-to-date. At best, it results in the continual “fire­fighting” that saps the collective energy of the organization, leading to quick-fix, work-around “solutions” that let you get today’s product out but only make each succeeding day that much more difficult. JIT/Lean, by highlighting problems, is quick to dispel the quick-fix mentality, demanding instead that problems be eliminated for today and tomorrow and forever.

The analogy of a lake better illustrates JIT/Lean’s ability to reveal real problems (see Figure 21.8). You look out over the lake and see the calm, flat surface of the water and per­haps an island or two. From this observation, you conclude that the lake is navigable, so you put your boat in and cast off. You avoid running into the islands because they can be seen plainly and there is plenty of room to steer around them. However, a rock just below the surface is not evident until you crash into it. It turns out there are lots of rocks at vari­ous depths, but you can’t see them until it is too late. This is like a traditional factory. The rocks represent problems that will wreak havoc on production (the boat). The water repre­sents all the inventory maintained: raw materials and parts, WIP, and even finished goods. Now if you make the change to just-in-time/Lean, you start reducing those inventories. Every time you remove some, the level of the water in the lake is lowered, revealing problems that had been there all along but that were not eliminated because they couldn’t be seen. You just kept running your boat into them, making repairs, and sailing on to the next encounter. But with the lower water level, the problems become visible and can be eliminated. Clear sailing? Probably not. Other rocks are no doubt just below the new lower surface level, so you have to take some more water out of the lake (remove more inventory), enabling you to identify and eliminate them. Like most analogies, our lake doesn’t hold all the way to the logical conclusion of zero inventory because the lake would be dry by then. But remem­ber, true zero inventory doesn’t hold either. As was said be­fore, it is a target to aim at but never to be fully reached.

JIT/Lean is by nature a visible process, making prob­lems and opportunities for improvement obvious. Moreover, when problems do occur in a JIT/Lean setting, they must be solved and not merely patched up, or they will immediately reappear. Visibility to all levels, from the workers to the top executive, means that the power to make necessary changes to eliminate problems and improve processes is available.

4. Elimination of Waste

In the preceding three sections, it was shown how just-in- time/Lean facilitates reduction of inventories and cycle time and promotes continual improvement. This section will show that JIT/Lean is also a powerful eliminator of waste. Common types of waste include waste arising from: (1) over­producing, (2) waiting (time), (3) transport, (4) processing, (5) unnecessary stock on hand, (6) unnecessary motion, and (7) producing defective goods. These types of waste are explained in the remainder of this section.

1. Mass production pushes materials into the front of the factory in response to market forecasts. These raw materials are converted to finished goods and pushed through the distribution system. The first real cus­tomer input into the process is at the retail level. If customers don’t want the goods, they will eventually be sold at prices much lower than anticipated, often below their actual cost. That is waste to the producer. In addition, producing goods for which there is not a matching demand is a waste to society by using re­sources to no purpose. In a JIT/Lean environment, the customers enter the system at the beginning, pulling goods from the distribution system and, in turn, from the manufacturer. The JIT/Lean factory produces nothing without a kanban, which, in effect, originates with a customer.

The same is true within the two kinds of factories. A fender-stamping press in a mass production factory will continue to stamp out fenders even though the final assembly line, which uses the fenders, is stopped. The overproduction must then be handled by people who contribute nothing to the value of the product, stored in buildings that would otherwise be unnecessary, and tracked by people and systems that add no value to the product, but cost a lot of money. In a JIT/Lean factory, the fender-stamping press will shut down unless it re­ceives kanbans requesting more fenders, and there will be no overproduction. Of all the wastes, overproduction is the most insidious because it gives rise to all the other types of waste.

2. Wait time can come from many causes: waiting for parts to be retrieved from a storage location, wait­ing for a tool to be replaced, waiting for a machine to be repaired or to be set up for a different product, or waiting for the next unit to move down the line. JIT/ Lean parts are typically located at the workstation, not in some central staging area or warehouse. JIT/Lean sets aside time for tool and machine maintenance, so replacement or repair during a production period is rare. Whereas setup times for machines in mass pro­duction plants tend to take hours (or even longer), JIT/ Lean factories devote a great deal of attention to setup time, typically reducing it to a very few minutes. In a traditional factory, an operator is assigned to each ma­chine. While the machine is running under automatic control, the operator has nothing to do but wait. In a JIT/Lean factory, the same operator may run five ma­chines, arranged so that he or she can easily see and control all five without much movement. As three ma­chines are running automatically, the operator may set up the fourth and unload the fifth, for example. In this way, the operator’s day is no longer mostly wait time.

Perhaps the biggest waste associated with wait­ing involves not human waiting but inventory waiting. In the traditional setting, raw materials and parts can sit idle for weeks and months before they are needed. Work-in-process may wait weeks to have a few hours of value-adding work done. Finished goods may wait very long periods for customers. JIT/Lean does not allow any of these waits to occur, and the carrying expense is eliminated.

3. Mass production factories tend to buy their materials and parts in very large quantities from the lowest price (as opposed to lowest cost or best value) source, regard­less of the distance from the source to the factory. JIT/ Lean factories of necessity must buy in small quantities (no warehousing) with frequent deliveries, often sev­eral times a day. That means that the suppliers should be relatively close to the factory, cutting transportation time and costs.

Transportation within plants can be a very high- cost item, too. Moving things costs money and time and increases exposure to damage. Moving materi­als in and out of storage areas, to and from the floor, or back and forth across the factory from process to process is waste. None of that happens with JIT/Lean. Production materials are delivered to the point of use in a JIT/Lean factory, so they are not shuttled in and out of storage or put in temporary storage to be moved again before use. Factories are arranged to minimize distances between adjacent processes, whereas the same product manufactured in the traditional factory could log thousands of feet, or even miles, of move­ment before completion.

4. Any process that does not operate smoothly as in­tended but instead requires extra work or attention by the operator is wasteful. An example is the neces­sity for the operator to override an automatic machine function to prevent defective products. Because one of the basic tenets of JIT/Lean is continual improve­ment of processes, wasteful processes are soon identi­fied and improved to eliminate the waste. That is far more difficult in the traditional production environ­ment because of its emphasis on output, not process improvement.
5. Any stock on hand has storage costs associated with it. When that stock is unnecessary, the costs are pure waste. Included in these costs are real estate, buildings, employees not otherwise needed, and tracking and ad­ministration. Because JIT/Lean attempts to eliminate stock, unnecessary stock is just not tolerated.
6. JIT/Lean plants are laid out to minimize motion of both workers and product. Motion takes time, adds no value, makes necessary additional workers, and hides waste. The contrast between a JIT/Lean plant laid out with product orientation and the traditional plant laid out with process orientation is profound (see Figure 21.9). In the traditional plant, there is much motion, with peo­ple and product shuttling all over the place. In a JIT/ Lean plant, motion is almost undetectable to a casual observer.
7. Defective goods will surely cost money in one of three ways: (a) the product may be reworked to correct the deficiency, in which case the rework labor and material costs represent waste; (b) it may be scrapped, in which case the cost of the materials and the value added by labor has been wasted; or (c) it may be sold to custom­ers who, on discovering that the product is defective, return it for repair under warranty and may be dissatis­fied to the extent they will never buy this manufacturer’s products again. Warranty costs represent a waste, and the potential for a lost customer is great, portending a future loss of sales.

In a traditional factory, it is possible to produce large quantities of products before defects are discovered and the line corrected. It is not uncommon in mass production for a company to keep the line running, intentionally producing defective products, while trying to figure out what has hap­pened and devising a solution. It is considered less trouble­some to fix the defective products later than to shut down the line. In JIT/Lean, however, because line stops are anticipated and because the preferred lot size is one unit, it is improbable that more than one defective unit could be produced before shutting down the line.

Dr. M. Scott Myers, author of the landmark book Every Employee Is a Manager, made the case for an eighth waste: the waste arising from the underutilization of talent. Myers believed that the most damaging of the eight wastes is the waste of talent.¹⁴ If all the talents of all em­ployees were brought to bear on the problems and issues of production, the other wastes would probably disappear. This is the rationale for both employee involvement and teamwork. JIT/Lean is designed to make use of the ideas and talents of all employees through team activities and employee involvement, in an environment that fosters the open and free interchange of ideas, all of which are for­eign to the traditional production systems. Elimination of waste is an integral focus of just-in-time/Lean by design. No other production system looks at waste except after the fact.

Source: Goetsch David L., Davis Stanley B. (2016), Quality Management for organizational excellence introduction to total Quality, Pearson; 8th edition.