Effects of Setup and Processing Time Reductions on WIP in the JIT Production Systems

Abstract

Sarkar and Zangwill (S-Z, [Sarkar, D., W. I. Zangwill. 1991. Variance effects in cyclic production systems. Management Sci. 37(4, April) 444–453.]) have shown that in the presence of variance, setup and processing time reductions can have “detrimental” effects on the work-in-process (WIP) inventory in both push and pull (JIT) systems. In this note, we point out that the merits of such a warning for JIT production systems are questionable. If we treat a setup as a PERT network, it is difficult to accept S-Z claim that waiting queues can grow without bound when setup time is reduced. Furthermore, we show that the amount of setup cut, in addition to the level of variance, can determine whether waiting time grows or not. This finding can help in planning a viable setup reduction project. Additionally, we use S-Z example to show that, even when the variances are not reduced proportionately, the expected waiting time does not necessarily increase.