Description of Just in Time Manufacturing - Term Paper Example

Student Name Tutor Title: Just In Time Manufacturing Institution Date Just In Time Manufacturing Introduction In the past, manufacturing philosophies have generally came out as discrete, practical, and viable planning and control systems for enhancing the organizational performance (Guptaa and Snydera (2009). This paper presents a general description of JIT and compares it to MRP/ERP systems while also highlighting its major strengths and weaknesses. The study then presents discussion on how the two systems can be intergraded for more effective results. Concept of JIT The ideology of JIT is ‘producing the necessary item in the necessary quantity at the necessary time is an eternal diver of production and operations management (Bo Hou et al, 2011) and it aimed at achievement of operational excellence. According to Bozarth and Handfield, it basically entails manufacturing based on planned elimination of all waste while also considering continuous improvement of productivity or (Bozarth and Handfield, 2008). It is generally intended towards a perfect product at the most suitable and appropriate time. According to Rhodes, Warren, and Carter, (2006) JIT systems could bring about delivery of ‘perfect’ goods or services at the precise time they are needed. JIT Goals The framework recommended by Vollmann et al. (2005) shows that the critical objective of JIT is a balanced system, that is, one that attains a smooth, fast flow of resources and/or work via the system. The idea is to make the process time as short as possible by using resources in the best possible way. Apart from minimizing stock holdings, the JIT policy is also based on maximizing and co-coordinating inter- and intra-firm transactions with the production process. A key characteristic of JIT is the factor time and a focus on shorter lead times in production and delivery times. Hence, JIT depends on quick, regular and dependable deliveries and communication to maintain the scheduling of element deliveries firm (Allen et al., 1994). JIT in a Manufacturing environment In the context of a manufacturing company, raw materials or parts from its suppliers perhaps are received just hours before they will be used in production, and the firm's output should be shipped to its customers as soon after completion as possible, without holding onto a stock of either raw goods or finished products. In order to achieve this, the parts needed to complete finished products are produced or delivered at the assembly site as required (Wafa & Yasin, 1998). In the same context, this system requires total employee involvement but also supplier participation, total quality control and workplace organization (Aghazadeh, 2004). Main strengths of JIT system There is reasonable consensus among authors that JIT is a useful and beneficial approach to reduce the Manufacturing costs while simultaneously improving the quality of a product (Guptaa and Snydera, 2009). This could be partly attributed to the principle of the system itself. As observed earlier, the main purpose of JIT systems is to identify and to eliminate as many kinds of wastes as possible through improving production activities within a company as a result of this, Monden believes this system unlike others like MRP/EPR could be an ‘effective tool’ for assisting a company to reduce cost and then to obtain higher profits (Monden, 1998). In a supportive mood, Aghazadeh (2004) assert that JIT is a philosophy of problem solving with the purpose of cutting cost and eliminating waste. Closely related to reduction of cost is the use of the use of standard parts. To this end, workers not only have less or fewer parts to deal with, but also training time and cost are significantly reduced. In addition, purchasing, handling, and checking quality become more routine and consequently leading to continual improvement. In fact, reduced cost can be achieved by production of the quality products which eliminates re-production of the same. The earlier the quality is built into the product or process, the wider the cost of design quality can be spread over units (Slack, Chambers, & Johnston, 2007). The other strength of this system relates to Concurrent engineering associated with it. It entails mobilizing or bringing engineering designer and manufacturing personnel together early in the design stage so that the firm can be able to utilize the expertise of the manufacturing personnel, and ensure the technical feasibility and cost-efficiency of the products. In addition, this could significantly shorten the product development process, which is of course gives the firm that ahs adopted the system key competitive edge over others. Moreover, a carefully planned implementation of JIT can immediately provide increased teamwork and employee involvement. Involvement of people at all levels of an organization is paramount in JIT. This can be achieved by the creation as well as maintenance of effective teams. Employees generally work as the together to find areas of waste to target as well as looking for strategies which can assist them reduce waste in the firm (Slack, Chambers, & Johnston, 2007). Employees can also be involved by way of continuous improvement and total quality management aspects thus increasing organizational overall commitment. JIT is also associated with improved quality which is one of the basic requirements for its successful implementation. Quality improvement mainly targets the “never-ending” finding and eliminating the causes of problems. This can be achieved for instance by using an One useful “autonomation” mechanism which automatically detects defects during production using foolproof instruments, then stops the production line to correct the cause of the defects. The halting of production forces immediate attention to the problem; investigation is conducted, by which an appropriate or corrective measures is undertaken. Consequently, quality is continuously improved. Adoption of this system improves the quality of suppliers, as well as the lean/JIT firm's internal quality. When lot sizes are drastically reduced, defect discovery is naturally enhanced. If a worker produces a lot size of one and passes it to the next station, the quality of feedback will be immediate. In this way, defects are discovered quickly and their causes can be corrected immediately. Production of large lots with high defect rates is avoided. Main weaknesses of the JIT Many companies have embraced the Just-In-Time manufacturing method because of the zeal with which its successes have been reported as indicated earlier. Though, there are a number of disadvantages associated with the utilization of JIT. One common weakness is that the execution of JIT, if it is unincorporated into a structure of lean management practices like entire quality management and constant enhancement, it can be costly and counterproductive as it will be unable to attain the competence achievements that are among its main advantages (Slack, Chambers, & Johnston, 2007). Also, implementing thorough JIT procedures can involve a major overhaul of the firm or business systems which may not only be difficult but also expensive to introduce. Studies and Simulation runs at different demand levels revealed that at each demand level, there exists a breakeven ratio after which the JIT model becomes more costly, and is better off using an MRP/EPR system. Those breakeven points, as intuitively anticipated, exist due to the nature of the JIT system, which reduces the inventory levels through continuous ordering resulting in increased ordering costs (Abuhilal, Laith quoted in Geraghty and Heavey, 2005). Again, the steady demand and production planning is almost a pre-requisite for any JIT systems. Thus, the practicability of steady production planning could affect the JIT performance. Many companies have embraced the Just-In-Time manufacturing method because of the zeal with which its successes were reported. But JIT is a simple idea, and therefore often complicated to implement. In its pure form, JIT emphasizes low cost, high quality, and the consolidation of the product line--a smaller number of products and fewer options. This does not mean that one has to do without inventories. There must be some backups in place. Another weakness of JIT relates to its inability to cope with internal and external uncertainties, overstressed workers and uncooperative suppliers. This could be attributed to as a result of real-world constraints to JIT’s applicability in certain settings, including customer-driven and economic conditions, logistics, organizational culture and conditions, intractable accounting and finance practices, and small supplier difficulties (Beard & Butler, 2000). This system can also expose the firm to a number of risks, notably those associated with your supply chain. With no stocks to fall back on, a minor disruption in supplies to your business from just one supplier could force production to cease at very short notice. Sometimes implementation of JIT may not be easy particularly in a scenario where a company may want to adopt it as a new strategy since this may require considerable changes in the firm’s organizational structure. Furthermore, JIT benefits do not just come by; there is a lot that is needed including the acceptance of JIT as an organizational philosophy, the modification of operating procedures, production systems and organizational culture (Wafa and Yasin, 1998). Discuss the main similarities and differences of JIT with other operational management techniques, such as MRP/ERP systems and explain how these could be combined into a hybrid system Similarities Material Requirements Planning (MRP) and Just-in-Time (JIT) systems, as well as more recent Enterprise Resource Planning (ERP) systems are similar on various grounds. To start with, all the systems or models are generally designed to manage the flow of materials, components, tools, production processes and even information. The second similarity between JIT and MRP/EPR techniques relates to the fact that both employ the use of the concept, Bill of Material, which includes all the subassemblies, intermediates, parts, and raw materials that go into a parent assembly showing the quantity of each required to make an assembly. In case of a processing industry, The Bill of material may include the formula, recipe, or ingredient list (Geraghty and Heavey, 2005). Thirdly, JIT and MRP are mutually quite relevant in manufacturing sectors where value is added to the product in large part through direct labor and reducing work-in-process is often one of the high priorities. However, ERP goes beyond this to include the items of the service industries (Salimi, Danbaar and Davidrajuh, 2006). Differences All the systems are peculiar in various ways. Although the JIT philosophy is appropriate to any kind of organization, its practical components apply mostly to repetitive manufacturing operations like the production and assembly of automobiles or appliances. This is contrary to MRP/ERP system which can be non-repetitive. MRP is a production scheduling tool for an environment that has intermittent and/ or irregular schedule. Again, the efficiency focus for MRP is to have a prefect balanced factory which most often means that all departments are equally balanced in their workload of labour hours. This system is the most data-intensive and has the toughest data accuracy requirement (Gerhand, 2002). On the other hand; JIT focuses in the efficiency utilization of the materials resources through elimination of all inventory waste. As observed, it is generally used in highly repetitive manufacturing processes (Gerhand, 2002). Another unique feature is that JIT is basically a "pull" system since the production of the previous work stations are pulled by the demand of the next stations. On the contrary, MRP is usually considered as a "push" system due to the fact that each work station produces up to the quantities stated in the MRP output reports and pushes their parts to the next station regardless of whether there is an actual need for their parts. However, unlike JIT and MRP, ERP goes beyond production and stretches itself not only across the internal interfaces from production to items of service but it also goes further to the external interfaces to integration with client(s) by using the applications ‘customer relationship management’ (CRM), and ‘supplier relationship management’ (SRM). In other words, it relates to both tangible-related functions and intangible-related functions such as service-oriented activities. It includes functionalities such as human resources planning, decision support applications, regulatory control, quality, elements of supply chain management and maintenance support that are beyond the traditional focus of other models. As a result of an additional orientation, ERP implementation entails project related tasks, a contingency approach to implementation and interfaces, outsourcing of implementation tasks, application of simulation cases, and emphasizes on importance of continuity of team members on ERP projects (Salimi, Danbaar and Davidrajuh, 2006). Explain how these (systems) could be combined into a hybrid system Integration of the two systems Plenert (2002) defines integration as simply a measure in improving performance. Integration could be associated with various advantages including elimination of key problems existing in the aforementioned operational models through incorporating both the scheduling and capacity planning aspects simultaneously. It could also help in getting rid of the need to specify planned lead time. Again, integration also help in providing detailed shop-floor schedules copiously lacking in MRP and lastly, by integrating the two methods it is possible to handle a very general environment which is not possible particularly in JIT which operate in the level of schedule case (Johnny and Jih-Long Chang, 2001). Hybrid Systems Geraghty and Heavey (2005) defined that "A hybrid production system could be characterized as a production system that combines elements of the two philosophies in order to minimize inventory and unmask flaws in the system, while maintaining the ability of the system to satisfy demand. Hybrid systems can be classified into two categories: vertically integrated hybrid system (VIHS) or horizontally integrated hybrid system (HIHS) and Bottleneck Allocation Methodology (BAM). Vertically integrated hybrid system (VIHS) is one that combines the two strategies, JIT and MRP and it is associated with two levels, an upper level push-type production control strategy and a lower level pull-type production control strategy making use of both MRP and JIT for long range planning and shop floor execution respectively. By integrating them, the two systems do not resist each other instead they interact and lend assistance to each other. The main advantage of VIHS is that it can control the individual weaknesses and reinforces the individual strengths of JIT and MRP. However, its main shortcoming is that those MRP calculations must be performed for each stage in the production system. In addition, it is relatively more difficult or complicated to implement compared with other hybrid system. Horizontally Integrated Hybrid System (HIHS):In the HIHS the push elements of the system cover from the raw material storage until the components complete processing and go to buffer storage at the end of each line, while the pull elements start from this point down to the packaging station (Beamon and Bermudo 2000). This system can say start with the MRP then sum up with JIT. This can be achieved or instance by adopting a three-line, five-stage production system where the first three stages is done under the control of MRP where components and parts are produced up to the quantities stated in the MRP output reports and then pushed to the next stage regardless of the demand of the upstream stage. At the end of stage 3, the inventories pile up to form buffering stock. The last two stages are where the production of each workstation is controlled by the pull from the real demand of the next stage in other words; the workstation is working under the JIT philosophy (Beamon and Bermudo 2000). Bottleneck Allocation Methodology (BAM): Unlike the a foregoing hybrid, this combines or attempts to mix the best feature of the above systems while also considering the adjustment of the competitive trends for instance time-market evaluation schedule, cycle minimization as well as inventory optimization. Contrary to MRP which generates time-phased schedules based on average-estimate lead times, BAM demands is time phased based on the allocation of the critical resources optimization. However it is closely related to just in time and other systems that improves throughput (Plenert, 2000). In summing up, it is clear from the description and analysis in the proceeding paragraphs that JIT and MRP/ERP both have their share of strengths and weaknesses however, when they work together, they would complement each other and further enhance the effectiveness in the production of products and /or service. Reference Aghazadeh, S-M. (2004), Does manufacturing need to make JIT delivery work? Management Research News, Vol. 27 No. 1, pp. 27-42 Beamon, B. M. and Bermudo, J. M. (2000) A hybrid push/pull control algorithm for production control strategies. OR Spectrum, 27, 435-457. Bo Hou, Hing Kai Chan, and Xiaojun Wang(2011)A Case Study of Just-In-Time System in the Chinese Automotive Industry ,Proceedings of the World Congress on Engineering 2011 Vol I WCE 2011, July 6 - 8, 2011, London, U.K. Bozarth, C. and Handfiled, R. (2008) Introduction to Operations and Supply Chain Management, USA: Pearson Education, 2nd Edition E. Rhodes, J. P. Warren, and R. Carter (2006) Supply Chains and Total Product Systems: A Reader, UK: The Open University and Blackwell Publishing Farshad Salimi, Ben Dankbaar and Reggie Davidrajuh(2006) A Comprehensive Study on The Differences Between MRP and ERP Implementation Communications of the IIMA Volume 6 Issue 1pp 83-94 Geraghty, J. and Heavey, C. (2005) A review and comparison of hybrid and pull-type multi-stage, multi-line production system. Production Planning & Control, 11 (4), 349-356. Gerhand, J. Plenert (2000) Bottleneck Allocation Methodology: An integrated Manufacturing Management Model, the international Journal of Flexible Manufacturing system Vol. 12 pp 80-101 Gerhand, J. Plenert (2002) International operations Management, Copenhagen Business School Press, 2002 1 st Edition Guptaa M. & Snydera D. (2009) Comparing TOC with MRP and JIT: a literature review International Journal of Production Research Volume 47, Issue 13, pages 3705-3739 Johnny C. 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