Project report on just in time production

JUST IN TIME PRODUCTION
A PROJECTREPORT
Underthe guidanceof
Submitted by
In partial fulfillment of the requirements
For the award of the degree of
MASTER OF BUSINESS ADMINISTRATION(MBA)
IN
OPERATION MANAGEMENT
Session2009-2010 (May2010)
Submitted to
Sikkim-Manipal university of Health, Medical and technological sciences
Distance education wing Syndicate house Manipal – 576 104.
Learning Centre code: Vashi (02973)
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ACKNOWLEDGEMENT
I have taken this opportunity to express my sincere gratitude towards the pillars
of successful completion of this Management thesis on “Just in Time
Production”, without whose unflinching assistance & co-operation at all times it
would rather have been impossible for me to achieve the desired goal.
I would like to thank …………………………………………………………..
for his invaluable guidance and support that made my going easy and provided
me a good learning opportunity. I would also like to express my sincere gratitude
towards all supply chain team colleagues of CIPLA LIMITED, who have always
helped me to know and learn various aspects of management at various stages. A
special thanks to my parents they have always tried to give me higher education.
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STUDENT DECLARATION
I hereby declare that the project report entitled,
“JUST IN TIME PRODUCTION”
Submitted in partial fulfillment of the requirements for the degree of
Masters of business Administration to Sikkim-Manipal University, India, is
my original work and not submitted for the award of any other degree,
diploma, fellowship, or any other similar title or prizes.
Place:Vashi -----------------------
Centre Code :
Date: Reg. No:
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BONAFIDE CERTIFICATE
Certified that this project report titled “JUST IN TIME
PRODUCTION” is the bonafide work of “------------------------
-------” who carried out the project work under my supervision
SIGNATURE OF HOD SIGNATURE
STORES FACULTYINCHARGE
Cipla Limited, A-42, Patalganga,Raigad Karrox college of Technology
Maharashtra Vashi, New Mumbai, Maharashtra
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EXAMINER‟S CERTIFICATION
The project report of
Is approved and is acceptable inquality and form.
Internal Examiner External Examiners
Name: Name:
Qualification: Qualification:
Designation:
Page 5

UNIVERSITY STUDY CENTRE CERTIFICATE
This is to certify that the project report entitled,
Submitted in partial fulfillment of the requirements for the degree of Masters
of Business Administration of Sikkim-Manipal University of Health,
Medical and technological sciences by
has worked under my supervision and guidance and that no part of this
report has been submitted for the award of any other degree, Diploma,
Fellowship or other similar titles or prizes and that the work has not been
published in any journal or Magazine.
Certified
(Guide‟s Name and Qualification)
Page 6

Table of Contents
UUITS Page No.
1. Executive Summary of the Project - 8
2. Company Profile (Cipla Ltd.) - 9-20
2.1 Introduction
2.2 Visions, Mission and Objectives
2.3 Finance and staffing
3. Brief Introduction about JIT - 21-24
4. Just in Time Production - 25-43
5. JIT - Philosophy or Technique - 44-58
6. KANBAN Just-in-Time at Toyota - 59-67
7. JIT and IBS - 68-79
7.1 JIT and IBS
7.2 Classification of IBS
7.3 Value Stream Mapping
7.4 Example Structural Steel Supply Chain in Building Construction
8. Case Studies - 80-90
9. Case Study in Malaysia (Putrajaya) - 91-100
10. Abbreviations - 101
11. References & Bibliography - 102
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Unit-1 Executive summary
In this paper, we are examining the implementation of Just-In-Time
methodology in Ford for its latest small car KA; possibly one of the most
interesting manufacturing revolution where companies involved in the
production are integrated not only in their business processes moreover in
their physical plants. The concept has been successfully developed and
implemented in Valencia, Spain and is due to be adopted in other Ford
production plants. The case study clearly shows how companies can work
together in a harmonic and synchronised system meeting probably the most
idealistic manufacturing principles (JIT) to produce the best quality product
within the shortest time frame with minimum/no wastage and cost-effective
to all parties. Careful production planning, cost-benefit analysis, adequate
outsourcing plans and customer orientation are being praises as the key
success factors ofthis amazing Just-In-Time concept.
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Unit-2 Company Profile (Cipla Ltd.)
HISTORY:-
Khwaja Abdul Hamied, the founder of Cipla, was bornon
October31, 1898. The fire of nationalism was kindled in him when he was
15 as he witnessed a wanton act of colonial highhandedness. The fire was to
blaze within him right through his life. In college, he found Chemistry
fascinating. He set sail for Europe in 1924 and got admission in Berlin
University as a research student of "The Technology of Barium
Compounds". He earned his doctoratethree years later.
In October 1927, during the long voyage from Europe to India, he
drew up great plans for the future. He wrote: "No modern industry
could have been possible without the help of such centres of research
work where men are engaged in compelling nature to yield her secrets
to the ruthless search of an investigating chemist." His plan found
many supporters but no financiers. However, Dr Hamied was
determined to being "a small wheel, no matter how small, than be a
cog in a big wheel.
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BORN OF CIPLA
In 1935, he set up The Chemical, Industrial & Pharmaceutical
Laboratories, which came to be popularly known as Cipla. He gave
the company all his patent and proprietary formulas for several
drugs and medicines, without charging any royalty. On August 17,
1935, Cipla was registered as a public limited company with an
authorised capital of Rs 6 lakhs.
The search for suitable premises ended at 289, Bellasis Road (the
present corporate office) where a small bungalow with a few rooms
was taken on lease for 20 years for Rs 350 a month.
Cipla was officially opened on September 22, 1937 when the first
products were ready for the market. The Sunday Standard wrote:
"The birth of Cipla which was launched into the world by Dr K A
Hamied will be a red letter day in the annals of Bombay Industries.
The first city in India can now boast of a concern, which will
supersede all existing firms in the magnitude of its operations. India
has lagged behind in the march of science but she is now awakening
from her lethargy. The new company has mapped out an ambitious
programme and with intelligent direction and skillful production
bids fair to establish a great reputation in the East. "
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July 4, 1939 was a red-letter day for Cipla, when the Father of the
Nation, Mahatma Gandhi, honoured the factory with a visit. He was
"delighted to visit this Indian enterprise", he noted later. From the
time Cipla came to the aid of the nation gasping for essential
medicines during the Second World War, the company has been
among the leaders in the pharmaceutical industry in India.
VISITED BY MAHATMA GANDHI
July 4, 1939 was a red-letter day for Cipla, when the Father of the
Nation, Mahatma Gandhi, honoured the factory with a visit. He was
"delighted to visit this Indian enterprise", he noted later. From the
time Cipla came to the aid of the nation gasping for essential
medicines during the Second World War, the company has been
among the leaders in the pharmaceutical industry in India.
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On October 31, 1939, the books showed an alltime high loss of Rs
67,935.
That was the last time the company ever recorded a deficit.
In 1942, Dr Hamied's blueprint for a technical industrial research
institute was
accepted by the government and led to the birth of the Council of
Scientific and Industrial Research (CSIR), which is today the apex
research bodyin the country.
In 1944, the company bought the premises at Bombay Central and
decided to put up a "first class modern pharmaceutical works and
laboratory." It was also decided to acquire land and buildings at
Vikhroli. With severe import restrictions hampering production, the
company decided to commence manufacturing the basic chemicals
required for pharmaceuticals.
In 1946, Cipla's product for hypertension, Serpinoid , was exported to
the American Roland Corporation, to the tune of Rs 8 lakhs. Five
years later, the company entered into an agreement with a Swiss firm
for manufacturing foromycene.
Dr Yusuf Hamied, the founder's son, returned with a doctorate in
chemistry from Cambridge and joined Cipla as an officer in charge of
research and development in 1960.
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In 1961, the Vikhroli factory started manufacturing diosgenin. This
heralded the manufacture of several steroids and hormones derived
from diosgenin
Global Presence
Exports for the financial year ended March 31, 2009 amounted to
more than Rs. 27,500 million. Cipla exports raw materials,
intermediates, prescription drugs, OTC products and veterinary
products. Cipla also offers technology for products and processes.
Technical know-how/fees received during the year 2008-09 amounted
to about Rs. 2200 million Cipla's manufacturing facilities have been
approved by the following regulatory authorities
Food and Drug Administration (FDA), USA Medicines
and Healthcare products Regulatory Agency (MHRA),
UK
Therapeutic Goods Administration (TGA), Australia
Medicines Control Council (MCC), South Africa
National Institute of Pharmacy (NIP), Hungary
Pharamaceutical Inspection Convention (PIC), Germany
World Health Organisation (WHO) Department of
Health, Canada
State Institute for the Control of Drugs, Slovak Republic
ANVISA, Brazil
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IMPORTANT DAYS MILESTONE OF CIPLA
1935
Dr K A Hamied sets up "The Chemical,
Industrial and Pharmaceutical Laboratories
Ltd." in a rented bungalow, at Bombay
Central.
1941
As the Second World War cuts off drug
supplies, the company starts producing fine
chemicals, dedicating all its facilities for the
war effort.
1952
Sets up first research division for attaining
self-sufficiency in technological
development.
1960
Starts operations at second plant at Vikhroli,
Mumbai, producing fine chemicals with
special emphasis on natural
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products.
1968
Cipla manufactures ampicillin for the first
time in the country.
1972
Starts Agricultural Research Division at
Bangalore, for scientific cultivation of
medicinal plants.
1976
Cipla launches medicinal aerosols for
asthma.
1980
Wins Chemexcil Award for Excellence for
exports.
1982
Fourth factory begins operations at
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Patalganga, Maharashtra.
1984
Develops anti-cancer drugs, vinblastine and
vincristine in collaboration with the National
Chemical Laboratory, Pune. Wins Sir P C
Ray Award for developing inhouse
technology for indigenous manufacture of a
number of basic drugs.
1985
US FDA approves Cipla's bulk drug
manufacturing facilities.
1988
Cipla wins National Award for Successful
Commercialisation of Publicly Funded
R&D.
1991
Lauches etoposide, a breakthrough in
cancer chemotherapy, in association with
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Indian Institute of Chemical Technology.
The company pioneers the manufacture of
the antiretroviral drug, zidovudine, in
technological collaboration with Indian
Institute of Chemical Technology,
Hyderabad.
1994
Cipla's fifth factory begins commercial
production at Kurkumbh, Maharashtra.
1997
Launches transparent Rotahaler, the world's
first such dry powder inhaler device now
patented by Cipla in India and abroad. The
palliative cancer care centre set up by the
Cipla Foundation, begins offering free
services at Warje, near Pune.
1998
Launches lamivudine, becoming one of the
few companies in the world to offer all
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three component drugs of retroviral
combination therapy (zidovudine and
stavudine already launched).
1999
Launches Nevirapine, antiretroviral drug,
used to prevent the transmission of AIDS
from mother to child.
2000
Cipla became the first company, outside the
USA and Europe to launch CFC-free
inhalers – ten years before the deadline to
phase out use of CFC in medicinal products.
2002
Four state-of-the-art manufacturing facilities
set up in Goa in a record time of less than
twelve months.
2003
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Launches TIOVA (Tiotropium bromide), a
novel inhaled, long-acting anticholinergic
bronchodilator that is employed as a once-
daily maintenance treatment for patients with
chronic obstructive pulmonary disease
(COPD).
Commissioned second phaseof
manufacturing operations at Goa.
2005
Set-up state-of-the-art facility for
manufacture of formulations at Baddi,
Himachal Pradesh.
2007
Set-up state-of-the-art facility for
manufacture of formulations at Sikkim.
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Boardof Directors
Founder
Dr. K.A. Hamied
(1898-1972)
Chairman & Managing Director
Dr. Y.K. Hamied
Joint Managing Directors
Mr. M.K.Hamied
Mr. Amar Lulla
Non-Executive Directors
Mr. V.C. Kotwal
Dr. H.R. Manchanda
Mr. S.A.A. Pinto
Mr. M.R. Raghavan
Mr. Ramesh Shroff
Mr. Pankaj Patel
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Unit-3 Brief Introduction about JIT
Introduction
Just-in-time (JIT) is a management philosophy that strives to eliminate
sources of manufacturing waste by producing the right part in the right place
at the right time. Waste results from any activity that adds cost without
adding value, such as moving and storing.JIT (also known as lean
production or stockless production) should improve profits and return on
investment by reducing inventory levels (increasing the inventory turnover
rate), reducing variability, improving product quality, reducing production
and delivery lead times, and reducing other costs (such as those associated
with machine setup and equipment breakdown). In a JIT system,
underutilized (excess) capacity is used instead of buffer inventories to hedge
against problems that may arise.
JIT applies primarily to repetitive manufacturing processes in which the
same products and components are produced over and over again. The
general idea is to establish flow processes (even when the facility uses a
jobbing or batch process layout) by linking work centers so that there is an
even, balanced flow of materials throughout the entire production process,
similar to that found in an assembly line. To accomplish this, an attempt is
made to reach the goals of driving all queues toward zero and achieving the
ideal lot size of one unit. The goal of JIT, therefore, is to minimize the
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presence of non-value-adding operations and non-moving inventories in the
production line. This will result in shorter throughput times, better on-time
delivery performance, higher equipment utilization, lesser space
requirement, lower costs, and greater profits.
JIT was developed as a means of meeting customer demands with minimum
delays. Thus, in the olden days, JIT is used not to reduce manufacturing
wastage, but primarily to produce goods so that customer orders are met
exactly when they need the products.
JIT is also known as lean production or stockless production, since the
key behind a successful implementation of JIT is the reduction of inventory
levels at the various stations of the production line to the absolute minimum.
This necessitates good coordination between stations such that every station
produces only the exact volume that the next station needs. On the other
hand, a station pulls in only the exact volume that it needs from the
preceding station.
The JIT system consists of defining the production flow and setting up
the production floor such that the flow of materials as they get manufactured
through the line is smooth and unimpeded, thereby reducing material waiting
time. This requires that the capacities of the various workstations that the
materials pass through are very evenly matched and balanced, such that
bottlenecks in the production line are eliminated. This set-up ensures that the
materials will undergo manufacturing without queuing or stoppage.
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Another important aspect of JIT is the use of a 'pull' system to move
inventories through the production line. Under such a system, the
requirements of the next station are what modulate the production of a
particular station. It is therefore necessary under JIT to define a process by
which the pulling of lots from one station to the next is facilitated.
JIT is most applicable to operations or production flows that do not
change, i.e., those that are simply repeated over and over again. An example
of this would be an automobile assembly line, wherein every car undergoes
the same productionprocess as the one before it.
Some semiconductor companies have likewise practiced JIT successfully.
Still, there are some semiconductor companies that don‟t practice JIT for the
simple reason that their operations are too complex for JIT application. On
the other hand, that‟s precisely the challenge of JIT – creation of a
production set-up that is simple enough to allow JIT. (find a semi conductor
factory)
Inventory stocks allow production process to continue even when some
problem occurs. In a way, inventory stocks act like a buffers to hide any
problem that may occur. But, with JIT, there are no buffers to hide problems
and thus, occurrence of problem can shut down the entire production
process. Thus, JIT philosophy helps organization to prominently expose
problems and thus, bring a clear focus on removal of it at source, by
eliminating the cause, rather than effects, of problem. With JIT, it is believed
that the root causes of most problems are due to faulty production process
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design. Hence, with JIT, nothing is takenfor granted, everything is
subject to analysis. Each activity is identified as either „Value-Added‟ or
„Non-Value-Added‟. The reduction of „Non-Value-Added‟ activities is
achieved mainly through increasing manufacturing flexibility and improved
quality. JIT is an extremely powerful tool to identify where improvements
should be made. It helps you to identify cause (not the effect) of problem
and its elimination. Failures and exceptions are treated as opportunities
to improve the system. In fact, JIT initiates failures due to problems to
expose them. It is a system of trouble-shooting, within a culture of constant
analysis and improvement. It is clear, as an attitude and approach, JIT and
TQM are perfectly complimentary to each other, to expose and correct
problems at source, so as to avoid wasting resources on production of
defective products.
Just-in-time manufacturing is a process where suppliers deliver
inventory to the factory only when it's needed for assembly. Companies are
beginning to turn to Internet-based technologies to communicate with their
suppliers, making the just-in-time ordering and delivery process speedier
and more flexible.
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Unit-4 Just in time Production
History of Just in Time:
Just-In-Time is a Japanese manufacturing management method developed in
1970s. It was first adopted by Toyota manufacturing plants by Taiichi Ohno.
The main concern at that time was to meet consumer demands. Because of
the success ofJIT management, Taiichi Ohno was named the Father of JIT.
After the first introduction of JIT by Toyota, many companies
followed up and around mid 1970s‟, it gained extended support and widely
used by many companies. One motivated reason for developing JIT and
some other better production techniques was that after World War II,
Japanese people had a very strong incentive to develop a good
manufacturing technique to help them rebuilding the economy. They also
had a strong working ethnic which was concentrated on work rather than
leisure, seeked continuous improvement, life commitment to work, group
conscious rather than individualism and achieved common goal. This kind of
motivation had driven Japanese economy to succeed. Because of the natural
constraints and the economy constraints after World War II, Japanese
Manufacturers looked for a way to gain the most efficient use of limited
resources. They worked on "optimal cost/quality relationship".
Before the introduction of JIT, there were a lot of manufacturing
defects for the existing system at that time. According to Hirano, this
included inventory problem, productdefects, risen cost, large lot production
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and delivery delays. The inventory problems included the unused
accumulated inventory that was not only unproductive, but also required a
lot of effort in storing and managing them. Other implied problems such as
parts storage, equipment breakdowns, and uneven production levels. For the
product defects, manufacturers knew that only one single product defects
can destroy the producer‟s creditability. They must create a "defect-free"
process. Instead of large lot production - producing one type of products,
they awaked that they should produce more diversified goods. There was
also a problem of rising cost, the existing system could not reduce cost any
further but remember improvement always leads to costreduction.
Lastly, the existing system did not manage well for fast delivery request, so,
there was a need to have a faster and reliable delivery system in order to
handle customers‟ needs. Thus, JIT manufacturing management was
developed based on these problems.
Focus of JIT?
Mainly JIT focuses to eliminate the waste or the non-value added. Thus
there are several types of wastes categorised. JIT usually identifies seven
prominent types of waste to be eliminated:
Waste from Overproduction
Transportation Waste
Processing Waste
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Waste from ProductDefects
Waste of waiting/idle time
Inventory Waste
Introduction Phase for Just in Time:
According to Hirano, the introductory phases of JIT involve 5 steps.
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FIVE STEPS IN THE INTRODUCTORYPHASE OF JIT
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Step 1: Awareness Revolution
It means giving up old concept of managing and adopting JIT way of
thinking. There are 10 principles for improvement:
1. Abolish old tradition concepts.
2. Assume that new method will work.
3. No excuses are accepted.
4. It is not seeking for perfection, absolutely zero-defect process, few defects
is acceptable.
5. Correct mistakes immediately.
6. Do not spend money on improvement.
7. Use you brain to solve problem.
8. Repeat to ask yourself 5 times before any decision.
9. Gather information from several people, more is better!
10. Remember that improvement has no limits.
The idea of giving up old concept was especially for the large lot production,
The lot production was felt that "having fewer changeover was better", but it
was no longer true. Whereas JIT is a one-piece flow manufacturing. To
compare the two, Hirano had this idea:
Lot production: "Unneeded goods...In unneeded quantities...At unneeded
times..." JIT: "Needed goods...Inneeded quantities...At needed times..."
The main point here is to have an awareness of the need of throwing out old
system and adopting a new one.
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Step 2: 5S‟s ForWorkplace Improvement
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The 5S‟s standfor:
Seiri - ProperArrangement
Seiton- Orderliness
Seiso - Cleanliness
Seiketsu- Cleanup
Shitsuke – Discipline
This 5S‟s should be implemented company-wide and this should be part of a
total improvement program.
Seiri - Proper Arrangement means sorting what you have, identifying the
needs and throwing out those unnecessary. One example is using red-tags.
This is a little red-bordered paper saying what the production is, how many
are accumulated and then stick these red tags onto every box of inventory . It
enhances the easiness to know the inventory status and can reduce cost.
Seiton - Orderliness means making thing in order. Examples include
keeping shelves in order, keeping storage areas in order, keeping workplace
in order, keeping worktables in order and keeping the office in order.
Seiso - Cleanliness means having a clean workplace, equipment, etc.
Seiketsu- Cleanup mean maintaining equipment and tools.
Shitsuke - Discipline means following the rules and making them a habit.
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Step 3: Flow Manufacturing
Flow manufacturing means producing one single piece of productat a time
but multi-handling which follows the process sequence.
There are several main points concerning flow manufacturing:
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1. Arrange machines in sequence.
2. U-shaped production line (Cellular Manufacturing).
3. Produceone-piece at a time.
4. Train workers to be multi-skilled.
5. Follow the cycle time.
6. Let the workers standing and walking around while working.
7. Use small and dedicated machines.
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Step 4: Standard Operations
Standard Operation means to produce quality safely and less expensively
through efficient rules and methods of arranging people, products and
machines.
The basis of standard operations is:
1. Cycle time It means how long it would take to "carry out part all the
way through the cell". Following are the equations for calculating
cycle time.
Daily Quantity Required = Monthly Quantity Needed / Working Days per
month
Cycle Time = Working Hours per day / Daily Quantity Required
2. Work sequence
3. Standard stock-on-hand
4. Use operation charts
Step 5: Multi-Process Handling
Multi-process handling means one worker is responsible for several
processes in a cell.
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Some points that should be aware:
·Clearly assign jobs to machines and workers.
·Make a good use of U-shaped cell manufacturing.
·Multi-skilled workers
·Operation should be able to perform multi-machine handling and multi
process handling.
Multi-machine handling - a worker should handle several machines at once,
this is also called "horizontal handling".
Multi-process handling - a worker should handle several different processes
at once, this is also called "vertical handling" and this is the basis for JIT
production.
· Uses casters extensively as author written, "Floor bolts are our enemies!
Machines must be movable."
Elements of Justin Time
According to Cheng, the basic elements of JIT manufacturing are:
·People Involvement
·Plants
·System
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People Involvement
Maintaining a good support and agreement from people involved in
production. This is not only reduce the time and effort in implementation of
JIT, but also minimize the chance of creating implementation problem. The
attempt to maximize people‟s involvement may carry through the
introduction of quality circle and total involvement concept.
Manufacturers can gain supportfrom 4 sources.
1. Stockholders and owners of the company - should maintain a good
long-term relationship among them.
2. Labor organization - all labors should be well-informed about the
goals of JIT, this is crucial in gaining supportfrom the them.
3. Management support - support from all level of management. The
ideas of continuous improvement should spread all over the factory,
managers and all shop-floor labor.
4. Government support - government can show their support by
extending tax and other financial help. This can enhance the
motivation, and also help in financing the implementation of JIT.
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Plants
Certain requirements are needed to implement JIT, there are:
1. Plant layout - the plant layout is mainly focus on maximizing
working flexibility. It requires the use of "multi-function workers".
2. Demand pull production - it means to produce when the order is
received. This can manage the quantity and time more appropriately.
3. Kanban - a Japanese term for card or tag. Special inventory and process
information are written on the card. This helps tying and linking the process
more efficiently.
4. Self-inspection - it is carried out by the workers at catch mistakes
immediately.
5. Continuous improvement - this conceptshould be adopted by every
members in the organization in order to carry out JIT. This is the most
important conceptof JIT. This can allow an organization to improve its
productivity, service, operation and even customer satisfaction in an on-
going basis.
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System
This refers to the technology and process that combines the different
processes and activities together. Two major types are MRP (Material
Requirement Planning) and MRP II (Manufacturing ResourcePlanning).
MRP is a computer-based, bottom-up manufacturing approach. This
involves two plans, production plan and master production schedule.
Production plan involves the management and planning of resources through
the available capacity. Master production schedule involves what products to
be produced in what time.
MRP II is mainly involved the management or planning of financial
resources in order to carry out the operation.
Goalof Just in Time
According to Cheng in Just-In-Time Manufacturing – An Introduction, he
explains the objectives of JIT. There are three main objectives:
1. Increasing the organization‟s ability to compete with others and remain
competitive over the long run. The competitiveness of the firms is increased
by the use of JIT manufacturing process as they can develop a more optimal
process for their firms.
2. Increasing efficiency within the production process. Efficiency is obtained
through the increase of productivity and decrease of cost.
3. Reducing wasted materials, time and effort. It can help to reduce the costs.
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Other short-term and long-term objectives are:-
1. Identify and response to consumers needs. Customers‟ needs and wants
seem to be the major focus for business now, this objective will help the firm
on what is demanded from customers, and what is required of production.
2. Optimal quality/cost relationship. The organization should focus on zero-
defect production process. Although it seems to be unrealistic, in the long
run, it will eliminate a huge amount of resources and effort in inspecting,
reworking and the production of defected goods.
3. Reduceunwanted wastes. Wastes that do not add value to the products
itself should be eliminated.
4. Develop a reliable relationship between the suppliers. A good and long-
term relationship between organization and its suppliers helps to manage a
more efficient process in inventory management, material management and
delivery system. It will also assure that the supply is stable and available
when needed.
5. Plant design for maximizing efficiency. The design of plant is essential in
terms of manufacturing efficiency and utility of resources.
6. Adoptthe work ethnic of Japanese workers for continuous improvement.
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Commit a long-term continuous improvement throughout the organization. It
will help the organization to remain competitive in the long run.
Other Similar Ideas
1. Reduction of Inventory. JIT reduces inventory at all level of
the organization.
2. Reduction of Lead Time. Lead time such as setup time and move time and
waiting time is reduced.
3. Quality Control. JIT improves the quality controlby increasing its
efficiency of managing shop floor productionand increasing its
commitment to its suppliers.
4. Improvement for Performance. In JIT manufacturing, the organization can
obtain a greater impact/control over its suppliers. With fewer suppliers,
organizations have larger control because the amount purchased is usually
large. And, organizations can obtain a tighter requirement on products from
their suppliers.
5. Total Preventive Maintenance. JIT provides preventive maintenance
to lessen the risk of machine breakdowns.
6. Continuous Improvement. JIT is a never-ending method in
operation management.
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7. Strategic Gain. JIT helps organization to remain competitive in the
market place.
8. Reduction of Wastes. JIT helps significantly in reducing wastes.
JIT can help organization remains competitive by offering consumers
higher quality of products than their competitors, it is very important in the
survival in the market place.
These major objectives are suitable for all organizations. But each
organization is unique in some way, adjustments of JIT objectives for each
form should be made in order to complement the overall production process.
Limitation of Just in Time
Regardless of the great benefits of JIT, it has its limitations, the following
are the major limitations.
· Culture Differences The organizational cultures vary from firm to firm.
There are some cultures that tie to JIT success but it is difficult for an
organization to change its cultures within a short time.
· Traditional Approach The traditional approach in manufacturing is to store
up a large amount of inventory in the means of backing up during bad time.
Those companies rely on safety stocks may have a problem with the use of
JIT.
·Difference in implementation of JIT Because JIT was originally established
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in Japanese, it is somehow different for implementing in western countries.
The benefits may vary.
·Loss of individual autonomy. This is mainly due to the shorter cycle
times which adds pressures and stress on the workers.
·Loss of team autonomy. This is the result of decreasing buffer
inventories which lead to a lower flexibility of the workers to solve
problem individually.
·Loss of method autonomy. It means the workers must act some way when
problems occur, this does not allow them to have their own method to
solve a problem.
·JIT success is varied from industry to industry. Some industries are
benefit more from JIT while others do not.
·Resistance to change JIT involves a change throughout the whole
organization, but human nature resists to changes. The most common
resistances are emotional resistance and rational resistance. Emotional
resistance are those psychological feeling which hinder performance such as
anxiety. Rational resistance is the deficient of the needed information for
the workers to perform the job well.
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Some other limitations:-
·Relationship between management and employees is important .A
mutual trust must be built between management and employees in order to
have effective decision making.
·Employee commitment Employees must commit to JIT, to enhance the
quality as their ultimate goal, and to see JIT as a way to compete rather
than method used by managers to increase their workload.
·Production level JIT works best for medium to high range of production
volume.
·Employee skill JIT requires workers to be multi-skilled and flexible
to change.
·Compensation should be set on time-based wages. This allows the workers
to concentrate on building what the customers wants.
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Unit – 5 JIT - Philosophy or Technique
Just In Time is a philosophy and not the technique for elimination of wastes.
The JIT strategy is to have "the right product at the right place at the
right time."
The Just-in-time philosophy that emerged, is a management logic based on
simplicity and continuous improvement. It may be applied to any process
where it will aim to make improvements through elimination of excess,
waste and unevenness.
The Just-in-Time concept comprises methods and techniques that aim to
increase the potential for short times to delivery.
Production system in which both the movement of goods during production
and deliveries from suppliers are carefully timed so that at each step of the
process the next (usually small) batch arrives for processing just as the
proceeding batch is completed
The "Just in time" (JIT.) inventory concept, also called Kanban, asserts that
just enough inventories, arriving just in time to replace that which was just
used, is all the inventory that is necessary at any given time. Excessive
inventory unnecessarily ties up money, adds warehousing costs, increases
risk of damage and risks obsolescence, and most of all, can possibly obscure
opportunities for operational improvements.
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Storing inventory is still the basics of warehousing, but in today‟s business
it constitutes only part of the total. A modern thought on warehousing is that
large inventories are really not as necessary as oncebelieved.
To some companies storing large quantities of inventory is detrimental to
business because it ties up capital and can also disguise poor management
practices. The JIT philosophy emphasizes flow flexibility and developing
supply chains to reduce all excess and waste
Implementation Of JIT
Although the just-in-time (JIT) concept is very young, perhaps 10 to 15
years old in this country, it is so widespread in American manufacturing and
service. Perhaps this is because the idea is so simple and so appealing. In
short, the JIT strategy is to have "the right product at the right place at the
right time." It implies that in manufacturing or service, each stages of the
process produces exactly the amount that is required for the next step in the
process. This notion holds true for all steps within the system.
Suppose, for example, that all products pass through a drilling operation and
then a milling operation. With JIT, the drill produces only what the mill will
need next. It also holds for the last step that is, the system produces only
what the customer desires.
Implementation of a JIT system typically includes emphasis on the
following aspects of the productionprocess:
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Production Smoothing
Capacity Buffers
Set-up Reduction
Cross Training and Plant Layout
Total Quality Management
Most of the companies today seek this method of implementation:
Form a top-level team:
This team‟s responsibilities include deciding upon an organizational
structure and developing a plan to implement JIT within the company. This
plan should include the company‟s goals concerning production, as well as
how to establish this plan among all employees (i.e. motivation & discipline)
This plan then be used to establish the overall philosophy of the company
concerning JIT
To train the top managementin the basic concepts ofJIT:
This is the first step of the implementation process. It is very important to
educate and train the top-level management, as they are the ones who frame
policies and get things moving. This being a new idea, getting this into
practice will need full support& cooperation from these people.
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To implement this system to every aspectof the company from supplier
to distributors:
First of all each department should establish its goals and a specific problem
to attack. Then a team should be chosen by each department and establish
team leaders. The teams should focus on the reduction of costs and the
elimination of wastes. Data must then be collected on the team‟s problems.
This data should be plotted in order to find excess waste or costs. Once this
is done, measurement should be plotted in order to find excess waste or
costs. Once this is done, measurement should be made. Manipulation of this
data should show at least some apparent problems in the current system.
Further analysis should help in the implementation of JIT by showing
problem areas. In addition, the data the data could be used to show the
effects of implementing JIT into the company.
Guidelines for SuccessfulJIT Implementation
Make the factory loadings uniform, linear, and stable. Fluctuations in
manufacturing loadings will result in bottlenecks. Reduce, if not eliminate,
conversion and set-up times. Reduce lot sizes. This will smoothen out the
flow of inventories from one station to another, although this may
necessitate more frequent deliveries or transfers. Reduce lead times by
moving work stations closer together and streamlining the production floor
lay-out, applying cellular manufacturing concepts, using technology to
automate processes and improve coordination. Reduce equipment
downtimes through good preventive maintenance. Cross-train personnel to
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achieve a very flexible work force require stringent supplier quality
assurance since an operation under JIT can not afford to incur errors due to
defects. Use a control system to convey lots between workstations
efficiently; the use of a kanban system is an example of this
Benefits of JIT
Perhaps, the most significant benefit of JIT is to improve the responsiveness
of the firms to the market place thereby affording it an overwhelming
advantage in competition. Specific benefits will depend upon size of the
market, technology of processes etc. Therefore, they vary from organizations
to organization.
One of the benefits of JIT is that with raw materials and WIP being
processed in smaller batches, errors can be easily identified and corrected
quickly, during each stage of the production process. This in turn has the
‘knock-on’ effects of reducing non-value added costs
Conceptually, the JIT benefits could be grouped into the following
categories;
Product Cost: This is greatly reduced of manufacturing cycle time,
reduction of scraps, inventories, space requirement, and material handling
and eliminations of non-value adding operations.
Quality: It has greatly improved due to fast detection and correction of
defects, use of automatic stop devices, higher quality of purchased parts,
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worker centered quality control and statistical process control. Total
preventive maintenance an d lower inventory levels also help in quality
improvements.
Design: Due to fast response to engineering change, alternative designs can
be quickly brought on the shop floor.
Productivity: Order magnitude productivity improvements are obtained due
to the use of flexible workforce, reduced rework, reduced inspection,
reduced part delay and reduced throughout time. Workers acquire multiple
skills and becomehighly productive.
JIT systems have a number of other important benefits also, which are
attracting the attention of various companies. The main benefits are:
Reduced levels of in-process inventories, purchased goods, and
finished goods.
Reduced spacerequirements.
Increased productquality and reduced scrap and rework.
Reduced manufacturing lead times.
Greater flexibility in changing the productionmix.
Smoother production flow with fewer disruptions.
Worker participation in problem solving.
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Pressure to build good relationships with vendors.
Increased productivity levels and utilization of equipment
Reduction in the need for certain indirect labour.
Just In Time (JIT) Manufacturing
Just in Time manufacturing is a systems approach to developing and
operating a manufacturing system. It is based on the total elimination of
waste. JIT is not a new concept. It has been part and parcel of the Japanese
manufacturing industry adopted approach for quite some time. It requires
that equipment, resources and labor are made available only in the amount
required and at the time required to do the job. It is based on producing only
the necessary units in the necessary quantities at the necessary time by
bringing production rates exactly in line with market demand. In short, JIT
means making what the market wants, when it wants it. JIT has been found
to be so effective that it increases productivity, work performance and
productquality, while saving costs.
JIT AND COSTS
JIT can affect the bottom line in a variety of ways. Improvement in quality
and delivery times can increase demand and, thus, revenue. Costs are also
affected; the JIT philosophy contends that inventory reduction and increased
quality reduce costs. Traditional costaccounting Systems often makes it
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difficult to measure the effects of changes except in very aggregate terms.
One of the tenets of JIT is to account for these effects more accurately.
CostAccounting Systems
Costs are a major factor in PIM decisions. Unfortunately, traditional cost
accounting Systems often do not tell the decision maker how much a
specific decision wilt affect actual expenditures. This is due to overhead
costs being hidden by the allocation methods.
For example, overhead costs usually are allocated to departments (cost
centres) rather than to activities, such as set-up, and inspection and
maintenance operations. In addition, allocation based on the material or
directs labour required to manufacture an item ignores the fact that different
items are in different stages of their life cycles.
Thus, different items may have different manufacturing, engineering, and
tooting costs, may have quite different quality and inspection requirements,
and may require different marketing and distribution expenditures. When
these costs are aggregated and allocated on the basis of the average direct
labour cost of a part-as is the case with most traditional cost accounting
systems-some products are allocated costs considerably below the actual
expenditures required for their manufacture and distribution and others are
allocated more than their true cost. Thus, decisions often are based on
inaccurate information.
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In order to manage costs and base decisions on accurate information, the
causes (source) of the expenditures must be identified. Various expenditure
causes; such as set-up times, shop and purchase order processing, receiving,
and material handling deserve more discussion.
These basic causes of indirect costs are called cost drivers. The cost
accounting system must report the cost of these activities to accurately
determine the costs of individual products. Such reporting enables
manufacturing management to treat set-up, inspection, receiving, and
transaction costs as direct costs, to base decisions on accurate information,
and to focus on reducing high cost elements. An ABC analysis can be used
to select the activities that are appropriate for costreduction studies.
JIT, TQM, AND THE PRODUCTIONPIPELINE
Think of a company as a pipeline with raw materials entering at one end and
products emerging at the other.( the pipe can be extended conceptually with
customer needs or orders going in at one end and products arriving to
customers at the other.)
The goal is to minimize the through put time, that is to move the materials
as quickly as possible Shorter throughput time is better But the pipeline
varies in size and has obstructions through out. Output is determined by the
narrowest part of the pipeline and the biggest obstruction.
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These must be identified and then eliminated to achieve the goal. As each
obstruction is eliminated the flow speeds up but only by as much as allowed
by the next biggest obstruction elsewhere in the pipeline.
Identification and location of these obstructions, understanding them, and
finding ways to eliminate them are the purposes of JIT and TQM. The
pipeline analogy may give an impression those barriers to flow / production,
once removed is gone forever. This is not true. To identify the obstruction
and its precise location in itself is difficult and time consuming
Inventory as a way of avoiding problems
Sources of obstructions keep changing and it could be any one of the factors
of production and /or in any combination of the factors. One gets eliminated
and another one crops up and therefore it has got to be continuously attended
to.
The pipeline itself and the things that floe through are changing always. The
diameter of the pipeline may have to be changed. But only the extent
required. Over size is waste, while undersize would not meet the required
throughput.
The BEST flow rate would be that which matches the required output rate.
At times the pipeline itself may have to be modified or even replaced. As
changing processes and products introduce whole new set of obstructions.
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In short the work on the pipeline is CONTINUOUS. JIT and TQM
continuously enable tinkering the pipeline so that the material coming out of
the pipeline is the best possible in all respects.
JIT / TQM Difference in Organizations
JIT /TQM greatly increase the number of people who are involved in
identifying and eliminating obstructions. Every one does it Level of
authority of workers to make and carry out decisions is much higher
Emphasis is on measure, diagnose, and improve it.
Second difference is in the process employed to identify and prioritise
problems and sources of waste
In JIT the primary process is reduction of inventory, mainly to reveal the
obstructions (which were earlier hidden or ameliorated by the inventory) and
prioritise them.
Just in Time Summary
Efficient Techniques Reduce Leeway(Maintaining Continuity)
1. Prepare a disaster plan, e.g. firing protection or backing-up data. He
believes that the better the disaster plan, the larger chance the companies
will survive after disaster.
2. Cost-reduction strategies.
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3. Develop long-term continuity plan.
4. Identify critical functions and estimate the time, the company can afford
without such function.
5. Identify potential alternative suppliers.
6. avoid too complicated continuity plan.
7. Evaluate risk before any decision.
8. Conducting continuity tests.
Just in Time-----Manufacturing
(1) Introduction
Just in Time---manufacturing is a systems method to develop and operate a
factory system. It is mainly basis on the total Decrease of waste. As you
know, many people think JIT is not a new knowledge field. As a matter of
fact, it has been part and plays an important role of the Japanese
manufacturing industry adopted method for a long time. It requires all the
materials such as equipment, human resources, and management skills are
made available only in the amount required and at the time required to do
the job. It is based on producing only the necessary units in the necessary
quantities at the necessary time by bringing production rates exactly in line
with market demand. Generally speaking, JIT means making what the
market wants. JIT has been found to be so effective that it increases
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productivity, work performance and product quality. What‟s even more, it
plays a vital role to increase productivity and decrease the total cost of
manufacturing production.
(2) Planningfor JIT
Since each manufacturing process is different, it is up to the individual
company to determine the degree of appropriateness and the final
application of JIT. However, it is very important to define the plan and
objectives before setting up a JIT manufacturing system. It is impossible to
establish a new JIT system that can be used successfully without change.
Therefore, we should take serious consideration to make a plan for Just-In-
Time, which will benefit to our factory performance.
(3) Defining the Planning
JIT manufacturing system requires an understanding of the objectives of JIT,
and objectives of the JIT system. After the objectives are set up for the
manufacturing, the process of planning becomes one of determining what is
required to meet those objectives. The goal of a JIT approach is to develop a
system that allows a factory to have only the materials equipment and people
by hand required doing the some plan. T o achieve this goal, we should have
equipped with at least five fundamental plan:
· Integrating and optimizing every step of the manufacturing process ·
Reducing manufacturing cost· Producing producton demand · Developing
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manufacturing flexibility · Produce quality product to maintain
commitments and links made between Customers and Suppliers
We also should keep in mind that achieving these obtaining targets does not
automatically make a company a JIT manufacturer. On the contrary, it will
lead to achieve even one of these objectives will prevent a manufacturer
from establishing a successfulJIT system. According to Common Wealth on
May, 1996 report, it said that “A company cannot decide to implement JIT;
they must earn the right to use JIT by revising their quality for system."
(4) Reducing ManufacturingCost
If we can design products that it will speed up and decrease manufacturing
processes. Gradually, it will help us to reduce the cost of manufacturing and
building the product to specifications benefit. One aspect in designing
products for manufacture ability is the need to set up a good boss and
employee relationship. At least, this is to cultivate and procure the resources
of the production experts, and the line employees to develop cost saving
solutions. Participatory quality programs utilize employee knowledge about
their job functions and review the department performance. It will, finally,
encourage with rewards for suggested total costsaving.
(5) Manufacturing Flexibility
According to China time report on August 1996. "Manufacturing flexibility
is the ability to start new projects or the rate at which the production mix can
be adjusted to meet customer demand." Planning for manufacturing
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flexibility requires the understanding of the elements in the manufacturing
process and understanding elements in the process that restrict flexibility and
improving on these areas. The unique feature of Just-In-Time is the
modification from between pull and push systems. The main idea behind
these approaches is that "work should not be pushed on to the next worker
until that worker is ready for it." (Hauser, J.R.) As a result, manufacturing
flexibility requires production managers to consider the some important
factors, such as supplier lead time, production process time, process setup
time and so forth.
(6) Keep in touch between customers and suppliers
For factory main commitment to achieving the internal structures, both
customer and supplier are also playing a vital role to support JIT
manufacturing. Because it is the primary requirement for developing the JIT
system, each other can establish trust and honest between the supplier and
the customer which is a must, since every Just-in-Time operation depends on
it. Supposed, finally, it leads to failure to keep the commitments each other.
Finally, it will be result to a serious form of breakdown manufacturing
systems. Therefore, we should pay attention to this kind of serious call.
Never be ignorant of this commitment. If we can make use of Just-In-Time
(manufacturing approaches), it, eventually, will attain those goal, which are
the fundamental conceptof producing productonly as needed or on demand.
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UNIT – 6 KANBANJUST-IN-TIME AT TOYOTA
INTRODUCTION:
When we talk about Kanban Just-In-Time, you maybe have a question
which company set a very good example to fulfill this approach. The answer
is Japanese company ------Toyota. Not only did Toyota take advantage of
Kanban Just-In-Time, but it also get a very good benefit to operate its
company. Kanban just-In-Time helps companies solving many
Manufacturing problems. Kanban derives it name from the manufacturing
systems and processes implemented at Toyota Motor Manufacturing that are
so effective at producing at low cost, high quality, and short cycle times. As
a consequence, these systems are highly flexible and responsive to customer
requirements. Toyota capabilities are listed below. Kanban Just-In-Time
impact on whole Toyota productionapproachas following:
(a) Standardized work
Manufacturing Cells
Manufacturing Lines
Facility Layout
Technology Development
Simulation of processesand systems
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(b) Quality Improvement
In Process Inspection
Experimental Design
Process Development
(c) Continuous Improvement
Example:
Toyota manufacturing processes route the product around the plant to
various work centers where work is staged to be processed. Implementing
manufacturing cells typically increases net income dramatically and reduces
cycle time over 50%. The cost of design and implementation is usually
recovered within the first year from inventory savings. In this paper, we
present the benefits of bringing the processes to the product and discuss the
value of simulation as a tool to design and predict cell performance prior to
implementation; therefore, reducing financial and technical risk to the
company.
On September 10, 1997, Mr. Hoskins presented on "Improve Profits and
Reduce Cycle Time with Manufacturing Cells and Simulation" for the
National Technology University series on Kanban just-In-Time
Manufacturing of this series. On October 27 - 28, 1996 Jerry Hoskins,
President presented a paper titled "Developing a Lean Implementation
Roadmap" at the SME Kanban Manufacturing Conference in Dearborn,
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Michigan. The intent of this paper is to provide information to companies on
where to start with a Kanban implementation based on where one is
currently manufacturing operation. His theory help our many manufactures
implement all the elements of Kanban Manufacturing directed at elimination
of manufacturing waste as defined by the Toyota Production System. These
systems are more flexible, responsive, and profitable than traditional
manufacturing systems. And, its theory also help our many participate
determine where best to start with a Kanban implementation which usually
involves an assessment of current operations. Once plan is developed we
design the system to be implemented which may involve layout, cells, JIT,
process technology, and process simulation.
Conclusion:
To sum up, we should make fully use of Kanban in order to improve the
performance of a production line which is under controlled by Kanban.
Generally speaking, Kanban is combined with base stock or immediately
improvement to create a hybrid production control system. Simulation
results based on a Toyota factory show that this policy meets throughput
targets with significantly lower inventories than Kanban alone. As a result,
Toyota research considers a line production system which purchases raw
materials from a supplier, processes them into finished products and delivers
them to a buyer just in time. This study focuses on finding the optimal
number of raw material orders, finished goods deliveries and Kanbans
between work stations for a time-proportionate demand of finished goods.
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Unit – 7 JUST IN TIME IN FORD
FORD KA IN JUST IN TIME
Production of Ford latest small car, the Ford KA has been a dramatic
improvement compared to Ford previous product, Fiesta (Kochan, 1997).
This is a real example of successful JIT implementation with all its
outsourcing strategies. The production target of 1,100 KA cars per day has
been reached only within 8 weeks since the launch date, compared to 15
weeks required for Fiesta. Ford found that the initial bottleneck was caused
by material handling, assembly time and inbound logistic. Some of the
components in Fiesta are supplied by various suppliers and these
components had to be made, loaded in the container and scheduled for
delivery before finally delivered by trucks. This common process is found to
be inefficient as every part has to be continuously handled by human and
this causes big risks of damages, misplaced and imperfection in quality,
especially for cosmetically sensitive and fragile parts such as instrument
consoles, electrical wiring and airbags.
With the new developed JIT system supported with sophisticated aerial
tunnels connecting Ford with its suppliers, production lead times can be
minimised, product quality can be improved, responsiveness towards
customer demands can me boosted and the most important thing is
inventory, space requirements, handling and transportation cost can be
dramatically reduced (Kochan, 1997). Ford is now connected with more than
50 suppliers in Valencia with specifically designed aerial tunnels. These
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tunnels are also very useful to transport bulky and heavy items such as seats
and fuel tank. The brain of this amazing system is DAD (direct automated
delivery) which will integrate the whole processes virtually as one extended
manufacturing warehouse. DAD will enable a smooth manufacturing
process by applying Ford scheduling system so that all the supplied
components being delivered right on time they are needed. In addition, DAD
and its tunnels enable the integration of manufacturing equipment so that the
component being delivered can be immediately installed with the main body
or other components in Ford factory.
Summary of Ford Valencia manufacturing system prior JIT
implementation:
Minimum of 15 weeks to reach full productioncapacity
Required at least 3,000 parts to be assembled for each car
Very small outsourcing involve for car components
All parts from suppliers are delivered on trucks
Stockmust be kept at certain level to assure the continuity of
production
Parts are often damaged during packaging, handling or delivery
Spent over $6 million for inefficient delivery system (250+ trucks per
day)
80 per cent automation in overall
Manual seats and battery placement and this may cause injury for
employee
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In a dynamic market trends, pre-JIT system clearly is not responsive enough
as an answer. There are minor inefficiencies throughout the system which
accumulate into serious problem that may cause Ford being less competitive
in the market.
Improvement Process analysis
The main objectives of JIT are obtaining low-cost high quality products and
on-time production as well as eliminating waste and stagnant stock
(Svensson, 2001). Even though most of JIT implementation has similar aim
and purposes, the strategies involved may differ from industry to industry or
company to company. Ford has smartly chosen the right methods and
strategies by reducing the barriers in relation with its suppliers.
Through JIT, Ford is achieving the highest efficiency in car manufacturing
industry. Its plant in Valencia has become the standard and being adopted in
its other plants in many other countries. Apart from its tangible benefits such
as saving on transport costs, stock/inventory costs, quicker manufacturing
process and minimised risk/wastage, JIT will also bring immediate
intangible benefits such as improved customer satisfaction through
immediate responses and shorter timeframe to respond towards market
trends.
Improvements being achievedthrough JIT implementation:
Only 8 weeks required to reach full productioncapacity
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Only 1,200 parts need to be assembled, the rest have been done by its
suppliers
All the outsource-viable productionparts are outsourced
Automatic delivery system and aerial tunnels are developed to
minimise transport
There is barely any stockrequired as most parts are made to order
The whole manufacturing process including the suppliers are working
as one system
The need of conventional truck delivery is minimum
98 per cent automation
Seats and battery placement are being done by automated high-
precision machines
There is not enough detail to measure the benefit of JIT implementation
against the pre-JIT system, however from rough analysis Ford will gain the
benefit immediately and get the investment back in virtually no time.
JIT cost/benefitanalysis for Ford Valencia
COSTS BENEFITS
Extending outsourcing (losing Speed-up production process 8
control) weeks
$500 million pilot plan and Smaller number or manufacturing
analysis parts
Concentrating on core business
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functions
25% shorter time production time
needed
Accuracy of production on plan
Building aerial tunnels Less handling = less damages /
Setup Direct Automated Delivery costs
DAD Less conventional transport
$16 million delivery system dependent
Time saving
Manufacturing seamless
integration
Further interest from more
suppliers
Saving $6+ million per year on
transport
Conclusion
In this paper, we examined the implementation of Just-In-Time methodology
in Ford for its latest small car KA; possibly one of the most interesting
manufacturing revolutions where companies involved in the production are
integrated not only in their business processes moreover in their physical
plants. JIT has shown it success to produce the best quality product within
the shortest time frame with minimum/no wastage and cost-effective to all
parties. Careful productionplanning, cost-benefit analysis, adequate
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outsourcing plans and customer orientation are being praises as the key
success factors ofthis amazing Just-In-Time concept.
GeneralMotors
An example of the use of JIT in General Motors is given below.
General Motors (GM) in the USA has (approximately) 1700 suppliers who
ship to 31 assembly plants scattered throughout the continental USA. These
shipments total about 30 million metric tons per day and GM spends about
1,000 million dollars a year in transport costs on these shipments (1990
figures).
JIT implies frequent, small, shipments. When GM moved to JIT there were
simply too many (lightly loaded) trucks attempting to deliver to each
assembly plant. GM's solution to this problem was to introduce
consolidation centres at which full truckloads were consolidated from
supplier deliveries.
This obviously involved deciding how many consolidation centres to have,
where they should be, their size (capacity) and which suppliers should ship
to which consolidation centres (suppliers can also still ship direct to
assembly plants). As of 1990 some 20% by weight of shipments go through
consolidation centres and about 98% of suppliers ship at least one item
through a consolidation centre. All this has been achieved without sacrificing
the benefits of JIT.
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1. Uniit – 7 JIT and IBS
AN OVERVIEW OF IBS
7.1 JIT and IBS
The term „Just-In-Time‟ (JIT), used for instance to describe the delivery of
materials to a construction site, suggests that materials will be brought to
their location for final installation and be installed immediately upon arrival
without incurring any delay due to storage in a laydown or staging area. JIT
is a conceptdeveloped by the Japanese who created the Toyota Production
System, later translated into English as the lean production system. The
ultimate objective of JIT productionis to supply the right materials at the
right time and in the right amount at every step in the process.
Thus, IBS is one example of JIT in construction. Rahman and Omar
(2006) defined IBS as a construction system that is built using pre-fabricated
components.
The manufacturing of the components is systematically done using
machine, formworks and other forms of mechanical equipment. IBS is
defined as products, systems and techniques used in making construction
less labour-oriented, faster as well as quality controlled. It generally involves
prefabricated products, factory manufactured elements that transported to the
construction sites and erected. (Shaari, Bulletin Ingénieur, 2003) According
to Abraham Warszawski (1999), IBS is defined as a set of element or
component which is inter-related towards helping the implementation of
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construction works activities. He also expounded that an industrialisation
process is an investment in equipment, facilities, and technology with the
objective of maximising production output, minimising labour resource, and
improving quality while a building system is defined as a set of
interconnected element that joint together to enable the designated
performance of a building.
7.2 Classification of IBS
According to Badir- Razali, generally, there are four types of building
systems currently available in Malaysia‟s building system classification
(Badir et al. 1998), namely conventional, cast in-situ, prefabricated and
composite building systems. Each building system is represented by its
respective construction method which is further characterised by its
construction technology, functional and geometrical configuration.
Fig. 3 : Type of building system in Malaysia Nonetheless, according to
CIDB (2003), the structural aspects of IBS of the systems, divided into five
major types as follows:
1. Precast Concrete Framing, Panel and Box Systems Precast columns,
beams, slabs, 3-D components (balconies, staircases, toilets, lift chambers),
permanent concrete formwork, etc;
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Precast concrete wall
2. SteelFormwork Systems
Tunnel forms, beams and columns molding forms, permanent steel
formworks (metal decks, etc;
Steel formwork system
3. SteelFraming Systems
Steel beams and columns, portal frames, roof trusses, etc;
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Steel roof trusses
4. Prefabricated Timber Framing Systems Timber frames, roof trusses, etc;
Prefabricated timber framing system for a double storey house
5. Block Work Systems
Interlocking concrete masonry units (CMU), lightweight concrete blocks,
etc.
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Lightweight concrete blocks are used for wall construction The pre-cast
concrete components are among the most common prefabricated elements
that are available both locally and abroad. The pre-cast concrete elements
are concrete products that are manufactured and cured in a plant
environment and then transported to a job site for installation. The elements
are columns, beams, slabs, walls, 3-D elements (balconies, staircase, toilets,
and lift chambers), permanent concrete formwork and etc.
The steel formwork is prefabricated in the factory and then installed on site.
However the steel reinforcement and services conduit are installed on site
before the steel formwork are installed. The installation of this formwork is
easy by using simple bracing system. Then concrete is poured into the
formwork and after seven days, the formwork can be removed and there is
some system whereby the formwork served as a part of the structure itself
after concreting. The steel formwork systems are used in tunnel forms,
beams, column moulding forms and permanent steel formworks.
The elements of steel framing system are rolled into the specific sizes
and then the elements are fabricated that involves cutting, drilling, shot
blasting, welding and painting. Fabricated elements are sent to the
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construction site to be then erected whereby welding and the tightening of
bolts at joints are conducted.
The elements include steel beams and columns, portal frames and roof
trusses the prefabricated timber framing system is normally used in the
conventional roof truss and timber frames. The timber is prefabricated by
joining the members of the truss by using steel plate. It is important that all
members are treated with the anti pest chemical. Then, the installation is
done on site by connecting the prefabricated roof truss to the reinforcement
of the roofbeams.
The elements of block work system include interlocking concrete masonry
units (CMU) and lightweight concrete blocks. The elements are fabricated
and cured in the factory. The elements are normally used as bricks in
structures and interlocking concrete block pavement.
7.3 Value Stream Mapping
Koskela (1992) pointed out that architects, engineers, and construction
practitioners have for the longest time focused on conversion activities and
overlooked issues of flow. Flow is important because work or materials that
do not flow sit idle in inventory, tying up money (including the procurement
costof ingredients plus labor and machine time to bring them to the stage of
completion they are in) as well as space. They stand the risk of being
damaged or becoming obsolete due to design changes or market
competition. Inventory means productwaits: its cycle time increases, that is,
it takes longer for the productto traverse all production steps it needs to go
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through before reaching its customer. As a result, project durations are larger
than they would have been had flow not been inhibited.
Most tools used today by practitioners who manage construction, such
as those fordesign, planning, scheduling, and costing, do not acknowledge
flow: they do not explicitly capture changes of resource characteristics over
time. Process modeling tools for discrete event simulation are an important
exception and warrant more attention by the lean construction community.
Such models can incorporate input regarding individuallycharacterized
components, uncertainties of numerous kinds, and sequencing rules (e.g.,
Tommelein 1997) and then produce output data regarding buffer sizes, cycle
times, idle times, production rates, etc.
The symbols commonly used to depict process models for construction,
however, have yet to distinguish how processes are being managed, for
instance, whether or not a JIT system has been implemented. Practitioners in
manufacturing, working for Toyotaand then later for other companies
„going lean‟ developed their own pictorial language to help focus attention
on what matters in their transition. We borrowed such symbols from Rother
and Shook (1998) and used them to map structural steel supply chains.
Boxes denote value-adding processes or tasks, such as ordering raw
materials, fabricating steel, and transporting shipments to a site. A triangle
denotes work in progress or inventory. It represents an accumulation of
product (materials or information) possibly of unlimited amount and for an
indeterminate duration. An inverted triangle is an order to batch. Kanban
(introduced in Figure 1) denote orders to withdraw or produce product, in
order to deplete or replenish a supermarket. A supermarket, represented by ,
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refers to controlled inventory in terms of how much material is kept on hand
and how replenishment takes place. The FIFO symbol denotes the first-in-
first out release of resources output by a task. The circular arrow denotes a
physical pull of materials from a supermarket. It differs from the withdrawal
kanban in that it pertains to the amount of product needed at the time of the
withdrawal and not necessarily a predetermined fixed quantity. A dashed
line with an arrow designates the flow of product. A solid white line is
transportation of product to the customer site. A black-andwhite dotted line
shows that productis pushed into inventory.
Rother and Shook (1998) use these symbols for so-called “value
stream mapping” where the term “value” pertains mainly to reducing work n
process inventories and product cycle times. Our use of this notation stems
as much from our desire to engage in mapping the structural steel supply
chain as it does from our desire to test the adequacy of those symbols in
representing architecture/engineering/construction processes and in
capturing value.
7.4 Example Structural SteelSupply Chain for Building Construction
The structural steel supply chain for building construction differs in several
regards from the one for industrial construction. The building‟s frame may
in fact be more complex, especially when it supports a very tall structure, so
the major steel sections require extra procurement effort.
The industry is also organized differently. On design-bid-build projects, a
common delivery method for buildings, the owner typically hires an
architectural engineering (AE) firm, which in turn hires a structural designer.
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When the AE has prepared all bid documents, the project is put out for bid.
A general contractor (GC) is then selected. The GC subcontracts the steel
work to the fabricator, who in turn subcontracts field installation work to a
structural steel erector. The latter essentially provides the crane and skilled
labor, whereas the former is responsible for acquiring, fabricating, and
shipping the materials to site in the sequence needed for erection. The
fabricator may also subcontract the structural steel detailing work. Fabricator
and erector work as a tightly knit team. The GC will meet with them during
bid preparation. They must assess the project site constraints to position the
erector‟s crane, as it determines not only the steel erection sequence but also
the layout of other temporary facilities and thus the flow of many
construction resources. This sequencing in turn drives the fabrication
schedule. It must of course meet the GC‟s master schedule but must also be
efficient4 the fabricator who subcontracts the erection work has an incentive
to minimize that work and does so by thoroughly planning the sequencing
and site delivery of steel pieces in the order they will be needed.
As for logistics, a big difference between the industrial and the building
sectoris that more often than not building space is very tight, especially on
projects located in an urban environment. Industrial projects tend to be more
remotely sited. Materials deliveries to building projects accordingly are
constrained by traffic patterns and transportation permit requirements.
Trucks parked in the street along the edge of a site ready to off-load steel
may not remain there for any extended time. When deliveries take place, the
crane gets dedicated to off-loading and moving pieces to a staging area,
namely the highest floor with decking, from where steel will subsequently
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be picked up and moved into final position. Only in exceptional cases will
steel be erected directly off the flatbed truck. This saves extra handling steps
but can be done only when it is acceptable to tie up the truck longer and
provided the steel has been loaded in inverse order needed. Differences in
value stream maps between industrial and building construction are therefore
expected at least near the end of the chain, especially in the way delivery to
the project site is organized. If JIT is practiced in industry today one possible
way is depicted in figure 3.
Figure 3 includes two supermarkets, which illustrate the presence of pull
mechanisms. The steel mill (IV) still takes special orders. The resulting
output is stored in a generic buffer (triangle). The buffer is not specifically
controlled in size but it is filled only based on firm customer orders. That
product is sold so it is unlikely to become obsolete (waste). The mill also
produces run-of-the-mill productin anticipation of customer orders. As was
the case in figure 2, this is denoted by a supermarket where quantity-on-hand
will not exceed a threshold value and gets replenished at appropriate times.
A second supermarket is shown in figure 3 to handle output from fabrication
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(III). For instance, the fabricator of a 20-story building could complete the
steel for stories 1 through 3, then await orders from the construction site
(withdrawal kanban) to ship them steel for story 1 before starting work on
story 4 (production kanban). A smaller inventory buffer may be well suited
provided fabrication can keep pace with erection. Since there is virtually no
storage space on site, no buffer of materials is shown preceding ERECT
[ion] (VI). The creation of large buffers either at the contractor‟s or
fabricator‟s site is contrary to JIT production system design. As the word
JIT suggests, materials must be fabricated or delivered on time, which means
not too late but not too early either. This implies that variability regarding
timing, actual pieces released, as well as quality must be limited and
controlled.
In a true JIT system, this timeliness pertains not only to a single hand-
off between two production steps, but rather, one aims at achieving JIT flow
between all production steps. In the idealistic extreme, this means having no
buffers at all! In practice, this means buffers must be determined trategically.
Admittedly, doing so is not an easy task, especially in a production system
of complex products that involve several organizations as is the case for
structural steel. But this is what lean Because of construction‟s one-of-a-
kind project nature, the structural steel supply chain differs from
manufacturing systems for more standardized products, which can be
likened to the Toyota Production System. The manufacturing symbols used
here for mapping the steel supply chain provide no room for defining
individually-characterized resources or detailed sequencing rules. While
their ability to show processingdurations and delay times has not
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been used in this paper (we expect to do so in future work), we doubt that
using only deterministic values will suffice. Some representation of
uncertainty will have to be incorporated in the maps.
The current practice of buffering stems from the desire to optimize
labor and machine utilization and from admitting that uncertainties exist in
the supply chain. Many uncertainties are the result of variability, which
could be understood better if at least it were measured and explicitly
accounted for. This is not the current practice in construction. Uncertainties
and variability should not be taken for granted. They should be
acknowledged, managed, and minimized to a reasonable degree. In fact, one
technique to identify them is to reduce buffer sizes in-between various
production steps in order to see and learn the extent to which they are
needed. Process improvement efforts can then focus on those steps where
the impact on throughput of the system as a whole will be most significant.
Example improvements in construction are those that aim at reducing
uncertainty, as is done for instance through reliable planning by the Last
Planner (Ballard and Howell 1998), work methods design, and work
structuring (Ballard et al. 1999).
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Unit – 8 CASE STUDY JUST IN TIME
CASE STUDY – 1
JUST IN TIME
A case study pertains contractors who bids on projects from County of San
Francisco, the Public Utilities Commission as well as the Water Department.
Most of these jobs include concrete of a well-defining and widely-used kind
through quantities usually small in comparison to what is needed for
residential or office building projects. Concrete is a very common
construction material. Projects ranging from a single family home to a high-
rise building all may need concrete for their foundation, slabs, columns,
beams, walls, etc. to be constructed. In urban settings, the task of delivering
concrete moreoften than not has been delegated to ready-mix batch plants
and contractors has to rely on the timing and reliability of their service.
Although this set-up puts the contractor‟s project somewhat at the mercy of
the batch plant, most batch plants perform at their very best to meet their
customers‟ schedules.
On-time delivery is part of the product they sell. The interplay
between contractors and batch plants is interesting. On one hand, the
contractor must order a large enough quantity, sufficiently long ahead of
time to ensure available batch plant capacity and timely delivery service in
order to maximize productivity of their placing crew.
On the other hand, the batch plant tries to time its deliveries so that all
projects are served according to the contractors‟needs and the plant as well
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as the trucks and drivers have little idle time. This balancing act between the
two parties is not always achieved due to the nature of concrete and the
nature of the production systems being used.
In addition to contractors and batch plants, this balancing act also involves
the suppliers of raw materials to the batch plant, crews on site that erect
formwork and tie reinforcing basin preparation for concrete placement, as
well as others.
Although the interdependence of all these parties typically results in
uncertainties rippling through the supply chain, the focus of this paper is
limited to the downstream-, namely the contractor vs. batch plant
relationship.
The batch plant could, in order to level its load, vary its unit price of ready-
mix concrete based on the time and day of the week at which concrete is to
be delivered. This would illustrate a market mechanism at work, however,
we are not aware of such differential pricing being advertised in the industry
today.
As one can imagine the city imposes limits on working hours in order
to avoid congestion during peak traffic times, excessively long closure of a
road for vehicular or of a sidewalk for pedestrian traffic, undue
inconvenience of road users and complaints about noise from citizens or area
residents. In addition, contractors must obtain a work permit from the city in
order to work at a specific location.
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This contractor s main concern has been tardiness of deliveries made
by batch plants. Because most of these jobs have restricted working hours,
punctual delivery is of paramount importance.
However because each order is small ( a few cubic yard at a time),this
Contractor cannot get any plants attention. Went plant truck arrive late to his
jobs, he loses that time for the concrete to set and may therefore not be able
to open the site to traffic when needed.
To achieve on-time performance this contractor has acquired a fleet of small
revolving-drum trucks as well as dump trucks (used to fill „potholes with
concrete) to meet his projects concrete transportation needs, The latter trucks
are not so good as the former for transporting concrete as the mix may
segregate.
This contractor has its trucks pull into any batch- plant during operating
hours and order concrete. The contractor-owned trucks simply join the line
of plant trucks waiting to be loaded. The driver then goes to the operator‟s
walk-up window and orders the needed mix design and quantity. The batch
plant fills these trucks in the same way as it fills its own in a first-in-first-out
manner. The contractor then gets billed on a regular basis for exact amount
loaded. At the site, the driver works with the crew in placing concrete.
Providing one‟s own ready-mix trucks does not mean that the unit price of
concrete is any cheaper but it overcomes many scheduling hassles. No
advance order needs to be placed to reserve plant capacity as only a few
cubic yards of commodity mix are needed each time.
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By taking controlover the transportations process and the contractors crew
can work at their own paceand not have to fret over when concrete would
arrive.
This kanban system work well especially on these projects where timing of
need is not dictated exclusively be the contractor, but as is the case here also
to a significant extent by the owne.This contractors has its trucks pull into
any batch-plant during operating hours and order concrete. The contractor-
owned truck simply join the line of plant trucks waiting to be loaded. The
driver then goes to the operators walk-up window and orders the needed mix
design and quantity.
The batch plant fills these trucks in the same way as it fills its own, in a
firstin- first –out manner. The contractor then gets billed on a regular basis
for exact amount loaded. At the site the driver works with the crew in
placing concrete.
Providing ones own ready mix trucks does not mean that the unit price of
concrete is any cheaper but it overcomes many scheduling hassle. No
advance order needs to be placed to reserve plant capacity as only a few
cubic yards of commodity mix are needed each time.
By taking control over the transportation process and using trucks as kanban
each time concrete is needed, the contractor‟s crew can work at their own
pace and not have to fret over when concrete would arrive. This kanban
system works well especially on these projects where timing of need is not
dictated exclusively by the contractor, but as is the case here, also to a
significant extent by the owner.
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This contractorthus controls what is otherwise a system variable controlled
by an upstream supplier, namely the batch plant‟s delivery of concrete. As a
result, the contractor can better schedule his work and be more reliable in
making project due dates. Should one batch plant not be able to serve his
needs, he can easily go elsewhere. The contractors pays for this ability. He
now needs to have capital tied up in trucks and is responsible for hiring and
training drivers. Because he has a fairly steady need for concretefrom one
project to the next(contrary to many other who need concrete only for one
phase of their work.)he can keep them gainfully employed.
Ready-mix concrete is a prototypical of a JIT production system in
construction. Two practices regarding ready-mix batching and delivery were
described in this paper and depicted using value stream mapping symbols.
Each case highlighted the presence of buffers of information, materials, and
time as well as production order and withdrawal mechanisms positioned at
strategic locations to meet specific system requirements, as defined by the
nature of the contractor‟s work. One alternative is favored over the other
depending on the amount of control the contractor wants in terms of on-time
delivery of concrete and the variability in the contractor‟s demand for
concrete project after project. While these practices clearly exemplify JIT
production, the paper was limited in scope. No data was included to
characterize the actual performance in terms of timeliness, buffer sizes, error
rates, etc. Moreover, the paper focused on batching and delivery, which are
only parts of the entire concrete productionsystem.
Current practices for managing the concrete supply chain upstream in terms
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of raw materials acquisition or prerequisite work on site are not geared
oward JIT production. Further investigation is therefore warranted and
significant process improvements may be achieved by those working
towards fully implementing a lean construction system.
Case Study 2 :
Fakuda Production System (FPS)
The construction companies that adopted the Toyota Production System and
Just in Time on a large scale in Japan are Fakuda Corporation in the field of
building construction and couple of companies in the field of housing
construction. Fakuda Corp. is a Niigita-based construction company having
annual sales of $ 946 million (in 2003).With the objective of making
construction work more efficient and reducing construction costs, the
company introduced the system in construction work in 2002.
In order to introduce the system the company received guidance from
consultants CULMAN CO.LTD who were former employees of Toyota otor
Corp. This building production system is called the Fakuda Production
System ( FPS)
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The material distribution facilities were established so that materials can be
delivered to the site JIT. In addition, the JIT material distribution network
was set up to link the field office,branch offices, and material distribution
facilities, Necessary materials are delivered to the predetermined location(
Room C on Floor B at Site A,for example)in time. To visualize the JIT
delivery process, the JIT delivery system board is posted to boost awareness.
Time is Money among
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workers. The JIT ideal is elimination of physical buffers (materials or
time)between production processes, and the achievement of one piece flow
within processes, i.e. batch sizes of one.JIT was able to virtually eliminate
such in-process inventories because production scheduling provided
sufficiently stable coordination of flows. Construction scheduling does not
provide such stabilization. Consequently, it is not appropriate to simply
eliminate physical buffers without first attacking the causes of variation and
uncertainty. Even though manufacturing and construction share the same
ultimate objective of reducing variation and waste, their strategies for
achieving that objective must be different. Materials constitute a huge
proportion of the cost of construction. Materials are sometimes ordered
weeks or even months ahead of requirement leading to uneconomical
inventory on construction sites or contractors' warehouses. Building material
inventory represents cost to procure, cost to store and insure, cost to guard
against theft and cost incurred when inventory becomes obsolete. This paper
presents an overview of the Just-in-Time (JIT) production system and
discusses application and implementation issues for the control of material
inventory in building construction.
JIT ensures that suppliers deliver directly to the production floor to
achieve either a reduction in inventory or zero inventory and consequently a
reduction in production costs. Implementation of JIT building material
management in construction has the potential to realize the same far
reaching benefits experienced in manufacturing. Relevant factors to consider
in JIT implementation for material inventory management in construction
are implications for construction output and quantities, productionplanning,
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design planning, construction contractor and suppliers' relationships,
material sourcing, and education and training.
Case Study 3
The Byggelogistik project
Up till now Byggelogistik has been tested on six housing schemes, the first
being Sophiehaven approximately 20 miles north of Copenhagen. The
project is a typical Danish social housing project comprising 100 flats in two
stories blocks, erected in two phases - not a big project on an international
scale (Bertelsen 1993, 1994-1, 1994-2). Contractually the project was
undertaken by a general contractor and approximately 10 trade contractors.
The general contractor's staff participated in the whole planning of the
project. It was also from the staff of the general contactor that the provider
was recruited and his job developed, as the project progressed, into being the
production manager of the construction site. He planned the day-to-day
operations, he provided the materials required, he coordinated the individual
trade contractors' works and he followed up on the co-operation with the
wholesale dealers. In order not to overreach the experiment in the first phase
it was decided to restrict the logistics to a minor number of the trades. This
decision caused a great deal of trouble. Those not participating were
repeatedly in the way of those who were. In the second phase all trades
participated and this problem was solved. Even though the methods were
developed with EDP in mind the first tests were restricted to management by
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paper and pencil only. EDP was used in the usual manner in the participants'
own operations but no attempt was made to use IT in the logistics.
Inspired by the Toyota Production System the aim of Byggelogistik is to
reduce cost by eliminating waste of all kinds. Foremost waste of materials,
but also waste of labour time and transportation. In this the Byggelogistik
concept is an instrument for making the whole building process more
effective. The main objective is to look not only at direct transportation costs
but at all costs in the building procesrelated to materials delivery. Materials
are not considered delivered until the workers lay their hands on them in the
exact quantity as the first step in the construction. Packing, temporary
storage, on site transportation, on site losses and breakage, and low
effectiveness due to badly and impedingly delivered and stored materials are
all considered as belonging to the transportation costs. A Swedish study
(Hammarlund 1989) has shown that approximately a third of the time used
by the worker on the building site is spent procuring his materials in the
widest sense, equalling about 10 percent of the total building cost. The
hypothesis of Byggelogistik is that a near-optimum form of supply will
increase costs only marginally, but will reduce waste of time considerably.
This means that materials delivery in Byggelogistik is looked upon from the
point of view of an optimum building process primarily.
Byggelogistik (Bertelsen 1994-1) makes use of a two level logistics
with a planning approach for the over all logistics and a JIT consumption
approachfor the daily deliveries. The logistics are considered already on the
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drawing board. Materials are, where it is possible, specified as belonging to
the separate building operation during the detailed design.
In the planning of the operations all supplies are described in detail aiming at
JIT supply once a day, comprising only materials needed until the next day,
and packed for the various trades and heir individual tasks and work areas.
Such assemblies of materials are named 'units'. Each type of unit is carefully
specified to include all materials needed for the particular task, and form of
packing as well as equipment for the delivery is detailed. Each type of unit is
given a specific number for identification. Several participants in the project
consider the unit the most original element in the whole concept. The idea is
taken from the Swedish furniture chain Ikea who sells furniture in parts to be
assembled by the customer but with all the parts – and often tools and
assembly instructions in the same box. In order to manage sorting, packing
and delivery a close co-operation with the wholesale dealers must be
established. In Denmark 3 kinds of dealers cover all necessary materials, and
their warehouses are used as store room for the building site. A few kinds of
materials are Delivered directly in units packed by the manufacturer, but
most materials are delivered to the warehouse to be sorted and packed in
units, ready for transportation as the work progresses. In order to reduce
the costs of external transportation joint deliveries are used containing all
units from the dealer regardless of contractor, and to minimize internal
transportation delivery of units takes place as close to the work area as
possible. The dealers' drivers are considered as part of the building team in
as much as the aim is to employ the same drivers to load the trucks and
deliver the materials every day thereby making them familiar with the ever
Page 90

Project report on just in time production

Project report on just in time production

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