By- Sanjay Kumar Jha (Roll No.510916614) Page 1
JUST IN TIME PRODUCTION
A PROJECT REPORT
Under the guidance of
Mr. Deepak Dhuri & Rajesh Gujrathi
Submitted bySANJAY KUMAR JHA
(Registration No: 510916614)
In partial fulfillment of the requirements
For the award of the degree of
MASTER OF BUSINESS ADMINISTRATION (MBA) IN
OPERATION MANAGEMENT
Session 2009-2010 (May 2010)
Submitted to
Sikkim-Manipal university of Health, Medical and technological sciences Distance education wing Syndicate house Manipal – 576 104.
By- Sanjay Kumar Jha (Roll No.510916614) Page 2
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 Mr. A. R. Dixit, Mr. Amit Hota & Mr. Subhash Babar 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 3 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 : 02973 SANJAY KUMAR JHA
By- Sanjay Kumar Jha (Roll No.510916614) Page 4
BONAFIDE CERTIFICATE
Certified that this project report titled “JUST IN TIME
PRODUCTION” is the bonafide work of “SANJAY KUMAR
JHA” who carried out the project work under my supervision
SIGNATURE OF HOD SIGNATURE
STORES FACULTY INCHARGE
Cipla Limited, A-42, Patalganga, Raigad Karrox college of Technology
By- Sanjay Kumar Jha (Roll No.510916614) Page 5 EXAMINER‟S CERTIFICATION
The project report of
SANJAY KUMAR JHA
“JUST IN TIME PRODUCTION”
Is approved and is acceptable in quality and form.Internal Examiner External Examiners
Name: Name:
Qualification: Qualification:
By- Sanjay Kumar Jha (Roll No.510916614) Page 6 UNIVERSITY STUDY CENTRE CERTIFICATE
This is to certify that the project report entitled,
“JUST IN TIME PRODUCTION”
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 SANJAY KUMAR JHA (Reg. No: 510916614)
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
By- Sanjay Kumar Jha (Roll No.510916614) Page 7 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
By- Sanjay Kumar Jha (Roll No.510916614) Page 8
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 of this amazing Just-In-Time concept.
By- Sanjay Kumar Jha (Roll No.510916614) Page 9
Unit-2 Company Profile (Cipla Ltd.)
HISTORY:-
Khwaja Abdul Hamied, the founder of Cipla, was born on October 31, 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 doctorate three 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 10 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. "
By- Sanjay Kumar Jha (Roll No.510916614) Page 11 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 12 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 body in 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 13 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
By- Sanjay Kumar Jha (Roll No.510916614) Page 14
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
By- Sanjay Kumar Jha (Roll No.510916614) Page 15 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
By- Sanjay Kumar Jha (Roll No.510916614) Page 16 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
By- Sanjay Kumar Jha (Roll No.510916614) Page 17 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
By- Sanjay Kumar Jha (Roll No.510916614) Page 18 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
By- Sanjay Kumar Jha (Roll No.510916614) Page 19 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 phase of 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
By- Sanjay Kumar Jha (Roll No.510916614) Page 20 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 Board of Directors
By- Sanjay Kumar Jha (Roll No.510916614) Page 21
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
By- Sanjay Kumar Jha (Roll No.510916614) Page 22 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 23 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 production process 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
By- Sanjay Kumar Jha (Roll No.510916614) Page 24 design. Hence, with JIT, nothing is taken for 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 25
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 of JIT 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, product defects, risen cost, large lot production
By- Sanjay Kumar Jha (Roll No.510916614) Page 26 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 cost reduction.
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
By- Sanjay Kumar Jha (Roll No.510916614) Page 27 Waste from Product Defects
Waste of waiting/idle time
Inventory Waste
Introduction Phase for Just in Time:
According to Hirano, the introductory phases of JIT involve 5 steps.
By- Sanjay Kumar Jha (Roll No.510916614) Page 28 FIVE STEPS IN THE INTRODUCTORY PHASE OF JIT
By- Sanjay Kumar Jha (Roll No.510916614) Page 29 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...In needed 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 30 Step 2: 5S‟s For Workplace Improvement
By- Sanjay Kumar Jha (Roll No.510916614) Page 31 The 5S‟s stand for:
Seiri - Proper Arrangement 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 32 Step 3: Flow Manufacturing
Flow manufacturing means producing one single piece of product at a time but multi-handling which follows the process sequence.
By- Sanjay Kumar Jha (Roll No.510916614) Page 33 1. Arrange machines in sequence.
2. U-shaped production line (Cellular Manufacturing).
3. Produce one-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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 34 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 35 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 Just in Time
According to Cheng, the basic elements of JIT manufacturing are: · People Involvement
· Plants · System
By- Sanjay Kumar Jha (Roll No.510916614) Page 36
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 support from 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 support from 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 37
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 concept should be adopted by every members in the organization in order to carry out JIT. This is the most important concept of JIT. This can allow an organization to improve its productivity, service, operation and even customer satisfaction in an on-going basis.
By- Sanjay Kumar Jha (Roll No.510916614) Page 38
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 Resource Planning). 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.
Goal of 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 39 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. Reduce unwanted 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 40 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 control by increasing its
efficiency of managing shop floor production and 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 41 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 42 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 43 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 44
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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 45 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 once believed.
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 production process:
By- Sanjay Kumar Jha (Roll No.510916614) Page 46 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 management in the basic concepts of JIT:
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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 47 To implement this system to every aspect of 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 Successful JIT 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
By- Sanjay Kumar Jha (Roll No.510916614) Page 48 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,
By- Sanjay Kumar Jha (Roll No.510916614) Page 49 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 become highly 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 space requirements.
Increased product quality and reduced scrap and rework. Reduced manufacturing lead times.
Greater flexibility in changing the production mix. Smoother production flow with fewer disruptions. Worker participation in problem solving.
By- Sanjay Kumar Jha (Roll No.510916614) Page 50 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 product quality, 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 cost accounting Systems often makes it
By- Sanjay Kumar Jha (Roll No.510916614) Page 51 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.
Cost Accounting 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 52 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 cost reduction studies.
JIT, TQM, AND THE PRODUCTION PIPELINE
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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 53 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 54 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 55 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
By- Sanjay Kumar Jha (Roll No.510916614) Page 56 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) Planning for 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 product on demand · Developing
By- Sanjay Kumar Jha (Roll No.510916614) Page 57 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 successful JIT 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 Manufacturing Cost
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 cost saving.
(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
By- Sanjay Kumar Jha (Roll No.510916614) Page 58 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 concept of producing product only as needed or on demand.
By- Sanjay Kumar Jha (Roll No.510916614) Page 59
UNIT – 6
KANBAN JUST-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 production approach as following:
(a) Standardized work Manufacturing Cells Manufacturing Lines Facility Layout
Technology Development
By- Sanjay Kumar Jha (Roll No.510916614) Page 60 (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,
By- Sanjay Kumar Jha (Roll No.510916614) Page 61 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.
By- Sanjay Kumar Jha (Roll No.510916614) Page 62
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
By- Sanjay Kumar Jha (Roll No.510916614) Page 63 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 production capacity 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
Stock must 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
