Inefficiency may bring different kinds of wastage in production. The Productivity Development Team (1998) has categorized all types of wastage in production: defects, waiting, processing, overproduction, movement, inventory, transport, and unused employee creativity. Ignoring the wastage in production may increase the dollar cost and opportunity cost as well.
Savings will go directly into the firm's profit and just-in-time (JIT) production is one of the best production tools that focus on the quality of output and minimizing wastage. JIT was developed and perfected by Taiichi Ohno of Toyota Corporation during the 1960s and 70s to meet fast changing consumer demands with minimum delays (O'Neal and Bertrand, 1991) , and was first documented in Sugimori, Kusunoki, Cho, and Uchikawa (1977). JIT is a philosophy of improvement whereby it aggressively discovers and resolves any problems or weaknesses that impedes the organization's effectiveness and efficiency (Bennett, 2009; Dilworth, 2000) and manifests the firm's operations capability (Tan & Narasimhan, 2007). Moreover, this method is the most important productivity enhancing management innovation since the turn of the century (Schonberger, 1986). Similarly, JIT production is generally referred to as a manufacturing system for achieving excellence through continuous improvements in productivity and elimination of wastage (Bennett, 2009; Crawford Blackstone, & Cox, 1988; Finke, Medeiros, & Traband, 2007; Polat & Arditi, 2005). By implementing JIT method, materials, parts, sub-assemblies, and support items are delivered just when they are needed; neither sooner nor later. Besides that, the other elements of JIT method help manufacturers produce smaller lot size, lesser employees, unnecessary movements, and defects. Hence, JIT not only helps in the supply chain, it also contributes to the firm's competitiveness by allowing the firm to produce the desired variety while keeping the cost low (Keane & Feinberg, 2007; Lee, 2007; Polat et al, 2005), quality high (Polat et al, 2005) and leads to a minimal time (Ward & Zhou, 2006).
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Just-In-Time approach continues to gain acceptance from the late 1980s until today (Polito & Watson, 2006). This is supported by Lee's study (2006); he found that the JIT production has attracted increasing interest among the Chinese manufacturing industries and this technique has been widely implemented in China. Nevertheless, there have been some scholars' critics on the JIT practices; such as being impractical for certain industries. A study outlined by Polito et al (2006) suggested that pure JIT method is appropriate only for limited economic environments. It is asserted that it is ineffective to some organizations due to cultural differences and is unattainable by many small or low-capital suppliers. Polito et al (2006) listed five major constraints in implementing the JIT technique; which are customer driven and economic condition, logistics, organizational culture and conditions, intractable accounting and finance practices, and small supplier difficulties. Similarly, Polat et al (2005) found that the contractors in developing countries may be forced to keep inventory under some circumstances to help manage uncertainty; for instance, uncertainties of annual demand and production rate (Pan & Yang, 2008). Therefore, those scholars stated that unstable external environmental circumstances have prevented the success of implementing JIT method in an organization. Besides that, multiple definitions of JIT manufacturing are considered as the difficulties with modeling JIT manufacturing (Funk, 1989).
However, several scholars argued that incomplete understanding of JIT method may lead to unsuccessful implementation of JIT production tool in their production (Finch & Cox, 1986; Manoochehri, 1988; Yavuz and Akcali, 2007). The misconception between JIT delivery and JIT production may fail the implementation of JIT method in any production system. According to Manoochehri (1988); small firms are more flexible in producing small lot; whereas JIT production focuses on small lot size production, less employees, high flexibility in production, and high quality of output. Those principles encourage producers to operate with a lesser capital and that fits small manufacturers who are lack of resources.
Furthermore, recent studies have found that serious inefficiency problems occur in small and medium enterprises (SMEs), particularly in food and beverages industry (Alias, Rusli, & Saidatul, 2008; Alias, Liana, & Mahir, 2008). Besides that, Alias et al (2008) suggested that JIT/lean production should be focusing on SMEs in order to enhance their efficiency. Therefore, how is the current production tool of food and beverages (F and B) industry? How well is the adoption of JIT production in F and B industry? If they are currently implementing JIT production, is that significant enough to help bring benefits in production?
Always on Time
Marked to Standard
The general objective is to find out a solution to efficient resource management problems in theme restaurants. The specific objectives are: (1) to determine the present status of JIT and its development among theme restaurants; and (2) to determine the relationship between JIT elements and the benefits obtained in the restaurants implemented.
In these modern days, restaurants' consumers not only look for delicious food; but they also seek for good environment in a restaurant. Besides the taste of the food, consumers ask for very good services, comfortable ambience, and a good set-up of the restaurant itself. Theme restaurant is a modern restaurant where it meets specific demands of consumers' in today's market and to derive their competitive advantages from the market-oriented focus. Thus these organizations' existence fulfills the satisfaction of consumers' demand and needs while meeting the organizational objectives. Theme restaurants are restaurants in which the concept of the restaurant takes priority over everything else; hence, this influences the architecture, food, music, and overall environment of the restaurant. However, the motive of theme restaurants is not only to serve food to others and to make profit. They also need to fulfill certain consumers' desires in order to make long-term profit.
A LITERATURE REVIEW ON THE PRACTICES OF JIT AND THE ADVANTAGES
The quality of food, services and the price of dishes are the key to success for restaurants (Hester and Harrison, 2005). Just-In-Time method is one of the best ways for theme restaurants to reduce their manufacturing cost and to maintain the quality of food (Polat at al, 2005). The production cost in Isa (2006) is the combination of three types of costs, as shown in Equation A.1:
Production Costs = Raw Material Costs + Direct labor Costs +Utility Costs + Factory Overhead Costs (1)
Direct raw material cost is the cost of purchasing direct material in the production process. Raw material becomes a part of the manufacturing cost when it is purchased in the production process. If this is not used up in the production process on time, it will be kept as inventory. Hence, additional costs are involved when inventory occurs. This expense can be reduced by implementing small lot size in production, JIT purchasing, and Kanban. Moreover, this consideration is supported by several scholars. Zangwill (1987) pointed that by holding minimum or never holding inventory can simplify the site location and space utilization; whereas, Bennett (2009) stated that JIT purchasing provides significant advantages to American manufacturers. The benefits are; able to reduce raw materials inventory, WIP inventory, finished goods inventory, and their associated capital, handling, and storage costs. Whereas in several studies like Charles, Puthraya, and Kavitha (2007), Davis and Stubitz (1987), and Ramnath, Elanchezhian and Kesavan (2009) stated that Kanban significantly reduces inventory.
Direct labor cost is defined as costs of hiring labor who are directly involved in the process of converting raw material into finished goods. Sugimori et al (1977) stated that the number of employees can be decreased by implementing small lot size, multifunctional employee (Lee, 2006) and group technology (Finke et al, 2007).
On the other hand, manufacturing overhead costs includes all manufacturing costs other than direct raw material cost and direct labor cost. Generally, among the main costs in this classification are salary for supervisors, wages for maintainers, indirect raw material cost, machinery depreciation expenses, warehouse depreciation expenses, warehouse insurance expenses, machinery and factory building repair expenses. These expenses can be reduced significantly by implementing small lot size approach (Funk, 1989), total preventive maintenance, and JIT purchasing (Bennett, 2009).
H1: JIT elements are related to wastage reduction and minimizing inventory
The expenses of utilities can be decreased when the firm is able to save those manufacturing costs. Utilities consist of power, water and fuel. If restaurants can successfully eliminate the excess stocks, shorten the lead time and reduce other wastage in production, this means that they don't have to pay higher utilities cost. For example, small lot size in production saves the power and electricity of keeping the large lot of WIP or raw material (Bennett, 2009; Charles, 2007; Hoque, 2007; Lee, 2007; Low & Wu, 2005; Ward et al, 2006).
H2: JIT elements are associated to the ability to produce in small batches
Besides that, defects can be reduced by implementing zero quality control and standard work. Approaches like Jidoka and Poka-Yoke documented in Sugimori et al (1977) and The Productivity Development Team (1998) can help to increase the quality of output and to reduce the frequency of re-do operations. Study of Ansari and Modarress (1988) outlined that JIT purchasing and small lot-size production contributes to product quality improvement. When utilities cost reduces, the production cost will also decreases. O'Neal and Bertrand (1991) addressed other success stories of JIT in their studies, like Harley-Davidson was able to increase its final product quality from 50% to 99%, and Digital Equipment Corporation's "defectives" manufactured had reduced from 17% to only 3%.
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