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In managing the operation in a competent industry, the business leaders understands the emergence of essential strategies wherein they can obtain the two main goals in creating businesses - to increase profits and minimize or maintain the costs involved. Targeting these two goals has been a mystery for the entrepreneurs most especially in the increasing level of competition. Within the manufacturing industry, the efficiency of the production lies in the effectiveness of the operation. Each process that contributes in creating a product should be designed according to the said objectives of the organizations. Apparently, with the noted globalization and associated technological improvements, the combination of lean philosophy in the operations is described to be more effective if the organization adopted various innovative systems like kanbans.
The paper seeks to demonstrate the awareness in the utilizing the Lean/JIT philosophy towards the effective and efficient operations. In the support of this aim, the paper is promoted to critically appraise the Lean/JIT philosophy and its applications within the industry. Part of the investigation is to cover the adoption of pull based planning and control system as well as the use of kanban system. The underpinning principle that lies in the study is the combination of the lean philosophy and technological approach that can pull the operations in promoting the desired operations and outcome. Meeting the needs and improve through the continuous process, the operations should interact with other functions in order to be part of the overall organizational strategy.
1.0 Lean/JIT and the Pull Based System Approach
The JIT inventory system is one of the most frequently models used as a TQM and control tool to avoid the failure and too much wastes. This idea has been introduced and applied within the automotive systems. Because of the learning regarding the associated failures in the mass production of some manufacturing firms, the JIT aims for the tactics wherein the risks minimized and delivering the well-coordinated in production processes (Hinrichs & Crepas, 1997).
The philosophy of JIT is already adopted in many countries. It focuses on the undertaking of activities as needed or demanded and driving the four aspects that is more engaged in the cost engagement. First is the elimination of all of the activities that do not add the values in the product or in the service because it focuses more broadly in reduction of the cost. Second is the commitment given to the high level of quality because of the philosophy in doing the work for the first with no time allowed to re-do or to repeat the work. Third is the commitment for the continuous improvement in terms of the efficiency of an activity. The last is giving emphasis on the simplification and increased visibility of the activities that do not add any value into it (Younies & Barhem, 2007).
Due to the continuous development in the manufacturing industry, the JIT philosophy introduced the principle of customer pull. This concept states the idea that the companies should not push their products to the customers; instead let the customers pull the products and services including the "value" and the associated link within the production chain (Manotas Duque & Cadavid, 2007). Since the aim of the modern generation in manufacturing industry leads to efficiency in the processes, the reduction in inventory levels and accompanied with the perfect timing of material, parts, and other supplies are ideal in the production processes. Therefore, the demands of production are now just in time, not weeks or even days before. This emphasis places pressure on suppliers throughout the entire system. They are all pressured to shorten the timing in order to meet the demands of the primary producer.
In emphasizing the agenda of cost efficiency in the organizations, the evolution of technological approach became evident in the practice such as the idea of cost accounting. Within the dimensions of computer integrated environment in manufacturing systems, there involves five interrelated objectives. First is the increase in the product quality; second is to shorten the time among the non-value added activities (e.g. setting the machineries); third is to reduce the inventory level and enhancing the pull based methods over the push-through approach; fourth is to develop the flexibility and feasibility in manufacturing systems; an fifth is to work fully integrated and coordinated in the production system through the centralized computer (Lewis, 1993).
The process involved in pull based approach starts in the production chain in communicating with the suppliers on the way that materials are not released and activities are not done until needed. This kind of discipline in pull strategy is possible through the use of kanbans that can be physical or electronic mechanisms in order to transmit the need for the parts and subassemblies from one point in the process until the preceding one (Manotas Duque & Cadavid, 2007). Kanban is a card in which Toyota uses two types of- a production card and a move card. The system works in the manufacturing process where parts are moved between work centers in standard containers which hold only a small, predetermined number of parts. When a work center empties one of these containers, it sends the empty container to the supplier work center accompanied by a move card. At the supplier work center the move card is removed and placed in a finished container of parts, thus authorizing the moving of this container to the demander work center.
The finished container of parts previously was accompanied by a production card. When the move card is placed into this container, the production card is removed and added to the work schedule of the supplier work center. Thus, the production card authorizes the production of another container of items. When the new container is filled, the production card is placed back into the full container at the storage area of the supplier work center (step 4), waiting for a move card to arrive again to claim the container.
The move cards are sent from demander work centers to supplier work centers to claim containers of parts. When a container is taken, a production card is removed and used to signal a new batch of production at the supplier work center. Therefore, a work center doesn't begin production of a new batch of items until a previously produced batch is taken away. Of course, most work centers are both suppliers and demanders, receiving move cards in their role of supplier and sending move cards in their role as demander (Summers, 1998).
2.0 Benefits and Drawbacks in Adopting Pull Based Approach
In the idea of bringing the advantage for the business over the rivals, the perceived solution of the business is to engage their processes in the concept of cost-efficiency and effectiveness. Therefore, the lean manufacturing and measuring system has been introduced, wherein there should be standard and continuous work. And through the aim of improving the process in manufacturing, the product flow is enhanced by applying the concept of just-in-time (JIT), in which it represents a continuing effort to reduce waste and at the same time add value in the activities within the production process. The primary objective of JIT is to reduce overall product cost by conserving all resources used in the process which deliberately targets the common goal of the organizations (Lewis, 1993).
In terms of improving the production quality in manufacturing industry, there is no doubt that Japanese entrepreneurs are most outstanding. From the experience of the Toyota in manufacturing the automobiles and today's leading manufacturer, the applied philosophy that they usually keep in the four corners of their organization is also introduced in the Western society. The manufacturing systems dramatically changed through their application in some of their philosophies like "kaizen", which promotes changes for betterment. The Kaizen philosophy is established to encourage the manufacturers that through the continuous improvement in the area of manufacturing system. As part of the lean manufacturing, the product or process has a room for improvement (Khalil, Khan, & Mahmood, 2006). The same philosophical view is emphasized in the assessment of pull based approach.
In the pull based approach, the advantages can be measured through the objective of manufacturing environment. Because the firm is aiming to improve quality, the globalization and introduction of technological opportunities is enough to produce a computer-integrated manufacturing system (CIMS) that is related technological changes and provide the means for improving not only the product quality but also the associated processes (Lewis, 1993). The use of the philosophical views is additional benefit because it can be the founding element to provide appropriate execution.
The other benefits can be measured by the use of kanbans to coordinate the production in the different areas in workstations as well as the company with the suppliers, enabling them to execute the JIT system. This is because the kanban pull system is meant for production control (Ketokivi & Schroeder, 2003). The consistency of the procedure applies when the firm has applied the JIT delivery concept and the pull system concept in the operational link with customers (Matsui & Phan, 2006), and the processes are well-tracked, such as the transformation of the materials, under the JIT operation (Manotas Duque & Cadavid, 2007). The use of kanban for pull approach is a kind of process that provides signaling mechanisms in order to inform the previous stage in the process that a certain number of specific parts are required. In the analysis of the use of kanbans, the processes are important to facilitate the raw materials towards the finished products. In the generation of manufacturing processes, many manufacturing firms use the JIT and the accompanied processing control. Therefore, the firm might find competitive edge if they successfully adopted the developments in the Lean/JIT strategies. The idea of lean marketing brought the use of kanbans as part of the inventory control system (Nataraajan & Sersland, 2002)
As compared to the push strategy, where the manufacturer make outputs as long as there are materials, pull based approach make only what the customer needs. Instead of anticipating their customer needs, the pull approach is precise in the production because of the information based on the customer consumptions (Lewis, 1993). In addition, against the push strategy, there are smaller inventories that will help the leaders drive problem resolution. Due to the minimized time in production and consumption of materials, the wastes are also controlled and at minimized state and there is no need to be engaged in team meetings, trainings, additional staff, and so on that will only increase the pressure in the manufacturing processes. Furthermore, because the system is controlled, there is communication in between the management and suppliers and the received feedback from the customers.
Within the management, there is an increase of employee involvement, reduce the schedule complexities, and the importance of team leaders who are allowed to make decisions based on their judgment and experience. From the gained insight on the customer feedbacks, the leaders can provide the common system and applied in other manufacturing processes. This emphasizes the Lean concepts which involved the investigation of "things to do" once it is known which are the "things to achieve" (Manotas Duque & Cadavid, 2007).
In using pull based strategy in the production, the company may increase the traceability of the cost, not only workers but also through eliminating the activities identified to be not important or do not add values. This also decreases the amount of the information in terms of production costs or in labor costs as the system considers the individual as a team (Younies & Barhem, 2007). Added to that, the areas previously used, to store inventories can be used for other more productive uses.
In the implementation of JIT procedures, there is no doubt that there involved major changes in the business operations. If the business is operating in the traditional business model or have a continuous production emphasizing the push strategy. The adoption of the JIT in the organization maybe difficult and expensive in the beginning and may open a number of risks that may be associated with the supply chain. Furthermore, the technologies that will be used in pull model should be competent enough to avoid the consequences in the operation such as the accidents (Best, 2001).
In addition, if one of the processes fails, the train of failure might follow. As an example, if there are no available materials there would be a minor disruption inÂ supplies to the business and might force to abandon the production if there are no available substitutes found. This dilemma resembles to the disadvantages in terms of sole reliance on one supplier. In addition, too much competition within the industry serves a great burden in the business in achieving the objective of JIT (Yang, 1995). The impact of all the changes reaches in influencing the other strategies implemented in the organization as well as bringing strength towards the accounting principle (Cagwin & Barker, 2006; Hutchinson, 2007).
On the other hand, both push model or mass production strategy and pull based approach of JIT shares the issue of coordination and feasibility. All the processes that the manufacturing organization promotes should be organized and achievable. Therefore, the routines of the procedure should be strictly followed (Dosi, Nelson, & Winter, 2001).
And in terms of trend and modification, the manufacturing industry that promotes the use of pull model has a chance in failure, although minimal, to be the leader the industry (Swamidas, 2002). Because the organization already knows the consumer preferences, the manufacturing firm might be reluctant in implementing their product customization.
The practical implementation such as the team collaboration in the face of Japanese's management is hard to copy. From the very beginning, the organization is seeking for the young wherein they can be trained and have a potential in staying in the company longer. The application of the Japanese management started from their culture to continue the recognized strengths, review the current problems and find specific answer to it (Kono, 2001).
Many successful organizations allowed the practice and be passed from generations. The recognized benefit of this practice is that, it allows the people to collaborate with other member of the team and scrutinize the operation based on their knowledge and experience. This type of practice was applied to Toyota, which is one of the leading automobile producers in their country. Based on the Japanese management techniques, an employee can enhance his own potential through his own explorations (Tippu, 2006).
Through the effective rotation of the roles, the organization can discover the best position for the person, therefore, the right people for the right position is resolved. On the other hand, still the HR managers' seeks for the effectiveness of the employees towards the execution and operation. Kaizen was designed in the Japanese management to stop the production processes if there is any problem recognized (Berggren and Dalgaard, 2009).
According to the analysis, the pull based system is delivered according to the concept of time reduction and frequent communication and coordination with the suppliers to construct the factor on supplier relationships and customer relationships (Ketokivi & Schroeder, 2003).