Manufacturing System Customer

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Cellular manufacturing facilitates the concept of 'just in time'. Under this philosophy, products are made to specify order levels in small lot sizes. This is possible due to short setup times and dynamic work environments that drive the system. According to Richard T. Lubben, this production strategy assumes that:

Each worker or work unit is both a customer and a supplier.

Customers and suppliers are an extension of the manufacturing process.

Continually seek the path of simplicity.

It is more important to prevent problems that to fix them.

Obtain or produce something only when it is needed. [1]

The crux of cellular manufacturing is to exploit similarities to achieve manufacturing and design efficiencies. By developing an efficient cellular production system, companies can provided better cost estimation and verification, reduce potential proliferation of parts, eliminate repetitious tools and fixtures, minimize changeover and wait times and decrease the required levels of inventory for improved production planning and control. [2]

One of the important strategy in employment of lean manufacturing is implementing Kaizen event based focused technique. Kaizen is a Japanese word meaning change for the better of continuous improvement. It is fundamental to lean manufacturing that we must continuously strive to get better. [3]

Few of the Kaizen event outline are to identify the area (bite size), identify focus (changeover, one piece flow, kanban, quality), identify suitable times, gain management commitment, select team, establish TAKT time, preparation, training, general mapping, establish sub-teams, mapping & data collection, initial analysis, initial changes & testing, further changes and standardisation. [4]

Sometimes long set-up times force companies to manufacture in large batches. It is very important to manufacture in small lots, ensuring customers can be supplied in required quantities without holding large stocks. Thus the concept of SMED is utilised.

Single Minute Exchange of Die (SMED) is one of the many lean production methods for reducing waste in a manufacturing process. It provides a rapid and efficient way of converting a manufacturing process from running the current product to running the next product. This rapid changeover is key to reducing production lot sizes and thereby improving flow which is a 'Lean' aim. It is also often referred to as Quick Changeover (QCO). Performing faster change-overs is important in manufacturing, or any process, because they make low cost flexible operations possible. [URL 2]

In March 1999, Bel-Ron a manufacturer of engineered chain products, hosted SMED program to sustain the gains and keep progress moving forward. These mini-Kaizen projects were used to continually reinforce the principles of lean and demonstrate to the workforce that Bel-Ron was serious about utilizing this approach to improve the business. The benefits achieved after the implementation of SMED in the inventory levels were remarkable. [5]

Kanban is a signaling system to trigger action. As its name suggests, kanban historically uses cards to signal the need for an item. However, other devices such as plastic markers (kanban squares) or balls (often golf balls) or an empty part-transport trolley or floor location can also be used to trigger the movement, production, or supply of a unit in a factory. [URL 3]

Setting kanban sizes is one of the first decisions that users of kanban system must address; yet researchers have largely assumed kanban sizes to be given. This paper investigates the effect of varying kanban size on the performance of just-in-time (JIT) manufacturing systems. Two types of JIT production systems, the Pull-type and the Hybrid-type are analysed using computer simulation models. The performance measures considered simultaneously are the fill rate, in-process inventory, and manufacturing lead-time. Parameters such as demand rate, processing time, and kanban size are taken into consideration, thereby finding the possible solutions of the kanban size that can be employed to achieve the most favourable conditions for production. A favourable condition usually refers to the ability of the system to produce finished goods at a shortest possible lead-time, which the customers are always demanding for. Both the single product and multi-products manufacturing environments are investigated. [6]

With reference to the analysis, for a single product, as the kanban size increased, the fill rate decreased, whilst with both the in-process inventory and the manufacturing lead-time increased. Generally, for multi-products manufacture, it was observed that as the kanban size increased, the fill rate increased with a decrease in the manufacturing lead-time. However, for multi-products the interaction between the manufacturing lead-time and the fill rate is discussed in depth in this paper. [6]

TPM is a synergistic relationship among all organizational functions, particularly between production and maintenance. This aims for continuous improvement of product quality, as well as operational efficiency and capacity assurance. An efficient TPM depends on both production and maintenance activities. Also, Yamashina (1995) stated that no matter how well plants are equipped with advanced manufacturing techniques, it is always the operators, not managers or systems, who affect the plant's performance. In this connection, operators should participate in the maintenance function by becoming responsible for the prevention of deterioration. The central role of operators in equipment operation, condition, and maintenance must be acknowledged. The co-operative effort allows maintenance personnel to focus their energies on tasks requiring their technical expertise and to learn about and use more sophisticated techniques for advanced manufacturing. Operators and maintenance personnel must reach mutual understanding and share responsibility for equipment (Jostes and Helms, 1994; Lawrence, 1999; Ben-Daya and Duffuaa, 1995). In fact, everyone concerned with equipment must co-operate with and understand the role of everyone else (Co et al., 1998).

Operators should do the following:

Maintain basic equipment conditions (cleaning, lubrication, bolting);

Maintain operating conditions (proper operation and visual inspection);

Discover deterioration, mainly through visual inspection and early identification of signs of abnormalities during operation;

Enhance skills such as equipment operation, set-up, and adjustment, as well as visual inspection. [7] [8] [9] [10] [11]

A value stream is a collection of all actions (value added as well as non-value-added) that are required to bring a product (or a group of products that use the same resources) through the main flows, starting with raw material and ending with the customer (Rother and Shook, 1999). These actions consider the flow of both information and materials within the overall supply chain. The ultimate goal of VSM is to identify all types of waste in the value stream and to take steps to try and eliminate these (Rother and Shook, 1999). While researchers have developed a number of tools to optimise individual operations within a supply chain, most of these tools fall short in linking and visualizing the nature of the material and information flow throughout the company's entire supply chain. Taking the value stream viewpoint means working on the big picture and not individual processes. VSM creates a common basis for the production process, thus facilitating more thoughtful decisions to improve the value stream (McDonald et al., 2002). [12] [13] [14]

After World War II, the Japanese incrementally applied new management practices to improve their global competitiveness. With refinement and systematic integration of these new practices the Japanese achieved a new manufacturing paradigm and, by the 1970s, a competitive superiority in the marketplace. In an effort to emulate the success achieved by Japanese manufacturers, US managers began to apply these new management practices in their organizations. These management practices were introduced as just-in-time (JIT) manufacturing. US managers have progressed through a series of trial and error efforts to apply these new management practices and still do not understand many of the issues associated with JIT implementations. This study attempts to address some of the misunderstandings associated with JIT implementations. A systems approach is utilized for collecting data and analyzing pertinent relationships associated with JIT implementations in US manufacturers. Findings from the study suggest that an association exists between implemented JIT practices and type of production system. In addition, this is the first study to show that the benefits attributed to JIT implementation as a function of implementation status of specific JIT management practices and type of production system. [15]

Everything has a place and everything in its place! If it does not warrant a label, it does a not warrant a place in the area! These are words to live by in a lean manufacturing environment. So, what is so important about housekeeping? According to authors Henderson and Larco (Lean Transformation: How To Change Your Business into a Lean Enterprise), it is very important: Most people underestimate the importance of safety, order, and cleanliness in the workplace. Our former colleagues at Toyota and Honda will tell you that 25 to 30% of all quality defects are directly related to this issue. [16]

One of the major goals of OEE and TPM programs is to reduce and/or eliminate what are called the Six Big Lossesthe most common causes of efficiency loss in manufacturing. The following table lists the Six Big Losses, and shows how they relate to OEE Loss categories. [URL 4]

The Japanese automobile manufacturer, Toyota, developed the JIT concept and its main technique, the kanban saystem used for production planning and inventory control for multi-stage production inventory systems. The JIT system consists of the right-on-time approach and automation. (Takahashi 1998). The JIT system is the approach in which production is pulled through the system as and when it is needed. Automation refers to a system with built-in functions to prevent the production of defective parts and to automatically check on damage to machinery.

Although the early concept of the JIT system focused on the production line, it has been expanded to become the current approach called the just in time system which still suffers from a lack of consensus about its meaning, at least on the part of manufacturing organizations. While some managers view it as a near total system of continuous improvement, others simply regard is as only the Kanban system (Bukchin 1998 and Hemamalini 2000).

Among the many authors favoring the larger scope of the meaning of JIT, some regard it as a complicated philosophy comprising of various techniques to improve productivity, reduce waste, and achieve continuous improvement. According to (Voss C and Robinson 1988), the JIT methodology is that which aims to improve overall productivity through the elimination of waste and that leads to improved quality. Other opinions about JIT are listed in Table given below

Golhar (1991) suggested that the benefits of JIT include reduced inventory, increased productivity and higher quality of products. It should be noted that JIT has been included in many other competitive practices such as World Class Manufacturing (WCM) (Schonberger, 1986), lean production (Womack 1990), and Kaizen (Imai 1986). However, JIT implementation involves additional costs due to the required provision of new equipment and employee training programmes (Golhar 1991)

The application of JIT concepts can be advantageous for the food retail industry: Quality, reduction of manufacturing lead time and market advantage. Food quality is measured by three factors: quality of raw materials, production process quality and freshness of the final product. For example, in preparing any curry made with vegetable using fresh raw vegetables will improve the quality. Fresh vegetable tastes better than frozen vegetables. Minimizing the storage period of the raw materials and using fresh materials is possible only by a switch to the JIT system, Xin (2002) presented a study that showed the effects of long storage periods of raw materials in relation to the quality of the finished product.

2.6.3 Just - In-Time

Closely associated with lean manufacturing is the principle of just-in-time, since it is a

management idea that attempts to eliminate sources of manufacturing waste by producing the right part in the right place at the right time. This addresses waste such as work-in-process material, defects, and poor scheduling of parts delivered (Nahmias, 1997). JIT can be considered as a method whereby the production lead time is shortened by 'having all the processes produce the necessary parts at the needed time and have on hand only the minimum stock necessary to hold the processes together' [Aytac, (2003)]. Inventory and material flow systems are typically classified as either push (traditional) or pull systems. Customer demand is the driving force behind both systems; the major difference is in how each system handles customer demand. Just-in-time is a tool that enables the internal process of a company to adapt to sudden changes in the demand pattern by producing the right product at the right time, and in the right quantities [Monden,

(1998)]. Moreover, just-in-time is a critical tool to manage the external activities of a company such as purchasing and distribution. It can be thought of as consisting of three elements: JIT production, JIT distribution, and JIT purchasing. More details are given for each in the following sections.

Just-In-Time Production

Lean manufacturing is about eliminating waste wherever it is. One of the most important steps in the implementation of lean manufacturing is JIT. [Monden, (1998)] and [Levy, (1997)] both agreethat JIT production is the backbone of lean manufacturing. Just-in-time production is about not having more raw materials, Working process or products than what are required for smooth operation. JIT production is accomplished by a 'pull' system instead of a 'push' system, which is used in traditional production system. In traditional manufacturing system; the production schedule of the final product is exploded to determine the requirement of all subassemblies and parts that make up the final product. [Aytac, (2003)]. The process goes on as each process pulls the needed parts from the preceding process further up stream. The whole process is coordinated through the use of a Kanban system. Shipments under JIT are in small, frequent lots. A Kanban is used to manage these shipments. Kanban is an information system that is used to control the number of parts to be produced in every process [Monden, (1998)]. The most common types of Kanban are the withdrawal Kanban, which specify the quantity that the succeeding process should pull from the preceding process, and the production kanban, which specifies the quantity to be produced by the preceding process [Monden, (1998)]. The withdrawal Kanban shows the parts, the subsequent machining process requests from the preceding process. A supplier kanban is another type of kanban that is used between the supplier and the manufacturer under JIT. Lean manufacturing requires quick deliveries and in order to achieve this, many manufacturers require their suppliers to deliver items just in time. In order to achieve JlT delivery, suppliers have to adjust from the traditional run sizes to smaller lot sizes. The supplier kanbans circulate between the manufacturer and the supplier. The kanban is delivered at predefined times from the manufacturer to the supplier. For example, if parts were conveyed twice a day (8 a.m. and

10 p.m.), the truck driver would deliver the kanban at the supplier's store at 8 a.m. which is a signal to the supplier to produce the required quantity. At the same time the driver picks up the parts that are completed at 8 a.m. that morning along with the kanban attached to the boxes containing these parts. These are the kanbans that would have arrived the previous night at 10 p.m. signaling the production of the parts [Monden, (1998)]. By utilizing a kanban system under JIT, smaller lot sizes and huge inventory reductions can be achieved. Under JIT production, raw material, subassemblies and finished product inventory are kept to a minimum and the lean manufacturing principles are followed to eliminate inventory as a source of waste. Another type of waste that is eliminated under JIT production is overproduction. Since every process is producing at a pace no higher than that of the subsequent process's requirements, the need to produce more than what is needed is diminished.

Just-In-Time Distribution

JIT effectiveness depends heavily on having a strategic alliance between buyers and suppliers. By having a third-party logistics distributor, companies can focus on their core competencies and areas of expertise leaving the logistics capability to logistics companies [Simchi, et al., (2000)], [Quinn and Hilmer, (1994)]. Third-party logistics (3PL) refers to the use of an outside company to perform all or part of the firm's materials management and product distribution functions [Simchi, et al, (2000)]. 3PL can support just-in-time distribution (JITD) by providing on time delivery to customers or distributors, technological flexibility such as EDI and flexibility in geographical locations. [Simchi, et al., (2000)], [Raia, (1992)]. JITD requires the exchange of frequent, small lots of items between suppliers and customers, and must have an effective transportation management system because the transportation of inbound and outbound material can have a great effect on production when there is no buffer inventory [Spencer, et. al. (1994)]. Under HTD having a full truckload sometimes is difficult due to the frequent delivery of smaller lots, which in turn will increase the transportation cost. However, to get over the problem [Monden (1998)] states that instead of having one part loading, using a mixed loading strategy makes it possible to have full truckloads and increase the number of deliveries.

Another important factor that is essential to JITD is EDI. In order to have effective product deliveries between suppliers and their distributors or customers, an EDI system must be in place.In traditional product delivery system suppliers always have to keep finished goods inventory or have to alter their production schedules to respond to demand surges. Under EDI, suppliers can look at all the shipment and inventory data and adjust their production schedule accordingly [Simichi, et. al., (2000)] .To stay competitive under JITD, it is very important to share information in the whole supply chain because suppliers can adjust their production schedule and narrow their delivery windows as more product data becomes available to them . Other benefits of EDI include cost reduction, cycle time reduction, stock out reduction, and inventory reduction. Just-In-Time Purchasing. [Ansari and Mondarress (1986)] and [Gunasekaran, (1999)] define just-in-time purchasing (JITP) as the purchase of goods such that their delivery immediately precedes their demand, or as they are required for use. The idea of JITP runs counter to the Traditional purchasing practices where materials are brought well in advance before their use. Under JITP activities such as supplier selection, product development and production lot sizing become very critical. Customer-supplier relationships are a very important part of JITP. Under JITP it is Necessary to have a small number of qualified suppliers. Having quality-certified suppliers shifts the inspection function of quality and piece-by-piece count of parts to the supplier's site where the supplier must make sure that parts are defect free before they are transported to the manufacturer's plant. Another important factor of JITP is product development. Buyers must have a "Black Box" relationship with the suppliers where suppliers participate heavily in design and development. The benefits of sharing new product development and, design innovation include a decrease in purchased material cost, increase in purchased material quality, a decrease in development time and cost and in manufacturing cost, and an increase in final product Technology levels [Simchi, et al., (2000)]. EDI is very important under JITP. The ultimate goal of JITP is to guarantee that production is as close as possible to a continuous process from the raw material reception until the distribution of the finished goods [Gunasekaran, (1999)]. EDI can support JITP by reducing the transaction processing time and meeting the specialized needs of buyers by helping them to synchronize their material movement with their suppliers. Although under JITP the carrying cost of materials is increased due to frequent small lots, this cost is offset by a decrease in the cost of processing a purchase order and by the decreased inventory holding cost. Some of the benefits of JIT [Nahmias, 1997)]:

Eliminating unnecessary work-in-process, which results in reduction of inventory costs?

Since units are produced only when they are needed, quality problem can be detected early.

Since inventory is reduced, the waste of storage space will be reduced.

Preventing excess production can uncover hidden problems.