A Project Report on Just In Time (With Respect to the Comparative Analysis of Tata Motors and Toyota Motors)

Submitted By Domenico M. Gouveia

T.Y.B.M.S 2012-13

Project Guide Prof. Chitra More

Submitted To University of Mumbai

Vidyalankar School of Information Technology (Affiliated to University of Mumbai) Vidyalankar Marg, Wadala (E), Mumbai 400 037

PROJECT REPORT ON [Just In Time]

SUBMITTED BY Dominic Gouveia

T.Y.B.M.S. 2012-13

PROJECT GUIDE Prof. Chitra More

SUBMITTED TO UNIVERSITY OF MUMBAI

VIDYALANKAR SCHOOL OF INFORMATION TECHNOLOGY (AFFILIATED TO UNIVERSITY OF MUMBAI)

VIDYALANKAR MARG, WADALA (E), MUMBAI 400 037

VIDYALANKAR SCHOOL OF INFORMATION TECHNOLOGY

(Affiliated to Mumbai University)

Certificate
This is to certify that Mr./Ms. _________________________________ of B.M.S Semester _____ has undertaken & completed the project work titled ______________________________ during the academic year __________ under the guidance of Mr./Ms. _______________ submitted on _________ to this college in fulfillment of the curriculum of Bachelor of Management Studies, University of Mumbai. This is a bonafide project work & the information presented is True & original to the best of our knowledge and belief.
DECLARATION
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PROJECT PRINCIPAL

COURSE

EXTERNAL

Vidyalankar School of Information Technology (Affiliated to University of Mumbai) Vidyalankar Marg, Wadala (E), Mumbai 400 037

I ,Dominic Gouveia of Vidyalankar School of Information Technology, T.Y.B.M.S Semester V hereby declare that I have completed the project on Just In Time in the academic year 2012-13.The information submitted is true and original to the best of my knowledge.

Signature of the Student, Dominic Gouveia

ACKNOWLEDGMENT
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I hereby acknowledge all those who directly or indirectly helped me to draft the project report. It would not have been possible for me to complete the task without their help and guidance First of all I would like to thank the principal Dr. Rohini Kelkar and the coordinator Prof. Vijay M. Gawde who gave me the opportunity to do this project work. They also conveyed the important instructions from the university from time to time. Secondly, I am very much obliged of Prof. Chitra More for giving guidance for completing the project. Then I must mention the person who co-operated with me Mr. Dharmik Vora Manager , Sales Operations Division of Toyota Kirloskar Motor. He not only rendered time out of their busy scheduled but also answered my queries without hesitation. He gave me information on their system of working in their organisation and told me how Promotional Strategies are done in their organisation.

Last but not the least, I am thankful to the University of Mumbai for offering the project in the syllabus. I must mention my hearty gratitude towards my family, other faculties and friends who supported me to go ahead with the project.

EXECUTIVE SUMMARY
In the field of Productivity and Total Quality Management , Just In Time is the field concerned with organizational activity that is in manufacturing , inventory and service sector aimed at implementing better structuring of the time management and is also used in day to day life. Just in time acts as a subsystem. It ensures that an organization produces what is needed immediately or randomly but within or just in time. The purpose of the organization is to upgrade individual skills within a given time through the given work. Through this project , Just In Time will be looked at more specifically in terms of the needs of the organization and the industry. The following topics or issues will also be considered in the project 1) Why is Just In Time considered? 2) How is Just In Time carried out? 3) What are the methods of Just In Time ? 4) JIT process 5) Method followed to assemble the data 6) Sources used to get the information 7) Tools used during collection of data

INTRODUCTION TO THE STUDY

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Aim of doing the project:

To learn about the Just In Time process in an organisation. To put to use the practical knowledge imparted by the subject besides the information received from the theoretical knowledge . By meeting the professional and experts in their respective fields, gaining the information and learning and discussing the comprehension which surely helped in deciding the target of doing my project.

Objective of doing the project:

To implement my learning in the form of presentation. To understand the objective behind Just In Time To understand how the organisation conducts Just In Time Programmes through the employees. To understand the challenges of the customer for conducting services of the customer. To gain knowledge related to the subject How to produce with minimum lead time

Limitation of doing the project:

Lack of support in the information Collection of data is easy but is difficult to sort Constraint of time

Methodology of data collection:

1. Primary Data Collection a) Reference Books 2. Secondary Data Collection a) Internet and various websites 3.Interview with the personnel 4.Field Study

INDEX
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Sr.no

Topic

Page No.

1. 1.1 1.2 1.3 1.4 2 2.1 2.2 2.3 2.4 3 3.1 3.2 3.3 3.4

INTRODUCTION TO JIT Preface of TQM Introduction Jit definition and objective History of jit Jit process Jit implementation process Philosophy of jit :literature review Diagram of jit Requirement of jit management Just in time in tqm Importance of tqm in jit Principles of jit Characteristics of jit Features of jit

10 10 12 13 14 17 17 20 21 26 29 29 32 33 34

4 4.1 4.2 5 6 7 8

Pros and cons of jit Benefits of jit Limitations of jit Kanban system of jit Case study Conclusion Bibliography

32 35 36 35 42 66 67

CHAPTER 1 : 1.1 TQM

Introduction to JIT

A. Why care about quality?

increase productivity 9

 expand market share raise customer loyalty enhance competitiveness of the firm at a minimum, serve as a price of entry

B. Achieving high quality Is Difficult

Only 36% of the firms felt that Total Quality programs boosted their ability to compete. ----Arthur D. Little Survey of 500 Firms Over 50% of firms rated their efforts D or F relative to increasing customer satisfaction, increasing market share, or reducing their cost. - Rath and Strong Main Problem: Achieving high quality is as easy to understand as losing weight and quitting smoking and is as difficult to do. -Steve Schwartz, IBM MDQ VP

C. What is TQM??
Ans. The essence of Total Quality Management is a common sense dedication to understanding what the customer wants and then using people and science to set up systems to deliver products and services that delight the customer.

D. 6 Characteristics of Total Quality Management

TQM is a new method of quality management involving many levels and processes of different functions, but requiring an integrated cooperation. Characteristics of TQM can be listed as follows: 1. Target: In TQM, the most important target to achieve is Quality; Quality policy must be set toward customer. Meeting customer's needs mean satisfying every customer requirement but not trying to reach some quality standards set before. Never stop innovating - never stop perfecting the quality is one of the most important principles of TQM. 2. Scope: To ensure the quality of service and product, TQM system requires the extending of production process to suppliers and sub-contractors. Normally, the trading of material in production may account for 70% of final product cost (depend on types of 10

product). Therefore, to ensure the quality of the input material, it is necessary to set up specific standards for each type of material to control its quality. It is also necessary to change the method of placing order to make it suitable with the production process. 3. Form: In stead of controlling the quality of the finished product (after production), TQM sets up plans and programs to supervise and prevent problems right before the production process. Statistical tools are used to supervise, quantitatively analyze the results as well as factors affecting the quality, consider the reasons and take appropriate prevention methods. 4. Basis of TQM system: The basis of TQM practice in the company is Human. Talking about quality, people usually think about the product quality. But it is the quality of employees that is the main concern of TQM. Of the three factors of Business, which are hard factor (machines, equipments, money...), Soft factor (methods, secrets, information...) and Human factor, Human is of the first concern to TQM. The basic principle for implementation of TQM is that the qualification of employees is developed fully and integratedly through training, delegation and assignment. 5. Organization: TQM system is cross organized and functioned in order to manage, integratedly corporate with different activities of the system and facilitate group working. The implementation of TQM requires the participation of high and middle level managers. A proper organization will help duties to be assigned clearly. Thus, TQM needs new management model, with different characteristics from the previous model. 6. Management skills and tools: Methods to implement must be based on the principle "do correctly at the very beginning", in researching and designing to minimize economic cost. Strictly apply DEMMING circle (PDCA) to make foundation for the continuous quality improvement.

1.2

Introduction

Just-in-time (JIT) is easy to grasp conceptually, everything happens just-in-time. For example consider my journey to work this morning, I could have left my house, justin-time to catch a bus to the train station, just-in-time to catch the train, just-in-time to arrive at my office, just-in-time to pick up my lecture notes, just-in-time to walk into this lecture theatre to start the lecture. Conceptually there is no problem about this; however achieving it in practice is likely to be difficult! 11

So too in a manufacturing operation component parts could conceptually arrive justin-time to be picked up by a worker and used. So we would at a stroke eliminate any inventory of parts, they would simply arrive just-in-time! Similarly we could produce finished goods just-in-time to be handed to a customer who wants them. So, at a conceptual extreme, JIT has no need for inventory or stock, either of raw materials or work in progress or finished goods. Obviously any sensible person will appreciate that achieving the conceptual extreme outlined above might well be difficult, or impossible, or extremely expensive, in reallife. However that extreme does illustrate that, perhaps, we could move an existing system towards a system with more of a JIT element than it currently contains. For example, consider a manufacturing process - whilst we might not be able to have a JIT process in terms of handing finished goods to customers, so we would still need some inventory of finished goods, perhaps it might be possible to arrange raw material deliveries so that, for example, materials needed for one day's production arrive at the start of the day and are consumed during the day - effectively reducing/eliminating raw material inventory. Adopting a JIT system is also sometimes referred to as adopting a lean production system. 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 inventory buffers toward zero and achieving the ideal lot size of one unit.

1.3

JIT DEFINITION AND OBJECTIVE

Def^n - just-in-time A strategy for inventory management in which raw materials and components are delivered from the vendor or supplier immediately before they are needed in the manufacturing process. Objectives 1. To Produce only products that the customer wants. 12

2. To Produce products at a rate acceptable by the customer. 3. To Produce products with perfect quality. 4. To Produce with minimum lead time. 5. To Produce with no waste of labour , material or equipment

1.4

HISTORY OF JIT

JIT is a Japanese management philosophy which has been applied in practice since the early 1970s in many Japanese manufacturing organisations. It was first developed and perfected within the Toyota manufacturing plants by Taiichi Ohno as a means of meeting consumer demands with minimum delays . Taiichi Ohno is frequently referred to as the father of JIT. Toyota was able to meet the increasing challenges for survival through an approach that focused on people, plants and systems. Toyota realised that JIT would only be successful if every individual within the organisation was involved and committed to 13

it, if the plant and processes were arranged for maximum output and efficiency, and if quality and production programs were scheduled to meet demands exactly. JIT manufacturing has the capacity, when properly adapted to the organisation, to strengthen the organisation's competitiveness in the marketplace substantially by reducing wastes and improving product quality and efficiency of production. There are strong cultural aspects associated with the emergence of JIT in Japan. The Japanese work ethic involves the following concepts.

Workers are highly motivated to seek constant improvement upon that which already exists. Although high standards are currently being met, there exist even higher standards to achieve. Companies focus on group effort which involves the combining of talents and sharing knowledge, problem-solving skills, ideas and the achievement of a common goal. Work itself takes precedence over leisure. It is not unusual for a Japanese employee to work 14-hour days. Employees tend to remain with one company throughout the course of their career span. This allows the opportunity for them to hone their skills and abilities at a constant rate while offering numerous benefits to the company.

These benefits manifest themselves in employee loyalty, low turnover costs and fulfilment of company goals. Just-in-Time originally encapsulated the logistics aspects of the Toyota Production System. Our current view of what it should encapsulate incorporates some of the principles of "leanness" because by itself and specifically detached from Kanban and continuous improvement it begins to loose its meaning. Also to implement these techniques without flexible, reliable processes and appropriate organisation is impossible. However at this point it begins to blur with agile manufacturing principles. This section should therefore be read in conjunction with these others and as a minimum JIT should include:

Strategic Capacity Management for example the use of multiple small machines . Group Technology (Also commonly called "Cellular" manufacturing). This is based on the principle that segmented manufacture is much simpler, with less interference of material flows, than factories where similar processes are grouped together, such as heat treatment. This principle has also been applied to other processes where natural groups are formed to perform a complete process aligned to customer needs in manufacturing and other industries, and "category management" in procurement. However we have shown in some circumstances that the benefits of cellular manufacturing can be gained by creating virtual cells (without moving the plant).

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Production smoothing, avoids the problems associated with poor demand tracking and unnecessary interference of the production schedule. In a recent consultancy assignment we established that whilst customer orders were highly volatile, the underlying demand was extremely stable. The volatility downstream in the supply chain was in fact being artificially induced by poor customer planning, resulting in late changes to the order schedule, to bring the orders back in line with the very stable underlying demand! However many companies experience cyclic or seasonal demand, where it is beneficial, and in some cases vital, to flex or move resources to respond to fluctuating demand, the alternative being to pre-build stock to a forecast to afford some production smoothness, at some risk and tying up of capital. Leveled schedules, bring more stability and regular patterns of production Labour balancing when used in conjunction with Takt time (Previous Best Practice of the Week 046: "Using Takt Time to Manage Your Business") highlights process / line imbalance from the cycle time of one operation to the next and indicates the need to balance the manning for each operation (and the opportunity to improve the slowest to achieve balance). There are some dangers here in achieving balance. This is the guiding principle of lean manufacturing where the problem would be permanently solved as opposed to the traditional approach of buffering the uncertainty with stock. Set-up reduction, which is based on the principle that small is beautiful as far as batch sizes are concerned and that what is required, is made that day without inflating batch sizes. (In the article Previous Technique of the Week T019: Avoiding Set Ups and Reducing Changeover Times (SMED) (and thereby reducing batch sizes)) we show that there is in fact much more to this than the set-up reduction techniques proposed by Shingo. But there are a number of techniques available to do this stated by Shingo. His SMED techniques give rise to the opportunity to reduce batch sizes by up to a factor of 50. It should be remembered however that this should be applied to the bottleneck first and maybe even stop there. Standard working. Defined by the operator, not the industrial engineer, it is a prescribed sequence of production steps done by one operator and balanced to the required rate of demand. It becomes the basis of understanding the job and therefore what can be improved. Visual controls. Characteristic of JIT factories are simple visible controls, held locally where they are used to monitor key performance indicators and

used as a spur to improvement. This is a deliberate attempt to give eyeball control rather than the over-sophistication provided by remote computer systems. Examples include:

Standard container sizes replacing irregular sizes such that stockholding is a simple question of counting containers rather than the parts within them. The reorder point in this case is a chalk mark on the wall rather than it being hidden in a computer system and appearing on a reorder report the following morning. 15

The graphs of quality, productivity, safety and delivery performance updated daily and discussed at the daily stand-up meeting. A small segregation area for quality defects kept deliberately small to ensure that problems are solved quickly and rejects are not allowed to accumulate. The flip chart to write down todays problems while they are still fresh.

Minimizing inventory, Minimizing Work in Process, and synchronizing production by the use of replenishment systems such as Kanban. The principle of Kanban operation is extremely simple but there are a number a detailed considerations to make in design and implementation which are not trivial including:

Positioning of buffers Buffer sizing Signaling mechanisms Prioritization of signals Priming the system Accounting aspects Ongoing integrity of cell design

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CHAPTER 22.1

JIT PROCESS

JIT IMPLEMENTATION PROCESS

Based on the diagram model by HP Boise plant to accomplish its JIT program.

Just-in-time production began in Japan in the 1970s and spread to the U. S. in the 1980s. We can make these general observations about JIT:
o o

JIT is used to finely tune an operating system. JIT is somewhat different in U. S. than in Japan and goes by several names, including stockless production, material-as-needed, continuous-flow, zero inventory production system, and lean production. JIT is still evolving and meshing in new ways with advanced technology JIT isnt for everyone -- mass production is still best for very high volume production; job shops are still necessary for highly specialized products.

o o

Suppliers Suppliers can be crucial to JIT success Supplier gets:

long-term, guaranteed, contract a good price steady demand minimal paperwork (e.g. use electronic means to order - such as email or Web or electronic data interchange, EDI)

In return the supplier agrees to

quality components (e.g. zero defects) guaranteed delivery times a "partnership" with its customer contingency plans to cope with disruptions, common disruptions might be:
o o

the effect of bad weather a truck drivers strike blocking roads/ports 17

a flu outbreak reducing the supplier's workforce

Supplier selection criteria:

close to production plant (else potential transportation delays) good industrial relations ("involvement", "value", "dignity", "ownership"), no strike deals you believe that the supplier can met their promises with respect to the list of factors given above that that they are agreeing to

With suppliers satisfying these criteria you can reduce the total number of suppliers, indeed it seems logical so to do. If you had five suppliers meeting all these criteria why do you need five? Obviously you might decide to have more than one supplier for safety reasons. Even the best run supplier can suffer a factory fire or an earthquake, but probably no more than two or three suppliers. As an illustration of this in 1997 Toyota was affected by a fire at a supplier of brake parts that cost the company an estimated $195 million and 70,000 units of production. The fire was at a plant that was the sole supplier of brake parts for all but two Toyota models and forced the company to shut its 18 assembly plants in Japan for a number of days. As a result Toyota embarked on a review of components that were sourced from a single supplier. Having a single supplier may be attractive in cost terms, but one does need to balance the risk (albeit a low probability risk - perhaps a fire every 100-250 years say) against the cost savings. JIT implementation design Based on a diagram modeled after the one used by Hewlett-Packards Boise plant to accomplish its JIT program. 1) F Design Flow Process F Redesign/relayout for flow L Reduce lot sizes O Link operations W Balance workstation capacity M Preventive maintenance S Reduce setup Times

2) Q Total Quality Control C worker compliance I Automatic inspection M quality measures 18

 M fail-safe methods W Worker participation 3) S Stabilize Schedule S Level schedule W Establish freeze windows UC Underutilize Capacity 4) K Kanban Pull System D Demand pull B Backflush L Reduce lot sizes 5) V Work with Vendors L Reduce lead time D Frequent deliveries U Project usage requirements Q Quality expectations 6) I Further Reduce Inventory in Other Areas S Stores T Transit C Implement carrousel to reduce motion waste C Implement conveyor belts to reduce motion waste 7) P Improve Product Design P Standard production configuration P Standardize and reduce the number of parts P Process design with product design Q Quality expectations

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2.2

PHILOSOPHY OF JIT

The philosophy of JIT is simple - Inventory is defined to be waste. Just-in-time (JIT) inventory systems expose the hidden causes of inventory keeping and are therefore not a simple solution that a company can adopt; there is a whole new way of working that the company must follow in order to manage its consequences. The ideas in this way of working come from many different disciplines including statistics, industrial engineering, production management and behavioral science. In the JIT inventory philosophy there are views with respect to how inventory is looked upon, what it says about the management within the company, and the main principle behind JIT. Inventory is seen as incurring costs, or waste, instead of adding value, contrary to traditional accounting. This does not mean to say that JIT is implemented without awareness that removing inventory exposes pre-existing manufacturing issues. Under this way of working, businesses are encouraged to eliminate inventory that doesnt compensate for manufacturing issues, and then to constantly improve processes so that less inventory can be kept. Secondly, allowing any stock habituates the management to stock keeping and it can then be a bit like a narcotic. Management are then tempted to keep stock there to hide problems within the production system. These problems include backups at work centres, machine reliability, process variability, lack of flexibility of employees and equipment, and inadequate capacity among other things. In short, the just-in-time inventory system is all about having the right material, at the right time, at the right place, and in the exact amount without the safety net of Inventory, the implications of which are broad for the implementors. A JIT system requires an attitude that places emphasis on the following: 1. Cooperation with a value chain perspective, 2. Respect for people at all levels, 3. Quality at the source, 4. Simplification or just enough resources, 5. Continuous improvement and 6. A long term perspective. A JIT system also incorporates the following practices:

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1. Just-in-time purchasing, 2. Focused factories, 3. Cellular manufacturing, 2.3 DIAGRAM OF JIT

A depiction of the classic JIT diagram would be shown Cause and Effect Diagram Introduction: There are a number of productivity and management tools used in business organizations. Cause and Effect Diagram, in other words, Ishikawa or Fishbone diagram, is one such management tools. Due to the popularity of this tool, majority of managers make use of this tool regardless of the scale of the organization. Problems are meant to exist in organizations. That.s why there should be a strong process and supporting tools for identifying the causes of the problems before the problems damage the organization. Steps for Using the Tool: Following are the steps that can be followed to successfully draw a cause and effect diagram. Step 1 - Properly identify the problem in hand Start articulating the exact problem you are facing. Sometimes, identification of the problem may not be straightforward. In such instances, write down all the effects and observations in detail. A short brainstorming session may be able to point out t the actual problem. When it comes to properly identifying the problem, there are four properties to consider; who are involved, what the problem is, when it occurs, and where it occurs. Write down the problem in a box, which is located at the left hand corner (refer the example cause and effect diagram). From the box, draw a line horizontally to the right hand side. The arrangement will now look like the head and the spine of a fish. Step 2 - Add the major factors that contribute to the problem In this step, the main factors of the problem are identified. For each factor, draw off a line from the fish.s spine and properly label it. These factors can be various things such as people, material, machinery, or external influences. Think more and add as many as factors into the cause and effect diagram.

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Brainstorming becomes quite useful in this phase, as people can look at the problem in different angles and identify different contributing factors. The factors you added now become the bones of the fish. Step 3 - Identify the causes Take one factor at a time when identifying possible causes. Brainstorm and try to identify all causes that apply to each factor. Add these causes horizontally off from the fish bones and label them. If the cause is large in size or complex in nature, you can further breakdown and add them as sub causes to the main cause. These sub causes should come off from the relevant cause lines. Spend more time in this step; the collection of causes should be comprehensive. Step 4 - Diagram analysis When this step starts, you have a diagram that indicates the problem, the contributing factors, and all possible causes for the problem. Depending on the brainstorming ideas and nature of the problem, you can now prioritize the causes and look for the most likely cause. This analysis may lead to further activities such as investigations, interviews, and surveys. Refer the following sample cause and effect diagram:

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Use of cause and effect diagrams: 23

When it comes to the use of cause and effect diagrams, brainstorming is a critical step. Without proper brainstorming, a fruitful cause and effect diagram cannot be derived. Therefore, following considerations should be addressed in the process of deriving a cause and effect diagram. 1. There should be a problem statement that describes the problem accurately. Everyone in the brainstorming session should agree on the problem statement. 2. Need to be succinct in the process. 3. For each node, think all the possible causes and add them into the tree. 4. Connect each casualty line back to its root cause. 5. Connect relatively empty branches to others. 6. If a branch is too bulky, consider splitting it in two. Conclusion Cause and Effect diagrams can be used to resolve organizational problems efficiently. There are no limitations or restrictions on applying the diagrams to different problems or domains. The level and intensity of brainstorming defines the success rate of cause and effect diagrams.

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PDCA Statistical Tools5 Some of the statistical tools used in the continuous improvement cycle include: 1. Pareto diagrams, 2. Fishbone, or cause and effect diagrams, 3. Histograms, 4. Other graphs and charts, e.g., pie charts, 5. Control charts and 6. Scatter diagrams and related techniques, e.g., regression and correlation analysis. Pareto diagrams show the causes of problems in bar chart format. The idea is to graphically display opportunities for potential improvement. For example, Figure 8-5 illustrates the reasons for down time at a particular cell. These include A - Out of parts, B - Defective part, C - Equipment failure, D - Operator error and E Power failure. Figure 8-5 reveals at a glance that nearly fifty percent of the down time is caused by a shortage of parts and another thirty percent results from defective parts

2.4

REQUIREMENT OF JIT MANAGEMENT

25

1. Standardization 2.Software 3.Multifunctionality 4.Cleanliness Implementation of JIT is not a one day affair. It requires year to pursue the basic ingredients of JIT. Some of the requirement is controllable by the management, while rest is uncontrollable

Training Japanese view manpower as a vital asset of the firm. With investment in training and development firm upgrades the skill of workers. Since Japanese culture in industry is of life-time-employment type, such investments in manpower are found to be helpful in developing a team of multi-skilled workers, who have better problem solving temperaments. Therefore, better quality production is achieved through training. Alongside, the productivity also improves. The awareness about wastes and improvement of productivity and efficiency is always in focus in these trainings.

Some requirements for implementing JIT

26

Long Term Planning The implementation of JIT is a long-term process. This requires continuous improvements and trial and error approach. However, it is important to note that the benefits of JIT start coming even at the early stages of its implementation.

Stockholders Stockholders are those, who invest int eh company finance. In Japan, the earned profit is reinvested in the firm by stockholders, who are management worker. Similar attitude is difficult in our country as major profit is distributed among stockholders as dividend. So, a changed mindset is needed which should be focused on long-term gains rather than annual dividend.

Labor and Union Unlike situations in our industry, where there is a demand of specialist workers, JIT demands for multifunctional workers with flexibility to switch over. Union must be enterprise-oriented rather than worker-focussed.

Government Support Role of government in relaxing regulations related JIT industries is very important. Better labor-union-management-government relation is a must for conducive JIT environment.

Management Support Complete management support is needed in the implementation of JIT. For elimination of productivity-related problems and reduction of asset/inventory level, the support of management is a must.

Management and Labour Responsibilities 27

Management has to be open in JIT environment, Healthy criticism should be encouraged and hidden problems should be eliminated. Team decision making and cooperative problems solving facilitates JIT implementation.

Cellular Layout and Work Flow The functional layout is no more useful in JIT environment. Group technology based cellular layout is needed. He flow of material and arrangement of machines in the cell may preferably be of U-type. This arrangement is useful for reduced inventory, multifunctional workers and elimination of other forms of waste like set-up time, etc.

Department Function There are major changes in the functions of departments of JIT industries. Workers are better trained to solve quality and engineering problems. In case of any problem, at any worker level, it is attended by entire department even if total production remains disrupted for few minutes. This is called as Jidoka in Japanese industries. Many traditional functions of departments get modified. For example, purchase department works more or quality of raw material rather than dealing with level of inventory and when-to-order.

Supplier Management JIT advocates single but highly reliable vendor. Suppliers are treated as partner rather than competitors. They are trained in quality and production so that no defective should reach at the shop floor or assembly line. Extreme care is needed in choosing and developing vendors in JIT environment.

Email Based Homework Assignment Help inRequirements For Implementing JIT Transtutors is the best place to get answers to all your doubts regarding requirements for implementing JIT.You can submit your school, college or university level homework or assignment to us and we will make sure that you get the answers you need which are timely and also cost effective. Our tutors are available round the clock to help you out in any way with industrial management.

CHAPTER 3 3.1

JUST IN TIME IN TQM

IMPORTANCE OF TQM IN JIT

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TQM is critical in JIT since poor quality would cause us to not deliver the right products at the right time in the right quantities. Poor quality would cause us to have to either spent time fixing the product or to scrap it if it can not be fixed. Introduction: There are many approaches in the business domain in order to achieve and exceed the quality expectations of the clients. For this, most companies integrate all quality related processes and functions together and control it from a central point. As the name suggests, Total Quality Management takes everything related to quality in to consideration, including the company processes, process outcomes (usually products or services), and employees. The Origin: The origin of the TQM goes back to the time of the First World War. During the World War I, there have been a number of quality assurance initiatives taken place due to the large-scale manufacturing required for war efforts. The military fronts could not afford poor quality products and suffered heavy losses due to the poor quality. Therefore, different stakeholders of the war initiated efforts to enhance the manufacturing quality. First of all, quality inspectors were introduced to the assembly lines in order to inspect the quality. Products below certain quality standard were sent back for fixing. Even after World War I ended, the practice of using quality inspectors continued in manufacturing plants. By this time, quality inspectors had more time in their hands to perform their job. Therefore, they came up with different ideas of assuring the quality. These efforts led to the origin of Statistical Quality Control (SQC). Sampling was used in this method for quality control. As a result, quality assurance and quality control cost reduced, as inspection of every production item was need in this approach. During the post World War II era, Japanese manufacturers produced poor quality products. As a result of this, Japanese government invited Dr. Deming to train Japanese engineers in quality assurance processes. By 1950, quality control and quality assurance were core components of Japanese manufacturing processes and employees of all levels within the company adopted these quality processes.

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By 1970s, the idea of total quality started surfacing. In this approach, all the employees (from CEO to the lowest level) were supposed to take responsibility of implementing quality processes for their respective work areas. In addition, it was their responsibility to quality control, their own work. Basic Principles of TQM: In TQM, the processes and initiatives that produce products or services are thoroughly managed. By this way of managing, process variations are minimized, so the end product or the service will have a predictable quality level. Following are the key principles used in TQM. 1. Top management . The upper management is the driving force behind TQM. The upper management bears the responsibility of creating an environment to rollout TQM concepts and practices. 2. Training needs . When a TQM rollout is due, all the employees of the company need to go through a proper cycle of training. Once the TQM implementation starts, the employees should go through regular trainings and certification process. 3. Customer orientation . The quality improvements should ultimately target improving the customer satisfaction. For this, the company can conduct surveys and feedback forums for gathering customer satisfaction and feedback information. 4. Involvement of employees . Pro-activeness of employees is the main contribution from the staff. The TQM environment should make sure that the employees who are proactive are rewarded appropriately. 5. Techniques and tools . Use of techniques and tools suitable for the company is one of the main factors of TQM. 6. Corporate culture . The corporate culture should be such that it facilitates the employees with the tools and techniques where the employees can work towards achieving higher quality. 7. Continues improvements . TQM implementation is not a one time exercise. As long as the company practices TQM, the TQM process should be improved continuously. The Cost: Some companies are under the impression that the cost of TQM is higher than the benefits it offers. This might be true for the companies in small scale, trying to do everything that comes under TQM. According to a number of industrial researches, the total cost of poor quality for a company always exceeds the cost of implementing TQM. 30

In addition, there is a hidden cost for the companies with poor quality products such as handling customer complaints, re-shipping, and the overall brand name damage. Just-in-time manufacturing was a concept introduced to the United States by the Ford motor company. It works on a demand-pull basis, contrary to hitherto used techniques which worked on a production-push basis. To elaborate further, under just-in-time manufacturing (colloquially referred to as JIT production systems), actual orders dictate what should be manufactured, so that the exact quantity is produced at the exact time it is required. Just-in-time manufacturing goes hand in hand with concepts such as Kanban, continuous improvement and total quality management (TQM). Just-in-time production requires intricate planning, in terms of procurement policies and the manufacturing process, if its implementation is to be a success. Highly advanced technological support systems provide the necessary back-up that Just-in-time manufacturing demands, with production scheduling software and electronic data interchange being the most sought after.

Conclusion: Total Quality Management is practiced by many business organizations around the world. It is a proven method for implementing a quality conscious culture across all the vertical and horizontal layers of the company. Although there are many benefits, one should take the cost into the account when implementing TQM. For small-scale companies, the cost could be higher than the short and mid term benefits.

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3.2

PRINCIPLES OF JIT

1.Product to exact demand 2.Eliminate waste 3.Produce one at a time 4.Acheive continuous improvement 5.Respect people Traditional Manufacturing- Increases Inventory to protect against process problems. Emphasizes push manufacturing. . Tolerates defects. . Treats suppliers as armslength, independent entities. Just-in-Time Manufacturing Emphasizes pull manufacturing. Emphasizes zero defects. Emphasizes supplier partners

Other Principles Of JIT Manufacturing Principles TotalQualityManagement Management Production Management aSupplier Management Supplier Managementa Inventory Management Inventory Managementa Human Resource

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3.3

CHARACTERISTICS OF JIT

1. Pull method of material flow - In pull method the customer demand activities the production of an item. It pulls a unit to where it is needed just as it needed. 2. Constantly high quality -JIT system seek to achieve a uniform flow of materials that are fir for use, reliable, and meet specific customer expectations 3. Small lot sizes -It helps in reduction of cycle inventory, reduces lead time, achieving uniform workload. 4. Uniform workstation loads - The JIT system works best if the daily load on individual workstation is relatively uniform. 5. Standardized components and work methods 6. Close supplier ties 7. Flexible work force - Workers in flexible work force can be trained to perform more than one job 8. Automated production - It is equipping machines with automatic stopping devices. The benefits are greater profits and greater market share. 9. Total preventive maintenance

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3.4

FEATURES OF JIT

1. The production line is run on a demand pull basis, so that activity of each work station is authorised by the demand of downstream work stations. Thus, parts move through production system based on end unit demand, focusing on maintaining a constant flow of parts rather than batches of WIP. 2. Set-up time and manufacturing lead time are minimised. Demand-led production may require manufacturing small quantities of the product and producing small batches is economical only if set up time are small. 3. The production line is stopped if parts are absent or defective work is discovered. In absence of buffer stock emphasis is placed on doing the job right the first time. The focus is on eliminating the root causes of defect, waste or re-work. JIT goes hand in hand with total quality.

A surprising effect was that factory response time fell to about a day. This improved customer satisfaction by providing vehicles within a day or two of the minimum economic shipping delay. Also, the factory began building many vehicles to order, eliminating the risk they would not be sold. This improved the company's return on equity. Since assemblers no longer had a choice of which part to use, every part had to fit perfectly. This caused a quality assurance crisis, which led to a dramatic improvement in product quality. Eventually, Toyota redesigned every part of its vehicles to widen tolerances, while simultaneously implementing careful statistical controls for quality control. Toyota had to test and train parts suppliers to assure quality and delivery. In some cases, the company eliminated multiple suppliers. When a process or parts quality problem surfaced on the production line, the entire production line had to be slowed or even stopped. No inventory meant a line could not operate from in-process inventory while a production problem was fixed. Many people in Toyota predicted that the initiative would be abandoned for this reason. In the first week, line stops occurred almost hourly. But by the end of the first month, the rate had fallen to a few line stops per day. After six months, line stops had so little economic effect that Toyota installed an overhead pull-line, similar to a bus bellpull, that let any worker on the line order a line stop for a process or quality problem. Even with this, line stops fell to a few per week. The just-in-time philosophy was also applied to other segments of the supply chain in several types of industries. In the commercial sector, it meant eliminating one or all of the warehouses in the link between a factory and a retail establishment. Examples in sales, marketing, and customer service involve applying information systems and mobile hardware to deliver customer information as needed, and reducing waste by video conferencing to cut travel time 34

CHAPTER 4 - PROS AND CONS OF JIT

4.1

BENEFITS OF JIT

JIT Reduce Costs JIT Improves Supplier Relationships JIT Allows Customization and Increase Customer Satisfaction JIT Develops Human Resources Main benefits of JIT include:

Reduced setup time. Cutting setup time allows the company to reduce or eliminate inventory for "changeover" time. The tool used here is SMED (single-minute exchange of dies). The flow of goods from warehouse to shelves improves. Small or individual piece lot sizes reduce lot delay inventories, which simplifies inventory flow and its management. Employees with multiple skills are used more efficiently. Having employees trained to work on different parts of the process allows companies to move workers where they are needed. Production scheduling and work hour consistency synchronized with demand. If there is no demand for a product at the time, it is not made. This saves the company money, either by not having to pay workers overtime or by having them focus on other work or participate in training. Increased emphasis on supplier relationships. A company without inventory does not want a supply system problem that creates a part shortage. This makes supplier relationships extremely important. Supplies come in at regular intervals throughout the production day. Supply is synchronized with production demand and the optimal amount of inventory is on hand at any time. When parts move directly from the truck to the point of assembly, the need for storage facilities is reduced. Minimizes storage space needed. Smaller chance of inventory breaking/expiring.

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4.2

LIMITATIONS OF JIT

Culture Differences Traditional Approach Difference in implementation of JIT Loss of individual autonomy.. Loss of team autonomy. Loss of method autonomy. JIT success is varied from industry to industry. Some industries are benefit more from JIT while others do not.

Just-In-Time Problems Since just-in-times development, many companies have found it beneficial while others have been unable to successfully implement the basic philosophy. JIT is not for every company as many have found out the hard way. With todays highly competitive business world, JIT continues to have many problems adapting to the every changing environment. Listed below are several instances when just-in-time approaches can and/or have failed. Supplier Obstacles The ability of JIT companies to find suppliers that conform to their needs is very important. Since just-in-times emphasis is on smaller quantities and more frequent deliveries, many small suppliers are forced to except more transportation costs to retain large clients. On the other hand, many JIT companies experience higher costs due to the same need for increased shipments and smaller quantities. For instance, many supermarkets receive discounts if they exceed certain weight requirements of a load. Companies must weigh the opportunity costs of inventory and additional transportation costs. Another problem found with suppliers is that they are not always reliable. Many companies can be enticed away from their regular supplier expecting to find lower costs elsewhere. Once the company changes to the new supplier, the prices are slowly raised, as the client becomes dependent. The company in question then has no other alternative in the short-run but to pay the higher prices. One such example is OPEC, Organization of the Petroleum Exporting Countries, which has constantly raised prices on countries as well as businesses worldwide. JIT industries requiring 36

large amounts of petroleum have no other alternative, but to pay the higher prices or slow production. Other reliability examples include the railroad strike of 1992. General Motors, a heavily reliant JIT company, had no choice but shut down several factories due to lack of raw materials. On the first day, over 75,000 workers were involved and GM would have had a total production shutdown if the strike had not been immediately solved Other Disadvantages of JIT

There is little room for mistakes as minimal stock is kept for re-working faulty product. Production is very reliant on suppliers and if stock is not delivered on time, the whole production schedule can be delayed. There is no spare finished product available to meet unexpected orders, because all products is made to meet actual orders however, JIT is a very responsive method of production.

Problems Within a JIT system Just-in-time operation leaves suppliers and downstream consumers open to supply shocks and large supply or demand changes. For internal reasons, Ohno saw this as a feature rather than a bug. He used an analogy of lowering the water level in a river to expose the rocks to explain how removing inventory showed where production flow was interrupted. Once barriers were exposed, they could be removed. Since one of the main barriers was rework, lowering inventory forced each shop to improve its own quality or cause a holdup downstream. A key tool to manage this weakness is production levelling to remove these variations. Just-in-time is a means to improving performance of the system, not an end. Very low stock levels means shipments of the same part can come in several times per day. This means Toyota is especially susceptible to flow interruption. For that reason, Toyota uses two suppliers for most assemblies. As noted in Liker (2003), there was an exception to this rule that put the entire company at risk because of the 1997 Aisin fire. However, since Toyota also makes a point of maintaining high quality relations with its entire supplier network, several other suppliers immediately took up production of the Aisin-built parts by using existing capability and documentation. Thus, a strong, long-term relationship with a few suppliers is better than short-term, price-based relationships with many competing suppliers. Toyota uses this long-term relationship to send Toyota staff to help suppliers improve their processes. These 37

interventions have been going on for twenty years and have created a more reliable supply chain, improved margins for Toyota and suppliers, and lowered prices for customers. Toyota encourages their suppliers to use JIT with their own suppliers. Within a raw material stream

As noted by Liker (2003) and Womack and Jones (2003), it ultimately would be desirable to introduce synchronised flow and link JIT through the entire supply stream. However, none followed this in detail all the way back through the processes to the raw materials. With present technology, for example, an ear of corn cannot be grown and delivered to order. The same is true of most raw materials, which must be discovered and/or grown through natural processes that require time and must account for natural variability in weather and discovery. The part of this currently viewed as impossible is the synchronised part of flow and the linked part of JIT. It is for the reasons stated raw materials companies decouple their supply chain from their clients' demand by carrying large 'finished goods' stocks. Both flow and JIT can be implemented in isolated process islands within the raw materials stream. The challenge becomes to achieve that isolation by some means other than carrying huge stocks, as most do today. Because of this, almost all value chains are split into a part made-to-forecast and a part that could, by using JIT, become make-to-order. Historically, the make-to-order part has often been within the retailer portion of the value chain. Toyota took Piggly Wiggly's supermarket replenishment system and drove it at least halfway through their automobile factories. Their challenge today is to drive it all the way back to their goods-inwards dock. Of course, the mining of iron and making of steel is still not connected to an order for a particular car. Recognising JIT could be driven back up the supply chain has reaped Toyota huge benefits and a dominant position in the auto industry. Note that the advent of the mini mill steelmaking facility is starting to challenge how far back JIT can be implemented, as the electric arc furnaces at the heart of many mini-mills can be started and stopped quickly, and steel grades changed rapidly. Oil It has been frequently charged that the oil industry has been influenced by JIT. [6][7][8] The argument is presented as follows: The number of refineries in the United States has fallen from 279 in 1975 to 205 in 1990 and further to 149 in 2004. As a result, the industry is susceptible to supply shocks, which cause spikes in prices and subsequently reduction in domestic manufacturing output. The effects of hurricanes Katrina and Rita are given as an example: in 2005, Katrina caused the shutdown of 9 refineries in Louisiana and 6 more in Mississippi, and a large number of oil production and transfer facilities, resulting in the loss of 20% of the US domestic refinery 38

output. Rita subsequently shut down refineries in Texas, further reducing output. The GDP figures for the third and fourth quarters showed a slowdown from 3.5% to 1.2% growth. Similar arguments were made in earlier crises. Beside the obvious point that prices went up because of the reduction in supply and not for anything to do with the practice of JIT, JIT students and even oil and gas industry analysts question whether JIT as it has been developed by Ohno, Goldratt, and others is used by the petroleum industry. Companies routinely shut down facilities for reasons other than the application of JIT. One of those reasons may be economic rationalization: when the benefits of operating no longer outweigh the costs, including opportunity costs, the plant may be economically inefficient. JIT has never subscribed to such considerations directly; following Waddel and Bodek (2005), this ROI-based thinking conforms more to Brown-style accounting and Sloan management. Further, and more significantly, JIT calls for a reduction in inventory capacity, not production capacity. From 1975 to 1990 to 2005, the annual average stocks of gasoline have fallen by only 8.5% from 228,331 to 222,903 bbls to 208,986 (Energy Information Administration data). Stocks fluctuate seasonally by as much as 20,000 bbls. During the 2005 hurricane season, stocks never fell below 194,000,000 bbl (30,800,000 m3), while the low for the period 1990 to 2006 was 187,017,000 bbl (29,733,300 m3) in 1997. This shows that while industry storage capacity has decreased in the last 30 years, it hasn't been drastically reduced as JIT practitioners would prefer. Specialty (SRS) Finally, as shown in a pair of articles in the "Oil & Gas Journal", JIT does not seem to have been a goal of the industry. In Waguespack and Cantor (1996), the authors point out that JIT would require a significant change in the supplier/refiner relationship, but the changes in inventories in the oil industry exhibit none of those tendencies. Specifically, the relationships remain cost-driven among many competing suppliers rather than quality-based among a select few long-term relationships. They find that a large part of the shift came about because of the availability of short-haul crudes from Latin America. In the follow-up editorial, the Oil & Gas Journal claimed that "casually adopting popular business terminology that doesn't apply" had provided a "rhetorical bogey" to industry critics. Confessing that they had been as guilty as other media sources, they confirmed that "It also happens not to be accurate."

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CHAPTER 5 - KANBAN SYSTEM OF JIT Kanban is not an inventory control system. It is a scheduling system that helps determine what to produce, when to produce it, and how much to produce. The need to maintain a high rate of improvement led Toyota to devise the Kanban system. Kanban became an effective tool to support the running of the production system as a whole. In addition, it proved to be an excellent way for promoting improvements because reducing the number of Kanban in circulation highlighted problem areas

Kanban/ Just-in-Time at Toyota 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 Simulation of processes and systems

(b) Quality Improvement In Process Inspection Experimental Design Process Development 40

(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, 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.

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CHAPTER 6 -

CASE STUDY

In the case study I will be doing a comparative analysis of the use of JIT technique in a foreign company and an Indian Company. The case study will also include the following 1. Comparative Analysis of Jit technique used in Toyota and Tata Motors . 2. Applicability of JIT IN small scale automobile industry in India 3. Reasons for JIT efforts in these companies 4. Profile of the companies 5. Whether Indian Companies are ready for JIT? 6. Questionnaire for Company/Industrial Visit +

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1.Comparative Analysis of Jit technique used in Toyota and Tata Motors .

GENERAL MOTORS An example of the use of JIT in General Motors is given below. General Motors (GM) in the USA has (approximately) 1700 suppliers who ship to 31 assembly plants scattered throughout the continental USA. These shipments total about 30 million metric tons per day and GM spends about 1,000 million dollars a year in transport costs on these shipments (1990 figures). JIT implies frequent, small, shipments. When GM moved to JIT there were simply too many (lightly loaded) trucks attempting to deliver to each assembly plant. GM's solution to this problem was to introduce consolidation centres at which full truckloads were consolidated from supplier deliveries. This obviously involved deciding how many consolidation centres to have, where they should be, their size (capacity) and which suppliers should ship to which consolidation centres (suppliers can also still ship direct to assembly plants). As of 1990 some 20% by weight of shipments go through consolidation centres and about 98% of suppliers ship at least one item through a consolidation centre. All this has been achieved without sacrificing the benefits of JIT. Classic JIT diagram The classic JIT diagram is as below. There the company (the boat) floats on a sea of inventory, lurking beneath the sea are the rocks, the problems that are hidden by the sea of inventory.

| --|-| --------------\ / ========\ Company /============ Sea of inventory 43

\---------/ x xxx xxxx xxxxx xxxxxx Rocks - the problems hidden xxxxxxxxxxxxxxxx by the sea of inventory If we reduce the inventory level then the rocks become exposed, as below. | --|-| --------------- x \ / xxx xxxx ========\ Company /====xxxxx===xxxxxx======== \---------/ xxxxxxxxxxxxxxxx Now the company can see the rocks (problems) and hopefully solve them before it runs aground! One plan to expose the problems is simply to:

make a large amount of finished goods stock to keep the customers supplied try running the production system with less inventory to expose problems revert to the original levels of inventory until you have had time to fix the problems you exposed repeat the above - hence continuous improvement

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Company Profile
TOYOTA Kirloskar Motors and the International Automobile Industry

Taiichi Ohno, an employee of Japans Toyota Motor Company, envisioned a new way of inventory management. The Toyota Production System (TPS or JIT) was a new and exciting prospect. Toyota plunged headfirst into this new concept integrating Ohnos three main just-in-time principles.

1. Reduced lot sizes, leading to production flexibility. 2. Controlling parts required in production to enable provided when and where they are needed for specific tasks. them to be

3. Arranging production equipment in the order that people work and value is added instead of grouping by equipment function. Immediately, Toyota realized that just-in-time policies needed to be integrated into other parts of their automotive operations. These new improvements included employee participation, autonomation, supplier participation, kanban, and waste reduction/elimination. Employee cooperation was essential in the implementation of the Toyota Production System. JIT was based upon the assumption that employees could be empowered. This theory takes into account that employees follow William Ouchis Theory Z motivational scheme. The morale and loyalty of the Japanese worker made this a very easy adaptation. Characteristics of Japanese companies include high employee commitment, motivation, and productivity. The empowerment of workers includes the ability and authority of making quick rational decisions. Every employee throughout the process has the power to stop production to assure quality, otherwise known as autonomation or Jidoka. These employees usually do not specialize ensuring the ability of job rotation and knowledge of the system in general. Workers and management alike share failure in this process since they are seen as equals. Typically, Japanese workers are rewarded for their devotion to the company by having positions for life. Another important aspect of the newly designed TPS, is the relationship between the company and its supplier. Japanese companies reduced the number of suppliers, but those that it kept became partners in quality. These supportive supplier relations share information, technology, and needs. Companies must find suppliers that are willing to deliver smaller quantities while assuring pristine quality. All deliveries are made directly to the to the point of use at the exact time of need. 45

Kanban, a Japanese word meaning signal or visible record, is a method of inventory supply and communication directly related to the supplier relationship. It uses visual devices to control flows of materials between work stations and supplier or limited inventory. This technique allows production to pull supplies when needed. Fixed quantity bins are established to signal replenishment, and these small quantities can be quickly replaced and reordered from the supplier. The primary achievement of Kanban is the direct communication between production workers and suppliers. Such contact with knowledgeable employees allows for another opportunity for information transfer. The most important of all the processes involved in just-in-time is the reduction and/or elimination of waste! Toyotas president, Shoichiro Toyoda, states that waste is anything other than the minimum amount of equipment, materials, parts, space, and workers time, which are absolutely essential to add value to the product. 7 Waste management links all aspects of the JIT process. 1. Overproduction - involves excessive use of manufacturing resources. 2. Waiting time requires space, adds no value. 3. Unnecessary transporting increases handling, increases work-in-process inventory. 4. Inventory causes idle resources, hides quality problems and production inefficiencies. 5.Processing waste makes unnecessary production steps, scrap. 6. Inefficient work methods indicates poor layout and material movement patterns, increases work-in-process inventory. 7.Product defects requires rework costs and possible sales loss due to customer dissatisfaction.

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Toyota Production System

Japanese car makers: Toyota, Mitsubishi, Honda and Nissan, have begun showing concept passenger vehicles with in-wheel electric motors that afford a compact mono-box design, small on the outside, spacious on the inside. Toyota Production System (TPS) is an explanation of the Toyota philosophy toward production. The production system developed by Toyota Motor Corporation to provide best quality, lowest cost, and shortest lead time through the elimination of waste. TPS is comprised of two pillars, Just-in-Time and jidoka. TPS is maintained and improved through iterations of standardized work and kaizen, following PDCA, or the scientific method. Americans spent $150 billion last year on foreign oil. Plug-in, flex-fuel hybrid and battery-electric cars would save American drivers hundreds of billions of dollars at the pump, reduce global warming greenhouse gas emissions and end US dependence on declining global oil reserves. DCX has stepped forward and announced PHEV production is underway. Toyota has yet to step up to the plate in terms of greater stewardship, which could improve everyones quality of life while increasing Toyota profitability. Meanwhile, as more and more reports appear that warn about peak oil and global warming, oil companies are reporting profit as much as $23 billion in just one quarter. *Note: An example of the admirable Toyota engineering premiered at the Tokyo Motor Show and will appear at the New York Motor show next week. As fulsomely illustrated by Watt Head, this innovative design includes in-wheel electric motors, a drive-by-wire system, and universal design unseen before in most passenger cars. The electric drive is beneath the vehicle floor and in or near the wheels, allowing available cabin space to extend nearly the entire length of the vehicle. This makes for a comfortable roomy interior while keeping the exterior size compact with the further advantage of a low center of gravity.

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The Toyota Fine T also displays excellent aerodynamics. Besides adding a plug, another advantages Japanese car makers have eschewed so far is the use of composite materials. TPS is comprised of two pillars, Just-in-Time and jidoka, and is often illustrated with the "house" shown below. TPS is maintained and improved through iterations of standardized work and kaizen, following PDCA, or the scientific method.

Development of TPS is credited to Taiichi Ohno, Toyota's chief of production in postWWII period. Beginning in machining operation and spreading from there, Ohno led the development of TPS at Toyota throughout the 1950's and 1960's and the dissemination to the supply base through the 1960's and 1970's. Outside Japan, dissemination began in ernest with the creation of the ToyotaGeneral Motors joint venture - NUMMI - in California in 1984. The concepts of Just-in-Time (JIT) and jidoka both have their roots in the pre-war period. Sakichi Toyoda, founder of the Toyota group of companies, invented the concept of Jidoka in the early 20th Century by incorporating a device on his automatic looms that would stop the loom from operation whenever a thread broke. This enabled great improvements in quality and freed people up to do more value creating work than simply monitoring machines for quality. Eventually, this simple concept found its way into every machine, every production line, and every Toyota operation.

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Kiichiro Toyoda, son of Sakichi and founder of the Toyota automobile business, developed the concept of Just-in-Time in the 1930's. He decreed that Toyota operations would contain no excess inventory and that Toyota would strive to work in partnership with suppliers to level production. Under Ohno's leadership, JIT developed into a unique system of material and information flows to control overproduction. Widespread recognition of TPS as the model production system grew rapidly with the publication in 1990 of "The machine that changed the world", the result of five years of research led by the Massachusetts Institute of Technology. The MIT researchers found that TPA was so much more effective and efficient than traditional, mass production that it represented a completely new paradigm and coined the term "Lean Production" to indicate this radically different approach to production.

Once Toyota applied all aspects of the just-in-time process, they realized that change would constantly be needed. Therefore, the concept of Kaizen, continuous improvement, was put into the process as well. For almost a decade, Toyota and its suppliers were alone in the use of the Toyota Production System. By the late 1970s, other Japanese automobile manufacturers began to take Toyotas ideas and put them to practical use. Mazada, Honda, and Nissan all adopted the concept of just-in-time to continue to compete with arch rival Toyota.

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As one decade ended and a new one began, TPS/JIT slowly began to gain acceptance in the business world. In the mid 1980s automobile manufactures in the United States and Europe benchmarked the JIT philosophy because Japanese companies began immerging as market share contenders. The Big Three U.S. automakers, General Motors, Ford, and Chrysler had to act quickly to remain competitive. A St. Louis logistics-consulting firm, in 1990, estimated that 18% of all U.S. products had some relation to the JIT system. This percentage increased to 23% in 1992, and it was expected to grow passed 28% by 1995. Only time will tell if JIT will advance to the expected 39% in the year 2000!

just in Time, or JIT is a set of techniques to improve the return on investment of a business by reducing in-process inventory, and its associated costs. The process is driven by a series of signals, or Kanban that tell production processes to make the next part. Kanban are usually simple visual signals such as the presence or absence of a part on a shelf. JIT causes dramatic improvements in a manufacturing organization's return on investment, quality, and efficiency. The technique was first adopted and publicized by Toyota Motor Corporation of Japan as part of its Toyota Production System (TPS). Japanese corporations cannot afford large amounts of land to warehouse finished products and parts. Before the 1950s this was thought to be a disadvantage because it reduced the economic lot size. An economic lot size is the number of identical products that should be produced, given the cost of changing the production process over to another product. The undesirable result would be a poor return on investment for a factory. The chief engineer at Toyota in the 1950s examined accounting assumptions, and realized that another method was possible. The factory could be made more flexible, reducing the overhead costs of retooling, and therefore reducing the economic lot size to the available warehouse space. Over a period of several years, Toyota engineers redesigned car models for commonality of tooling for such production processes as paint-spraying and welding. Toyota was one of the first to apply flexible robotic systems for these tasks. Some of the changes were as simple as standardizing the hole sizes used to hang parts on hooks. The number and types of fasteners were reduced in order to standardize assembly steps and tools. In some cases identical subassemblies could be used in several models. Toyota engineers then determined that the remaining critical retooling operation was the time to change the stamping dies used for body parts. Traditionally, these were adjusted by hand, with crowbars and wrenches. It sometimes took as long as several days to install a large (multiton) die set and achieve acceptable quality. Further, these were usually installed one at a time by a team of experts, so that the line would be down for several weeks. 50

Toyota implemented a program called "The Single Minute Exchange of Die," SMED. With very simple fixtures, measurements were substituted for adjustments. Almost immediately, die change times fell to about a half hour. At the same time, quality of the stampings became controlled by a written recipe, reducing the skill reuqired for the change. Analysis showed that the remaining time was used to search for hand tools, and move dies. Procedural changes (moving the new die in place with the line in operation) and dedicated tool-racks reduced die change times to as little as 40 seconds. Dies were changed in a ripple through the factory, as a new product began flowing. After SMED, economic lot sizes fell to as little as one vehicle in some Toyota plants. Carrying the process into parts-storage made it possible to store as little as one part in each assembly station. When a part disappeared, that was used as a sign to produce or order a new part. Effects Some surprising things occurred. A huge amount of cash appeared, apparently from nowhere, as in-process inventory was built out and sold. This by itself generated tremendous enthusiasm in upper management. Another surprising effect was that the response time of the factory fell to about a day. This improved customer satisfaction by providing vehicles musually within a day or two of the minimum economic shipping delay. Also, many vehicles began to be built to order, completely eliminating any risk that they would not be sold. This dramatically improved the company's return on equity by eliminating a major source of risk. Since assemblers no longer had a choice of which part to use, every part had to fit perfectly. The result was a severe quality assurance crisis, and a dramatic improvement in product quality. Eventually Toyota redesigned every part of its vehicles to eliminate or widen tolerances, while simultaneously implementing careful statistical controls. (See Total Quality Management). Toyota had to test and train suppliers of parts in order to assure quality and delivery. In some cases, they eliminated multiple suppliers. When a process problem or bad parts surfaced on the production line, the entire production line had to be slowed, or even stopped. No inventory meant that a line could not operate from in-process inventory while a production problem was fixed. Many people in Toyota confidently predicted that the initiative would be abandoned for this reason. In the first week, line stops occurred almost hourly. However, by the end of a month, the rate had fallen to a few line stops each day. In six months, line stops had so little economic effect that Toyota had an overhead pull-line, similar to a bus bell-pull, that permitted any worker on the production line to order a line stop for a process or quality problem. Even with this, line stops fell to a few per week. The result was a factory that became the envy of the industrialized world, and which has since been widely emulated. 51

Company Profile Tata Motors and the Indian Automobile Industry 2nd largest company in Private sector Globally ranked as: 2nd largest Bus manufacturer 52

5th largest Bus & Truck manufacturer Largest Indian Exporter of Automobiles

Largest portfolio of products by an Auto major: Mini, Light & Heavy Trucks Range of Buses & Coaches Passenger Cars & Utility Vehicles Indigenously developed & Indias 1st Light Commercial Vehicle (1986) Sports Utility Vehicle Passenger Car Mini Truck ACE (1998) (1998) (2005)

Largest R&D network in India with offshore centers in :-

Korea (Gunsan) Spain (Zaragoza) UK (Midlands)

1st Engineering company to be listed on NYSE (2004)

Market leader in Commercial Vehicles in domestic market with ~60% MS

2nd largest player in Passenger Cars in domestic market with 16.5% MS

Nation wide Sales, Service, Spare parts and Auto financing network with over 1,200 customer touch points

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Indian Scenario Just in Time manufacturing is a philosophy of manufacturing based on planned elimination of waste and continuous improvement of productivity. It encompasses the successful execution of all manufacturing activities required to produce a final product, from design engineering to delivery and including all states of conversion from raw material onward. The primary elements of Just-in-Time are to have only the required inventory when needed; to improve quality to zero defects; to reduce lead times by reducing setup times, queue lengths, and lot sizes; and to accomplish these things at a minimum cost. It is a manufacturing system whose goal is to optimize processes and procedure by continuously pursuing waste reduction. Today, JIT is commonly viewed as a Japanese innovation, because Toyota popularized this approach two decades ago. The Toyota automobile factory, where the notion of JIT may have started, is the best example of the use of JIT in repetitive manufacturing. In these factories, the continuous flow of products makes planning and control rather simple. The basic idea of JIT is to drastically reduce work in progress inventories throughout the production system. In this way, products flow from suppliers to production to customers with little or no delays or interruptions beyond the amount of time they spend being produced at work centers in manufacturing. JIT does not come free; certain changes to the factory and the way it is managed must occur before the benefits can be realized. These changes are:

Stabilize production schedules Increase production capacities of manufacturing work centers Improve product quality Cross-train workers Reduce equipment breakdowns through preventive maintenance Develop long-term supplier relations to avoid interruptions to material flows

Benefits of Just-in-Time Manufacturing:

Inventory levels are drastically reduced Set up times are significantly reduced in the factory. Product quality is improved Cost of scrap is reduced. Promotes teamwork among workers. Manufacturing operations are streamlined and problem free.

Indian Automotive Industry: The automotive industry in India is the ninth largest in the world, with an annual production of over 2.3 million units in 2008. In 2009, India emerged as Asia's fourth largest exporter of automobiles, behind Japan, South Korea and Thailand. Following 54

the economic liberalization in India in 1991, the Indian automotive industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions. Several Indian automobile manufacturers such as Tata Motors, Maruti Suzuki and Mahindra and Mahindra, expanded their domestic and international operations. India's robust economic growth led to the further expansion of its domestic automobile market which attracted significant Indiaspecific investment by multinational automobile manufacturers. In February 2009, monthly sales of passenger cars in India exceeded 100,000 units. The strong global competition left the Indian automotive industry with no option but to focus on adopting new technologies, which enabled manufacturers to improve their processes and products. Major initiatives in the automotive industry include just-intime (JIT) manufacturing, mass customization, "zero error production", and reduced cycle time. To accomplish these, automotive manufacturers increasingly rely on information technology to help manage processes. Although the Indian Automotive Industry has made great strides in various aspects, supply chain management is one area where there is tremendous scope for improvement. Just-in-time (JIT) as a philosophy is good in most environments, including India. Its core philosophy is identifying and eliminating waste and continuous improvement. This is important in a country like ours where resources are scarce. There are auto component companies in India that have excelled in implementing the JIT concept. Inventory management using JIT has been used by many companies in the inbound (supply side) part of the supply chain. Through the use of JIT inventory management, the automobile industry has been able to achieve significant gains in productivity. JIT in Tata Motors Limited: Tatai brought a whole new manufacturing culture that included participative management, team work, communication and information sharing, open office system, Kaizen (continuous improvement), multi-skilling of operators, flat hierarchy, and most important of all, the concept of Just-in-Time manufacturing. Many of these characteristics had been bruited about earlier in India as relating to typical Japanese manufacturing culture but Tata was the first Indian company where the practices were actually implemented from top to bottom. The factory at Jamshedpur can be a culture shock for a visitor. Not a wet or oily patch to be seen, no shavings or cuttings strewn on the floor, all tools and parts and stock - in-progress neatly in place, gauges free of dust, piping sans leaks, cover plates all in place, no peeling paint on the machines, walkways clearly marked, adequate lighting and a clean atmosphere. TATA is going about the task in the typical Japanese methodical fashion of Plan, Do, Check and Action. First, the overall targets were fixed by the top management, which was then broken down into factors and elements and mini-projects worked out to achieve these. The eight typical wastages at each operational point (over-production, man movement, material movement, idle time of operator, work-in-process, machine availability, waiting time and needless processing) have been measured by observation and even videography. The bottlenecks have been identified and a lot of work has been done to streamline the process. In 1995, when tata had 4,800 55

employees, it was producing at the rate of 730 cars a day. Today, with 4,500 employees, the plant is producing at the rate of 1,700 cars a day. Simultaneously, the supply chain system is being honed. A delivery instruction system places orders with the vendors for the next day's production target. TATA is now working with an inventory of four hours maximum for local items and six days average for imported materials. The inventory to sales turnover ratio, on the scale of 100 in 1999-2000, is now down to 41. TATA has also started working with its vendors to reduce their cost of production so that its own cost of bought outs can be reduced. It has also launched a quality enhancement scheme recently, called as the Quality Gate system. With so many MNCs entering the Indian automotive market, there will be a push towards lean production. TATA has implemented JIT for some of its major suppliers. Some others are in the process of doing so. There is a stress on quality in this highly competitive industry. However, the success of JIT depends not only on the efforts of the assemblers, but also on the suppliers and on institutional and cultural factors. The bargaining power of suppliers of some components is high, because of capacity constraints. This makes them accept only large orders, and therefore makes it difficult for assemblers to implement JIT Problems faced by the Indian Automotive Industry in implementing JIT: Several Indian firms have either initiated steps towards JIT implementation or claim to have already implemented many aspects of JIT. However, the Indian Automotive Industry faced a few problems in implementing the JIT manufacturing systems, they are:

The Size of the Industry in India is either medium or small compared to multinational corporations. Hence the type of concerns and nature of efforts could be different. The Indian economy is characterized by Government controls and intervention, and there is a lack of long term stability in Government policies. Conceptual details of JIT and other such approaches to manufacturing are well known to Indian firms. However there is a lack of internalization of these concepts, leading to lack of clarity at the time of implementation. To evolve to a pull inventory system, manufacturing needs to be organized through cells. The introduction of such systems would involve substantial rearrangement of facilities and demand greater managerial effort. Indian Automotive Manufacturers have not made significant progress towards supplier development. The quality circles concept was introduced in India during the early 80s. Though it started with much fanfare, it did not produce the expected results as reported in Japan. Hence, the Indian automobile manufacturers were skeptical of adopting them.

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The Indian automotive companies have overlooked the importance of viewing the supply chain as a whole. They need to have their supply chains streamlined for effective implementation of JIT. It is not easy to implement JIT in a situation where there is a need to manage inventory in a short duration with a lot of uncertainty in the system. The supply unreliability and the uncooperative attitude of transporters have affected the successful implementation of JIT. Indian automotive manufacturers tend to have a management style that is highly centralized. Decentralized and professionally managed companies would stand a better chance of implementing JIT. There is lack of efficient transport services, unavailability of suppliers, severe bottlenecks in transport and communication infrastructure.

Suggestions for implementation of JIT manufacturing: Keeping in mind the above issues, a 3 step approach is recommended; which can be used to implement JIT manufacturing systems. The first step involves changing attitudes towards purchasing and achieving improvements which would help prepare for the drastic changes that would take place. The second step involves initiating a pilot programme with a handful of suppliers and parts. This step aims to identify the problems and eliminate them. The third and final step involves modifying the organizational set-up so that there are distinct departments handling logistics, materials handling and control and supplier up gradation.

The first and foremost step is to obtain top management support and the support and involvement of all the employees in the programme. The Indian Automotive Industry has to take steps to increase the supply chain efficiency. The Indian Automotive Industry needs to understand that certain system level changes are inevitable; which may include introduction of Kanban, Set-up time reduction exercises. Managing continuous supply-demand matching and optimization. Achieving efficient use of materials and other resources. Managing demand and customer expectations. Technology and Infrastructure up gradations. Investment in training and human resource development. Maintain good relations with suppliers Encourage automation

Conclusion: 57

Just-in-time manufacturing can be a positive influence on a company. However there are many risks associated with attempting to implement JIT manufacturing techniques. When looked at it appears to be a very simple, quick, and easy thing to do. In reality it is a very complicated technique that takes long term commitment and an initial cost with no guarantee of success. If implemented successfully it would eliminate waste, make the company more productive and more efficient. It does this through shorter transportation and increased communication. Although there are many companies that are successful, many companies are not. Even though there are enormous risks many still consider implementing JIT for it many advantages. To summarize, there is a great need for transition from traditional manufacturing to Just-in-Time manufacturing, but several aspects of the industry are not very conductive to JIT implementation as there are many constraints. However, by taking appropriate action, it should be possible to move smoothly towards implementing an efficient JIT system.

Are Indian Companies Ready for Just-In-Time?

Implementation or claim to have already implemented many aspects of JIT. However, the Indian experience in this regard isquite different from that of the others on many counts and the effects of the following factors need to be studied and reported:_ The size of the firms in the country is either edium or small compared to multi-national corporations. Hence the type of concerns and the nature of efforts could be different._ The Indian economy was characterised by government controls and intervention in many areas of business until recently. As a result, firms developed capabilities to work with a short term perspective and to manage business in tune with government policies. Although the economy has started to open up, there is still a perceived lack of long term stability in government policies. Therefore the mindset and management approaches towards implementing new manufacturing innovations tend to have an overdose of mechanisms that seem to have worked well in the era of controls. _ Consequent to the opening up of the Indian economy, there has been wide- spread interest in industrially developed countries in setting up manufacturing bases in India. Although multinational corporations (MNCs) would have experience of JIT implementation in their home countries, it would be worthwhile to know the status in India. _ Conceptual details of JIT, Total Quality Management (TQM) and other such new approaches to manufacturing management are well known to many Indian firms. However, there is a lack of internalization of these concepts, leading to varying degrees of conviction and clarity at the time of 58

implementation. This has resulted in wide variations in the perception and implementation patterns among Indian firms. Survey on JIT Practices Practitioners belonging to different sectors of industry (for example, automobile, capital goods, electrical and electronics), different manufacturing complexities (for instance, mid volume-mid variety, low volume - high variety and mass production), different ownership patterns and different sizes (for example large, medium and small joint ventures) would like to know what areas to concentrate on for successful JIT implementation. They would like to learn from the experience of those who have already begun this process. This study primarily addresses these issues and seeks to bridge the gap between the doers of JIT implementation with that of the thinkers.

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2.SURVEY

The survey was conducted through a questionnaire administered to 400 organisations. 43 organisations returned the questionnaire in a usable form . The questionnaire consisted of the profile of the organisations, the manufacturing complexity and other information pertaining to JIT implementation. Fourteen critical factors were identified and participating organizations were asked whether these factors were important for JIT implementationin their firms. They were also asked whether these features were present at the time of the study. Other questions related to the nature of the JIT efforts they were pursuing were put to them. Contrary to popular perception, two factors viz., Quality Circles and Cellular Manufacturing have been rated very low. This could be due to the fact that the Quality circle concept was introduced in India only during the early 80s. Although it started with much fanfare, it did not produce the expected results as reported in Japan. Indian organizations became sceptical of adopting them and this might have been the reason for the poor rating of this factor by the respondents. Yet another reason could be that to evolve to a pull inventory system, manufacturing needs to be organised through cells. The introduction of such systems would involve substantial rearrangement of production facilities and demand greater managerial effort. Lack of conviction could have led to deprioritisation of such measures and less-important rating. All the sectors have rated TQM as an important factor for successful JIT implementation. It is well known that while JIT systems seek to provide an organizational framework for exposing problems, TQM principles provide an organisational framework for problem solving. The analysis based on ownership pattern brought out certain salient features. There seems to be considerable ariation in the perception among the three categories regarding the importance of the factors. For xample, perception on factors such as TQM and kaizen has varied widely. Unlike the other two categories, MNCs have strongly felt the need for Quality Circles. Indian ompanies have not made significant progress towards supplier development. On the other hand, MNCs might have been exposed to recent practices in purchasing and would have experienced the Advantages of these much more than the other two categories. It has not been possible to draw conclusive inferences based on the size of participating organisations. Differences in the Nature of JIT Efforts Pursued When different organizations begin to implement changes in their manufacturing and business systems, they end up with a wide spectrum of variations in the nature of efforts and the quantum of benefits realised. A JIT implementation is no exception to this. Why do these differences occur? What are the lessons for others who would like to replicate this process? The results indicate that companies that have initiated 60

major JIT programmes have very different concerns from those who merely think about JIT. This The Reasons for JIT Efforts in the Participating Organisations 1 For Better Quality Control 2 High Volume Repetitive Manufacturing 3 Outcome of Strategic Planning Exercise 4 Proximity of Suppliers 5 Rising Inventory Levels 6 Stable Production Plan 7 Standard Product Group 8 To Gain competitive advantage in the market 9 To simplify prodn. planning 10 To motivate the work force Guidelines for Successful JIT Implementation The study confirmed and further reinforced several known issues. Firstly, firms planning to go for major JIT efforts need to understand that certain system level changes are inevitable. These may nclude, for example,introduction of kanban, cellular manufacturing and Set-up time reduction exercises. Secondly,the nature of efforts to be employed to launch JIT programme differs with the complexity of manufacturing, the sector, and the ownership. Lastly, there are reasons for the differences in the nature of JIT efforts in organisations. Major JIT efforts succeed only when it is part of a strategic planning exercise. Such a process will ensure top managements active role and commitment. However, what hampers successful . JIT implementation is the lack of clarity and Priority leading to confusion and wasteful expenditure of organizational energy. The study offers several guidelines to resolve these problems. Practitioners often think that JIT is applicable only to volume producers belonging to discrete engineering industry. However, the underlying principle of JIT is one of continuous waste elimination and hence it is universally applicable. Obviously, the manner in which JIT principles are applied across different industries will vary. For example, in process industries, potential applications of JIT philosophy would include implementation of TPM, vendor development and JIT purchasing. On the other hand, in the automobile sector, in addition to the above, factors such as cellular manufacturing, multi-skilled work force and small lot sizing may also find application. A high volume manufacturer may find What have been the experiences of JIT implementers so far? 22 companies had undertaken JIT efforts at the time of the study. While 13 of them reported some efforts such as experimental and ad hoc modification of systems, 9 reported major JIT efforts in place. Most of the firms with some JIT efforts reported starting their efforts only recently. Those with major JIT programmes 61

had started their efforts as early as in 1986. Firms with major JIT programmes indicated an implementation lead time of more than three years. Supplier development, Employee involvement, and Top Management commitment were prominently listed as critical success factors. Training, task force formation, re-layout, and pilot study were indicated as among the first five steps taken in JIT implementation. Three most important reasons for embarking upon a JIT implementation programme were gaining competitive advantage in the market place, simplifying production planning & control, and curbing rising inventory levels. Proximity of suppliers, stable production plan, or high volume repetitive manufacturing were never mentioned among the main reasons for JIT implementation. Firms reporting major JIT efforts have done so after carefully evaluating this strategic nature. On the contrary, firms reporting some ad hoc modification and experimental efforts did not do any strategic planning exercise. JIT efforts were initiated by middle management because the top management asked them to do so. Are Organisations JIT prepared? Often, practitioners wish to know whether firms belonging to a particular sector, say Capital Goods, are in a position to implement JIT. Whenever firms believe they are not ready for successful JIT implementation, knowledge of the factors in which they are lacking will be invaluable. This would help them set the agenda for improvement and eventually implement JIT. One of the motivations for this study was to assess the extent to which firms belonging to different categories were amenable to JIT implementation and to identify areas where firms should direct their improvement for uccessfully implementing JIT. Using the data from the study, it was possible to extract this nformation by developing a framework for JIT preparedness. Logic of the Approach The mean scores of importance of fourteen factors and percentage of firms reporting the presence of each of these factors have brought together valuable information regarding the extent to which organisations can initiate JIT efforts. Firms in a sector can successfully implement JIT only when a higher level of importance for any given factor is complimented by higher percentage of firms having hat factor. Hence a comparison of the level of importance and the level of percentage firms having the factor indicates the JIT preparedness for the sector. Consider, for example, the factor TPM. In terms of importance, the participating firms ranked it fifth . However, few firms have this feature (ranked thirteenth). This means that organisations need to concentrate more on this aspect for successful mplementation of JIT. On the other hand, it was found that factors such as Quality Circle might not be the stumbling block for successful JIT implementation. This could be because many either have this feature or considered it less important. 62

Findings of the study The 43 organisations in the study were classified into several groups on the basis of sector of industry, ownership pattern, or size and the comfort and the concern factors were identified. The results brought out clearly the distinction in application of JIT to various categories and the relative priorities. The findings suggest that TQM and vendor development efforts must precede the launch of major JIT programmes. Automobile industry in the country has made significant improvements in areas such as multi-skilling of work force, setup time reduction and small lot sizes. Hence such factors do not belong to the concern category. However, the current study indicates that the immediate priorities for this sector are TQM, TPM and JIT purchasing. These three factors appear to be the concern for fferent classification schemes and thus constitute the basic requirements for successful JIT mplementation in any firm. Managers need to prioritise TQM programmes ahead of TPM. JIT and TQM are considered as two sides of the same coin. While JIT provides an organizational framework for the exposure of waste and problems, TQM programmes provide an organisational framework to solve these problems. Hence, it is important for managers to understand that neither JIT nor TQM can stand alone in the long run. Indian managers, the study suggests, have not exploited the leap frogging effect. Many of these ideas relating to successful JIT implementation are well known and have become common place. Despite this, they seem to tread the same path as some of the early Entrants to this field elsewhere. Case in which JIT has failed J IT p ro d u ct i o n a l l o w s co mp a n i e s to re d u ce b o th i n v e n t o r y a n d th e e n ti re p ro d u ct i o n n ch a i n . I t e n c o u r a g e s th e re mo va l o f a l l su r p l u s, i n cl u d i n g su rp l u s f a c to ri e s. U n d e r normal business conditions this is not a problem. However, if there is any disruption at any given point in the supply chain, then all production grinds to a halt. E vi d e n ce o f th e p ro b l e m w i t h J IT p r o d u ct i o n b e ca me cl e a r i n t h e w a ke o f H u rri ca n e Ka tr i n a a n d H u r ri ca n e R i t a , b o t h o f w h i ch h i t t h e U S Gu l f co a st i n 2 0 0 5 . A t t h a t t i m e , n o n e w o i l r e f i n e ri e s h a d b e e n b u i l t i n th e U S si n ce 1976. D u ri n g th a t ti me p e ri o d , companies actually shut down several refineries to reduce capacity. The old refineries still operating ran at full capacity, so no new refineries were needed according to JITt h e o r y s i n c e t h e y w o u l d o n l y p r o d u c e surplus gasoline. When the Katrina hit, 15 oil refineriesin Mississippi and Louisiana representing 20% of US refining capacity was shut down.R i ta d a ma g e d a n o t h e r 1 6 re fi n e r i e s i n Te xa s , a cc o u n ti n g fo r 2 .3 m i l l i o n b a r re l s p e r day of capacity shut 63

down.The lack of surplus in oil refining caused a shock to the United States. Gasoline pricessurged. Had companies not shut down refineries in order to reduce capacity accordingt o J IT t h e o ry , p a rt i c u l a rl y re f i n e ri e s o n t h e w e s t c o a s t, t h e n i t i s l i k e l y th a t g a so l i n e prices would have remained stable.U S r e g u l a r g ra d e g a so l i n e p ri c e s w e re $ 2 . 1 5 4 p e r g a l l o n o n N o ve mb e r 2 8 , 2 0 0 5 , down from a spike of $3.09 on September 19, 2005 in the immediate aftermath of thehurricane Katrina disaster

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3.QUESTIONNAIRE
Q. 1 In their zeal to implement new concepts like TQM and JIT, auto companies in India have overlooked the importance of viewing the supply chain as a whole. Most of the auto manufacturers focused on implementing JIT from an interfirm production perspective. What do you understand by JIT interfirm production? What are theinevitable limitations of this approach to production? Answer - Yes. Indian automobile manufacturer's using JIT & TQM technique from lastfew years. Q.2 JIT is certainly one of the best practices in any production system but you need to have supply chains streamlined for it.' What in your view can be done to streamline the supply chain in order to achieve greater efficacy of JIT? Answer - Yes. JIT and SCM need to implemented jointly by the automobilemanufacturer`s Q. 3 Does your enterprise consider spending money on the latest ITimplementations as a burden on your expenditure or do you feel it is aninvestment and mandatory for any enterprise? Elaborate. Answer It is important to enhance the basic capability of the enterpriseand improve the throughput of the business. This increases competitivecapability. Q. 4 What was the expenditure on JIT ) in your organization? Answer Confidential

CHAPTER 7 -

CONCLUSION
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To have a total hit manufacturing system , proper material , quality, people and equipments must be made available when needed. So in the following project I will try to decipher the need and application of JIT in general and in two different automobile manufacturing companies Toyota & Tata Motors. The following is what I have learn from doing this project on JIT I have learnt about the function of Just In Time process in an organisation. By meeting the professional and experts from TATA and Toyota Motors in their respective fields , gaining the information and learning and discussing the comprehension which will surely help in deciding the target of doing my project. JIT can only be achieved by a combination of strategic capacity considerations, strategic supply chain management and detailed ways to make work flow using pull systems such as Kanban. This can only be achieved by a holistic view such as is given by Business Process Reengineering, followed by a focused approach to continuous improvement. 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.

CHAPTER 8 - BIBLIOGRAPHY
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The following are the sources from where I have done my my data collection and study from

www.bsu.edu www.witiger.com www.japan-101.com www.toyota.co.jp

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